Customer Reviews

Asian Eclipse: Exposing the Dark Side of Business in Asia

5 star:		(13)
4 star:		(5)
3 star:		(2)
2 star:		(1)
1 star:		(5)

 

 

Asia was a shining star in the world economy for most of the 1980s and 1990s. The secrets of its success were often a subject of intense debate. Plaudits cited Japanese economic power, Confucian work ethics, the freeing of China's markets, Eastern ingenuity and the powerful overseas Chinese guanxi networks. Critics were dismissed as ignorant of Asian values.

But behind the façade lay a darker, more sinister truth. This remarkable account tears away the myths of Asian business and reveals the dark side of the Asian success story. The recent downturn in the Asian economies has been blamed on a number of factors. This controversial, eye-opening book analyzes a number of dubious business practices that are endemic in the region and which the author believes have played a significant part in Asia's economic downfall. Along with an in-depth examination of such troubling symptoms as widespread cronyism and inadequate legal protection, Asian Eclipse includes chapters on the unique business environments of Japan, China, and Indonesia.

Of particular interest to Malaysians are the whole sections devoted to "The Mahathir Family in Business" (pp 304-311), "Sarawak Incorporated" (pp 311-314), and "Malaysia's Ekran Group" (pp 120-124).

From endemic corruption to rampant cronyism, Asian Eclipse is a tale of capitalism gone sour, it names the perpetrators and offers timely advice on what is really needed for Asia to clean up its act. With its lucid explanations on how outside investors should approach the new Asian markets, it will remain an indispensable guide to the complexities of corporate Asia for years to come.

Australian Michael Backman is a leading commentator on corporate Asia, regularly contributing to the Asian Wall Street Journal. Previously an executive officer of the East Asian Analytical Unit of Australia's Department of Foreign Affairs and Trade, he is known for this detailed and uncompromising analysis. Trained as an economist, he has lived and worked in Jakarta and travels widely throughout Asia. He is the principal author of Overseas Chinese Business Networks in Asia. He is now a fellow at the EC-ASEAN Management Centre.

Reviewed by Azlan Adnan, Managing Partner of Azlan & Koh Knowledge and Professional Management Group

This books reads well and has great stories, valuable to know. However I'm worried about 2 things: 1. balance. There is plenty of very bad commercial practice in the west. The writer implies Asia is worse. I don't think it is, just different. It's tougher on outsiders. 2. WHY WHY WHY? I'd like to see the underlying rationale for why things work the way they do in Asia.They don't work that way to spite western business.There are deep reasons. As the author of 'Negotiating China', I know the above considerations are difficult to deal with, but I miss a deeper analysis in Asian Eclipse. Anyway congratulations to Michael Backman, it's a big, interesting book and I appreciate the huge amount of research that has gone into it.

Unlike most readers of this text, I am very familiar with nearly all of the information presented here, as many of these stories have occurred in the same time frame as my professional and personal experience living and working in the Pacific Rim. As such, the content of this book is not new to me, or for that matter, anyone in Asian business circles, as all of the stories have appeared in one or more of the regional newspapers at some point in time. However, in the author's defense, those observing the region from the outside would have to read well over 100 sources, many of them in foreign languages, on a daily basis to get the information that is presented in this juicy, scandalous book.

Asian Eclipse presents the reader case after case detailing the more objectionable aspects of business in Asia. After reading many of the cases (presented by chapters devoted to each country in the Asian region), it becomes extremely difficult to distinguish any real differences, and I personally could not say if the individuals in question were Chinese, Japanese, Indian, Indonesian- the behavior in the end was virtually the same. Only the company name and the locality where the less-than-above-board behavior took place differed.

The book actually pays for itself in the first three chapters, for here is where the reader will learn the commonalities across the region. It is also the place in the book where Backman chooses to delineate, albeit very briefly, the underlying reasons for the under-handed and unsavory business practices that unfortunately typify, but as we are increasingly seeing with the spectacular financial skullduggery of US and European corporations, are not wholly limited to the Asian corporate landscape.

The author tells the would-be investor in Asia what it means to be a stakeholder in publicly listed and privately held companies in the region. Backman deftly delineates all of the obstacles one will face when doing business or directing investments toward Asia. Should you decide to invest in Asia be forewarned: Comprehensive due dilligence is paramount. Too many Western businesspeople who venture unaware into the region have found themselves holding the bag for the embarrassing things their so-called Asian partners have done before, during and after the partnership.

One very important point from the book is this: In Asia, those who enforce the rules are also the same people who make the rules...and break them with impunity (Modern Feudalism writ large). Thus, any attempt to enforce the laws written on the legal books protecting minority corporate stakeholders (and foreigners are definitely relegated to minority positions) or to uphold terms and conditions as stated in written contracts, would only result in one and only one outcome- nothing. In other words, any rights and protections that you take for granted in the Western hemisphere simply do not exist in Asia.

In sum, the book serves as a stern warning about commonplace business practices in Asia. It also serves as a good bit of contemporary regional financial history. Finally, I do not believe that any of the players learned the appropriate lessons from the various Financial Meltdowns, large and small and/or country-specific or regional. As is often the unfortunate case, the movers and shakers in this region of the world learned all the wrong lessons. Rather than opening up, reforming, and tackling their problems in a sincere and concerted fashion, they have chosen to insulate themselves, beseech their governments to bail them out, and spend precious time and resources shifting the blame- almost always to foreigners.

Backman clearly has extensive knowledge of the complex Asian business structures that encompass families, holding companies, cross holdings and often governments. Furthermore, he presents his detailed knowledge in an readable format that is relatively easy to follow. He gives excellent insight into the workings of Asian businesses, their unwillingness to disclose information and the dangers associated with hidden transactions, creative accounting and inefficient (family) management. The research Backman has gathered in this book is priceless and thorough.

Though I would never claim to be an expert on Asia myself, having lived more than 10 years in the region, I found that I was often grinning to myself in agreement with Backman's observations. Backman further managed to fill in many blanks I have in my Asian business knowledge, having grown up to realise only the social aspects of the various cultures here.

This book is an excellent read and a good reference guide for non-Asians doing business in Asia. I also suspect it's useful for Asians doing business outside their own countries, since often these sort of cross-border, cross-cultural relationships can be tricky in the region.

This is a good dark book. Read it and you will see bogey men around every corner in Asia. I found the guidelines for foreign investors particularly offensive -- certainly stupid. In my opinion, the book ignored the great opportunities in Asia and did a poor job of indicating strategies that businesses may follow. Buy this book for an Australian's look at Asia -- but for a more balanced view, by people who have actually worked there, I recommend "New Asian Emperors: the Overseas Chinese, their Strategies and Competitive Advantages" by George Haley et al.

There is no doubt that this book was very well researched. The stories are very detailed and cover the most important companies in the Asian region. However, precisely because it was well researched, it is a dangerous book for unsuspecting minds.

The author may have stayed in Asia for a long time. He may also have written articles and books about the region. But like most western authors, he had falsely believe that such qualifications make him an expert on Asia. He clearly misunderstood Asia on many counts.

For example, he mentions that the Confucius believes in ancestor worship. That is incorrect. In the Analects, it was recorded that Confucius when asked about the afterlife would rather his disciples concentrate on matter of the living. He did not comment on anything related to ancestor worshipping at all.

It would have been inconsequential for the author to have such beliefs and the book would still have been great if the author had stuck to reporting the events surrounding Asian companies. However, he chose to inject his flawed beliefs into the book by explaining in flawed reasoning why the failures of Asian companies occurred.

Unsuspecting readers or readers who do not understand Asians well thus tend to fall for his flawed logic as factual events lends credence to his reasonings. The author should have stuck to being a journalist and not venture into being a socialogist.

I recommend this book to anyone who is interested in Asian large business and the economic collapse of Asian countries in 1997-1998. It is a comprehensive book on the subject. However, when the author starts telling you why certain things happen or how asians think, skip those parts. Specifically, skip chapter 1 and the last chapter.

This book is so pragmatic and unforgiving that many in Asia will find it hard to accept. Nevertheless, for those of us risking our livelihood in Asian business and who need clarity, not half-truths, it is really an excellent read. Few punches are pulled - but, is it is not about time that corrupt business practices in Asia were exposed? For those considering business ventures in Asia this book is a 'must read'. Some of the advice, particularly about the banking systems, might save your company a fortune. Well done Michael Backman - straight talk is what leads to new attitudes. Decent, honest Asian business people will celebrate your work. Unfortunately, cognitive dissonance is likely to prevail in many of the more corrupt quarters.

Corporate Asia has big problems and this author is not afraid to tackle them head on. I don't agree with everything in the book - but then that's why I found it to be so interesting. Backman isn't afraid to challenge the reader. The author's love for the topic is obvious in the intensity with which he writes. It is some of Asia's corporate practices that he aims at rather than Asia itself. It is an important difference that not every reader will have the maturity to appreciate. Well done!

After having lived and worked in Asia in the banking and financial sector, I can say that this book is the most astonishingly accurate account of how corporate Asia really functions that I've ever read. I'm surprised the author has been able to say as much as he has as candidly as he has. There's no doubt that it is highly controversial and that there is a lot in it that many in Asia will be uncomfortable with. It exposes all those business practices that if you haven't worked in business in Asia you just wouldn't believe were possible, and because it uses real names and companies it makes it just riveting reading. It is brutally honest and also quite well written. The author has written it more in the style of a story with first hand experience rather than as a reference book (although it could be used as the latter as well especially MBA students.) It is filled with anecdotes and stories, some of which are amusing but all are telling. Nothing appears to be sacred to the author - whether it is the business interests of a lot of Asia's political leaders such as the Sultan of Brunei, the Kings of Thailand and Malaysia, as well as huge amounts on the unsavoury practices going on in Asia's banks, stockmarkets and by the Asian partners of the Big 6 accounting firms. The chapter on Japan is unrelenting and ably demonstrates why the Japanese government doesn't seem able to fix the country's problems. I also found interesting info such as Planet Hollywood, Fashion Cafe and Crabtree and Evelyn being Asian owned. The book is an absolute page-turner and highly recommended, but not for the politically correct. That is one thing the book isn't.

Asian Eclipse was listed in The Economist magazine as one of the best books published in 1999. I was not disappointed. The author is at times controversial but always highly informative. The added plus is that the book does not read like a text book but is easy to read. There's lots of information on and examples of corporate intrigue in Asia, including Japan, China and all of Southeast Asia. The level of detail is at times overwhelming - a great amount of research has obviously gone into the book. Overall, I was very impressed.