INSIDE KNOWLEDGE
Also by Michael Backman and published by Palgrave Macmillan: BIG in Asia: 25 Strategies for Business Success (with Charlotte Butler) The Asian Insider: Unconventional Wisdom for Asian Business
MICHAEL BACKMAN nside Knowledge STREETWISE IN ASIA
* Michael Backman 2005 Softcover reprint of the hardcover 1st edition 2005 978-1-4039-4237-1 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London wn 4lP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2005 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin's Press, LLC and of Palgrave Macmillan Ltd. Macmillan is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 978-1-349-52125-8 ISBN 978-0-230-52239-8 (ebook) DOI 10.1057/9780230522398 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. 10 9 8 7 6 5 4 3 2 1 14 13 12 11 10 09 08 07 06 05 Transferred to Digital Printing 2011
CONTENTS Acknowledgements I Introduction: Getting Streetwise I 2 You're Who? Names in Asia 8 vii Part I Places 19 3 China Triumphant 21 4 China in Crisis 31 5 Asia's Big New Frontier: The Stans of Central Asia 48 6 The Stans in Detail 57 7 Anwar Ibrahim: Malaysia's Dark Cloud 77 8 Guns for Hire: Australian Expatriates 89 9 Nepal: From Democracy to Dictatorship 98 Part II Markets III 10 Outsourcing: It Need not be India 113 II Asia's Art Market: For Investment and Connections 124 12 Singapore, Malaysia, and the International Arms Industry 138 13 Asia's Great Casino Invasion 147 14 Diamonds, Jains, and Jews 160 15 From Starbucks to Coffee Bean: Asia's Coffee Shop Revolution 167 v
vi Contents 16 The Peculiar Market for Birds' Nests 176 17 Wheeling and Dealing in Asian Distressed Debt 182 18 The Secrets of Asia's Five-star Hotels and their Guests 191 19 Who Owns Patpong? Thailand's Sex Industry 20 I 20 Flowerhorn Fish, Huanghuali, Zi Beads, and Bollywood 207 21 Making Money and Avoiding Prejudice: Asia's Pars is 224 22 The Far East and other Nonsense 233 Notes Bibliography Index 236 247 250
III '-- ACKNOWLEDGEMENTS "How do you get your infonnation?" is a question I'm often asked. The answer is from everywhere. Rarely do I miss an opportunity for a detail here or a scrap of infonnation there. Friends and associates in Asia and elsewhere who pass on their ideas or send infonnation to me that they think might be useful are an important source. The following have provided ideas and anecdotes that have specifically been used in preparation of this book: Eddie Chin, Alistair Nicholas, Charlotte Butler, David Hale, Ritchie Ramesh, Yolanda Fernandez Lommen, Raymond Yee, Geoff Backman, Berry Cameron, M. Shanmughalingam, Eric Pringle, Justin Doebele, Zaman Tambu, Salil Tripathi, Michael Warby, Ilangoh Thanabalan, John Kidd, Sandra Chia, Anne Richter, Cyrill Eltschinger, Fred Woollard, and Joni Djuanda. Thank you to each of you. And to Alison Anag who cares so much about my writing and whose generosity and perceptiveness have helped to get me through, thank you also. Various politicians and business figures in Asia have been helpful. Often it is not appropriate to attribute their comments to them but I have done so in the text where I can. Stephen Rutt, Alastair Gordon, Steve Maginn, Anna van Boxel, Keren Cheung, Regina Chan, and the rest of the team at Palgrave Macmillan have put in their usual excellent effort. This is the third book of mine that has been handled by Stephen and the others at Palgrave Macmillan. It started with Big in Asia, which I co-wrote with my good friend Charlotte Butler, and has grown into a series. Finally, a big thank you to Rudolf Phua, his wife Catherine, and their vii
viii Acknowledgements team at Pan sing Distribution in Singapore. Rudolf and Catherine are two of the most decent people I've met in the book business. They and their staff are utter professionals and are a real pleasure to work with. Writing a book is just one part of a long process and there's little point if at the other end the book doesn't receive the attention it should. The effort and the care taken by Rudolf and Pan sing make me want to keep writing. What more can I say?
III FACTS.. China is set to emerge second only to the United States as having the world's biggest population of English speakers. Imagine what that will do to India's business process outsourcing sector... Kazakhstan has the world's second largest oil field. Prior to 2000, no one knew the field existed. Suddenly Kazakhstan matters... China has 33 cities with populations of a million or more... Eight out of ten of the world's diamonds are cut and polished by Indian Jain family companies in India... There are more McDonald's restaurants in Japan than there are in Australia. There are more Chinese restaurants in Australia than there are in Japan... India, the world's leading IT outsourcing country, has Just a quarter of the number of internet users of China. Both have billion plus populations... Casinos are banned in China. Neighbouring countries have responded by ringing China with at least 50 legal casinos just inside their borders... Adult literacy levels are higher in Mongolia and North Korea than in Singapore... China is an emerging investor in third world countries. One reason? It is not constrained by foreign corrupt practices legislation... Tetley Tea worldwide, like Asia's largest IT outsourcing company Tata Consultancy Services (TCS) is controlled by a series of Parsi charitable trusts... Food consumption rises in Asia's Islamic nations during the Islamic fasting month of Ramadan... Prostitution is legal in Singapore and Illegal in Thailand. ix