Inequality damages economies, is divisive and can lead to social unrest, Oxfam International said on Monday.
SA is one of the world’s most unequal societies, with a Gini coefficient of 0,63 in 2011 — a coefficient of zero means a country has complete equality and all households earn exactly the same.
"Whilst a certain level of inequality may benefit growth by rewarding risk takers and innovation, the levels of inequality now being seen (globally) are in fact economically damaging and inefficient," Oxfam said in a report released on the eve of the World Economic Forum in Davos this week.
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The charity said the poorest people in the world could be lifted out of poverty several times over should the richest 100 billionaires give away the money they made last year.
"They limit the overall amount of growth, and at the same time mean that growth fails to benefit the majority. Consolidation of so much wealth and capital in so few hands is inefficient, because it depresses demand," the report, titled The Cost of Inequality: How Wealth and Income Extremes Hurt Us All, said.
Oxfam associate country director for SA Jose Barahona said the report was very relevant for SA, where inequality was increasing.
"In SA inequality has gone up in the last 20 years, despite government’s efforts (to reverse this trend)," he said.
Oxfam noted the World Economic Forum is highlighting inequality as one of the top global risks of 2013, and the International Monetary Fund terms inequality dangerous, divisive and a possible route to civil unrest.
The Oxfam report found that the world’s richest 1 percent had increased their incomes by 60 percent in the past 20 years, with the financial crisis accelerating rather than slowing the process.
It called on world leaders to curb income extremes and commit to reducing inequality to at least 1990 levels.
Article continues on page two: inequality is not as socially damaging as poor service delivery...