Latin American billionaires surge as world’s most unequal region buckles under coronavirus strain

The fortunes of Latin America’s 73 billionaires surged by $48.2 billion since the beginning of the pandemic even as the region buckles as one of the worst-hit regions in the world, said Oxfam today. 

The region minted on average one new billionaire every two weeks since March while millions of citizens have been left battling sickness, extreme economic hardships and struggling to put food on the table during lockdowns, with hospitals on the verge of collapse.

Brazil’s 42 billionaires increased their combined net worth from $123.1 billion in March to $157.1 billion in July, while Chile’s seven richest saw their combined fortunes increase by 27 percent to $26.7 billion.

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 in tax revenue this year, equivalent to 59 percent of spending on public health in the region. 

“While everyone else is locked down, trying to survive and living in fear of getting sick, Latin American billionaires were doubling down on their fortunes and privileges to the tune of over $413 million for each and every day of the pandemic so far”, said Oxfam International Interim Executive Director Chema Vera.

“Billionaires never had to worry about being evicted for not paying their rent or having to tell their children there is nothing to eat today. Instead they invested in more stocks, bonds, gold and real estate, like they did after the global economic crisis of 2008 and 2011.

“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. Without action to change our economic systems, governments are throwing petrol into the fire of protest against social injustices now sweeping the world.”

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. 

Despite ordering one of Latin America’s swiftest and most aggressive nationwide lockdowns, even before France and the UK, Peru has more than 366,550 recorded cases and a death toll of 13,767, the second hardest-hit country in Latin America after Brazil and now one of the world’s worst coronavirus hotspots.

More than 70 percent of Peruvians work day-to-day for cash in the informal economy, with no proper contracts or benefits, job security or sick pay. Since the beginning of lockdown on 16 March, 2.3 million people living in Lima, Peru’s capital, have lost their jobs and ability to feed their families and 200,000 have fled cities on foot to their home villages in the countryside, some taking the virus with them. At the same time, the wealthiest two Peruvians saw their combined fortune surge by 6 percent to $5.5 billion and Peru minted two more new billionaires. 

Peru’s government scrambled to help the poorest families survive by providing cash transfers of $100, but inequality made the worst of good intentions.  

“Only 42 percent of Peruvians aged 15 years or older have a bank account and the majority of aid recipients, the country’s poorest, are excluded from the banking system. They had no choice but to go in-person to the bank, where the dense queues became a thriving ground for coronavirus. Beating the pandemic means beating inequality. It also means putting a stop to privileges and free passes for the fortunate few,” said Vera.

Peru’s lockdown shuttered all businesses except for providers of food, medicine and other essential services. However, just a week later, large mining, oil and agribusiness companies circumvented the order, arguing their vital and strategic importance and promising to comply with strict sanitary measures. But many failed to implement minimal risk mitigation measures. Copper mine Antamina has reported 210 positive coronavirus cases, while 90 percent of employees at palm oil company Ocho Sur who tested in early June were positive —a huge threat to nearby Indigenous communities, which are among the most underserved by Peru’s public healthcare system and who fear a heavy death toll. In the Amazon region where the company operates, there are fewer than eight doctors per 10,000 people.

Across Latin America, 140 million people, about 55 percent of the working population, are in the informal economy, and nearly one in five live in overcrowded shantytowns. 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. 

In a region where already one in three women are affected by gender-based violence, stay-at-home orders have led to an upsurge in reports of domestic violence and murders of women and girls. In Argentina, at least 81 women have been murdered under lockdown since March 20.

The average investment in health by Latin American countries is 4 percent of GDP, 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. 

For the more than 5 million Venezuelan migrants living in the region, the pandemic is a double crisis. After fleeing economic and political chaos, millions have found themselves jobless because of lockdowns. Many are undocumented and have fallen through the cracks of government responses, unable to qualify for cash transfers or access healthcare services. Desperate and often homeless after being unable to pay rent, 80,000 have retraced their steps through the Andes to head home, where even before the pandemic one in three Venezuelans was facing hunger. 

Getting individuals with fortunes over $1 million to pay between 2 to 3.5 percent tax depending on their net wealth in 2020 would allow Latin American governments to raise up to $14.2 billion in tax revenue, which could be spent on healthcare and social safety nets. The figure is 50 times the amount that is likely be collected this year from the region’s billionaires.  

“The virus has expanded through Latin America not because of indiscipline, but because of inequality as epitomised by the region’s huge informal economy and its lack of safety nets, and by governments under-taxing those with the most wealth. People face a dilemma: stay home and starve or risk trying to make a living. The super-rich owe a huge debt to our societies and it’s more than time they pay their fair share,” said Vera.