The fortunes of Latin America’s 73 billionaires have surged by $48.2 billion (£37.87bn) since the beginning of the Covid-19 pandemic while millions of citizens have been left battling sickness, facing extreme economic hardship and struggling to put food on the table, Oxfam said today.
On average one new billionaire has been created every two weeks since March, as the region struggles with one of the world’s worst outbreaks, with many hospitals on the verge of collapse.
Across Latin America, 140 million people, about 55 per cent of the working population, are in the informal economy, and nearly one in five live in overcrowded shanty towns. As many as 52 million people could be forced into poverty in Latin America and the Caribbean as a result of the pandemic, setting the fight against poverty back 15 years.
Rebecca Gowland, Oxfam Head of Inequality Campaign and Policy said “During one of the most desperate times in living memory, when millions of people in the region are struggling to survive, Latin America’s billionaires have watched their total wealth grow by an average of $413 million (£325m) a day.
“While people are dying and facing destitution, sickness and hunger, it is unconscionable that a handful of super-rich are free to leverage yet more power and wealth. The creation of new billionaires while so many are facing hardship is evidence of a broken economy.
“These shocking figures from Latin America are the latest evidence that around the world, Covid-19 is exacerbating existing inequality. We need those who are profiting from the pandemic to pay more for the good of us all.”
Brazil’s 42 billionaires increased their combined net worth from $123.1 billion (£96.71bn) in March to $157.1 billion (£123.43bn) in July, while Chile’s seven richest saw their combined fortunes increase by 27 per cent to $26.7 billion (£20.98bn).
Latin American governments are massively under-taxing the wealthiest individuals and corporations which is undermining their fight against the coronavirus and poverty and inequality. Oxfam estimates that Latin America will lose $113.4 billion (£89.09bn) in tax revenue this year, equivalent to 59 per cent of spending on public health in the region.
Latin America was already the world’s most unequal region. Governments’ efforts there to tackle coronavirus and save lives have been thwarted by the deep-rooted inequality and corruption, and the virus is set to further increase the huge gap between the richest and the rest.
The average investment in health by Latin American countries is four per cent of gross domestic product, half the amount invested by Organisation for Economic Cooperation and Development (OECD) member countries. Decades of privatization and underinvestment have left the region’s public healthcare systems horrifically unprepared and even made them a contributing factor in soaring coronavirus infections.
Gowland added: “Extreme inequality was already trapping millions of people around the world in poverty before the pandemic; these figures show that once again the rich continue to get richer at the expense of everybody else.
“The virus has expanded through Latin America because of inequality, not ill fortune, as epitomised by the region’s huge informal economy and its lack of safety nets. The super-rich owe a huge debt to our societies and it’s more than time they pay their fair share.”
Taxing individuals with fortunes over $1 million (£785,000) to pay between 2 to 3.5 per cent tax depending on their net wealth in 2020, would allow Latin American governments to raise up to $14.2 billion (£11.6bn) in tax revenue, which could be spent on healthcare and social safety nets. The figure is 50 times the amount that is likely to be collected this year from the region’s billionaires.
Notes to editor
Oxfam’s calculations are based on the most up-to-date and comprehensive data sources available. Figures on the very richest in society come from Forbes’ 2020 Billionaires List and Forbes‘ Real-Time Billionaires ranking. We compared the net wealth of Latin American billionaires on 18th March 2020, to their net wealth on 12th July 2020.
During this period, the combined net worth of billionaires in Argentina increased from $8.8 billion (£6.92bn) to $11.2 billion (£8.81bn); in Brazil from $123.1 billion (£96.8bn) to $157.1 billion (£123.54bn); in Colombia from $13.7 billion (£10.77bn) to $14.1 billion (£11.09bn); in Chile from $21 billion (£16.51bn) to $26.7 billion (£21bn); in Peru from $5.2 billion (£4.09bn) to $5.5 billion (£4.33bn); and in Venezuela from $3.4 billion (£2.67bn) to $3.5 billion (£2.75bn).
Only three countries in Latin America have a wealth tax: Argentina (maximum rate of 1.25 per cent), Colombia (1 per cent) and Uruguay (1 per cent).
Oxfam in Latin America’s report: ¿Quién paga la cuenta? is available on request (Spanish and Portuguese only).
Since the pandemic began, Oxfam has reached 4.5 million of the world’s most vulnerable people with food aid and clean water, working together with over 344 partners across 62 countries. We aim to reach a total of 14 million people by raising a further $113 million (£88.86bn) to support our programmes.