Food and agriculture specialist
Since the first wave of Covid-19 pushed countries into lockdown, central banks, mostly in wealthy countries, have printed a $ 9 trillion surplus. Well, the underlying goal was to inject that excess money into the economies affected by the pandemic, which were breathless.
According to economist Ruchir Sharma, chief global strategy strategist at Morgan Stanley Investment Management, this pandemic stimulus has in turn allowed the rich to add to their wealth. âMuch of this stimulus had gone to financial markets and, from there, to the net worth of the ultra-rich,â he wrote (Financial Times, May 16). The total wealth of the super rich has increased over the same period to between $ 5,000 billion and $ 13 trillion. No wonder the markets are bursting with cash, while countries struggle to pull the economy out of the crisis.
The sad irony is that what appears to be an ingenious way to indirectly transfer wealth from public coffers to the pockets of the ultra-rich happened at a time when Brookings estimated that an additional 144 million people in the world, in 2020 , have slipped under the strict respected. poverty line. Using the World Bank and IMF poverty estimates, calculations show that India has outperformed Nigeria when it comes to the largest population of people living in extreme poverty. India added 85 million poor to its huge number who somehow survived below the poverty line. The devastating second wave of Covid-19 could leave an even bigger hole in poverty estimates.
But what we may not realize is that it only takes $ 100 billion to eradicate extreme poverty in the world, a tiny fraction of the pandemic stimulus that has been injected to revive the global economy and which ended up rewarding billionaires by helping them accumulate more wealth. This is not the first time that such astonishing surpluses have been indirectly injected into the hands of the super rich. For a number of years, the central banks of rich countries have been printing excess money. However, what remains unexplained is how come there is all the money for the rich, yet the world is still unable to find enough money to fight poverty.
If only a fraction of the pandemic revival had gone where it was needed – to eradicate poverty, the world would have been much larger
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Meanwhile, the pandemic has further deepened income inequality, pushing it to unpleasant levels. In America, according to the Institute for Policy Study, the combined wealth of its billionaires increased by 44.6% during the pandemic. During the same period, around 80 million people lost their jobs. Either way, America’s top 50 super rich hold as much wealth as the bottom 165 million. In India, income inequality is no less blatant. Just to give you an idea, the average farm income established by the 2013 National Sample Survey Office (NSSO) report, for around 50% of the population largely dependent on agriculture, is a meager Rs 6,426 per months (about half from non-agricultural activities). That is why the protesting farmers demanded a guaranteed income in the form of a guaranteed price for their products.
Compare that with what an Oxfam ‘Inequality Virus Report’ reveals. The combined wealth of Indian billionaires increased by 35% during the pandemic, and to explain how the increase would translate into layman’s terms, the report says that the increase in the wealth of the top 11 billionaires alone is enough to pay off. the work of the MNREGA. ten years. Either way, the richest 1% own four times the wealth of the poorest 953 million.
To understand how an increase in income works wonders for the poor, look at the outcome of this experiment on the feasibility of universal basic income. Two years before the outbreak of the pandemic, in early 2018, the Foundation for Social Change, a charity, along with the University of British Columbia in Canada, donated C $ 7,500 (or US $ 6,206) to 50 homeless families in the Vancouver area. A year later, during which the charity kept an eye on how the money was being used, the results that emerged were not only astounding, but equally encouraging. More or less, the same results were obtained in almost similar types of studies conducted elsewhere.
Contrary to the public perception that the poor are generally thought to have no idea how to handle money, the results clearly showed how wisely they used limited financial support, spending it on basic necessities like food. food, clothing, shelter and more. utilities. According to media reports, while consumption of basic food items increased by 37 percent, the poor actually reduced drug and alcohol use by 39 percent. By quickly settling into housing, these homeless people actually worked to secure a roof over their heads. The study therefore conclusively established the importance of roti, kapda and makaan to poor households all over the world, and their strenuous efforts to achieve it. In other words, these petty cash transfers have the potential to lift the poor out of the clutches of poverty.
Instead, we are seeing more money funneled to the rich through tax breaks, economic stimulus packages, bank write-offs, bailouts, and massive subsidies in the name of growth incentives to spur people on. corporate profits with the mistaken assumption that some of them will. flow to the poor and needy. When it comes to giving the poor their share, the argument is that by putting the excess money directly into the hands of the poor, everyone will have more to spend, resulting in higher inflation.
So the model of economic growth has been very cleverly designed to help widen income inequality and make fat cows bigger. The poor are expected to fend for themselves.