South-east Asia's economic miracle was the creation of the canny Chinese tycoons who dominate regional commerce, right? Wrong - and if you still believe this kind of 1990s nonsense you badly need to read this book. Joe Studwell, who edits the China Economic Quarterly and wrote The China Dream (2005), should be named chief myth-buster for Asian business.
The first and most fundamental myth he explodes in this tour d'horizon of the billionaire businessmen of Hong Kong and south-east Asia is the self-serving notion that the godfathers were in some way responsible for high economic growth in the run-up to the 1997 financial crisis and for the recovery thereafter.
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.
Studwell - his tone is ironic without being cruel - at times almost seems to sympathise with the godfathers as they ingratiate themselves with corrupt politicians and grapple with confused cultural identities; some resort to born-again Christianity even as they enrich themselves and impoverish their fellow citizens.
But his myth-busting is as merciless as it is enlightening. 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.
Does being ethnically Chinese predispose you to commercial success? Of course not. A high proportion of tycoons do happen to be Chinese - as politically innocuous immigrants in south-east Asia they have been favoured as compradors since colonial times - but millions of Chinese immigrants are as poor as the natives, while several spectacularly wealthy godfathers are of Jewish, Scottish, Tamil or Malay origin.
How plausible 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 skewers several other myths with equal passion and panache, including the ludicrous and much-repeated 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.
In spite of minor errors - the Philippines is misspelt in one of the maps and the 1984 Sino- British joint declaration on Hong Kong is wrongly dated - this book goes deeper than previous studies of Asian business families and branches out into previously neglected topics, including routine abuse by tycoons of commercial banks and listed companies for their own nefarious ends.
Above all - and this is Studwell's purpose in writing Asian Godfathers - he puts the tycoons firmly in the context of contemporary Asian politics, arguing 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 - Studwell rightly links economic stress to the rise of the Hong Kong pro-democracy movement in 2003 - 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.
Not for very much longer, perhaps, if they read and digest the alarming facts Studwell has marshalled here.
