Wealth inequality deepens in emerging world, including Turkey
ZURICHNew research from Credit Suisse has revealed that global wealth is at an all-time high and has grown at a record pace over the past year to reach $263 trillion. But, at the same time, inequality has deepened, especially in the developing world. In countries such as Brazil, India, Turkey and Russia severe inequality has risen, with the wealthiest 10 percent owning more than 70 percent of the wealth.
Turkey comes fourth in the list of countries which have seen the most rapid rise in wealth inequality since 2000 after China, Egypt and Hong Kong.
“Our research suggests that countries often experienced a structural break in inequality trends around the time of the financial crisis. Prior to 2007 most countries show little change in inequality, or a slight decline; after 2007, wealth inequality has tended to increase,” the Swiss bank said in the latest version of an annual report on global wealth.
The world’s richest 1 percent owned a 48.2 percent share of global wealth in 2014, up from 44.7 percent in 2007, according to the report. This is almost back to the level in 2000, when the wealthiest 1 percent accounted for 48.7 percent of wealth. Inequality is rising fastest in developing countries such as Turkey, China and India, according to the report.
Wealth inequality rose rapidly in China, Egypt and Hong Kong both before and after the global financial crisis, but Turkey and South Korea saw a particularly rapid increase in wealth inequality after the 2007 financial crisis, the report said. In the report’s list of countries where wealth inequality has been rising very rapidly, these five countries are followed by Argentina, India, Russia, Taiwan and Indonesia.
The richest nations, with wealth-per-adult at over $100,000, are found in North America, Western Europe and among the richest Asia-Pacific and Middle Eastern countries. Switzerland is the country with by far the highest wealth per adult, followed by Australia and Norway. Denmark and the U.K. have moved up two places and now rank 8th and 9th respectively in terms of wealth per adult. Singapore has dropped three places, but is still among the top 10.
Regarding the impact of the 2008 global financial crisis on median wealth, the report said median wealth in Turkey “has been subjected to a roller coaster,” rising by 150 percent up to 2007 and then shedding all these gains in the following years. Turkish household wealth declined by $100 billion in 2014 from 2013, the report said, adding that this was largely attributable to “adverse currency movements.”
There are some 35 million millionaires in the world right now, according to the report.
Credit Suisse also offered predictions for 2019, by which time the authors suggest global wealth will have grown by 40 percent and reached $369 trillion. It is predicted that emerging markets will account for 26 percent of global wealth, more than double what they do now. The number of millionaires worldwide is projected to boom from 35 million today to 53 million in 2019, the report also said.
The number of individuals with wealth of above $1 million in Turkey declined to 79,000 this year from 87,000 in 2013, although the figure is expected to increase again up to 2019.