MENA billionaires’ wealth increased by $10 billion, enough to pay Beirut blast repair bill
The 21 billionaires in the Middle East and North Africa (MENA), all of them men, saw their wealth increase by nearly $10 billion USD since the start of the COVID-19 crisis, almost double the estimated amount required to rebuild Lebanon's shattered capital, while 45 million more people in the region could be pushed to poverty as a result of the pandemic, a new Oxfam report revealed today.
The report, For a Decade of Hope Not Austerity in The Middle East and North Africa also showed that since March, the region’s richest have amassed more than double the regional emergency funds provided by the International Monetary Fund (IMF) to respond to the pandemic, and almost five times the United Nation’s COVID-19 humanitarian appeal for the region.
“The pandemic has exposed the deep inequalities and massive failures in the region’s economic systems, which left millions without jobs, healthcare, or any kind of social security, and enabled billionaires’ fortunes to surge more than 63 million USD per day since the beginning of the pandemic,” said Nabil Abdo, Oxfam in MENA’s senior policy advisor.
“Unless governments immediately prioritise people over profits and the rich pay their fair share, millions more people will be pushed to the brink of poverty and denied their basic rights. For too long profit has been prioritised at the expense of the public good and safety. The result of this could not be starker in the aftermath of the catastrophic explosion in Beirut, which has further exposed the fragility of the economy and will only exacerbate existing inequalities.
Governments in the region need to act quickly and raise revenues to protect the most vulnerable in society. In Lebanon, if a solidarity net wealth tax had been introduced last year at a rate of five per cent, a 3.7 billion USD of revenues would have been generated to help rebuild the electricity and water infrastructure and provide services to keep people safe in the aftermath of the blast.
Before the virus hit, the MENA region was already one of the most unequal in the world; and Covid-19 has now further deepened the gap between the rich and the poor. 76 per cent of the region’s income goes to just 10 per cent of the population, with 37 billionaires owning as much wealth as the poorest half of the adult population.
If Jordan, Lebanon, Egypt and Morocco had implemented a two per cent wealth tax from 2010, these countries could have raised $38 billion in tax revenues, which could have been invested in improving public healthcare and rebuilding social protection systems.
At the same time, measures to protect the poor have fallen short. It is estimated that only 11 per cent of stimulus packages in the region focused on social protection and health measures. Against this backdrop, an estimated 89% of the region’s 16 million informal workers have been severely affected by pandemic measures. Foreign investment is also projected to drop by 45 per cent and 1.7 million people are expected to lose their jobs, 700,000 of them women, costing $42 billion in lost wages.
“The crushing austerity in recent years could have been avoided if the wealthiest in the region had paid more tax, a cost they can easily afford. This alternative could have given countries more flexibility on their spending policies and crucially, seen the region enter the coronavirus crisis with less inequality and debt”, added Abdo.
To avoid millions more being pushed to the brink of poverty, the region’s governments must urgently adopt deliberate inequality-busting policies like healthcare and education for all, and must raise the minimum wage and taxing wealth fairly to build better, more equal economies and societies.
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Notes to the editors
- Oxfam partnered with Wealth X who provided wealth data for four countries (Jordan, Lebanon, Morocco and Egypt). 6,168 individuals in 2010 with a net wealth above $5m had a combined net worth of $195.5bn, while by end of 2019 that had grown to 7,665 individuals with a combined net wealth of $221.5bn: an increase of 13.27%.
- 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’ Billionaires List and Forbes' Real-Time Billionaires ranking. We compared the net wealth of MENA billionaires on March 18, 2020, to their net wealth on August 16, 2020.
- PWC has estimated the cost of damage to 30 - 40 buildings destroyed, 3,400 buildings uninhabitable and 40,000 total buildings affected to be 5 billion USD
- Download the full report here