From a book review in Financial Times
Joe Studwell, who edits the China Economic Quarterly and wrote The China Dream has exposed some of the fallacies of Asia's super-rich in his latest book Asian Godfathers
Were they responsible for the regions economic boom ? No .
Growth and recovery were in fact both driven by humdrum export industries, an area of business generally shunned by the tycoons because it involves international competition.
“The godfathers,” Studwell concludes, “have been much more the beneficiaries than the instigators of growth.”
The leading business families – switching their allegiance after (or during) the second world war from the colonial powers to their new rulers – have prospered in protected local sectors such as real estate, gambling or commodity imports, often in cartels or monopolies. Those who succeed do so because they maintain the “core cash flow” from these protected businesses. Many of their forays into genuinely competitive sectors have ended in ignominious failure.
Does Li Ka-shing, Asia’s richest man, work as hard as the myth of the toiling Chinese tycoon suggests?
Yes, if you count playing golf, arriving at the office at 10am, checking the press to see if anyone has said anything nasty about you, holding a business lunch and having a massage or two as hard work. For most tycoons, it is the “chief slave” – the boss’s fix-it man – or the western “gweilo running dogs” who actually run the operation.
How true are the numerous “rags-to-riches” stories put about by the tycoons and their fawning publicists?
Not very, says Studwell. Thaksin Shinawatra, the Thai telecommunications tycoon and deposed prime minister, liked to talk about his “modest family background” and understanding of rural poverty. In fact, Thaksin is from an established business dynasty involved in silk, finance and property.
Studwell exposes claim that Hong Kong is a “free” economy, when the territory’s domestic economy is lumbered with cartels, duopolies and monopolies and still lacks a competition law , including routine abuse by tycoons of commercial banks and listed companies for their own nefarious ends.
Studwell’s purpose in writing Asian Godfathers is to argue that the wealthy have merely taken advantage of the lamentable failure of the region’s politicians to regulate economies for the benefit of society as a whole. The disadvantaged are not only the labourers on low wages but also the middle classes, punished by high costs for cartel-provided goods and often cheated of their share of profits if they are foolish enough to invest as minority shareholders in godfather- controlled listed companies.
With inequality worsening even in the prosperous cities of Hong Kong and Singapore one is forced to ask for how long Asians will allow themselves to be tricked out of the fruits of their labour by a collection of over-privileged godfathers who vary from the unsavoury to the merely unimpressive.