(About the book by J. R. R. Tolkien) Studuella "The Godfathers of Asia: Money and Power in Hong Kong and Southeast Asia")*

Let me say something about very rich people. They're not like you and me.

Francis Scott Fitzgerald

The famous statement given in the epigraph appeared in F. S. Fitzgerald's novella "The Rich Man" in 1926. As rumor has it, E. Hemingway noticed this: "Yeah, they have more money." It is about such people that J. R. R. Tolkien's book is written. Studuella "The Godfathers of Asia: Money and Power in Hong Kong and Southeast Asia".

Southeast Asia (SE) encompasses Singapore, Malaysia, Thailand, Indonesia, and the Philippines (the founding countries of ASEAN), as well as Hong Kong, which has become part of China. In addition, this region includes Vietnam, Cambodia, Laos, Myanmar (Burma) and Brunei.

In 1996, Forbes magazine included eight businessmen of the region in the list of 25 and 13 in the list of the 50 richest people on the planet (four of them had a fortune exceeding $ 4 billion). At the same time, there is not a single non-state corporation in Southeast Asia that is included in the list of the 500 largest companies in the world, and the salary is $ 500. a month is considered very decent.

The region's economy is a product of the interaction of political and economic forces that were formed in colonial times and are steadily developing in the post-colonial era, despite the structural changes that have occurred. In accordance with the established order, the political elite grants members of the economic elite virtually monopoly rights to create concession enterprises mainly in the domestic market of services. This provides members of the economic elite with access to vast wealth, without stimulating them to implement technological developments, create prestigious firms and increase productivity - sources of sustainable economic development.

Previously, such opportunities were used by the colonial elite. Then the business was continued by a new, local political leadership, which attracted industrial or financial magnates who did not have local roots to cooperate. They ensured the collection of economic rent, the transfer of part of it to the political elite, and, importantly, did not pose a threat to the current government. The tycoon class performed the functions assigned to it, acquired vast wealth, but did not contribute enough to overall economic growth, which was supported mainly by the efforts of small entrepreneurs in manufacturing and related industries, as well as as a result of the policy of providing workers to export-oriented TNCs. The city-states of Hong Kong and Singapore have thrived thanks to the development of port facilities, financial services and offshore business services for countries across the region.

* Studwell J. Asian Godfathers. Money and Power in Hong Kong and South-East Asia. London: Profile Books Ltd., 2007. - XXX + 328 p.

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Such a system worked perfectly well until July 1997, before the financial crisis, when it became clear that the countries of Southeast Asia were characterized by many institutional and political shortcomings. In the years that have passed since the crisis, they have not been eliminated.

Tycoons who live in stunning luxury do not feel any remorse. At the same time, to say that they are mafia bosses would not be entirely correct, despite the fact that many of them are engaged in smuggling goods and services, less often-people, drugs and weapons, maintain contacts with organized crime in the person of Chinese triads, Indonesian premans (preman), etc. in parallel, in a number of spheres it intersects with the world of tycoons. Recall that the region's politicians-the British and Japanese colonialists, the Chinese Communist Party, Suharto-had a long history of relations with organized criminal groups. But as a clear concept, "godfathers of Asia" is more of a myth.

Ethnic Chinese own 50 to 80% of the shares listed on the ASEAN stock markets. At the same time, the share of Chinese in the total population of the Philippines is 2%, Indonesia - 4, Thailand - 10, Malaysia - 29 and Singapore - 77%. In the 1990s, the Chinese controlled 45% of all major firms in the Philippines, 18 out of the 20 largest corporations in Indonesia, 9 out of 10 in Thailand, and 24 out of 60 in Malaysia. Most of the godfathers of Asia are ethnic Chinese (c. XV).

At the same time, it is a mistake to consider these facts as confirmation of the exclusivity of the Chinese and their culture. Rather, the main reason is the high number of ethnic Chinese in the world. Not the least role was played by historical factors. The Chinese had no choice but to learn how to survive, since immigrants were not allowed to fill vacancies in the civil service, and a number of professions were banned for them. Moreover, they were not even allowed to engage in farming. The Chinese had to survive in the face of fierce competition, which also contributed to the formation of the phenomenon of godfathers. Today, Chinese godfathers are not so much carriers of the traditions of Chinese culture as chameleons. They are well-educated, cosmopolitan, speak many languages and are reliably isolated from the usual aspirations and concerns of their fellow tribesmen.

The status of godfathers is supported by the current political and institutional system, which is characterized by the absence of real democracy and is not able to ensure sustainable economic growth, but at the same time does not push the countries of the region to develop according to Latin American scenarios. The crisis of 1997 did not change the existing social foundations, but, on the contrary, strengthened them.

Asian tycoons are primarily consumers of the fruits of economic growth, not its driving force. The productivity of their companies is significantly lower than the national average. For example, in Thailand, in 1985-2005, productivity growth in agriculture and manufacturing was noticeably higher than in the service sector, which is mainly controlled by the godfathers.

The engine of development in the region is export production, which is beyond the control of tycoons. It employs small firms and employees of foreign enterprises. In 1960 - 2005, exports of these industries from ASEAN countries in dollar terms grew by 11-15% annually. Malaysia's exports increased 118-fold over the same period, while Singapore's increased 150-fold (p. XXIII).

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According to a Chinese proverb, the first generation accumulates wealth, the second retains it, and the third loses it. The actual experience of the last hundred years shows that there is a cycle of four generations: the first generation creates only the core of capital; the second, with the help of strong political connections, turns it into a really huge fortune; the third tries to preserve widely diversified assets that reflect the personality of its ancestors; the fourth generation gets the same results as the third in The reason lies in the organization of business on the basis of the family, which by definition is less effective than professional management, as well as in the general decline of the former mores - the foundations of the empire being created.

Becoming very rich in a single generation is unthinkable in Southeast Asia, primarily because there is no open economy. At the same time, the rich people of Southeast Asia traditionally support the myth of their difficult childhood, attempts to escape from the grip of poverty. In fact, their path to the top is a typical insider story, often supplemented by marrying the boss's daughter.

Another myth is the widely recognized thrift of tycoons. The refusal of taxis in favor of the metro, cheap hours, lower wages than workers-all this is just ostentatious asceticism, supposedly helping to save capital. Also, for tax reasons, high salaries are less profitable than dividends. This is the case in Hong Kong. The godfathers ' real annual income is estimated at hundreds of millions of dollars. All the local tycoons, without exception, are regulars of casinos all over the world.

In personal terms, they are patriarchal, vindictive, and demand obedience from their relatives. The loyalty of the latter is ensured by the prospects of receiving an inheritance in the future, but in the present they are not greatly pampered with money. There are no strict rules in the order of inheritance, although here men have an obvious priority.

In general, the family business culture in Southeast Asia is prim, which often causes personal unhappiness, but almost never causes opposition. The life of tycoons is filled exclusively with work, during breaks they can indulge in sex, most often debauched. None of them have any friends in the usual sense.

A mandatory feature of the standard image of the godfather in the region is secrecy, which is associated with the cultural traditions of the Chinese, who are horrified by any communication with the media, as well as with the peculiarities of the activities of the godfathers. Suffice it to recall that back in the 19th century, the private banks of Rothschild, Morgan, and Warburg did not even have signs because of their active insider activity. At the same time, Southeast Asian tycoons show an increased interest in such magazines as Forbes and Fortune, wanting to know what they write directly about them. Finally, all tycoons are afraid that either they or their loved ones may be abducted. The Philippines has the most impressive abduction statistics: over 100 cases per year (p. 61).

The godfathers of the region perceive business in many ways as a gamble. Many tycoons died at a respectable age at work. What should I do if I don't work? Play golf? Then why change anything? At the same time, they have almost no idea about the life of ordinary people.

At the heart of virtually every godfather empire is a concession or license that gives them the right to conduct monopoly or oligopoly activities. The tycoon cartel may also receive

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the right to prosperity as a result of structural deformations created by the Government and measures to suppress competition. Any aspiring tycoon is busy looking for such uncompetitive powerful cash flows. Their source is usually very simple.

So, the six richest people in Hong Kong and Malaysia draw money from gambling monopolies. In 1961, Stanley Ho obtained such a monopoly in Macau. In 1986, he managed to extend the monopoly rights for another 15 years. Ananda Krishnan, Malaysia's richest man since Robert Kuok left for Hong Kong, is considered the owner of real estate, telecommunications and mass media. He built the world's tallest buildings - the Petronas Twin Towers in Kuala Lumpur. At the same time, for almost 20 years, this gentleman received the main flow of funds from the monopoly rights to organize cross-country games in Malaysia. There are other examples, such as food import licenses. They were issued to combat speculation in local markets. Thus, no one thought specifically about the interests of the godfathers. Subsequently, for the tycoon who received it, the license became a source of a constant influx of huge funds. The situation was particularly favorable for tycoons under Marcos in the Philippines and Suharto in Indonesia.

In the late 1990s, due to the lack of tariff and currency regulation of international trade, Hong Kong and Singapore were considered the best countries in the world in terms of economic freedom. At the same time, the first one for a long time was a steep "batch" of various cartels. Historically, they appeared here in colonial times. Under the influence of the British administration, the concentration of capital in the real estate market has become particularly high. In 1991-1994, only 10 developers (as it is now commonly said, developers) provided for the construction of ^3/4 of all new residential buildings. Four of them accounted for 55% of new housing construction. Its profitability, including income from land use, reached 77-364% (p. 68).

Hong Kong has no competition laws, and its godfathers, usually Chinese, British, etc., actively use it, extracting unimaginable incomes. The container terminal in the port of Hong Kong is the most expensive in the world. In fact, this is rent collected by local magnates.

The entire system of obtaining licenses and other tools to ensure a monopoly or oligopoly would be incomplete without large-scale corruption and bribery. However, it has its own regional specifics: it is important to have stable ties with top managers, supported by family relationships.

The system of interaction between godfathers is of interest. They compete with each other for access to the political elite, but they can cooperate in the implementation of joint business plans. At the same time, everyone is guided by their own interests. As a result, their interaction can hardly be called cooperation, rather, forced partners get along like wolves in a pack.

Tycoon businesses are usually characterized by vertical integration. So, in the 1950s, Henry Fok, who received monopoly rights to import Chinese sand to Hong Kong, later acquired barges for its transportation, as well as storage facilities for its storage. In addition, vertical integration gives tycoons freedom of action when preparing an income statement at different stages of the business process. At the same time, each tycoon is overgrown with conglomerates, covering-

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There are 300-400 private companies in various industries. The principle of control is the same-capture of any new business.

"If someone tells you that they got rich as a result of hard work, ask them whose it is." These words of the American humorist, journalist and writer Don Marquis are quite suitable for describing the activities of the godfathers of Southeast Asia. Admittedly, they work harder than mere mortals would ever dream of. But this is not much like the work of an ordinary manager. Tycoons maintain and strengthen their connections, and in an almost uniform way. For example, they all play golf without exception. Their working day is really long, but it is mostly filled with socializing.

So, the usual day of the richest tycoon of Southeast Asia, Li Kashing, begins around 6 o'clock in the morning. By about 7 o'clock, he arrives at his own golf club and plays with one of the right people, or at least one of his top managers. By 10 o'clock, he goes to the office and reads the press, especially articles about himself. He speaks English, but all materials that may be of interest to him are translated into Chinese before his arrival. At half past eleven - massage; at 13 o'clock-business lunch. Then Lee spends a couple of hours in the office and leaves for home at 4: 00. At 17 o'clock - another massage and at 18:30 - a game of cards with business partners. Then a business lunch and at 22 o'clock-going to bed. The next day, everything repeats.

Thus, the godfather's working day lasts 16 hours. It is clear that managers do the real work. As a rule, there are many of them, but the main one is always one. It is also called the "main slave". The tycoon turns to him when he needs to do something. The relationship between them resembles that of Don Corleone (the hero of M. Puzo's book "The Godfather") with your goons. For their service and obedience, the "master slave" receives approximately $ 15 million a year. He doesn't go to bed until 2 a.m. at the earliest, and he should be in the office long before the boss arrives. It is believed that money is not his main motivation. He is happy to be close to the boss and power.

More serious cases are handled by foreigners close to the boss. This practice has developed since colonial times. Modern tycoons trust them as much as their compatriots. They usually manage their share capital and work in the stock market. In general, tycoons are great masters of "pulling strings" and thus controlling their virtual puppet environment, even though it consists of highly paid representatives of international business.

Most employees are deprived of any privileges and have low incomes due to the underdevelopment of trade unions. Due to the existence of a monopoly, the boss is not interested in hiring the best specialists, so his priority is always to minimize costs, in particular salaries.

For the first time, Southeast Asian entrepreneurs gained access to the capital market after the end of the colonial era. This was due to changes in the credit policy of banks, the acquisition of licenses by tycoons to open their own banks, which became, in fact, something like an ordinary piggy bank, although filled with other people's money, as well as the development of the regional financial market (p.94).

The financial revolution in the region is connected with the activities of Hong Kong and Shanghai Banking Corporation (HSBC). In 1949, after the Communist victory in the Chinese Civil War, the bank relocated from Shanghai to Hong Kong. None of the shareholders could own more than 1% of the shares. This is largely the case

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This prompted the bank to cooperate with the godfathers of the region, since without the latter's participation, it became increasingly difficult for bank management to hide their income. Until the mid-1990s, the bank actually played the role of a central bank. With his active participation, the transfer of economic control over British companies in favor of Chinese companies, which turned out to be very profitable, was ensured. The bank has become a kind of catapult that puts Chinese-born tycoons into an unattainable orbit.

Just before the 1997 crisis, loans accounted for between half and 4/5 of all banking assets in Southeast Asia (1/5 in the United States) (p. 107). The emergence of this asset structure was determined by the average annual growth of bank deposits by more than 20% in the 10 years before the crisis, due to the growth of household savings. Between 1986 and 1996, the volume of bank lending in Thailand, Malaysia, Indonesia, and the Philippines increased sixfold. As you know, simplified access to bank lending provokes acute economic problems. In the context of South-East Asia, excessive lending has contributed to abuse by regional tycoons.

Political patronage in relation to the godfathers of the region can be both active and reactive, that is, act as a reaction to certain events. In the first case, we are talking about simply providing magnates with lucrative orders and benefits; in the second, politicians interfere in the course of affairs, which directly supports the interaction of political and economic elites. In other words, when there is a real threat to the welfare of a particular tycoon, the authorities stand up for him under the pretext of ensuring economic stability (p. 116). Taking advantage of this support, regional tycoons have been very successful in seizing the most lucrative areas of business, turning public companies into private ones, and other illegal operations.

The Asian financial crisis was driven by four strong macroeconomic trends. The first was an attempt to copy the development path of Hong Kong and Singapore in order to obtain indisputable benefits: export-oriented industrialization, increased foreign investment and, as a result, increased exports. The second is associated with rapid population growth, and the third is associated with an increase in savings. For example, household savings account for 30% of GDP in Hong Kong and Indonesia, and 45% in Singapore (p. 126). Finally, in the pre-crisis period, the region had the psychological advantages of a rapidly growing, developing economy against the background of a high level of public confidence in the political elite.

At the same time, there was a growing belief in all Southeast Asian countries that economic growth is based on solid foundations. At the same time, there were no large sustainable companies in the region, and acute socio-economic contradictions were accumulating. Since the mid-1990s, the greed of tycoons, corruption and excess have become clearly excessive, in most companies, asset trading has replaced productive business, and many financial institutions have begun to experience difficulties.

The analytical studies of the region's economy conducted at that time were not very effective. The World Bank and the IMF prepared reports that resembled victory reports. The only exception was the work of Alwyn Young (Alwyn Young) from the Massachusetts Institute of Technology. It was published in a popular form in 1994. Its essence boiled down to the fact that the Asian miracle is a myth. Capital growth-

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investment and labor were not accompanied by a corresponding increase in productivity. At the same time, it grew more slowly than in the US, whose economy is much more mature. Post-crisis studies have shown that productivity was actually slightly higher, but the conclusion about the instability of economic growth remained unchanged.

When studying the causes of the Asian crisis, most analysts focused on analyzing the negative impact of changes in foreign exchange rates, short-term capital flows and foreign loans of local firms on regional currencies. This is certainly correct. At the same time, it is already clear that the Asian financial crisis was not just a consequence of the short-term imbalance of the economy. Some experts argue that with a more balanced macroeconomic policy and without the intervention of international organizations, the crisis could have been avoided altogether. Perhaps in this case it would have been delayed, but not prevented. The crisis was caused primarily by internal factors - political manipulation in the economy, the corruption of the banking system, cartelization and restrictions on free business activity.

The unprecedented growth of investment in the region's economy before the crisis was mainly driven by domestic sources. Foreign investments began to arrive only shortly before it and in a limited amount. At the same time, they were mostly of a short-term nature. The inflow of funds from abroad to the regional stock market and significant fluctuations in the exchange rates of foreign currencies against the dollar finally formed the pre-crisis conditions.

The Asian financial crisis, firstly, contributed to the rejection of some of the godfathers of the region, and secondly, significantly changed the system of economic regulation. As a result, competition in the regional services market increased slightly, but there were no significant political, economic and structural changes in general. The most skillful and clever of the godfathers managed to strengthen their positions. In addition, a number of new tycoons have appeared. The former tycoons who disappeared were mostly representatives of Malaysia and Indonesia, who managed to rise high as school friends or close relatives of influential people.

From a macroeconomic point of view, the recovery in Southeast Asia is linked to export growth and the boom in the Chinese economy that began in 2003. The literature underestimates the role of the positive impact of exports on overcoming the crisis consequences in the region. At the same time, the growth of exports is largely due to the conscious policy of TNCs regarding the organization of export production outside of China, in particular in Vietnam and the Philippines. In 1997-2006, the share of exports in the region's GDP increased from 45% to 65%. To support it, the governments of Southeast Asian countries have ensured the purchase of incoming foreign currency, resumed fixing national currencies to the dollar exchange rate, and continue to increase their gold and foreign exchange reserves.

The godfathers of the region have managed to take advantage of the fruits of export expansion, providing services to the sectors of the economy they control, in particular, supplying gas from Malaysia, rubber from Thailand, and timber from Indonesia. An important aspect of their activity was to use the opportunities of the Chinese boom to expand operations in the real estate market and develop the gambling industry.

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Casinos are banned in China, but citizens are allowed to travel. As a result, no one is complaining about the lack of visitors at the Genting Highlands Casino complex near Kuala Lumpur. Macao, which has been a special administrative region of China since 1999, has received the greatest benefits. The attraction of this center is connected with the possibilities not only of playing games without restrictions, but also of laundering unrighteous incomes (pp. 176-177).

Who paid for the 1997 crisis, if the godfathers were barely affected? Despite the economic recovery, the population of Southeast Asia fared worse in early 2007 than in 1995. The reason is the policy of the respective governments. So, in Singapore, the richest people received tax breaks, while indirect taxes increased significantly. Value added tax increased by 5-7%. The situation is similar in other countries of the region. The main difference between Hong Kong and Singapore in terms of the impact of the crisis is due to the fact that Hong Kong still has currency restrictions. This means that the deflationary pressure here was entirely blamed on the stock market and the real estate market. As a result, the cost of home ownership reached the level of 1997 only by the end of 2006 (p.187).

The level of poverty in Southeast Asia has either remained the same or, as in Indonesia, has increased significantly. In 2006, 52% of the country's population earned less than two dollars a day. In the Philippines, this figure was 47%, in Thailand-32%. For comparison, the corresponding figure in Argentina was 14%, and in Brazil - 22%.

It is noteworthy that a huge number of political assassinations take place in the region. In the Philippines, between 2001 and 2006, according to local police, there were 11 such murders. During the 20 years of Marcos ' rule, 3,000 people disappeared without a trace (p. 181).

The Southeast Asian development model differs from the corresponding Northeast Asian model in three aspects. First, Japan, South Korea, and Taiwan implemented land reform, and the population received land ownership rights. As a result, everyone has the opportunity to form their own capital and increase their personal well-being. In Southeast Asia, the political elite managed to avoid these reforms. The Gini coefficient of social inequality in Japan, South Korea, and Taiwan is 0.25, 0.32, and 0.24, respectively. In Indonesia, it is 0.34, and in Hong Kong and Singapore-0.5.

Secondly, in the northern neighbors, state support for corporations, which, by the way, were also built on the family principle, did not lead to the emergence of economic elites like the godfathers of Southeast Asia, since it did not have a rental character and extended not only to the service sector. More often, it was provided to manufacturing enterprises and established businesses. In addition, state support did not destroy competition.

Third, democratic approaches borrowed from developed European countries have become widespread in the political sphere. So, in its legislation, Japan used many provisions of the German constitution. Despite periods of military dictatorship, South Korea and Taiwan have managed to embark on a path of democratic transformation.

It is still difficult to say how long Southeast Asia will be able to resist the power of economic logic. The region has become an example of a not very successful development option, but sooner or later the godfathers will have to say goodbye.

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