There's an interesting item in John Plender's column in the FT today involving the crony-capitalism of four pseudo-democratic Asian countries. Whether you agree with Plender's conclusion or not, another moral of the story is to show just how powerful pension funds are these days. And these funds represents the savings of ordinary workers.
Although the trade unions of workers in some industries (or the company directors) (or both) may lobby politicians in favour of protective tariffs against competitive imported goods, the same workers (and company directors), qua future-pensioners, are really acting against their own longer terms interests because their pension funds are spread all around the world and need as much free trade as possible for optimum investment. (JP) <<<< Since the Asian financial crisis in 1997-8, portfolio capital flows to the emerging markets have collapsed. Despite all the policy effort to improve the so-called financial architecture of these countries, very little revival has taken place. So I am left uneasy when Calpers, the giant California state pension fund, puts Indonesia, Malaysia, the Philippines and Thailand on a blacklist in the name of socially responsible investment. The gross value of Calpers' investment portfolio at end-June last year was US$170 billion -- almost exactly the combined stock market capitalisation of the four Asian countries where it is selling all its shares. Just think what would happen if a mere handful of other US funds followed suit. Blacklisting countries rather than individual companies is a little like red-lining -- the practice whereby home-lenders ostracise complete neighbourhoods regardless of the creditworthiness of individual inhabitants. Surely each and every listed company in these Asian countries does not deserve to be treated as a pariah. And if countries are to be screened on the basis of whether they are democratic or not, will denying them access to capital make it more or less likely that they become democratic in the future? Not a simple question, I grant. Denying capital could arguably make for a more bloody transition to democracy. Providing capital might equally keep despots in power. . . . To my mind the Calpers approach smacks too much of rough justice. >>>> Keith Hudson __________________________________________________________ �Writers used to write because they had something to say; now they write in order to discover if they have something to say.� John D. Barrow _________________________________________________ Keith Hudson, Bath, England; e-mail: [EMAIL PROTECTED] _________________________________________________
