The Changing Wealth of Nations 2018

Building a Sustainable Future

Editors: Glenn-Marie LangeQuentin WodonKevin Carey

Total Wealth

Long Term Prosperity and Well-Being

National Income / GDP

ProducedCapital

MachineryEquipmentStructures

UrbanLand

NaturalCapital

Energy/Minerals

AgriculturalLand

ForestsProtected

Areas

HumanCapital

NetForeignAssets

Male/Female and Employed /Self-

employed

Total Assets-Total

Liabilities

Wealth and well-being

Global Wealth by Income Group 1995 to 2014 Global wealth grew 66% between 1995 and 2014

The share held by Middle income countries increased

from 19% to 28%

The share held by Low income countries didn’t

change

$690 trillion

$1,143 trillion

Percent Change in Wealth Per Capita Total wealthgrew

everywhere,but per capita

wealth did not

50%5%-5% 100%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

Zim

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Mad

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Low income Lower middle income Upper middleincome

AFRICA: Annual Ave Growth of Wealth, by Income Group

Wealth, ave annual growth 95-14Wealth per cap, ave annual growth 95-14

Most African countries increased wealth, but for some, not enough to keep up with population growth

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

The composition of wealth changes with economic development

Percent Shares of Wealth by Asset Type

Note: Net foreign assets are small and negative, except for High-income non-OECD countries

Development as Portfolio Management

... but growing aneconomy is not about

liquidating natural capitalto build other assets

Natural capital per capita is highest in upper middle and high income OECD countries

Natural Capital: Share vs Per Capita Value

Low income Lower Middle income

Upper Middle income

High incomeOECD

... but growing an economy is not about

liquidating natural capital to build other assets

At the global level, agricultural land, fossil fuels & minerals grew the most

Value of Natural Capital Per Person, 1995 to 2014 (2014 US$)

Varying trends inrenewable resources

in the developing regions, with forest value per

capita declining almost everywhere

Growth in Per Capita Value of Forest and Agricultural Land,1995 to 2014 (percent)

Regions include only low- and middle-income countries

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)?

Where is CWON used?

• 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

What’s next for CWON?

Focus on Africa

• 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

Wealth in Africa is highly concentrated in 2 countries, while per capita wealth shows large diversity

• Two countries account for about half

• Six countries hold 2/3 of SSA wealth

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

Zim

babw

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rund

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ngo,

DR

Com

oros

Mad

agas

car

Tanz

ania

C. A

frica

n Re

p.Ga

mbi

a, T

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ger

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ina

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Afric

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Low income Lower middle income Upper middleincome

AFRICA: Annual Ave Growth of Wealth, by Income Group

Wealth, ave annual growth 95-14Wealth per cap, ave annual growth 95-14

Most African countries increased wealth, but not enough to keep up with population growth

• 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

•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

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

- 200,000 400,000 600,000 800,000 1,000,000

Nat

ural

Cap

ital 2

014

Total Wealth 2014

AFRICA: Renewable and Non Renewable NR Wealth Plotted with Total Wealth

Renewable NR Capital

Non-Renewable NR Capital

Linear (Renewable NR Capital)

• 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

Focus on 10 countries with growth/capita < 0

-100%

-50%

0%

50%

100%

150%

200%

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

Changes in Wealth per Capita by Category for 10 Countries with Negative Wealth Changes from 1995 to 2024

ProducedRenewableNon-renewableHumanPop'n Change

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 balancebiological/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 FrameworkRoll-Out

The Climate Infusion:

ENR GP Contribution to Climate Co-Benefits

Innovation and Disruptive Technologies

0

500

1,000

1,500

2,000

2,500

3,000

FY13 FY14 FY15 FY16 FY17 FY18 Expected* FY19

ENR GP Lending FY 13-FY 19 in US million

IBRD IDA TFs

0

5

10

15

20

25

30

35

40

45

50

FY13 FY14 FY15 FY16 FY17 FY18 Expected* FY19

ENR GP number of projects FY 13-FY 19

IBRD IDA TFs

Our robust growth path

4,413.54

5,085.32

4,512.94

5,218.415,073.53

7,405.01

6,718.77

.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

FY11 FY12 FY13 FY14 FY15 FY16 FY17

US

Mill

ions

Fiscal Year

ENR GP net commitments per year

Arigato Gozaimashitaありがとうございました