The Changing Wealth of Nations 2018

1. The Changing Wealth of Nations 2018 Building a Sustainable Future Editors: Glenn-Marie Lange Quentin Wodon Kevin Carey February 5, 2018 Brookings Institution

2. The World Bank has developed wealth as an indicator of sustainability for two decades This book tracks wealth in 141 countries, from 1995 to 2014 Long Term Prosperity and Well-Being National Income / GDP Total Wealth Produced Capital Natural Capital Human Capital Net Foreign Assets Protected Areas Male/Female and Employed /Self-employed Total Assets- Total Liabilities Urban Land Forests Machinery Equipment Structures Energy/Minerals Agricultural Land

3. Global Wealth by Income Group 1995 to 2014 Global wealth grew 66% between 1995 and 2014, from $690 trillion to $1,143 trillion with increasing convergence between middle-income and high-income countries

4. Growth in Total Wealth and Per Capita Wealth, 1995 to 2014 Population growth impacts per capita wealth, especially in low- and middle-income countries

5. Per Capita Wealth in 2014 by Income Group Despite gains in middle-income countries, inequality persists. Per capita wealth in high-income OECD countries is 52 times that of low-income countries. Upper Middle income High income non-OECD High income OECD World Low income Lower Middle income

6. Percent Change in Wealth Per Capita Total wealth grew everywhere, but per capita wealth did not

7. The composition of wealth fundamentally changes with economic development Percent Shares of Wealth by Asset Type

8. ... but growing an economy is not about liquidating natural capital to build other assets Natural capital per capita is highest in upper middle income and high income OECD countries Natural Capital: Share vs Per Capita Value Upper Middle income High income OECD Low income Lower Middle income

9. Value of Natural Capital Per Person, 1995 to 2014 (2014 US$) Agricultural land, fossil fuels and minerals grew the most; forests grew just enough to maintain the per capita value ... but growing an economy is not about liquidating natural capital to build other assets

10. Human Capital: Share vs Per Capita Value Human Capital rapidly increases as economies grow Upper Middle income High income OECD Low income Lower Middle income

11. Women account for less than 40% of human capital. Gender equality could generate large gains Gains in Human Capital from Gender Equality

12. What Have We Learned? • Global wealth increased by 66% in 20 years • Middle income countries’ share has risen; beginning to close the gap with high income countries • Per capita wealth increased by 30%, but 25 countries saw stagnation or a decline • Natural capital, if managed wisely and rents invested properly, is a driver of sustainable growth • Human capital is the biggest component of wealth • The composition of wealth changes with economic development; managing wealth as a portfolio of assets is critical

13. WAVES