Lai See

Hong Kong tops wealth concentration table

PUBLISHED : Saturday, 31 May, 2014, 12:56am
UPDATED : Saturday, 31 May, 2014, 12:56am

It is interesting but not wholly surprising to see that Hong Kong has topped another index which it may not be so proud of. It leads the rankings of an analysis which shows the wealth of the uber-rich as a proportion of an economy's gross domestic product. According to a Bank of America Merrill Lynch report, the net worth of Hong Kong's billionaires in 2013 represented 76.4 per cent of the city's gross domestic product.

Sweden's billionaires were a distant second accounting for 20.7 per cent of GDP. Next was Russia with 20.1 per cent, Malaysia 18 per cent, Israel 18 per cent, Philippines 16.5 per cent and Singapore 16.3 per cent. US billionaires accounted for 13.8 per cent of GDP, Britain's 6.2 per cent, China's 3.5 per cent and Japan's 1.9 per cent.

The report, titled Piketty and Plutonomy: the Revenge of Inequality, examined Thomas Piketty's highly successful tome, Capital in the Twenty-First Century. Analysis of plutonomy - where economic growth is powered by and largely consumed by the wealthy few - is critical, the authors say, for understanding the complexities of today's markets, as they go on to enumerate 10 implications of plutonomy for investors.

Piketty projects that the global private wealth to national income ratio will rise from 440 per cent in 2010 to record highs of 500 per cent by 2030, levels that were last seen in 1910. Hong Kong is also highly placed in terms of income inequality when ranked in terms of relative Gini coefficient levels. Hong Kong is third after Colombia and Brazil. One of the report's conclusions is that unless there is policy intervention, in the longer term "emerging markets are likely to become entrenched and egregious plutonomies".


Ice cream immunity

For the last three years an ice cream vendor has plied his trade by parking illegally in Haiphong Road, Tsim Sha Tsui, while running his engine, much to the irritation of some of the residents.

Following a complaint to the EPD about the matter a reader received the usual response pointing out that a driver is prohibited to run an engine for more than three minutes in an hour.

However, this letter carried the additional information that an EPD team had spotted the ice cream van in operation but since the vendor was making ice cream "the ordinance does not apply to a driver of a motor vehicle if idling the vehicle is necessary for a purpose for which the vehicle is primarily designed".

The EPD said it would refer the matter of the "alleged illegal parking" to the police. However, more than one month later, the police have so far felt disinclined to act. This is not surprising since they haven't done anything for the past three years.


Cup of cups

The World Cup starts in 12 days in Brazil. Amid criticism of the country's preparations for the event Brazilian president Dilma Rousseff said: "I am sure that our country will put on the cup of cups." She may not have intended any ambivalence in her remarks. But if the comments by former player Ronaldo are true, then these remarks may come back to haunt her.

Ronaldo, who is a member of Brazil's World Cup organising committee, said only 30 per cent of the infrastructure has been completed. It has barely managed to complete essential projects such as stadiums, and has shelved much of the rest.


Summer reading

JP Morgan has just released its 15th annual summer reading list. Every year the firm narrows its list down to 10 titles from a list of more than 500. The list covers business and technology, philanthropy, personal growth, art, sports, adventure, cooking and science. It includes Thrive: The Third Metric to Redefining Success and Creating a Life of Well-Being, Wisdom, and Wonder by Arianna Huffington and An Astronaut's Guide to Life on Earth: What Going to Space Taught Me About Ingenuity, Determination, and Being Prepared for Anything by Colonel Chris Hadfield.

In sports there is The Billionaire and the Mechanic: How Larry Ellison and a Car Mechanic Teamed Up to Win Sailing's Greatest Race, the America's Cup by Julian Guthrie.

Olives, Lemons & Za'atar: The Best Middle Eastern Home Cooking by Rawia Bishara, sits somewhat strangely among the other earnest titles.

All worthy stuff, but not many you'd want to take on holiday.


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