The new gilded age

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We live in a lopsided world. Even those who can afford the modest luxury of reading op-eds in English papers in a country like Pakistan know that a vast majority of citizens in their own country lack the capacity and the resources to do the same. Some amongst us, however, are much richer than others, and the wealth of even the richest Pakistanis pales in comparison to the super-rich people in the world.

Oxfam's latest report on global inequalities titled 'Takers, Not Makers' highlights mind-boggling statistics concerning the growing global wealth inequality. The gap between the rich and the poor keeps growing, and those who are already obscenely rich are becoming richer. Total billionaire wealth has grown three times faster in 2024 than it did in 2023. In 2024 alone, over 200 new billionaires were created, and some billionaires are now set to become trillionaires within the next decade.

Varied economic stresses, indebtedness, lingering conflicts and increasing climate threats continue to intensify the plight of billions of people, who are already struggling to survive. Almost 3.6 billion people, nearly 40% of the global population, live below the World Bank's revised poverty line of $6.85 per day. On the other hand, the richest 1% of people on this planet own 45% of all wealth.

Oxfam further notes that around 60% of wealth accumulated in the hands of modern-day billionaires is not earned but comes either from inheritance, cronyism, corruption or their undue manipulation of power.

The phenomena of colonialism and imperialism have benefited the rich at the cost of marginalising and exploiting vast segments of the global population based on race and ethnicity. While colonialism ended many decades ago, the systems of appropriation developed during this era continue to persist in the forms of unfair terms of trade and inequitable structures of global governance. Oxfam, for instance, notes how an average Belgian has 180 times more voting power in the World Bank than the average Ethiopian. The leadership positions at both the World Bank and the IMF are still held by the US and Europe, respectively. These two powerful lending agencies in turn use their influence over highly-indebted countries to shape economic policies which align with Western interests.

In the name of structural adjustment, the IMF and World Bank have compelled indebted nations to give utmost priority to repaying earlier debts incurred to implement ineffective strategies to boost economic growth via privatisation and trade liberalisation. However, despite the failure of economic reforms prescribed by the IMF and World Bank to alleviate poverty, they pressure recipient governments to balance their fiscal deficits to qualify for new loans. As a result, poor governments then implement strict austerity measures which safeguard the vested elite interests but increase pressure on the already marginalised. In addition to using regressive tax measures, poorer countries curb public spending on education and healthcare. While the lack of investment in development dampens future prospects of growth, the international creditors continue extracting their pound of flesh.

According to data cited by Oxfam, between 1970 and 2023, countries in the global south paid around $3.3 trillion in interest to creditors in the global north. The lopsided global economic system thus continues exacerbating the global wealth gap.

To make the world a fairer place, countries of the global north need to offer reparations to those who were brutally enslaved and colonised, and they need to funnel more funds into the hands of poor and marginalised people rather than their corrupt rulers, who squander loans and make their countries even poorer. However, instead of seeing greater emphasis being placed on the need to redistribute wealth, we have seen a resurgence of authoritarian leaders in the global north, who use xenophobia and populism, to deflect the growing angst of their domestic populations, while offering more opportunities to extremely wealthy individuals to become even richer.