[Reader-list] UN: first ever study of global household assets

[Rana Dasgupta]

World's richest 1% own 40% of all wealth, UN report discovers
http://www.guardian.co.uk/international/story/0,,1964813,00.html

- First ever study of global household assets
- 50% of world's adults own just 1% of the wealth



James Randerson, science correspondent
Wednesday December 6, 2006
The Guardian

	

The richest 1% of adults in the world own 40% of the planet's wealth, 
according to the largest study yet of wealth distribution. The report 
also finds that those in financial services and the internet sectors 
predominate among the super rich.

Europe, the US and some Asia Pacific nations account for most of the 
extremely wealthy. More than a third live in the US. Japan accounts for 
27% of the total, the UK for 6% and France for 5%.

The UK is also third in terms of per capita wealth. UK residents are 
found to have on average $127,000 (£64,000) each in assets, with 
Japanese and American citizens having, respectively, $181,000 and 
$144,000. All data relate to the year 2000.

The global study - from the World Institute for Development Economics 
Research of the United Nations - is the first to chart wealth 
distribution in every country as opposed to just income, for which more 
comprehensive date is available. It included all the most significant 
components of household wealth, including financial assets and debts, 
land, buildings and other tangible property. Together these total $125 
trillion globally.

Anthony Shorrocks, director of the research institute at the United 
Nations University, in New York, led the study. He affirmed that the 
existence of a nest egg provided an insurance policy that helped people 
cope with unforeseen events such as ill health or a lost job. Capital 
allowed people to drag themselves out of poverty, he added. "In some 
ways, wealth is more important to people in poorer countries than in 
richer countries." It was more difficult in developing countries to set 
up a business because it was harder to borrow start-up funds, he said.

His team used detailed data from 38 countries, but had to rely on 
incomplete information from the rest.

The report found the richest 10% of adults accounted for 85% of the 
world total of global assets. Half the world's adult population, 
however, owned barely 1% of global wealth. Near the bottom of the list 
were India, with per capita wealth of $1,100, and Indonesia with assets 
per head of $1,400.

Many African nations as well as North Korea and the poorer Asia Pacific 
nations were places where the worst off lived.

"These levels of inequality are grotesque," said Duncan Green, head of 
research at Oxfam. "It is impossible to justify such vast wealth when 
800 million people go to bed hungry every night. The good news is that 
redistribution would only have to be relatively small. Such are the vast 
assets of the rich that giving up a small part of their wealth could 
transform the lives of millions."

Madsen Pirie, director of the Adam Smith Institute, a free-market 
thinktank, disagreed that distribution of global wealth was unfair. He 
said: "The implicit assumption behind this is that there is a supply of 
wealth in the world and some people have too much of that supply. In 
fact wealth is a dynamic, it is constantly created. We should not be 
asking who in the past has created wealth and how can we get it off 
them." He said that instead the question should be how more and more 
people could create wealth.

Ruth Lea, director of the Centre for Policy Studies, a thinkthank set up 
by Margaret Thatcher, said that although she supported the goal of 
making poverty history she did not think increasing aid to poorer 
countries was the answer. "It's no use throwing lots of aid at countries 
that are basically dysfunctional," she said.

The UN report was issued as the Swiss magazine Bilan released a list of 
the richest Swiss residents. Ingvar Kamprad, the founder of Ikea, topped 
the list with an estimated fortune of $21bn.
-- 
Rana Dasgupta
www.ranadasgupta.com