Building a Sustainable Future
A decade ago, the World Bank launched the book Where Is the Wealth of Nations?,
which first introduced the concept of wealth as a complementary indicator to gross
domestic product (GDP) for monitoring sustainable development in a country. For the
first time, we showed that development is about managing a broad portfolio of assets—
produced, human, and natural capital. Just as a company measures its value by looking
at both its income statement and balance sheet, a look at comprehensive national
wealth signals if GDP growth can be sustained over the long run.
There is some good news from the analysis presented in The Changing Wealth
of Nations 2018—global wealth grew significantly between 1995 and 2014 and
middle-income countries are catching up to high-income countries in terms of their
wealth, mainly because of rapid growth in Asia. More than two dozen low-income
countries, where natural capital dominates the composition of wealth, have moved to
middle-income status, in part by investing resource rents into infrastructure and education
and health, which increases human capital.
However, the wealth accounts also indicate areas of concern. Some low-income
countries—especially in Sub-Saharan Africa—saw a decline in per capita wealth as
rapid population growth outpaced investment. We also see that in 12 countries the
percentage of people living in extreme poverty has jumped over the last decade.
Looking at this disturbing trend through the lens of wealth accounting shows that the
‘demographic dividend’ from population growth can be realized only with rapid
investment in infrastructure and education, and by managing the natural asset base
sustainably in the long run. In high-income countries, human capital accounts for
70 percent of wealth, whereas for low-income countries, natural capital is still the
Of the 24 countries that have remained low-income since 1995, 13 are classified
as fragile and conflict states and out of these a majority are resource-rich. This helps us
see better the links between poverty, fragility, and governance. It is not a coincidence
that several fragile countries are rich in resources but cannot at present use resource
rents to build their institutions and people.
In The Changing Wealth of Nations 2018, which covers 141 countries over
20 years (from 1995 to 2014), we have made huge strides in how we measure comprehensive
wealth. For the first time, we have a sound estimate of human capital, drawing
from a unique database of more than 1,500 household surveys maintained by the
World Bank. New data has greatly improved our estimates of natural capital as well.
This new volume sets the stage for addressing development through a comprehensive
measure of wealth, which underpins income and well-being. We hope that the
results will be used by policy makers and others to improve measures of economic
progress and lead to policies that improve lives for generations.
Chief Executive Officer