Despite all its economic growth, no Bangladeshi has yet made Forbes’ list of billionaires. One can only wonder: if Bangladesh is doing really well, where are all the billionaires?
Another way to look at this would be to consider economies roughly the same size as Bangladesh. This is where things get more interesting. Of the 71 countries with at least one billionaire, 31 had smaller economies than Bangladesh. For example, seven billionaires hailed from Chile, an economy roughly 78% the size of Bangladesh. On the other hand, Cyprus had four (04) billionaires despite an economy one-fifteenth the size of Bangladesh.
In fact, Bangladesh has a GDP roughly the same or higher than all of the following countries (number of billionaires in brackets): Colombia (03), Czech Republic (08), Egypt (06), Kazakhstan (04), Lebanon ( 06), Denmark (08), Vietnam (07), Ukraine (07), Monaco (03), Philippines (20), Hong Kong (67), Singapore (27) and Malaysia (12). Therefore, the size of the economy cannot explain why Bangladesh has no billionaires.
One explanation could involve the business climate in each of these countries, measured in terms of commercial freedom, monetary freedom, property rights, innovation and technology, bureaucracy, tax burden, etc. Some of the countries, as mentioned earlier, like Singapore, Denmark and Hong Kong rank among the top 10 most business-friendly countries in the world, while Malaysia, Chile, Cyprus and the Czech Republic rank much higher (among the first 40) on this list.
Even Kazakhstan, Colombia and the Philippines are ranked higher than Bangladesh, which currently occupies the 109th position on this list. Therefore, the investment climate in a country can play a major role in determining the accumulation of wealth.
That said, the business climate in Kazakhstan, Colombia, the Philippines or even India remains far from satisfactory, and their rankings often seem at odds with the number of billionaires in the respective countries. For example, the Philippines, Ukraine and Vietnam ranked 79th, 77th and 84th respectively for business climate, while India, an economy of 166 billionaires, ranked 73rd. Lebanon is ranked 92nd while Egypt is ranked 95th, a few places above Bangladesh.
To solve this last piece of the puzzle, we can look at the nature of the markets in these countries. Countries that allow corporate consolidations are also likely to have more billionaires than countries that do not. Returning to the case of Chile, Horst Paulmann’s Cencosud and the international chain Walmart have created an oligopoly in the Chilean market and have been repeatedly fined by the regulatory authorities. Despite this, they hold too much power in these markets, allowing the owner of Cenkosud to accumulate obscene wealth.
Likewise in India, people like Mukhesh Ambani and his Reliance have almost unchallenged control over the energy markets and also considerable influence over the ruling party leaders. Poor institutions and a lack of accountability have also led to the concentration of wealth in these countries.
This is where we need to discuss the privatization of natural monopolies like oil, airlines, railroads, power and other natural resources. For example, Three (03) of Chile’s seven billionaires, including Iris Fontbona – the richest person in Chile – are involved in the mining industry. In the case of Cyprus, two of their billionaires are involved in the tanker trade and another in the private airline industry.
In the case of Bangladesh, public utilities such as railways, airlines and natural resources are generally owned by state-owned enterprises and therefore by the government. Therefore, individuals have no opportunity to get obscenely rich by accumulating these precious resources.
Finally, one can also look at innovation and technology adoption in the manufacturing sector. As an indicator, we can consider exports of medium and high technology (% of exports of manufactured goods). Of Bangladesh’s manufactured exports, only 2% are medium and high technology exports. Compare that with Lebanon, Kazakhstan, Egypt, Ukraine or even Vietnam, where at least 30% of manufactured exports are high value-added technology exports.
Another reason a country has billionaires has nothing to do with its GDP or policies. Since Forbes only records a billionaire’s nationality – not the main source or region of their income – it’s possible that a person has never earned a penny in their own country but is recorded as a billionaire.
For example, Jean Salata, although a Chilean citizen, has lived and worked in Hong Kong since 1989, where he chairs Baring Private Equity Asia. Similarly, many Indian billionaires do not primarily operate in India either. That being said, it is worth considering why Bangladeshis are unable to hold CEO positions in foreign companies while Indians are making progress.
In conclusion, there could be several factors for Bangladesh not having a billionaire. On the one hand, it may be true that Bangladesh has billionaires, but their incomes are not reported. The unfavorable investment climate, rising tax and tariff burdens, and slow technology adoption may also play a crucial role here. On the other hand, it may be because Bangladesh has yet to privatize its state-owned natural monopolies.