Rich leaders, poor people

Posted on | mei 6, 2011 | No Comments

When the North African-Middle East social uprisings started at the beginning of the year, I conducted a very brief research to find out who are the richest leaders in the world – not all, just some – and to compare them invariably under authoritarian regimes with wealthy politicians in the West – and not just “Latin lover Silvio” who cannot buy good press any more despite owning most of Italy’s media, but with American congressmen. What we find is that many world leaders and politicians are extremely wealthy either before they went into politics or after.

Unless Wikileaks comes up with the information as it has on some of them, we have no way of knowing exact assets of politicians. For example, Egypt’s Mubarak, Tunisia’s Ben Ali, and Yemen’s Ali Abdullah Saleh were not on any published list of richest world leaders. Social upheaval in those three Islamic countries forced the press to uncover the assets of these dictators and to the surprise of the public, these leaders’ personal wealth amounted to a substantial percentage of their country’s GDP.

Egypt’s GDP is $216 billion, while Mubarak’s personal wealth is one-third of the country’s GDP, or $70 billion! The country’s sovereign debt is at 80% of GDP or about $165 billion, of which external debt is $30 billion; Mubarak’s personal wealth can help solve the debt problem. Per capita income in terms of real GDP is $2,160, the second lowest in the Arab world just above Yemen, that is because Mubarak and a small percentage of Egyptians own most of the wealth. The average Egyptian spends between 40 and 50 percent of income on foodstuffs, while the average American spends just under 10% despite the recent spike in prices. Are these conditions for a social uprising? Maybe not, but chronic poverty, repression, combined with external (US) dependence seemed the right combination for an uprising.

Abu Dhabi’s Sheikh Khalifa is worth 12 billion pounds sterling and has been trying to modernize his country by turning into a ‘commercially-pop-culturally-trendy’ vacation spot for the rich and famous. Without the support of the conservative Arab states and the West, it is difficult to say what the political fate of the UAR would be; any more than what it will be after the recent Arab uprisings. In Saudi Arabia with its monocultural economy (oil-dependent), King Abdullah is worth about the same as Sheikh Khalifa built a city and modestly named it after himself “King Abdullah Economic City”, as well as King Abdullah University of Science & Technology, and many other institutions after his name just in case people forget who owns the country. Meanwhile, an estimated 30% live below the poverty line and unemployment is at 10%. The question is how long will the royal family (about 7000 princes that rule the country as a fiefdom) be able to play both the West as well as placate Islamists that allegedly indirectly are supporting al-Qaeda. How long now that the genie is out of the Tunisian, Egyptian, and Yemeni bottles?

Thailand’s King Bhumibol Adulyadej’s is reportedly worth 20 billion pounds sterling, (roughly 10% of GDP), while the per capita income is about 2,500 pounds sterling. Mired in popular protests that often turn violent against an unpopular government, Thailand is an example of a plutocrat ruling a country where roughly one-third of the people are poor, where human rights violations run rampant, especially against women reduced to prostitution and subjected to human trafficking. But as long as the King make the rich and famous list, all is well!

As one of the most ostentatious rulers in the world, the Sultan of Burnai is worth 13.5 billion pound sterling, but the country’s GDP is at $12 billion; in other words, the Sultan has more money than his entire country! Imagine if only Silvio ‘teenage chasing’ Berlusconi worth an estimated 6 billion pounds sterling, had more money than Italy’s GDP. But who really knows with Silvio how much he is actually worth? After all, he has been so stingy with the trade unions, and ever so generous with his ‘little girls’ and with politicians reaching out their hand in return for a vote in the ‘right (Silvio’s) direction’.

Latin America has its millionaire leaders as well, most notable among them Sebastián Piñera, President of Chile, worth well over one billion dollars, in a country with poverty rate just under 20% (comparable to the weakest EU members) and per capita income at just over $10,000. Historically a country where the wealth was concentrated among a few families and mostly in Santiago and surrounding areas, 40% of the country’s wealth is owned by 10% of the people. The only countries will less equitable income distribution are Brazil and Guatemala; two very different countries in many respects.

Africa also has its share of petty dictators who have become multimillionaires by virtue of public power entrusted to them (or seized by them). Equatorial Guinea’s president Teodoro Obiang Nguema Mbasogo, President of Equatorial Guinea is in the infamous club, but notorious because in 2003 he actually deposited several hundred million (up to one billion) dollars into a private family account, arguing that its purpose was to fight corruption! Robert Mugabe of Zimbabwe and King Mswati III of Swaziland are not much better than Nguema Mbasogo. The King of Swaziland often supplements his personal accounts with public treasury funds – how else could he afford to keep his wives and ‘others’ living in style in a land where two-third of the people cannot meet basic needs and only 10% account for half of the country’s consumption.

Like many underdeveloped nations, most of the former Soviet republics from Georgia to Kyrgyzstan are ruled under corrupt officials from top down, and leaders who have become wealthy and use the state as a means of enriching themselves and a small clique of people in the private and public sectors. Kazakhstan’s Nursultan Nazarbayev is probably the poster child for Trans-Caspian-Central Asian official corruption under authoritarian rule, but hardly the only one. The USSR was hardly a utopia as many Marxists wished it would become before and during the October Revolution, in fact the Soviet Union had become a static relic that needed major structural reforms. But how much better is what we have today in the republics under authoritarian regimes with problems with narcotics and prostitution, official corruption and vast socioeconomic inequality?

Do we have a case of ‘Exceptionalism’ or more of the same in the United States when it comes to politicians who have little in common with the average citizen? Clearly the US has some of the strictest laws on the planet about official corruption, and as the world’s wealthiest nation where the financial elites are dominant over the political, there cannot be a situation of one or a few political leaders or public officials using the state as a private fiefdom. Historically, the honorable and noble thing to do, at least such was the image the rich projected, a man let us say an honorable politician whom I admire for his foreign policy, Herbert Hoover made money in the private sector and then went into politics. But what if a large percentage of politicians are millionaires and they go into politics to safeguard the economic system in which they believe along with augmenting their considerable personal wealth.

The Center for Responsive Politics in the US has revealed that in 2008 there were 237 millionaires serving in Congress, a decline from 2007 when there were 239 millionaires, or about 45 percent of the total serving in the Senate and House. The median reported asset value in 2008 was $1.8 million. It is worth considering that in net assets reported, members of congress do not include everything, and often their residences are excluded, making the official worth actually lower than the real gross asset value. Considering that about one percent of all Americans are millionaires, there is an immense socioeconomic gap between the average congressman and a typical constituent. Even worse, many millionaire members of congress have investments in the companies receiving billions in taxpayer money in some form especially bailouts. Those include Goldman-Sachs, Bank of America, General Electric, Wells Fargo, and Citigroup. The larger question, of course is the degree to which these office holders make policy for the benefit of and are really accountable to their constituents or they are there to benefit the corporations in which they have investments and which fund their campaigns.

It seems to me that approximately 1500 years after Merovingian King Clovis consolidated power to establish the Frankish kingdom, we still have the basic Barbarian concept of the public leader’s role; namely, the public domain exists to enrich the leader (s) (and his chosen privileged nobles), and it is to be treated as such. In short, the concept of public service is really all about private gain using the public office. Piaget may have been right about stages of cognitive development, but it seems that the same theory cannot apply to stages of development in human civilization, given that world leaders and politicians today think of the public domain in Medieval terms, no matter the modern rhetoric they use to justify their actions designed to enrich themselves.

AUTHOR: Jon Kofas
E-MAIL: jonkofas [at]


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