13 March 2011
What the Forbes billionaire list may tell us about the problems of wealth-distribution in the Middle East
Forbes' latest list of the richest people in the world is a pretty good gauge of the global financial market and its winners.
And while the winners are usually predictable: the trio of Carlos Slim, Warren Buffett and Bill Gates - the classic triumvirate of new wealth, old wealth and innovation-related wealth - it does offer a good helicopter view of where the wealth is and where it is coming from. And where it's conspicuous by its absence.
This year billionaires from Brazil, Russia, India and China - aka BRIC - made up 108 of the 214 new names in the list. That's the result of new wealth generated in the last year in these new economic powerhouses.
Overall, China now has 115 billionaires in the list, Russia 101, India 55 and Brazil 30, out of a total of 1,210 billionaires, or nearly 25% of the list.
For all the flaws of the Forbes list - and it has many - every year the list gives a pretty good indication of where this year the new wealth came from (emerging), where the markets are opening (Russia, China) and which sectors are engines of growth (social media websites).
And where was the Middle East in the list?
There were 29 Middle East billionares, in the list - with only one new entry - that of Mohammed Al Fayed after realising its investment in Harrods when he sold it to the Qatari sovereign wealth fund last year.
Also present were the familiar names, with Prince Waleed Bin Talal Al Saudi once again topping the list with $19.6-billion in the list. The Sawiris, the Makatis, Hariris, Al Rajhis and Al Ghurairs were all present.
So the Middle East only has 29 billionaires? Of course not. In a year where the vulnerable global economy still managed to churn out 214 new billionaires, did Middle East wealth decline? With oil well over $80 per barrel for much of last year, that seems unlikely.
Remember that the Forbes list only looks at wealth from public listed companies or companies that have gone public with their funding requirements. For example, Mark Zuckerburg, the CEO of non-public-market-listed Facebook has 'paper' wealth on the strength of Goldman Sachs $50-billion valuation of the company.
So there is a very good likelihood that more Middle East billionaires were created, but nobody knows about them, as they never went public. It is also possible that with regional wealth still concentrated in the hands of governments, government institutions and a handful of entrepreneurs
(also read Royal Investments to see how much of the regional wealth is controlled directly by regional ruling families, and not government institutions).
AlifArabia believes that it is a failure of regional markets and lack of government incentives to create a business environment that encourages entrepreneurs to create meaningful businesses that create value, jobs and wealth.
The 29 Middle East billionaires (see list) is in effect much smaller if you count family members as one entry. For example, in Egypt the Sawiris family has four members in the Forbes list, and the Mansours three. Distill them further and you get 15 billionaire families and individuals in the Middle East. While it is commendable that quite a few of the billionaires are self-made, Alifarabia would like to see more Sawiris and Mansours come to the fore.
It is also interesting that the closed Saudi economy has eight billionaires, equal to Egypt which is a much poorer economy, but far more open. Similarly, the more market-oriented and entrepreneurial Lebanese economy with a GDP of $35-billion has six billionaires on the list, compared to Kuwait's three and the UAE's four.
Where are the Middle East billionaires? Has Forbes failed to document them (Arabianbusiness.com list has at least 49 names that could make the grade on the Forbes list), or is that new wealth continues to fill the coffers of old wealth? This list will look far more impressive for the Middle East if Arab royals were included in the list.
While Saudi Arabia routinely lists state-owned governments on the Tadawul as a way to distribute wealth, it has not created much value. All it appears to have done is to turn many average Saudis into day-traders.
While entrepeneurship is taking root in places like the UAE, it is not happening to the extent that it would spill out in the public domain and make for inspirational stories coming out of the Middle East on the global stage.
While the Chinese, Indian, Brazilian and Russian economies are far from perfect and have structural reforms to contend with it, they are doing enough to generate new wealth and giving opportunities to new sets of people to create wealth, value and - more importantly - jobs in their countries.
One could argue that China and Russia are hardly open economies, yet they continue to generate new wealth and new billionaires. So why does a country like Saudi Arabia not generate more billionaires? The counter argument could be that Saudi Arabia is a much smaller market, but then in many cases we are talking about wealth that transcends borders and is not restricted to a single market.
It is interesting to note that many Arab citizens are out on the streets. And many of their issues centre around basic needs across Egypt, Tunisia, Saudi Arabia, Oman, Kuwait and Bahrain. These are: jobs, fairer distribution of wealth, and a merit-based society where they have equal opporunity to succeed through sheer hard work and industriousness.
In that sense, the Forbes list could serve as an interesting indicator why the ordinary Arab is out on the street.
Here is a list of Middle East billionaires according to Forbes:
Forbes Ranking, Name, Wealth, Country
26 Prince Alwaleed Bin Talal Alsaud $19.6B, Saudi Arabia
63 Mohammed Al Amoudi $12.3B, Saudi Arabia
77 Nasser Al-Kharafi & family $10.4B, Kuwait
120 Sulaiman Al Rajhi $7.7B, Saudi Arabia
136 Mohamed Bin Issa Al Jaber $7B, Saudi Arabia
182 Nassef Sawiris $5.6B, Egypt
310 Naguib Sawiris $3.5B, Egypt
393 Onsi Sawiris $2.9B, Egypt
409 Najib Mikati $2.8B, Lebanon
409 Taha Mikati $2.8B, Lebanon
420 Abdul Aziz Al Ghurair & family $2.7B, UAE
459 Bahaa Hariri $2.5B, Lebanon
459 Abdullah Al Rajhi $2.5B, Saudi Arabia
512 Mohammed Al Issa $2.3B, Saudi Arabia
595 Mohamed Mansour $2B, Egypt
595 Saad Hariri $2B, Lebanon
692 Yasseen Mansour $1.8B, Egypt
692 Youssef Mansour $1.8B, Egypt
736 Saif Al Ghurair & family $1.7B, UAE
736 Mohammed Al Rajhi $1.7B, Saudi Arabia
736 Saleh Kamel $1.7B, Saudi Arabia
833 Ayman Hariri $1.5B, Lebanon
833 Fahd Hariri $1.5B, Lebanon
879 Bassam Alghanim $1.4B, Kuwait
879 Kutayba Alghanim $1.4B, Kuwait
879 Samih Sawiris $1.4B, Egypt
938 Abdulla Al Futtaim $1.3B, UAE
993 Mohamed Al Fayed & family (NEW) $1.2B, Egypt
993 Majid Al Futtaim $1.2B, UAE
Source: Forbes
AlifArabia 2011
What the Forbes billionaire list may tell us about the problems of wealth-distribution in the Middle East
Forbes' latest list of the richest people in the world is a pretty good gauge of the global financial market and its winners.
And while the winners are usually predictable: the trio of Carlos Slim, Warren Buffett and Bill Gates - the classic triumvirate of new wealth, old wealth and innovation-related wealth - it does offer a good helicopter view of where the wealth is and where it is coming from. And where it's conspicuous by its absence.
This year billionaires from Brazil, Russia, India and China - aka BRIC - made up 108 of the 214 new names in the list. That's the result of new wealth generated in the last year in these new economic powerhouses.
Overall, China now has 115 billionaires in the list, Russia 101, India 55 and Brazil 30, out of a total of 1,210 billionaires, or nearly 25% of the list.
For all the flaws of the Forbes list - and it has many - every year the list gives a pretty good indication of where this year the new wealth came from (emerging), where the markets are opening (Russia, China) and which sectors are engines of growth (social media websites).
And where was the Middle East in the list?
There were 29 Middle East billionares, in the list - with only one new entry - that of Mohammed Al Fayed after realising its investment in Harrods when he sold it to the Qatari sovereign wealth fund last year.
Also present were the familiar names, with Prince Waleed Bin Talal Al Saudi once again topping the list with $19.6-billion in the list. The Sawiris, the Makatis, Hariris, Al Rajhis and Al Ghurairs were all present.
So the Middle East only has 29 billionaires? Of course not. In a year where the vulnerable global economy still managed to churn out 214 new billionaires, did Middle East wealth decline? With oil well over $80 per barrel for much of last year, that seems unlikely.
Remember that the Forbes list only looks at wealth from public listed companies or companies that have gone public with their funding requirements. For example, Mark Zuckerburg, the CEO of non-public-market-listed Facebook has 'paper' wealth on the strength of Goldman Sachs $50-billion valuation of the company.
So there is a very good likelihood that more Middle East billionaires were created, but nobody knows about them, as they never went public. It is also possible that with regional wealth still concentrated in the hands of governments, government institutions and a handful of entrepreneurs
(also read Royal Investments to see how much of the regional wealth is controlled directly by regional ruling families, and not government institutions).
AlifArabia believes that it is a failure of regional markets and lack of government incentives to create a business environment that encourages entrepreneurs to create meaningful businesses that create value, jobs and wealth.
The 29 Middle East billionaires (see list) is in effect much smaller if you count family members as one entry. For example, in Egypt the Sawiris family has four members in the Forbes list, and the Mansours three. Distill them further and you get 15 billionaire families and individuals in the Middle East. While it is commendable that quite a few of the billionaires are self-made, Alifarabia would like to see more Sawiris and Mansours come to the fore.
It is also interesting that the closed Saudi economy has eight billionaires, equal to Egypt which is a much poorer economy, but far more open. Similarly, the more market-oriented and entrepreneurial Lebanese economy with a GDP of $35-billion has six billionaires on the list, compared to Kuwait's three and the UAE's four.
Where are the Middle East billionaires? Has Forbes failed to document them (Arabianbusiness.com list has at least 49 names that could make the grade on the Forbes list), or is that new wealth continues to fill the coffers of old wealth? This list will look far more impressive for the Middle East if Arab royals were included in the list.
While Saudi Arabia routinely lists state-owned governments on the Tadawul as a way to distribute wealth, it has not created much value. All it appears to have done is to turn many average Saudis into day-traders.
While entrepeneurship is taking root in places like the UAE, it is not happening to the extent that it would spill out in the public domain and make for inspirational stories coming out of the Middle East on the global stage.
While the Chinese, Indian, Brazilian and Russian economies are far from perfect and have structural reforms to contend with it, they are doing enough to generate new wealth and giving opportunities to new sets of people to create wealth, value and - more importantly - jobs in their countries.
One could argue that China and Russia are hardly open economies, yet they continue to generate new wealth and new billionaires. So why does a country like Saudi Arabia not generate more billionaires? The counter argument could be that Saudi Arabia is a much smaller market, but then in many cases we are talking about wealth that transcends borders and is not restricted to a single market.
It is interesting to note that many Arab citizens are out on the streets. And many of their issues centre around basic needs across Egypt, Tunisia, Saudi Arabia, Oman, Kuwait and Bahrain. These are: jobs, fairer distribution of wealth, and a merit-based society where they have equal opporunity to succeed through sheer hard work and industriousness.
In that sense, the Forbes list could serve as an interesting indicator why the ordinary Arab is out on the street.
Here is a list of Middle East billionaires according to Forbes:
Forbes Ranking, Name, Wealth, Country
26 Prince Alwaleed Bin Talal Alsaud $19.6B, Saudi Arabia
63 Mohammed Al Amoudi $12.3B, Saudi Arabia
77 Nasser Al-Kharafi & family $10.4B, Kuwait
120 Sulaiman Al Rajhi $7.7B, Saudi Arabia
136 Mohamed Bin Issa Al Jaber $7B, Saudi Arabia
182 Nassef Sawiris $5.6B, Egypt
310 Naguib Sawiris $3.5B, Egypt
393 Onsi Sawiris $2.9B, Egypt
409 Najib Mikati $2.8B, Lebanon
409 Taha Mikati $2.8B, Lebanon
420 Abdul Aziz Al Ghurair & family $2.7B, UAE
459 Bahaa Hariri $2.5B, Lebanon
459 Abdullah Al Rajhi $2.5B, Saudi Arabia
512 Mohammed Al Issa $2.3B, Saudi Arabia
595 Mohamed Mansour $2B, Egypt
595 Saad Hariri $2B, Lebanon
692 Yasseen Mansour $1.8B, Egypt
692 Youssef Mansour $1.8B, Egypt
736 Saif Al Ghurair & family $1.7B, UAE
736 Mohammed Al Rajhi $1.7B, Saudi Arabia
736 Saleh Kamel $1.7B, Saudi Arabia
833 Ayman Hariri $1.5B, Lebanon
833 Fahd Hariri $1.5B, Lebanon
879 Bassam Alghanim $1.4B, Kuwait
879 Kutayba Alghanim $1.4B, Kuwait
879 Samih Sawiris $1.4B, Egypt
938 Abdulla Al Futtaim $1.3B, UAE
993 Mohamed Al Fayed & family (NEW) $1.2B, Egypt
993 Majid Al Futtaim $1.2B, UAE
Source: Forbes
AlifArabia 2011
