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Why Risk in Asia?

If you live or do business in Asia, you are transported in a whole new world of people and cultures with different codes and behaviours.

You can not just cut-and-paste, say a European mindset, to succeed, understand or just survive in here. You need to “upload the program” in your brain to be able to process who and what is going on around you.

In this blog, we will share with you pieces of news analyzed through the prism of an Asian-European perspective, as my profession involves daily interaction with all country nationals as head of non-life insurance advisors firm since 1989.

Most of our posts will have an angle that you will not read in the press written in English news, simply because our information are straight from the locals in chinese, Vietnamese or asian language through newspapers, blogs, forums, lawyers disputes, surgeons, judges or police reports. Speaking the language and being in the claims reimbursement business help us tremendously in providing insider content.

This introduction to riskinAsia blog content has 3 parts:

#1 Understanding risk, ‘Trust me I am an insurer’

#2 Asia specific environment for decision making then the topical sections you will read about,

#3 4 risks to consider through our local lens + some personal development skills you need when in Asia + Success tips we will share to help you make ‘Asia-educated’ decisions. Because we like the idea of Asia lovers not to be left deceptive.

A- we will start with giving you a framework for understanding risk exposition and perception, with concepts taken from:

– best-seller ‘The black swan: the impact of the highly improbable’ by Nassim Nicholas Nassim Taleb,: likely occurrence, maximum impact.

– the works of behavioral specialist ‘Predictably irrational’ by Dan Ariely and ‘Think like a freak’ by economist Stephen Levitt how statistical and cognitive biases lead to wrong weighting of risks.

– But also the Johari window explaining cognitive psychology biases in the Known | Unknown matrix made popular by Secretary of Defense Donald Rumsfeld justifying Iraq war. Read more

B- We will give you a brief idea of the software you need to upload -normally by pieces, reading  and experiences- to decypher 3 main area of opacity for foreigners: the people, the circumstances and the traditions (culture, religions, politics…) those will be our #5 Culture shock and #6 Success in Asia sections. Read more

C- Finally a quick review of 3 main common risks anywhere + a 4th risk, barely relevant in western countries : our 4 sections

#1 Life & health | #2 Business & Financial | #3 Partners at large risk | #4 Time & Timing

A- TRYING TO FRAME THE RISK WITHIN BOUNDARIES

Trying to frame and calculate the risks is a full time job. Feared for its opacity and complexity by insurance professionals, it is delegated to mathematics and statistics specialists called insurance Actuaries. It’s them who calculate statistically at what average age a Chinese smoker will die and hurricanes will hit the Philippines and pull out the insurance premium to be paid for the risk level so when the worse happen, the insurer do pay the claim and stays in business.

THE RISK MATRIX

At our level, we may have a gut feeling the higher the likelihood (or the probability of occurrence) we should stay away. But as we are humans and like a little bit of spice, of betting against the odds we can play when the stakes are low. When we say it is not too risky -even if the probability is high- what we are really saying is I can afford to lose this. When you step into the casino with 200$ to play, you know why the casinos are rich because probabilities are against the players, but you still go for your lucky day. The same when you go for 20km run without preparation, having a bad day recovering or injured is a ‘being alive and human’ choice.

THE COGNITIVE BIASES

We know when in low energy level or highly emotional states -asleep, furious, jealous, in love- we act, decide or promise things we would not do normally. This is when furious you hit the policeman when he is fining you or in love you swear to buy her a 5 carats diamond ring. Sometimes it is just wrong maths logic, like when 3 neighbours just buy the latest BMW sports car and they confirm they are very happy and it is reliable. Then you go into buying the same on 3 people’s recommendation, meanwhile reviews says that 8-out-of-10 clients are dissatisfied.

I recommend the reading of Dan Ariely’s ‘Predictably irrational’ who lists most cases when we act like a fool, risking health or money as a result of not mastering our ‘monkey brain’.

The same goes to cognitive biases when John -with suspected cancer- ask facebook groups ‘which the best hospital with good value-for-money’ in town and most people point to Cho Ray (the biggest) where they have been treated for a broken arm, while the designated hospital may not have oncology department.

THE UNKNOWN – KNOWN MATRIX

Apart from the human biases there is the army of experts giving advices in Social Media based on casual reading or experience.

The GREEN QUADRANT is common knowledge.

After some time, you move upwards and sideway to the ORANGE QUADRANT. After some years (5+) you start going upwards to the Elders because of reading, exchanges and experiences. Or sideway if you learnt to read and speak the local language.

The RED QUADRANT is normally equal land of discovery for all where something unpredictable can happen and wreck havoc. In fact, we/westerners have a little economic advantage with a little crystal ball due to our economic and technological advance, where we have experienced the future of Asia that has already happened in Western economies.

This advantage is largely balanced in favor of the Asian by western ignorance and disbelief of the codes for decision.

THE 3 MAIN UNKNOWN INCREASING OUR RISKS

As it is our wish to improve understanding of Asians and Western/foreigners at large, we will

THE PEOPLE and their reverse centric approach to self realization

THE CULTURE and holistic view of the world and the balance of the universe

THE ENVIRONMENT, freedom and happiness can only start when all is known, understood and accepted with a heavy dose of empathic feeling.

ASIAN PEOPLE: If you cut-and-paste your long-term experience as Western psychologist when you relocate in Asia, sit long and tight for a new chapter of your education.

If they are Vietnamese, just take a deep and closer look at behaviour patterns of your lady, her father, her mother, her siblings, the maid, the nanny, her colleagues, her manager, the district police, the doctor, the waitress or the immigration officer for your resident permit… Is all what happen crystal clear about what is said and the result you can expect?

The Asian are known for hiding sentiments and one is always in a second-guessing mode because ‘we say things that you should know what it really means if you care’. Sounds familiar gentlemen?

CULTURE SHOCK: Actually you will never see or hear culture shocks publicly unless You provoke it. Asian are into consensus and agreement in public. It will always be a ‘YES’, anyway to reach a public ‘nice time’. Then what happens next will tell you what kind of Yes, you had. ‘Yes I heard’, ‘Yes I understand’, ‘Yes we will see later’, ‘Yes you will ask my boss’, ‘Yes, you go to hell’… The hard talk happens in the backstage and off-record.

Western do the rational and legal stuff 100%, Asian do the holistic way: an agreement is a whole… a all lot of things make the whole. In Asia decisions are altered by another 50% of ‘irrationality’. You name it; call it Education, parents and family, cult of the ancestor, geomancian, vietnamese zo(o)diac, religions, buddhism, taoism, numerology, the shape of your ear lobes, and I almost forgot Facebook friends and  the ghosts re-incarnation…

Those will be appearing in our section #5 Culture

THE ENVIRONMENT: beyond the culture shock, I have a saying ‘understand and live easier, accept and live happier’.

We have all heard of casts, families, arranged wedding, ex and current royal family ties, place of birth, University degree (or not), degrees/positions by cooptation, communist or capitalist, monopoly, cronyism, re-education camps, old and new regime… for most of us those are words without a deep connection to the facts. Think about it, what is in common between a husband and wife, the former lost everything as a boat-people but managed to get Harvard degree by way of a scholarship to a USA Ivy league boarding school and the latter wife graduated from Hanoi language University, lost parents and siblings while studying under the candlelight in a bunker during US bombings? Experience and aftermath only can tell, no book nor movie can create enough empathy for those feelings.

RISKINASIA.COM BLOG PURPOSE: “the purpose of life is to be happy”, the Dalai Lama

Once we understand the framework of ‘riskinAsia’, our aim is to be very practical and hopefully entertaining when possible with a view from an Asian ‘Local’  insider and, at times, professional -remember I am an insurance advisor by trade- perspective. Most of which you don’t get in expatriate social network forums for many reasons -including barriers such as censorship and language- but also not having the ‘long tail experience of older generations or the experiences of the rare 1-off events.

RiskinAsia.com is a blog to discuss and create a community of like-minded people willing to understand Asian but also to live in harmony and successfully in Vietnam/Asia ‘the Asia of Asia’

Articles issued from the press and real stories may be short or long and will be filed under 6 sections -sometimes multiple sections-

When you travel or relocate to Asia, you certainly want to review your decision criteria on past experiences and new ones:

#1 Life & health, for sure being admitted to a local hospital for instance raise all kind of questions apart from the language. You name it: generic or genuine medicines? surgery or acupuncture/ western or chinese plants? Local trained pediatrician or western experience? VND100,000VND or USD100 doctor’s consultation? Read More

#2 Business & Financial, for sure for most countries the rules and business laws are in the making. Be it, licenses, new business sectors for Asia, wordings, expectations of various parties that are not usually in Western business laws makes any deal a riddle when it comes to forecast the outcome at short, medium or long-term. Just think about it: Vietnam private companies laws started just 15 years ago (in 2003), the real ‘revamped’ version (due to many failed parts) was 2008, just 10 little years, not to mention the labor laws still in the making if you look at foreign employment regulations.

#3 Partner’s risks, what is amazing is the number of partnership failures, really big failures leading to bankrupcies and at times to suicide. We say partners at large can be the biggest deception of your life: the country lawmakers, your local partners, landlords, taxman, lawyers, judges, police… but also your boss, supplier or your partner-in-life (local or expatriate).

#4 Time & Timing, but one overlooked risk I have had plenty of time exploring since 1989 back in Asia developing countries is the notion of time and timing for all project endeavors. Asian and westerners value their time differently, making the timing, planning and scheduling very different and at times opposite. For instance, how many real estates projects for just 1 tower have been delayed for ages, while Vingroup built the Times City and VinHomes ‘district’ in just 5 years from signing the deal, evictions of the residents, to completion.

#5 Culture shock, each country have their own set of culture, we will focus on Vietnam the country we know the most. Over time some contributors/friends across Asia may bring to light other countries cultures like Cambodia, China, Hong Kong, Singapore or Japan.

#6 Success in Asia sections, as mentioned before the blog is not about finger pointing, ‘we’ Vs ‘them’ but about how this blog can make us more successful and in turn, happier by better understanding and acceptance of our Guest country people, culture and environment.

Finally to quote the Dalai-Lama and buddhism philosophy “the purpose of life is to be happy”.