The Changing Wealth of Nations 2018 Building a Sustainable Future Editors: Glenn-Marie Lange Quentin Wodon Kevin Carey
Wealth and Long Term Prosperity and Well-Being well-being National Income / GDP Total Wealth Produced Capital Natural Capital Human Capital Net Foreign Assets Machinery Equipment Structures Urban Land Energy/ Minerals Agricultural Land Forests Protected Areas Male/Female and Employed /Selfemployed Total Assets- Total Liabilities
Global Wealth by Income Group 1995 to 2014 Global wealth grew 66% $1,143 trillion between 1995 and 2014 $690 trillion The share held by Middle income countries increased from 19% to 28% The share held by Low income countries didn t change
Percent Change in Wealth Per Capita Total wealth grew everywhere, but per capita wealth did not -5% 5% 50% 100%
Most African countries increased wealth, but for some, not enough to keep up with population growth 10.00% 8.00% 6.00% AFRICA: Annual Ave Growth of Wealth, by Income Group Wealth, ave annual growth 95-14 Wealth per cap, ave annual growth 95-14 4.00% 2.00% 0.00% -2.00% -4.00% Zimbabwe Burundi Congo, DR Comoros Madagascar Tanzania C. African Rep. Gambia, The Niger Togo Burkina Faso Liberia Mali Chad Uganda Mozambique Guinea Malawi Ethiopia Sierra Leone Rwanda Nigeria Cote d'ivoire Kenya Swaziland Senegal Zambia Cameroon Ghana Congo, Rep. Mauritania Gabon South Africa Mauritius Botswana Namibia Low income Lower middle income Upper middle income Wealth per capita declined in 10 African countries assets critical for generating future income may be depleted, a trend not reflected in annual income growth figures
Development as Portfolio Management The composition Percent Shares of Wealth by Asset Type of wealth changes with economic development Note: Net foreign assets are small and negative, except for High-income non-oecd countries
Natural Capital: Share vs Per Capita Value... but growing an economy is not about liquidating natural capital to build other assets Natural capital per capita is highest in upper middle and high income OECD countries Low income Lower Middle income Upper Middle income High income OECD
Value of Natural Capital Per Person, 1995 to 2014 (2014 US$) At the global level, agricultural land, fossil fuels & minerals grew the most... but growing an economy is not about liquidating natural capital to build other assets
Growth in Per Capita Value of Forest and Agricultural Land, 1995 to 2014 (percent) Varying trends in renewable resources in the developing regions, with forest value per capita declining almost everywhere Regions include only low- and middle-income countries
Where is CWON used? More than half of SCDs use wealth accounts--provides the macroeconomic perspective on Nat Cap and the economy: 1. Measuring macro-economic performance: Not only, Is GDP growing?, but, Is GDP growth sustainable? 2. Sectoral applications and Fiscal policy implications: How will economy benefit from better mgmt. of Nat Cap (forest, fisheries, land, mineral & energy)?
What s next for CWON? Missing natural capital, expand CWON for Air pollution: make explicit the impact on human capital Make relevant to CMUs and country economists: Make it easy to use: country tool on platform for easy use Link to other factors essential for assessing sustainability Institutions, governance, policies Critical natural capital, monitored in biophysical terms
Focus on Africa
Wealth in Africa is highly concentrated in 2 countries, while per capita wealth shows large diversity SSA has 2% of global wealth, but 13% of population Gabon is wealthiest per capita, followed by Mauritius, Botswana, Namibia, South Africa 26 countries have wealth/capita < $30k 6 countries have wealth/capita <$10k Two countries account for about half Six countries hold 2/3 of SSA wealth
Most African countries increased wealth, but not enough to keep up with population growth 10.00% 8.00% 6.00% AFRICA: Annual Ave Growth of Wealth, by Income Group Wealth, ave annual growth 95-14 Wealth per cap, ave annual growth 95-14 4.00% 2.00% 0.00% -2.00% -4.00% Zimbabwe Burundi Congo, DR Comoros Madagascar Tanzania C. African Rep. Gambia, The Niger Togo Burkina Faso Liberia Mali Chad Uganda Mozambique Guinea Malawi Ethiopia Sierra Leone Rwanda Nigeria Cote d'ivoire Kenya Swaziland Senegal Zambia Cameroon Ghana Congo, Rep. Mauritania Gabon South Africa Mauritius Botswana Namibia Low income Lower middle income Upper middle income Wealth/capita declined in 10 African countries assets critical for generating future income may be depleted, a trend not reflected in annual income growth figures
Africa: Value of Natural Capital Grows with Wealth Natural Capital 2014 450,000 400,000 350,000 300,000 250,000 200,000 150,000 AFRICA: Renewable and Non Renewable NR Wealth Plotted with Total Wealth Renewable NR Capital Non-Renewable NR Capital Linear (Renewable NR Capital) 100,000 50,000 - - 200,000 400,000 600,000 800,000 1,000,000 Total Wealth 2014 As countries gain wealth, renewable NR wealth tends to grow in absolute terms (even while it may decrease as a share of the total) Non-Renewable NR capital does not exhibit the same strong trend NB: SA, Nigeria & ETH not shown to make more points visible in graphic
Focus on 10 countries with growth/capita < 0 200% 150% 100% Changes in Wealth per Capita by Category for 10 Countries with Negative Wealth Changes from 1995 to 2024 Produced Renewable Non-renewable Human Pop'n Change 50% 0% -50% -100% Burundi - LIC FCS Congo, DRC - LIC FCS RRS Zimbabwe - LIC FCS Nigeria - LMIC RRS Madagascar - LIC FCS RRS Comoros - LIC FCS Tanzania - LIC RRS Kenya - LMIC Cote d'ivoire - LMIC FCS RRS Gabon - UMC RRS Most had growth in non-renewable NC Most depleted renewable NC substantially (8 depleted by >25%) All had high population growth Most failed to accumulate human capital
The Environment & Natural Resources Global Practice
The BIG picture
Sustainable Approaches Fundamental for Growth + Prosperity
Urgent ACTION is needed to avert Earth s tipping points
Planetary Boundaries: Need to balance biological/physical and economic/social systems
Our business in ENR and in the Bank
Green Business: Pursues Effective Use and Management of Forests and Landscapes US$ 6.1 Billion in active and pipeline
Blue Economy: Approach Cuts Across Entire Blue Spectrum With a Focus on Sustainability US$ 3.6 Billion in active and pipeline
Brown Business: Improves Health Globally through Pollution Management US$ 4.6 Billion in active and pipeline
Safeguards Business: Environmental Risk Management & Environmental and Social Framework Roll-Out
The Climate Infusion: ENR GP Contribution to Climate Co- Benefits
Innovation and Disruptive Technologies
ENR GP Lending FY 13-FY 19 in US million 3,000 Our robust 2,500 growth path 2,000 1,500 1,000 500 8,000.00 ENR GP net commitments per year 7,405.01 0 FY13 FY14 FY15 FY16 FY17 FY18 Expected* FY19 IBRD IDA TFs 7,000.00 6,718.77 ENR GP number of projects FY 13-FY 19 50 6,000.00 45 US Millions 5,000.00 4,000.00 3,000.00 4,413.54 5,085.32 4,512.94 5,218.41 5,073.53 40 35 30 25 20 2,000.00 15 10 1,000.00 5.00 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Fiscal Year 0 FY13 FY14 FY15 FY16 FY17 FY18 Expected* FY19 IBRD IDA TFs
Arigato Gozaimashita ありがとうございました