- The Washington Times - Tuesday, December 5, 2006

LONDON (AP) — The richest 2 percent 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 yesterday.

The report from the Helsinki-based World Institute for Development Economics Research shows that in 2000 the richest 1 percent of adults — most of whom live in Europe or the United States — owned 40 percent of global assets.

The richest 10 percent of adults accounted for 85 percent of assets, the report said.

By contrast, the bottom 50 percent of the world’s adult population owned barely 1 percent of the world’s wealth.

“Income inequality has been rising for the past 20 to 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 gulf between rich and poor nations has long concerned politicians and economists, who say it is one of the biggest obstacles to development.

But Mr. Davies said there are some hopeful signs: China and India, which are developing rapidly, are gaining wealth, and in countries like Bangladesh, the spread of micro-credit institutions is helping people to increase their personal wealth, he said.

In other countries, land registration programs allow the poor to own land for the first time, he said.

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 percent of adults had assets of $61,000 or more while those in the top 1 percent — who now number 37 million — had at least $500,000.

Researchers defined wealth as the value of physical and financial assets minus debts.

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.

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 percent of the total world wealth, and where almost all the world’s richest individuals live, the report said.

Although North America has only 6 percent of the world’s adult population, it accounts for 34 percent of household wealth.

China occupies much of the middle third of global wealth distribution, while India, Africa and the low-income Asian countries 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,” he said.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide