The global economic recession in later part of 2008 hit all economies negatively and there was nothing positive to write home about. However, if there was one positive that emerged from the crisis it was the emergence of Asia as a economic powerhouse.
Countries like India and China for long have been touted as emerging economies with high growth potential but the same gained visibility post 2008 where these two economies were quick to recover even as the developed economies like U.S. continued to suffer.
The financial markets in the developed economies become highly unstable and continue to do so. Amidst all the chaos, investors looked towards Asia as a safe haven and the businesses in Asia saw an inherent opportunity to accelerate their growth when others were reeling under economic pressures.
The economic prosperity of Asian countries like China and India have in turn resulted in increasing the affluence of these nations significantly. Market research firm TNS in its latest study of Global Affluence has uncovered the growing affluence of India and China in the recent times.
The study reveals how the number of affluent has risen in India and China even though majority of world’s wealthy are from the west
Despite the unstable economy, U.S. continues to be the home to the world’s most wealthy with 31 Mn wealthy households (TNS defines wealthy / affluent household as the ones with more than $100,000 in investable assets).
The study also highlights:
- The number of affluent households in India and China are pegged at 3 million each. With this, the number of affluent in India and China have overtaken the number of wealthy households in some of the major European countries like UK (2.9 Mn), Germany (2.5 Mn) and France (2.7 Mn)
- India and UAE are in the top 5 countries where the wealthy have more than $1 Mn investable assets. Singapore, Hong Kong are also part of this list demonstrating the increasing affluence in Asia
- The study also reveals the contrasts in concentration of wealth in various nations. In countries like India and China, majority of wealth is concentrated among a small set of households. Benchmarked as incidence of affluence, while 27% of the U.S. households are wealthy only around 1% of Indian and Chinese households are wealthy. This is a sign of the uneven distribution of wealth among different nations
- There is a great contrast between the demographics of affluent people across the globe. Men seem to dominate the decision making in affluent households in India (80%) and Central Europe (79%), equality seems to be the order of the day in the US with 45% men being at the helm of decision making in affluent households. It is heartening to see the increasing clout of women with decision making powers in the U.S. . Wonder if the balance will be restored in India in the coming years
- The study also reveals investment patterns in various geographical regions. For instance, affluent people in China, India and Germany like to invest in precious metals but folks in Sweden, Norway, Denmark etc. invest marginally in precious metals and rather prefer to invest in bonds
Like with all surveys, the findings may not be completely conclusive but TNS seems to have taken a rather large sample of 12,000 people across 24 markets which lends some weight to these findings. It is interesting to see the differences in both the wealth distribution as well as the mode of investments across different nations.
What are your thoughts on the wealth distribution across the globe? The findings on India’s affluent does suggest that even as the rich become more richer, there is a positive trend that more and more people are working their way to riches?