Singapore has been ranked fourth in the 2023 crony-capitalism index recently published by The Economist, behind Russia, the Czech Republic, and Malaysia.
The British weekly magazine calculated the index based on whether the livelihoods of people from capitalist economies are easily affected by crony capitalism.
The index lists 43 countries with a GDP of over $250 billion and estimates how much plutocrats profit from rent-seeking industries that benefit from state favouritism.
The Economist called out Russia as the “most crony-capitalist country” in the index.
Malaysia fell to No. 3 on The Economist’s crony-capitalism index for 2023, while Singapore dropped from third to fourth place compared to 2021.
The Economist derived the index by starting with data from Forbes, which publishes an annual list of the world’s wealthiest people.
Forbes listed 2,640 billionaires with a total worth of $12 trillion, but most of them do not operate in rent-seeking sectors.
The Economist then classifies the sources of wealth into rent-seeking and non-rent-seeking sectors. The chart mentioned that Singapore’s billionaire wealth from crony sectors amounts to over 10% of GDP.
Amassed wealth from industries that benefit from favourable relationships with the state
“Crony capitalists’ wealth has risen from $315bn, or 1% of global Gross Domestic Product (GDP), 25 years ago to $3trn or nearly 3% of global GDP now, ” The Economist’s article said.
According to the article, 65% of the global increase in crony-capitalist wealth has been generated by the United States, China, India, and Russia.
In total, autocratic countries account for 40% of crony-capitalist wealth, which amounts to 9% of their respective GDPs.
The article highlights that many billionaires around the world are believed to have amassed their wealth from industries that benefit from favorable relationships with the state.
The effects of the Ukrainian war are clear, with crony wealth declining from $456bn in 2021 to $387bn in 2023.
The index also illuminates other trends among the mega-wealthy.
Singapore became prime destination for China’s crazy rich
Many of America’s 735 billionaires have been hit by the crash in tech stocks last year, and China’s crony wealth has fallen sharply due to Xi Jinping’s crackdown on private capital.
Over 1.5 million people in China have been punished so far, and has also resulted in high-profile tycoons facing increased scrutiny, such as Jack Ma, co-founder of Alibaba, who disappeared in 2020 after criticizing the authorities.
The article notes that the Chinese government’s emphasis on “common prosperity” has led to an increase in the number of Chinese family offices in Singapore, from 33 in 2019 to an estimated 750 by the end of 2022.
Indeed, multiple reports from international news agencies have highlighted the influx of ultra-wealthy families from overseas, particularly from China, to Singapore.
