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328 pages, Paperback
First published October 10, 2007
This has led to what one of the earliest critics of the godfather economies, the Japanese scholar Yoshihara Kunio, termed ‘technologyless industrialisation’. South-east Asia has all the trappings of a modern economy – high-tech factories, stunning high-rise buildings, contemporary transportation systems and utility providers – but no indigenous, large-scale companies producing world-class products and services. As a result, there are no global brands. Real competitiveness is limited to relatively small-scale businesses because tycoons have plucked all the fat economic fruits for themselves.
The possibilities for tax evasion and transfer pricing between different south-east Asian jurisdictions have also produced vast funds in need of off-shore havens. Hong Kong and Singapore’s banking secrecy, their willingness to bank the accounts of exotic shell companies with nominee directors, and Hong Kong’s exemption of private companies from the need to produce public accounts, have offered the perfect, readily accessible refuge. As the European Union finally brought pressure to bear on Switzerland and other European private banking centres to block tax evasion and introduce withholding tax for some non-nationals, Singapore moved to fill a global – as well as its regional – niche. The city increased account secrecy provisions and changed trust laws in a manner designed to attract the kind of money Switzerland had dealt in; the number of foreign private banks in Singapore almost doubled between 2000 and 2006.
People at the meeting, he said, ‘were competing with each other to praise Singapore as the success story of globalization … Actually, Singapore’s success came mostly from being the money laundering centre for corrupt Indonesian businessmen and government officials … To sustain its economy, Singapore is building casinos to attract corruption money from China.’