The world’s billionaires “did extremely well” during the COVID-19 pandemic, growing their already huge fortunes to a record high of US$10.2 trillion.
A report by Swiss bank UBS Group AG found that billionaires increased their wealth by 27.5 percent at the height of the crisis from April to July, just as millions of people around the world lost their jobs or were struggling to get by on government schemes.
The report found that billionaires had mostly benefited from betting on the recovery of global stock markets when they were at their nadir during the global lockdowns in March and April.
UBS said that billionaires’ wealth had hit “a new high, surpassing the previous peak of US$8.9 trillion reached at the end of 2017.”
The number of billionaires has also hit a new high of 2,189, up from 2,158 in 2017.
“Billionaires did extremely well during the COVID crisis, not only [did] they ride the storm to the downside, but also gained up on the upside [as stock markets rebounded],” said Josef Stadler, the head of UBS’ global family office department, which deals directly with the world’s richest people.
Stadler said that the super-rich were able to benefit from the crisis because they had “the stomach” to buy more company shares when equity markets around the world were crashing.
Global stock markets have since rebounded making up much of the losses. The shares in some technology companies — which are often owned by billionaires — have risen very sharply.
Billionaires typically have “significant risk appetite” and were confident to gamble some of their considerable fortunes, Stadler said.
Luke Hilyard, executive director of the High Pay Centre, a think tank that focuses on excessive pay, said that the “extreme wealth concentration is an ugly phenomenon from a moral perspective, but it’s also economically and socially destructive.”
“Billionaire wealth equates to a fortune almost impossible to spend over multiple lifetimes of absolute luxury,” Hilyard said. “Anyone accumulating riches on this scale could easily afford to raise the pay of the employees who generate their wealth, or contribute a great deal more in taxes to support vital public services, while remaining very well rewarded for whatever successes they have achieved.”
“The findings from the UBS report showing that the super-rich are getting even richer are a sign that capitalism isn’t working as it should,” Hilyard said.
Stadler said the fact that billionaire wealth had increased so much at a time when hundreds of millions of people around the world are struggling could lead to public and political anger.
“Is there a risk they may be singled out by society? Yes,” he said. “Are they aware of it? Yes.”
“Wealth concentration is as high as in 1905, this is something billionaires are concerned about,” he said. “The problem is the power of interest on interest — that makes big money bigger and, the question is to what extent is that sustainable and at what point will society intervene and strike back?”
The UBS report did not rank the fortunes of the world’s wealth, but the richest person on the planet is Jeff Bezos, the founder and chief executive of Amazon, with US$189 billion.
Bezos’ wealth has increased by US$74 billion so far this year, the Bloomberg Billionaires Index showed, due to the surge in Amazon’s share price as more people turned to the company.
SETTING AN EXAMPLE: The commission suspended the bank’s two top executives as ‘a warning to all banks,’ while the fine is the biggest to be given to a bank in a single case The Financial Supervisory Commission (FSC) yesterday fined E.Sun Commercial Bank (玉山銀行) NT$20 million (US$693,698) over a theft scandal and punished the bank’s two top executives. A customer relationship manager surnamed Pan (潘) at the bank’s branch in Kaohsiung’s Fengshan District (鳳山) stole NT$140 million from 41 clients over the past seven years, the commission said. Pan secretly transferred the stolen money to accounts belonging to her and her family members by using clients’ debit cards, passwords or documents that were stamped using the clients’ personal stamps between July 2013 and June this year, the commission said. The commission suspended Ben Chen (陳炳良), the
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain the third-largest IC supplier this year, unchanged from last year, IC Insights said yesterday. IC designer MediaTek Inc (聯發科) is expected to become the 11th-largest, up from 16th last year, the semiconductor market research firm said. TSMC is expected to post US$45.42 billion in sales, up 31 percent from last year, IC Insights said in a report released on its Web site. TSMC’s sales growth is largely due to a surge in orders from Apple Inc and HiSilicon Technologies Co (海思半導體) — two of its major clients — which
HARD ASK: At a meeting held by the MOEA to talk about the RCEP trade deal, trade associations said that they expect the government to push for more free-trade deals Business representatives yesterday urged the government to slow the appreciation of the New Taiwan dollar, saying that some Taiwanese industries have been undercut by rivals due to unfavorable foreign exchange rates. The government should also assist local industries to expand their domestic market, and push for more bilateral trade deals so that Taiwanese companies can enjoy zero or preferential tariffs on exports, following the nation’s exclusion from the Regional Comprehensive Economic Partnership (RCEP) which was signed by 15 Asia-Pacific nations on Nov. 15, they said at a meeting with the Ministry of Economic Affairs (MOEA). Some participants said that the NT dollar’s
BREATH OF LIFE: The firm said the under-utilized plant should start mass production in the first quarter, timed to coincide with Intel Corp’s release of its Ice Lake server chip Hon Hai Precision Industry Co (鴻海精密) plans to assemble key components for Google servers at its plant in Wisconsin, people familiar with the matter said, finally breathing life into a factory that US President Donald Trump hailed as crucial to bringing manufacturing back to the US. The company has decided to locate production for this new contract at the existing complex rather than make the components at home or in China, the people said, asking not to be identified. The under-utilized plant should start mass production in the first quarter, timed with the release of Intel Corp’s Ice Lake server chips,