Only a skilled nation can create national wealth

Copyright@shravancharitymission

By Kamlesh Tripathi

50% of the world’s wealth remains with 4-5 countries

    “National wealth” refers to the total value of wealth possessed by the citizens of a nation at a set point in time. That is, the total value of wealth and goods generated by all economic activity in a particular nation.

    It is also referred as the national (net) wealth, or the national net worth, or even the gross national wealth (GNW); summing up to the total national wealth and is the total sum value of wealth possessed by the citizens of a nation at a set point of time.

    This figure of national wealth is an important indicator of a nation’s ability to take on debt and sustain spending and is influenced by not only real estate prices, but also by the stock market, human resources, technological advancements which may create new assets or render other worthless, and it also steered by the national infrastructure and exchange rates. For value creation optimum skill levels are a must for any nation and therefore skill building is an important ingredient required to augment national wealth.

    The most significant component by far among most developed nations is commonly reported as household net wealth or worth, and also reflects infrastructure investment. National wealth can fluctuate, as evidenced in the US data (to follow) following the financial crisis of 2008 and subsequent recovery.

    There are 196 countries in the world today. If we compare the national wealth figures of the first 30 major countries we will come across an interesting paradigm as below:

    ANALYSIS

-               The world’s wealth has grown from 117,225 billion USD in 2000 to 171,577 in 2005, up to 216,374 in 2010 and to 250,145 in 2015. This is a cumulative growth of 113% over the last 15 years and an average annual growth rate of 7.5%.

-               USA remains the richest in terms of national wealth and also a consistent performer since 2000 to 2015. In 2000 it had a national wealth of 42,941 billion USD which has grown to 85,901 billion USD in 2015. This is a cumulative growth of 100% over 15 years and an average annual growth rate of 6.67%.

-           The national wealth of the US in 2000 was 42,941 billion USD, a little more than the national wealth of Japan, UK, Germany, Italy and China, put together.

-           The national wealth of the US in 2005 was 59,664 billion USD, a little more than the national wealth of Japan, UK, France, Italy and Germany, put together.

-           The national wealth of the US in 2010 declined from 59,664 billion USD by 4.27% to 57114 on account of the economic crisis, but it still remained more than the combined national wealth of countries such as Japan, China and France, put together. China by 2010 had become a major skill development country and thereby started generating wealth. It would not be wrong to say that 50% of the wealth of the world is controlled by only four or five countries.

-           By 2015 the national wealth of the US had increased to 85,901 billion USD, a little more than the combined wealth of four economic super powers such as China, Japan, UK, France and Germany.

-           China’s policy of underscoring on skill development under the banner of human resources gave encouraging results when its national wealth from 4664 billion USD in 2000 went up to 8674 in 2005 and to 17505 in 2010 and finally to 22817 in 2015. And from 6^th position in 2000 it has jumped to 2^nd position in 2015 in terms of national wealth.

-           India on the contrary from 14^th position out of 196 countries in 2000 jumped marginally to 12^th position in 2005 and to 11^th position in 2010, but slumped back to 14^th position in 2015. Its national wealth was 1163 billion USD in 2000, 2142 billion USD in 2005, 3788 billion USD in 2010, and 3447 billion USD in 2015. It has cumulatively grown by 196% with an average growth rate of 13%. But it is not enough when we compare it with world standards and our political establishment needs to understand this. India requires wide spread skill development if it wants to grow its national wealth. A lesson we need to learn from China where there is no opposition when it comes to policies affecting national wealth.

-           50% of the world’s wealth in the year 2000 was with super economic powers such as the USA, Japan and the UK. This changed somewhat in 2010 where 50% of the world’s wealth was held by the USA, Japan, UK and France, and this further changed in 2010 when 50% of the wealth of the world was held by USA, Japan, China (China replaced UK) and France. In 2015 the scenario further changed when China jumped to the second position next to the US leaving behind Japan to a close third.

-           Canada with 35 only million people has maintained a steady 8^th position in the world. In 2000 it had a national wealth of 2,469 billion USD. This rose to 4277 in 2005, to 6212 in 2010 and finally to 6872 in 2015. Its cumulative growth in 15 years has been 178% with an average growth rate of 11.88%. But it has failed to take a quantum leap because it doesn’t have great reserve of skill bank which it is largely importing from other countries now. It also has a huge geographical territory and it remains to be seen how in times to come it will manage its assets with such a meagre population.

-           South Korea has turned into another industrial giant by lifting its skill levels. It rose from the 16^th position where it had a national wealth of 1089 billion USD in 2000, to 2149 billion USD in 2005 at 11^th position. But it slumped back to 14^th position in 2010 even when it increased its national wealth to 2791 billion USD. But in 2015 it jumped to 12^th spot with a national wealth of 3545 billion USD.

-           Greece a typical example with its economic crisis has crashed to the 30^th spot in 2015 with 743 billion USD from the 23^rd spot in 2000 with a national wealth of 493 billion USD.

-           Russia with the roots of once a super power has stagnated from 315 in 2000 to 1284  USD billion in 2015 but has gone up notches from 30^th to 23^rd position.

    The point to essence—mere size of population doesn’t increase national wealth. One has to individually create it for the nation. And you can create, only if you have the skill. The US remains the leader in this field with a population of 310 million people which is less than one third of the population of India. Even Canada with only 35 million people generates more revenue than India. Prime Minister Narendra Modi is by far on track by underscoring on skill development in India.

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