World’s richest men get richer in 2023, poor get poorer

 

By Abimbola Tooki

The combined fortunes of the world's five richest men have more than doubled their wealth to $869 billion since 2020 while five billion people have been made poorer within the same timeframe, a latest report by Oxfam, anti-poverty group, has said.

The report, which comes as business elites gather this week for the annual World Economic Forum (WEF) meeting in Davos, found that a billionaire is now either running, or is the main shareholder of, 7 out of 10 of the world's biggest companies.

At the instance of Nigeria’s President Bola Ahmed Tinubu, Senator Kashim Shettima, Vice President, has departed Abuja to represent Nigeria at the 2024 annual meeting of the World Economic Forum scheduled to hold in Davos, Switzerland from January 15 to 19, this year.

Top on Shettima’s agenda, apart from the plenary session, is the launch of the Private Sector Action Plan for African Continental Free Trade Area (AfCTA) at a special session to be co-chaired by him. 

He is also billed to hold high-level discussions with the Managing Director of IFC, Makhtar Diop and the Prime Minister of Vietnam, Pham Minh Chinh, among others. 

Also on the sidelines of the annual meeting, Shettima will chair a roundtable dialogue on Nigeria’s economic path and also attend a special session dedicated to building trust in the global energy transition programme. 

Oxfam called on governments to rein in corporate power by breaking up monopolies; instituting taxes on excess profit and wealth; and promoting alternatives to shareholder control such as forms of employee ownership.

Aliko Dangote, a prominent Nigerian businessman and the founder of the Dangote Group, is indeed a major player in various sectors of the Nigerian economy, including cement production, sugar refining, and other industries.

His companies have significant market shares in these sectors, which has led to some concerns about potential monopolistic practices and the impact on competition.

Monopolies, or near-monopolies, can indeed stifle competition and potentially limit opportunities for other businesses to thrive.

This has led to higher prices for consumers, reduced innovation, and barriers to entry for new competitors. It has brought negative effects on the overall economy by impeding growth and reducing consumer choice.

The Oxfam report estimated that 148 top corporations made $1.8 trillion in profits, 52 percent up on three-year average, allowing hefty pay-outs to shareholders even as millions of workers faced a cost of living crisis as inflation led to wage cuts in real terms.

"This inequality is no accident; the billionaire class is ensuring corporations deliver more wealth to them at the expense of everyone else," Amitabh Behar, Oxfam international interim executive director, said.

The Davos events were launched to champion "stakeholder capitalism", which the WEF says defines a corporation as being not just about maximising profits but fulfilling "human and societal aspirations as part of the broader social system".

Oxfam said its report, based on data sources ranging from the International Labour Organization and World Bank to the Forbes annual rich list, showed such aspirations were far from being fulfilled.

"What we know for sure is that today's extreme system of shareholder capitalism, which puts ever-increasing returns to rich shareholders above all other objectives, is driving inequality," said Max Lawson, head of inequality policy.

The inflation-adjusted surge in wealth of the top five billionaires was driven by strong gains in the assets of Tesla CEO Elon Musk, LVMH chief Bernard Arnault, Amazon's Jeff Bezos, Oracle co-founder Larry Ellison and investor Warren Buffett.

Meanwhile nearly 800 million workers saw their wages over the past two years fail to keep up with inflation, resulting on average in the equivalent of 25 days of lost annual income per worker, according to Oxfam's analysis.

Of the world's 1,600 largest corporations, just 0.4% of them have publicly committed to paying workers a living wage and to supporting a living wage in their value chains, the study found.

Davos predicts precarious year ahead

The global economy faces a year of subdued growth prospects and uncertainty stemming from geopolitical strife, tight financing conditions and the disruptive impact of artificial intelligence, a survey of top economists released today found.

Conducted each year ahead of the World Economic Forum's (WEF) annual meeting in the Swiss resort of Davos, the survey of 60-plus chief economists drawn globally from the private and public sectors attempts to sketch priorities for policymakers and business leaders.

Some 56 per cent of those surveyed expect overall global economic conditions to weaken this year, with a high degree of regional divergence. While majorities saw moderate or stronger growth in China and the United States, there was broad consensus that Europe would muster only weak or very weak growth.

The outlook for South Asia and East Asia and Pacific was more positive, with very high majorities expecting at least moderate growth in 2024.

Reflecting commentary from the world's top central banks suggesting that interest rates have peaked, a full 70 per cent of those surveyed nonetheless expected financial conditions to loosen as inflation ebbs and current tightness in labour markets eases.

Some economic analysts in Nigeria, while reflecting on the report, said it is important for government and regulatory bodies to monitor and address anticompetitive practices to ensure fair and open markets.

This can involve enforcing antitrust laws, promoting market competition, and preventing the abuse of market power by dominant companies.

In the case of Dangote's businesses, it's essential for Nigerian authorities to ensure that competition laws are upheld and that the market remains open to other players. At the same time, it's important to recognize the positive contributions that Dangote's companies have made to the Nigerian economy, including significant investments, job creation, and infrastructure development.

Balancing the need for competition with the benefits of large-scale investments and industry development is a complex challenge. Ultimately, fostering a business environment that encourages competition while supporting responsible and sustainable business growth is crucial for the long-term health of the economy.