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Should Billionaires Pay?

The inherent justification of the rich paying for societal issues stems from inequality. Financial inequality is an unfortunate truth around which the world has no answers. But what remains disturbing is its degree the top 1 per cent owns 43 per cent of global wealth, the ratio is worse regionally for developing and underdeveloped nations. Oxfam reports on inequality state that the Covid pandemic has made the world more unequal


Recently, the World Food Programme (WFP) director David Beasley proposed a one-time payment by billionaires to save 42 million facing the threat of imminent death from hunger. He suggested that billionaires like Elon Musk and Jeff Bezos part with only a fraction of their wealth to do so. Specifically, 2 per cent of Elon Musk’s wealth amounting to USD 6.6 Billion would do the trick, Beasley proposed.

This started a twitter feud; Musk responded by demanding from the WFP an exact plan with timeline guaranteeing “end to world hunger”. Beasley clarified that ending world hunger is a larger issue while what he proposed was saving 42 million from imminent starvation. Following this, WFP released a plan titled “A one-time proposal to billionaires” seeking $6.6 Billion to save 42 million from famine. The proposal provides a breakdown of the sum including expenses for food and its delivery, cash and food vouchers, operations management and administration. This engagement between WFP and Musk propels to centre stage the humanitarian crisis of world hunger. Thus, the question we face is: should billionaires pay for world hunger? The answer is in the affirmative.

The answer finds justification in the acute financial inequality prevalent worldwide with a strong causal relation with hunger. However, no silver bullet exists for issues as mammoth and complex as world hunger. Policy-makers must evade the temptation to get caught up in rhetoric and silver bullet solutions and assiduously examine the core facts at play. The solution for world hunger is not a binary between available funding or otherwise. Beyond the binary lies the issue of insufficient funding plaguing actions against hunger to a large degree, but only to a degree nonetheless. Other issues are of a more systemic nature.

The United Nation’s Food and Agricultural Organization (FAO) understands hunger as “an uncomfortable or painful physical sensation caused by insufficient consumption of dietary energy”. FAO refers to hunger as undernourishment and uses its Prevalence of Undernourishment indicator to estimate world hunger and monitor United Nations Sustainable Development Goal 2 (UN SDG2) with it as well. UN SDG2 targets Zero Hunger by 2030. Current estimates consider more than 700 million people to be facing hunger.

It is understood that SDG2 is not only off track but approximately 840 million will face hunger by 2030. Further, WFP estimates show that currently 282 million people are experiencing “extreme levels of acute hunger”. While WFP flags funding as the primary issue, other studies also showcase the causal link of lack of funding with world hunger Food security finds recognition in relevant international instruments. Article 25 of Universal Declaration of Human Rights, 1948 (UDHR) states “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food”.

The International Covenant on Economic, Social, and Cultural Rights, 1966 (ICESCR) recognizes under Article 11(2) “the fundamental right of everyone to be free from hunger”. States enforce the obligation through national legal frameworks, for example, India’s National Food Security Act, 2013. India’s National Food Security Act endeavours to provide subsidized food grain to ensure food security. The Act covers 75 per cent of the rural and 50 per cent of the urban population, together approximately two thirds of the total population.

The Act’s enforcement banks on the national Public Distribution System (PDS). Relevantly, during the pandemic hit year 2020-21, India paid its highest food subsidy bill ever of Rs 5.3 trillion, a fivefold increase from the previous year. Yet, India’s ratification of relevant international instruments and national legal framework has not ensured the desired results. Global Hunger Index (2021) by Welthungerhilfe gave India its lowest ever rank of 101 out of 116 countries surveyed (calculated on four indicators ~ undernourishment, child wasting, child stunting, and child mortality).

FAO’s report The State of Food Security and Nutrition in the World 2020 estimates 190 million to be undernourished in India ~ 14 per cent of the population. Systemic issues for prevalent hunger include storage issues amongst others, resulting in anomalies like more food procured than distributed. Incidentally, 2020-21 is the year of record food grain production by India. Thus, the legal framework doesn’t guarantee eradication of hunger, even with high expenditure.

International Food Policy Research Institute (IFPRI) in a published brief has estimated annual costs ranging from $7 billion to $265 billion for tackling world hunger. The range is on the basis of various models of tackling hunger proposed by institutions including WFP, IFPRI, and World Bank. A German government-backed study in 2020 has estimated such annual cost to be even higher at $330 billion. We must note that these estimations are on an annual basis and not a one-time payoff. The estimates are calculated on the basis of the cost of certain actions. These actions include controlling food wastage, improving storage of perishable food items, improving health and sanitation to make food intake efficient, and limiting crop damage.

Other actions argued are climate smart agriculture and bridging gender inequality. Given the large costs estimated coupled with the financial handicap of hunger-stricken nations, the world looks at the exorbitant profits of billionaires with hope. Global commitment along with a legal framework (at international and national levels) are established to address world hunger. Leading institutions put forth annual cost estimates to address world hunger. WFP unequivocally states the need for funds but systemic issues beyond funding prevail; at regional levels India is a case in point.

With this understanding, we now explore the liability of billionaires to fund actions to tackle hunger. Why should billionaires pay? Maybe WFP director Beasley was making a “nudge” for philanthropy by billionaires, philanthropy being discretionary and not a duty. As such, no profit-seeking individual is liable beyond the letter of the law applicable to it such as corporate taxes, labour regulations etc.

However, the legal liability of Corporate Social Responsivity (CSR) directs certain corporate profits for social causes. Such funding, should it be made, maybe characterized as an action somewhere between discretionary philanthropy and duty-bound CSR. The inherent justification of the rich paying for societal issues stems from inequality.

Financial inequality is an unfortunate truth around which the world has no answers. But what remains disturbing is its degree ~ the top 1 per cent owns 43 per cent of global wealth, the ratio is worse regionally for developing and underdeveloped nations. Oxfam reports on inequality state that the Covid pandemic has made the world more unequal. One report highlights that the world’s richest thousand individuals have recouped pandemic losses within nine months whereas the world’s poorest may take more than a decade to do the same.

The causal effect of inequality on hunger has been recognized. FAO report State of Food Security and Nutrition in the World 2019 states that such causal effect is 20 per cent higher for low-income countries as compared to middle income countries. Further, the report states that for countries with high income inequality, severe food insecurity is three times higher than those with low-income inequality. The converse has been recognized as well, addressing hunger reduces inequality. Here we must note recent and popular financial aid by billionaires, say the ambitious $10 billion Bezos Earth Fund for climate change launched in February 2020. Currently, under $1 billion has been granted to the Fund. Interestingly, some argue that these actions are calculated risks for popularity among consumers for ultimate financial gain.

However, we are not concerned with the intention of billionaires as much as we are with the solution of the global issue. Actions against world hunger showcase systemic issues depriving those suffering from hunger from favourable results. India’s experience at the regional level is a case in point. However, funding remains the core issue, the proposed rectification being immediate payment of large estimated sums by the affluent living with excess money. Such payment finds justification in prevalent acute financial inequality further exacerbated by the pandemic. Should the likes of Elon Musk and Jeff Bezos empty a fraction of their pockets for the purpose, we must hope that WFP and like institutions together with national governments will come through in ensuring the funds’ most efficient usage.

(The writer is an Advocate practising law in New Delhi and an alumnus of the
National University of Juridical Sciences, Kolkata)