Values vs. wealth

WEALTH inequality has grown, despite an environment of world economic challenges placing more emphasis on local millionaires to solve global problems. In latest reports, faster-growing Asia for the first time had more millionaires than North America, putting the issue of vast income gaps in the region in the spotlight.

A new report has said that the global personal wealth of people with $ 1 million and more to invest fell in 2011 for the second time in four years, reflecting the euro zone crisis and economic sluggishness in developed markets. But several emerging markets also felt pain, as the number of millionaires in India and Hong Kong fell by almost one-fifth. And with Europe’s debt crisis still in full throttle, the outlook for wealth creation in 2012 remains dim, according to Capgemini and RBC Wealth Management’s latest world wealth report.

The world’s population of millionaires grew by 0.8 per cent to a record 11 million, according to the report, yet their collective wealth fell by 1.7 per cent to $ 42 trillion. Every region except the Middle East saw declines in wealth. It was the first global drop in millionaire wealth since the 2008 financial crisis, when the ranks of the wealthy fell by 15 per cent and their wealth contracted by 20 per cent.

Families with $30 million or more to invest saw their combined wealth fall 4.9 per cent and their ranks shrink by 2.5 per cent to 100,000 people. However, the very fact that such vast wealth is controlled by a mere 100,000 people in a region of billions is shocking.

Meanwhile, millionaire wealth in the United States and Canada in 2011 fell 2.3 per cent to $11.4 trillion – still the wealthiest region by this measure – though it had 1.1 per cent fewer millionaires, slipping by about 39,000 to a total of 3.35 million.

Strong economic growth in China and other markets increased the ranks of millionaires across the Asia-Pacific region by 1.6 per cent to a total of 3.37 million, as Asia vaulted past North America as home to the most millionaires. This is also the world’s most populous region adding credence to the argument that developing nations in Asia need better wealth distribution rather than help from non-governmental organisations and monetary organisations from the West.

Bill Gates, the second wealthiest man in the world, is a great example of how great wealth can be used for great good. Since its inception in 1994 the Bill and Melinda Gates Foundation has donated over US$ 26 billion for projects that include global heath, development and biodiversity. While this is still a fraction of the wealth enjoyed by the world’s billionaires and even Gates himself, it is an indication of how much can be done to reduce poverty by the extremely wealthy in their own countries.

As a result of the steps taken by Gates and other philanthropists such as Warren Buffet, who is also a donor to the Foundation, they have a stronger voice in global policy making and dealing with major issues such as poverty reduction, climate change and a host of other measures that save thousands of lives. Gates is also one of the most powerful advocates in the world, not only because he is rich, but because he has taken the step to care beyond his bank account. By contrast, Carlos Slim who has retained the crown of the world’s richest man does not claim as much recognition.

In a time of global economic constraints, there is more responsibility by the wealthy of any nation to help their own people, not merely to score brownie points but because they care.