Hong Kong – where politically connected businessmen are most likely to prosper
The Economist recently created an index around crony-capitalism, or more exactly “rent-seeking”: grabbing a bigger slice of the economic pie rather than making the pie bigger. Common examples of rent-seeking (which may or may not be illegal) include forming cartels and lobbying for rules that benefit a firm at the expense of competitors and customers.
This is hardly a surprise, in a City where the combined wealth of Hong Kong’s billionaires is equivalent to more than 70% of Hong Kong’s GDP (Source: Wall Street Journal) and a fifth of the population live in poverty. Their recent article “Hong Kong’s Tycoons Under Attack” singled out Cheung Kong Holdings Ltd., Sun Hung Kai Properties, Chow Tai Fook Enterprises, Swire Pacific Ltd., Wheelock and Jardine Matheson Holdings Ltd. This is no means an exuaustive list of who sits on the wealthy side of one of the world’s most imbalanced societies. Read the Forbes list of Hong Kong’s richest individuals.
Scoring Hong Kong in first place globally, The Economist notes “Countries that do well on the crony index generally have better bureaucracies and institutions, as judged by the World Economic Forum. But efficient government is no guarantee of a good score: Hong Kong and Singapore are packed with billionaires in crony industries. This reflects scarce land, which boosts property values, and their role as entrepots for shiftier neighbours. Hong Kong has also long been lax on antitrust: it only passed an economy-wide competition law two years ago.”
Author: Peter Udall
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