Oxfam: Billions will need a Decade to Recover from Covid-19 Impact

As the world’s richest people recoup losses in just nine months

Nur Jahan and her daughter are walking through the narrow alley beside their tent in a. Rohingya refugee camp in Cox's Bazar, Bangladesh. Oxfam International Photo

While it only took nine months after the Covid-19 pandemic broke out for the world’s richest people to regain what they have lost, Oxfam International said will take a decade for billions of poor people to recover from the economic impacts of the deadly virus.

Major nonprofit group Oxfam International on Monday reported that 1,000 of the world’s richest people have already recovered what they have lost at the onset of the pandemic while billions of impoverished people will suffer the effects of the pandemic in the next decade.

A report entitled The Inequality Virus, published on the opening day of the World Economic Forum’s ‘Davos Agenda’ shows that COVID-19 has the potential to increase economic inequality in almost every country at once – the first time this has happened since records began over a century ago.

With rising inequality, the report explains that it could take at least 14 times longer for the number of people living in poverty to return to pre-pandemic levels than it took for the fortunes of the top 1,000, mostly White male, billionaires to bounce back.

A new global survey of 295 economists from 79 countries, commissioned by Oxfam, also reveals that 87 percent of respondents, including Jeffrey Sachs, Jayati Ghosh, and Gabriel Zucman, expect an ‘increase’ or a ‘major increase’ in income inequality in their country as a result of the pandemic.

Oxfam’s report also shows how the rigged economic system is enabling a super-rich elite to amass wealth in the middle of the worst recession since the Great Depression while billions of people are struggling to make ends meet. It reveals how the pandemic is deepening long-standing economic, racial and gender divides.

Gabriela Bucher, Executive Director, Oxfam International

Gabriela Bucher, Executive Director of Oxfam International, said:

“We stand to witness the greatest rise in inequality since records began. The deep divide between the rich and poor is proving as deadly as the virus.”

“Rigged economies are funneling wealth to a rich elite who are riding out the pandemic in luxury, while those on the frontline of the pandemic —shop assistants, healthcare workers, and market vendors— are struggling to pay the bills and put food on the table,” Bucher said.

Recession is over for the World’s Richest

The world’s ten richest men have seen their combined wealth increase by half a trillion dollars since the pandemic began — more than enough to pay for a COVID-19 vaccine for everyone in the world and to ensure no one is pushed into poverty by the pandemic.

Last year’s Nobel Peace Prize winner, the UN’s World Food Programme, also reported that in the 11 weeks since the March lockdowns started, Amazon.com Inc. founder Jeff Bezos saw his wealth soar by about $36.2 billion, while Facebook Inc. CEO Mark Zuckerberg’s fortune surged by about $30.1 billion. Tesla Inc. Chief Executive Elon Musk’s net worth also rose $14.1 billion.

The US Institute for Policy Studies in June 2020 reported that the combined wealth of America’s billionaires jumped over 19% or half a trillion since the outbreak of the novel coronavirus pandemic.

At the same time, the pandemic has also ushered in the worst job crisis in over 90 years with hundreds of millions of people now underemployed or unemployed.

Europe’s 305 billionaires have seen their fortunes increase by nearly 500 billion euro since March – enough to write a cheque of 11,092 euro to each one of the poorest 10% of Europeans.

Women are the hardest hit

The nonprofit organization also pointed how women are among the most vulnerable sector during the Covid-19 crisis.

Women all over the world are overrepresented in the low-paid precarious professions hit hardest hit by the pandemic.

“Women and marginalised racial and ethnic groups are bearing the brunt of this crisis. They are more likely to be pushed into poverty, more likely to go hungry, and more likely to be excluded from healthcare,” Bucher stressed.

If women were represented at the same rate as men in these sectors, 112 million women would no longer be at high risk of losing their incomes or jobs, the Oxfam report highlighted.

Women also make up roughly 70 percent of the global health and social care workforce − essential but often poorly paid jobs that put them at greater risk of COVID-19.

Inequality is costing lives

Infection and mortality rates are higher in poorer areas of countries such as France and Spain while England’s poorest regions experience mortality rates double that of the richest areas.

In the EU, 74 percent of the highest-paid employees can work from home, compared with only 3 percent of the lowest-paid workers putting them at greater risk of contracting COVID-19.

Chiara Putaturo, Oxfam’s EU inequality and tax policy advisor said: 

“The EU can step up the fight against inequality and build back better by creating a fairer tax system. “

Putaturo also stressed that ordinary Europeans should not have to pick up the bill of COVID-19 through cuts to vital services like healthcare and education.

“Extreme inequality is not inevitable, but a policy choice. Governments around the world must seize this opportunity to build more equal, more inclusive economies that end poverty and protect the planet,” added Bucher.

Fairer economies for quick recovery

Bucher said the fight against inequality must be at the heart of economic rescue and recovery efforts.

“Governments must ensure everyone has access to a COVID-19 vaccine and financial support if they lose their job. They must invest in public services and low carbon sectors to create millions of new jobs and ensure everyone has access to a decent education, health, and social care, and they must ensure the richest individuals and corporations contribute their fair share of tax to pay for it,” the Oxfam executive director said.

“These measures must not be band-aid solutions for desperate times but a ‘new normal’ in economies that work for the benefit of all people, not just the privileged few.”

Putaturo, meanwhile, said that taxation also plays a big role in determining how the people will recover from the pandemic and that the EU must end the practice of ‘tax dodging’  and ensure that large companies like big tech commit their fair share to recovery spending.

“The EU has a unique opportunity to do this through the swift introduction of an effective EU digital tax, public Country by Country Reporting for corporations, and better screening of tax havens in the EU and beyond,” Putaturo said.

A temporary tax on excess profits made by the 32 global corporations that have gained the most during the pandemic could have raised $104 billion in 2020. This is enough to provide unemployment benefits for all workers and financial support for all children and elderly people in low- and middle-income countries.

At the EU level, this amount is almost the equivalent of the EU’s financial support plan for Europeans at risk of unemployment and loss of income due to the pandemic.

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JM Agreda
JM Agreda is a freelance journalist for more than 12 years writing for numerous international publications, research journals, and news websites. He mainly covers business, tech, transportation, and political news for Businessner.