Capital Brokers in Emerging Markets

Dramatic shifts in global financial flows over the last decade point to a decline of Western influence and a rise of East and Southeast Asian power in international financial markets. In particular, two major events have pushed scholars to rethink the dominance of Western nations in global finance: the 2008 financial crisis that rocked the United States and Europe, and the concurrent economic rise of East Asia. The 2008 global financial crisis reversed the fortunes of leading global cities like New York and London, which have struggled to retain their lead in relation to Singapore, Dubai, Hong Kong, and Shanghai (Ong 2011). These market transformations suggest that the rules of the game—a game that is now full of new players—are up for grabs and, in order to understand the emerging new rules, we must examine the culture of how investors broker business deals on the ground. This paper examines how highly speculative capital deals are brokered in newly emerging markets with a diverse set of Western and East Asian investors. While economists have illustrated how global capital moves around the world, foreign direct investments are not disembodied flows of global economic capital but, rather, they are the result of capital deals brokered by people embedded in Southeast Asia’s newly emerging markets. This study compares how Western investors, constrained by the Foreign Corrupt Practices Act, navigate the local market and compete for investment projects with East and Southeast Asian investors, who operate from contexts that are not subject to that law. I examine how brokers embed themselves in these local economies as they calculate the potential risk and rewards for their investments.