Asian Godfathers by Joe Studwell

Author:Joe Studwell
Language: eng
Format: epub
Publisher: Grove Atlantic
Published: 2007-04-13T04:00:00+00:00

A Nasty Crisis, for Some

The Asian financial crisis did two things to large-scale domestic business in south-east Asia. First, it culled or emasculated some of the least competitive, most value-destroying godfathers of the 1990s. Second, it brought about considerable regulatory change, although some of this proved superficial. As a corollary, foreign direct investment, and hence competitive pressure, in ‘sensitive’ sectors previously closed to outside investment – such as financial services – increased, and had a positive impact. However – and this is the big reservation – the crisis did not change the fundamental political–economic structure of the region. Local economies are still godfather economies, and the smartest, slickest godfathers were actually strengthened by the crisis. Until the system that creates tycoon economies changes, most godfathers will remain untouchable – just as their American equivalents were at the start of the twentieth century. Moreover, as we shall see, new godfathers will be created.

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