However, thanks to falling energy and commodity prices, politically-connected tycoons have come under the pump over the past two years. Among the indexed economies, crony wealth has declined by $116 billion since 2014.<\/p>\n
The report noted that another reason for the pressure is a backlash from the middle class, while corruption scandals have lit a fire under governments, as has happened in South Africa.<\/p>\n
The report warned that if commodity prices rebound, crony capitalists\u2019 wealth is likely to rise again.<\/p>\n
The Economist used data from Forbes<\/em> to calculate the total wealth of those billionaires whose activities are largely in industries that benefit from political influence.<\/p>\n At last count, South Africa had six dollar billionaires, while the sectors under question include the likes of defence; infrastructure; oil\/gas\/chemicals and other energy; construction; mining; commodities; utilities; and telecoms.<\/p>\n “Crony capitalism\u00a0–\u00a0or ‘rent-seeking’, as economists call it\u00a0–\u00a0shades from string-pulling to bribery. Much of it is legal, but all of it is unfair,” The Economist said.<\/p>\n “It undermines trust in the state, mis-allocates resources and stops countries and true entrepreneurs from getting rich. So the dip in crony activity is welcome. To stop it roaring back, governments need to seize the moment.”<\/p>\n Germany is seen as the ‘cleanest’ country on the index, where only a fraction of its billionaires derive their wealth from crony sectors. Russia is the worst – wealth from the country\u2019s crony sectors amounts to 18% of its GDP.<\/p>\n South Africa is ranked 13th, where wealth from the country\u2019s crony sectors amounts to approximately 3% of its GDP (\u00b1 R156 billion).<\/p>\n The results are presented for 22 economies: the five largest rich ones, the 10 biggest for which reliable data are available and a selection of other countries where cronyism is a problem.<\/p>\n “The rich world has lots of billionaires but fewer cronies. Only 14% of billionaire wealth is from rent-heavy industries,” The Economist said.<\/p>\n Developing economies account for 43% of global GDP but 65% of crony wealth.<\/p>\n How South Africa\u2019s richest people make their money<\/strong><\/a><\/p>\n Black billionaires sold their skin for wealth: Malema<\/strong><\/a><\/p>\n![\"Cronycapitalism\"](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2016\/05\/Cronycapitalism.jpg\")
<\/a><\/p>\n![\"Crony\"](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2016\/05\/Crony-640x414.png\")
<\/a>More on wealth in SA<\/h3>\n