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Economy

Brazil, Where The Wealth Divide Is Particularly 'Obscene'

Symmetry in Sao Paulo
Symmetry in Sao Paulo
Clóvis Rossi

-Op-Ed-

SAO PAULO —Â Two studies published in recent months show how inequality around the world is becoming even more obscene than before.


One such study is the UBS report on the rich that focuses on capital. The figures involved are predictably shocking, but one element in particular caught our attention: The wealth owned by the ultra-rich (those owning at least $30 million in assets, who represent just 0.004% of the world's adult population) grew by an average 6.6% every year between 1992 and 2012.


These people saw their wealth rise at a similar rate as the booming Chinese economy, despite the fact that during part of this period of time, between 2008 and 2011, most of the world was mired in a deep financial crisis.


As for the workers, on the other hand, John Evans, a top official on trade at Paris-based OECD commented in a recent forum that "Governments and international institutions are not changing a business model drives profits up but still won't provide a minimum living wage of $177 a month in Cambodia or $120 in Bangladesh."


Sharan Burrow, the International Trade Union Confederation's General Secretary went further and said that "the rule for working people is uncertainty: low income, insecure jobs with little or no social protection are the reality for too many families."

None of this is new, of course. But it's still shocking, especially when we take a closer look at the data for Brazil. Despite still being generally considered a poor country, Brazil ranks tenth for the number of millionaires, higher than rich countries such as Spain or Switzerland. .

Brazil v. USA

What's even more obscene, that group grew faster than in any other country in the world between 2013 and 2014, except for China. In that period, the number of millionaires shot up by about 350%. For the sake of comparison, in the United States, where the concentration of rich and ultra-rich is still higher than anywhere else on Earth, that number grew by a mere 20%.


Again, we're talking about a time when the economy is largely stagnating. But as we saw with the figures published by UBS, the global economic slowdown didn't even scratch those at the top.


Unbelievably, there are still people in Brazil who believe that Lula da Silva's and Dilma Rousseff's Workers' Party has reduced inequality. It hasn't.


What was reduced, if that's actually what happened, was the wage difference among different employees — but not the difference between the rate of capital accumulation and wages.


I must confess that I'm growing tired of working on this subject, but it wouldn't be honest to just walk away from it at a time when even the "rich-country club" OECD publishes a report damning its own members. In the words of John Evans: "Rising income inequality is no longer just an ethical or normative issue — it has very tangible economic costs."

Not only does a deep wealth divide prevent a bona fide recovery from the crisis of the last decade, it limits opportunity for a new generation. In other words, steep income inequality affects not just the present, but our future.

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Geopolitics

How Ukraine Keeps Getting The West To Flip On Arms Supplies

The open debate on weapon deliveries to Ukraine is highly unusual, but Kyiv has figured out how to use the public moral suasion — and patience — to repeatedly shift the question in its favor. But will it work now for fighter jets?

Photo of a sunset over the USS Nimitz with a man guiding fighter jets ready for takeoff

U.S fighter jets ready for takeoff on the USS Nimitz

Pierre Haski

-Analysis-

PARIS — In what other war have arms deliveries been negotiated so openly in the public sphere?

On Monday, a journalist asked Joe Biden if he plans on supplying F-16 fighter jets to Ukraine. He answered “No”. A few hours later, the same question was asked to Emmanuel Macron, about French fighter jets. Macron did not rule it out.

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

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Visiting Paris on Tuesday, Ukrainian Defense Minister Oleksïï Reznikov recalled that a year ago, the United States had refused him ground-air Stinger missiles deliveries. Eleven months later, Washington is delivering heavy tanks, in addition to everything else. The 'no' of yesterday is the green light of tomorrow: this is the lesson that the very pragmatic minister seemed to learn.

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