A staggering 35 per cent of household wealth in Russia is owned by just 110 people, the highest level of inequality in the world barring a few small Caribbean islands, a report by a major investment bank has said.
By contrast, billionaires worldwide account for just 1-2 per cent of total wealth, Credit Suisse said in its World Wealth report published yesterday. Russia has one billionaire for every $11 billion (£6.9bn) in wealth while in the rest of the world there is one for every $170bn.
The fall of Communism saw Russia’s most prized assets sold off to a small circle of businessmen later known as oligarchs. President Vladimir Putin allowed them to keep their wealth in exchange for their loyalty.
Metals and banking tycoons Vladimir Potanin and Mikhail Fridman, who made their fortunes in the 1990s, are still high on the list of Russia’s richest. But the past decade saw a rise of new billionaires who draw their wealth from state contracts and some are Mr Putin’s friends, such as Gennady Timchenko.
Credit Suisse said there were hopes post-Soviet Russia would turn into a high skilled economy with fair wealth distribution but “this is almost a parody of what happened in practice”.
The 35 per cent of wealth that Russian billionaires own is equivalent to $420bn (£263bn). “Russia has the highest level of wealth inequality in the world, apart from small Caribbean nations with resident billionaires,” the bank said.
One of the authors, Anthony Shorrocks of Global Economic Perspectives, said Russia was in a league of its own. “The situation in Russia has no parallel. If you look at how Russians have made their money and the sort of political ties that seem to be necessary to maintain it, there are just very few places where the situation is similar,” he said.
The also report noted global wealth has risen by 68 per cent over the past decade to $241 trillion and the United States accounts for nearly three quarters of the rise. Average global wealth has hit a $51,600 per adult but is spread unevenly, with the richest 10 per cent owning 86 per cent of the wealth.
The top 1 per cent alone own 46 per cent of all global assets. Global wealth will jump a further 40 per cent by 2018 to reach $334tn, the report added.
The richest nations, with wealth per adult of more than $100,000, were concentrated in North America, Western Europe and among the rich Asia-Pacific and Middle Eastern countries.
They are headed by Switzerland, where average adult wealth amounts to $513,000, followed by Australia ($403,000), Norway ($380,000) and Luxembourg ($315,000). However, two thirds of adults in the world have assets worth less than $10,000 and account for just 3 per cent of global wealth.
Despite its strong growth, Chinese hold barely 9 per cent of global wealth while accounting for more than a fifth of the global adult population.
For Africa and India, the population share exceeds the wealth share by a factor of ten.
Credit Suisse said there were 98,700 individuals with net worth exceeding $50m, more than half of them in the US. Europe ranked second, home to nearly 25,000.