THE NUMBER OF MILLIONAIRES IN SINGAPORE DEPENDS ON HOW MANY TIMES THE MONKEYS IN THE ZOO SCRATCH THEIR HEADS

I was trying to parse some numbers on wealth and millionaires and came across this old article from Mothership (23 Sep 2022). 

Mothership's views are seen as skewed in favour of the establishment. It was quick to flash this catchy and feel-good headline, careless as to veracity of the statement. Private wealth is not exactly public wealth. What if most of the private wealth is in overseas holdings, how does that make the city wealthy?  Having the 5th highest number of millionaires does not mean Singapore is the 5th wealthiest city in the world. 

Then again, earlier in 18 Aug 2022 article "S'pore's share of millionaires to grow from 7.5% in 2021 to 13.4% in 2030", Mothership stated the number of millionaires in Singapore in 2021 was 400,000, an incredible 37% difference from  their September article. Mothership was oblivious to the discrepancy as long as the headlines feel good.

Of course Mothership was simply referencing professional global wealth reports. In August it was HSBC report "The Rise of Asian Wealth" and September it was the Henley & Partner's "The 20 Wealthiest Cities in the World for 2022"  So why was there such a huge disparity of 2021 numbers of millionaires of 250,000 and 400,000 that Mothership glossed over? 

The lesson here is a small dose of skepticism and a big spoonful of critical thinking in what we read is healthy. Challenging suppositions is not being conspiratorial but the very foundation of healthy inquiry.

The reason for the huge difference of 250,000 and 400,000 millionaires has got to do with the focus, methodology, definitions and formulation of the reports. It is of course beyond outsiders to get behind these reports to observe how they are actually prepared. Private wealth excludes the net assets of the city (public wealth). Researchers cull data from various sources such as the city's statistical publications on demographics, household expenditures, savings, taxes, debts, from land registries, real estate transactions, stock exchange transactions, financial data from banks and central banks, etc. All these reports from the public domain are anonymised data which researchers feed into their system with their own algorithm and formulae. Could the formulae be based on the number of times the monkeys in the zoo scratched their heads? Of course not, but you get the point.

Apart from what may be culled from public domain, Henley's report is based on data feed from New World Wealth, a global wealth intelligence firm based in South Africa which tracks the movements and spending habits of the world’s wealthiest people. They do this based on 150,000 high net worth  individuals they maintain on their datasets. Henley's numbers for Singapore appears too low. Could it be they are skewed towards a migration and passport strength focus and downplaying on the larger indigenous population?

I have no access to HSBC's full report so unable to express any opinion on the 400,000 millionaires in 2021.

For year 2022, Henley's World Wealth Report 2023 of numbers of millionaires in various cities shows consistency with 2021. Singapore remains in 5th spot but a slightly lower number of millionaires of 240,100. With a total population of 6.2m that means 1 out of everyone 25 persons you meet on the streets is a millionaire.

On a comparative note let's look at the more popular Credit Suisse Global Wealth Report 2023. This report looks at wealth at country level instead. According to CS there were 332,000 millionaires in Singapore in 2022, mid-point between the figures from Henley and HSBC. Maybe relying on the number of times the monkeys in the zoo scratch their head is a better option after all. 332,000 means 1 out of every 20 persons you meet on the streets is a millionaire. Incredible.

CS report has much more details delving into micro and macro-economics. Perhaps a more meaningful gauge of  the sense of wealth is metrics on distribution per adult. Here is CS' top 20 country ranking of wealth per adult in terms of the mean (simple average) and the median (mid-point).

On the mean basis, Switzerland ranks #1 and Singapore #8. On average each adult in Singapore has a wealth of US$382,960. On the median basis, the rankings change drastically. Singapore is ranked #17 and Belgium is #1. Singapore adults have a median wealth of US$99,940. It means  US$99,940 is the middle line and one half of adults in Singapore has wealth in excess of this while the other half has less.

Inequality of wealth distribution is the reason for the change in rankings between mean and median figures. Lower gini coefficient (lower inequality) favours the country's median figure. Singapore has a very high gini coefficient of 78.8, ie very unequal wealth distribution, which explains the big difference in its mean and median ranking.

It is about the residents in Singapore, ie inclusive of Permanent Residents and long visa holders of foreigners working here. Singapore has all the positive attributes that attract immigration - pro-business government, low tax regime, low crime, good quality of life, cosmopolitan, good business climate, marvelous infrastructure, good schools, etc. and most importantly a Global Investor Program  designed for wealthy and experienced foreign entrepreneurs, business owners, and managers who are interested in starting a business or investing in Singapore and who wish to make the country their home. Singapore has been consistently seeing a net inflow of high networth individuals.

The top 3 countries that had the most net gains in high networth individuals in 2022 were UAE, Australia, and Singapore in that order. Australia has traditionally been a favourite, but UAE is fast becoming a go to country. A friend who returned recently from the COP28 Climate Summit mentioned the many Christmas decorations he saw in Dubai. Unusual for Islamic country but testimony to accommodation needed to attract international high networth individuals. In 2022, Singapore had net inflows of 2,900 compare to UAE which received net inflows of 5,200.

The countries that had the most net lost in high networth individuals in 2022 were China (10,800), Russia (8,500) and India (7,500). Most Russians and Indians headed for UAE while most Chinese to Singapore and Australia.

As a pro-establishment site, Mothership conveniently failed to explain to readers these wealth figures are not about Singaporeans. If the government brings in 1 more high networth individual, the mean wealth figure will increase, but will have no impact on the median wealth figure. The millionaire numbers will likewise increase.

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