The richest 1% of Indians own 48.7% of the country’s wealth. The latestGlobal Wealth Report from Credit Suisse lays bare the stark inequalities in wealth distribution not only between countries, but also within them. The details, including how they arrived at the estimates, are available at bit.ly/17tSYsm.
While the richest 1% own almost half of India’s wealth, the next 4% lag far behind, owning a comparatively low 16.6%. Together, this top 5% of the population makes up a plutocracy that owns almost two-thirds of total assets in the country. The top 10% have 73.8%, close to three-fourths of the nation’s wealth. Contrast that with the bottom half of the Indian society, which owns 4.5%. The bottom 30%, which is either below the poverty line or just above it, has 1.4% of the country’s wealth.
India is the most unequal among the large economies, although among Asian emerging markets Thailand, where the top 1% owns 50.6% of the country’s wealth, ranks higher.
Among emerging markets, while China’s income inequality is very high, inequalities in wealth are still not so pronounced. The richest 1% of Chinese own a mere 33% of their country’s wealth, while the bottom 50% own 9.6%. It does look as if some unfortunate Communist vestiges remain, althoughDeng Xiaoping
’s injunction to “Let some people get rich first” has been embraced with fervour by the current rulers of China.
The Gini coefficient for wealth for India stands at 81.3% (a reading of zero in the Gini index represents perfect equality, while 1 or 100% represents perfect inequality).
Wealth equality is highest in Slovakia, with a Gini index of 44.7% and in Slovenia, with an index score of 53.5%. At the other extreme we have Russia, with a Gini index of 93.1%. Also, according to the Credit Suisse data, there has been some increase in inequality since the Gini index for India was at 77.8 in its 2010 Global Wealth Report.
For the world as a whole, the bottom half of the population holds 0.7% of global wealth, while the top 1% holds 46.4% and the richest 10% have 85.9%. In India, 3.9 million people are lucky enough to be part of that global top 10% of the wealth pyramid.
Even in the so-called social democratic nations of Europe, wealth is very unequally distributed. The richest 10% in Sweden own 71.1% of the country’s wealth, while in France they own 51.8%.
The total pie to be shared, however, has increased rapidly.
India’s total wealth has trebled from $1.2 trillion at the turn of the century to $3.6 trillion in 2013, at current exchange rates.
China, of course, has done much better, increasing total wealth from $4.7 trillion in 2000 to $22.2 trillion in 2013. Indonesia’s wealth has grown 6.3 times over the period.
India’s share of world wealth increased from 1.02% in 2000 to 1.5% by 2013, although it’s much lower than India’s 16.45% share of the world’s adult population.
The problem, though, is that India had 1.6% of the world’s wealth in 2007, which shows the extent to which the financial crisis has affected it.
In 2010, thanks to a huge fiscal and monetary stimulus, India’s share of world wealth peaked at 1.77%. But there was no such shrinking in wealth for the very rich. The number of dollar billionaires in India doubled from 25 in 2010 to 50 in 2013.
In 2010, India had 2.5% of the world’s billionaires—in 2013, it had 4.4%. India’s share of ultra high net-worth individuals having wealth between $500 million and $1 billion also increased from 1.9% in 2010 to 3.3% in 2013.
India’s share of global wealth may have shrunk since 2010, but its share of the very rich has gone up.
Some of the more obvious conclusions and questions that follow from these numbers are:
1) The US, or at least the US plutocracy, seems to have done rather well out of the crisis—its share of world wealth went up from 27.9% in 2007 to 29.9% in 2013.
2) The huge disparities in wealth inevitably lead to vast inequalities in opportunity.
3) Democracy doesn’t seem to do much to address wealth inequalities—the fear of populist redistributive policies is vastly exaggerated;
4) Given this highly skewed wealth ownership, is it any wonder that it is the wealthy who are in a position to influence policy?
5) As long as we have a transnational elite able to exploit capital mobility and with labour’s share of national income declining everywhere, are we going to see even higher levels of inequality in future?