Global Wealth & Inequality

Global Wealth & Inequality

Dr. A.C.Prabhakar

Director- Third World Social Networks (TWSN)

World wealth has reached a record $263 trillion in mid-2014, $20.1 trillion more, and an 8.3 percent increase, over mid-2013, more than doubled since 2000, but it is concentrated in fewer hands. The top richest one percent people have more wealth than 3.5 billion people who just survive with one percent wealth. Oxfam International says at the World Economic Forum in Davos in 2014 that the world's 85 richest people controlled more assets with the same value as those owned by the poorer half of the world's population, or 3.5 billion people (including children). Both groups have $US 1.7 trillion. That's $20 billion on average if you are in the first group and $486 if you are in the second group. While Forbes published its 2014 Billionaires List in early March, it took only 67 of the richest peoples' wealth to match the poorer half of the world (see www.forbes.com). Each of the 67 is on average worth the same as 52 million people from the bottom of the world's wealth pyramid. Bill Gates, the world's richest man, with a net worth of $76 billion, is worth the same as 156 million people from the bottom.

Credit Suisse released a new report on Global Wealth on 18 October, 2014; warns that the "abnormally high wealth income ratios" may spark a trigger recession, as high disparity leads to economic friction. In the United States has household wealth to 34.7 percent ($91 trillion) of global wealth. Europe's portion comes in a close second with 32.4 percent, followed by India and China's 23.7 percent share, and then the 18.9 percent concentrated in the Asia-Pacific region.

The USA has the highest average wealth and is also the world's leader in GDP with USD17.4 trillion, which the report estimates grew by $12.9 billion in 2013. Wealth in the US and Europe was driven by a rather spectacular year on the stock exchanges. Since the financial crisis of 2008, the US has added $31.5 trillion in household wealth. In the last year alone the stock market increased in value by 22.6 percent. Germany, Canada, and France all experienced huge spurts in capital markets, gaining more than 30 percent.

Between 2000 and 2014, emerging markets accounted for 11.4 percent of wealth, particularly China and India. Asia and particularly China will account for the largest portion of newly created wealth among the emerging markets. Other emerging players on the international scene, according to Credit Suisse, are Russia, Brazil, India, Indonesia, South Africa, and Turkey. The conclusion of the report offers predictions for 2019, where the authors suggest global wealth will grow by 40 percent and reach $369 trillion, but emerging markets will account for 26 percent, more than double what they do now. The number of millionaires worldwide is projected to blossom from 35 million today to 53 million in 2019. However, Forbes claim that each of the 67 is on average worth the same as 52 million people from the bottom of the world's wealth  pyramid. Bill Gates, the world's richest man, with a net worth of $76 billion, is worth the same as 156 million people from the bottom.

Who are the 67? The biggest group—28 billionaires, or 42% of them—is from the United States. No other country comes close. Germany and Russia have the second-highest number, with six each. The rest are sprinkled among 13 countries in Western Europe, APAC and the Americas. Five British families enjoyed with 1.7 trillion dollars where world's half population have one percent of the world's total resources or wealth. In such a system, the false appearance of "pure" capitalism is publicly maintained to preserve the exclusive influence of well-connected individuals.

According to the Bloomberg Billionaires Index, the top richest people in the world got even richer in 2013, adding $524 billion to their collective net worth, a daily ranking of the world's 300 wealthiest individuals. The ranking says the aggregate net worth of the world's top billionaires stood at $3.7 trillion as on December 31, 2013. One percent richest people have more wealth than 3.5 billion people all over the world.

A Chinese research firm, the Hurun Report, compiled a list of world's richest billionaires—Hurun Global Rich List 2014.

Seven in the top ten of the list are from the United States. Bill Gates is at the top of the wealthiest men list with a fortune of US$ 68 billion. This is an increase by US$ 14 billion as compared to last year. As per the website, wealth calculations are a snapshot of January 17, 2014. The list ranked 1,867 billionaires from 68 countries.

The US has 481 billionaires, followed by China with 358 billionaires. The US and China now have half of all billionaires on the planet. The UK, Japan, Switzerland, India and Russia are growing fast in terms of billionaires. In India, 8200 people controlled 70% wealth of India.