July 4, 2011 World Bank Changing Wealth of Nations seminar (at ifad) by Gianni Ruta
The changing wealth of nations 2018 - World Bankpubdocs.worldbank.org › en › 361301547027542495...
Transcript of The changing wealth of nations 2018 - World Bankpubdocs.worldbank.org › en › 361301547027542495...
Azerbaijan Human Capital Forum
THE CHANGING WEALTH OF
NATIONS 2018Building a Sustainable Future
December 19-21, 2018
Outline
▪Wealth Accounting and its Importance
▪ Main Components of Wealth: Human Capital as the Largest
Component of Global Wealth
▪ Human Capital as the Most Important Driver of Development
▪ Key Messages
The Changing Wealth of Nations 2018 – Building a Sustainable Future
Numbers to remember!
The Changing Wealth of Nations 2018 – Building a Sustainable Future
•5
•14
•60
•70
Measuring wealth and its changes are essential
to monitor the long-term economic well-being of nations
The Changing Wealth of Nations 2018 – Building a Sustainable Future
2006 2011 2018
The Changing Wealth of Nations 2018:
Building a Sustainable Future
▪Wealth accounts
available for 141
countries, 1995 to 2014
(market exchange) rates,
(in 2014 US$)
▪Wealth underpins
income and well-being
▪Human capital –
explicit estimates
possible for the first time, drawing from more
than 1,500 household
surveys maintained by the
World Bank
The Changing Wealth of Nations 2018 – Building a Sustainable Future
Long Term Prosperity and Well-Being
National Income / GDP
Total Wealth
Produced Capital
Machinery Equipment Structure
Urban Land
Natural Capital
Energy/Minerals
Agricultural Land
ForestsProtected
Areas
HumanCapital
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%
The Changing Wealth of Nations 2018 – Building a Sustainable Future
% change in wealth per capita
▪Global wealth
per capita grew
31% from
$128,921 (1995)
to $168,580 (2014)
▪Azerbaijan’s
wealth grew
by over 100%,
from about
40,638 (1995)
to $85,341
(2014)
50%5%-5% 100%
The Changing Wealth of Nations 2018 – Building a Sustainable Future
Wealth Accounting: Development as portfolio management
▪Is current GDP sustainable, or are we liquidating capital?
▪How much to save vs. consume?
▪What assets to invest in?
Low and middle-income countries: leverage natural capital to build infrastructure, human capital, etc.
Percent Shares of Wealth by Asset Type
The Changing Wealth of Nations 2018 – Building a Sustainable Future
Human capital as a driver of development
▪ Human capital is the largest component of global wealth, 64%
▪ Human capital increases rapidly as economies grow
▪ Women account for less than 40% of human capital wealth
▪ Achieving gender parity in earnings could generate an 18% increase in human capital wealth.
The Changing Wealth of Nations 2018 – Building a Sustainable Future
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
0%
10%
20%
30%
40%
50%
60%
70%
Low income Lower middleincome
Upper middleincome
High income:OECD
Human capital, US$ per capita
Human capital, share of total wealth
Human Capital: Share of Wealth vs Per Capita Value in 2014
Natural capital remains important
▪ 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
The Changing Wealth of Nations 2018 – Building a Sustainable Future
Azerbaijan is an outlier, with less human capital wealth than
even low income countries
Percent Shares of Wealth by Asset Type
The Changing Wealth of Nations 2018 – Building a Sustainable Future
Azerbaijan human capital’s contributions
to national wealth considerably low
The Changing Wealth of Nations 2018 – Building a Sustainable Future
Do you know what these numbers are?
The Changing Wealth of Nations 2018 – Building a Sustainable Future
•5
•14
•60
•70
What the numbers stand for
• 5 – Azerbaijan is 5th from bottom among the 141 countries for which we have measured wealth and its components
• 14 – the share of human capital in Azerbaijan’s wealth (%)
• 60 – Azerbaijan’s human capital index (%)
• 70 – The share of human capital in high income OECD countries’ wealth (%)
The Changing Wealth of Nations 2018 – Building a Sustainable Future
Key messages
▪ Development is about building and managing a diverse portfolio of assets• Growth is in part about more efficient use of natural capital and investing the
earnings from natural capital sources into human capital and infrastructure. These investments then result in growth of total wealth.
• Human capital is the single biggest component of global wealth• Azerbaijan’s human capital wealth is lower than even the average for low income
countries
To ensure economic growth and the sustainability of that growth, accelerate investments in human capital and manage the natural asset base sustainably.
▪ Wealth should be used as an indicator of sustainability to complement GDP, which measures only current income
Important to implement full wealth accounting to better inform sustainability assessments
▪ Important to link to other factors for assessing sustainability, such as strong institutions and good governance
The Changing Wealth of Nations 2018 – Building a Sustainable Future
Thank you!
The Changing Wealth of Nations 2018 – Building a Sustainable Future