Accumulation of wealth in few hands a global dilemma

Credit Suisse’s Global Wealth Report 2016

Only 1pc people hold 74.5pc of nation’s wealth; Russia most unequal country
in wealth distribution; second and third position occupied by India and Thailand

LAHORE: Unequal distribution of wealth and concentration of material bounties in just a few human hands is a global dilemma, reports prestigious British and American media houses like ‘The Independent’ and the ‘CNBC’. The media has cited a recent study, conducted by Credit Suisse, the renowned Zurich-based multinational financial services holding company that managed to earn revenues to the tune of 23.38 billion Swiss Francs in 2015.

Ironically, there is no mention of Pakistan in this Credit Suisse report. The Independent states: "The global economic recovery since the 2008 crash has failed to reach all levels of society and inequality continues to grow, according to a major report. Credit Suisse’s Global Wealth Report 2016 identified Russia as the world’s most unequal country, with a staggering 74.5 per cent of the nation’s wealth controlled by the richest one per cent of people. In India and Thailand, the top 1 per cent own nearly 60 per cent of the wealth, while the figure was around 50 per cent for Indonesia and Brazil."

The British newspaper writes: "Credit Suisse said the world had been growing more equal from the start of the century until 2008. “The trend reversed after the financial crisis,” its report notes however, and while the most recent data is only provisional it looks set to continue to get more unequal. Overall, it said wealth inequality was a major issue “in almost every part of the world”. “Our estimates suggest that the lower half of the global population collectively owns less than 1 per cent of global wealth, while the richest 10 per cent of adults own 89 per cent of all wealth, with the top 1 per cent accounting for half of all global assets,” the report notes.

The Independent further notes: "Since its report last year, Credit Suisse identified the US and Japan as the biggest earners in the world in terms of improving household wealth, whileSwitzerland was once again named the richest country per capita. And the biggest loser? Thanks to the Brexit vote and the subsequent crash in value of the pound, the UK was ranked as suffering the worst losses in household wealth in the world in the last year. Credit Suisse estimates that the decision to leave the EU wiped £1.5 trillion from Britain’s collective wealth, and saw the number of US dollar millionaires in the country fall by 406,000. The next biggest loser on this metric, Switzerland, was down just 58,000."

Meanwhile, the findings of the 160-year old Credit Suisse have also been quoted by the Hindustan Times, which has lamented the fact in its introductory paragraph that the Swiss institution had listed India as the second most unequal country in the world with the top one per cent of the population owning nearly 60 per cent of the total national wealth.

Quoting The Independent, the Hindustan Times further writes: "According to Global Wealth Report 2016 compiled by Credit Suisse Research Institute, the gap between the world’s haves and have-nots does not appear to be getting any narrower and a mere 0.7 per cent of the global population owns nearly half of the world’s wealth.

In India and Thailand the top 1 per cent own 58.4 per cent and 58 per cent of the wealth, while the figure was 47.9 for Brazil and 43.8 for China, The Independent reported. Noting that Switzerland remained as the wealthiest country in the world, per capita, the report said that overall wealth inequality was a major issue in almost every part of the world."

The key Indian newspaper asserts: "Currently, an estimated 9 per cent of adults globally are net debtors, which is without a doubt a worrying development. Our calculations suggest that 80 per cent of adults in India and Africa belong to the bottom half of the global wealth distribution,” it said. The contrast between China and India may also come as a surprise, given their similarities in terms of huge populations and rapid growth. Their representation in the global bottom half is very different, and the discrepancy is even greater in the bottom quintile which covers 31 per cent of Indians but only 7 per cent of Chinese, the report said. Personal wealth in India is dominated by property and other real assets, which make up 86 per cent of estimated household assets, it said."

The Hindustan Times concluded saying: “The report said that while wealth has been rising in India, not everyone has share in this growth.”

The Indian media outlet quotes another excerpt from the Credit Suisse report under review: “There is still considerable wealth poverty, reflected in the fact that 96 per cent of the adult population has wealth below US $10,000, whereas this percentage is only 68 per cent in China,” it said. India’s wealth has grown quite quickly since the turn of the century, except during the global financial crisis, it said, adding that wealth per adult fell in USD terms in China, India, Russia, and the UK, largely due to exchange rate changes.”