ZAGREB, January 31, 2018 – Croatia, with per capita wealth of 147,545 dollars, ranks 28th in Europe and Central Asia, shows the World Bank report “The Changing Wealth of Nations 2018”.
Based on data for 2014, countries in Europe and Central Asia accounted for 27% of global wealth, and most of the wealth in that region was held by western European countries, while Croatia was below the regional average of US$ 368,233, shows the World Bank report.
Poland, for example, ranks one place higher than Croatia, with per capita wealth of US$ 154,932 while Slovenia ranks 16th, with per capita wealth of US$ 351,776.
In 2014, 83% of regional wealth was held by western European countries, mainly Germany (19%), France (14%), and the UK (13%); 9% by the Russian Federation; and the remaining 8% was held by eastern European and central Asian countries.
Per capita wealth varied enormously in the region of Europe and Central Asia. Norway, Switzerland and Luxembourg held wealth well over $1 million/person. In most of the remaining high-income OECD countries, per capita wealth was between $600,000 and $900,000 per person. A large number of eastern European and central Asian countries (13) have wealth well under $100,000 per person.
The World Bank report shows that global wealth grew significantly over the past two decades but per capita wealth declined or stagnated in more than two dozen countries in various income brackets.
The report found that global wealth grew an estimated 66 percent (from $690 trillion to $1,143 trillion in constant 2014 U.S. dollars at market prices). But inequality was substantial, as wealth per capita in high-income OECD countries was 52 times greater than in low-income countries.
A decline in per capita wealth was recorded in several large low-income countries, some carbon-rich countries in the Middle East, and a few high-income OECD countries affected by the 2009 financial crisis.
Declining per capita wealth implies that assets critical for generating future income may be depleted, a fact not often reflected in national GDP growth figures.
The change in wealth between 1995 and 2014 was rather varied, with some countries recording major progress while others ‘lost their footing’, notably after the financial crisis in 2009.
The reasons for the stagnation or reduction of per capita wealth in individual countries are varied. For example, in Greece, Portugal and Spain it declined after the financial crisis in 2010, caused by an increase in the countries’ foreign debt and the stagnation and decline of human capital.
In Ukraine, total wealth dropped 10% but the population loss of 12% resulted in a 2% increase of per capita wealth. In Turkey, per capita wealth stagnated, going up by only 2% between 1995 and 2014. The report notes that this is due to a gradual increase in the foreign debt and a drop in natural capital, which accounts for a large share of wealth, as well as low earnings from other assets.
In other countries, total per capital wealth increased. Population losses contributed to an increase in per capita wealth in European and central Asian countries such as Armenia, Georgia, Moldova, Bosnia and Herzegovina, Bulgaria, Belarus, Albania, Romania, Latvia, Lithuania, the Russian Federation, Poland, Estonia, Hungary, Germany and Croatia.
The highest increase in per capita wealth, of 274%, was reported by Bosnia and Herzegovina, primarily owing to a fast growth of human capital and following recovery from regional conflicts since the base year 1995. Of 43 European and central Asian countries, Bosnia and Herzegovina ranked 41st, with total per capita wealth of US$ 40,486, with only Moldova and Kyrgyzstan ranked lower.
The Changing Wealth of Nations 2018 tracks the wealth of 141 countries between 1995 and 2014 by aggregating natural capital (such as forests and minerals), human capital (earnings over a person’s lifetime); produced capital (buildings, infrastructure, etc.) and net foreign assets.
“By building and fostering human and natural capital, countries around the world can bolster wealth and grow stronger. The World Bank Group is accelerating its effort to help countries invest more – and more effectively – in their people,” said World Bank Group President Jim Yong Kim.
“There cannot be sustained and reliable development if we don’t consider human capital as the largest component of the wealth of nations.”
