World Economy

Taiwan 10th in Crony Capitalism Ranking

Taiwan 10th in Crony Capitalism RankingTaiwan 10th in Crony Capitalism Ranking

Taiwan was listed in 10th place on the Economist’s latest index of crony capitalism, which gives an indication of how much the livelihood of people in certain countries or cities depends on close relationships between business people and government officials.

The index is compiled with the use of data such as a country’s total wealth in comparison to its gross domestic product, the Forbes rankings of its billionaires, and the source of their wealth, CNA reported.

In its rankings this year, the Economist listed 22 economies that it described as the five richest ones, the 10 biggest emerging ones for which it had reliable data, and a selection of other countries where cronyism is a problem.

Taiwan was listed at 10th, a drop of three notches from the previous rankings in 2014, indicating that it had scored better on this year’s index of crony capitalism.

This year, Taiwan’s crony wealth was assessed as 3.2% of its GDP, compared with 5.5% in 2014, according to the London-based weekly newspaper.

The higher the ratio, the more likely it is that the economy is suffering from a severe case of crony capitalism, the newspaper had said as publishing its crony-capitalism index in 2014.

In its report of the 2016 index, published May 7, the newspaper said developing economies accounted for 43% of global GDP but 65% of crony wealth.

Among the big countries, it said, Russia still scored the worst, in reflection of its “corruption and dependence on natural resources,” and was moved to the top of the list from No. 2 in 2014.

Russia’s percentage of crony wealth in proportion to its GDP was estimated at 18% this year. It was followed by Malaysia (13%), the Philippines (11.3%), Singapore (10.7%), and Ukraine (6.7%).  

China (including Hong Kong) was ranked at 11th, although in absolute terms it now has the biggest concentration of crony wealth in the world, at $360 billion, the newspaper said.