A Capital CommentI'm nowhere near being an expert in capital markets, but a posting in
The Aseanist caught my eye.
He quotes
Robert E. Anderson, an ex-World Bank economist, who points out that how corporations are
owned in the developing world is more important than how they are
governed.
In Indonesia, Thailand and Malaysia ... by and large, a few large shareholders control most of the stock, and whatever was sold to the public (I suspect in the I.P.O. boom of the early 1990s) was to raise a lot of cash for the company and its owner without giving anything much to the public.
The vast majority of Southeast Asian "public" companies are actually privately held. Either they're owned by governments or by well-connected individuals and families (many of whom, by the way, have close relations with government). So naturally, they're run by the same people who "own" them: bureaucrats or family heirs. And those that are run by managers aren't really run professionally, because regardless of those executives' experience or (often Western M.B.A.) educations, they exercise their discretion or expertise at the mercy of the large shareholders (who) have effective veto power over their day-to-day decisions. They're the professional face of what is essentially mom-and-pop (or matriarch-and-patriarch) operations.The Aseanist then argues that we need more entrepreneurs and innovators;
we need more people to build businesses as this is better for the economy (so resources are allocated more wisely).And, I would add, more widely.
A wiser and wider dispersal of wealth would do much to alleviate the economic distress which drives those without hope into the welcoming arms of the
fascisti of al-Qaeda.
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