By Joanne Bladd
An annual wealth report confirms what most of us have always suspected — you can’t keep the rich down for long.
Boston Consulting Group’s annual wealth report is out and confirms what most of us have always suspected — you can’t keep the rich down for long.
Barely eighteen months out of market meltdown the fat cat population has staged a comeback, with global wealth surging 11.5 percent to a hefty $111.5 trillion. Thanks in part to perky financial markets, we’re now snapping at the heels of pre-crisis levels — somewhat quashing BCG’s earlier prediction that we’d need another three years to grope our way out of the wealth wasteland.
Also on the rise is the number of millionaire households — which, incidentally, is defined as those with investable assets of more than $1m. (BCG doesn’t count piffling trinkets such as Maldives mansions, Lear jets and Van Gogh originals.) The seven-figure club now has 11.2 million filthy rich, card-carrying members, who together horde 38 percent of global wealth. That’s a two percent rise on 2008’s figure; proof, were it needed, that not only are the ranks of the rich swelling, but their pockets are getting deeper.
Naturally, the Gulf states are in the leading pack. According to BCG, the GCC’s super-rich are swimming in nearly $1.95 trillion-worth of capital; almost half the $3.9 trillion of wealth housed in the Middle East and Africa. An astounding 54 percent of it is squirrelled away in cash and deposits — an ‘under-the-bed’ saving tactic that would explain why the Gulf took it on the chin when the crash hit.
Thanks to their fizzing growth, the Gulf states are also home to three of the world’s most millionaire-dense populations. More than eight percent of Kuwait’s residents have attained gilded status, against 7.4 percent of those in Qatar and 6.2 of those in the UAE. Only Singapore, Hong Kong and Switzerland have a higher ratio. To reverse Scott Fitzgerald’s famous dictum, then, just about everywhere the rich are becoming less and less distinguishable from everyone else. You could be sitting next to one now.
Oil kingpin Saudi Arabia was a glaring absence from the list, the price it pays for diluting its super-spenders with a 21 million-strong population.
All in all, it’s a rosy picture, but it’s not one that will resonate with the wider population. Just ask America’s 15 million unemployed workers. North America posted the largest absolute gain in global wealth at $4.6 trillion — a climb of 15 percent — yet it shows no sign of trickling down to the wider population. Europe, a region in fiscal freefall, is ranked the wealthiest in the world, with a $37.1 trillion pot of gold. For the taxpayers barely squeaking by, creaking under the weight of those austerity cuts, that must stick in the throat. Here in the Gulf, where the last year has taught us that state-backed doesn’t equal a state bailout, its $1.95 trillion wad is staying firmly put.
It’s hardly reassuring, but this is the clearest sign yet that an economic recovery is underway. The rich are getting richer, and the poor are getting poorer — what could signal business as usual better than that?
For those of us not in the ranks of the super-rich, take comfort in the fact that the Gulf’s epic wealth can’t buy it everything. It might be home to $1.95 trillion and more millionaires than you can shake a stick at, but it still can’t manage uninterrupted footage of the 2010 World Cup. (Aside from the career of calamitous England goalkeeper Rob Green, arguably the biggest casualty of the tournament so far has been Al Jazeera’s reputation.)
See? Money can’t always buy you happiness.
Joanne Bladd is the Deputy Editor for Arabian Business.