The economic miracles of Southeast Asia...
Since Maoist China was closed to Japanese capital in the madness of the Cultural Revolution, it was only natural that Japanese banks, trading companies and multinational consumer electronics companies invested heavily in the region. This, in turn, was only possible since Holland lost its Indonesian colonies, the British granted independence to Malaysia, the French were in full retreat after Dien Bien Phu in Indochina. Japanese FDI was lubricated by war reparations transfers and mining investments in thermal coal, timber, copper, bauxite crude oil/gas. By the 1980's, Japanese, US and later Hong Kong, Taiwanese and South Korean capital had helped ignite one of history's swiftest, most spectacular capitalist take offs.
Ironically, Chairman Mao was the unwitting father of Southeast Asia's economic miracle since central planning an iron rice bowl and the Great Helmsman's Great Leap Forward famine meant the People's Republic did not compete with Southeast Asia for foreign capital or Western export markets until the mid 1980s. This is another great irony of Asian history.
In my travels in Southeast Asia, I was stunned by the central role played by immigrant Chinese family business dynasties with roots in Fujian, Guangdong and Hanian in the regional financial renaissance. The Bangkok Bank empire is owned by a Chinese Thai clan, the biggest conglomerates in Suharto's (and Yudhoyono) Indonesia were controlled by Chinese taipans, the richest tycoons in Manila are Chinese and Malaysian finance is full of magnates who speak Hokkien, Cantonese, Hakka, Hainanese and Teochieu.
In Singapore, the offspring of the overseas Chinese created one of history's most successful city states under an ex Cambridge alumnus Harry Lee, known to posterity as the legendary Lee Kwan Yew.
The Cold War is long over, symbolized by Vietnam's new openness to the US and the closure of Clark, Sabic, Cam Ranh Bay (for the USSR), the dictatorships of Suharto, Marcos, New Win and Thieu. Burma's return to the global economy is the most thrilling event of my lifetime in ASEAN. Japan, mired in its lost decade, was impotent in the 1997-98 Asian currency meltdown. The recurrent theme of the past two millennia was the imperial ambitions of the Middle Kingdom in Southeast Asia. Are Beijing and Washington destined to clash or collaborate in the Straits of Malacca and the South China Sea?
Will democratic governments in Jakarta, Singapore, Manila, Bangkok and Kuala Lumpur (and yes, Rangoon) survive military coups, terrorist assaults and ethnic strife? Will the Communist Party of Vietnam vanish, like its former Soviet patrons or rebrand/survive like its Chinese nemesis? Will Singapore replace Tokyo as the world's third most prominent financial centre after New York and London?
As an investor, I have never hid my fascination and awe for Singapore. A British colonial outpost overrun by General Yamashita's imperial Japanese army in 1942, expelled from the Malayan Federation in 1965, blessed with no natural resources or even a vast internal l market, Singapore has morphed into the richest most successful island microstate on earth.
The spirit of Sir Stamford Raffles of the Honourable East India Company still graces a lovely hotel, a shopping centre, colleges, streets and office blocks, a testament to the British Empire that shaped Singapore's values and elite. Sentosa was once a barracks and few Kampongs, Jurong was a wasteland, Changi was the site of a brutal Japanese POW camp (I could not hold back my tears at the Kranji War Memorial, for all those lost souls in a time of sorrow).
Singapore's Chinatown, Little India, Arab quarter and Malay villages still exude the charm of Asia's ancient, polyglot culture. Singapore rivals Rotterdam as a hub for oil trading/bunkering port, Geneva as the world's preeminent private banking hub, Hong Kong as the hub of Asian hedge funds, Zug as a centre of commodities trading. The technocratic elite of Singapore has stunned the world with its reverence for education, its openness to global culture and markets, its incredible work ethic and zero tolerance for corruption, its prudent government spending, its meritocratic leadership.
A critical component of Singapore's success, in retrospect, was the PAP's decision to retain English as the language of the civil service and an Anglo-Saxon legal culture, the passports to the networked global grid. The Singapore dollar is the hard money of my generation now that the SNB has pegged the Swissie. The Lion City is an investor's dream.
Currencies - Sterling will lose its sizzle!
Mirror, mirror on the wall, who is the ugliest currency of them all? If I was an evil stepmother in a fairy tale, this query to my magic mirror is a no brainer. The Bernanke dollar (nicknamed the Yankee Rupee!), the Draghi Euro, the Argentine peso, the Indian/Pakistan rupees, the Mugabe Zimbabwe dollar and all the high inflation, hot money dependent, overleveraged economies on the planet.
However, as I scan the world for compelling FX trades (were not the Mexican peso and Norwe
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|Date:||Oct 21, 2012|
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