the changing wealth of nations 2018 · the changing wealth of nations 2018 • natural capital...

The Changing Wealth of Nations 2018 Building a Sustainable Future

Editors: Glenn-Marie Lange Quentin Wodon Kevin Carey

Wealth accounts available for 141 countries, 1995 to 2014

Market exchange rates

Human capital—explicit estimates possible now

Still missing: • Fisheries • Water • Agr land degradation

(unsustainable farming practices)

• Natural hazard protection, esp. flooding

The Changing Wealth of Nations 2018

Long Term Prosperity and Well-Being

National Income / GDP

Total Wealth

Produced Capital

Machinery Equipment Structure

Urban Land

Natural Capital

Energy/Minerals Agricultural Land Forests Protected Areas

Human Capital

Male/Female and Employed/Self-employed

Net Foreign Assets

Total Assets-Total

Liabilities

Global Wealth Grew 66% from 1995 to 2014

Changing shares:

• East Asia’s share grew from 20% to 26%

• Sub-Saharan Africa’s share did not change

• Europe & Central Asia and N. America declined from 75% to 65%

[CELLRANGE]

[CELLRANGE] [CELLRANGE]

[CELLRANGE]

[CELLRANGE]

[CELLRANGE] [CELLRANGE]

2014 ($1,143 trillion)

1995 ($690 trillion)

Wealth in Low- and Middle-income Countries


Shares of Global Wealth, 1995 and 2014

Low income 2%

Other Lower middle income

11%

Other Upper middle income

15%

China 45%

Brazil 12%

India 7%

Mexico 4%

Indonesia 4%

0%

2%

4%

6%

8%

10%

12%

14%

Low income Lower middleincome

Upper middleincome excl

China

China

1995 2014

Distribution of wealth among low- and Middle-income countries, 2014

Percent Change in Wealth Per Capita


50%5%-5% 100%

• Asia leads

• Africa: mixed performance

At risk: • Fragile-

conflict states • Resource rich

states

Growth in Total Wealth and Per Capita Wealth, 1995 to 2014

Population growth impacts per capita wealth, especially in low- and middle-income countries

A closer look at growth in Sub-Saharan Africa


-50%

0%

50%

100%

150%

200%

250%

300%

350%

400%Rw

anda

Sier

ra L

eone

Ethi

opia

Mal

awi

Gui

nea

Moz

ambi

que

Uga

nda

Chad

Mal

i

Libe

ria

Burk

ina

Faso

Togo

Nig

er

Gam

bia,

The

Cent

ral A

fric

an R

epub

lic

Tanz

ania

Mad

agas

car

Com

oros

Cong

o, D

em. R

ep.

Buru

ndi

Zim

babw

e

Mau

ritan

ia

Cong

o, R

ep.

Gha

na

Cam

eroo

n

Zam

bia

Sene

gal

Swaz

iland

Keny

a

Cote

d'Iv

oire

Nig

eria

Nam

ibia

Bots

wan

a

Mau

ritiu

s

Sout

h Af

rica

Gab

on

Low income Lower middle income Upper middleincome

Growth in total wealth

Growth in per capita wealth

Growth of wealth in EAP (low and middle income countries) Country average (excluding China): 68% per capita

0%

50%

100%

150%

200%

250%

300%

Cambodia Lao PDR Vietnam Indonesia Philippines Papua NewGuinea

SolomonIslands

China Malaysia Thailand Mongolia

Low income Lower middle income Upper middle income


Growth in total wealth percapita

Wealth Accounting: Development as portfolio management


• Is current GDP sustainable, or are we liquidating capital?

• How much to save vs. consume?

• What assets to invest

in? Low- and middle-income countries: leverage natural capital to build infrastructure, human capital, etc.

Percent Shares of Wealth by Asset Type

Note: Net foreign assets are small and negative, except for High-income non-OECD countrie

Human Capital as a driver of development


• largest component of global wealth, 64%

• increases rapidly as economies grow

Human Capital: Share of Wealth vs Per Capita Value in 2014

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

0%

10%

20%

30%

40%

50%

60%

70%


Upper middleincome

High income:OECD

Human capital, US$ per capitaHuman capital, share of total wealth

Natural capital remains important as its share of wealth declines


• Natural capital remains important even as countries grow and develop

• Growing an economy is not about liquidating natural capital to build other assets

• Natural capital per capita is highest in upper middle and high income OECD countries

Natural Capital: Share vs Per Capita Value (US$) in 2014

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


Upper middleincome

High income:OECD

Natural capital, US$ per capita

Natural capital, share of total wealth

Growth achieved by investing in renewable Natural Capital for resilient growth, not by depleting it


Growth of Renewable assets and Total wealth, per capita, all countries

How per capita wealth changed, selected African countries 1995 to 2014 (2014 US$)

-5,000

-3,000

-1,000

1,000

3,000

5,000

7,000

9,000

11,000

Malawi Tanzania Burundi Ethiopia Rwanda Sub-SaharanAfrica

Total Wealth

ProducedCapitalNatural Capital:RenewableNatural Capital:NonrenewableHuman Capital

Net ForeignAssets

Where is CWON used in the World Bank?


More than half of Systematic Country Diagnostics use wealth accounts—provides the macroeconomic perspective on Nat Cap and the economy: 1. Measuring macro-economic performance:

Not only, ‘Is GDP growing?’, but, ‘Is GDP growth sustainable? 2. Sectoral applications and fiscal policy implications:

How will economy benefit from better mgmt. of Nat Cap (forest, water, fisheries, land, minerals & energy)?

• Resource rents finance development, poverty reduction • Fiscal benefits from less damaging natural hazards – utilizing nature-based infrastructure • From current market value to potential economic value—the benefits of optimizing natural

cpaital

3. Work on human capital supporting gender analysis and the Human Capital Project

Macroeconomic indicators using wealth, especially natural capital

accounts 1. Change in wealth per capita at national level 2. Adjusted net national income (ANNI) and Adjusted net savings

(ANS) (published in World Development Indicators annually) 3. Fiscal balance/Gross operating balance, adjusted for natural

resource depletion 4. Public sector balance sheet including natural resources (IMF’s

Fiscal Monitor, Managing Public Wealth) 5. Total Factor Productivity including natural resources

What we’ve learned for CWON 2020


Extensive engagement with country teams and regional teams within the World Bank, country clients and external partners

1. Expand CWON 2020for missing natural capital: • water & fisheries • ecosystem services: wetlands, mangroves, coral reefs • degradation: air pollution, agriculture & forest degradation --link degradation to human capital

2. Policy focus • Benefits from natural resource policy reform • Macro/fiscal policy and indicators using wealth accounts • Climate change: impact on assets + ‘stranded assets

3. Link to other factors for assessing sustainability risk • Institutions, governance, policies • Critical natural capital, monitored in biophysical terms

4. Dissemination and user-friendly tools

Thank you!


Thank you!

A closer look at growth in South Asia

-50%

0%

50%

100%

150%

200%

250%

300%

350%

Nepal Bangladesh India Sri Lanka Pakistan Maldives

Low income Lower middle income Upper middleincome

Growth in total and per capita wealth, 1995 to 2014


Growth in total wealth per capita

A closer look at growth in Latin America

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Hai

ti

Nic

arag

ua

Gua

tem

ala

Hon

dura

s

Boliv

ia

El S

alva

dor

Guy

ana

Peru

Ecua

dor

Pana

ma

Dom

inic

an R

epub

lic

Cost

a Ri

ca

Para

guay

Colo

mbi

a

Beliz

e

Braz

il

Mex

ico

Surin

ame

Jam

aica

Uru

guay

Vene

zuel

a, R

B

Arge

ntin

a

Chile

Low income Lower middle income Upper middle income High income: non-OECDHigh income: O

Growth in total and per capital wealth, 1995 to 2014 Growth in total wealth

Growth in total wealth per capita

A closer look at growth in Middle-east and North Africa (excluding high-income countries)


-50%

0%

50%

100%

150%

200%

West Bankand Gaza

Morocco Yemen, Rep. Djibouti Egypt, ArabRep.

Tunisia Jordan Lebanon

Lower middle income


Growth in per capita wealth

A closer look at growth in new EU-member states


0%

20%

40%

60%

80%

100%

120%

140%

Bulgaria Romania Latvia Lithuania Croatia SlovakRepublic

Poland Estonia Hungary Slovenia

High income: non-OECD High income: OECD


Growth in total wealth percapita

Ageing of population, slow wage growth, & other factors affect human capital in some countries


0%

10%

20%

30%

40%

50%

60%

70%

80%


High income: non-OECD

Upper middleincome

China High income: OECD

Human Capital Share of Total Wealth in 1995 and 2014

1995 2014

the changing wealth of nations 2018 · the changing wealth of nations 2018 • natural capital...

Documents