UAE shines on wealth index

Dubai: The UAE and Switzerland led the global wealth ranking with millionaire households accounting for 6.1 per cent of all households in both countries - almost nine times the global average, according to the latest Global Wealth report by Boston Consulting Group (BCG), issued on Tuesday.

"The rise in oil prices has been a major driver of economic growth in the GCC region, but governments have also been diversifying their economies to develop sustainable income sources beyond the oil industry," the report said.

A World Wealth report released earlier by Merrill Lynch and Capgemini showed that the number of millionaires or high net worth individuals (HNWI) in the UAE shrank by 12.7 per cent to 67,000 last year. Across the Middle East, the total HNWI population dropped to 373,600 and their wealth declined 16.2 per cent to $1.4 trillion. HNWIs are individuals with assets of at least $1 million (Dh3.67 million), excluding their primary residences and consumables.

The BCG report is based on household assets under management (AuM), which includes listed securities, cash deposits, money market funds and offshore assets.

Singapore had the highest concentration of millionaires, with 8.5 per cent of the country's households worth more than $1 million. The Middle East is not far behind in this respect, boasting three of the six densest millionaire populations - Kuwait, the UAE, and Qatar.

The AuM of wealthy households in the GCC was put at close to $1 million, compared with the global average of less than $400,000.

"Global wealth fell from $104.7 trillion in 2007, measured in assets under management, to $92.4 trillion in 2008 - a decline of 11.7 per cent. It was the first decline since 2001," the report said.

"Millionaire households represent the richest 0.7 per cent of all households, and they owned $33.2 trillion - or a third of global AuM."

The number of millionaire households worldwide fell from 11 million to about 9 million - a drop of 17.8 per cent. The decline was steepest in North America and Europe - 22 per cent in both regions.

"Wealth will begin a slow recovery in 2010 but may not reach its pre-crisis level until 2013," said Peter Damisch, co-author of the report.

On the flip side, the World Development Report 2010 issued by the World Bank yesterday highlighted that a quarter of the population of developing countries still lives on less than $1.25 a day. Focusing on climate change, it said sea levels could rise by one metre this century, threatening 60 million people and more than $200 billion in assets in developing countries alone.

"The countries of the world must act now, act together and act differently on climate change," said World Bank President Robert B. Zoellick.

"Developing countries are disproportionately affected by climate change - a crisis that is not of their making and for which they are the least prepared."

Bruce Holley, a BCG senior partner and a co-author of the report, said, "The industry will need to do more with less. Revenues and profitability are sliding, but clients want more intensive service."