Inequality shot up during the pandemic, as did number of billionaires: Oxfam

A new report by Oxfam released on May 23 says that inequality and extreme poverty shot up globally during the two years of the Covid pandemic. The report, titled ‘Profiting from pain’, also observes that during this period, 573 new billionaires were created across the world.

“The combined crises of Covid-19, rising inequality and rising food prices could push as many as 263 million people into extreme poverty in 2022, reversing decades of progress. This is the equivalent of one million people every 33 hours,” notes the report, which begins with, “This is inequality that kills, contributing to the death of at least one person every four seconds. Only the richest are immune.” 

Oxfam notes, after analysing data from Forbes Rich List 2020 and 2022, that the time it takes to push a million people into extreme poverty was similar to what it took to create a single billionaire during the pandemic.

What does this mean for India?

While 102 Indians made it to Forbes Billionaires List in 2020, the number is 166 in 2022. Going by Oxfam’s assessment methodology, India created a billionaire every 11 days in the last two years — India now has the third highest number of billionaires after the US and China.

At the same time, the World Inequality Report 2022, published by the Paris School of Economics, calls India one of the most unequal countries. It notes that the top 10 per cent and top 1 per cent in India hold 57 per cent and 22 per cent of the total national income, respectively, while the bottom 50 per cent hold 13 per cent of it.

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However, an IMF working paper and a world bank report say that extreme poverty reduced in India during the pandemic.

Pharma giants

The Oxfam report also notes that the richest 10 men have greater wealth than the poorest 40 per cent of humanity combined. It also says that the income of 99 per cent of humanity fell because of Covid-19, with the equivalent of 125 million full-time jobs lost in 2021.

Oxfam’s study says that the food, oil, pharma and tech sectors have made the most during the pandemic.

“The pandemic has created 40 new pharmaceutical billionaires, 98 profiting from the monopolies their companies hold over vaccines, treatments, tests, and personal protective equipment,” it says.

While the report concentrates on the growth of Moderna and Pfizer, vaccine giant Cyrus Poonawalla — the founder of Serum Institute of India — became the richest billionaire in the healthcare sector in 2022, according to the Hurun Global Healthcare Rich List 2022. In two years, Poonawalla’s wealth grew by 217 per cent to $26 billion.

Causes and solutions

“As Covid-19 spread, central banks injected trillions of dollars into economies worldwide, aiming to keep the world economy afloat. This was essential because it prevented a total economic collapse. Nevertheless, in turn, it dramatically drove up the price of assets and with this, the net worth of billionaires and the asset-owning classes. An enormous increase in billionaire wealth has been the direct by-product of this cash injection,” the report notes.

It concludes with “more equality is the way out of this crisis”, and asks governments to tax the rich more stringently and permanently. 

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