According to a recent research the world’s richest 1% are on course to control as much as two-thirds of the world’s wealth by 2030. The tipping point as projected by the researchers is the 2008 financial crash. What is taking place today is the greatest transfer of public wealth into private hands in the history of this world. Contrary to a myth long popular in the West and now espoused by the East it’s been the poor of the world that finance the rich not the other way round. How this transfer of wealth or the bailout of bankrupt western economies takes place is analysed in-depth in our special issue on the Global War On Cash.
So where does all the money go? The US Department of Commerce estimates that each $1 billion in trade deficit translates to about 13,000 to 19,000 lost jobs for Americans – meaning that every $1 billion sucked out of India will stabilize atleast 13,000 jobs in the US. How many jobs would RS 36.5 trillion that the Indian govt. wrote off save? Roughly around 80 lakh American jobs, enough to sustain entire US economy with job/wage guarantee multiplier effects setting in. This same 80 lakh jobs it was promised in 2011 will be created in India instead by FDI in Retail.
Recently the Indian Cabinet approved key changes in India’s foreign direct investment (FDI) policy by allowing 100 percent FDI (from current 49%) under automatic route for single brand retail trading and construction development paving the way for global players. This ludicrous policy has been announced when the American markets themselves are undergoing what is now termed as Retail Apocalypse. Do you know of the 1,200 shopping malls across the US, 50% are expected to close by 2023. Do you know more than 12,000 stores in US are expected to close in 2018. Now these same bankrupt companies would be opening up shop in India via non-existent FDI.
While India is opening up its markets to be developed by borrowed foreign investment there is a fundamental question that remains to be answered or rather even asked by experts. While the Western European countries are themselves still reeling under the pressure of the 2008 financial crisis that shook not just their economic but societal and even security foundations and brought them to the verge of bankruptcies; where would all these FDI investment monies come from? This simple question if answered would lay bare the entire charade of Foreign Direct Investment in India as well as the American Dream. It is really amusing that none from the entire 1.3 billion population of India has been able to ask this humble question.
Today, nations increasingly carry out geopolitical combat through economic means. Policies governing everything from trade and investment to energy and exchange rates are wielded as tools to win diplomatic allies, punish adversaries and coerce those in between. India is ill prepared for this new era of geo-economics contest, while rising powers are adapting rapidly. Modern India needs structures to combat the threats posed by this kind of war by other means that aims for the strategic de-stabilization of the country.
It is high time we Indians as a country pause for a moment of introspection and engage in a serious discourse on the kind of development we wish to pursue. Otherwise whatever we hold dear of our culture, heritage and traditions will be washed out in the name of blindly following the western models of development!
The world’s richest 1% are on course to control as much as two-thirds of the world’s wealth by 2030, according to a shocking analysis that has lead to a cross-party call for action.
World leaders are being warned that the continued accumulation of wealth at the top will fuel growing distrust and anger over the coming decade unless action is taken to restore the balance.
An alarming projection produced by the House of Commons library suggests that if trends seen since the 2008 financial crash were to continue, then the top 1% will hold 64% of the world’s wealth by 2030. Even taking the financial crash into account, and measuring their assets over a longer period, they would still hold more than half of all wealth.
Since 2008, the wealth of the richest 1% has been growing at an average of 6% a year – much faster than the 3% growth in wealth of the remaining 99% of the world’s population. Should that continue, the top 1% would hold wealth equating to 5tn (£216.5tn) – up from 0tn today.
Analysts suggest wealth has become concentrated at the top because of recent income inequality, higher rates of saving among the wealthy, and the accumulation of assets. The wealthy also invested a large amount of equity in businesses, stocks and other financial assets, which have handed them disproportionate benefits.
New polling by Opinium suggests that voters perceive a major problem with the influence exerted by the very wealthy. Asked to select a group that would have the most power in 2030, most (34%) said the super-rich, while 28% opted for national governments. In a sign of falling levels of trust, those surveyed said they feared the consequences of wealth inequality would be rising levels of corruption (41%) or the “super-rich enjoying unfair influence on government policy” (43%).
The research was commissioned by Liam Byrne, the former Labour cabinet minister, as part of a gathering of MPs, academics, business leaders, trade unions and civil society leaders focused on addressing the problem.
The actor Michael Sheen, who has opted to scale back his Hollywood career to campaign against high-interest credit providers, was among those supporting the calls.
The hope is to create pressure for global action when leaders of the G20 group of nations gather for a summit in Buenos Aires in November. Byrne, who organised the first OECD global parliamentary conference on inclusive growth, said he believed global inequality was “now at a tipping point”.
“If we don’t take steps to rewrite the rules of how our economies work, then we condemn ourselves to a future that remains unequal for good,” he said. “That’s morally bad, and economically disastrous, risking a new explosion in instability, corruption and poverty.”
In a sign of the concern about the accumulation of wealth in the hands of so few, the move has gained support from across the political divide.
George Freeman, the Tory MP and former head of the prime minister’s policy board, said: “While mankind has never seen such income inequality, it is also true that mankind has never experienced such rapid increases in living standards. Around the world billions of people are being lifted out of poverty at a pace never seen before. But the extraordinary concentration of global wealth today – fuelled by the pace of technological innovation and globalisation – poses serious challenges.
“If the system of capitalist liberal democracy which has triumphed in the west is to pass the big test of globalisation – and the assault from radical Islam as well as its own internal pressures from post-crash austerity – we need some new thinking on ways to widen opportunity, share ownership and philanthropy. Fast.”
Demands for action from the group include improving productivity to ensure wages rise and reform of capital markets to promote greater equality.
Danny Dorling, professor of geography at the University of Oxford, said the scenario in which the super-rich accumulated even more wealth by 2030 was a realistic one.
“Even if the income of the wealthiest people in the world stops rising dramatically in the future, their wealth will still grow for some time,” he said. “The last peak of income inequality was in 1913. We are near that again, but even if we reduce inequality now it will continue to grow for one to two more decades.”
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