Crazy Rich Asians can teach us about the re­gion's eco­nomic rise

The Guardian Australia - - Opinion - Ken­neth Ro­goff

In the sur­prise hit movie Crazy Rich Asians (based on a 2013 Kevin Kwan novel), a New York Uni­ver­sity eco­nomics pro­fes­sor (Rachel), trav­els with her boyfriend to Sin­ga­pore to meet his fam­ily. There, she learns, ap­par­ently for the first time, that her sig­nif­i­cant other (Nick) is heir to one of Asia’s largest for­tunes and has a mother in­tent on mak­ing sure her son does not marry a com­moner, Asian Amer­i­can or not.

Partly be­cause of its (ter­rific) all-Asian cast (an ex­treme rar­ity), and partly be­cause it re­calls ear­lier eras of great ro­man­tic come­dies, the film has caused a lot of buzz. Per­haps there will even be a long over­due Os­car for Michelle Yeoh (from Crouch­ing Tiger, Hid­den Dragon), who plays the steely but lov­ing mother.

But the film also stars Sin­ga­pore, a place un­fa­mil­iar to most western­ers. For some, the real shocker in the movie will be just how crazy rich parts of Asia have be­come.

To get a sense of the is­land citys­tate’s me­te­oric rise, one need only com­pare the glit­ter­ing metropo­lis de­picted in Crazy Rich Asians with the hut-filled fish­ing vil­lage de­picted in the 1940 clas­sic com­edy, Road to Sin­ga­pore, star­ring Bing Crosby, Dorothy Lamour and Bob Hope. The com­par­i­son makes it easy to un­der­stand how the fic­tional Young fam­ily be­came ul­tra-rich as early real-es­tate in­vestors. With an­nual out­put of ap­prox­i­mately $325bn in 2017 and 5.6 mil­lion in­hab­i­tants, Sin­ga­pore now ranks with Den­mark eco­nom­i­cally (though its pop­u­la­tion is more di­verse).

This is a flat­ter­ing com­par­i­son, given that Den­mark typ­i­cally ranks at or near the top in global qual­ity-of-life sur­veys. Sin­ga­pore does not re­dis­tribute in­come as ag­gres­sively as Den­mark, choos­ing in­stead to main­tain lower taxes and con­cen­trate trans­fers on low-in­come in­di­vid­u­als. Nev­er­the­less, all ci­ti­zens have ac­cess to high­qual­ity health cov­er­age and school­ing, and many are also el­i­gi­ble for heav­ily sub­sidised hous­ing. In Crazy Rich Asians, poverty is de­picted (rather in­ge­niously and hi­lar­i­ously) as a long-haul flight in econ­omy rather than first class.

Although Asian Amer­i­cans have em­braced the film as a break­through for Asian ac­tors in main­stream Hol­ly­wood pro­duc­tions, is hotly de­bated in Sin­ga­pore it­self. Although many Sin­ga­pore­ans are ex­cited that “CRA” (as it is called in Singlish) will catal­yse a tourist boom, com­plaints are rife. One is that the char­ac­ters don’t use more Singlish phrases; an­other is that the citys­tate’s large In­dian and Malay com­mu­ni­ties are in­vis­i­ble. Most of all, there is a pop­ulist back­lash against the Young fam­ily’s out­size wealth, mak­ing some ques­tion why Sin­ga­pore has no cap­i­tal­gains or es­tate taxes. Why should Nick be al­lowed to in­herit so much money?

But the back­lash is per­haps less than an Amer­i­can or a Euro­pean might

ex­pect. This may be be­cause the mid­dle class has done fairly un­der Sin­ga­pore’s unique sys­tem, which is very much a mar­ket econ­omy, but one where the govern­ment plays a big role in longterm plan­ning and in­vest­ment.

One might cyn­i­cally say that the back­lash would be much more vis­i­ble if there were fewer re­stric­tions on the me­dia. But surely slow­ing growth, es­pe­cially where it af­fects mid­dle-class in­comes, has been a ma­jor driver of pop­ulism in Europe and the US, ex­ac­er­bated no doubt by the fi­nan­cial cri­sis. Although Sin­ga­pore’s growth has also slowed, it still com­pares favourably to Europe. The Mone­tary Author­ity of Sin­ga­pore is fore­cast­ing that growth will ex­ceed 3% in 2018, on par with the US, which is now the envy of the ad­vanced economies.

Sin­ga­pore’s suc­cess is all the more re­mark­able given that prox­im­ity to the equa­tor is usu­ally as­so­ci­ated with weak growth and poverty. Yet Sin­ga­pore is si­t­u­ated vir­tu­ally on top of it. (In one im­plau­si­ble scene in Crazy Rich Asians, Nick and Rachel are picked up at the air­port in an open-air jeep.) Econ­o­mists who study growth al­most come to blows at con­fer­ences over whether “in­sti­tu­tions” or “cul­ture” are more im­por­tant to growth, with both sides seek­ing to take credit for Sin­ga­pore, which in­her­ited English in­sti­tu­tions and el­e­ments of Chi­nese cul­ture.

And now, one hopes, Asia will be­come a big­ger part of Hol­ly­wood cul­ture, with more films fea­tur­ing Asian lo­cales and ac­tors. Pro­duced for just $30m (com­pared with more than $300m for Dis­ney’s Avengers: In­fin­ity War), Crazy Rich Asians has al­ready grossed more than $200m world­wide.

That’s im­pres­sive for any film, and per­haps es­pe­cially for one that opens with a les­son in game the­ory. In the first scene, Rachel uses poker to il­lus­trate a con­cept to a large class sit­ting in rapt at­ten­tion, and she schools a grad­u­ate teach­ing as­sis­tant. Of course, most cour­ses on game the­ory in­volve a lot of math­e­mat­ics about strate­gic re­la­tion­ships, not play­ing ac­tual games. But they can be fun all the same. Prince­ton Uni­ver­sity pro­fes­sor Av­inash Dixit fa­mously uses clips from films such as Dr Strangelove to il­lus­trate key con­cepts.

Now per­haps Hol­ly­wood will use films like Crazy Rich Asians to il­lus­trate key con­cepts about a re­gion that is the big­gest eco­nomic suc­cess story of the last sev­eral decades. There are many more sto­ries about that story to be told.

• Ken­neth Ro­goff is pro­fes­sor of eco­nomics and pub­lic pol­icy at Har­vard Uni­ver­sity. He was the chief econ­o­mist of the IMF from 2001-2003.

© Project Syn­di­cate

Pho­to­graph: All­star/Warner Bros

Crazy Rich Asians cost just $30m, but has grossed more than $200m world­wide.

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