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The Economic and Social Commission for West Asia (ESCWA) said the total wealth of the Arab region’s 31 richest billionaires – all men – is roughly equivalent to that of the poorest half of its adult population.
The ESCWA added – in a study published today on its website – that inequality will increase due to the effects of the Coronavirus, but 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 total household wealth in the region.
The committee pointed out that the Arab region is the only developing region where low-income poverty has increased over the past decade and the study expected this general poverty to affect around one third of the population of Arab countries. middle and least developed income, or 115 million people in 14 countries, after it was affecting 66 million people in 2010.
The study attributed the cause of the increase in poverty in the region to conflicts and economic depression and expected that the situation would worsen due to a pandemic.
COVID-19.
The new study is part of a series of studies to evaluate 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 adopting a solidarity tax on wealth of 1.2%, based on the fact that the cost of bridging the poverty gap in these countries rises to $ 15.6 billion in 2020, but is modest relative to the wealth of the band The richest decimal is estimated to be $ 1.3 trillion.
The executive secretary of the committee, Rola Dashti, stressed “the need to implement pro-poor initiatives that are supported by the richest decile and have a direct positive impact on the most vulnerable social groups”.
Dashti called for the establishment 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 – ESCWA says – the real estate sector attracts large investments, but contributes little to tax revenues.
The study also suggested establishing a fair and progressive tax system, backed by strong political will and institutional capacity, which would lead to raising the revenue needed to fight poverty without imposing additional financial burdens.
ESCWA stressed that this solidarity tax is not appropriate for less developed Arab countries 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 poverty eradication, which increases the need for other financial policies to generate revenue and, above all, for foreign aid. .
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