UN Study finds Wealth Inequality is widening Worldwide by Reuters/ New York Times 3:08pm 4th Dec, 2006   December 2006.    Wealth concentrated in hands of a few: UN report. (Reuters)    A United Nations (UN) survey has found that 2 per cent of adults command more than half of the world''s wealth, while the bottom 50 per cent possesses just 1 per cent.    While income is distributed unequally across the globe, the geographical spread of wealth, which includes property and financial assets, is even more skewed, the study by the World Institute for Development Economics Research of the UN University showed.    The report was released last Tuesday and its authors say it is the most comprehensive study of personal wealth ever taken.    It says 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 per cent of total world wealth," the survey said.    The Helsinki-based institute said there was only limited data available and the study is based on figures from 2000.    Institute director Anthony 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.    "The super-rich are even more grotesquely rich than 50 years ago," he said.    According to the study, a couple in 2000 needed $1 million in capital to be included in the richest 37 million people in the world, who form the top 1 per cent.    More than half of that group lives in the United States or Japan.    "The USA and Japan stand out because they have large populations and high average wealth," Mr Shorrocks said. "Although Switzerland and Luxembourg have high average wealth, their populations are small."    Average per capita net assets in Japan were $181,000, while in the United States the average was $144,000.    The study found that net assets of $2,200 per adult would put a household in the top half of the wealth distribution.    At the bottom of the list came nations such as the Democratic Republic of Congo and Ethiopia, with capital of less than $200 per head.    December 6, 2006    Study finds Wealth Inequality is widening Worldwide, by Eduardo Porter. (New York Times).    Experts have long worried about the skewed distribution of the world’s income, with vast rewards massing in the hands of a wealthy elite and precious little left over for the vast majority of the global population.    But even as income inequality has reached near record levels in many countries, the distribution of the world’s wealth — things like stocks, bonds or physical assets like land — has become even more narrowly concentrated than income, according to a new report by the World Institute for Development Economics Research of the United Nations University.    In 2000, the top 1 percent of the world’s population — some 37 million adults with a net worth of at least $515,000 — accounted for about 40 percent of the world’s total net worth, according to the report.    The bottom half of the population owned merely 1.1 percent of the globe’s wealth. The net worth of the world’s typical person — whose wealth was above that of half the world’s population and below that of the other half —was under $2,200.    The widening gap between the global haves and the have-nots in large measure reflects the failure of less- developed countries to develop, while rich countries — particularly the United States — have experienced fast economic growth and a spectacular buildup of assets.    “Developed countries have pulled ahead of the rest of the world,” said Edward N. Wolff, a professor of economics at New York University who is a co-author of the new study. “With the notable exception of China and India, the third world has drifted behind.”    Moreover, poorer nations face many obstacles to amassing wealth, including sketchy property rights and land tenure systems, and underdeveloped financial markets.    According to the report, in 2000 the United States accounted for 4.7 percent of the world’s population but 32.6 percent of the world’s wealth. Nearly 4 out of every 10 people in the wealthiest 1 percent of the global population were American.    The average American had a net worth of nearly $144,000, losing only to the average Japanese, who had $180,000, at market exchange rates; the average person in Luxembourg, who had $183,000; and the average Swiss, who had $171,000.    By contrast, in 2000 the average Chinese had a net worth of roughly $2,600, at the official exchange rate. China, home to more than a fifth of the world’s population, had only 2.6 percent of the world’s wealth. And India, with 16.8 percent of the world’s people, accounted for only 0.9 percent of the world’s wealth.    Among Americans, wealth is distributed about as unequally as it is around the globe. The new study cited data from the Federal Reserve’s Survey of Consumer Finances, which found that the richest 1 percent of Americans held 32 percent of the nation’s wealth in 2001. (This excludes the billionaires in the Forbes list, who control roughly another 2 percent of the nation’s wealth.)    This tops the inequity in every country but Switzerland, among the 20 nations that measure these wealth disparities and are cited in the report.    A recent study by Emmanuel Saez of the University of California, Berkeley, and Thomas Piketty of the École Normale Supérieure in Paris, found that in 2004 the top 1 percent of Americans earned a higher share of the nation’s income than at any time since the 1920s.    Income inequality shows few signs of abating in most countries. Still, there is evidence that the global gap in wealth may close somewhat over coming years. Paradoxically, the reason is the fast growth of China and India.    Inequality is growing rapidly in both those countries. As tens of millions of Chinese and Indians climb out of poverty, they are leaving tens of millions of less fortunate Chinese and Indians behind.    But even as wealth and income become more unevenly distributed within China and India, these hundreds of millions of people making their way into the middle class and accumulating assets will actually make global wealth distribution more equal than it was before.    “China and India are definitely an offsetting factor,” said James B. Davies, a professor of economics at the University of Western Ontario and director of the world institute’s program to study global wealth accumulation and a co-author of the report. “If they weren’t rising in the ranks of the world’s wealthy, inequality would be increasing at a fairly good rate.”
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