Customer Reviews

Asian Godfathers: Money and Power in Hong Kong and Southeast Asia

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Studwell's Asian Godfathers challenges the mythos surrounding Li Ka Shing, Robert Kuok and a group of about 50 others, the economic kings of Southeast Asia he calls godfathers. Media consumers have been force-fed repeated helpings of stories about the godfathers as economic clairvoyants, captains of wealth creation, etc. Studwell demonstrates that the godfathers are creating little if any wealth in their areas of operation (Hong Kong, Indonesia, Malaysia, Philippines, Singapore and Thailand)---that they are rather parasites, having gained monopoly access to limited resources (raw materials, port facilities, banking licenses) through guanxi with political cronies, maintaining it through bribery in various forms, and pocketing use fees.
The cover is sappy, but don't let that deter you--Studwell's book is well worth your time if you seek to better understand SEAsia.

This book makes a very interesting read and offers a different approach to understanding the economy of a region: the author looks at these economies mainly through the business sector and avoids overloading the book with graphs, charts, tables, etc. It is an interesting story (although heavily studded with Chinese names). This may result in an incomplete picture, and the book is not quite academic, but this does not avoid it providing a relatively objective look on an important sector of this region's economy.
Studwell is very critical of the corporate sector of the SE Asian countries, including those of Hong Kong and Singapore. He traces the origins of the mostly ethnic Chinese businessmen and their companies from the colonial days to the present. He dismisses any notion of "Asian values" as the foundation for the success of these businesses and their owners, but rather attributes their rise to license-peddling, concessions, monopolistic practises, lots of graft, etc. One is reminded of Balzac's words: "every great fortune, of onknown origin, is usually the result of a crime". His comments on the banking sector are particulary scathing. The author explains that these businessmen are not the cause of this situation, but have merely adapted to a region-wide system of patronage and corruption held in place by the local politicos for hundreds of years to the present (much of it inherited from their colonial masters). The business leaders have saving graces: personally charming, they lead flamboyant lives and they obviously do contribute to their local economies (through employment and investment).
In spite of this, and the crisis of 1997-98 the SE Asian economies have sustained high levels of growth over the past two decades, which Studwell attributes mostly to multinationals, and the export prowess of small local firms, plus the hard-work of the average Asian.
The author's critique goes beyond mere anecdotes and history , as he affirms that the SE Asian corporate sector does not have the efficiency and productivity of the typical world-class company. The origins of these businesses leads to a focus on trading and short-term wheeling-dealing, without a clear strategy, technological strength and branded products. The companies are very much tied to the personality and/or the family of the main owners. Worst of all, they are lacking in transparency, corporate governance and their stock market practises are less than ethical.
Studwell's observations seem vindicated by the markets: since the 1994-97 peak the stock markets of these countries have not fully recovered, and the Hong Kong and Singapore indices are barely above their levels of 10 years ago.
As SE Asia acquires more economic stability it is logical to assume that per-capita income will rise and lead to stronger domestic economies, with less dependence on export-led growth. In this context Studwell is correct in insisting the the corporate sector of these countries clean up their act and become serious and sustainable contributors to their economies.

Solid reporting with a sense of history about many of the people behind Asia's economies. Good background of why and how but the "who" is what is compelling. Had hoped for even more gossip, but lawyers must have counseled care. But there is more than enough to be worth reading if you are involved in Asia or even just interested.

Joe Studwell's "Asian Godfathers" is written in a clunky academic style, and takes some time to get into but it's really worth the read. The author has distilled his formidable experience with and understanding of Southeast Asia into this book, and readers will come away with a more nuanced, deeper understanding of the place.

Southeast Asia is a fractured diverse place, but their tycoons share many similarities: they come from wealthy established families, they read well the political winds and they're good (and only good at) massaging the political connections that permit them the monopoloy and cash flow from which their empire is based, they're hard-headed non-ideological businessmen who put their interests above all else, they're racist patriarchs, and they're predators who spend other people's money (from banks and equity markets) in order to advance their business interests. They are the products, the beneficiaries, and contributors to the crony capitalist system in southeast Asia, a system that led to the 1997 East Asian financial crisis -- a crisis that, as a testament to the godfathers' flexibility and power, only made the most powerful godfathers richer.

At the end of the book, Mr. Studwell concedes that he wrote the book about Asian godfathers because he wanted to highlight the financial malaise and political corruption of Southeast Asia. But even if readers do not care about southeast Asia they should still read "Asian Godfathers" because it's also the story of China today. Like southeast Asia's economy, China's economy is growing not because of but despite its tycoons. China's export economy (fueled by the technology of multinationals, the efficiency of local subcontractors, and the limitless supply of migrant workers) is booming, and it's covering up the gross inefficiencies, capital misallocation, and bad practices of the rest of the economy where tycoons (usually relatives of powerful government officials) monopolize a sector or a service, expand with public bank money or rip off shareholders, and spend so much time massaging guanxi that they have no time to focus on their core business (not that they would know how to run a business if they indeed had the time). Like southeast Asia, China also suffers from crony capitalism -- and it's a time bomb waiting to explode.

"Asian Godfathers" is a very important and insightful read for those interested in China.

Journalist Joe Studwell takes us behind the scenes and details how about fifty families have dominated the economic, historic and political aspects of the South Asian countries for some 150 years. Anyone doing business in these regions, or doing research, best take a glance at Studwell's book - he got names and dates of who's who in Thailand, Philippines, Macau, Hong Kong, Indonesia, Singapore,etc. He discusses moguls, power brokers, money exchange, commodities, GNP's, capital markets and banking. Great book to read on the plane on the way to Asia.

Growing up in South East Asia and having followed much of the Asian Financial Crisis in school and in my job this book is indeed a great read. It is well researched and well written and offers a plausible explanation to the economics and development in the region. I wrote an article about it in my magazine column. I recommend this book to anyone from SEA or anyone interested in the region as a whole.

I will have to be brief: wrote a detailed review, only to see it disappear with pressing the back button after going to the Real Name section for some editing ! (Amazon: wake up !)

This is a wonderful, very well researched book that is not condescending at all. It looks at events and flow in a matter-of-fact style, and offers interpretations based on a nicely done model. Joe Studwell, the author, was also gracious enough to answer my email with further questions in detail within a week.

Southeast and Northeast Asia are both great exporters with huge growth over the last 4 decades. The difference is that the Southeast mostly exports multinational low-value goods because of insourcing cheap local labor. Southeast Asia's domestic economy is the typical economic rent model based on licenses and monopoly concessions obtained via graft and personal/famiy connections.

Northeast Asia (Japan, Taiwan, S Korea and now China) have shown much better growth because of fairly democratic governance practices that have enabled local R&D and thus contributed to value-add in both the export and domestic markets.

So one can actually predict (with some nuances) the prospects for Asia's response to the current global crisis, keeping in mind the 1997-8 Asian flu as well. Basically Northeast should capitalize on consumer development as exports to the West slow for a long time. The Southeast will struggle, except for periphery investment by China taking over from Western multinationals, whereby some sectors might do well.

Thus China stock markets should do well in the long term, followed by other Northeast ones. Already, China's command-capitalist hybrid model is being directed towards domestic consumption spearheaded by infrastructure spending. So expect oil/commodities price to recover by end-2009 !

I worked in Singapore in the 90's, and have kept up links with SE Asia ever since, although I have been based in the UK. I have always wondered why all my attempts to invest in the region have been disappointing. Now I know.

This book is exceptional because the author seems to know something about economics. Although there is 'colour' in the description of the various godfathers, the author is very clear about the way their money comes from seeking of economic rents, rather than from engaging in proper competitive value creation.

I have talked to a lot of Chinese and Hong Kong businesspeople, and read a lot of books about the Chinese economy, and ivesting in China. I lived in the region for three years. I learned a lot more from this book than I learned from these other sources. I strongly urge you to buy it, especially if you are tempted to invest in the region.

The Western world views the economies of Southeast Asia as "Asian tigers," and sees Hong Kong, Malaysia, Singapore, Indonesia, Thailand and the Philippines as hubs of free trade and innovation. Not so fast, warns Asia expert Joe Studwell. What appear to be sleek, streamlined economies are more like rickety old jalopies that creak with cronyism and secretive monopolies. In this enlightening, searing attack, Studwell pegs Asia's ruling tycoons or "godfathers" as charming billionaire throwbacks who ruthlessly control business empires with the permission of corrupt, ever-shifting governments, prospering as the populace struggles. Studwell does a masterful job of synthesizing a sprawling topic. getAbstract recommends his book to anyone who's considering investing in or doing business in Southeast Asia.

The word Mr. Studwell adopts for his title, "godfathers," has of course acquired its relevant connotations from a classic novel by Mario Puzo and the subsequent motion-picture trilogy directed by Francis Ford Coppola.

Messrs. Puzo and Coppola were self consciously creating a myth, romanticizing the ugly reality of mob violence. Mr. Studwell thinks of himself as the debunker of a myth, and he employs the Puzo-Coppola language to reverse its effect.

The myth about Southeast Asia is a matter of Sinocentric cultural determinism. Chinese ethnic groups have scattered about the region and wherever they have gone--so runs a common contention--they have brought with them a Confucian ethos, a dedication to hard work and entrepreneurialism, which has sparked growth and turned the beneficiary nations into "tigers" of productivity.

Those whom Mr. Studwell calls Asia's "godfathers"--the Chearavanont family in Thailand and the Hartonos family of Indonesia are two examples--have taken advantage of this myth to legitimize their own wealth and privilege. He associates them with the Corleones of Sicily and New York, then, in an effort at deflation.

The class at issue isn't, furthermore, as thoroughly Chinese as it portrays itself or as its outside admirers imagine. A few, such as the two families just mentioned, surely are. Many others are partially ethnic Chinese, and in such cases "the non-Chinese bloodline is sometimes seen as a source of embarrassment and played down, particularly in a Chinese setting." Still others aren't Chinese at all. Ananda Krishnan, of Malaysia, surely belongs in any list of the region's godfathers, though he's a Sri Lankan Tamil.

In general, Mr. Studwell contends that the godfather class throughout the region has been a retardant to growth, not the accelerant that its quite successfully promulgated self-image would have one believe. Southeast Asia hasn't shared the successes of Northeast Asia--Japan, South Korea and Taiwan--for three reasons. The northeastern countries have a successful history of land reform behind them. They have seen the development and political encouragement of branded businesses (not merely outsourcing operations for western brands) that compete globally. They've learned the tricky politics of stable multi-party competition. That is the direction forward for their southern brethren.

I learned a good deal from this book. Still, I think that Studwell rather overdoes it, and allows deromanticization to spill over into distortion. I suspect that Confucian values do have something to do with developments in the region, just as Calvinism has had a good deal to do with economic developments in the north of Europe for the last few centuries.