Lucio Tan as Asian godfather

Asia Sentinel , August 22, 2007
Asian Godfathers: Money and Power in Hong Kong and South-East Asia
By Joe Studwell

Excerpts:

In the Philippines another usurper, Ferdinand Marcos, demonstrated a similar response to Suharto’s with respect to the possibilities of godfather relationships. After winning two presidential terms in (distinctly dirty) elections, Marcos circumvented his country’s two-term presidential limit by declaring martial law in 1972. Like Suharto, he also looked beyond the established godfather élite – in the Philippines, traditional Spanish and Chinese mestizo families – to find some of his key business proxies. The archetype was Lucio Tan, a first-generation immigrant and one-time janitor who became, under Marcos’ patronage, the Philippines’ leading tobacco vendor, as well as having interests in everything from banking to real estate.

It is probable that – as with Liem Sioe Liong, who knew Suharto from the latter’s military postings in central Java – Tan and Marcos knew each other from Ilocos, the president’s home region where Tan had his first, small cigarette factory. Both Suharto and Marcos signalled regime change by promoting new, non-indigenous outsiders to godfather roles. Tan was a clear break in the ethnically more mixed and integrated Philippines because he represented the so-called ‘one-syllable Chinese’ – those who had not assimilated and adopted local surnames.

The promotion of new outsiders achieved two useful things for the dictators: it provided ultra-dependent, ultra-loyal sources of future finance for them and their families; and it served as a warning to the established, more integrated economic élite that it was not indispensable.

The role-playing that is part and parcel of the godfathers’ lives may explain the insecurity that appears to afflict them. One facet of this is an obsession with status. Asian godfathers collect and display gongs – honorary titles, doctorates, and so on – with a hunger that puts Western billionaires to shame.

Asia Sentinel , August 23, 2007
How to be a Godfather (Part 2)
By Joe Studwell

Excerpts:

In the Philippines a tradition of political allocation of state offices and government largesse built up from the 1920s, under American colonial rule, until it reached its logical conclusion under Ferdinand Marcos. There were trading monopolies for major foodstuff imports, and marketing monopolies for the key local crops – sugar and coconuts.

Eduardo ‘Danding’ Cojuangco was one of the leading Marcos monopolists. (It is a reminder of the small and élitist world in which money and power resides in Southeast Asia that Danding is from the same landed family as Cory Aquino, whose ‘people power’ movement overthrew Marcos in 1986.) Danding, a Marcos favorite, benefited from a new levy on coconut production that funded the development of United Coconut Planters Bank. He was made president of the bank, which in turn bought up most of the Philippines’ coconut milling facilities. Danding’s coconut cash flows were strong enough to buy up much more besides. He became known as Mr Pacman, after the video game character that eats everything in its path.

Marcos monopolies set new standards in the powers they conferred. Lucio Tan’s Fortune Tobacco Co., which was given tax, customs, financing and regulatory breaks that were tantamount to a domestic monopoly on cigarette making, wrote a new cigarette tax code that Marcos signed into law. In the same period Tan is alleged to have printed his own internal revenue stamps to paste on cigarette packets. The cash flow from tobacco propelled him into chemicals, farming, textiles, brewing, real estate, hotels and banking. After Marcos fled to Hawaii in 1986, Tan wrote an open letter to new president Cory Aquino in which he asserted: ‘We can proudly say that we have never depended on dole-outs, government assistance or monopoly protection throughout our history.’

Cartels, Cartels Everywhere

The crudeness of the monopolies handed out by Marcos and Suharto tends to obscure the almost universal presence of monopolies, cartels and controlled Asian markets in Southeast Asia. Hong Kong is a case in point, not least because it is regularly voted one of the freest economies in the world. The right-wing American think tank the Heritage Foundation has ranked Hong Kong first (and Singapore second) in its Index of Economic Freedom for the past fourteen years. The Nobel Laureate economist Milton Friedman lauded Hong Kong for decades as a bastion of the free market; a week after the territory’s return to Chinese sovereignty in 1997, he lamented: ‘If only the United States were as free as Hong Kong.’

Lucio Tan, the Yellow Economic Lucifer in the Filipino land, beat all the Asian godfathers. He could even bite the hand of his master, the late Dictator Marcos. And he has now collected the title of “doctor” more than 10 times, buying them at a cost of P20M each, sourced from his tax cheated cheated! The other Asian godfathers in these articles are not said to be tax evaders like this Yellow Economic Lucifer.