Malaysia drops a rung to third spot on crony capitalism index

PETALING JAYA: Malaysia fell from second to third position in The Economist's crony capitalism index 2023, while Singapore went from third to fourth place, from 2021.

The index named Russia top in crony capitalism worldwide, with the Czech Republic taking second place.

The British weekly calculated the index based on whether or not the livelihoods of people in capitalist economies are easily affected by crony capitalism.

The index lists 43 countries each with a GDP of over US$250bil (RM1.11bil) and estimates how much plutocrats profit from rent-seeking industries that benefit from favouritism by the state.

Rent-seeking is the practice of influencing public policy as a profit strategy.

The Economist derived the index from data used by Forbes, which publishes an annual list of the world's wealthiest people.

Forbes listed 2,640 billionaires with a total wealth of US$12 trillion (RM53.49 trillion), but most of them do not operate in rent-seeking sectors.

The Economist then classifies the sources of wealth into rent-seeking and non-rent-seeking and sectors.

It mentioned that Singapore's billionaire wealth from "crony sectors" amounts to over 10% of its GDP.

The magazine said 65% of the global increase in crony-capitalist wealth is generated by the United States, China, India and Russia.

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