World Bank releases the Changing Wealth of Nations report that says environmental degradation is leading to a decline in overall wealth
South Asia suffers the most among all regions of the world in terms of loss of human capital due to air pollution, according to the latest The Changing Wealth of Nations 2021 report published by the World Bank.
The latest edition of this periodic report has measured wealth creation and distribution in 146 countries covering a 20-year period from 1995-2018.
The World Bank included gross domestic product, human-produced capital, human capital and natural capital like renewable and non-renewable natural resources in its measurement of wealth. The Bank defines human capital as “earnings over a person’s lifetime.”
Human capital was “the largest source of worldwide wealth, comprising 64 per cent of total global wealth in 2018,” the report said. “Middle-income countries increased their investment in human capital and in turn, saw significant increases in their share of global human capital wealth,” the report said.
Human capital in south Asia accounts for 50 per cent of the region’s wealth. This did not change during the survey period —1995-2018. It shows the importance of a healthy workforce.
But air pollution was seemingly taking a toll on this significant wealth generator. South Asia as a region was the most severely affected by the estimated loss of human capital due to air pollution, the report said. The report did not quantify such a loss in human capital due to air pollution for any other region.
South Asia has increased its wealth since 1995. But still, its per capita wealth is among the lowest in the world, comparable to sub-Saharan Africa. “Due to population growth in the same time period, per capita wealth remains among the lowest in the world,” the report said.
Over 80 per cent of the region’s wealth was attributed to men, indicating a huge gender disparity in human capital and its contribution to national wealth. The report said globally, wealth had increased during the two decades. In fact, middle-income countries were catching up fast with high-income ones in wealth generation.
“However, growing prosperity has been accompanied by unsustainable management of some natural assets. Low- and middle-income countries saw their forest wealth per capita decline eight per cent from 1995 to 2018, reflecting significant deforestation,” the report said.
This wealth creation, arguably the best in recent decades, has not been equal. Low-income countries’ share in global wealth is below 1 per cent, a level which has remained the same for decades. These countries account for 8 per cent of the world’s population.
The survey found that countries that depended more on natural resources were also reporting a decline in wealth due to the degradation of resources.
“Over a third of low-income countries saw declining wealth per capita. Countries with declining wealth also tend to be degrading their base of renewable natural assets. For low-income countries, appropriately managing renewable natural capital, which accounts for 23 per cent of their wealth, remains crucial,” the report said.
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