Billionaires’ wealth rose more during Covid-19 pandemic than in 23 years combined

THE COVID-19 PANDEMIC has created a new billionaire every 30 hours and now one million people could fall into extreme poverty at the same pace, Oxfam said today as the Davos summit returns.

The international charity said it was time to tax the rich to support the less fortunate as the global elite gathered at the Swiss mountain haven for the World Economic Forum after a two-year Covid-induced absence.

Billionaires’ wealth rose more in the first 24 months of Covid-19 than in 23 years combined, according to the report Profiting from Pain.

The total wealth of the world’s billionaires is now equivalent to 13.9% of global GDP, up from 4.4% in 2000.

Oxfam said it expects 263 million people to sink into extreme poverty this year, at a rate of one million every 33 hours, as soaring inflation has added a cost-of-living crisis on top of Covid.

By comparison, 573 people became billionaires during the pandemic, or one every 30 hours.

“Billionaires are arriving in Davos to celebrate an incredible surge in their fortunes,” Oxfam executive director Gabriela Bucher said in a statement.

“The pandemic and now the steep increases in food and energy prices have, simply put, been a bonanza for them,” Bucher said.

“Meanwhile, decades of progress on extreme poverty are now in reverse and millions of people are facing impossible rises in the cost of simply staying alive,” she said.

Solidarity tax

Oxfam has called for a one-off “solidarity tax” on billionaires’ pandemic windfall to support people facing soaring prices as well as fund a “fair and sustainable recovery” from the pandemic.

It also said it was time to “end crisis profiteering” by rolling out a “temporary excess profit tax” of 90% on windfall profits of big corporations.

Oxfam added that an annual wealth tax on millionaires of 2%, and 5% for billionaires, could generate $2.52 trillion (about €2.4 trillion) a year.

Such a wealth tax would help lift 2.3 billion people out of poverty, make enough vaccines for the world and pay for universal health care for people in poorer countries, it said.

Oxfam based its calculations on the Forbes list of billionaires and World Bank data.

Ireland

Commenting on the report, Jim Clarken, CEO of Oxfam Ireland, said: “Billionaires arriving in Davos have seen an incredible surge in their fortunes. Simply put, the pandemic followed by the steep increases in food and energy prices have been a bonanza for them.

“Meanwhile, decades of progress on ending extreme poverty are now in reverse and millions of people are facing impossible rises in the cost of simply staying alive.”

The wealth of Ireland’s nine billionaires has increased by €15.55 billion since the start of the pandemic, a 44% increase bringing it to €51 billion, Oxfam said. Latest figures show that 691,587 people in Ireland are experiencing deprivation, of which 204,710 are children.

Oxfam’s new research also reveals that corporations in the energy, food and pharmaceutical sectors — where monopolies are especially common — are posting record-high profits, even as wages have barely budged and workers struggle with decades-high prices amid Covid-19.

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The fortunes of food and energy billionaires have risen by $453 billion in the last two years, equivalent to $1 billion every two days. Five of the largest energy companies are together making $2,600 profit every second, and there are now 62 new food billionaires.

In Ireland, five of the best-known Irish energy companies had combined yearly profits of €280 million. Yearly inflation for energy products in Ireland is 43.6%. While food inflation in Ireland is currently at 3.5% in consumer price figures, wholesale prices are likely to push figures higher in the near future.

“It is unconscionable that some are profiteering from the pandemic and its aftermath while others are trying to choose between paying their energy bills or going hungry,” Clarken said.

“Billionaires’ fortunes have not increased because they are smarter or working harder. Workers are working harder, for less pay and in worse conditions. The super-rich have rigged the global system with impunity for decades and they are now reaping the benefits.

“They have seized a shocking amount of the world’s wealth as a result of privatisation and monopolies, gutting regulation and workers’ rights while stashing their cash in tax havens — all with the complicity of governments.”

Clarken said that while billionaires are increasing their wealth, “millions of others are skipping meals, turning off the heating, falling behind on bills and wondering what they can possibly do next to survive”.

“Across East Africa, one person is likely dying every minute from hunger. This grotesque inequality is breaking the bonds that hold us together as humanity. It is divisive, corrosive and dangerous. This is inequality that literally kills.

“Government leaders in Davos face a choice: act as proxies for the billionaire class who plunder their economies or take bold steps to act in the interests of their great majorities.”

- © AFP 2022 with reporting by Órla Ryan