The crisis arising out of the Coronavirus ate the jobs of tens of crores of people on one hand and the wealth of a handful of billionaires on the other hand, during this time, reached a new height.
Covid-19 has widened the gap between rich and poor in the whole world including India. According to a recent Oxfam report, during this crisis, the wealth of billionaires of the country has increased by about 35 per cent. It also means that if the wealth of 100 richest people of India has earned money since March last year, if it is distributed among the poorest 13.8 crore people of the country, then each of them will get about 94 thousand rupees. Mukesh Ambani, who emerged as the richest person in India and Asia during the Coronavirus crisis, earned an average of Rs 90 crore per hour. According to Oxfam, this increase in their wealth could keep about 40 crore workers in the unorganized sector out of the poverty line for at least five months.
Coronavirus crisis has increased income inequality, this is not being confirmed for the first time. Some time ago Bloomberg released its list of the 500 richest people in the world. It was also revealed that the year has gone by has been a nightmare for most of the people of the world, it has been fantastic for the Dhankubers. During 2020, his wealth has increased by 23 per cent, ie $ 13 trillion. Elon Musk, the owner of the American electric car company Tesla, broke all records in this case. He added more than $ 100 billion in his wealth last year. By the time the news was written, this figure has been more than $ 175 billion and with assets of $ 200 billion, he has become the richest person in the world. On the other hand, the wealth of Mukesh Ambani, head of Reliance Industries, increased by about $ 22 billion last year. He is currently the 11th richest person in the world with a net worth of about $ 80 billion.
This is a staggering contradiction. Coronavirus has shrunk the economy of every country of the world including India. The work of millions of people has been destroyed. The jobs of tens of crores of people have gone away. On the other hand, money is being shed in the houses of Dhankubers by splashing thatch. It is also interesting to note that according to a report by Switzerland-based bank UBS and famous accounting firm PricewaterhouseCoopers, the greatest increase in the wealth of the world’s billionaires occurred during April to July 2020, when the coronavirus was at its peak. . At the same time, jobs of crores of people were going away and there were many people eating food in their homes. But at the same time, the wealth of these moneylenders increased by 27.5 per cent. If we take the example of America, which is called world power, due to the epidemic, more than four crore people have lost their jobs so far, while the wealth of American billionaires has increased by more than 637 billion dollars.
The question arises as to how this happened. Before understanding this, it is important to know that this is not happening for the first time. Eight of the first 10 names of Bloomberg’s list are American, so understand it from the example of America itself. In 2007, there was a financial crisis in America. The reason for this was that the indiscriminate loans that banks had distributed in the real estate sector were drowned. Due to the tsunami created by this financial crisis, the stock market there had given a dive of 50 per cent. By the end of 2009, about 9 million people lost their jobs. 80 per cent of Americans have still not fully recovered from the impact of that crisis. But in the case of Dhankubers, the story is reversing. If you look at the figures from 2009 to 2012, during this period, the income of 99 per cent of Americans increased by only 0.4 per cent, but for the richest one per cent people, this figure was 31.4 per cent. The total wealth of the 400 richest people of America has increased by more than 80 per cent since then. It means to say that disasters have been an opportunity for the rich before and often.
Now we understand the reason behind the phenomenal increase in wealth of top Dhankubers last year. At the beginning of 2020, when the coronavirus was declared a global pandemic, there was a furore in the stock markets of the world at that time. There were reports of historical decline from all sides. But soon this trend reversed and today the stock markets of all the countries of the world including India are at historic heights. This has directly benefited Dhankubers whose market capitalization of companies has increased.
For example, if you look at Amazon, the big name of online retail sector, the shares of the company have registered a growth of more than 50 percent since March last year. The head of the company Jeff Bezos sits second in the list of world’s rich with assets of $ 194 billion. He added more than $ 74 billion to this figure in 2020. Something similar has happened with Facebook, which has seen an increase of more than $ 30 billion in the wealth of its chief, Mark Zuckerberg. Zuckerberg, with assets of $ 102 billion, is ranked fifth on the list of moneylenders.
At the beginning of 2020, when the coronavirus was declared a global pandemic, there was a furore in the stock markets of the world at that time. There were reports of historical decline from all sides. But soon this trend reversed
If we look carefully at this trend, then the first thing is understood that these are the same companies that have benefited from the situation arising from the coronavirus. For example, due to the fear of epidemic people reduced the number of people going out shopping, online retail companies like Amazon became twelve. Similarly, during the lockdown, the internet became a big support for the people locked in the houses, then companies like Reliance Jio and Facebook benefited from it. The same can be said about companies operating in the health sector. Take Serum Institute of India, which is one of the largest vaccine manufacturer companies in the world. The vaccine for Coronavirus developed by Astra Janeca and Oxford University is being produced by the Serum Institute in India. The company’s owner Cyrus Poonawala ranks fifth in the world in the list of billionaires whose wealth grew at the fastest pace during the peak of Coronavirus infection. He is currently ranked 165th on the Forbes list with a net worth of about $ 15.8 billion. He is the sixth richest person in India.
The wealth of such businessmen has also increased drastically during this period, which is known for reversing the established equations of their respective regions. Take the example of Elon Musk. In the case of electric cars, the founder of Tesla, the leader, has grown more than $ 100 billion in assets last year. Tesla has been consistently in profit for the last five quarters and its production has been steadily increasing. It is believed that it can completely change the picture of the decade-old automobile industry. This is the reason why his stock is constantly flying high.
On the other hand, in India, Mukesh Ambani, the head of Reliance Industries, is known for changing all the equations of the Indian telecom sector through Jio. The company was continuously advancing even before the corona epidemic and it is believed that in doing so, it has got the support of the present government as well. Reliance Jio, which was launched just four years ago, is on top in the Indian telecom market with 37 crore subscribers today. One reason for this is that during the Corona period, many veterans, including Facebook, bought 33 per cent stake in it by investing about Rs 1.5 lakh crore in it. That is, investors are taking such companies hands-on which are considered to be the companies of the future in the changed circumstances and as a result, the weight of their owners’ bag is constantly increasing.
According to experts, the riches of the world’s richest people continue to live during times of economic turmoil because they get more help from the power system than other classes. For example, during the financial crisis of 2008, a law called Emergency Economic Stabilization Act was passed in America. Its purpose, as the name suggests, was to halt economic instability. Under this law, the government planned to spend $ 700 billion. Under this, the assets were to be bought from banks whose value had fallen considerably due to the economic crisis. Of this, only $ 75 billion went to reduce the interest charged on loans given to home buyers. That is, about 90 per cent of the relief given by the government went to the accounts of banks and big companies. Whereas the common people had to operate only 10 per cent. A similar imbalance was seen in other cases as well.
As a result, when the stock markets started climbing again after the decline, the rich had money in their hands. He invested it in the market and made a lot of profit. The reason for the stock market’s rise was that due to the economic crisis, the US central bank Federal Reserve had reduced the short-term interest rates to almost zero. For the next decade, these rates remained almost the same. Due to this, the boom that started in the US stock market in 2009 continued till the arrival of an epidemic in March 2020. During this period, the index S&P 500, made up of the shares of the 500 largest companies listed on the US stock markets, rose 462 per cent. This means that if someone had invested $ 1 million in these companies in 2008, their value would have reached $ 46 lakh 200 in March 2020. Not surprisingly, according to a report, from 2009 to 2020, the total wealth of America’s billionaires had increased by more than 80 per cent.
Now let’s talk about the current era. In 2019, a report by the Federal Reserve said that 40 per cent of Americans who do not have so much money in their savings account can afford it if there is a sudden expenditure of $ 400 (about 30 thousand rupees). After this, due to the Coronavirus crisis, the situation got worse. In the early months of 2020, there were reports that about 40 million people have become unemployed in the US and many small jobs have stopped due to lockdown. To help these traders, the US government announced a relief of $ 349 billion. Under this, a scheme named ‘Pay Check Protection Program’ was made. In this, companies were to be given loans without any guarantee. The special thing was that this loan could also be completely forgiven. The condition was that after receiving this money, the company should not have fired an employee for six months and spent at least 60 per cent of the debt on salary. The interest on spending the loan amount for some other item was just one per cent.
According to experts, the riches of the world’s richest people continue to live during times of economic turmoil because they get more help from the power system than other classes.
But according to experts, this time the same thing happened in 2008. A large part of this amount was grabbed by big businessmen. The combination of the ‘Pay Check Protection Program’ and the fall in interest rates resulted in the heaping stock market in March reaching new heights by June. Due to this, the wealth of seven of the world’s richest people increased by more than 50 per cent in just a few months.
This happens everywhere in the world. Members of a prominent association of businessmen in India tell Satyagraha on the condition of anonymity, ‘In the time of Corona crisis, thousands of crores were announced for businessmen like us, but the benefit would be given only to those close to the power system is. A large part of the needy is still left unturned. ‘
That is, many moneylenders have the resources of the government besides themselves to turn a disaster into an opportunity. This can be understood by another example. Revenue-related laws in the US are such that Amazon did not have to pay anything tax in 2017 and 2018, while its domestic profit doubled to $ 11 billion during this period. In 2019, he paid only 16.2 million dollars in tax, which was just 1.2 per cent of the company’s earnings that year. Not only this, statistics show that since 1980, the tax paid by billionaires has decreased by 79 per cent. And this reduction has come only through the legal measures that rich people use to avoid paying tax. According to an estimate, money equivalent to 10 per cent of the world’s GDP has been kept in the countries known as heaven to save tax.
These signs are not right. According to experts, the rise of the rich and the rich and the poor and the poor suggests that capitalism is not working properly. Some time ago Raghuram Rajan, former governor of the Reserve Bank, warned that capitalism is in danger because the common people have stopped getting its benefits. According to him, the increasing inequality in society cannot be ignored. Other experts believe that the transfer of property to the hands of a few people to this extent is not only morally wrong, but it can also have disastrous consequences in terms of economic and social terms. In conversation with Luke Hillard the Guardian, executive director of the famous think tank High Pay Center, “billionaires have so much wealth that even if they live extreme luxury for many lifetimes, it will not end.” If someone is earning so much money, then he can comfortably increase the salary of the employees who create this wealth. Or he can contribute more to the tax so that the government can improve the facilities available to the public. ”Luke further says that this will not reduce the wealth of these rich people. But except for the names of Bill Gates and Warren Buffet, who gave a large part of their wealth for social welfare, most of the Dhankubers seem to be far behind on this front.
Many people like Raghuram Rajan believe that if this gap between rich and poor increases, social instability will increase as a result. According to some experts, if this goes on like this, then these billionaires are sure to become villains in the eyes of society and this has started appearing in many parts of the world including India. “We are at a critical juncture,” says Joseph Stadler, head of a UBS department that advises Dhankubers on investment. We have returned to where we were in 1905 in order to shrink wealth into the hands of a handful of people. ”According to him, the point of view now is how long it will last and at which point the society will react decisively against it.
Can this process be stopped? According to a recent report by the famous American think tank Institute for Policy Studies, many steps need to be taken for this. For example, such rules should be made by which Dhankuber cannot hide his earnings by making paper companies. Also, tax should be levied on the rich and shut down the economy that operates in the world in a secret manner. Every year from America alone, about 200 billion dollars go to the countries known as tax havens. This amount is almost three times more than the money that the US government has allocated for the education sector in 2021. Oxfam has also made several suggestions in its report, such as a re-imposing a special tax on the rich.
But what if this does not happen and the current trend continues? Many experts believe that in such a situation the world can again go towards medieval and feudalism. According to him, it would be a world where a handful of people would be running the world with the help of top lawyers, accountants and managers and a large section of the population working on a modest income would have been living in some way while being exploited.