One hopes the similarities end there. Because China Dreams, for all its brilliance, was quite wrong. In that book, Studwell's central message was to avoid buying Chinese assets, and we all know now that those who shunned this advice are considerably better off.
Asian Godfathers wonÆt repeat that fate. Mainly because it is not quite as bold or opinionated as its predecessor. In some cases, itÆs not opinionated enough, such as over the causes of the Asian financial crisis of 1997. Of course, itÆs hard to be entertaining or definitive when dealing with complicated and opaque economic issues. There are simply too many schools of thought. Still, he probably presents sufficient evidence to support his thesis that the æestablishmentÆ is little short of kleptocratic in much of the region, and contributed significantly to the crisis.
His attacks on the smug establishment figures of the region are satisfyingly savage. SingaporeÆs æminister mentorÆs' views on race are held up to ridicule; the rags-to-riches myth of Hong Kong plutocrat Lee Ka-shing is exposed; and the relationship between business and politics across the region is laid bare in all its horrid profusion.
Studwell believes that Southeast Asia is held back by rotten politics. Even the nominal democracies have serious problems with the judiciary, the police force and the media. He sees most of the regionÆs ills as being the result of collusion between politically powerful, cash-poor locals and cash-rich, politically insecure immigrants.
ôThe Southeast Asian economy is the product of a relationship between political and economic power that developed in the colonial era and was sustained ... in the post-colonial era. In this relationship, the political elite grants to members of the economic elite concessions, normally in domestic service industries, that enable the latter to extract enormous wealth,ö he writes.
These tycoons, while very wealthy, are paradoxically not very good at generating wealth. ThatÆs because they are not required by their political masters ôto generate the technological capabilities, branded corporations and productivity gains that drive ... economic developmentö.
Indeed, the tycoons are not interested in competition and open markets û phenomena which would have forced them to work harder and be more conscious of innovation, branding and technology. On the contrary, they want to hide behind cartels and monopolies. If any hard work has to be done, foreigners are called in to provide expert advice or skills.
The thing I liked best about the book was the way Studwell highlights the role of the man on the street. One can debate the causes of the 1997 Asian crisis ad nauseam, but itÆs clear that it was the Wangs, Nguyens, Wulandaries and so on, who suffered most. Yet it was precisely the common local worker or small-scale shop-owner who is also the real hero of the Asian miracle û he and his colleagues working out of miserable shacks to provide the network of support that every gleaming multinational factory requires for its exports.
Studwell believes it is this docile, hard-working and incredibly frugal population which enables the political and business elites to flourish û not the other way around. He makes the point well and convincingly. Even long-serving expats tend to forget this simple fact, probably hypnotized by the charisma of wealth and power that local tycoons radiate.
In a region obsessed by economics and finance, StudwellÆs view on the importance of politics is a healthy corrective. Given the possibility of a downturn just a few weeks ago, Asian Godfathers central message about the role of democracy in sharing the pain fairly is also timely.
Asian Godfathers: Money and Power in Hong Kong and Southeast Asia
By Joe Studwell
Publisher: Atlantic Monthly Press
Hardcover: 352 pages
US$17.16 from www.fa-bookend.com
¬ Haymarket Media Limited. All rights reserved.
