Ukraine ranks 123rd in Global Wealth Report. Is it worse than Lesotho?

Author : Oleksiy Kushch

Source : 112 Ukraine

It often happens that every new world rating - whether it is about wealth or efficiency – turns into another minute of shame for Ukraine. This time, analysts of Credit Suisse made a rating of the personal wealth of citizens, depending on their country of residence
20:11, 30 October 2018

112 Agency

Let us start with the good news - the world has become richer, and women already own 40% of the world's wealth. Citizens of the United States are steadily getting richer, despite the global financial crises produced by their economy: since 2008, their wealth has steadily increased, even when it was falling all over the world (2014-2015). Over the past 12 months, when the assessment was made, global wealth increased by $ 14 trillion and reached $ 317 trillion. A remarkable fact: the growth rate of world wealth by 4.6% outpaces the same dynamics of growth of the world economy. As a rule, this happens only on the eve of a crisis. Although it is necessary to take into account the growth factor of the population, even with this adjustment we will get + 3.2%. More than 63,000 dollars per one adult inhabitant of the Earth! A historical record. China takes second place in this list.

But this was measured by the number of inhabitants. And if we measure income per capita, then the rating of the rich varies somewhat: Switzerland is in the first place (530,000 dollars), Australia is second with 411 000, and United States is in the third place with 403,000 dollars. These figures are too average. A clearer picture of the distribution of wealth is given by the indicator of median welfare, that is, taking into account the level of inequality and the proportion of major social groups. With this measurement, Australia is already in the first place, following by Switzerland and the US.

The main group of rich countries is North America and Europe. They account for 60% of world wealth. At the same time, only 17% of the adult population of the planet live in these territories.

The general world trend - the growth of wealth - has lost its inclusiveness. In numbers, this is reflected in the growth of the gap between the average and the median wealth. In simple words: after the financial crisis of 2008 the rich became richer faster, and the poor became poorer. It seems that the "golden age" of mankind has ended, barely beginning in the mid-90s of the last century.

The group of countries with emerging markets accounts for only 21% of world wealth. In the next five years, the growth of world welfare will be 26%, and the number of millionaires will increase to 55 million.

The adult population with a level of wealth below 10 thousand dollars has decreased to 64%, although at the beginning of the 2000s it has reached 80%. In the foreseeable future, the wealth of developing countries will grow somewhat faster than the developed ones, and the above figure will decrease to 61%.

Unfortunately, Ukraine is in the group of the poor countries. In terms of personal wealth, we are at the 123rd place with a level of 1,500 USD. Totally, 140 countries are on the list. In this hierarchy of the poor, we are ahead of the people of Nepal (more than 2,000 USD), Bangladesh (2,300 USD), Lesotho (2,600 USD). Belarus (1,500 USD), Tajikistan (1,300 USD), Zambia (1,100 USD), Syria (1,100 USD) are higher on the list. Ethiopia ($ 160) and Malawi ($ 140) are at the bottom of the list. Being next to Belarus is encouraging, but not with Lesotho.

Let’s look at Ukraine closer. For example, as of August of this year, Ukrainians kept 18 billion USD in banks. If we take the number of economically active population in our country at the age of 15 to 70 years, we get 17.8 million people. That is only with financial assets, we have more than a thousand dollars per adult resident. Plus the available resources of households: according to our State Statistics Committee, in the amount of 300 USD per family per month or 1,700 USD per year per adult. Do not forget about tangible assets in the form of cars, real estate, and land.

Of course, the problems of assessing the Ukrainian economy are based on the fact that a significant part of the working-age population (from 3 to 6 million people) is earning abroad (migration). About the same number of people are employed in the shadow sector. Their influence on the wealth of the country is very conditional because this welfare does not participate in the redistribution of public goods within the official institutions of the state. Let us compare the numbers. We have 17.8 million economically active population. At the same time, the number of officially listed working people is only 7.68 million. That is, more than 10 million people either went into the shadow economy or abroad. If we estimate the prospects for our GDP for the current year, we will get about $ 120 billion in equivalent. If we recalculate it on one economically active resident, we will get more than 15,000 USD a year.

That is, 10 million people who have dropped out of the system of legal economic reproduction could generate an additional 150 billion dollars a year! The same 3 million workers (minimum) are theoretically capable of generating 45 billion dollars in their home countries. And trust me, they generate them in Poland, Italy, the Czech Republic, the Russian Federation... And we are comforted by the 9 billion dollars they send to Ukraine. But the impact of this figure on our GDP is even smaller - as a rule, our incomes make up 20-30% of GDP, that is, transfers of labor migrants add no more than $ 3 billion to the national gross product. Thus, we are not poor people but we have the inefficient system of state management and the same level of pro-government elite.

In fact, all these misunderstandings with the ratings mean the difficulties of "civilization translation." Swiss analysts do not disclose their assessment methodology. But I can confidently tell you: any calculations have the so-called in-country coefficients that show how the wealth of a country can be activated in real life. In simple terms, we are talking about the liquidity of the economy. Recall our country in 2007. Real estate and land prices were almost like in the best world capitals. Permanent revenue growth. A stable currency rate and moderate inflation. Or back in the years 2014-2015. How many people had deposits in banks, including foreign currency deposits? And how much money they lost then?

It turns out that from the point of view of the so-called liquidity of the economy, every adult Ukrainian can count on 1 500 dollars on average. Is it bad? Yes, I would like to live in a different way, in a liquid economic system. Unfortunately, in terms of the current level of "elite" and the current model of the economy - this is impossible.

Lesotho is an enclave state in South Africa, completely surrounded by the territory of the Republic of South Africa. Lesotho is a poor country which economy is integrated with the economy of South Africa. More than half of the population work in agriculture. Many residents of Lesotho work in South Africa.

Read the original text at

This column does not necessarily reflect the opinion of the editorial board or 112.International and its owners.

Related: Physics propels Ukrainian teacher to YouTube fame

Related: Russia’s FSB detains suspect in leaking of information about Petrov, Boshirov, - source


Система Orphus

If you find an error, highlight the desired text and press Ctrl + Enter, to tell about it

see more