During a pandemic, the rich are getting richer and the poor are getting poorer. In short, inequality is widening. This is Oxfam's research.
tirto.id The research institute Oxfam stated that the COVID-19 pandemic has caused inequality in the world to increase. In short, the Corona virus is making the rich even richer while the poor are getting poorer.
In a research entitled “The Inequality Virus”, Oxfam noted that the wealth of the world's 1.000 billionaires had dropped from US$9.150 billion in February 2020 to US$6.432 billion in March 2020. However, in just nine months or as of November, the wealth of billionaires has returned. to the level of 9.139 billion US dollars.
In other words, over a period of less than a year, the world's billionaires managed to add to their wealth of 2.707 billion US dollars. Of course with a thick note that it happened when the economy and business were sluggish due to the pandemic.
If the wealth is distributed evenly, then the amount is more than enough to withstand the increase in poverty caused by the pandemic. Oxfam estimates the cost of preventing 226 million people from falling below the poverty line (US$5,5 per day) as predicted by the World Bank at only US$88 billion.
Governments around the world must work hard to prevent inequality from worsening due to COVID-19, Oxfam said. They predict if Gini ratio or the inequality gauge worsens by only 2 percent, there is the potential for an additional 501 million people living below the poverty line. As a result, it will take more than 10 years for the poverty rate to return to pre-pandemic levels. Oxfam predicts that without adequate intervention, the number of poor people in the world in 2030 (3,4 billion) will remain higher than the level in 2019 (3,2 billion).
“We are witnessing the biggest jump in inequality since the calculations began. The gap between the poor and the rich has proven to be as deadly as the COVID-19 virus," said Gabriela Bucher, Executive Director of Oxfam International.
In Indonesia, indications in that direction have been seen. According to Forbes, the wealth of billionaires continued to increase as of December 2020 compared to December 2019. The Hartono Brothers, for example, increased their wealth from US$37,7 billion to US$38,8 billion. Meanwhile, the Widjaja family in second place, their assets increased from 9,6 billion US dollars to 11,9 billion US dollars. On the other hand, BPS noted that the average wage for salaries/labor/employees as of August 2020 alone had fallen by 5,2 percent, from Rp. 2,89 million to Rp. 2,76 million.
Another indication, Gaikindo data records sales of premium and luxury brands are relatively low unaffected because the upper class society is quite strong economically. Sales such as BMW only fell 16,7 percent. Meanwhile, brands such as Toyota, which are more dominantly used by the lower-middle class, fell by 44,8 percent.
Head of the Center of Macroeconomics and Finance Institute for Development of Economics and Finance (Indef) Rizal Taufikurahman said that before the pandemic, inequality in Indonesia was real, seen from the Gini ratio which is still quite high even though it has decreased over the last 10 years.
“Before COVID-19, the distribution was slow. As a result of the pandemic, of course, inequality will widen again," Rizal told reporters Tirto, Wednesday (27/1/2021).
The Gini ratio as of March 2020 is still in the range of 0,381 after dropping from March 2011 at around 0,410. The value that has been reduced with difficulty is not much different from the position as of March 2009 which reached 0,376 points.
BPS data also shows that in the last five years the top 20 percent of the population controlled more than 45 percent of total national expenditure. Meanwhile, 40 percent of the poor consistently control only about 17 percent.
Association Social Policy Researcher PRAKARSA Eka Afrina Djamhari said it was increasingly difficult to avoid a worsening of inequality due to the impact of the pandemic which hit almost all sectors in average. In contrast to the 1998 and 2008 crises, MSMEs and the lower middle class really had difficulty obtaining income because the pandemic required restrictions on activities.
He was also not surprised that in March 2020 poverty had increased from 9,22 percent to 9,78 percent, even though the pandemic was only announced in mid-March. Poverty will certainly increase if you take into account the impact of the surge in unemployment from 7,1 million to 9,77 million as of August 2020, along with a 5,2 percent decline in the income of workers in Indonesia.
Unfortunately, the government has responded less than optimally to the various facts on the ground. For example, data on social assistance (bansos) which only reaches the poor but does not include those who are close to touching the poverty line, let alone the victims of layoffs. Not to mention that the social assistance received by the community has also been reduced due to corruption.
Unfortunately, last year, the government cut corporate taxes from 25 percent to 23 percent. Then it continues again this year by 21 percent. For those who are already listed on the stock exchange, the tax can still go down again up to 17 percent.
According to Eka, this policy will clearly be enjoyed by the upper class. At the same time, state revenues fell and the government's ability to contain the widening of inequality was increasingly limited. Not to mention a long series of tax relaxations and other policies meant to ease the burden on entrepreneurs.
“Inequality is clearly going to be more prevalent in Indonesia, not just European countries. Definitely," concluded Eka to reporters Tirto, Wednesday.
Finance Minister Sri Mulyani once said that the government had made various efforts to prevent the worst impact of the pandemic for the lower classes. The former Managing Director of the World Bank stated that without various government assistance, the poverty rate could certainly worsen from what is currently recorded.
"Had the government not taken this step, the prediction of poverty could soar above 10,2 percent," Sri Mulyani said in a virtual hearing with Commission XI of the Indonesian House of Representatives, Wednesday.
A study by the Fiscal Policy Agency (BKF) also noted that government assistance had succeeded in preventing the spending of the poorest households from falling. For example, initially COVID-19 caused a decline of up to 6,3 percent but government aid raised up to 8,3 percent.
Sumber: Tirto.id
