The “Gini is out of the bottle” as we grossly joked last week. (We couldn’t help but insert a pun about the Gini Coefficient.) Gini Coefficient measures the level of wealth distribution…the higher the number, the higher the inequality — less people are above the mean. So if a country scores a ‘0’, then there is complete equality regarding distribution of wealth within a country. Think: ideal communism in China.
This quote comes from an interview by Robert Shiller with Associated Press. How concerned should we be that wealth distribution is more skewed in some countries compared to others? Earlier this month, The Executive Magazine wrote that about less than 1 percent (five families) in Lebanon represent about 48 percent of Lebanese wealth. Growing up in the U.S., there is this presumption–or assumption–that countries with extremely high inequalities of wealth distribution turn out dissatisfied majorities. More simply put: disproportionate wealth distribution translate into disproportionate political power. How true is this?
This could easily apply to the United States as easily as it does for Tunisia and Lebanon…Turkey, and Egypt…and Syria. The list is long outside of the MENA world too (Israel, Mexico, Chile, Brazil and India).
Half a percent of Lebanese adults own half the country’s wealth
At least 48 percent of Lebanon’s privately-held wealth is concentrated in the hands of some 8,900 citizens — just 0.3 percent of the adult population — according to calculations based on a new report. The nation’s staggering wealth inequality is detailed in Credit Suisse’s Global Wealth Databook 2013, released last week. The distorted wealth figures help to push the country’s Gini coefficient, a measure of inequality, to 86.3 percent — the fourth highest globally behind Russia, Ukraine and Kazakhstan (see chart, below left).*
While Credit Suisse did not directly publish how much wealth is in Lebanese millionaires’ hands, Executive was able to estimate a lower bound based on the report and Forbes magazine’s list of billionaires. Lebanese worth more than $1 million own at least 48 percent of the country’s wealth (see chart above). This figure, however, is a minimum estimate. It also implies that the rest of the country owns less than 52 percent of private wealth, valued at some $91 billion.
The richest Lebanese are its six billionaires, all from the Mikati and Hariri families. According to Forbes, their combined worth is $14 billion — some 15 percent of all private wealth. [Click here to continue….]