2% Hold Half
The World’s Assets
By Chris Giles
08 December, 2006
The Financial Times
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
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
Debt is also low in poor
countries because financial institutions do not exist to allow people
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 Ltd 2006.
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