It’s Raining (Rich) Men
From a financial perspective, the last fifty years or so have not been kind to Southeast Asia. Emerging from the shadow of colonialism, Southeast Asian countries established governments that were, as a rule, economically disadvantaged by the two chief byproducts of corruption: economic inefficiency (leading to the enrichment of a small elite), and capital flight (the disappearance of those elites’ money from their home countries). In contrast to the flagrant corruption of the regimes of decades past – Suharto in Indonesia, or Ferdinand Marcos in the Philippines – today’s Southeast Asian governments are on the whole a more efficient and attractive economic entity, as the increased prominence and ambition of the Association of Southeast Asian Nations (ASEAN) in recent times might suggest.
Of course, in an economic bloc where all countries have an equal say, some countries profit more equally than others from an increasingly favorable economic climate. Though less overtly corrupt than before, certain Southeast Asian countries continue to struggle with endemic problems of capital flight. In a report that published 2010 data on global capital flight, Malaysia, the Philippines, Thailand, and Indonesia all found themselves either within the top 10 list or just outside it.
Illegal capital flight, then, appears to be in Southeast Asia for the long haul. But what of legal versions of capital flight – in other words, when really rich people decide to legitimately set up shop in a Southeast Asian country? Certainly this was not a feature of past decades; Southeast Asia wasn’t where the money was. Heck, even Asia wasn’t where it was. But it most certainly is now, and Southeast Asian countries like Singapore are heavily benefitting from the decisions of the ultra-rich to join them. Whether from Australia, China, or the United States (think Eduardo Saverin), their former home countries are wondering (as other Southeast countries doubtless are) why and how to stem the exodus.
How Singapore – and other Southeast Asian countries, once they create economic conditions that inspire enough confidence – will manage this alternative “capital flight” remains to be seen. It is often taken for granted now that the future lies with Asia, as Saverin himself said; even taking that to be true, where in Asia the future lies precisely in another matter up for debate. For Singapore’s neighbors, they will be faced with difficult economic decisions to make if they attempt to follow Singapore’s zero-corruption model (arguably the strongest reason, geography aside, why investors accustomed to the stability of Western laws have found Singapore an attractive choice). They will have one eye on the ASEAN Economic Community proposed for 2015 – a chance for the whole region to acquire a common image of economic stability and business-friendliness – and another eye on the rich men and women out there, each one of them searching for a reason to sink their money into a region of the future.
But are these people really worth it? Are their initial contributions to the economy worth the side effects of the entrenchment of an entire community of foreign and wealthy elites largely unconcerned with the culture or long-term future of their new home? Public opinion in Singapore on the matter has been loud and provocative; but what can the angry words of these do beyond complain in a country prepared to protect a lucrative source of income? As with all things, but especially wealth, looking at the relative utility of things is important; having attained a certain level of wealth, the introduction of ever-more wealthy people to move capital around (and not necessarily to local firms) doesn’t always seem like a great idea once the initial fanfare’s subsided. Perhaps it is because Singapore is my home, but when people in the United States complain about Saverin leaving for pastures new, sometimes it is tempting to say: “you can have him back!”