Today I was wondering how many of the richest people of the world would be required to donate part of their wealth to provide a basic income for everybody living below the subsistence level. A quick google search lead to figures from 2013 which were staggering.
According to a report by Oxfam, often quoted in january 2013, the annual income of the richest 100 people is enough to end global poverty four times over.
In other words, it only takes 100 people and all they need to donate is 25% of one year’s income… That’s a perfectly feasible thing, and I am pretty sure that there are many people who only have an average income who actually donate much more than an equivalent of 25% of their income. But because their income is so low, it doesn’t make any difference.
So, to end poverty all you need to do is actually to impose an international tax on the richest people of the world. If you increase the group from the richest 100 persons to the richest 1%, the amount they’ll need to donate will be an even smaller percentage of their income. It would not make any difference to the wealth they live in…
So how much money is actually required to end global poverty?
In 2012, the net income of the richest 100 people equaled to $240 billion dollars. So at that time it would’ve only taken 60 billion dollar to end poverty. That is really not that much when considering that often a few billion $ are required in cases of emergencies. To fight Ebola, it was estimated that 1 billion was needed. Malaria is estimated to cost African health care systems around $12 billion a year! About $6 billion a year is invested to eradicate malaria, but this needs to be invested until 2020 to get the world free of malaria. Haiti generated a 9 billion aid response. Japan had 30 billion available for rebuilding by 2014. but for a catastrophe which took place in 2011 and which was budgeted to have cost 300 billion. Rebuilding after Hayian hit the Philippines in 2014 is estimated to cost $6 billion.
Post WWII Marshal Plan cost the equivalent of £60 billion pounds today. The same amount has already been spent by Britain just on rebuilding Afghanistan since 2003, but there corruption and waste has caused a lot of spillage. The U.S. Has spent a similar amount on rebuilding Iraq.
Putting these numbers together now starts to daunt me. $60 billion is not that much, but in the light of all the other costs the world is facing it becomes more understandable that we are putting money in so many different things that we are actually tackling none of them. Which brings me to the SDG´s. Where the MDG´s still focused on only 8 themes, we are now saddled up with no less than 17 SDG’s. And on top of those SDG’s we’ll need to put aside money for natural disaster relief. Luckily post-war rebuilding could be done in the context of the SDG’s, but it would be far better to prevent the destruction of war, because rebuilding is really expensive!
The cure is cheaper than the illness…
As the costs for malaria have shown, having a large population living in abject poverty is a much larger burden to the world than fixing this inequality needs to be. People living in extreme poverty often make irrational decisions simply due to the stress they live in. When you´re poor, you also often only have expensive options. The cost of drinking water for example is often much higher in slums where people need to get their water from water vendors, then for people who have a tap at home. People who cannot afford health care insurances, often also won´t get the health care they need. Having sick family members in turn is a burden for the family and may leave children orphaned and families missing one parent and an additional income. The quicker we´d eradicate poverty, the less it would cost in the long run and the more finances would be available for disaster relief (the costs of which are projected to increase as a consequence of climate change).
So who should pay?
I proposed that the richest 1% of the world should take the responsibility to end poverty. But who are these people? Can they really afford to donate so much of their income? The following site allows you to calculate how rich you are compared to the rest of the world: https://www.givingwhatwecan.org/get-involved/how-rich-am-i
Here’s my result: I am among the richest 3% of the world. My income is more than 26 times the global average. If I would donate 10% of my income, over 1000 mosquito nets could be donated, over 5,750 tropical diseases could be treated, or I could save 2 lives. Once our second kid is born, our wealth drops: we’ll be among the richest 4% of the world with an income which is still more than 21 times the global average.
A Burkinabe with a family with 2 kids and having a good job could earn about 80 euro per month, or 1000 euro per year. He would in the richest 85% (or poorest 15%) of the world. His income would be 0.3 times the global average. If he would donate 10% of his income he would still be able to buy 17 mosquito nets or treat 90 people for tropical diseases.
So who in the Netherlands fall in the richest 1%? That would be people who have more than twice my family’s income after tax deduction: if it were a family with two kids, then their total income would be more than 120 000 Euro after tax. If that family were living in America their income would be more than 145 000 USD after tax. For a similar family living in Burkina Faso, the annual income would be only 58 000 USD to qualify as the richest 1% of the world. Isn’t that strange?
So knowing that, here’s a feel-good article about some of the rich and famous who set the right example and are among the most charitable celebs: http://daystyles.com/entertain/celebrity-news/15-of-the-most-charitable-celebs.html
I’m really glad to see some of my favorite actors and singers among them. Of course there’s Matt Damon, who’s http://water.org i’ve known and followed already for years. So I thought I’d highlight his brothers in arms here: http://notonourwatchproject.org founded by Don Cheadle, George Clooney, Matt Damon, Brad Pitt, David Pressman and Jerry Weintraub. But there’s actually not much to be found in the media about this initiative. I assume that’s because they work ‘behind the scenes’. However, did you know that all the money George Clooney makes with the Nespresso adds goes to the organization? What else?