Ghana, in West Africa, has seen positive economic growth for several decades now, on a par with many of its peers (similar countries by virtue of their development stats):
However, it has been more successful that other countries in translating that economic growth into social development, as measured by the decline in stunting and the increase in primary education enrolment:
This is all according to a recent (June 2020) Report by the World Bank: Building Human Capital: Lessons from Country Experiences – Ghana.
The report takes an in-depth look at the government policies of Ghana and concludes that the positive social development has been the result of a multi-pronged policy initiatives all working together in the longer term, including:
Setting up a National Health Insurance Scheme – ensuring everyone has access to basic healthcare. This was funded by primarily by increasing tax on selected goods and services and on formal sector workers.
FCUBE – Free Compulsory Universal Education
School feeding programmes
WASH programmes – to address poor access to water and sanitation – this was largely funded by aid from the International Community.
Adult education programmes – particularly useful in educating adults about health care issues and preventing stunting.
Of particular note here is that the Ghanian government put a special tax (I think it was 2.5%) on oil extraction, specifically to fund health and education.
Also noted is the good governance in Ghana – government is stable so they’ve had continuous investment in health and education for decades now.
Analysis – what does this tell us about theories of development?
Really it tells us that governments are important – if you think about the UK – we have a (relatively) high tax and high-cost free health and education system, which help us develop ‘human capital’ – and that is what Ghana seems to have focused on at the national level.
This case study suggests that MORE government works best for social development, not less – development in Ghana has happened through taxing the oil industry and paying for state social services – taxation, public services and more regulation resulting, in this case, in MORE positive development – a great case study against the neoliberal theory of development.
Analysis – how generalisable is this case study to other countries?
This kind of development may only apply to countries who are free of conflict and have a stable, minimally corrupt government – that way, if resources such as oil are discovered, they can be taxed and the income used for health and education.
There are plenty of low to middle income countries (Ghana’s ‘peer’ countries as outlined in the World Bank report) which could learn from Ghana – so this is maybe a good low-middle income development case study.
However, as Paul Collier and the authors of ‘Failed States’ have demonstrated, many countries stuck at the bottom of the development ladder are not in a position to put in place such policies, so this case study is no help to them.
How successful has economic and social development in Kenya been since the year 2000?
This post has primarily been written for students studying the global development option for A-level sociology. The purpose of this post is to provide a specific example of a country which has, overall, experienced rapid and positive development over the last 20 years.
One of the key questions in this module is ‘what are the most effective strategies for development’ – one way of addressing this question is to explore further what development policies and initiatives have been applied in Kenya to promote positive development.
NB the purpose of this post is not to answer the question ‘why has Kenya developed economically and socially, but simply to provide a case study demonstrating the extent of the rapid progress according to many indicators of social and economic development.
Kenya in 2020: An Overview
Kenya is located in East Africa, with a population of just over 50 million people.
It is classified by the World Bank as a low to middle income country with a Gross National Income per capita of just over $1700.
Overall, Kenya has experienced positive economic and social development since the year 2000, as evidenced in the quadrupling of its GNI per capita during that time.
Social development has also been rapid: life expectancy has increased by 15 years since the year 2000, and both primary and secondary school enrolment ratios are significantly improved.
However, as some of the statistics below suggest there is still room for improvement and development challenges going forwards into the 2020s.
Kenyan Gross National Income per Capita as Quadrupled since the year 2000, from $400 to over $1700.
Kenya’s Debt as a percentage of its GNI has been relatively stable, and is currently low, at only 2.2% of GNI
Kenya’s Employment Ratio is high and has increased to 72.5% of the population
NB – this bucks the global trend of increasing levels of unemployment
Official Development Assistance to Kenya increased from $500 million in 2000 to $2.5 billion in 2018
This would suggest as far as Kenya is concerned that Aid has not retarded broader economic or social development.
Industrialisation and Urbanisation in Kenya
The breakdown of Kenya’s GDP is:
Agriculture – 34%
Industry – 17%
Services – 47%
Kenya’s major exports remain agricultural products:
In the year 2000 20% of Kenya’s population was rural, this has grown to 28% by 2020
Education Trends in Kenya
Secondary School Enrolment increased from 39% in 2000 to 57% (2010)
Tertiary Enrolment is currently at 9%
NB the World Bank data on enrolment ratios is sketchy, there appear to be several data gaps!
Life Expectancy Trends
Life expectancy at birth has increased from 50 to 66 years in the last 20 years
Health and Sanitation Trends
Approximately 4% of the population have HIV
X percent have access to clean water
Y percent have access to improved sanitation
Population and Birth Rate Trends
Kenya’s Population increased by 20 million between the year 2000 and 2020, from 30 million to 50 million
The Fertility Rate – decreased from 5.2 to 3.5 babies per woman
Contraceptive prevalence increased from 39 to 61%
The Infant mortality rate decreased from 99 per 1000 to 45 per thousand
Access to Technology Trends
Mobile phone access increased from 0.4 to 96%
Internet access increased from 0.3 to 22%
Kenya’s Peace levels, as measured by the Global Peace Index, have been up and down over the last decade, but have remained broadly stable over the 10 years since the index began.
Gender Equality Trends
Gender inequality seems to be a faltering point for Kenya. After some seemingly rapid progress in the last decade, gender equality has fallen back to almost the same level as in 2006.
Other notable development trends
Kenya has had a net migration of minus 50 000 per year in recent years, combined with an increase of money received from abroad.
Conclusion: Is Kenya A Development Success Story?
Based on the above statistics it is easy to conclude that, overall, Kenya has seen a great deal of positive economic and social development – especially based on the measurements of GNI growth, life expectancy and education.
However, there are some areas where no significant development appears to have taken place – peacefulness and gender equality seem to be struggling for example.
NB – this is only a very brief look at some of the general statistics, so keep in mind that there will be regional variations and that not everyone would have benefitted equally from any development that has taken place.
Also, i haven’t tried to look at why development has (or hasn’t on some indicators) taken place in Kenya, just the statistics!
I really don’t understand why there is such a panic over exams next year, when the solution is quite simple:
Put all other school years not doing exams on a part-home study schedule with about 1/5 of their lessons to be done at home, self-study for the duration of the exams.
This means every class gets 1 day home-study a week, make it the same day of the week per class for simplicity. So class 1A is always Monday, class 1B always Wednesday and so on.
This will free up 1/5th of classrooms, set them up as exam-rooms.
1/5th of classrooms will be equivalent to the entire cohort (year 11) sitting their GCSE exams, so sufficient room even for those large compulsory exams such as English.
If classrooms are a little cramped, a portion of the class could sit the exam in the regular exam hall (typically the sports hall) – but the extra space created by the classrooms being used should allow an extra measure of social distancing.
Simply get GCSE students to sit their exams in their regular class-sets, even if in different class rooms.
If necessary mix the teachers up as invigilators and get volunteer parents in to be second invigilators.
As far as I can see it the above is a pretty minimally disruptive way of minimising disruption for regular teaching while maintaining ‘class bubbles’ and the integrity of the exams.
Parents coming into the school will not increase the risk of transmission of covid compared their kids coming in!
OK there will be a bit more mixing of people than in regular classrooms, but honestly, will it be more than takes place during regular break times?
OK it’s a bit of hassle for the parents who may need one day off of work a week to look after their children, but it’s only for a month of exams.
I fail to see what all the fuss is about!
Of course with A-levels it should be a no-brainer to not scrap them – with those you COULD send the entirety of year 12 home to study independently for 3 weeks while the exams take place which really would create sufficient classroom space for the A-levels – year 12s are 16/17 so need no legal adult supervision at home!
Then teachers can simply teach the year 12s until the bitter-end of the summer term -right up until the 20th of July if necessary, rather than letting it all ease off.
Coronavirus has had a negative effect on economic growth. Lockdown measures imposed by governments the world over have seen disruption to global supply chains, a decrease in international trade, an increase in unemployment, and a decrease in investment and global wealth in general.
Coronavirus has decreased global wealth
Probably the easiest way to summarise the economic consequences of coronavirus is to look at the impact it has had on Global Wealth, which I’ve already summarised in this blog post here.
Global Wealth has decreased by $8 trillion compared to where it was projected it would have been before the outbreak of the pandemic.
Personally I find this the most useful individual indicator, as it just takes one static gross snap shot figure and compares it with another, it’s very easy to understand.
Coronavirus has pushed most countries into recession
However, we need to look at a lot more figures to get a fuller picture.
Further reports emphasise the near universal negative consequences of Coronavirus:
This report (June 2020) by the World Bank predicts a 5% decrease in global GDP over the coming year, the largest decline since the 1870s, with all regions and countries showing significant cuts to their expected (pre-covid) economic growth rates.
The consequences of this economic slowdown which will be declining rates of investment, job losses and a corresponding decline in the rate social development in many developing countries.
Some sectors have been especially badly hit – the price of oil fell drastically with the Pandemic, but the agricultural sector has not been so badly effected. As a general rule, you might say that the less essential the sector, then the more it has been affected!
This report highlights that no country will escape the effects of Covid-19 unscathed, but China and Asia will probably fair better than the rest.
How Coronavirus Disrupted Global Supply Chains
The immediate impact of Coronavirus was a significant disruption to global supply chains, meaning that many global retailers struggled to maintain stocks of their products.
Supply chain problems also meant that manufacturers had to slow down or cease production of their products altogether, because they struggled to source raw materials.
Lockdown measures imposed in China in early 2020 were the main cause of this, because China is the world’s biggest manufacturer – it not only produces a lot of ‘end products’ (such as iPhones) but it also manufactures a lot of components that factories in other parts of the world need in the products they produce.
To find out more, this article by Bloomburg outlines how disruption to global supply chains impacted a variety of businesses all over the world – from watchmakers in Hong Kong to Lobster fishermen in New Zealand, it does a great job of highlighting the truly global effects of the Pandemic.
According to analysis of data on Tradeshift (a global supply platform) by the World Economic Forum global trade fell dramatically in February – April 2020. Chinese trade transactions fell by over 50% in March 2020, and the United States and Europe followed suit with a 26% drop in April, and a 17% drop after that.
The article suggests that as Chinese trade declined because of lockdown measures, global manufacturers struggled to source materials from other countries and so their production also slowed down.
What Coronavirus has revealed is that the world has become very dependent on China as the source of products – and when it goes into lockdown the rest of the world suffers.
The article further suggests that manufactures will probably look to diversify their supply bases in the future so as to be less dependent on China – and countries such as India, Vietnam and Mexico will probably be the main beneficiaries from this.
Another possible change might be more production in developed countries, further decentralising global supply networks,
So maybe the long term impact of globalisation will be a much more diverse form of economic globalisation (with China being less dominant) and maybe a reversal of the globalisation of manufacturing if we end up with more manufacturing taking place in developed countries?
The effects of Coronavirus on Transnational Corporations
A 2020 World Bank survey of Multinational Enterprises found that more than 90% had been negatively impacted by the Coronavirus Pandemic.
75% reported decreasing reliability of supply chains (meaning more difficulty in producing stuff) and decreasing worker productivity.
Half of MNEs surveyed have cut investment in developing countries by an average of 30% and 40% have reduced employment by an average of 16% – so overall that’s an average reducing of 15% investment and around 7% in employment.
The report (linked above) calls on governments to provide tax breaks to MNEs as well as more deregulation, so in other words more neoliberalisation, which is unsurprising coming from the World Bank.
Not all sectors have been affected equally
As has been reported widely, sectors of the economy associated with travel and leisure, such as the oil and aviation sectors have been affected very badly, with the number of flights taken being significantly reduced.
However, one sector which is doing better, with the hope of a vaccine coming soon, is the Pharmaceutical sector:
NB – these aren’t the only economic consequences of Coronavirus – I will cover the human cost in a separate post, in which I focus on the disruption to people’s working lives – the small enterprises struggling with lockdown measures, and how so many people are struggling to cope with reduced income and job losses.
Many of the most commonly used platforms and downloadable apps for learning the language, such as Duolingo focus on Brazilian Portuguese as there are many more people seeking to learn the Latin American version compared to the European version.
HOWEVER, there are significant differences between the two, especially in terms of pronunciation – so if you learn ‘Brazilian Portuguese in Portugal then you run the risk of not being able to understand what people are saying to you and not being able to make yourself understood.
Hence if you are a newly arrived resident in Portugal or are thinking of moving to Portugal in the near future (which I recommend btw!) then you’re better off using a dedicated European Portuguese learning platform such as Practice Portuguese, which is what I use!
Trust me, as a professional teacher I don’t recommend any old online learning platform – but I’m happy to direct people to this site because it’s so well thought-out for those new to the language:
When starting out, you’re directed to a number of clear modules, with progress indicators, starting with ‘the basics’ and the gradually getting more complex.
There are lot more modules after this, I just don’t want to put in too many screenshots!
Videos and Podcasts for Learning Portuguese
Another feature I really like about the site is the collection of videos and podcasts which are available, again nicely organised and easy to navigate…
Being new to the language I cannot emphasise enough how useful being able to hear the language is, and being able to practice along is fundamental to gaining confidence in using it.
They even have videos focussing on gaining residency, which you’ll know is very useful if you’ve every tried dealing with Portuguese bureaucracy – attempting to speak the language goes a long way!
Finally there’s a nice forum in which you can pose questions for people to answer, or just browse previous questions – which is a nice link to the lived experience of living in Portugal which you won’t get with some of the larger learning sites.
Practice Portuguese Final Thoughts
Overall I’m really enjoying using the site, it’s a very accessible way of learning European Portuguese.
I also really like the fact that it’s a relatively small scale, niche service run by two very friendly guys: Rui and Joel, which is much like what I do with this blog here!
Is the world becoming a better place to live? What do the latest trends in global development suggest?
How much progress has been made towards global development since the year 2000?
In this post I examine the global trends in development since the year 2000 according to key statistics from the World Bank, United Nations and other global institutions to try and answer the question: ‘do we live in a better world at the end of 2020 compared to 20 years ago?
I aim to produce a post like this every two years, to keep abreast of the latest trends in Development.
In this post I am focusing on whole world trends, or truly global statistics, so the very highest level of generalisation to provide an overview, in what you might call the Positivist tradition!
However, at the end of 2020 it is especially difficult to make judgements about the extent of development because of the impact of Coronavirus – we simply don’t know what the medium to long term consequences of this will be on global development.
The chances are that Coronavirus will impact the future development of regions, countries and communities within countries in very different ways, so now more than ever it will be important for students to try to qualify any generalisations about development suggested by the global statistics I am looking at below.
Key Indicators of Development
There is considerable debate over what the most valid indicators of development are, because definitions of ‘development’ vary widely. For this reason I include below several indicators of development, including:
The Human Development Index
Gross National Income (GNI) per capita
Extreme poverty statistics (those living on less than $1.90 a day)
National debt as a proportion of GNI
The employment ratio (the proportion of working age adults in employment)
The infant mortality rate
The adult literacy rate
Access to electricity
Peacefulness as measured by the Global Peace Index.
If you want to find out more about exactly what these indicators measure and some of their strengths and limitations you might like to read the following posts:
You can also find further information on some of the specific indicators by following some of the links from my Global Development Page.
Mixed Evidence of Global Development taking place since 2020
Some of the global indicators below suggest there has been significant economic and global development over the last 20 years, other indicators suggest there are significant challenges still facing us as a global population!
For example, the number of people living in extreme poverty has shrunk from nearly 30% of the population to less than 10% while Life Expectancy of females has increased from.
HOWEVER, these are just the global average statistics, and what you need to remember is that the averages will hide variations by country, and variations within countries. The later is especially important to consider – there are regions within some rapidly developing countries that are getting left behind. China and America are two good examples of this.
Some indicators suggest negative trends in development – such as increasing unemployment and increasing violence in some countries, and progress towards sustainable development seems slow.
The Human Development Index
The United Nations Development Programme’s (UNDP) Human Development Index combines Gross National Income, Life Expectancy and Years of Education into one score.
Practically every country shows positive development having taken place since 1990, when HDI first started tracking.
The two countries with significant declines are Syria and Yemen, which have both unfortunately experienced serious conflicts in recent years.
The total external debt of the 120 low- and middle-income countries was $8.1 trillion at the end of 2019, equivalent to 26% of their Gross National Incomes.
Nearly 40 (1/3rd of) low- and middle-income countries had debts greater than 60% of their GNI, treble the amount which had such ratios in 2010.
About 10 low to middle income countries (9%) had debts exceeding 100% of their GNI, 30% up from the number of countries in 2010.
Depending on what you think the role of debt is in development, this could be seen as counter trend to development. Dependency theorists would certainly see the increasing debt levels of poorer countries in this way.
The proportion of working age adults (15+) in paid employment has declined from 61% in 2000 to 57% in 2020.
This seems to be a counter-trend to development, with what is effectively a 4% increase in unemployment over the last 20 years.
However, this does not take into account the fact that more 16-24 year olds may be in education for longer, increasing wages, the impact of huge numbers of women entering the labour market, or the billions of people who are subsistence workers or work informally, so this indicator is an especially challenging one to interpret in terms of what it tells us about development!
There has been radical progress made in improving the infant mortality rate over the last 20 years – it has reduced from 52.8 per thousand (0.5%) to 28.2 per thousand births (just under 0.3%).
However, the global average is brought down by the higher infant mortality rates in less developed countries, and there is significant room for improvement – in the UK and similarly developed countries, the Infant Mortality rate is only 5 per thousand (0.05%)!
The overall adult literacy rate (of both males and females) has increased from 80% in the year 2000 to 86% in 2020.
6% may not sound like much of an increase, but there is something of a generational factor at work here. One imagines that someone that was 40 in the year 2000 is probably not that likely to become literate by the time they are 60, which is going to be a lag on improving the numbers of people who can read and write.
Most of the improvement above will be due to the increasing numbers of children being taught to read and write at a young age, who then carry this through to adulthood.
Overall the world has become less peaceful since 2009, when Vision of Humanity first started its Global Peace Index.
Today there are 38 countries which are recored as having low to very low levels of peacefulness.
Trends in peacefulness are diverging (becoming further apart) – generally speaking those countries which were more peaceful in 2009 have become even more peaceful (mostly those in Europe), while those which were less peaceful have become even less peaceful (mainly in subsaharan Africa)
While many of the classic indicators of development such as GNI, health and education show signs of positive development, there are clearly challenges remaining – mainly around how to attain better employment levels, and the very serious problems of increasing conflict and how to develop sustainably.
Summary of a documentary on global inequalities and waste
This excellent 2018 documentary gives us a rare insight into the daily working lives of two men living in poverty, both making a living through trash, one in Kenya and the other in the United States.
It’s a really useful resource for gaining an insight into what the lived experience of poverty is like in these two very different countries, and for highlighting the extent of global inequalities.
Most of the documentary focuses on two men, and we get to hear a lot from them: details of their lives and their thoughts on poverty and inequality and what they would do to help overcome the problems of inequality.
We also here from a few experts and other people, but these take on a supporting role to the two main proponents (which is unusual for documentaries like this, but also welcome!
This is an excellent video to use to teach Global Development in A-level sociology, personally I would use it in the introductory lesson to the module.
Below i provide a brief summary of some of the key points of this documentary:
Sorting trash in Kenyan slum
After a brief introduction we get to see the first part the day of one guy in Kenya who works in waste management.
He gets up at 4.00 a.m and then spends several hours sorting through trash which is delivered from the nearby affluent suburbs and shopping areas. He sorts out food for his pigs and separates out any useful items which he can sell on.
There are a lot of people working sorting waste, many of them there because they have no other option. Many of them also eat waste food they find there.
Recycling cans in New York
The video now hops over to America where it follows another guy who also gets up at 4.00 a.m. to collect cans and bottles, which he then sorts to sell – there’s a good market in recycled containers it seams in New York – he can make $75 a day doing this.
We also get an insight into his life history – he used to be homeless, and he reminds us that many Americans are just one pay check away from falling into a similar situation.
Back in the slum
In this third section we see the guy in Kenya sorting out some of the cartons he’s found at the dump – he gets someone else to wash them and then he sells them on, making a daily income of $3-4 which is enough for him to feed his family, and lifts him above Kenya’s formal poverty line.
The U.S ‘Cultural Waste and Recycling Centres’
Back in the United States – we’re taken to a recycling centre, a community initiative that gives ‘canners’ support in their recycling endeavours – which plays a crucial part in helping them stay resilient.
The video also gets a bit more analytical at this point – there are 600 billionaires in the United States, but 40 million Americans live in poverty. But poverty is much worse in Kenya – it takes the average Kenyan 20 years to earn the annual salary of the average American.
There’s also a short interview with an anthropologist who reminds us that waste is cultural – a lot of things are only trash because we label them as such – and we take a trip to one guy’s museum of trash to drive the point home – he’s got thousands of dollars worth of perfectly good stuff he’s collected from what other people have thrown away!
Reflecting on Inequality
The documentary now highlights inequalities in the two countries – by taking a trip to the mall in Kenya – one gets the impression that the government there is investing more in malls for the wealth than in education and health for the poor.
In America we visit a guy who makes art from trash – one piece (which sold for a small fortune) adorns the wall of the one the most expensive apartments in New York – how’s that for irony.
in this section the two main men in the video give their views on inequality – both seem quite wise – neither think inequality is a good thing and would use our financial resources to give more enabling support to those in poverty, a leg up if you like to better help them help themselves.
Why do you think the video focuses on trash as a means of exploring inequality?
Have these two men found an effective solution (sorting and selling trash) to lift themselves out of poverty?
Do you agree with the two men in this video. Should our global resources be used to help the poor?
(This was almost 9% increase on the previous year, and continued a long term trend of increasing wealth over the last two decades.)
If this wealth were distributed evenly, each individual adult in the world would have a total net worth of almost $80 000. However, the distribution is far from equal!
The map below shows the median net private wealth per household in different countries in 2019, according to Credit Suisse.
From the figure we can see that generally:
North America, Western Europe and Australian households have an average wealth of over $100 000.
Brazil, China and Russia (three of the BRIC nations) have an average household wealth of between $25 000 to $100 000
Much of Asia and Latin American and North Africa have an average household wealth of between $5000 to $25 000
Most of Sub Saharan Africa and Afghanistan have an average household wealth of less than $5000.
NB – you can look at practically any map of any development indicator (health/ education/ peacefulness etc.) and you’ll find that poor health, low levels of education and high levels of conflict are correlated with low levels of wealth. There are some notable exceptions, but as a general rule, low levels of household wealth means poor social development!
(For example, one notable exception is the USA which is very wealthy but severely socially underdeveloped, possibly because of such high levels of relative poverty within the country)
Global Wealth by Country
The infographic below by Visual Capitalist (link below) shows us the amount of wealth per country:
Top wealthiest countries
Visual Capitalist also produced the following table:
Total Wealth ($B, 2019)
% Global Share
All Other Countries
Top 15 wealthiest countries.
The above table is kind of useful, when you see that the USA controls almost a quarter of the world’s wealth, but with only around 4% of the world’s population, that alone can give you a sense of the inequality, especially when it’s leading China in P2 whose population is more than double that of the United States.
NB – What country wealth statistics don’t show is how equally (or unequally in the case of America) wealth is distributed in a country, which is something we will consider later.
The Global Wealth Pyramid
A second visualisation Credit Suisse Produce is the global wealth pyramid
This pyramid shows us that:
The top 1% of the population, or just 52 million people (those worth more than $1 million) control 43.4% of the world’s wealth
The next 11.4%, or 590 million people (those worth from $100 000 to $1 million) control 40.5% o the world’s wealth
The next 34%, or 1.7 billion people (those worth from $10 000 to $100 000) control 14.7% of the world’s wealth
The poorest 53%, or 2.7 billion people (those worth less than $10 000) control only 1.4% of the world’s wealth.
The richest 1% own 43% of the world’s wealth
The visualisation below (courtesy of the global inequalities blog, link below) does a good of showing how few people control how much wealth, and how many people control so little:
Wealth controlled by Ultra High Net Worth Individuals
The graphic below zooms in closer on the very very wealthy. We see that those worth more than $30 million, just 0.002% of the world’s population control over 7% of the world’s wealth!
Definition of ‘Net Worth’ or Wealth
According to the Global Wealth Report, Net worth, or “wealth,” is the value of financial assets plus real assets (principally housing) owned by households, minus their debts.
This figure includes the net value of all the assets a household owns if sold and their private pension fund assets. The figure does not include any state entitlements/ benefits or state debts.
What is the best way to visualise global wealth inequalities?
Credit Suisse: Global Wealth Report 2020, linked above
Global Inequalities blog – does a nice job visualising some of the stats in the Credit Suisse Report. NB the stats above are from the 2019 report, but that’s not too long ago and I like them!
Visualcapitalist – produced the excellent football like visualisation of wealth inequalities by country!
This post focuses on a recent report produced by Credit Suisse. It is primarily written for students studying the Global Development option for A-level sociology, and is meant to serve as an update on Global inequalities!
In 2019, Privately Owned Global Wealth had grown to $399 trillion, an almost 9% increase on the previous year, according to Credit Suisse’s latest 2020 Global Wealth Report, which focuses on both wealth trends to 2019 and the impacts of Coronavirus on wealth up until June 2020.
That 9% increase from 2018 continued a long term trend of increasing wealth over the last two decades. In the year 2000, global wealth stood at $118 trillion (at current US prices) and has risen on average by 6.6% per annum since then, with a significant decrease (and subsequent recovery) in 2008 with the financial crisis.
NB – wealth is not distributed evenly and the map below shows the median net private wealth per household in different countries in 2019,
The impact of Coronavirus on Global Wealth
The Global Wealth Report notes that to June 2020 Coronavirus has cost the global economy around $8 trillion, in terms of what economic growth was predicted to be.
We see a rapid decline in global wealth per person January to March, when Coronavirus was taking hold, but then a recover, as governments around the world stepped in with stimulus packages.
The chart above also shows you that we’ve basically just had zero growth in wealth since from 2019 to June 2020.
However, you can see that by June 2020 there has been a decline in wealth per person of around $3 000, compared to projected growth which never happened!
The Economic Impact of Coronavrius on Different Regions
The chart below shows the impact by region
The impact of Coronavirus up until June 2020 seems to have been minimal on most regions if we compare the 2019 projections with the actual figures to June 2020.
The global average decline in wealth to June 2020 is – 2%, and most regions have seen around a 2% decline, compared to what was expected, overall we simply have almost 0 global growth compared to an anticipated 2% increase!
There are minor variations across regions, but nothing too significant according to the figures above!
There are significant variations by country
However, if we look at the impact of Coronavirus on wealth by country, we do see significant differences emerging:
The above chart shows us that to June 2020 the UK’s average household wealth declined by 7%, while China’s increased by 4%. Meanwhile the USA has seen almost no change to private household wealth!
This infographic shows the biggest percentage gains and losses per individual by country
We can see some dramatic variation here, with Brazil and South Africa’s per person wealth declining by around 25%, supposedly due to Coronavirus, while quite an eclectic mixture of countries have seen their individual wealth increase by 5%
NB – the figures look more dramatic if you look t the dollar amounts:!
Projections for future wealth growth
The Global Wealth Report is optimistic about future growth potential in most regions, especially India and China
How valid is this data?
NB – this report is latest based on available data, but it was written before the latest wave of lockdowns in November 2020.
The report is very clear that these global wealth trends could change dramatically depending on how Coronavirus and the societal reaction to it develops!
You need to be sceptical I think about the focus of this report – it is on global wealth, rather than global poverty, if you look at the later (poverty not wealth) you realise that there are millions of people around the world who are being pushed into poverty because of Coronavirus (more of that later!) – but you miss out on this in this report because it’s been written mainly (I think) for a Western audience, and you get the impression that’s everything is OK.
This report by Alianz and the World Bank gives you a different impression, talks of a ‘wealth buffer’ which insulates the wealthy from the worst effects of the economic downturn caused by the Pandemic, but it also talks about how millions of those towards the bottom are being pushed into extreme poverty.
You might remember that above the Credit Suisse report shows a negative 2% economic growth rate in Africa, then says nothing else about it – well, that basically means a LOT more people pushed into poverty, which is what the Allianz/ World Bank report focuses on!
Note: Definition of ‘Net Worth’ or Wealth
According to the Global Wealth Report, Net worth, or “wealth,” is the value of financial assets plus real assets (principally housing) owned by households, minus their debts. This figure includes the net value of all the assets a household owns if sold and their private pension fund assets. The figure does not include any state entitlements/ benefits or state debts.
If that wealth average wealth were distributed equally then every adult would have around $77 000. H
In 2019, Privately Owned Global Wealth had grown to $399 trillion, an almost 9% increase on the previous year, and continuing a long term trend of increasing wealth over the last two decades.
As we approach the end of 2020, there are almost 8 billion people on planet earth.
Trying to think in terms of billions of people is perhaps a little overwhelming, and maybe not that useful in helping us understand global differences and global inequalities.
A billion, (one thousand million) is so large a number that it’s maybe too abstract to help us understand the characteristics of our global population, it’s kind of easy to glaze over when talking and thinking in billions.
For example, if you look at the numbers of people on each continent, the figures are as follows:
4.8 billion from Asia
1.28 billion would be from Africa
800 million would be from Europe
720 million would be from Latin America & the Caribbean
400 million would be from North America
These numbers, presented in the billions and hundreds of millions aren’t that easy to comprehend – you kind of glaze over and switch off, it’s just because the numbers are so large we can’t relate to them that easily!
An easier way to compare these figures is to look at it in percentage terms, which is much easier for the human brain to understand:
Percentage of people on each continent:
60% in Asia
16% in Africa
10% in Europe
9% from Latin America & the Caribbean
5% from North America
With the percentages, we lose a bit of accuracy by rounding up or down, but for getting an overview it’s an easier starting point than the longer ‘billions and hundreds of millions’ figures above.
An even easier way to present an overview of global population characteristics is to imagine the world as 100 people, which is exactly the same as looking at the population in percentage terms, just a bit more ‘human’ and thus easier to relate to!
If the world were 100 People…
60 would be from Asia
16 would be from Africa
10 would be from Europe
9 would be from Latin America & the Caribbean
5 would be from North America
100 People: A World Portrait
There are a few versions of ‘the world as 100 people’ video – in which we are taken through how many people would live where, how many people would be what religion, how many have access to clean drinking water and so on.
However, although the most recent versions are dated 2019 and 2018, they both use the data from the 2016 project above: 100 people a world portrait – which also has it’s own (not as snazzy) video and sources (neither of the two more recent snazzier videos seem to think it’s even worth crediting where they got their information from, so I’m not going to link to them from here.
The Miniature Earth (Throwback)
I first came across the concept of the world as a 100 people back in 2010, through this miniature earth video.
IMO it’s a much better version, to the tune of ‘Mad World’ – just a shame it’s now dated and so not that useful, other than to compare to the 2016 statistics!
Privacy & Cookies Policy
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.