The Inclusive Wealth Report 2014

This post was authored by Richa Gupta during an internship at Fields of View.

(Please read the previous blog ‘The Inclusive Wealth Report 2012’ on Inclusive Wealth Index)

The Inclusive Wealth Report of December 2014 covers information from 140 countries, and was released in New Delhi, India. It laid a special emphasis on human capital. The report concluded that 85 of the 140 countries were producing sustainably, in terms of inclusive wealth, while the consumption patterns of the 55 others were considered unsustainable.

The report also found the extent to which human capital and natural capital are huge indicators of wealth, as compared to only produced capital (which is accounted for by the Gross Domestic Product). For instance, while global GDP rose by 50% from 1992 to 2010, the IWI rose by a relatively paltry 6%. As said by Dr. Partha Dasgupta, chair of the 2014 Report’s science advisory group, “vast losses in natural capital (and small increases in human capital) largely explain the anaemic overall growth in Inclusive Wealth worldwide despite enormous gains in produced capital”.

Components of Global Inclusive Wealth, from 1990 – 2010

Type of Capital % of total Inclusive Wealth % change from 1990 to 2010
Produced Capital 20 + 50
Human Capital 57 + 8
Natural Capital 23 – 30

The following statistics also show the extent to which the Gross Domestic Product is an inadequate standard of a nation’s wealth and prosperity:

As can be extrapolated from the December 2014 report, in the US, India and China, wealth measured only by GDP (from 1990 to 2010) rose by 33%, 155% and 523% respectively.

However, when measures of the social values of natural, human and manufactured capital were considered, the USA’s Inclusive Wealth Index rose by 13%, India’s by 16%, and China’s by 47%—over the same span of time. These are gaping disparities, and provide an indication of the narrow scope of the Gross Domestic Product. The statistics of a few other countries have been tabulated below:

Country % change in GDP from 1990 to 2010 % change in Inclusive Wealth from 1990 to 2010
US +33 +13
India +155 +16
China +523 +47
Ecuador +37 –17
Guyana +97 –2
Qatar +85 –53
Tanzania +67 –37

 


 

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