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The Economic and Social Commission for Western Asia (ESCWA) said the total wealth of the Arab region’s richest 31 billionaires – all of whom are men – is roughly equivalent to that of the poorest half of its adult population.
ESCWA added – in a study published on its website today – that inequality will increase due to the effects of the coronavirus, but it can be reduced through a properly designed solidarity tax.
The Arab region suffers from inequality, with the wealth of the richest 10% of adults accounting for over 75% of the total household wealth in the region.
The committee pointed out that the Arab region is the only developing region in which poverty resulting from low income has increased over the past decade, and the study predicted that this general poverty would affect about a third of the population of Arab countries. middle-income and least developed, 115 million people in 14 countries, after reaching 66 million people in 2010.
The study attributed the reason for the increase in poverty in the region to conflict and economic depression, and expected the situation to worsen due to the pandemic.
Covid19.
The new study is part of a series of studies to assess the impact of the Corona virus that ESCWA is preparing to support Arab countries in their joint efforts to mitigate the effects of this global epidemic.
Solidarity tax
ESCWA explained in its study that it is possible to save millions of people in middle-income countries from the clutches of poverty by enacting a 1.2% wealth solidarity tax, based on the fact that the cost of reducing the poverty gap in these countries amounts to $ 15.6 billion in 2020, but it is modest compared to the wealth of the bracket. The richest decimal number is estimated at $ 1.3 trillion.
The Executive Secretary of the Committee, Rola Dashti, underlined “the need to implement pro-poor initiatives which are supported by the richest decile and have a direct positive impact on the most vulnerable social groups”.
Dashti called for the creation of a regional social solidarity fund to accelerate the mitigation of the repercussions of the Covid-19 pandemic, meet humanitarian needs and address food shortages in the countries most at risk.
In most Arab countries – says ESCWA – the real estate sector attracts large investments, but contributes little to tax revenues.
The study also suggested the establishment of a fair and progressive tax system, supported by strong political will and institutional capacities, which would lead to the collection of the income necessary to fight poverty without imposing additional financial burdens.
ESCWA stressed that this solidarity tax is not appropriate for Arab countries which are the least developed and those affected by conflict, as the wealth of the richest segment of the population of these countries is not sufficient to cover the cost of eradicating poverty, which increases the need for other financial policies to generate income, and especially for foreign aid. .
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