Billionaires' wealth can remove India's poverty: IMF
By Indo Asian News Service | IANS India Private Limited/Yahoo India News – 2 hours 55 minutes ago
New
Delhi, Feb 4 (IANS)
Income inequality is rising in India, where the net
worth of its billionaires has jumped 12-fold in 15 years, enough to
eliminate absolute poverty twice over in the country, says the
International Monetary Fund (IMF).
"We are all keenly aware that income inequality has been rising in
most countries. In India, the net worth of the billionaire community
increased 12-fold in 15 years, enough to eliminate absolute poverty in
this country twice over," IMF managing director Christine Lagarde said.
Delivering the Richard Dimbleby Lecture in London Monday, Lagarde
said seven out of 10 people in the world today live in countries where
inequality had increased over the past three decades.
She referred to an earlier report by Oxfam which says the richest 85
people in the world own the same amount of wealth as the bottom half of
the world's population.
In the US, inequality is back to where it was before the Great
Depression, and the richest 1 per cent captured 95 percent of all income
gains since 2009, while the bottom 90 percent got poorer,Lagarde rued that in the past economists had underestimated the importance of inequality.
"Let me be frank: in the past, economists have underestimated the
importance of inequality. They have focused on economic growth, on the
size of the pie rather than its distribution. Today, we are more keenly
aware of the damage done by inequality.
"Put simply, a severely skewed income distribution harms the pace and
sustainability of growth over the longer term. It leads to an economy
of exclusion, and a wasteland of discarded potential," she said in her
speech, a copy of which was made available here.
Lagarde said as the work at the IMF showed, the fiscal system could
help to reduce inequality through careful design of tax and spending
policies.
"Think about making taxation more progressive, improving access to
health and education, and putting in place effective and targeted social
programmes. Yet these policies are hard to design and-because they
create winners and losers-they create resistance and require courage.
"Nevertheless, we need to get to grips with it, and make sure that
'inclusion' is given as much weight as 'growth' in the design of
policies. Yes, we need inclusive growth.
"More inclusion and opportunity in the economic life also means less
cronyism and corruption. This must also rise to the top of the policy
agenda," she said.
And while talking about inclusion in economic life, "we must surely talk about gender".
"The International Labour Organization estimates that 865 million
women around the world are being held back. They face discrimination at
birth, on the school bench, in the board room. They face reticence of
the marketplace-and of the mind."
"If women participated in the labour force to the same extent as men,
the boost to per capita incomes could be huge -- 27 percent in the
Middle East and North Africa, 23 percent in South Asia, 17 percent in
Latin America, 15 percent in East Asia, 14 percent in Europe and Central
Asia.
"We simply cannot afford to throw away these gains."
--Indo-Asian News service
