UN: World's richest 1% own 40% of all wealth

The largest and first ever study of global household assets and wealth distribution done by the World Institute for Development Economics Research of the United Nations reveals that the richest 1% of adults in the world own 40% of the planet's wealth and 50% of world's adults own just 1%. The report also reveals that those involved in financial and internet sectors are amongst the super rich.

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Other important findings:

1. Europe, the US and some Asia Pacific nations house most of the extremely wealthy.

2. More than a third live in the US.

3. Japan accounts for 27% of the total, the UK for 6% and France for 5%.

4. Highest per capita wealth: (1) Japan - $181,000 (2) America - $144,000 (3) UK - $127,000

5. The richest 10% of adults accounted for 85% of the world total of global assets.

The report considered only 38 countries of the world and is purely based on household wealth, financial assets and debts, land, buildings and other tangible property, which amounts to $125 trillion globally.

The first of its kind report reveals dreadful levels of inequality and the existing massive gap amongst people globally. This means that if the 1% rich part off even with a small amount of their wealth, it would be enough to feed those 800 million people who go to bed hungry every night. However, this distribution, call it unequal or unfair, purely owes to the supply of wealth, which is a dynamic process and some have a larger share.

Madsen Pirie's, director of the Adam Smith Institute, statement that we should now emphasize on 'how more and more people could create wealth', is the only practical solution left to end the existing inequality. But how?

Ruth Lea, director of the Centre for Policy Studies, raises a very important issue that there is no use giving loads of aid to poorer countries as these are 'basically dysfunctional' and not equipped enough to make the best use of it. But, that doesn't give us reason to dump them. The middle-income countries have a high growth rate, 6.0 percent this year compared to 2.7 percent for the industrialized world, and they're fast catching up, though still they've a long way to go, because as they grow richer, the population too grows with the same pace, diluting the overall growth. Also, more importantly, poorer/developing countries are more involved in solving, rather struggling with, other problems more exactly than building up assets, further widening the gap.

Now, getting straight and briefly to the point, as I expect more practical answers from my readers, the solution lies in restructuring global economy; I mean bring what we call 'Economic Democracy', with more emphasis on taxation, and boosting social programs that directly benefit the poor in the long run.

Individual countries should focus on economic reforms keeping in mind global trends and that too at the right time to keep up with the pace. If economic policies are not framed deftly to that effect, the overall growth automatically collapses. In addition, nation's resources should be constructively directed towards more productive activities like technology, this would attract more FDI too.

And to realize all this we'll to move ahead of our obsession with growth and bring in dramatic reforms in the whole 'global market and social structure' and realize the fact that the existing inequality is not only a financial problem rather a social problem too.

Via: The Guardian Unlimited