Apologies for the rant, but even a wandering layabout needs a soapbox, sometimes... I remember our school leavers ceremony. I suspect it was fairly typical of a British-style, Anglican boys boarding school. There were the normal speech day trappings, blazers, brushed hair, prizes for achievements both substantial and inane, all concluding with an impressive, rousing address by an old boy who had risen to become the global CEO of one of the worlds largest merchant banks. Shortly after he finished speaking we made our way to the beautiful chapel for our final service. Normally the ritual of filing in, was pretty automatic but somehow knowing this was the last time we would be there as student made us present and conscious. As we cruised back today, along the Saigon river, from the Cu Chi Tunnels, I reflected on our six weeks in Asia. The smells and sights of Asia assaulted our senses, yet again. From the exciting odors of wet markets, fresh coriander, basil, pungent fish and shrimp sauces, to the less pleasant odour of human waste from open sewers and the blight of plastic in its many forms is everywhere. Admittedly, Vietnam is better than its neighbors, Cambodia, Laos and Thailand but this is at the margin. It’s not just the pollution and plastic though. It’s more than that. When one moves out of the cities, their is no wildlife to speak of. Agent Orange and operation Rolling Thunder certainly didn’t help that but again that excuse would be an easy out. When one talks to local people in Thailand, Cambodia, Vietnam and Laos, there is just a resigned view that the decimation of the jungle and in particular the eco-system it supported is a natural cost of human development and urbanization. And hey, as a global traveler, I am not in a position to judge people’s need and drive to move out of poverty and make a buck. Conservation, like philosophy is a luxury that a regularly full belly allows. Nevertheless, in my professional life I have had cause to travel the African continent, extensively. One cannot help but contrast these experiences. Africa and in particular Sub-Saharan Africa is ten or fifteen years behind South East Asia, developmentally. So what does Asia’s success foretell? First up, South East Asia has been lauded for its no holes barred approach to infrastructure and financial growth as narrowly defined by GDP. The worlds capital has rewarded these Asian economies for this growth at any cost. Ultimately, this creates a self serving loop. Get financial growth, i.e. returns at any cost, regardless of long-term impact on town-planning, pollution, governance, social development or the environment. The financier in me understands this well. Capital’s singular metric is returns, and on that basis it’s certainly easier to make a case for investment into Asia than Africa. But... if I overlay what one sees in SE Asia, particularly in places like Sihanoukville, Cambodia, that level of seemingly unregulated development would be disastrous for Sub-Saharan Africa. The net result will be, destruction of the environment on a grand scale, mass pollution of air and ground water. In Sihanoukville, the several 1000 room hotels which will cocoon the Chinese tourists and gamblers will certainly provide employment and revenue for local government. Those who know me, know I am no “tree-hugger” and that I am a card-carrying capitalist. So I am not suddenly arguing against development. It’s as much an imperative today, in Uganda or Malawi, as it is in Cambodia. The key question is “how” its done? Whether the authorities in question give in to the temptation to monetize as much as possible, immediately? Whilst it’s patently what Capital wants, is it what we as a continent really want? Our Chaplin rose to deliver his parting message. The light from the rose window fell across the pulpit. The sermon finished, imploring us to follow the school motto and “Quit ye like men.” The values of what this meant were implied to involve, staying true to one’s moral compass, doing right by the world and most importantly talking care of the less fortunate. As the voice of the Chaplin trailed into the traditional rubrics of, “Go in peace...." I couldn’t shake this feeling of discomfort. Although, I hadn’t yet had time in a business or a corporate environment to confirm what I intuitively felt, somewhere deep inside I knew that quitting myself like a man was unlikely to be consistent with the cut and thrust politics required to get me to being CEO of a large financial institution. This duality continues today as a parent. The values of kindness, fairness and honesty, we tell our children to espouse, are completely at odds with what success looks like. I was tempted, for a moment to add, “in the modern world” but having had time, this year to indulge my history fetish, I think not. Whether Julius Ceasar, Genghis Khan or the Japanese generals who lead the Manchurian campaign, this trait is just, human. Ultimately, the values and tactics likely to get them to be a President, CEO or even Community Leader are far more likely to come from the Art of War, than the New Testament. So it is with infrastructure development and economic growth. The duality is the same. Most of us are the ultimate owners of this amorphous thing called Capital via our pensions and savings. We don’t want to see our country or continent ruined, as a by product of unbridled development. However, under the current system, the only metric that allocators and managers of money are held to account by, is short term returns. As long as this remains the only yard-stick that Capital really demands, development will continue to take place as efficiently as possible. In short, that means, at any cost, with no real regard for economic, social or governance factors. Under this scenario, the only custodians that can affect the, “How” are regulators. We all know how effective and proactive they are, even in environments where they sort of work! So what is the answer? The answer, I think, lies in having more than one measurement criteria for one’s capital. Returns are certainly important. That’s what determines whether we have enough for retirement. That said, most of us saving, are not living below the poverty line. In the same way that we save partly for retirement and partly for our kids, we also should care about the world we leave them and thier offspring. We have to realign the goals we give to the custodians of this capital. Leaving lots of money but an unequal social climate that results in civil war or hyperinflation seems somewhat pointless. The same is true about a world where the lack of governance required for basic infrastructure or spacial planning creates, over time, an unlivable city or the complete destruction of the environment and eco-system. In order to void this, I think goals must be added beyond returns on capital. Not some nefarious, make me money...oh and be nice while you are doing it. Rather that the majority of investors need to begin to require a clearly measurable impact, in terms of where there money is invested. The Development Finance Institutions have long been the lone custodians of this role but it needs to become more commonplace. Mutual fund and Unit Trust fact sheets should have graphs alongside the returns, showing environmental, social and governance impact. As investors we need to call our trustees and managers to account in the same way that we do in respect of returns. Until then, the amorphous Capital will continue to behave like Axe, from Billions or the Wolf of Wall Street. In closing, as I asked Michelle to proof this blog, she sent me this from the New York Times, Asia and Australia Edition, Jul 29, 2018 “Laos is under pressure. The deadly collapse of a billion-dollar hydroelectric project last week has exposed the default agenda of the country’s Lao People’s Revolutionary Party government: selling natural resources to foreign companies while evading scrutiny for projects that exacerbate rural poverty — or, in this case, kill innocent villagers. The government may now face more calls to incorporate social and environmental protections for rural people. “Their response could either build confidence in the government,” one analyst said, “or undermine it.” PS : As we prepare to publish this blog, I sit in our 9th floor apartment, overlooking the small (circa 10m people), ancient, Chinese city of Xi’an. We have also recently trained across the country and stayed in Chengdu and Shanghai. All of these places are at the other end of the continuum from Sihanoukville. Their 1st stage development is complete and, don’t get me wrong it is (fill in own expletive)’ing impressive. The scale of China is incomprehensible in numbers (that will be the subject of another blog). The thing is, the Chinese seem to now be trying to backfill the environmental, social and governance factors. It’s as through the agenda was growth and creation of an urban middle class at any cost. Now thats been achieved, they are trying to get rid of pollution, improve urban green spaces and improve governance. For example by contrast with Saigon’s incessant buzz of 9 million scooters, all the scooters in the cities mentioned above are electric. This is perilous because there’s no warning of their impending arrival right behind you, yes even on the pavements. Hence the Bungey’s have named them “Stealthies”, I digress... Once again my capitalist brain is blown away by the scale of it but my conscience can’t help but feel that the damage done to get here, isn’t entirely reversible, not just for China but also the planet. Capital needs a conscience.