Editor’s Sidelines, June 2022: It’s The Economy, Stupid

“It’s the economy, stupid,” was a catchphrase famously created for former U.S. President Bill Clinton’s 1992 election campaign. It referenced the need to focus on economic matters as the world was hit by recession and rising inflation. In the emerging post-Covid-19 era, the pressing issues of lockdowns, travel restrictions and vaccinations are being replaced by more conventional ones that faced the U.S. and the global economy three decades ago: rising prices, higher rates, weakening demand and slowing growth.

As what’s old becomes new again, the period of Covid exceptionalism is now giving way to a world where basic economic principles—combined with geopolitics, tech innovation and other traditional factors—hold sway over what comes next. One example is that rising rates and tighter liquidity means tech firms are getting slammed while old-economy companies making real-world products and actual profits are back in vogue among investors.

This rise of business as usual is showing its influence in this month’s content. The June edition contains the 30 Under 30 Asia list, two rich lists (for Japan and Malaysia) and the annual Global 2000 list of the world’s biggest public companies.

In Japan, the shift is stark. Tech billionaire Masayoshi Son has fallen from his perch on the top of the list to be replaced by Tadashi Yanai, founder of the global Uniqlo retail chain, worth $23.6 billion. The global tech wipeout means Son’s two Vision Funds have reported a record $27 billion loss for the year ended in March, and Son’s own net worth has been cut in half to $21.1 billion. Overall, Japan’s 50 Richest saw their collective wealth decline by one-third to $170 billion.

Malaysia’s 50 Richest, who operate in an economy less driven by tech and more by commodity exports, still took a hit but a milder one. They experienced a 10% decline in combined net worth to $80.5 billion. The highly diversified holdings of Robert Kuok, No. 1 on the list, cushioned him with the same 10% percentage decline in net worth to $11 billion.

Perhaps the biggest changing of the guard comes in the Global 2000 list. In recent years, the rise of China’s economy meant a growing presence of its biggest companies on the list. This year, as China suffers a slowdown, the new number one is Warren Buffett’s Berkshire Hathaway, a champion of value investments that traditionally shine in periods of economic gloom. Meanwhile the former No. 1, Industrial and Commercial Bank of China, dropped to second place after nine consecutive years at the top of the list.

Finally, there’s the annual 30 Under 30 Asia list of 300 innovators from around the region. As usual, this list is a bit of an outlier. In good times and bad, this emerging cohort inspires hope as they redefine the future of business and society in Asia. They also demonstrate a knack to quickly adapt and thrive as the world takes a crash course in Economics 101.

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