Friday, October 16, 2020

The rich get richer, the poor get poorer


“Extreme poverty” is defined as living on less than $1.90 a day. So somebody who has 5 cents more income - $1.95 a day - is no longer living in extreme poverty. Such is the poverty of statistics and its distance from actual reality. 

 phenomenal rise in extreme poverty has been accompanied by an upsurge in the incomes of the world’s billionaires and the super-rich. The paradox of poverty amidst plenty is being blamed largely on the coronavirus pandemic which has driven millions, mostly in the developing world, into a state of perpetual poverty.

The rich are getting richer and the poor poorer.

The world’s total population is around 7.8 billion, and according to the UN, more than 736 million people live below the international poverty line. A World Bank report last week said extreme poverty is set to rise this year, for the first time in more than two decades, while the impact of the spreading virus is expected to push up to 115 million more people into poverty. The pandemic, which is also compounding the forces of conflict and climate change, has already been slowing poverty reduction, the World Bank said. By 2021, as many as 150 million more people could be living in extreme poverty.

In contrast, the wealth of the world’s billionaires reached a new record high in the middle of the pandemic, primarily as “a rebound in tech stocks boosting the fortunes of the global elite”, according to a report released last week by UBS Global Wealth Management and PwC Switzerland. Providing a sheaf of statistics, the report said total wealth held by billionaires reached $10.2 trillion last July, described as “a new high”, compared with $8.9 trillion in 2017. The number of billionaires worldwide has been estimated at 2,189, up from 2,158 in 2017. The rising earnings were mostly from three sectors, including tech, health care and industry—a trend accelerated by the pandemic.  billionaires have seen their fortunes hit record highs during the pandemic, with top executives from technology and industry earning the most. The world’s richest saw their wealth climb 27.5% to $10.2tn (£7.9tn) from April to July this year, according to a report from Swiss bank UBS.

Professor Kunal Sen, Director of UN University World Institute for Development Economics Research (UNU-WIDER), told IPS the pandemic is going to push millions of households into poverty, all around the developing world.

The projected rise in poverty has also undermined one of the UN’s 17 Sustainable Development Goals (SDGs) which had targeted the eradication of extreme poverty and hunger by 2030.

Ben Phillips, author of ‘How to Fight Inequality’, told IPS the concentration of wealth amongst a handful of oligarchs, and the spread of impoverishment to hundreds of millions more people, are not the disconnected coincidences that the super-rich claim, but are two sides of the same bad penny. He said COVID-19 has not created obscene inequality, but it has supercharged it. In this systemic crisis, the healing impact of philanthropy will be no greater than a novelty sticking plaster on a gaping wound.

Dereje Alemayehu, Executive Coordinator, Global Alliance for Tax Justice, told IPS inequality is rising in every country; so also, is the income of billionaires. These are causally linked.

“Multinationals and the wealthy do not pay their share of taxes, thus depriving countries the public revenue needed to address inequality.”

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