the superstate that never was
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Howdy howdy let’s get rowdy. A quote from LKY to start:
There is a glorious rainbow that beckons those with the spirit of adventure. And there are rich findings at the end of that rainbow. To the young and the not too old, I say look at the horizon, find that rainbow, go ride it. Not all will be rich; quite a few will find a vein of gold; but all who pursue that rainbow will have a joyous and exhilarating ride and some profit.
Here’s the format of today’s email:
Part 1: Maphilindo: The superstate that never was
Part 2: Jason Sedawie on Compounding Curiosity
Part 3: Bonus Quirky Content - Something to Read, Watch, and Listen
What was Maphilindo?
Maphilindo was initially proposed as a dream of uniting the Malay peoples, who were seen as divided by colonial borders. The plan was to combine the resources of the nations in the Malay Archipelago into a single country. They envisioned a united Malay race, combining the Phillippines, Indonesia, and Malaysia.
Had Maphilindo happened, it would have had profound impacts on the economic, political, and military situation in Southeast Asia. And (naively) if you combine Indonesia's, Malaysia's and the Phillippines' current situations, you may get a small sense of what Maphilindo could have been...
Economics of Maphilindo
Economically, Maphilindo would be a powerhouse not only in Asian region but also the world. It would be one of the top 10 economies globally with a yearly GDP of ~2 Trillion USD rivalling Brazil (2.06 Trillion) and Italy (2.09 Trillion).
Tourism-wise it would replace Thailand as the most popular tourist destination in SEA.
Demographics of Maphilindo
With over 400m people, making it the third-largest country in the world. Would also possess the highest Christian and Muslim populations in the world, with around 300m Muslims and 200m+ Christians. The growth rate would also be pretty positive compared to other ASEAN countries as shown below:
Military of Maphilindo
This is where it would have gotten spicy. Maphilindo would play a huge role in global trade as they control The Malacca Strait, The South China Sea, The Torres Straits, Celebes and Sulu Seas. They would also possess the 8th largest military in the world with a combined 600,000 active personnel. Not too shabby!
The South China Sea dispute would be an interesting one. If Malaysia and the Philippines have a combined claim, might make it a stronger argument in the South China Sea argument.
By all reports though, the US was on board with the idea of Maphilindo. The Kennedy administration appeared to have given some encouragement to Maphilindo mainly because it was hoped that it would help “Indonesia to steer the forces of its nationalism into constructive channels, to turn toward economic development and towards picking up some of the responsibility for peace and security in the region.” The US had hoped that Maphilindo would reduce the danger of Indonesia, the most populous Southeast Asian country, from turning communist. Sounds familiar…
Why didn’t Maphilindo happen?
While Maphilindo was described as a regional association that would approach issues of common concern, it was also perceived as a tactic employed by the Philippines and Indonesia to hinder the formation of the Federation of Malaysia as Malaya's successor state.
The Philippines had its own claim over the eastern part of Sabah (formerly British North Borneo), while Indonesia protested the formation of Malaysia as a British imperialist plot. And then the final nail in the coffin with the newly formed Malaysia, Sukarno (Indosia’s prime minister) adopted a policy of Konfrontasi (confrontation), and just like that, Maphilindo was dead in the water.
Could Maphilindo have worked?
It could have. But if I was a betting man I wouldn’t be loading up on it to succeed. It’s probably one of those things that in theory sounds all nice and rosy, but in practice, it’d be a shitshow from start to finish. Where might it have gone wrong?
Culture: Managing and merging the cultures would have been hard. The below meme pretty much sums up the dynamic and why the Philippines may have struggled to fit in :(
Language-wise, Bahasa Indonesia comes from Bahasa Malaysia, so that difference is manageable. But Filipino is a whole other kettle of fish. Maybe the official languages would have to be Bahasa Malaysia, Tagalog and English, similar to what Singapore does now by having English, Mandarin, Malay, and Tamil as official languages.
Logistics? Good luck managing the 25,000 islands in the Malay Archipelago. Indonesia alone has around 6,000 inhabited islands. The Philippines has *only* ~2,000 inhabited islands.
Who would have lost in this situation? Minorities would be my bet. I don’t know, a superstate formed along Malay lines I don’t think is particularly bullish for those who aren’t Malay:
One criticism was that it was racially-inspired being formed along Malay lines. Various ethnic groups especially the Chinese especially in Singapore and Malaysia opposed it. The ethnic Chinese feared rumours that the MAPILINDO had “sinister implications” against them. This was denied by the Malayan Chinese Association President Tan Suw Sin.
- The Dream of Malayan Unity: President Diosdado Macapagal and the Maphilindo
The Dream of Malayan Unity: President Diosdado Macapagal and the Maphilindo [Link]
Maphilindo, the would be superstate of Asia [14 mins]
Jason Sedawie on Compounding Curiosity [Transcript] [Apple Link]
Jason is a Senior Portfolio Manager at Spaceship, and a great bloke to boot! Spaceship has around $1.2 billion funds under management so we cover Jason’s investing style, his mental models, and the Where The World is Going philosophy. I’m still kicking myself that I get to have these conversations!
My takeaways and lessons:
Know the incentives!
“think about the business news. They’re there to drive ratings. You think about stockbrokers. They’re there to get you to trade. And fund managers, most of them are there to build a business. It’s sort of linked to your returns, but they’re trying to build a business. So everyone’s not exactly aligned with your long-term wealth building. And I think that’s something to not stray from just that whole incentive structure that a lot of people are trying to get you to trade, to be active because that’s how they make money, but that’s not necessarily how you can make a lot of money.”
Use a filter for content.
“10, 15 years ago stockbrokers were like the bees knees, because it was all about information. The information didn’t really flow as easily as it does now. Now it’s just, there’s stuff everywhere, podcast, social media, you name it. For me, it’s more about filtering and it’s understanding. It’s not just news. News is just news. It’s just short term. Is this going to help me understand the company or improve my decision-making over the long term? And there’s lots of stuff you can read, but I filter it. Will this news matter in a year or two’s time? And if you use that filter, most things you can throw out.”
Different perspectives for better decision making
“learn the basics of each field. It’s difficult, but just having that different perspective will help you make better decisions and help you make better investments. I guess the benefit of good decision-making, doesn’t just help investing, it helps a lot of things like choosing what you want to do in life.
Just thinking [in] probabilities and just building up these mental models because I think they’re really key to helping you learn.”
Something to read: The Legendary Lao Gan Ma: How Chili Sauce Billionaire Tao Huabi Became a ‘Chinese Dream’ Role Model [Link]
Man, Tao Huabi’s story is unreal. She’s the creator of Lao Gan Ma, a crispy chilli oil that you probably know, you just can’t remember it off the top of your head! Her story is crazy and super inspirational, whatta legend.
Perhaps there is no better person to embody the Chinese dream than Tao Huabi, who has experienced life in China from so many different angles. A poor farmer’s daughter, a young struggling widow, a migrant factory worker, a loving mother, a roadside peddler, a business manager, a loyal Party member, and even an unexpected fashion icon – Tao Huabi has seen and been it all. There is one thing she will always be: China’s chili sauce queen.
And Tao Huabi’s marketing strategy?
The company rarely advertises, there are no celebrity endorsements, no social media accounts or campaigns, the website hasn’t been updated for years, and the Lao Gan Ma packaging has never modernized: it’s been the same old-fashioned logo for decades. It is a marketing strategy that follows Tao’s no-nonsense line of thinking: if your product is good enough, people will buy it again. “We’re selling the flavor, not the packaging”
Something to watch: What Eating the Rich Did For Japan [18 mins]
Spoiler alert: Not good.
Something to listen to: The Khmer Empire - Fall of the God Kings [Apple Link]
It's a long episode, but extremely well made and researched. Hot take: Didn’t enjoy my holiday in Cambodia. It’s been the only place I didn’t have a blast in. Happy to give it a second crack though. I wish I had listened to this before heading to Cambodia, would have given me a greater appreciation for the place. Bonus: This is my monthly rant wishing more podcasts had transcripts.
Bonus links that don’t fit anywhere else:
Red Roulette: It Sucks to be a Chinese Billionaire [Link]
This is one spicy meatball. Bought the book straight after (there’s a corresponding podcast episode). Not super related to the topic at hand, but this quote stood out: “We Western reporters are beneficiaries of the closed Chinese system. If the Chinese system were open, we would be nothing because it's the Chinese reporter's country, they understand it a hundred times better than we do, and they can just run circles around us. But they can't because of the system and that leaves it open for schmucks like me.”
The history and future of sustainable soy in China [Link]
I’ve previously done a mini dive on Vitasoy, so this is some valuable extra reading: “just as Pu’er tea has built up a high-value reputation for which consumers are willing to pay more, Heilongjiang soybeans now have the opportunity to develop a similar status in plant-based proteins, including tofu.”
CbK will be on break for next weeks issue, so you can expect me again gracing your inbox on November 10th. So until then, have a good one!
- Maphilindo Man