STAKING out the moral high ground in Asia has been expensive for the California Public Employees' Retirement System (CalPERS). It kept the largest US pension fund out some of the world's top performing markets in 2002.
A year ago, CalPERS pulled out of stock markets in Indonesia, Malaysia and Thailand, citing concerns about corporate governance, political instability and labour standards. CalPERS' holier-than-thou withdrawal rankled many. The US$130 billion fund felt that emerging-market countries not on its investment list would see it “as an incentive to improve” things.