June 1st, 2011
08:32 AM GMT
(CNN) – Pop quiz: Which country hosts the world's highest concentration of millionaires?
A) The United States
The answer is C) Singapore. A whopping 15.5% of Singapore households had more than $1 million in assets in 2010, according to a study out by the Boston Consulting Group. You are more likely to bump into a millionaire in Singapore than anywhere else in the world. Runner-up Switzerland doesn’t even come close, with less than 10% millionaire households.
Singapore’s millionaire population is also growing – and fast. The city-state had nearly a third more millionaires in 2010 than a year earlier, the swiftest increase of any country.
Singapore’s rapid GDP growth – 14.7% last year – and the solid appreciation of its currency have driven the millionaire boom. Analysis shows Singapore has had strong growth in financial services, tourism and exports in 2010.
Singaporeans have ridden the wave of increasing wealth throughout Asia. “Singapore is more plugged into wealth creation than any other nation,” says Mykolas Rambus, CEO of intelligence provider Wealth-X . He adds that Singaporeans are not just benefiting from China’s phenomenal growth, but also that of India and Southeast Asia. Boston Consulting Group’s study found wealth in Asia ex-Japan grew the fastest of any region in 2010, increasing more than 17%.
Policy also plays a role in Singapore’s wealth, with the city-state boasting low taxes, efficient regulation and high rating for quality of life. The Heritage Foundation, a Conservative think tank, ranked Singapore the second freest economy in the world in 2010, citing its pro-business credentials. One example from Heritage: “Starting a business takes only three days, compared to the world average of 34 days.”
Like many other nations, Singapore is facing a growing wealth gap. The Gini coefficient, a commonly used measure of income inequality, has risen steadily over the last decade and the issue struck a chord with the public during recent elections.
Tan Ern Sur, Associate professor of sociology at the National University of Singapore, believes neither the rich nor the poor are very visible in Singapore. “We also do not have a strong politics of envy, perhaps because Singapore is largely a middle-class society,” he says by e-mail. People are more concerned with their own financial pressures than with overall wealth concentration.
It may also help ease concerns that Singapore only ranked tenth in the concentration “ultra-high-net-worth,” households, those with more than $100 million in assets. According to BCG, the highest proportion of the super rich is in Saudi Arabia, with 18 per 100,000 households.
Proportion of millionaire household by market
1. Singapore 15.5%
Source: BCG Global Wealth 2011 Report
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.