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Thursday, June 26, 2008

East- A Millionaire Boom

As go the billionaires, so go the millionaires. East, that is. As I’ve discussed earlier that East is emerging as super power.

In Forbes' annual list of the world's billionaires, published in March, we were stunned to find the population of Indian billionaires jumped 47.2% to 53 from 36 the previous year. Not surprisingly, a new survey shows millionaire population growth in countries like India and China is also rapidly outpacing growth in the U.S.

According to the World Wealth Report published by Capgemini and Merrill Lynch (nyse: MER - news - people ), India had the fastest growing population of individuals holding at least $1 million in financial assets during 2007. The affluent group jumped by 22.7% to 123,000.

Propelling the Indian millionaire boom was strong economic growth and hefty stock-market gains in the country. One hot spot continues to be the country's flourishing high-tech industries.

One of India's wealthiest, Wipro (nyse: WIT - news - people ) chairman and billionaire Azim Premji, attributed that particular strength to the nation's base of highly skilled workers. "We will graduate 580,000 engineers this year. The United States will graduate 75,000 engineers this year," he said in an interview with Forbes.com last month. (See: "Wipro's Azim Premji.")

According to the World Wealth Report, China had the second-fastest-growing millionaire population. It grew 20.3% to 415,000 last year. The billionaire population grew even faster, the March Forbes' list included 42 Chinese billionaires, up from 20 the previous year.

Another country where the billionaire growth outran the millionaire growth was Russia. Forbes' recent list included 87 Russian billionaires, a 64% increase from the previous year. The millionaire population grew a respectable but less dramatic 14.4% to 136,000.

The U.S. had much more modest millionaire growth rates than India, China and Russia. Its millionaire population ticked up 3.7% to slightly over 3 million.

The slowing U.S. economy hindered wealth accumulation. Also slowing prosperity is the American tendency to spend instead of save. Merrill reported that the U.S. had one of the world's lowest saving rates in 2007, just 10.9% of GDP. Many countries with emerging economies had savings rates that surpassed 20%.

The report highlights that wealthy populations are growing more rapidly in emerging economies than traditional economic powerhouses like the U.S. and Europe. High-net-worth populations in Europe grew 3.7% over 2007.

They climbed 10% in Africa, 15.6% in the oil-flush Middle East and 8.7% in the Asia-Pacific region. Merrill Lynch and Capgemini expect the trends continue. It predicts continued strong growth in those regions over the next five years.

There is a consolation for Americans though: The U.S. will continue to lead the world in billionaire population for the foreseeable future. It boasts 469 billionaires, 382 more than any other country.

(From Forbes Magazine)

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