Richest 2% hold half the world’s assets
By Chris Giles, Economics Editor in London
Published: December 5 2006 13:13 | Last updated: December 5 2006 13:13
Personal wealth is distributed so unevenly across the world that the
richest two per cent of adults own more than 50 per cent of the world’s assets while the poorest half hold only 1 per cent of wealth.
A survey released on Tuesday shows that middle-income countries with high growth rates still have a long way to go before they have a hope of catching up with the levels of prosperity of the richest.
Adults with more than $2,200 of assets were in the top half of the global wealth league table, while those with more than $61,000 were in the top 10 per cent, according to the data from the World Institute fpr Development Economics Research of the United Nations University (UNU-Wider).
To belong to the top 1 per cent of the world’s wealthiest adults you would need more than $500,000, something that 37m adults have achieved.
So much of the world’s wealth is concentrated in few hands that if all the world’s wealth was distributed evenly, each person would have $20,500 of assets to use.
Almost 90 per cent of the world’s wealth is held in North America, Europe and high-income Asian and Pacific countries, such as Japan and Australia.
While North America has 6 per cent of the world’s adult population, it accounts for 34 per cent of household wealth.
The concentration of wealth in different countries varies considerably, with the top 10 per cent in the US holding 70 per cent of the country’s wealth, compared with 61 per cent in France, 56 per cent in the UK, 44 per cent in Germany and 39 per cent in Japan.
According to Anthony Shorrocks, the director of UNU-Wider, the number of wealthy individuals in a country depends on the size of the population, the average wealth and its inequality.
“China fails to feature strongly among the super-rich because average wealth is modest and wealth is evenly spread by international standards”, he said.
As countries grow richer, their population changes how it holds wealth, according to the report.
In developing countries, property, particularly land and farm assets are important, while cash savings tend to dominate in middle-income counties.
Only in certain advanced countries such as the US and the UK with developed financial sectors is there a strong appetite for holding equities and other more sophisticated financial assets.
Debt is also low in poor countries because financial institutions do not exist to allow people to borrow.
In contrast, the authors say “many people in high-income countries have negative net worth and, somewhat paradoxically, are among the poorest people in the world in terms of household wealth.”
Wealth is difficult to measure even in the most advanced countries, so the research was based on painstaking compilation of aggregate and survey data for the 38 countries of the world where it exists and statistical models for the rest of the world.
Copyright The Financial Times Limited 2006
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