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Business News/ Politics / Policy/  How CEOs are becoming more powerful than most politicians
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How CEOs are becoming more powerful than most politicians

Business leaders comprise an increasing share of the world's power elite while politicians on the list dwindle

India’s Prime Minister Narendra Modi. Photo: Reuters Premium
India’s Prime Minister Narendra Modi. Photo: Reuters

Prime Minister Narendra Modi may have made Forbes’ latest list of the world’s most powerful people, but he is part of a dwindling group. Money rather than political clout is deemed to be the currency of power today.

The list of the most powerful people in the world released annually by Forbes shows that politicians are perceived to have less power now than they did in 2009. Business leaders, on the other hand, have filled the ranks of the world’s most powerful people since that time. The list has been compiled since 2009, but the data for 2011 is unavailable, so that year has been excluded in this analysis.

From comprising 24 out of 67 people (35%) in 2009, business leaders now make up 60% of the world’s powerful—or 43 out of 72 people. Sociologist Dipankar Gupta says that many politicians have over time become spokesmen for business interests. This could explain why businessmen have seen their power grow.

This relative rise in the influence of business leaders and the corresponding sidelining of politicians is clear from the data. In 2009, the difference between the proportion of business leaders and politicians in the world’s most powerful people list was only 1.5 percentage points. By 2014, the gap between their representations had increased to 35 percentage points.

Central bankers have also seen a change in the amount of power they exert. In 2009, when the world economy was in dire straits, central bankers made up 10.4% of the world’s most powerful people, an indication of the importance placed on their jobs. Now, with the slowdown slowly abating, at least in the US and in emerging countries such as India, the proportion of central bankers in the list has fallen to 6.9%.

Interestingly, central bankers have seen quite a lot of regional variations in the perception of the power they wield. The chairman of the US Federal Reserve, for example, moved down the list from fourth place in 2009 to sixth in 2014. The president of the European Central Bank, on the other hand, moved up from 25th place in 2009 to 8th in 2014. The governor of the Bank of Japan saw his rank fall from 26th in 2009 to 48th in 2014.

One way to look at this is that regions that have seen some economic recovery no longer place as much importance on their central banks as they once did, while other regions with no recovery in sight are increasingly looking to their central bankers to get the job done.

Forbes measures the power of a person using four parameters—the number of people they influence, their wealth, the number of spheres of influence, and the degree to which they exercise their power. Gupta goes on to say that such a list of the world’s most powerful people only looks at hard power. Soft power, he said, is equally, if not more important. The wealth or political clout of a person, by themselves are not a complete indicator of their power and influence.

One of the most significant changes in the list over the years has been the proportion of women. Although the number of women deemed powerful enough to make the list has remained in the single digits, it has tripled to 9 in 2014 compared with 2009. Women make up 12.5% of the world’s most powerful people in 2014, up from just 4.5% in 2009.

Though this may look good, Anuja Agarwal, associate professor of sociology at the Delhi School of Economics, says that such a list does not reflect society at large. More women among the power elite does not mean that women in general are becoming more powerful in society.

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Published: 20 Nov 2014, 12:49 PM IST
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