Everyone enjoys the voyeuristic thrill of Forbes’ annual listing of the world’s billionaires, but as an emerging market investor I use the list as a tool to spot what I call Breakout Nations—economies poised to beat expectations, and rivals, over the next five to 10 years. Analysing the list can provide a quick read on an emerging economy. If the billionaire class controls fortunes that are outsize, compared with the size of the economy and its level of development, it’s a sign that an economy is out of balance. And if the same few names appear on the list year after year, with no new blood, it’s a sign of stagnation.

The emergence of billionaires is a good sign—if they are emerging in productive fields such as technology or manufacturing. In the 2000s, however, the world saw the rise of many billionaires who rely on government connections to build monopolies in sectors such as oil, real estate and mining—industries that traditionally contribute much less to sustainable growth because they are volatile and often prone to corruption. This type of billionaire is a bad sign.

Applying this analysis to the 2013 list yields some surprising results. For all the buzz about corruption and inequality in China, its billionaires control wealth equal to just 3.2 percent of its gross domestic product (GDP)—making this the least-bloated billionaire class among the big emerging markets. The average fortune of the top 10 Chinese billionaires is now $6.8 billion, still modest in an economy that was the single largest contributor to global GDP growth over the past decade. China also shows a healthy turnover among those top 10, with nine newcomers on the 2013 list compared with 2007. The country’s richest person, Wahaha Chairman Zong Qinghou, shot to the top this year, thanks to his fast-growing beverage business. Yet, his net worth of $11.6 billion is still smaller than the fortunes of leading tycoons in much smaller economies, including Malaysia and the Philippines.

These results may not be entirely coincidental—several men previously on the billionaires’ list have landed in jail. This suggests that the state may be stepping in to quash excessive and misbegotten fortunes, a policy akin to killing a few chickens to scare the monkeys. But they do imply that Beijing is working more effectively to foster competition and contain wealth—at least that of the ultrarich— than recent headlines indicate.

The general rule is that if the total net worth of the billionaire class surpasses 10 percent of GDP—the rough average for emerging markets—there could be a popular backlash. The Philippines, Malaysia, Taiwan and Thailand are now all above the 10 percent threshold, and India is on the edge, with billionaire wealth equal to 9.9 percent of GDP.

India is the most surprising billionaire story in Asia because in the global imagination it’s still closely associated with the Mumbai tech tycoons and the rising middle class of IT workers.

In the past decade, however, more and more of its largest fortunes were built by businessmen who cut political deals to corner provincial markets. India’s incomplete reform agenda has left it near the bottom, at No. 166, of the World Bank’s rankings of 183 countries for ease of starting a business. These obstacles to doing business are chasing big companies overseas and preventing small outfits from challenging well-connected tycoons.

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