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New measure of wealth accounts for resource depletion, environmental damage
Modified World Bank Press Release
September 18, 2005


Accounting for the actual value of natural resources, including resource depletion and population growth, shows that net savings per person are negative in the world's most impoverished countries, particularly in sub-Saharan Africa, according to a new World Bank publication, Where is the Wealth of Nations?, launched on the eve of the 2005 U.N. World Summit.

Current indicators used to guide development decisions – national accounts figures, such as Gross Domestic Product (GDP) – ignore depletion of resources and damage to the environment. In the Conference Edition of Where is the Wealth of Nations?, the World Bank offers new estimates of total wealth, including produced capital, natural resources, and the value of human skills and capabilities, which show that many of the poorest countries in the world are not on a sustainable path.

"New measures of wealth make the social and environmental costs of development decisions visible that are not captured by traditional economics, and thereby allow us to improve actions and policies for sustainable development. Including the value of natural resources and our social capital in national accounting is a vital step to achieve economic growth that is equitable and sustainable," said Achim Steiner, Director General of the World Conservation Union (IUCN).

The publication offers a ranking of countries according to total wealth, with tables highlighting the 10 wealthiest and the 10 poorest countries (see Annex). Switzerland heads the list of the top-ten performers, the other nine being European countries, the United States, and Japan. Sub-Saharan Africa dominates the bottom-10 list, with Ethiopia having the lowest level of total wealth.

"If a household is running down its bank account from month to month, or having to sell assets such as vehicles or livestock in order to keep food on the table, then we would conclude that this household is not sustainable," explains Kirk Hamilton, Lead Environmental Economist, Environment Department, and the main author of the book. "The same applies to nations as a whole – if their net saving rate is negative then this is a signal that national wealth is being run down and the development path is not sustainable."

The companion booklet, Ensuring Environmental Sustainability, however, highlights that there are important exceptions – Mauritania has improved its development prospects through better management of fishery resources, while Botswana has successfully used diamond resources to finance the schooling, health care, and infrastructure which have supported its high rate of growth.

In the case of Botswana, the government makes specific provision in its budget to ensure that mineral revenues are invested rather than consumed through government expenditures. It also maintains a large mineral revenue fund which can both finance future investments and buffer the government budget from swings in diamond prices. This sound combination of macroeconomic and natural resource management has permitted Botswana to avoid the 'resource curse' that has afflicted many oil producers.

"Every day, decision makers in developing countries are faced with difficult choices regarding the exploitation of natural resources and the environmental impacts of development programs and policies," said Ian Johnson, World Bank Vice President for Sustainable Development. "But the tools currently being used are leaving out the natural resources stocks and intangible capital such as knowledge and skills. Sound management of ecosystems is key to a responsible path to growth. This publication challenges common assumptions about how nations generate their wealth."

With this publication, the World Bank releases what could be termed the 'millennium capital assessment', or monetary estimates of the range of resources – produced, ecosystems, and intangible – upon which development depends. This comprehensive snapshot of wealth for 120 countries at the turn of the millennium aims to deepen the understanding of the linkages between the ability of a country to develop and the level and composition of wealth.

According to Where is the Wealth of Nations?, natural wealth – the value of minerals, energy, forests, cropland, pastureland, and protected areas – is actually a much higher share of total wealth in low-income countries than produced capital, 26 percent compared with 16 percent.

"Where is the Wealth of Nations further substantiates the realization," said Steve McCormick, President and CEO, The Nature Conservancy, "that if we can't get a handle on the deconstruction of natural systems, then we will seriously jeopardize our efforts to make lasting, substantial progress on improving the standard of living of the world's poorest people. Put simply, healthy ecosystems are the foundation of healthy economies."

The 7th Millennium Development Goal (MDG) – ensure environmental sustainability – calls on countries to "reverse the losses of environmental resources" by 2015. Achieving this goal has proven to be elusive for most countries, not least because of a lack of indicators of sustainable development.



"There is a shared sense of urgency about meeting the MDGs," added Warren Evans, Director of Environment, World Bank, "however, it would be tragic if the achievements of 2015 are not sustained because soils have been mined and fisheries and forests depleted. Avoiding this outcome is the true seventh Millennium Development Goal."

Measuring the change in total wealth and the change in natural wealth can contribute to a comprehensive measure of whether a development path is sustainable in the long term. The indicators in Where is the Wealth of Nations can guide countries toward a sustainable path.

Summary data from selected appendices in Where is the Wealth of Nations?, a report from the World Bank

More data is available at www.worldbank.org/sustainabledevelopment and more detailed tables can be found at:

• Total Wealth, by country [sort options available]
• Change in Wealth Per Capita, by country
• Genuine savings rates, by country

Country	gross national income US$ per capita	Total wealth US$ per capita	Adjusted net saving per capita	Change in wealth per capita
Albania	1220	17312	145	122
Algeria	1670	18491	-93	-409
Antigua and Barbuda	8700	131849	911	94
Argentina	7718	139232	154	-109
Australia	19703	371031	963	46
Austria	23403	493080	3032	2831
Bangladesh	373	6000	71	41
Barbados	9344	146737	588	520
Belgium-Luxembourg	21756	451714	2811	2649
Belize	3230	52935	303	-150
Benin	360	7895	14	-42
Bhutan	532	7747	111	-111
Bolivia	969	18141	9	-127
Botswana	2925	40592	1021	814
Brazil	3432	86922	265	64
Bulgaria	1504	25256	80	238
Burkina Faso	230	5087	15	-36
Burundi	97	2859	-10	-37
Cameroon	548	10753	-8	-152
Canada	22612	324979	3006	2221
Cape Verde	1195	32942	43	-81
Chad	174	4458	-8	-74
Chile	4779	77726	406	129
China	844	9387	236	200
Colombia	1926	44660	-6	-205
Comoros	367	8030	-17	-73
Congo, Rep. of	660	3516	-227	-727
Costa Rica	3857	61611	464	107
Cote d'Ivoire	625	14243	-5	-100
Denmark	29009	575138	4376	4014
Dominica	3344	59084	-53	7
Dominican Republic	2234	33410	341	198
Ecuador	1170	33745	-51	-293
Egypt	1569	21879	91	-45
El Salvador	2075	36476	113	37
Estonia	3836	66769	570	681
Ethiopia	101	1965	-4	-27
Fiji	2055	44880	-23	-109
Finland	22893	419346	4334	4236
France	22399	468024	3249	2951
Gabon	3370	43168	-1183	-2241
Gambia, The	305	6365	-5	-45
Georgia	601	13036	4	16
Germany	22641	496447	2180	2071
Ghana	255	10365	16	-18
Greece	10706	236972	1431	1327
Grenada	3671	55312	650	533
Guatemala	1676	30480	37	-123
Guinea-Bissau	870	3974	-49	-108
Guyana		15810
Haiti	503	8235	133	106
Honduras	897	11567	213	53
Hungary	4370	77072	676	765
India	446	6820	67	16
Indonesia	675	13869	20	-56
Iran	1580	24023	-142	-398
Ireland	21495	330490	4964	4199
Israel	17354	294723	1540	268
Italy	18478	372666	1990	1947
Jamaica	2954	47796	471	371
Japan	37879	493241	5906	5643
Jordan	1727	31546	236	28
Kenya	343	6609	40	-11
Korea, Rep. of	10843	141282	2694	2415
Latvia	3271	47198	412	551
Lesotho		15477
Madagascar	245	5020	9	-56
Malawi	162	5200	-2	-29
Malaysia	3554	46687	767	227
Mali	221	5241	20	-47
Mauritania	382	7959	-30	-147
Mauritius	3697	60284	645	514
Mexico	5783	61872	545	155
Moldova	316	8771	38	56
Morocco	1131	22965	200	117
Mozambique	195	4232	15	-20
Namibia	1820	36907	392	140
Nepal	239	3802	46	2
Netherlands	23382	421389	3673	3176
New Zealand	12679	242934	1550	1082
Nicaragua	739	13214	81	-18
Niger	166	3695	-10	-83
Nigeria	297	2748	-97	-210
Norway	36800	473708	6916	5708
Pakistan	517	7871	54	-2
Panama	3857	57663	829	585
Paraguay	1465	35600	131	-93
Peru	1991	39046	148	15
Philippines	1033	19351	211	114
Portugal	10256	207477	943	750
Romania	1639	29113	80	89
Russian Federation	1738	38709	-164	4
Rwanda	233	5670	14	-60
Senegal	449	10167	31	-27
Seychelles	7089	125572	1162	904
Singapore	22968	252607	8258	6949
South Africa	2837	59629	246	-2
Spain	13723	261205	1987	1663
Sri Lanka	868	14731	166	116
St. Kitts and Nevis	6746	100167	1612	-63
St. Lucia	4103	66199	507	253
St. Vincent	2824	49232	365	336
Suriname		47128
Swaziland	1375	27739	129	8
Sweden	26809	513424	4278	4191
Switzerland	37165	648241	8611	8020
Syrian Arab Rep.	1064	10419	-175	-473
Thailand	1989	35854	351	259
Togo	285	7109	-20	-88
Trinidad and Tobago	5838	57549	-541	-774
Tunisia	1936	36537	291	176
Turkey	2980	47859	476	273
United Kingdom	24606	408753	1882	1725
United States	35188	512612	3092	2020
Uruguay	5962	118463	137	20
Venezuela	4970	45196	-94	-847
Zambia	312	6564	-13	-63
Zimbabwe	550	9612	53	-4

The figures and text above are copyright the World Bank. Further information, along with the full report in PDF form, is available at www.worldbank.org/sustainabledevelopment