Three South Africans on Forbes billionaires list

Three South Africans made it onto the Forbes billionaires list published earlier this week. They are Nicky Oppenheimer, Anton Rupert and the country’s first black billionaire, Patrice Motsepe. With $5.7bn to his name, Oppenheimer occupies position 173 on

Oppenheimer, Rupert and Motsepe are not alone. They are joined on the list by no less than 1 122 other dollar billionaires. Forbes states that: “The 22nd annual ranking of the world’s billionaires reflects all sorts of upheavals in the list’s makeup. Two years ago, half of the world’s 20 richest were from the US. Now only four are. India wins bragging rights for having four among the top 10, more than any other country!”

Savvy investors, computer nerds and telecoms moguls come out tops

The struggle to occupy the top position has long been between Microsoft CEO Bill Gates and investment guru Warren Buffett. For the last 12 years Gates took the honours; but this time round Buffet managed to squeak ahead.

Buffett’s stake in investment holding company Berkshire Hathaway puts his estimated worth at $62bn. He earns some kudos for maintaining his fortune through some very turbulent economic times. Just as he did during the dotcom crash in 2000 Buffett has survived the significant fall out from the global sub-prime credit crisis without suffering a significant loss. We expect he will suffer some losses in 2008; so his tenure at the top could be short lived.

Gates has had to bow out of the race for the lead as his $58bn Microsoft fortune only secured him third place. Microsoft’s share price has languished over the last few months as the group faces numerous lawsuits for anti-competitive behaviour. And when Microsoft gets fined, the R100m penalty imposed on South Africa’s Tiger Brands looks like chump change. Gates gave up the silver medal to Mexican Telecoms billionaire, Carlos Slim. Fourth position on the list is held by a person familiar to most South Africans. Lakshmi Mittal owns Mittal Steel which dominates the global steel production industry. Years ago Mittal bought struggling local steel producer Iscor, growing it into today’s JSE-Listed giant Arcelor Mittal.

Not so rosy at the other end of the scale

“As the rich get richer; the poor get poorer,” is an oft repeated phrase. It is a saying which applies to modern day South Africa. The growing gap between rich and poor was high on the agenda during questions time in Parliament earlier this week. President Thabo Mbeki fielded a number of questions on the wealth status of South Africa’s citizens. When asked by an ANC member whether government policies were reducing the gap between rich and poor Mbeki was unable to provide a direct answer… He simply stated the answer to this question was too complex for a simple yes or no. We observe that if anything, government’s BEE policies have helped the gap between rich and poor grow bigger. There are light years between the financial assets of a businessman like Motsepe and a downtrodden shack dweller!

What Mbeki revealed was that statistics confirmed the poor were worse off when various social grants were stripped out of the equation. This follows a survey on household expenditure by Statistics SA which revealed that South Africa’s Gini coefficient was 0.72. Without social grants the measure weakened to 0.8. The Gini coefficient (as defined by Wikipedia) “is a measure of statistical dispersion most prominently used as a measure of inequality of income distribution or inequality of wealth distribution.” Furthermore, “a low Gini coefficient indicates more equal income or wealth distribution, while a high Gini coefficient indicates more unequal distribution!” Mbeki told Parliament that “a reduction in inequality through redistributive policies reduces the Gini coefficient by eight percentage points.” In 2005 the Gini coefficient for the US stood at 0.49.

FAnews Online believes the gap between rich and poor is largely irrelevant. The divide exists in every country in the world, regardless of the political or economic systems employed there. Imagine the difficulty in determining what an acceptable wealth gap should be! In South Africa the lowest paid (officially employed) workers are earning around R1 700 a month – yet it’s not uncommon to find salaried staff pocketing 100 times that amount! Ultimately greater wealth uplifts the quality of an entire society. So politicians should focus on ensuring that the poorest class is brought to an acceptable level rather than trying to narrow the gap. If the poorest in society have accommodation, running water, electricity, access to schooling and education, are clothed, and have enough to eat it hardly matters whether the richest have 1 000 or 10 000 times more.