Crazy rich Asia: The risks of rising inequality in the age of social media

Asia is now home to more billionaires than North America – but Asia’s wealth gap is among the largest in the world.

“I can tell you one thing: These people are richer than God” exclaims one character in the movie ‘Crazy Rich Asians’ – an adaptation of the bestselling novel by Kevin Kwan. Set largely in the city-state of Singapore, the movie showcases the fictional life and times of Southeast Asia’s unreasonably rich society. Singapore may be land scarce but lacking in rich people it is not. Since early 2000s, the total wealth of Singapore’s billionaires hasn’t stopped growing. Home to 37 billionaires in 2016, Singapore has the 3rd highest number of billionaires in the Asia-Pacific region and 6th globally.

Malaysia, Indonesia, Thailand or Vietnam also count their own elite class of billionaires and uber-rich investors with growing political influence. Asia’s dynamic economy has produced a new billionaire every other day in 20161. Offering an increasingly common stereotype, Asia’s ultra-rich families send their children to the world’s top boarding schools overseas and live in gated communities surrounded by endless designer labels, private jets and platoons of servants.

Year on year, the Credit Suisse Global Wealth Report2 takes a granular look at the assets of households in 173 countries. Like a high-resolution photo, it composes the clearest possible picture of global wealth, offering a perspective on the trends and habits of the world’s households – which countries have the poorest citizens, which count as the wealthiest, and the growing global divide between both ends of the spectrum. The report clearly shows that beneath the shiny facade of Asia’s rapid economic growth looms inequality. Thailand and Indonesia are ranked3 as the third and fourth most unequal countries in the world. Another commonly used measure of economic inequality, the GINI index, indicates a similar trend. Countries with high scores – which signal high inequality – include Thailand, Singapore and Malaysia. Overall, ASEAN’s inequality is lower than China’s but higher than India’s.

But economic inequality itself is not the problem. The important issue to consider is the level of people in poverty. The fact that some people have significantly more wealth makes this no more of a problem than if those people were less wealthy. Another important point is that the economic gap between rich and poor becomes even wider when the inequality is made visible.

Asia’s widening economic disparities are more visible than ever and it may have damaging side-effects

Firstly, economic disparities are most noticeable in cities where rich and poor live side by side. In Hanoi, Jakarta or Bangkok bicycles and motorbikes compete with Mercedes and Range Rovers. Walls are going up, dividing high-end property developments from the small one-room houses. Judy Baker, a World Bank urban specialist explains that, “widening inequalities can create social divisions in society and it’s much starker in cities where you have the wealthy living right next door to the urban poor in small spaces. A growing number of people who move to cities lack access to basic services, housing and jobs, which is creating growing resentment over the gap between urban rich and poor.”

Youth are the most affected by urban poverty. Youth unemployment in Asia is more than double the rate of the total working population and working poverty is significantly higher for workers in younger age brackets. For those young people who do have jobs, the issue is one of quality. Many young men and women simply cannot afford to be unemployed and are obliged to take up jobs with poor pay, poor conditions and poor prospects. Without decent work, young people struggle to maintain dignity, build a family and invest in their future. The idea that young people can “bootstrap” themselves from poverty to wealth – within the current system – is therefore tragically naïve.

If youth unemployment rate is at its highest and wealth inequality keeps widening, should we expect a growing resentment and social unrest? An important aspect to consider is the nature of the wealth inequality in Asia. Are the rich getting richer while the poor and middle class stay the same? Or, are the rich getting rich at the expense of the poor? When the latter is true, the risks of resentment, social protest or political instability are much higher.

According to Winnie Byanyima, Executive Director at Oxfam International, “Inequality of the levels we are seeing in Asia is not simply the outcome of talent, hard work and healthy competition. Over the last 30 years, the phenomena of unchecked deregulation, privatization, financial secrecy and globalization has allowed well-connected individuals to use their power and influence to capture an increasing share of the benefits of economic growth. On the other side of the ledger, the benefits for the poorest have shrunk.”

Just as populism has been fuelled by resentment over inequality in Trump’s America and in Brexit Britain – the 36 million Southeast Asians clustered under a poverty earnings line of $2 a day are easy prey for demagogues.

Rising inequality, youth unemployment and social media: What could go wrong?

Each year, the World Economic Forum’s Global Risks Report assess 30 risks as well as 13 underlying trends or drivers. Over the last 2 years, inequality was ranked as the most important driver of global risks and unemployment and social instability were the most important pairing of interconnected risks. The forum warned there was a “lost” generation of young people coming of age in the 2010s who lack both jobs and adequate skills for work, fuelling frustration. This could easily drive social upheaval, as seen already in a wave of protests over inequality and corruption from Thailand to Philippines.

Another important driver is the impressive growth and disruptive role of social media. The Digital Report from the creative agency We Are Social provides a compelling overview of all digital trends around the world. More than half of Southeast Asia’s population now uses the internet: the number of users has grown by more than 30% – or 80 million new users – in 2016 alone. Mobile internet use appears to be driving much of this growth, with most new internet users in the region now mobile-first, and often mobile-only. Social media users in Southeast Asia also grew by 31% in 2016, with 72 million people using social platforms for the first time in the twelve months up to January 2017. In Myanmar for instance barely one-quarter of the populations are using social media today, but one should remember Facebook was still blocked 5 years ago. Since restrictions have been lifted, social media use has skyrocketed, to the extent that Facebook now records 14 million users in the country. Mobile social media continues to grow even more rapidly around the region too, with the number of monthly active users accessing social platforms via mobile devices up 34% year-on-year.

There is no doubt that social media has brought change to politics. From the waves of protest after the 2008 financial crisis, to the Arab spring of 2011, there is a general feeling that social media has something to do with political mobilization. The political significance of social media activity and social networks is not as largely debated in Asia as in other parts of the world. But with new technologies and improved connectivity, waves of digital mobilisation should occur in the years ahead – leading to many questions regarding social media’s role in non-democratic countries.

In China, citizens are already using social media to expose government corruption, showcasing state officials wearing luxury watches they couldn’t possibly afford on a public-sector salary. In Philippines, on September 2017, thousands of Filipinos went on the streets to mark the declaration of Martial Law 45 years ago. Some millennials chose to make noise on social media, using Facebook and Twitter, to broadcast real-time the situation on the ground.

The book Political Turbulence investigates the relationship between social media and collective action, and reveals that social media allows new, “tiny acts” of political participation (liking, tweeting, viewing, following) which can scale up to large mobilizations, such as demonstrations, protests or campaigns for policy change. But according to its authors, they almost always don’t. Only a few may give rise to huge mobilizations or revolutions.

A group of faculty members at Harvard explains that somewhat limited impact by the fact that “social media makes mobilization too easy”. “Digital networks alone are no substitute for traditional organizational frameworks (…) It used to be that you had to get organized before you mobilized. When mobilization comes first, it seems that it can be difficult to build popular organizations afterward. The presence of energized and engaged citizens can constitute a powerful moment in time, but without organization, 140 characters cannot alone drive revolution.”

In most parts of Asia, resistance and criticism by the public is for now still prone to censorship. In Thailand, Vietnam and Malaysia the government is increasingly suppressing online freedom. The Technology Crime Suppression Division of the Thai police intends to monitor the country’s most popular chat site, Line, which has 15 million users in Thailand. In Vietnam the Decree 72 bans on posting news articles on blogs or social websites so that the site is used only for “personal” sharing. The government has even been blamed for cyber-attacks using bots on some bloggers causing them to move their servers outside the country.

In a context of rising economic inequality, there is a need for greater social inclusion and political engagement. Social media platforms have an important role to play to closely monitor attempts to propaganda, develop new ways of identifying fake accounts, educate at-risk people about how to keep their information safe, and support civil society programs around media literacy. Meanwhile, the only thing we can predict with certainty is that unpredictable things will happen, and that social media will be part of our political future.

1. According to a UBS and PwC’s Billionaires Insights report


3. According to the Credit Suisse Global Wealth Report (2016)