Small Band of Rich Controls Majority of Wealth
Small Band of Rich Controls Majority of Global Wealth, UN Study Finds
New York, Dec 5 2006 5:00PM
The richest 2 per cent of people in the world own more than half of all household wealth, while the poorer half of the global population control just 1 per cent, according to a study released today by the United Nations University (UNU).
Much of the wealth is concentrated in North America, Europe and rich Asia-Pacific nations such as Japan, Australia and the Republic of Korea, despite their comparatively small population when measured against Africa and countries such as China and India.
The UNU’s World Institute for Development Economics Research (UNU-WIDER), which conducted the study, called it the first of its kind to cover all countries and all major components of household wealth, including financial assets, debts and tangible property such as land and buildings.
The report’s co-authors – James Davies of the University of Western Ontario, Anthony Shorrocks and Susanna Sandstrom of UNU-WIDER, and Edward Wolff of New York University – said they defined wealth for the survey as the value of physical and financial assets less debts.
“In this respect, wealth represents the ownership of capital,” they said. “Although capital is only one part of personal resources, it is widely believed to have a disproportionate impact on household well-being and economic success, and more broadly on economic development and growth.”
Using data for the year 2000, the study calculated that global household wealth amounted to $125 trillion that year, or roughly $20,500 per person. But global inequities mean the average wealth was much higher in Japan ($181,000) and the United States ($144,000) than it was in India ($1,100) or Indonesia ($1,400), and that differences in wealth were greater than differences in annual income.
To belong to the richest 1 per cent in the world, more than $500,000 in wealth was needed – enough for about 37 million people to qualify, according to the report.