Brazil, Where The Wealth Divide Is Particularly 'Obscene'

Symmetry in Sao Paulo
Symmetry in Sao Paulo
Clóvis Rossi


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 â€" 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 â€" 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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Iran-Saudi Arabia Rivalry May Be Set To Ease, Or Get Much Worse

The Saudis may be awaiting the outcome of Iran's nuclear talks with the West, to see whether Tehran will moderate its regional policies, or lash out like never before.

Military parade in Tehran, Iran, on Oct. 3


LONDON — The Iranian Foreign Ministry spokesman Saeed Khatibzadeh said earlier this month that Iranian and Saudi negotiators had so far had four rounds of "continuous" talks, though both sides had agreed to keep them private. The talks are to ease fraught relations between Iran's radical Shia regime and the Saudi kingdom, a key Western ally in the Middle East.

Iran's Foreign Minister Hossein Amirabdollahian has said that the talks were going in the right direction, while an Iranian trade official was recently hopeful these might even allow trade opportunities for Iranian businessmen in Saudi Arabia. As the broadcaster France 24 observed separately, it will take more than positive signals to heal a five-year-rift and decades of mutual suspicions.

Agence France-Presse news agency, meanwhile, has cited an unnamed French diplomat as saying that Saudi Arabia wants to end its costly discord with Tehran. The sides may already have agreed to reopen consular offices. For Saudi Arabia, the costs include its war on Iran-backed Houthis rebels fighting an UN-recognized government in next-door Yemen.

The role of the nuclear pact

Bilateral relations were severed in January 2016, after regime militiamen stormed the Saudi embassy in Tehran. Amirabdollahian was then the deputy foreign minister for Arab affairs. In 2019, he told the website Iranian Diplomacy that Saudi Arabia had taken measures vis-a-vis Iran's nuclear pact with the world powers.

It's unlikely Ali Khamenei will tolerate the Saudi kingdom's rising power in the region.

He said "the Saudis' insane conduct toward [the pact] led them to conclude that they must prevent [its implementation] in a peaceful environment ... I think the Saudis are quite deluded, and their delusion consists in thinking that Trump is an opportunity for them to place themselves on the path of conflict with the Islamic Republic while relying on Trump." He meant the administration led by the U.S. President Donald J.Trump, which was hostile to Iran's regime. This, he said, "is not how we view Saudi Arabia. I think Yemen should have been a big lesson for the Saudis."

The minister was effectively admitting the Houthis were the Islamic Republic's tool for getting back at Saudi Arabia.

Yet in the past two years, both sides have taken steps to improve relations, without firm results as yet. Nor is the situation likely to change this time.

Photo of Iranian Supreme Leader Ali Khamenei in 2020

Iranian Supreme Leader Ali Khamenei in 2020

Riyadh's warming relations with Israel

Iran's former ambassador in Lebanon, Ahmad Dastmalchian, told the ILNA news agency in Tehran that Saudi Arabia is doing Israel's bidding in the region, and has "entrusted its national security, and life and death to Tel Aviv." Riyadh, he said, had been financing a good many "security and political projects in the region," or acting as a "logistical supplier."

The United States, said Dastmalchian, has "in turn tried to provide intelligence and security backing, while Israel has simply followed its own interests in all this."

Furthermore, it seems unlikely Iran's Supreme Leader Ali Khamenei will tolerate, even in this weak period of his leadership, the kingdom's rising power in the region and beyond, and especially its financial clout. He is usually disparaging when he speaks of Riyadh's princely rulers. In 2017, he compared them to "dairy cows," saying, "the idiots think that by giving money and aid, they can attract the goodwill of Islam's enemies."

Iranian regime officials are hopeful of moving toward better diplomatic ties and a reopening of embassies. Yet the balance of power between the sides began to change in Riyadh's favor years ago. For the kingdom's power has shifted from relying mostly on arms, to economic and political clout. The countries might have had peaceful relations before in considerably quieter, and more equitable, conditions than today's acute clash of interests.

For if nuclear talks break down, Iran's regime may become more aggressive.

Beyond this, the Abraham Accord or reconciliation of Arab states and Israel has been possible thanks to the green light that the Saudis gave their regional partners, and it is a considerable political and ideological defeat for the Islamic Republic.

Assuming all Houthis follow Tehran's instructions — and they may not — improved ties may curb attacks on Saudi interests and aid its economy. Tehran will also benefit from no longer having to support them. Unlike Iran's regime, the Saudis are not pressed for cash or resources and could even offer the Houthis a better deal. Presently, they may consider it more convenient to keep the softer approach toward Tehran.

For if nuclear talks with the West break down, Iran's regime may become more aggressive, and as experience has shown, tensions often prompt a renewal of missile or drone attacks on the Saudis, on tankers and on foreign shipping. Riyadh must have a way of keeping the Tehran regime quiet, in a distinctly unquiet time.

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