New global index shows catastrophic failure to tackle inequality across countries
Norway tops index, United States flails at 26, South Sudan ranks last, majority of world’s countries are woefully unprepared for COVID-19
Very low spending on public healthcare, weak social safety nets and poor labour rights meant the majority of the world’s countries were woefully ill-equipped to deal with COVID-19, reveals new analysis from Oxfam and Development Finance International (DFI).
The Commitment to Reducing Inequality Index (CRII) shows that only 26 out of 158 countries were spending a recommended 15 percent of their budgets on health prior to the pandemic, and in 103 countries at least one in three workers lacked basic labor rights and protections, like sick pay, when the virus struck.
The index ranks 158 governments on their policies on public services, tax and workers’ rights, three areas pivotal to reducing inequality and weathering the COVID-19 storm. It is being launched ahead of the World Bank and International Monetary Fund (IMF) virtual Annual Meetings next week.
Chema Vera, Oxfam International’s Interim Executive Director, said: “Governments’ catastrophic failure to tackle inequality meant the majority of the world’s countries were critically ill-equipped to weather the pandemic. No country on earth was trying hard enough to reduce inequality and ordinary people are bearing the brunt of this crisis as a result. Millions of people have been pushed into poverty and hunger and there have been countless unnecessary deaths.”
The index highlights that no country in the world was doing enough to tackle inequality prior to the pandemic and while COVID-19 has been a wake-up call for some, many countries are still failing to act. This is helping to fuel the crisis and has increased the vulnerability of people living in poverty, especially women.
- The United States ranks last out of the wealthy G7 countries and trails 17 low-income countries like Sierra Leone and Liberia on labor legislation due to anti-union policies and a very low minimum wage. The Trump administration gave only temporary relief to vulnerable workers with its April stimulus package after having permanently slashed taxes which overwhelmingly benefitted corporations and rich Americans in 2017. The index’s findings compound Oxfam’s broader concerns that the pandemic landed on a healthcare system that excludes millions of people living in poverty, which most affects Black and Latinx communities ―only 1 in 10 Black households has health insurance compared with 7 in 10 white households.
- Nigeria, Bahrain and India, which is currently experiencing the world’s fastest-growing outbreak of COVID-19, were among the world’s worst performing countries in tackling inequality going into the pandemic. India’s health budget (as a percentage of its overall budget) is the fourth lowest in the world and only half of the population has access to even the most basic healthcare services. Despite an already disastrous track record on workers’ rights, several state governments in India have used COVID-19 as a pretext to increase daily working hours from 8 to 12 hours a day and suspend minimum pay legislation, devastating the livelihoods of millions of poor workers now battling hunger.
- Kenya, which had ranked highly (9th) on progressive tax policies, has responded to the crisis with tax cuts for the wealthiest and big business and negligible additional funding for social protection and health measures. Nearly two million Kenyans have lost their job and tens of thousands of people living in Nairobi’s slums and in the countryside have received almost no help from the government and are struggling to feed themselves.
- In Colombia, which ranks 94 out of 158 countries on labor rights, 22 million informal workers don’t have sick pay and have been forced to work to feed their families ―even if ill with COVID-19. Meanwhile, Colombian women are bearing the brunt of the economic slowdown, with an unemployment rate of 26 percent compared to just 16 percent for men.
- Togo and Namibia, which were already taking strides to tackle inequality before the pandemic, have provided monthly cash grants to informal workers who lost their jobs because of lockdown measures. Ukraine, which has one of the lowest rates of inequality in the world despite its relatively low GDP, has increased frontline healthcare workers’ pay by up to 300 percent.
- Since the pandemic, Bangladesh, which ranks at just 113 on the index, has stepped up by spending $11 million on bonus payments for frontline healthcare workers, most of which are women. Both Myanmar and Bangladesh have added more than 20 million people to their social protection schemes.
- While some countries were taking positive steps before COVID-19 ―South Korea boosted the minimum wage, Botswana, Costa Rica and Thailand increased health spending and New Zealand launched a ‘well-being’ budget to tackle issues like child poverty and inequality, many countries had made little progress in the fight against inequality and some are going backwards. Many countries near the top of the index, such as Germany, Denmark, Norway and the UK, have been back-tracking on policies that reduce inequality like progressive taxation for decades.
Women, who generally earn less, save less and hold insecure jobs, have been particularly hard hit by the lockdowns introduced in response to the pandemic while unpaid care work and gender-based violence have increased dramatically. Nearly half of the world’s countries do not have adequate legislation on sexual assault and 10 countries, including Singapore and Sierra Leone, have no laws on equal pay or gender discrimination.
Matthew Martin, Development Finance International’s director, said: “Extreme inequality is not inevitable, and you don’t have to be a wealthy country to do something about it. We know that policies such as free public healthcare, safety nets for people who can’t work, decent wages and a fair tax system, have been proven to fight inequality. Failure to implement them is a political choice ―one that COVID-19 has exposed with catastrophic economic and human costs”.
Download the Commitment to Reducing Inequality Index (CRII), methodology note and datasets.
The 2020 CRII has seen significant changes in methodology from 2018. These changes to the index’s methodology mean that a straight comparison between the scores of a country in the 2020 index and those for 2018 may not give an accurate picture of its performance. For this reason, analysis of changes focuses on concrete policy changes since 2018’s index.
Oxfam and DFI used the 15 percent health budget recommendation in line with the Abuja Declaration. In April 2001, heads of state of African Union countries met and pledged to set a target of allocating at least 15 percent of their annual budget to improve the health sector. The Abuja Declaration provides a budget benchmark for other countries on health spending levels.
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