Profiting from pain
OXFAM International, the global confederation which includes 21-member organisations working to eliminate economic inequalities, disclosed on May 23 its calculation that the pandemic created a new billionaire every 30 hours — but that millions of people are likely to fall into extreme poverty at the same rate in 2022.
The activist agency said in the release issued this week, “As the cost of essential goods rises faster than it has in decades, billionaires in the food and energy sectors are increasing their fortunes by $1 billion every two days.”
“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,” said Gabriela Bucher, executive director of Oxfam International.
Among other recommendations, Oxfam is proposing that governments urgently “Introduce one-off solidarity taxes on billionaires’ pandemic windfalls to fund support for people facing rising food and energy costs and a fair and sustainable recovery from COVID-19. It is believed the super-rich have stashed nearly $8 trillion in tax havens.”
The Oxfam brief shows that 573 people became new billionaires during the pandemic and added that in 2022, another 263 million more people will enter extreme poverty, at a rate of a million people every 33 hours.
Oxfam said that the total wealth of the world’s billionaires is now equivalent to 13.9 percent of global gross domestic product (GDP). This is a three-fold increase (up from 4.4 per cent) in 2000.
The agency notes that simultaneously, “millions of others are skipping meals, turning off the heating, falling behind on bills and wondering what they can possibly do next to survive.”
Oxfam’s release stated that its 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.
Energy billionaires
“The fortunes of food and energy billionaires have risen by US$453 billion in the last two years, equivalent to $1 billion every two days. Five of the largest energy companies (BP, Shell, TotalEnergies, Exxon and Chevron) are together making $2,600 profit every second, and there are now 62 new food billionaires,” it was noted.
Meanwhile, from Sri Lanka to Sudan, record-high global food prices are sparking social and political upheaval, Oxfam noted.
It added, “60 per cent of low-income countries are on the brink of debt distress. While inflation is rising everywhere, price hikes are particularly devastating for low-wage workers whose health and livelihoods were already most vulnerable to COVID-19, particularly women, racialized and marginalised people. People in poorer countries spend more than twice as much of their income on food than those in rich countries”
Oxfam outlined, “The pandemic has created 40 new pharma billionaires. Pharmaceutical corporations like Moderna and Pfizer are making $1,000 profit every second just from their monopoly control of the COVID-19 vaccine, despite its development having been supported by billions of dollars in public investments.”
The pharma giants are calculated to be charging governments up to 24 times more than the potential cost of generic production.
Oxfam calls for Governments to put an end to crisis profiteering by introducing a temporary excess profit tax of 90 per cent to capture the windfall profits of big corporations across all industries. Oxfam estimated that such a tax on just 32 super-profitable multinational companies could have generated $104 billion in revenue in 2020.
Oxfam is also recommending that governments “introduce permanent wealth taxes to rein in extreme wealth and monopoly power, as well as the outsized carbon emissions of the super-rich.”
It proposes, “An annual wealth tax on millionaires starting at just 2 per cent, and five per cent on billionaires, could generate US$2.52 trillion a year — enough to lift 2.3 billion people out of poverty, make enough vaccines for the world, and deliver universal health care and social protection for everyone living in low- and lower middle-income countries.”