Profit Soars for Global Corporations Amid Rising Living Costs and Inflation
A staggering number of 722 major companies worldwide are raking in windfall profits exceeding $1 trillion annually, despite the escalating cost of living and inflation. This revelation comes from a study conducted by development charities, as reported by The Guardian.
The research, carried out by Oxfam and ActionAid, analyzed the Forbes Global 2000 ranking and found that these companies amassed $1.08 trillion in 2021 and $1.09 trillion in the previous year. These profits far surpassed the average earnings of the preceding four-year period from 2017 to 2020 by a staggering 89%.
Defining windfall profits as those surpassing the average earnings of 2017-2020 by more than 10%, Oxfam International’s press release stated that energy companies recorded the highest windfall profits. Among the 45 energy firms listed by Forbes, the research indicated that they made an average of $237 billion per year in windfall profits in 2021 and 2022.
The surge in energy profits resulted in the emergence of 96 energy billionaires with a combined wealth of nearly $432 billion, exceeding last year’s figure by approximately $50 billion. Additionally, food and beverage corporations, pharmaceutical companies, banks, and retailers also reported substantial profit increases. These revelations come at a time when more than 250 million people across 58 countries faced acute food insecurity in 2022.
The alarming magnitude of these profits has led to accusations of “greedflation.” Oxfam’s press release noted a growing body of evidence suggesting that corporate profiteering significantly contributes to the inflation surge. Concerns have been raised that corporations are capitalizing on the cost-of-living crisis to bolster profit margins, a trend aptly labeled as greedflation.
The analysis conducted by Oxfam revealed several key findings:
- 18 food and beverage corporations made an average of $14 billion per year in windfall profits in 2021 and 2022, an amount sufficient to cover the $6.4 billion funding gap required for life-saving food assistance in East Africa twice over.
- 28 drug corporations accumulated an average of $47 billion in windfall profits annually.
- 42 major retailers and supermarkets recorded an average of $28 billion in windfall profits.
- Nine aerospace and defense corporations generated an average of $8 billion per year in windfall profits, even as 9,000 people succumb to hunger daily, primarily driven by conflict and war.
Katy Chakrabortty, Oxfam’s head of advocacy, condemned these excessive profits as not only immoral but also contributing to the exacerbation of inflation. She emphasized the dire situation faced by millions worldwide who struggle to meet their basic needs. Chakrabortty called for the implementation of windfall taxes across all sectors to rectify the inequitable distribution of wealth and put an end to this exploitative practice where rich shareholders benefit at the expense of the majority.
Published in PakWeb, July 06, 2023.
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