Covid-19: The widening inequality between rich and poor
Even though Covid-19 pandemic has had overwhelming consequences on the lives and livelihoods of individuals across the world, the health crisis has been a boon for the richest. It’s obvious that the effect of the global health emergency has been uneven.
Millions have died and the global economy has contracted pushing more people into poverty. Yet the fortunes of the planet’s richest have seen an astronomical rise over the past year. Since the outbreak of the pandemic, the poor have become poorer and the rich richer.
While the richest countries may have been hit harder by the pandemic, they will be able to recuperate much faster than underdeveloped countries, further widening the gap between rich and poor nations with serious implications for world peace.
An Oxfam report released last month and titled The Inequality Virus has made some astonishing revelations about the troubling economic disparity in the times of pandemic. Hundreds of millions of people have lost their jobs and are finding it hard to survive, the rich have remained the least affected. It is projected that the total number of people living in poverty could be increased by between 200M to 500M in 2020.
The pandemic has deteriorated the existing inequality not only among countries and within countries but also between the rich and the poor. As UN Secretary General António Guterres said: “While we are all floating on the same sea, it’s clear that some are in super yachts, while others are clinging to the drifting debris.”
But, despite the slump in the global economy, billionaires’ wealth worldwide increased by a staggering $3.9 trillion between March 18 and Dec 31, 2020. According to the report by World Economic Forum, the world’s 10 wealthiest billionaires have seen an increase in prosperity by $540bn over this period. These figures show their cumulative wealth standing at $11.95tr. The top 25 US corporations earned 11 per cent more profits in 2020 compared with the previous year.
In US, billionaire Elon Musk and Jeff Bezos increased their net wealth by $128.9bn and $78.2bn respectively in this period. But it is not only American billionaires who got wealthier. India’s richest man Mukesh Ambani also saw his wealth double, reaching $78.3bn between March and October 2020.
“During that period, the average increase in Ambani’s wealth in just over four days represented more than the combined annual wages of all of Reliance Industries’ 195,000 employees,” according to the Oxfam report. From being the 21st richest person on Earth he now occupies the sixth-richest slot. Interestingly, India has been among the countries hardest hit by the pandemic with its economy facing its worst recession since independence.
It is almost the same story in other parts of the world. According to Oxfam, between March and August 2020, billionaires in the Middle East and North Africa increased their wealth by 20pc, which amounts to more than double the IMF’s emergency financing to the region for the same period. Meanwhile, the sales of private planes grew as commercial travel was banned.
This grotesque concentration of wealth has come at a huge human cost. While it took just nine months for the top billionaires’ fortunes to return to pre-Covid-19 levels, for the world’s poorest, economic recovery could take more than a decade, the report points out.
This situation could have easily been avoided. As pointed out by the report, “the increase in the 10 richest billionaires’ wealth since the crisis began is more than enough to prevent anyone on Earth from falling into poverty because of the virus, and to pay for a Covid-19 vaccine for everyone”. Unfortunately, this won’t happen in the existing world order which favors the wealthy.
This pandemic has exposed the extreme inequality that exists in today’s world. Billions of people were before now were living below the poverty line. Over 3bn people reportedly did not have healthcare privilege, and three-quarters of workers had no social protection access. That made them more susceptible to the impact of the contagion. The circumstances appear even dire as disparity increases.
There is no probability of people living in poverty returning even to pre-crisis level for over a decade which makes this situation extremely depressing that has serious political and social implications. Inequality means that more people are sick, fewer are educated and fewer live happy and dignified lives. Great discriminations in income poison our politics and drive extremism and racism. It leaves many more people living in fear and hopelessness.
Constituting one-fourth of the total world population, South Asia is most vulnerable to the pandemic’s impact. It will be the developing countries in Asia and Africa that would be most affected by the looming catastrophe.
According to a UNDP analysis of 70 countries, the virus may see an additional 490m people falling into poverty. In such a scenario, decades of progress will be reversed, retarding development and pushing tens of millions back into the cycle of poverty.