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Morgan
Stanley's Xie quits after critical email on Singapore
Netty
Ismail
Bloomberg
6 Oct 06
Andy Xie's
resignation as Morgan Stanley's chief economist in Asia last week
followed an e-mail in which he characterized Singapore as an
economic failure dependent on illicit money from Indonesia and
China.
Xie, who worked at Morgan Stanley for nine years,
sent the e-mail to his colleagues after attending the
International Monetary Fund and World Bank annual meetings last
month in the Southeast Asian island state. The 46-year-old
Shanghai-born economist questioned why Singapore was chosen to
host the conference and said delegates "were competing with
each other to praise Singapore as the success story of
globalization.''
"Actually, Singapore's success came
mostly from being the money laundering center for corrupt
Indonesian businessmen and government officials,'' Xie, who was
based in Hong Kong before leaving Morgan Stanley on Sept. 29,
wrote in the e-mail.
"Indonesia has no money. So
Singapore isn't doing well.'' Singapore's $118 billion economy is
recovering from three recessions since the 1997 Asian financial
crisis, and is expecting growth of as much as 7.5 percent this
year. The city-state is grappling with growing competition from
China and India, two of the world's most populous nations, where
labor costs are less than a quarter of those in
Singapore.
Mountain Summit
Officials from
the public relations departments of the Monetary Authority
of Singapore and the government's information service declined to
comment on the contents of the e-mail. They also declined to be
identified.
Xie, 46, declined to comment on his departure
when contacted on his mobile phone on Oct. 2 and said he hasn't
decided on what he will do next.
"I'm not at liberty
to comment on anything,'' Xie said. "I'm in Guangzhou and
I'm taking a break on top of a mountain. It's quite nice here.''
Prime Minister Lee Hsien Loong said in September that
Singapore's economy may sustain annual growth of 3 percent to 5
percent for the next 10 years to 15 years as the country expands
industries ranging from information technology to tourism.
"To
sustain its economy, Singapore is building casinos to attract
corruption money from China,'' Xie said.
Singapore is
ending a four-decade ban on casinos. The government plans to
triple tourism revenue to $19 billion and double visitors to
17 million by 2015.
Morgan Stanley confirmed the contents
of the e-mail and said the New York-based firm doesn't elaborate
on the reasons behind employee departures.
'Strong
Supporter'
"This is an internal e-mail based on
personal suppositions and aimed at stimulating internal debate
amongst a small group of intended recipients,'' said Cheung
Po-ling, a Hong Kong-based spokeswoman for the world's largest
securities firm by market value, in a written statement. "The
e-mail expresses the views of one individual and does not in any
way represent the views of the firm.
"Morgan Stanley
has been a very strong supporter of Singapore and has a great
deal of respect for Singapore's achievements,'' Cheung said.
In
the U.S., Wall Street analysts have lost their jobs for
recommending shares of companies that they privately disparaged.
Citigroup Inc., Merrill Lynch & Co. and eight rival
securities firms agreed in 2003 to pay $1.4 billion to settle
charges that analysts published misleading stock research in a
bid to win investment-banking business.
Dinner
Party
Morgan Stanley ranks sixth among merger advisers
in Singapore this year, handling $1.5 billion of deals, according
to data compiled by Bloomberg. It advised Temasek Holdings Pte.,
the Singapore government's investment company, in the purchase of
a 9.9 percent stake in Mumbai-based Tata Teleservices
Ltd.
Morgan Stanley, the No. 3 arranger of stock sales in
Asia outside Japan, hasn't underwritten a Singapore deal this
year, Bloomberg data show.
"I tried to find out why
Singapore was chosen to host the conference,'' Xie wrote in the
e-mail. "Nobody knew. Some said that probably no one else
wanted it. Some guessed that Singapore did a good selling job. I
thought it was a strange choice because Singapore was so far from
any action or the hot topic of China and India. Mumbai or
Shanghai would be a lot more appropriate.''
At a dinner
party hosted by Singapore Prime Minister Lee Hsien Loong, "people
fawned him like a prince,'' Xie wrote.
"These Western
people didn't know what they were talking about,'' he wrote,
describing the praise for Singapore as "nauseating
pleasantries.''
Xie, who said in September that the U.S.
economy may fall into a recession in 2008, worked at the
corporate finance division at Macquarie Bank in Singapore before
joining Morgan Stanley in 1997. He earlier spent five years as an
economist with the World Bank, overseeing the bank's programs in
Indonesia and other countries in the Asia-Pacific region,
according to the New York-based firm's Web site.
Xie holds
a doctorate in economics and a master's degree in civil
engineering from the Massachusetts Institute of Technology in
Cambridge, Massachusetts.
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