A catastrophe is looming for the world’s poor, and the force of the multiple crises will hit them first. Two years of corona pandemic, more than 100 days of attack on Ukraine, where Russian missiles blow up grain silos and merchant ships cannot leave the Ukrainian Black Sea ports: A global food shortage and hunger crisis is not far away. How bad it gets also depends on the consequences of climate change, how dry the year will be and how many natural disasters will happen.
What a contrast to the richest. The world situation has so far done little to harm them. Despite all the crises, their assets continued to rise in all regions of the world, sometimes more significantly than money is currently losing value due to high inflation. The number of people with assets in the millions also continued to grow last year, and from Beijing to New York they seem to have benefited more than they suffered in the second year of the Corona crisis. This is shown by new calculations by the consulting firm Capgemini, which collects data on the upper end of the wealth distribution once a year.
According to this, the number of dollar millionaires worldwide increased by 7.8 percent last year and their total assets by eight percent. 22.5 million people had at least $1 million in disposable funds, sharing $86 trillion in wealth. This roughly corresponds to the global gross domestic product, which was $84.7 trillion in 2020 according to World Bank data. Relative to the world’s population, it is therefore a vanishingly small group of wealthy people who share the wealth of the world.
More than 1.6 million millionaires in Germany
This also applies to Germany. In Germany, consultants counted 1.6 million dollar millionaires, 6.4 percent more than in the previous year. Their wealth rose more than 7 percent to nearly $6.3 billion — more than enough to offset annualized inflation of 3.1 percent. In terms of the number of millionaires worldwide, Germany is in third place, ahead of fourth-placed China, only surpassed by Japan and the USA. This top group has been consolidated for years, says Capgemini expert Klaus-Georg Meyer: “We are finding an ever-increasing concentration in these countries.”
For their “World Wealth Report”, which will be published for the 26th time, the consultants had more than 2,900 millionaires in 24 countries surveyed at the beginning of 2022, interviewed bank and wealth managers and included secondary sources, including data from the International Monetary Fund and the World Bank. Capgemini ranks the so-called “High Net Worth Individuals” with more than one million dollars in investable assets, with several notches upwards to the super-rich (“Ultra-High Net Worth Individuals”). with net worth of $30 million or more. The authors of the study disregard owner-occupied real estate, collectibles, consumer goods and durable goods.
There are a number of such surveys, written by banks, insurance companies, other consulting firms or NGOs. They all have weaknesses in methodology and a lack of precision in common – after all, there is no worldwide microcensus of the rich that would provide precise information about their true wealth, the rich tend to be less willing to provide information and money hidden in offshore companies can hardly be recorded. So the authors work with surveys, extrapolations and approximate values. They then at least reveal trends and tendencies – for example, that the particularly large fortunes have so far also been particularly crisis-proof.
A few weeks ago, the aid organization Oxfam came to the conclusion that it was primarily the world’s billionaires who benefited the most during the crisis years. The number of billionaires has grown by more than 570 to 2,668 since 2020, the NGO wrote on the occasion of the World Economic Forum in Davos. They shared a fortune of $12.7 trillion. During the pandemic alone, this value grew by 42 percent and was therefore stronger in the past two years than in the entire 23 years before.
Is the time of ever-growing fortunes now over?
Financially, things were going well for the richest part of the world’s population despite the crisis, which was mainly due to the ever-rising share prices. People in the USA benefited particularly from this: there are a corresponding number of shareholders in the largest stock market in the world, and pension provision is largely supported by the capital markets. According to Capgemini, the number of dollar millionaires in the United States increased by 13.5 percent.
Among them are likely to be many who became rich within a short period of time with cryptocurrencies, digital assets such as NFTs or so-called meme stocks – and many of whom are now in financial difficulties. The bull market on the world stock exchanges has come to a standstill, prices are under pressure on the crypto markets – and among the rich the willingness to take risks seems to have decreased. Capgemini expert Meyer has already observed a slight decline in total assets in the first three months of 2022. For the current year, the outlook is “much more cautious,” he says.
The wealthy have hardly ever been better placed to weather a recession, and unlike the poor, they will only challenge rising wheat or fuel prices to a limited extent.