India has made “no significant incursions” in the top 1% global rich despite rapid economic growth over the past two decades, according to a new study that says more super-rich are coming from emerging economies in recent years.
The study titled “Who are the global top 1%?” by Sudhir Anand of the University of Oxford and Paul Segal of King’s College London looks at the varying fortunes of the global rich from 1988 and 2012 and finds the representation of developing countries in the global top 1% declined until about 2002, but has risen significantly since 2005.
India’s top 0.01% is in the global top 1% in all years, but this top 0.01%, about 126,000 people in 2012, comprised about 0.2% of the global top 1% in all years – too small a share to feature in a table of top 20 countries in the global 1%, it said.
“Thus a rich Indian who can enjoy the real expenditures of the global top 1% in her own country will find her spending power severely curtailed when she travels to a developed country which may be three or four times more expensive, when measured at market exchange rates,” the study announced by Oxford on Thursday said.
Noting the increasing numbers of Chinese joining the global super-rich 1%, the study said that “India has made no significant incursions into the global top 1%, despite rapid economic growth over the past two decades”.
The study further said: “The fact that both China’s and India’s share of the world’s billionaires are much higher than their share of people with income or wealth in the global top 1% suggests that they are particularly unequal at the very top of their distributions compared with other countries.”
The researchers calculated the global distributions of income based on household surveys and income tax records. They found that the US still dominates with 38% of the individuals in the global top 1% in 2012, but this is much smaller than in 1998, when Americans made up nearly half of this group.
By contrast, China's share in the global top 1% rose from 1.3% to 3.4% between 2005 and 2012. Its share of the world's billionaires is much larger – in 2016, it is 14%. Citizens of advanced economies still make up the biggest share at 79% of the global top 1% in 2012.
The researchers calculated, however, that this share is on a downward trend, and is 7-11 percentage points lower than between 1988 and 2005. The study also found that in the ranks of the global top 1% in 2012, Japan is second to the US, with a share of 8.5%; followed by Germany at 5.8%, France at 5.4%, Brazil at 5.3%, and the UK in sixth position at 4.7%.
Anand said: “The turning point for the emerging economies appears to have been around 2005. That is when its citizens increasingly started to enter the ranks of the global rich. This trend was undoubtedly reinforced by the global financial crisis in 2008, which slowed growth in the advanced economies.
“But developing countries were already beginning to catch up before then. As long as emerging economies continue to grow faster, which seems likely for the near future, the trend will continue with developing countries comprising an increasing share of the global top 1%.”