2% own half of world's wealth
10% control 85% of global wealth
Yawning gap remains between assets of rich and poor, report says
The Helsinki-based institute said the study reveals the glaring gap of the wealth mass between countries.
THE RICHEST TWO PER CENT of adults still own more than half of the world's household wealth, perpetuating a yawning global gap between rich and poor, according to research published Tuesday.
The report from the Helsinki-based World Institute for Development Economics Research shows that in 2000 the richest one per cent of adults - most of whom live in Europe or the United States - owned 40 per cent of global assets. The study is said to be the most comprehensive study of personal wealth ever undertaken. It deals with all countries in the world - either actual data or estimates based on statistical analysis - and it focuses on wealth, where most previous research has looked at income.
The study define "wealth" in its long-established sense of net worth. It is what people own, less what they owe - their debts. This includes land, buildings, animals and financial assets.
According to the report, individual assets of $2,200 placed an adult in the top half of the world's wealth distribution in 2000. Those in the richest 10 per cent of adults had assets of $61,000 or more while those in the top one per cent - who now number 37 million - had at least $500,000.
Household wealth in 2000 was valued at $125 trillion, equivalent to roughly three times the value of total global production, or to $20,500 per person, the report said.
The elite of one per cent of people alone owned 40 per cent of global assets in the year 2000, and the richest 10 per cent of adults accounted for 85 per cent of assets, the report said.
By contrast, the bottom 50 per cent of the world's adult population owned barely one per cent of the world's wealth.
"The super-rich are even more grotesquely rich than 50 years ago," said Anthony Shorrocks, Director of the World Institute for Development Economics Research of the United Nations University (UNU-WIDER).
Shorrocks said if the world's population was reduced to a group of 10 people, one person would hold $99 and the remaining nine would share $1.
"Income inequality has been rising for the past 20-25 years and we think that is true for inequality in the distribution of wealth," said James Davies, a professor of economics at the University of Western Ontario, one of the report's authors.
"There is a whole group of problems in developing countries that make it difficult for people to build up assets, which are important, since life is so precarious."
The Helsinki-based institute said the study reveals the glaring gap of the wealth mass between countries. The rich are getting richer, and the poor poorer.
"Wealth inequality for the world as a whole is higher still," the study insists.
The gulf between rich and poor nations has long concerned politicians and economists, who say it is one of the biggest obstacles to development.
It found that wealth is heavily concentrated in North America, Europe and high-income Asia-Pacific countries like Australia and Japan.
"People in these countries collectively hold almost 90 percent of total world wealth."
Americans have amassed much of the world's treasure, according to the report.
In 2000, the US accounted for 4.7 per cent of the world's population but 32.6 per cent of the world's wealth.
Nearly four out of every ten people in the wealthiest one per cent of the global population are American.
Europe and high income Asia-Pacific countries also own disproportionate amounts of wealth.
Average wealth in the United States amounted to $144,000 per person in the year 2000, and $181,000 in Japan, it said.
In India, the figure was just $1,100 and in Indonesia, per-capita wealth was $1,400.
Even among high-income nations, the amounts vary, from $37,000 per person for New Zealand and $70,000 for Denmark to $127,000 for Britain.
The world's wealth is heavily concentrated in North America, Europe and the high-income Asia-Pacific countries, which hold nearly 90 per cent of the total world wealth, and where almost all the world's richest individuals live, the report said.
Although North America has only six per cent of the world's adult population, it accounts for 34 per cent of household wealth.
China occupies much of the middle third of global wealth distribution, while India, Africa and the low-income Asian companies dominate the bottom third.
Anthony Shorrocks, another of the report's authors, said despite its rapid growth, China does not yet feature among the super-rich because average wealth is modest and evenly spread by international standards.
"However, China is already likely to have more wealthy residents than our data reveals for the year 2000, and membership of the super-rich seems set to rise fast in the next decade," Shorrocks said.
On the other side, the overall share of wealth owned by people in Africa, China, India, and other lower income countries in Asia is considerably less than their population share.
At the bottom of the poorest nations' list came countries such as the Congo and Ethiopia.
Experts said there was only limited data available and the study is based on figures from 2000.
A more recent year would have involved more widening gap especially for developing countries.
Related Links Full study (.pdf)
World wealth levels in 2000 (.pdf)
Regional wealth shares (.pdf)
Population and wealth shares by region (.pdf)
Membership of wealthiest 10% by region (.pdf)
Comments to : email@example.com Copyright New Media Services Inc. © 2006. The views expressed herein are the writers' own and do not necessarily reflect those of shunpiking magazine or New Media Publications. You may not alter or remove any trademark, copyright or other notice from copies of the content. Copyright of written and photographic and art work remains with the creators.