The worst oligarchy?

The classic definition of an oligarchy is a government “ruled by the few.” It is a self-regulating elite that has “domination over a larger society.” The elite can be the military, a minority racial group such as apartheid South Africa, or any other small group holding great power.

The definition has been expanded to include “business oligarchy” where a group uses monopolistic tactics to dominate an industry, possesses sufficient political power to promote its own interests, and/or controls multiple businesses, which intensively coordinate activities.

Philippine Long Distance Telephone Co., was established in 1928, by a Philippine Government act, granting PLDT a 50-year charter to establish a nationwide network. A group of Filipino businessmen led by Ramon Cojuangco took control of PLDT in 1967 after buying its shares from the American company GTE. During the 1970s, President Ferdinand Marcos nationalized PLDT. In 1986, the company was reprivatized and Cojuangco’s son became the chief executive.

While telecommunication was pushed under President Fidel Ramos, PLDT did everything it could to stop interconnection with other companies, until Ramos forced it to cooperate by issuing Executive Order 59 requiring int erconnection among all authorized telecommunications companies. The PLDT “oligarchy” was broken.

We talk much about the “business oligarchs” and their control. And they do try all that they can to protect their interests. But there is still competition. The story is that the Metro Rail Transit-3 has a station at the Mega Mall Area, but it would seem not to be a logical location as the corner of Edsa and Ortigas Avenue. SM was willing to pay to build the MRT-3 station near its mall. Robinsons Galleria Ortigas was not willing.

According to the Edelman Trust Barometer 2020, globally only 49 percent trust government. Conversely, 58 percent trust “large business.” Yet, when people hear of big business abuses and “oligarchs,” they want government to intervene and protect the public.

India is the second most populous nation on Earth and one of the poorest. Its per-capita-gross domestic product is ranked number 142, between Honduras and Sudan. Its per capita GDP based on Purchasing Power Parity is below Laos. India’s wealth inequality is actually better than New Zealand, Japan, and Israel. Its poverty rate is the same as the Philippines.

India has the third largest number of billionaires after the US and China, which is not surprising given its huge population. However, it ranks No. 1 globally in the number of billionaires who have gone bankrupt in the last decade.

The “King of Good Times” Vijay Mallya was once worth several billion dollars. His business empire collapsed due to bad decisions. It happens to the best. But he left 13 banks holding the bag, which should have contained $1.3 billion. He is charged with bank fraud.

Ex-billionaire Mehul Choksi is living in Antigua and Barbuda, wanted by the Indian authorities for criminal conspiracy, cheating and dishonesty including delivery of property, corruption and money laundering. The Punjab National Bank wants their $1.8 billion returned. PNB is also looking for “billionaire” Nirav Modi in a $2 billion fraud case.

It would be unfair to assume that these—and other—“broke Indian billionaires” were crooked. Maybe it was all bad luck and timing. Likewise, maybe the banks hit with loaning money to fraudulent schemes were just victims of circumstance.

But there is one “oligarchy” in India that is hard to ignore. Virtually all the banks in the abovementioned cases are or were then “public sector”; that is, at least majority owned by the government. Is there any particular reason that all these “broke billionaires” borrowed money from government-owned banks?