South Korea Ranks 5th in Billionaires Who Have Inherited Wealth
David Lee, March 15, 2016, 7:46 a.m.
Korea ranked fifth in the world in terms of superrich business tycoons who inherited their wealth instead of making their own fortune, a think tank report showed. According to the Peterson Institute for International Economics, 74.1 percent of the 30 Korean billionaires inherited their fortune -- more than double the global average of 30.4 percent.
The report said the proportion of Korean billionaires who amassed their fortune through inheritance stayed unchanged over the past two decades. Meanwhile, the population of self-made billionaires has overtaken that of inheritors worldwide as the tech boom in 2001 helped put self-made billionaires in the majority.
Korea was behind Kuwait, Finland, Denmark and United Arab Emirates in terms of the percentage of inheritors although the ranking appears insignificant as the number of billionaires in the four countries is less than five each.
The 30 top Korean billionaires include Samsung chairman Lee Kun-hee, AmorePacific owner Suh Kyung-bae, Samsung vice chairman Lee Jae-yong and Hyundai Motor chairman Chung Mong-koo.
Yoo Jong-il, a macroeconomics professor at the KDI School, said that the reasons behind why Korea has a large proportion of billionaires who inherited their fortunes include the nation’s conglomerate-centered economic structure, immature capital markets as well as risk-averse social sentiment due to the lack of social safety nets.
Some industry experts are concerned that the economic structure that increasingly relies on family-controlled conglomerates may have adverse effects on the Korean society.
“The increase in business succession and inheritance is not a good sign for Korean society,” said Jeong Seon-sub, CEO of local business tracker Chaebul.com. He added: “This can make society lose its steam and widen polarization between the rich and the poor.”
The nation that has seen the most rapid growth in share of self-made billionaires is the United States, where hedge funds have played a large role in creating extreme wealth.
The world’s top 10 richest individuals are all self-made. According to Bloomberg, this includes Microsoft founder Bill Gates, Inditex chairman Amancio Ortega, Berkshire Hathaway chairman Warren Buffett, Amazon CEO Jeff Bezos, Telmex chairman Carlos Slim and Facebook CEO Mark Zuckerberg.