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America’s Dominance of World Wealth Slips As Poorer Nations Gain

America’s Dominance of World Wealth Slips As Poorer Nations Gain

Reporter ,  22-Sep-10

According to the report released by the Organization Economic cooperation and Development, the share of rich and poor nations in the global wealth is now almost at par. In 2000, the ratio was skewed 60-40 towards the developed nations. Now, it is 51-49, and will reverse to 43-57 in favor of the developing economies.

According to researchers, the swing is being created by the recession, which saw investor and company values erode substantially in the economically developed countries, while developing nations were spared too much of the pain. In a related piece of research, it was found that Americans are no longer as wealthy as they once were, though the country as a whole remains the wealthiest with a per capita wealth of $130,000. This is a decline of 12 per cent over three years, from 2007. However, 39 per cent of the world’s richest assets belong to Americans, with Europe at 31 per cent and the rest distributed through the world.

The impact of the last couple of years means that Americans are spending less, instead using their money to pay off accumulated debts. So with fewer investments, lower wealth creation is the result. Only Greece at 14 per cent has seen its assets decline more than the US. Switzerland, Spain and Japan also suffered heavy declines, but Switzerland continues to be the richest in per capita terms, with 163, 732 Euros per person.

However, poorer regions in the world are gaining ground. For example, Eastern Europe’s wealth went up by an average of 16 per cent since 2000, while that of Asia and Latin America went up by 12 per cent on average. The US and Europe on the other hand just rose by a little over 3 percent.

However, the gap between rich and poor is still huge. Per capita wealth in the richest countries is 45 times that of the poorest countries. However a decade ago, the figure was 135 times. Who knows what is next? Developing economies the world over have begun tapping into their real potential and are expected to make leaps and bounds in the coming years, even as the developed economies like EU and the US stagnate under the effects of the last recession and its accompanying problems.


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