percapita income

7/29/2019 Percapita Income

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Rank Country GDP - per capita (PPP) (US$)

1 Liechtenstein 141,100

2 Qatar 104,300

3 Luxembourg 81,100

4 Bermuda 69,900

5 Monaco 63,400

6 Singapore 60,500

7 Jersey 57,0008

Falkland Islands(Islas Malvinas)

55,400

9 Norway 54,200

10 Brunei 50,000

11 Hong Kong 49,800

12 United States 49,000

13United ArabEmirates

48,800

14 Guernsey 44,600

15 Switzerland 43,900

16 Cayman Islands

43,80017 Gibraltar 43,000

18 Netherlands 42,700

19 Austria 42,400

20 Kuwait 42,200

As on January 1, 2012

India 3876

By Arvind SubramanianFor the past three decades, the Indian economy has grown impressively, at an average annualrate of 6.4 per cent. From 2002 to 2011, when the average rate was 7.7 per cent, India seemedto be closing in on China - unstoppable, and engaged in a second "tryst with destiny," to borrow
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Jawaharlal Nehru's phrase.The economic potential of its vast population, expected to be the world's largest by the middle ofthe next decade, appeared to be unleashed as India jettisoned the stifling central planning andeconomic controls bequeathed it by Nehru and the nation's other socialist founders.

But India's self-confidence has been shaken. Growth has slowed to 4.4 per cent a year; the

rupee is in free fall, resulting in higher prices for imported goods; and the specter of a potentialcrisis, brought on by rising inflation and crippling budget deficits, looms.

To some extent, India has been just another victim of the ebb and flow of global finance, which itembraced too enthusiastically. The threat (or promise) of tighter monetary policies at theFederal Reserve and a resurgent American economy threaten to suck capital, and economicdynamism, out of many emerging market economies.

But India's problems have deep and stubborn origins of the country's own making.

The current government, which took office in 2004, has made two fundamental errors. First, it

assumed that growth was on autopilot and failed to address serious structural problems.Second, flush with revenues, it began major redistribution programs, neglecting theirconsequences: higher fiscal and trade deficits.

Structural problems were inherent in India's unusual model of economic development, whichrelied on a limited pool of skilled labour rather than an abundant supply of cheap, unskilled,semi-literate labour. This meant that India specialized in call centers, writing software forEuropean companies and providing back-office services for American health insurers and lawfirms and the like, rather than in a manufacturing model. Other economies that have developedsuccessfully - Taiwan, Singapore, South Korea and China - relied in their early years on

manufacturing, which provided more jobs for the poor.

Two decades of double-digit growth in pay for skilled labour have caused wages to rise andhave chipped away at India's competitive advantage. Countries like the Philippines haveemerged as attractive alternatives for outsourcing. India's higher-education system is notgenerating enough talent to meet the demand for higher skills. Worst of all, India is failing tomake full use of the estimated one million low-skilled workers who enter the job market everymonth.

Manufacturing requires transparent rules and reliable infrastructure. India is deficient in both.High-profile scandals over the allocation of mobile broadband spectrum, coal and land have

undermined confidence in the government.

If land cannot be easily acquired and coal supplies easily guaranteed, the private sector will shyaway from investing in the power grid. Irregular electricity holds back investments in factories.

India's panoply of regulations, including inflexible labour laws, discourages companies fromexpanding. As they grow, large Indian businesses prefer to substitute machines for unskilledlabour. During China's three-decade boom (1978-2010), manufacturing accounted for about 34per cent of China's economy. In India, this number peaked at 17 per cent in 1995 and is nowaround 14 per cent.


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In fairness, poverty has sharply declined over the last three decades, to about 20 per cent fromaround 50 per cent. But since the greatest beneficiaries were the highly skilled and talented, theIndian public has demanded that growth be more inclusive. Democratic and competitive politicshave compelled politicians to address this challenge, and revenues from buoyant growthprovided the means to do so.

Thus, India provided guarantees of rural employment and kept up subsidies to the poor for

food, power, fuel and fertilizer. The subsidies consume as much as 2.7 per cent of grossdomestic product, but corruption and inefficient administration have meant that the most needyoften don't reap the benefits.

Meanwhile, rural subsidies have pushed up wages, contributing to double-digit inflation. India'sfiscal deficit amounts to about 9 per cent of gross domestic product (compared with structuraldeficits of around 2.5 per cent in the United States and 1.9 per cent in the European Union). Tohedge against inflation and general uncertainty, consumers have furiously acquired gold,rendering the country reliant on foreign capital to finance its trade deficit.

At a news conference last week, India's harassed finance minister, P.

Chidambaram, addressed the issue of the rising current account deficit and the fall

of the rupeeagainst the dollar. His message to his countrymen:Please stop buying

so much gold.

Chidambaram has a point. India is the world's biggest consumer of gold, accounting

for a little more than one-third of world demand. Traditionally, gold in India has

served a double purpose of consumption (it's often the single biggest expense at a

wedding) and investment, because it is seen as a more reliable hedge against

inflation than savings in financial instruments. Urban and rural Indians differ in their

habits in many other spheres, but they are united in their trust in gold. A recent
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report showed that gold accounted for as much as10 percentof total household

savings in 2011.

Enlarge image

Gold necklaces sit in a window display at a Dhanraj Jewelers store in Mumbai. India this month increased a tax on gold

imports as it tries to curb demand for the metal thats contributed to the current -account gap and hurt the currency.

Photographer: Dhiraj Singh/Bloomberg

Unfortunately, almost no gold is produced domestically, and so rising demand for

the precious commodity severely affects the balance of payments. Gold is now the

second-largest expense on India'simport bill, after crude oil. One would have

thought that rising gold prices -- a jump of more500 percentsince 2000 -- would

have had the effect of curbing demand, but that's not been the case. As this graph

shows, India's demand for gold remained between 550 and 800 metric tons annually

from 1997 to 2009, even as prices kept going up.

Here's a market, then, that appears to be price inelastic -- but apparently only when

prices are rising. When prices fellto a two-year lowin April, gold demand shot up to

record levels, with monthly imports averaging152 tonsin the first two months of the

new fiscal year, more than twice the monthly average of 70 tons from the previous

year. To suppress demand, the government has already raised the import duty on

gold twice this year, from 4 percent to 6 percent in January and then from 6 percent

to 8 percentin June. Last week, Chidambaram delivereda small homilyon gold that

was part economics lesson, part supplication:

On gold, I am happy that all my appeals are being heeded partly by the people of

India.... Net gold imports averaged 135 million dollars a day in the first 13 business

days of May.... However, in the subsequent 14 business days, it averaged only 36

million dollars. So gold imports have sharply come down, but I would be happy if

they come down even further. I continue to hope and dream. Suppose we stop gold

imports ... suppose the people of India don't demand gold and we don't have to

import gold for one year ... the whole situation will so dramatically change.

People who want to buy gold must realize that every ounce of gold is imported --

every ounce. No gold is manufactured in India. You pay rupees, we have to provide

the dollars. You think you are buying gold in rupees but actually you are buying gold

in dollars. I would once again appeal to everyone: please resist the temptation to
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buy gold. If we can have it for six months, one year ... it will dramatically change the

situationof the current account deficit, and you will see its positive impact on every

other index that measures the economy: stock market, exchange rate, interest rates.

Chidambaram is right, asthis graphcalculating India's trade deficits with and without

gold demonstrates. He is by no means the first finance minister to try and persuade

his countrymen not to park their money into gold. Last year, his predecessor Pranab

Mukherjee, was quoted assayingthat the:

Quantum of import of gold ... is a clear indication (that) large section of community ...

want investment in dead asset only with expectation that value would appreciate....

Time is ripe to motivate our educated upper middle class to climb from saving mode

to wealth generation mode.

This is, however, a long-term project. India's gold-buying culture is deeply

entrenched. As Leif Eskesen, chief economist for India and Southeast Asia at HSBCHoldings Plc, wrote in his report"India Perspectives: The Love Affair With

Gold"published earlier this year:

Gold imports have always been high in India, which has left Indian households

collectively holding no less than 20,000 tonnes of gold, according to the World Gold

Council. At current prices that works out to USD4,500 worth of gold per household.

Arguing that investing in gold was for many Indians a perfectly logical decision,

Monika Halanwrotein the business newspaper Mint:

I hold the view that the Indian household makes a sensible decision to hoard gold. It

is sensible because access to financial assets remains difficult and where access is

easy, the regulatory failure to stop large-scale cheating of retail investors ... has

broken the fledgling faith in markets for the average investor. Regulatory and

institutional failure is the reason people hoard gold and not because they are stupid.

And as the country looks more and more unstable, we buy more and more gold

perfectly logical and rational. This is no different than industrialists moving their

business overseas and the rich buying real estate and stock abroad.

As the late Indian economist IG Patel, whowrote extensivelyin the 1950s on India's

gold obsession and ways in which to mobilize the hoarded wealth,once said: In

prosperity as in the hour of need, the thoughts of most Indians turn to gold. The

evidence from the last few years suggests that when steeply rising prices, and a

debilitating current account deficit that raises the cost of other goods, come up

against a powerfully entrenched cultural reflex, it's not always the laws of economics

that win out.
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(Chandrahas Choudhury, a novelist, is the New Delhi correspondent forWorld View.

Follow him onTwitter. The opinions expressed are his own.)

Why do Indians buy gold?Submitted byMisha Sharma

India is one of the biggest markets for gold and gold loans. Reasons for this are

spread across various social, economic and cultural dimensions. According to World

Gold Council, India accounts for 10% of total world gold stock, of which rural India

accounts for 65% of the total gold stock. For Indians, gold is not just a commodity,

but an auspicious metal that they buy for various purposes on different occasions.

There has always been a high demand for gold in India, irrespective of prices. During

2001- 2012, the annual demand for gold remained relatively stable at around 700 to

900 tonnes despite constant rise in prices during the last ten years[1].

In a recently concluded CMF research project, we attempt to understand

the characteristics and behaviors of the various stakeholders involved in the gold

loan market through a survey methodology. This post highlights one of the

interesting findings from our preliminary analysis of the data. In order to gauge

peoples perception about gold, we asked respondents their motive behind

buying gold. Following figure provides a snapshot of the various reasons people

cite for buying gold.
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As observed, 31% of respondents buy gold for use during emergency situations.

This is because gold loans are easily available with minimal procedural

requirements. Gold is also considered as one of the most liquid assets, since it

can be easily converted back to cash and hence the resale value of gold is quitehigh compared to other types of asset. The second most common reason for

buying gold is that gold has a very high traditional value in India. This includes

buying gold during festivals, marriages, etc. There are various festivals in India

during which buying gold is considered auspicious. This is true especially in the

case of South India where people are gripped with what we can call a gold

mania.

20% of respondents save in the form of gold. This is indeed a prudent decision as

the value of gold has seen an upward trend over the last few years. Therefore,Indians prefer investing and saving in the form of gold, as gold is considered to

be a safe asset. Lastly, a total of 19% of the sample size cites buying gold for

marriage purposes. To give you further insight on this, following is an

observation from one of our field visit while administering the gold

questionnaire:

Surveyor: Do you often buy gold?

Respondent: No

Surveyor: Any specific reason, why you dont show much interest in buying gold?

Respondent: I have two boy children and so I dont care! If I had a girl child, I would

start accumulating gold from the minute she was born. Guess I am lucky.
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The above anecdote reflects societys attitude towards importance of gold in

marriages. Low income households face extreme societal pressure to buy gold in

spite of their economic barriers.

Whether Indians are emotionally attached to accumulating/buying gold is an

interesting question to investigate. Historically, Indians have expressed great

emotional attachment to their gold, which is one of the primary reasons for aflourishing Indian gold-loan market. However off late, the industry has witnessed

increasing defaults on gold loans, due to decrease in prices of gold. This reflects

peoples changing perception about gold. Indians have proved to be smart

investors and consider gold as a medium to save, invest, hedge against inflation

and most importantly to safeguard their future.

Therefore, in spite of Finance Minister Chidambarams constant plea to contain

uncontrolled passion for gold the demand for gold in India is sky high.


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Golden facts

aboutGOLD


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Numbers and factsSome of the more extraordinary statistics which gold has accumulated across the centuries and around

the world.

The atomic number of gold, which means there are 79 protons in the nucleus of every atom of gold.

The 40,000 miners who joined the California Gold Rush in 1849 were called 49ers. Only a very few ever

got rich.

One ounce of gold can be stretched to a length of 50 miles; the resulting wire would be just five microns

wide.

Million - the number of times that all of the existing gold in the world, turned into 5 micron wire, could wraparound the planet.

One ounce of pure gold could be hammered into a single sheet nine metres square.


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Gold melts at 1064 degrees centigrade.

...And only boils at 2808 degrees centigrade.

This is the total number of tonnes of gold mined since the beginning of civilisation.

... all of which would fit into a crate of 21 metres cubed.

Over 90 percent of the worlds gold has been mined since the California Gold Rush.

million people worldwide depend on gold mining for their livelihood.


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The number of grams in a troy ounce of gold.

The number of troy ounces in a London Good Delivery Bar.

Julius Caesar gave two hundred gold coins to each of his soldiers from the spoils of war in defeating

Gaul.

Fort Knox holds 4,600 tonnes of gold.

And the US Federal Reserve holds 6,200.


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The temperature of the human body is 37 degrees centigrade. Because of golds unique conductivity,

gold jewellery rapidly matches your bodys heat, becoming part of you.

It is rarer to find a one ounce nugget of gold than a five carat diamond.

The percentage of gold mined today that becomes jewellery.

The % increase in the price of gold from Dec 2000 to March 2013.

The number of parts per thousand of pure gold in 18 carat gold.

In 95 BC, Chinese Emperor Hsiao Wu I minted gold commemorative piece to celebrate the sighting of a

unicorn.


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The largest gold coin ever minted, a 2007 Canadian $1,000,000 Maple Leaf is 53cm in diameter.

Howard Carter made his famous tiny breach of the top left hand corner of the doorway to reveal the first

glimpse of Tutankhamuns tomb on 26 November 1922.

Even at only 10 parts of gold per quadrillion, the worlds oceans are estimated to hold up to 15,000

tonnes of gold.

The largest ever true gold nugget weighted 2316 troy ounces when found at Moliagul in Australia in 1869.

It was called the Welcome Stranger.

In March 2013, the SPDR Gold Shares (GLD) fund, a World Gold Council sponsored exchange traded

fund, held around US$63 billion assets under management.'


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HeritageDespite its unrivalled properties, gold is an inert material. It does nothing until man discovers it, mines and

refines it and bends it to his will. So the history of gold is very much the history of civilisation. Here are

some points in time where that history was made.

Click on the images to enlarge

c. 3600 BCFirst smel t ing of gold

Egyptian goldsmiths carry out the first melting or fusing of ores in order to separate the metals inside.

They use blowpipes made from fire-resistant clay to heat the smelting furnace.

2600 BCEarly gold jewellery

Goldsmiths of ancient Mesopotamia (modern-day Iraq) craft one of the earliest pieces of gold jewellery, a

burial headdress of lapis and carnelian beads with willow leaf-shaped gold pendants.Image Trustees of The British Museum
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1200-1500 BCAdv ances in jewellery making

Artisans develop the lost-wax jewellery casting technique. The process allows for improved hardness and

colour variation which in turn broadens the market for gold products.

1223 BCCreation of Tutankh amun's fun eral mask

Instantly recognised the world over, the funeral mask of Tutankhamun is a triumph of gold craftsmanship

from the ancient world.

950 BCSolomon bui lds gold temple

The Queen of Sheba from Yemen presents King Solomon of Israel with 2,500 kilos of gold, bringing the

contents of his treasury to 5,700 kilos. Solomon uses part of his holdings to construct his famed temple,

allegedly overlaid with gold. Nir Levy
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600 BCFirst gold dentistry practiced

The first use of gold in dentistry as the Etruscans begin securing substitute teeth with gold wire. Bio-

compatibility, malleability and corrosion resistance still make gold valuable in dental applications.

564 BCFirst international gold c urrency c reated

King Croesus develops improved gold refining techniques, permitting him to mint the world's first

standardised gold currency. Their uniform gold content allows 'Croesids' to become universally

recognised and traded with confidence.

300First gold nanopart icles

The Romans use gold to colour the Lycurgus Cup. Melting gold powder into glass diffuses gold

nanoparticles throughout which then refract light, giving the glass a luminous red glow.Image Trustees of The British Museum

1300Hallmarking practice establ ished

The world's first hallmarking system, scrutinising and guaranteeing the quality of precious metal, is

established at Goldsmith's Hall in London - where London's Assay Office is still located today.Image The Assay office, Birmingham
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1717UK gold s tandard comm ences

Britain moves onto a de facto pure gold standard, as the government links the currency to gold at a fixed

rate (establishing a mint price of 77 shillings, ten and a half pennies per ounce of gold).

1803First gold electroplating practiced

The first recorded experiment in electroplating is carried out by Professor Luigi Brugnatelli at the

University of Pavia. Gold electroplating ensures improved conductivity, now essential to many 21st

century technologies.Image Deep Blue,CC-BY-SA-3.0,Wikimedia Commons

1848Cali fornia Gold Rush b egins

John Marshall discovers gold flakes while building a sawmill near Sacramento, California. The greatest

gold rush of all time follows as 40,000 diggers flock to California from around the World.
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1885South Afr ican Gold Rush begins

While digging up stones to build a house, Australian miner George Harrison finds gold ore on Langlaagte

farm near Johannesburg. Miners flock to the region. South Africa will go on to become the source of 40%

of the world's gold.Image Terry Davis

1885First Faberge Easter egg crafted

Carl Faberge makes his first gold Imperial Easter Egg for Tsar Alexander III. Named The Hen Egg, it was

commissioned as a gift from the Tsar to his wife, the Empress Maria Fedorovna, beginning a tradition that

lasts until 1917.Image PetarM,CC-BY-SA-3.0,Wikimedia Commons,

1870-1900Adop t ion of gold standard

All major countries other than China switch to the gold standard, linking their currencies to gold. The

practice of bimetallism is abandoned.
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1925Gold standard returns

The UK returns to the gold standard at pre-war parity of $4.86=1 with sterling convertible to gold at 77sh

10.5d per standard ounce. This follows the country's departure from the gold standard six years

previously at the outbreak of World War I.

1933Roosevel t suspends gold

President Roosevelt suspends US dollar convertibility to gold (gold at US$20.67/oz). The export of all

transactions in, and the holding of gold by private individuals, is forbidden. Presidential proclamation

makes the dollar convertible again in January 1934 at a new price of $35 per troy ounce.

1939World War II closes gold market

The London gold market is closed on the outbreak of war, as at the beginning of World War II. The world

will later return to a fixed system of exchange rates, this time with currencies fixed to the dollar and the

dollar convertible into gold.
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1944Bretton Woods conference

The Bretton Woods conference sets the basis of the post-war monetary system. The US dollar is set to

maintain a $35=1 oz gold conversion rate. Other currencies are fixed in terms of US dollar, thus forming a

Gold Exchange Standard.

1961First gold bonded microchips

Gold bonding wire is used in microchips engineered at Bell Labs in the US. Nowadays literally billions of

chips are bonded this way every year, controlling all manner of indispensible electrical devices.

1961First gold in space

The first manned space flight uses gold to protect sensitive instruments from radiation. In 1980, 41kgs of

gold is included in space shuttle construction through brazing alloys, fuel cell fabrication and electrical

contacts.
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1967First South Afr ican Krugerrand

The Krugerrand is introduced in 1967, as a vehicle for private ownership of gold. This iconic coin is

actually intended for circulation as currency.

1971Gold window closed

The Bretton Woods system of fixed exchange rates comes to an end as President Nixon "closes the gold

window", suspending US dollar convertibility to gold. The world enters its present day system of floating

exchange rates.

1985First gold -based arthr i t is treatment

Pharmaceutical giant, SmithKline & French, develops Auranofin, a gold-based drug for the treatment of

rheumatoid arthritis. The drug receives regulatory approval and goes on sale for the first time.
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1999First Central Bank Gold A greement

The First Central Bank Gold Agreement (CBGA) is agreed. 15 European central banks declare that gold

will remain an important element of their reserves and collectively cap gold sales at 400 tonnes per year

over next five years.

2001First gold us ed in heart surgery

Boston Scientific markets the first gold-plated stent (Niroyal) used in heart surgery. Inserted inside large

arteries and veins, such stents act like scaffolding, propping open the blood vessels to allow adequate

flow.Image Richard Lee

2003K-gold launched in China

The World Gold Council creates an entirely new market segment with the launch of K-gold, the first 18k

jewellery in China. The jewellery, in predominantly white and yellow gold, takes its inspiration from Italian

design.
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2004Launch o f SPDR

Gold Shares

The market is transformed by an innovative, secure and easy way to access the gold market. Six years

later SPDR exceeds $55bn in assets under management.

2009Central banks return to bu ying

In the second quarter of the year, central banks collectively become net purchasers of gold for the first

time in two decades. This reflects a combination of slowing sales from European banks and growing

purchases by emerging market countries.Image National Geographic

2010Gold pr ice susta ins record highs

Fiat currencies are undermined by inflation fears and successive financial crises. The London pm fix

achieves 35 separate successive highs in the year to date.
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2011Gold in catalyt ic conv erters

Gold used in catalytic convertors by a leading European diesel car manufacturer. The first use of gold in

automotive emissions control.

2012Olympic Gold

The custom of awarding gold, silver, and bronze in sequence for the first three places dates back to the

1904 Summer Olympics in St. Louis, Missouri in the United States. At the 2012 games, the International

Olympic Committee stipulates that each gold medal must have a minimum of at least six grams of gold.

The London 2012 gold medals are the biggest and heaviest summer Olympic medals ever made.Read

more...
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Demand and supply

Gold is rare. At the end of 2012, there were 174,100 metric tonnes of stocks in existence above ground. If

every single ounce of this gold were placed next to each other, the resulting cube of pure gold would only

measure 20 metres in any direction.

The demand for this precious and finite natural commodity occurs in many geographies and sectors.

Around 60% of todays gold becomes jewellery, where India and China, with their expanding economic

power, are at the forefront of consumption. In East Asia, India and the Middle East, gold has powerful

cultural meaning, accounting for approximately 70% of the worlds gold jewellery in 2012.

But jewellery creates just one source of demand; investment, central bank reserves and the technologysector are all significant. Each is driven by different dynamics, adding to golds strength and

independence.

In creating supply, gold mining companies operate on every continent of the globe. This broad

geographical dispersal means that issues, political or otherwise, in any single region are unlikely to

impact the supply of gold. Beyond mine production, recycling accounts for around a third of all current

supply. In addition, central banks can also contribute to supply should they sell part of their gold reserves.

It is worth noting that after 20 years as net sellers, central banks are now net buyers, causing not only a

significant decrease in supply but a corresponding, simultaneous increase in demand.


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The golden constant

Since the 14th Century, golds purchasing powerhas maintained a broadly constant level. To put this in

practical terms, an ounce of gold has repeatedly bought a mid-range outfit of clothing. This was true in the

fourteenth century, when an ounce of gold was worth 1.25 to 1.33; it was true in the late 18th century

and it remained true at the beginning of this century (2000 to 2008), when an ounce of gold averaged

269 or $472. Even the exchange rate between gold and commodities has been relatively constant over

the centuries.

On the other hand, the US dollar that bought 14.5 loaves of bread in 1900 buys only 3/4 of a loaf today.

While inflation and other forces have ravaged the value of the worlds currencies, gold has emerged withits capacity for wealth preservation firmly intact. Being no-ones liability, gold exhibits the same wealth

preserving qualities in the face of financial turmoil, earning a reputation as a crisis hedge in addition to its

credentials as an inflation hedge.

The Golden Constant: The English and American Experience 1560-2007 by Roy W Jastram with updated

material by Jill Leyland. Published 2009 by Edward Elgar Publishing Ltd (www.e-elgar.com), hardback,

368 pages, ISBN: 978 1 84720 261 1.
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Price

In todays market, trading in several exchanges of both physical gold and gold derivatives determines the

daily gold price, with the traditional London gold price fix still serving as the daily benchmark price. This fix

is set twice daily at 10am and 3pm. The price of gold is usually measured in US dollars per troy ounce.

percapita income

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