WIDER Report: Finland among the poorest of the rich in household wealth

Just 37 million people own 40 per cent of the world's wealth

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The richest two per cent of the world's population own more than half of the globe's total wealth. This is the finding of a new report from the World Institute for Development Economics Research (WIDER) of the United Nations University.
      The research also indicates that the richest one per cent of adults alone - a mere 37 million people - owned some 40 per cent of global assets in 2000, while the richest ten per cent owned as much as 85 per cent. In stark contrast to this, the poorest 50 per cent of the world's population own barely one per cent of the globe's wealth.
      In fact, having possessions worth just EUR 1,650 would have been sufficient in 2000 to make you wealthier than the majority of the world's population.
     
For Finns, the results may come as something of a shock. Finland is by no means as wealthy a country as many might have liked to imagine. On the colour-coded map accompanying the report, Finland competes in the same bracket with nations such as Mexico, Argentina, and Poland (although admittedly we are in the upper echelons of this particular category), while for instance our neighbour to the west belongs at the richer end of the rich, with fixed assets per capita well in excess of USD 50,000.
      Sweden's per capacity household wealth is more than double that of Finland's, regardless of whether the study uses official exchange rates or whether it is adjusted for purchasing power parity (PPP). In the first case, Finland scores a total of EUR 27,896 per capita, entitling the country to 62nd place on the global table. Adjusted for PPP the figure is EUR 29,085 and 65th place. Among the 24 countries of the OECD, Finland trails in at number 22.
      One reason put forward for Finland's lowly showing is that the study's methodology ignores the country's large pension funds, and a further possible cause is that the sound social welfare and pension cover in a country such as this does not provide a spur to the determined accumulation of personal wealth.
     
In 2000, the latest year for which adequate statistics exist, there were 13.6 million dollar-denominated millionaires in the world and 499 billionaires. At the beginning of December this year, the world's population was 6.5 billion. Two out of every three of the world's richest one per cent hail from either the United States (37%) or Japan (27%)
      The numbers presented by WIDER, which is based in Helsinki, are if anything even more dramatic than the often-quoted income disparities among people. The so-called GINI-coefficients for income disparities within countries generally fluctuate between 0.35 and 0.45, whereas those for real property and household wealth can be considerably higher, and in some countries - the United States for example - they can reach more than 0.80.
      The global GINI-coefficient according to the WIDER study is 0.892. This is roughly equivalent to a value that would be recorded in a ten-person population if one person had EUR 1,000 and the remaining nine each had EUR 1.00.


Links:
  United Nations University, WIDER
  WIDER: The World Distribution of Household Wealth (.pdf file)

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