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The world's most powerful people

U.S. President Barack Obama, right, talks with German Chancellor Angela Merkel.
U.S. President Barack Obama, right, talks with German Chancellor Angela Merkel on Nov. 3, 2011, during a meeting in Cannes, France. Obama and Merkel come in at No. 1 and No. 2, respectively, on Forbes list of the world's most powerful people.JIM WATSON / AFP - Getty Images file

What do the president of the United States, the pope and the founder of Facebook all have in common? They’re all featured on Forbes’ 2012 ranking of the World’s Most Powerful People – an annual look at the heads of state, financiers, philanthropists and entrepreneurs who truly run the world.

To compile the list, we considered hundreds of candidates from various walks of life all around the globe, and measured their power along four dimensions. First, we asked whether the candidate has power over lots of people. Pope Benedict XVI, ranked #5 on our list, is the spiritual leader of more than a billion Catholics, or about 1/6th of the world’s population. Michael Duke (#17), CEO of Wal-Mart Stores, employs two million people.

Next we assessed the financial resources controlled by each person. Are they relatively large compared to their peers? For heads of state we used GDP, while for CEOs, we looked at measures like their company’s assets and revenues. When candidates have a high personal net worth – like the world’s richest man, Carlos Slim Helu (#11) – we also took that into consideration. In certain instances, like Saudi King Abdullah bin Abdul Aziz al Saud, we considered other valuable resources at the candidate’s disposal – like 20 percent of the world’s known oil reserves.

Then we determined if the candidate is powerful in multiple spheres. There are only 71 slots on our list – one for every 100 million people on the planet – so being powerful in just one area is often not enough. Our picks project their influence in myriad ways: New York Mayor Michael Bloomberg (#16) has power because he’s a politician, because he’s a billionaire, because he’s a media magnate, and because he’s a major philanthropist.

Lastly, we made sure that the candidates actively used their power. Russian autocrat Vladimir Putin (#3) scored points because he so frequently shows his strength — like when he jails protestors.

To calculate the final rankings, 10 senior Forbes editors ranked all of our candidates in each of these four dimensions of power, and those individual rankings were averaged into a composite score.

U.S. President Barack Obama emerged, unanimously, as the world’s most powerful person, for the second year running. Obama was the decisive winner of the 2012 U.S. presidential election, and now he gets four more years to push his agenda. The president faces major challenges, including an unresolved budget crisis, stubbornly high unemployment and renewed unrest in the Middle East. But Obama remains the unquestioned commander in chief of the world’s greatest military and head of its sole economic and cultural superpower.

The second most powerful person in the world also happens to be the most powerful woman: Angela Merkel, the chancellor of Germany, jumps up from #4 last year to take the runner-up spot on the list. Merkel is the backbone of the 27-member European Union and carries the fate of the euro on her shoulders; she’s shown her power through a hard-line austerity solution for  the European debt crisis.

Facebook CEO Mark Zuckerberg (#25) is one of the youngest people on the list, at age 29; he dropped significantly from last year’s top-10 ranking after Facebook’s much-anticipated IPO turned out to be a flop. Brazilian president Dilma Rousseff (#18) is one of the list’s biggest gainers: At the midpoint of her first term, Rousseff’s emphasis on entrepreneurship has prompted a slew of new startups and energized Brazilian youths.

Apple CEO  Tim Cook (#35) made a big upward move, too: A year after he succeeded iconic founder Steve Jobs, the company is the most valuable in the world. Apple stock hit an all-time high in September, at $696.82 a share: That’s up $319 from the day Jobs died in October 2011.

New members of the list include LinkedIn co-founder Reid Hoffman (#71), the world’s most powerful venture capitalist and the most-connected man in Silicon Valley. Elon Musk (#66), the entrepreneur behind PayPal and Tesla Motors, is the most powerful man in space: His company SpaceX is a leader in the private space industry, and with that business set to boom, Musk stands to make out like a 19th-century railway tycoon.

A number of prominent people fell off the entirely. Last year’s #2, Chinese President Hu Jintao, is on his way out of office; he’s already handed over some of his duties, and will surrender the rest early next year. We  removed U.S. Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton from the list for the same reasons: They’re both not expected to return to their powerful posts for Obama’s second term.

Here is the list of the top 10:

1.         Barack Obama 
President, United States of America 
Age: 51

The decisive winner of the 2012 U.S. presidential election on all counts: Obama took the popular vote, the electoral college and 7 out of 7 toss-up states. Now he gets 4 more years to push his agenda past weakened congressional Republicans. Still, he faces major challenges, including an unresolved budget crisis, stubbornly high unemployment and renewed unrest in the Middle East. But Obama remains the commander in chief of the world’s greatest military and head of the sole economic and cultural superpower—literally the leader of the free world.

2.         Angela Merkel 
Chancellor, Germany 
Age: 58

The world’s most powerful woman is the backbone of the 27-member European Union and carries the fate of the euro on her shoulders. Merkel’s hard-line austerity prescription for easing the European debt crisis has been challenged by both hard-hit southern countries and the more affluent north, but it—and she—are still standing. Merkel has served as chancellor since 2005, but one of her biggest challenges still lies ahead: bolstering her government’s sagging popularity before the 2013 German general election.

3.         Vladimir Putin 
President, Russia 
Age: 60

Re-elected for a third six-year term as president in March after a few years swapping posts with Prime Minister Dmitri Medvedev, Putin officially regains the power that no one believes he truly gave up. This October the ex-KGB strongman—who controls a nuclear-tipped army, a permanent seat on the UN Security Council and some of the world’s largest oil and gas reserves—turned 60. That’s Russia’s retirement age, but who’s got the nerve to tell him to quit?

4.         Bill Gates 
Co-chair, Bill & Melinda Gates Foundation 
Age: 57

The world’s second-richest man is worth $65 billion—and that’s after giving away more than $28 billion. Gates’s post-Microsoft mission includes eliminating many infectious and deadly diseases: By his own estimates, that could translate into 8 million lives saved by 2020. But the quintessential activist billionaire doesn’t stop there: Gates continues to persuade his peers to sign the “Giving Pledge,” promising to give away half their wealth or more.

5.         Pope Benedict XVI 
Pope, Roman Catholic Church   
Age: 85

How’s this for a job description? According to the doctrine of Papal Supremacy, the pope enjoys “supreme, full, immediate, and universal power” over the souls of 1.2 billion Catholics around the world. They turn to the Vicar of Christ for the final word on life’s most personal decisions, including birth control, abortion, marriage and euthanasia. As the leader of Vatican City, he’s also a head of state. Of course, the pope faces dissent anyway—recently from “radical feminist” American nuns.

6.         Ben Bernanke 
Chairman, U.S. Federal Reserve 
Age: 59

Big Ben has been on a buying spree: In a third round of quantitative easing, the Fed is now snapping up $40 billion a month of mortgage-backed securities and $45 billion of Treasurys. Result: modest economic recovery and a near-record $2.9 trillion on the Fed’s balance sheet. The American economy’s “adult in the room” recently warned that there is only so much the Fed can do; politicians are the ones with the power to keep us from going over that fiscal cliff.

7.         Abdullah bin Abdul Aziz al Saud 
King, Saudi Arabia 
Age: 88

The absolute monarch of the desert kingdom controls 20 percent of the world’s known oil reserves and guards Islam’s holiest cities. The Arab Spring didn’t shake the ruling family’s control of the kingdom, but out-of-control youth unemployment remains a threat. Aging Abdullah lost his second heir apparent in two years when his brother, Crown Prince Nayef, died in June; he’s been replaced by another brother, 76-year-old Crown Prince Salman, the former governor of Riyadh.

8.         Mario Draghi
President, European Central Bank 
Age: 65

With the euro lurching constantly from crisis to crisis, the European Central Bank is more important than ever. As chief banker of the world’s largest -currency area—the euro zone’s collective GDP is now more than $17.4 trillion—Draghi faces the Herculean task of trying to maintain financial unity across 17 countries. But if anyone can wrangle the interests of nations as diverse as Germany and Greece, it might be the man who navigated the minefield of Italian politics so deftly, he earned himself a nickname: “Super Mario.”

9.         Xi Jinping 
General Secretary, Communist Party of China 
Age: 59

The man who will lead China for the next decade was recently promoted to the Communist Party’s top position; Xi also took over as chairman of the Party’s Central Military Commission, putting him in control of the world’s largest army. His rise to power will be complete in March, when he takes over for Hu Jintao as president and head of state. Xi’s only half of a Chinese power couple: His wife, Peng Liyuan, is a superstar folk singer.

10.        David Cameron 
Prime Minister, United Kingdom 
Age: 46

Two years into office, the Tory PM has gone from being the called the second coming of Margaret Thatcher to standing in the shadow of Europe’s new Iron Lady, Angela Merkel. Cameron has rejected the German Chancellor’s call to increase the EU budget and threatened to veto anything but a spending freeze. At home he faces a sustained economic downturn, a disillusioned electorate and rumblings from his own party over Britain’s future.

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