Nationalist Congress Party (NCP) chief Sharad Pawar on Friday came in support of industrialist Gautam Adani on the Adani-Hindenburg row. The Opposition, especially the Congress is targeting Prime Minister Narendra Modi and Adani over the Hindenburg’s report.
NCP Chief Sharad Pawar (File Image) Photo : PTI
New Delhi: Nationalist Congress Party (NCP) chief Sharad Pawar on Friday came in support of industrialist Gautam Adani on the Adani-Hindenburg row. Notably, Pawar’s views are contrary to the Opposition’s take on the issue. The Opposition, especially the Congress is targeting Prime Minister Narendra Modi and Adani over the Hindenburg’s report.
In an interview with NDTV, the NCP president said that undue importance was given to the issue. “Such statements were given by other individuals too earlier and there was a ruckus in parliament for a few days but this time out of proportion importance was given to the issue. The issues that were kept, who kept them, we had never heard of these people who gave the statement, what is the background,” Pawar told NDTV.
Taking a dig at other opposition parties, Pawar said that the ruckus caused over issue was “targeted”. The NCP chief told the media house, “When they raise issues that cause a ruckus across the country, the cost is borne by the country’s economy, we cannot disregard these things. It seems this was targeted.”
“An individual industrial group of the country was targeted, that is what it seems. If they have done anything wrong, there should be an inquiry,” Pawar added. When asked about the Congress demanding a Joint Parliamentary Committee (JPC) over the issue, the NCP president said that he had a different view from his Maharashtra ally.
Every 30 hours, the pandemic spawned a new billionaire, while pushing a million people into poverty. Here’s why.
[Nataliia Shulga/Al Jazeera]Death and devastation are not the only calling cards COVID-19 will be remembered by. The pandemic has also drastically widened inequalities across the globe over the past three years.
According to the Bloomberg Billionaires Index, 131 billionaires more than doubled their net worth during the pandemic. The world’s richest person, Louis Vuitton chief Bernard Arnault, was worth $159bn on December 27, 2022, up by around $60bn compared with early 2020. Elon Musk, the planet’s second-wealthiest man, boasted a $139bn fortune — it was less than $50bn before the pandemic. And India’s Gautam Adani, third on the index, has seen his wealth increase more than tenfold in this period, from approximately $10bn at the start of 2020 to $110bn at the end of 2022.
At the same time, close to 97 million people — more than the population of any European nation — were pushed into extreme poverty in just 2020, earning less than $1.90 a day (the World Bank-defined poverty line). The global poverty rate is estimated to have gone up from 7.8 percent to 9.1 percent by late 2021. Now, skyrocketing inflation is affecting real wage growth, eating into the disposable incomes of people around the world.
To curb rising prices, central banks are reducing the flow of money into the economy by increasing interest rates and withdrawing excess liquidity. But that has again boomeranged on workers, with companies — from tech firms like Amazon, Twitter and Meta to banks like Goldman Sachs — announcing layoffs at the end of an already tumultuous 2022.
Al Jazeera spoke to economists to understand why the rich keep getting richer even amid crises and whether that is inevitable each time there is an economic slowdown.
The short answer: Many countries adopt policies such as tax breaks and financial incentives for businesses to boost economies amid crises like the pandemic. Central banks flood the economy with money to make it easier to lend and spend. This helps the wealthy grow their money through financial market investments. But widening inequality is not unavoidable.
During economic crises, governments take measures to boost financial markets, like the New York Stock Exchange seen here, in turn helping the wealthy with major investments multiply their fortunes [Richard Drew/AP Photo]
Stock market boom
When the pandemic began, central banks across the world swung into action to protect financial markets that took a severe beating as governments started imposing lockdown restrictions.
To save the economy from collapsing, central banks slashed interest rates, thereby lowering borrowing costs and increasing the supply of money. They also pumped trillions of dollars into financial markets with the aim of encouraging companies to invest in the economy. Major central banks have infused more than $11 trillion into the global economy since 2020.
These interventions triggered a boom in the value of stocks, bonds and other financial instruments — but the rise in asset prices wasn’t accompanied by an increase in economic production.
“Instead of leading to more economic output, a bulk of the sudden infusion of money into the financial system led to a dramatic rise in asset prices, including stocks, which benefitted the rich,” Francisco Ferreira, director of the International Inequalities Institute at the London School of Economics (LSE), told Al Jazeera.
A year into the pandemic, capital markets had risen $14 trillion, with 25 companies — mostly in the technology, electric vehicles and semiconductors segment — accounting for 40 percent of the total gains, according to an analysis of stock performance of 5,000 companies by consulting firm McKinsey.
“The result is that this pandemic period has seen the biggest surge in billionaire wealth since the records began,” Oxfam America’s Director of Economic Justice Nabil Ahmed told Al Jazeera. “And we are still coming to terms about how extraordinary that rise has been.”
Billionaires saw their fortunes increase as much in 24 months as they did in 23 years, according to Oxfam’s “Profiting from Pain” report released in May this year. Every 30 hours, while COVID-19 and rising food prices are pushing nearly one million more people into extreme poverty, the global economy is also spawning a new billionaire.
India’s Gautam Adani, centre, is today the world’s third-richest man, and his wealth has multiplied more than tenfold since the start of the pandemic [Rajesh Kumar Singh/AP Photo]
Pre-pandemic factors
To be sure, both income and wealth inequalities have been on the rise since the 1980s when governments across the world began deregulating and liberalising the economy to allow more private sector participation. Income inequality refers to the gulf in the disposable income of the rich and the poor whereas wealth inequality deals with the distribution of financial and real assets, such as stocks or housing, between the two groups.
Among other things, the post-liberalisation period also resulted in declining bargaining power of workers. At the same time, companies increasingly started turning to financial markets to borrow money for their investments, Yannis Dafermos, a senior lecturer in economics at SOAS University of London, told Al Jazeera.
“It is the financialisation of the economy in particular that generated a lot of income for the rich, who invest in financial assets,” Dafermos said. “And whenever an economic crisis strikes, the central banks’ response is to save the financial market from collapsing because it is so much interlinked with the real economy. This helps stock and bond markets to thrive creating more wealth and inequality.”
This is what major central banks did during the global financial crisis in 2008-09 — injecting liquidity into the market through various tools and lowering interest rates to encourage companies to borrow and invest.
“The easy money policy that began after the global financial crisis led to really low to negative interest rates and big liquidity in the financial system,” Jayati Ghosh, professor of economics at the University of Massachusetts Amherst, told Al Jazeera. “So, in the past 15 years, corporations chose to reinvest the money into buying more financial assets chasing high returns, rather than increasing their production.”
Gautam Adani added $49 billion to his wealth last year – more than the net addition of wealth by Elon Musk, Jeff Bezos and Bernard Arnault.
Gautam Adani adds $49 bn wealth in 2021, higher than Jeff Bezos, Elon Musk
New Delhi:
Gautam Adani, India’s and Asia’s second-richest person, added $49 billion to his wealth last year – more than the net addition of wealth by the top three global billionaires Elon Musk, Jeff Bezos and Bernard Arnault, the 2022 M3M Hurun Global Rich List said on Wednesday.
Mukesh Ambani, who runs the oil-to-retail conglomerate Reliance Industries, continues to be the richest Indian with a wealth of $103 billion, a 24 per cent rise year on year.
Adani, the head of the ports-to-energy conglomerate Adani Group, is a close second, with his wealth surging 153 per cent to $81 billion.
In the last 10 years, while Ambani’s wealth has grown 400 per cent, Adani has seen a 1,830 per cent increase, the list said.
HCL’s Shiv Nadar is ranked third with USD 28 billion wealth, followed by Serum Institute’s Cyrus Poonawalla (USD 26 billion) and steel magnate Lakshmi N Mittal ($25 billion).
“Gautam Adani, 59, is the biggest gainer in the M3M Hurun Global List 2022 and added USD 49 billion to his wealth last year,” M3M Hurun Global Rich List said in a statement. His net wealth addition is “more than top three global billionaires such as Elon Musk, Jeff Bezos and Bernard Arnault.”
