The coronavirus crisis may have driven millions of people out of work globally, but the rebound in stock and other asset prices from the depths of a steep plunge has pushed up the wealth of the richest to even more dizzying heights, a survey published on Wednesday shows.
While the authors of the survey say today’s newly minted billionaires – many of whom are involved in cutting-edge technology and healthcare – are making the world a better place, critics have argued that their surging wealth is a cause of growing social and political instability.
The combined wealth of the world’s billionaires reached $10.2 trillion at the end of July, surpassing the previous peak of $8.9 trillion at the end of 2017, the survey by Swiss bank UBS and consultancy giant PwC showed.
The total number of billionaires now stands at 2,189, up from 2,158 in 2017, it said.
The jump in their wealth is mostly due to the surge in asset prices from March, shortly after governments around the world started imposing lockdowns to curb the spread of the coronavirus.
The measures briefly sent stocks tumbling to their lowest levels in years, but central banks swiftly stepped in to provide trillions of dollars to support commercial banks and borrowers. Those moves encouraged investors to dive back into stocks.
From a nearly four-year low in March, the MSCI All-Country World Index of stocks has bounced by 41 percent.
The great polarisation
Most of the gains have been among technology and healthcare companies, as investors bet on the prospects of companies involved in developing vaccines and therapies against the coronavirus.
“Fortunes are polarising as business innovators and disruptors deploy technology to be among the leaders of today’s economic revolution,” the authors of the report say. “During 2018, 2019 and the first seven months of 2020, entrepreneurs in the tech, healthcare and industrials sectors pulled ahead. The COVID-19 storm accelerated the divergence.”
Billionaire entrepreneurs involved in technology saw their wealth surge by 41 percent, closely followed by a 37-percent jump in the fortunes of health industry leaders, according to the survey.
Geographically, mainland Chinese entrepreneurs have enjoyed the greatest surge in wealth, with a 1,146 percent explosion between 2009 and this year, far ahead of the second-biggest gain – in France – of 439 percent. Wealthy Americans became 170 percent richer.
And the world’s wealthiest have also been giving to charitable causes in record amounts, with 209 billionaires donating $7.2bn between March and June, the vast majority coming from the United States.
UBS and PwC say a new generation of billionaires looks set to play a crucial role in repairing the damage of the coronavirus crisis.
“Using the growing repertoire of emerging technologies, tomorrow’s innovators will digitise, refresh and revolutionise the economy. Whether intentionally or not, this has the potential to help bridge financial, social and environmental deficits,” they said.
‘A rigged economic model’
But not everyone agrees that the growing number of billionaires is a force for good.
Global charity Oxfam, a leading campaigner against widening inequality, said in a report published last month that 32 of the world’s largest companies stand to see their profits jump by $109bn in 2020 “as the COVID-19 pandemic lays bare an economic model that delivers profits for the wealthiest on the back of the poorest”.
“COVID-19 has been tragic for the many but good for a privileged few,” Oxfam International’s executive director Jose María (Chema) Vera said.
“The economic crisis we are suffering because of the pandemic has been fuelled by a rigged economic model. The world’s largest corporations are making billions at the expense of low wage workers and funnelling profits to shareholders and billionaires – a small group of largely white men in rich nations,” Vera said.
And some have even criticised the growing amount of money that billionaires are giving away.
“Philanthropy is not the answer but is becoming another extension of private power and interests,” wrote Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, a progressive US-based think-tank, in a report published in August.