Offshore wealth: Steep rise in India's and world's stashed money
Trends for offshore wealth held by Indians have changed drastically in the last few years. Despite the much-publicized battle against black money, offshore wealth held by nationals increased 90% from 2007 to 2015 to Rs. 4L crore. In fact, total offshore wealth in the world stands at $8.6 trillion, up by 54% since 2007. Read on to know more details.
Offshore wealth of the whole world has risen drastically
The findings are based on reports by the Basel-based Bank of International Settlements. This is the first time they have revealed countries of origin in their data. Researchers analyzed figures to find that the total offshore wealth in the world stood at $8.6 trillion: 11.6% of the world GDP. This was a steep 54% rise since 2007, even excluding non-financial assets like real estate.
How do different countries fare in terms of offshore wealth?
There's wide disparity among countries with respect to proportion of wealth stored away in tax havens abroad. Figures range from a minor percentage of the GDP of Scandinavian countries, to 15% of Continental Europe, to as high as 60% for Russia, the Gulf states, and several Latin American countries. China has $287bn in offshore wealth: 2.4% of their 2015 GDP.
What has changed for India?
For India, Switzerland is no longer the top destination for storing wealth secretly. As of 2015, Swiss banks held 31% of Indian wealth- down from 58% in 2007. Presently, over 53% of Indian money is stored in Asian tax havens: Singapore, Hong Kong, Malaysia, Macau and Bahrain. All that has changed is offshore wealth has risen steeply, and the outward flow has shifted directions.
What does this mean?
The data has major implications, but an important conclusion is that this implies a change in the wealth held by the top 0.1% of the world's richest people. Their wealth has to be recalculated by adding their offshore wealth to find the actual wealth gap.