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 ‘Astonishing economic alteration’
The global economy is experiencing a period of astonishing economic alteration.

‘Astonishing economic alteration’

This week, UBS, a global financial services firm with presence in over 50 countries released a report on global wealth, which revealed that more than 3.5 million people lost their status as “dollar millionaires” in 2022 because of a dip in asset prices.


According to the report, high inflation and struggling currencies forced a push down in asset prices, as the number of adults with assets of more than $1m (£790,000) fell from 62.9 million at the end of 2021 to 59.4 million at the end of 2022.

This, according to the Swiss bank’s annual wealth report, was the first fall in global wealth since the 2008 financial crises. But the report also noted that despite the fall, global wealth today was four times the number at the turn of the century.

 The number of millionaires in the US was reported to have dropped by 1.8 million to 22.7 million, but the US remained the country with more millionaires than any other country. With 6.2 million “dollar millions”, China had the second-highest number of millionaires after the US.

In a separate finding, the Bloomberg billionaires index also reported that the richest 500 people in the world lost a combined $1.4 trillion in 2022.

 In particular, Elon Musk, noted as the world’s richest person, lost $138 billion in 2022, and Mark Zuckerberg, the Facebook co-founder, and one of the 10 richest people in the world, lost nearly $81 billion in net worth.

The reported numbers by these two global companies point to one thing: that 2022 was a very difficult year for all.

In fact, the aggregate decline in global wealth for the super-rich, the reasonably well-off and poor people, was the reason behind UBS’ claim that it was “the first fall in net global household wealth since the global financial crisis of 2008.”

 Average wealth per adult dropped by $3,200 to $84,718, and the bank noted that: “This outcome represents a break in the almost uninterrupted expansion of household wealth this century.” According to UBS, the world’s privately held wealth fell by $11.3 trillion, or 2.4 per cent, to $454 trillion.

“The global economy is experiencing a period of astonishing economic alteration. The sweeping changes of the fourth industrial revolution represent the most dramatic structural upheaval in 250 years.”

Revolutions, it turns out, are revolutionary – social as well as economic relationships will be challenged by this process”, Paul Donovan, the chief economist at UBS was quoted, in reference to the report.

It is indeed a period of astonishing economic alteration! In the June 26, 2021 edition of this column, I wrote on how in 2020 the increase in asset prices surprised many analysts.

In the year 2020, the world experienced a pandemic of epic proportion, which squeezed the global economy badly. Yet, the 12th Edition of the Credit Suisse Global Wealth Report, which was released in June 2021, stressed that there was more rich people in 2020 than the previous year.

 The authors, Anthony Shorrocks, James Davies and Rodrigo Lluberas, stressed in the report that “actions taken by governments and central banks to mitigate the economic impact of COVID-19” largely contributed to the growth in global wealth by 7.4 per cent in 2020. Wealth per adult, according to the report, grew by 6 per cent, “to reach another record high of USD 79,952” and that “overall, the countries most affected by the pandemic have not fared worse in terms of wealth creation”.

Let me just state that UBS has just concluded the take-over of Credit Suisse, therefore, this year’s report by UBS is in the same mould.

As you can infer, the 2020 narrative about the increase in global wealth was not in tandem with the headlines that we had become accustomed to because of the raging coronavirus pandemic and its impact on the global economy.

This is what l wrote in the June 26, 2021 edition of this column: “In fact, the main talking point in the street and in some academic circles is that the past year [2020] offered nothing but misery to the world. Not to everyone though.

 Yes, the lives lost and the large negative swing in economic activity have had profound effects on the global economy. Therefore, the negative impact on global output levels, with the widespread contraction reported in most economies, would never inspire bullish sentiments among many. So, it is agreed that 2020, perhaps, did not offer much to the global economy in broad terms”.

“However, the report by Credit Suisse has brought another perspective to the whole argument, echoing some of the sentiments that l expressed in the August 8, 2020 edition of this column. In that edition, writing under the headline: How life imitates, l expressed strong sentiments about why the pandemic could also offer some opportunities despite all the adverse effects it had had on economic, health and social activities.

‘Seize the moment’, l said, because there is nothing new under the sun, as explained by Biblical King Solomon in the following words: ‘What has been will be again, what has been done will be done again; there is nothing new under the sun (Ecclesiastes 1:9)’. There is no need to stop! Keep on moving on”.

Note the astonishing reversal of fortune in these two reports—and two periods of seemingly different economic “challenges”.

When the world was going through a period of severe economic, health and social challenges, due to the pandemic, more people became rich. But when there was seemingly a reversal in these conditions, there was an astonishing reversal of the situation— 3.5 million people dropped off the rich list.

My take is this. The seasons are hard to predict, sometimes. Whether in the era of the Great Depression of the 1920s or the Great Financial Crisis of the 2000s, not many were able to spot the coming events accurately.

The UBS report is yet another wake-up call to have a rethink about life in general, because the cyclic nature of life on earth means that there are always opportunities for everyone- and threats too.

To succeed you must be prepared to seize the moment as in my life l have never come across someone who never bought a lottery ticket and yet was presented with the winning raffle prize. It is not possible.

Seize every little opportunity as presented, to make the most of it. Several times in this column l have drawn attention to the fact that you have to be an optimist before you can see the treasure that lies hidden in any given situation.

 Life has no permanent features but ifs and buts. And so you can make it in bad times and lose it in good times! Nothing is permanent so keep on keeping on!

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