Twelve billionaires hold one fifth of the UAE’s wealth

01 August 2018 4 min. read

The Boston Consulting Group have just released the 2018 edition of the Global Wealth Report, this year titled ‘Seizing the Analytics Advantage’. The report identifies 18 percent of the total wealth held by individuals in the United Arab Emirates is owned by just 12 people.

The report which focuses on the worldwide growth in individual assets has identified that personal wealth grew in 2017. The majority of global wealth continues to be held by North Americans (40 percent) and the United States has a third of the world’s upper and ultra high net worth individuals (above $20 million).

In the Middle East, individual wealth grew by 11 percent over the past year after having been relatively flat between 2012 and 2016. The drop in oil prices at the beginning of 2016 was one of the largest factors which stagnated Middle Eastern wealth. Since last year, oil prices have recovered to upwards of $80 a barrel, prompting a growth in individual assets to $4.1 trillion.

This recovery saw an extra $400 billion added to wealth in the Middle East in 2017. The growth is roughly in line with the global average of 12 percent. Global wealth in 2017 grew from $180 trillion to $201 trillion.

Global Wealth in US Dollars Grew by 12 percent in 2017

In the UAE, 139 millionaires with assets over $100 million – referred to in the BCG report as ultra-high net worth individuals – hold 8 percent of the country’s wealth. A further 18 percent is held by just 12 billionaires.

According to the Forbes rich-list, the UAE’s billionaires own and administer a number of businesses outside of the oil sector, including in real estate, malls, hotels and import rights. The country’s richest man is Abdulla bin Ahmad Al Ghurair and his family, who are worth an approximate $5.9 billion.

Beyond the billionaires, the largest group of people in the UAE was those whose wealth is between $0 and $100,000. Those with assets in this category are said to number close to 7 million people, alluding to a grossly unequal distribution of wealth throughout the country.

North America Is the Clear Leader in Wealth per Capita

This can be seen throughout the whole Middle East as a trend with wealth per capita sitting at $18,000. Whilst that is significantly higher than Africa, Latin America and Asia, it’s still less than half the global average.

BCG Senior Partner and Managing Director, Markus Massi said; “Typically, in more mature markets you will see a more equal split, but not such a pronounced one where there are ultra-high net worth individuals holding 18 percent of the total wealth.”

“If you have family conglomerates driving a lot of the private sector growth here, then you will see a natural inclination where, if you have a got a country structure where certain families are holding a significant part of the private sector, that this also relates to wealth held by a few people in the country,” he said.

Affluent individuals personal wealth in percentage of region

Massi believes that in time, the divide between rich and poor will become less defined as markets mature. This is demonstrated in the BCG report in the chart showing affluent individuals – with a net worth of between $250,000 and $1 million – predicted to rise by 14.1 percent between 2017 and 2022, the highest rate of anywhere in the world.

This indicates the growing middle class across the Middle East, which while it is still premature in comparison to other markets like China or India, is nevertheless a sign of progress.

Regionally, Saudi Arabia has the highest concentration of personal wealth in the Middle East with roughly 22 percent, although that figure has shrunk since 2012 from a mark of over 25 percent. Turkey is also booming, with an increase of total Middle Eastern wealth from 11 percent to 12.4 percent.

According to the report, the UAE, Kuwait, Qatar, Bahrain will all loose a fraction of their portion of Middle Eastern wealth as other countries in the region begin increase their share.