How rich is Romania, really? The World Bank says each Romanian has a total wealth of USD 107,000, and human capital makes up half of it

Sorin Melenciuc 08/05/2018 | 15:41

Human capital accounts for 50.5 percent of the total wealth of Romania, being much more important than natural or produced capital, according to the “The Changing Wealth of Nations 2018” study published by the World Bank.

The study says Romania had a total wealth of USD 107,022 per inhabitant in 2014, the second-lowest among the 28 European Union member states, after Bulgaria (USD 81,878).

Out of the total wealth in Romania, human capital accounted for USD 54,014 per inhabitant (50.5 percent), while the produced capital amounted USD 41,163 (38.5 percent) and the natural capital – USD 17,265. The net foreign assets have a negative contribution, of –USD 5,420/inhabitant.

Estimations of the human capital wealth of countries are based on wage regressions used to compute expected earnings for individuals over their lifetimes by gender, age, and education level.

The natural capital of Romania is composed of forests (USD 1,950/inhabitant), protected areas (USD 3,248), cropland (USD 5,459), pastureland (USD 5,070) and subsoil assets (USD 1,899), World Bank’s experts estimate.

According to the study, wealthy nations are not necessarily those with huge natural resources, but those with high human capital.

In Europe, a country with half the natural capital of Romania, Switzerland (USD 8,531/inhabitant), is among the richest in the world – total wealth of USD 1.466 million/inhabitant – due to its very high human capital (USD 1.022 million/inhabitant).

Romania is globally considered an upper-middle-income country, having a similar level of total wealth to China (USD 108,172 /inhabitant), Mexico (USD 110,471), Ecuador (USD 102,451) and Iraq (USD 101,705).

The estimations were conducted using a large number of surveys from the World Bank’s International Income Distribution Database. Estimates are in 2014 US dollars per capita at market exchange rates, the authors said.

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