References

population growth is more rapid, greater investment in assets is needed for sustainability.

Middle-income countries are converging with high-income countries, albeit slowly, driven by China. Low-income countries are still lagging. Low- and middle-income countries (categorized as of 2018) saw the greatest growth rates in per capita wealth over 1995–2018. Countries that started as low income in 1995 show huge growth in per capita wealth on average, dwarfing all other income groups. But the overall trend hides two divergent groups: 29 countries moved up from low income, with a rapid average growth rate, driven by China, India, and countries in Europe and Central Asia, and 24 countries stayed low income, with very slow per capita growth, the majority in Sub-Saharan Africa and categorized as fragile, conflict-affected states and/or resource dependent.

Human capital, a key driver of development, represents 64 percent of global wealth. High-income non-OECD countries, which are heavily dependent on nonrenewables, are at risk from not diversifying and building human capital.

Natural capital is a key endowment for lower-income countries, and harnessing nature to invest in other assets is a key component of economic development. But building an economy is not about liquidating natural capital to build other assets. Natural capital per capita increases with income level, but the share declines as other assets are added.

To ensure both a convergence of prosperity and the sustainability of economic growth in lower-income countries, a significant increase in investments in human, produced, and natural capital will be needed to address the challenges posed by growing populations, depleting nonrenewable wealth, and the implications of climate change.

Beck, M. W., P. Menéndez, S. Narayan, S. Torres-Ortega, S. Abad, and I. J. Losada. 2021. “Building Coastal Resilience with Mangroves: The Contribution of

Natural Flood Defenses to the Changing Wealth of Nations.” CWON 2021 technical report, World Bank, Washington, DC. Hoekstra, R. 2021. “Analyzing the Driving Forces of Changes in Natural Capital

Wealth through Decomposition Analysis.” CWON 2021 technical paper, World

Bank, Washington, DC.