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Governments doing little to fight rising inequality: report

October 11, 2022

While Norway and Germany were top performing countries in terms of tackling inqeuality between 2020 and 2022, poorer countries with fewer resources have had a much tougher time.

A Dinka boy, suffering from cholera and severe malnutrition sits on the floor of a tent converted into a temporary field hospital near the remote village of Dor, Awerial country, in central South Sudan
Bottom performers were all lower-income countries affected by internal conflict and political instabilityImage: Fabio Bucciarelli/AFP via Getty Images

Most countries have failed to grapple with inequality that worsened because of the pandemic, a new report by the nonprofit groups Oxfam and Development Finance International (DFI) found on Tuesday.

The report, called the 2022 Commitment to Reducing Inequality, ranks countries between 2020 and 2022 on three pillars key to reducing inequality.

The three pillars are spendings on social protections, tax and labor policies which show researchers how countries fared in terms of closing the gap between the rich and poor.

Researchers tracked 161 countries for the report and found that half of low and lower middle income countries cut health spending during the pandemic, while half the countries cut social protection spending.

More than 90% countries didn't increase taxes on rich people, in spite of being strained on finances, the report said.

The report was released as delegates from the World Bank and the International Monetary Fund (IMF) prepare to gather for their annual meetings in Washington on Tuesday.

Norway and Germany are top performers

Norway was the top performing country, assessed by their overall performance on policies on social protection, tax and labor, followed by Germany.

Australia, Belgium and Canada came next, according to the findings. 

All countries in the top 10 were members of the Organization for Economic Cooperation and Development (OCED), an agency that represents the world's top economies.

On the other hand, the bottom performers were all lower-income countries, with Nigeria and South Sudan among the worst-performing countries.

South Korea and Senegal were among the countries that made significant improvement to fight inequality by improving spending in public services and spending more on social protections.

A report by the World Bank also found earlier this month that developing economies with fewer resources have borne the brunt of the global COVID-19 pandemic because they are not able to spend more to aid with economic recovery.

The World Bank said that 2020 saw the biggest setback to global poverty in decades.

Public spending cuts criticized

The Oxfam report said that economic inequality and poverty inpoor countries were exacerbated by the IMF's insistence on new austerity measures to reduce debts and budget deficits.

"The debate has catastrophically shifted from how we deal with the economic fallout of COVID-19 to how we reduce debt through brutal public spending cuts,  and pay freezes," Matthew Martin, the director of FDI, said.

"Inequality is a policy choice, governments must stop putting the richest first, and ordinary people last," Martin added.

Edited by: Amanda Rivkin

Roshni Majumdar Roshni is a writer at DW's online breaking news desk and covers stories from around the world.@RoshniMaj