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Half of the world's wealth is concentrated in less than 1% of the territory

2022-12-09T11:05:57.666Z

Large urban centers host 50% of the gross domestic product generated between 2000 and 2019 The more disaggregated the data, the better. Half of the gross domestic product (GDP) generated worldwide between 2000 and 2019 came from 0.9% of the territory, according to a study published by the American consultancy Mckinsey on Wednesday. According to the report Pixels of Progress: A granular look at human development around the world (Pixels of Progress: A granular look at human development a



The more disaggregated the data, the better.

Half of the gross domestic product (GDP) generated worldwide between 2000 and 2019 came from 0.9% of the territory, according to a study published by the American consultancy Mckinsey on Wednesday.

According to the report

Pixels of Progress: A granular look at human development around the world (Pixels of Progress: A granular look at human development around the world

),

This growth occurs in 3,600 small areas spread over 130 countries and that together add up to an area equivalent to the territory of South Africa.

The analysis, which dissects the world into more than 40,000 micro-regions

,

makes it possible to mitigate "the tyranny" of the national means and averages, which distort the image of the wealth and well-being of the population, and shows that large urban centers concentrate a good part of world wealth.

The distribution of the pie is similar when it is broken down by people and not by territories: according to a report by the Credit Suisse bank published in September, the richest on the planet accumulated 45.6% of the wealth in 2021. For Chris Bradley, director of the Mckinsey Global Institute, "the picture of the world, in aggregate data, is quite blurry."

In the video presentation of the study, Bradley compares Mapusa, a small town in India, with Porto, Portugal.

Although both cities have the same GDP

per

capita—$33,000—Portugal, in

per capita

terms , is five times as wealthy as India.

“When we try to analyze the world, details like Mapusa get washed out,” he concludes.

To illustrate this statistical tyranny, the report uses as an example the 30% of countries that experienced the highest

per capita growth.

in the period studied.

2.3 billion people live in these countries, including China and the United States.

His conclusion, after analyzing the rest of the world by area, is that establishing growth by country misclassified the individual progress of 1.4 billion people.

Of these, half (700 million) live in areas that did grow enough to enter this map, but since the average for their countries was lower, they did not.

The other 700 million, however, are classified within prosperous areas because they live in micro-regions located in the 28 countries that grew the most, when in reality these areas did not grow at the rate of the national average.

A clear example of this distortion is the comparison between the United States and India.

The GDP

per capita

in the US grew, between the year 2000 and 2019, more than 7,100 dollars, which places it in the 30% of countries that have experienced the greatest progress in these years.

In India, however, the advance was $4,150

per capita

, which is why it would be excluded from the

ranking .

of countries.

However, when analyzed by smaller regions, the picture changes: up to 1,400 US micro-regions —where 120 million people live, more than a third of their population— grew less than the national average.

In India, however, as many as 270 areas—home to 114 million people—experienced growth above $7,100 but were excluded by the national average.

social progress

The study is not limited to the economic, and also analyzes parameters such as social progress or life expectancy.

The improvement in these last two decades is evident: according to data compiled by the American consultancy, 3.5 billion people —almost half of the world population— lived in 2019 in areas with a standard of living equivalent to that of the richest 21% of the world. Early century.

“At the other end of the spectrum”, they point out, “the group of more than a billion people who lived in micro-regions with the lowest living standards at the beginning of the 20-year period has dwindled to a few hundred million at the end of east”, despite having increased its population.

By analyzing the relationship between GDP

per capita

and life expectancy, the study concludes that, although they remain related, approximately half of the significant improvement in life expectancy in 20 years is explained by the effects of healthcare innovation.

That is, better health with the same income.

To demonstrate this, the authors return to the analysis by micro-regions and compare three areas of Eastern Europe: the cities of Wroclaw (Poland) and Bucharest (Romania), and the region of Läane-Eesti (Estonia).

In the Estonian region, growth in terms of GDP was one of the lowest in the country, but its life expectancy skyrocketed from 70.3 years to 79. On the other hand,

Bucharest's GDP

per capita

grew by the first two decades of the century by almost 10%, but their life expectancy experienced the slowest advance in the entire country.

Wroclaw, for its part, reflects total growth: its GDP advanced more than all other large Polish cities and its life expectancy was on a par with other advanced urban centers.

Source: elparis

All business articles on 2022-12-09

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