Friday
Feb042011
What the Mubaraks are worth
Issandr El AmraniA rather baseless assertion:
The net worth of Egyptian President Hosni Mubarak, who is under pressure to quit following a massive mass movement, and his family is estimated to between $40 billion to $70 billion, a media report said. ABC News quoted experts as saying that the Mubarak family wealth was built largely from military contracts during his days as an air force officer.
Egypt's GDP in 2009 was around $180bn. The Mubaraks are not worth a third of Egypt's GDP, OK? Besides, Mubarak operated through front-men (such as the one handling the Israel gas deal) so I don't see how this accounting can be so easily done. But no way he's richer than Bill Gates. Don't believe the hype.
Reader Comments (4)
yes but if you had been slowly salting away millions over decades then that could quickly become billions couldn't it?
This is a "stock" vs. "flow" confusion. Assuming that the Egyptian GDP of $200 bln has grown at a 2% annual rate, assuming that the average "Mubarak tax" was 0.25% of GDP, assuming that the rate of return earned was 5%, over a 30 year period, the Mubaraks would be worth $23 billion. The 5% and 0.25% are probably low-end estimates. Up those to 7.5% and 0.35%, you get to $50 billion.
Easy to be a top billionaire if you have had 30 yrs to skim from a country. Gold price is at such a high that even modest collections of the first lady could be sizable. How much is in real estate in Europe and Middle East ? - hotels, apartments, beach houses, ranches bought 20 yrs ago in fashionable areas will hold value inspite of the downturn. Perhaps the worst would have been cash in the bank, just sitting there collecting dust and easy to track and freeze in case banking authorities want to seize the ill gotten cash.
1% of GDP a year for 30 years will do it. It is by no means outrageous.