The wheels of trade and industry continue to grind

It’s been ten months since the global economic tempest has washed over even the most stable of economies across the globe. Much has happened since then. The process of recovery has started to show positive signs for some economies, but certainly the fiscal crisis has not bottomed out. It would be interesting to revisit some of scenarios that figured prominently in this debacle, the companies that played major roles and the people behind these companies, and the countries that are catching up with the tail end of this devastating hurricane.

The biggest financial institutions that lorded it over at Wall Street fell to their knees in one fell swoop. Blue chip companies that have been there for generations like Lehman Brothers, AIG, Bear Stearns, Washington Mutual, Fannie Mae, Freddie Mac and many others just folded up, dimming the lights on Wall Street. One of these securities-trading firms, Goldman Sachs, though has rebounded quite impressively. The US government bailed it out to the tune of billions of dollars in October of last year. By this time, Goldman Sachs has repaid the $10 billion that US taxpayers gave the company last year, with interest. In the first and second quarter of 2009, it earned for itself a staggering net income of $5.3 billion, surpassing even its track record of old before the financial meltdown happened. And then its stock more than tripled, to the astonishment of its share holders. The astute Warren Buffet who did not seem to be touched by the global fiasco, even boldly put in $5 billion of his money to Goldman Sachs.

The unflappable Wall Street couldn’t believe it.

It just goes to show that with the right stewardship, a huge bungle can still be righted. Goldman has not forgotten to reward its loyal employees and has put them at the top of its priorities, after paying off its liabilities. Their top five officers have declined bonuses, but Fortune magazine has it that some 953 employees of Goldman stood to earn about a million dollars each in bonuses last year, and at least 78 executives each got $5 million or more, paying out a total of, hold your horses, $4.82 billion in bonuses. Talk about whopping bonuses.

AIG, on the other hand, just received another bail-out of $30 billion about five months ago, and the giant insurance firm does not look like it can stand on its own two feet yet. The US government now owns 80 percent of the company, so it is closely watching the $170 billion it gave AIG to keep it from all together tumbling down. If Goldman generously gave $4.82 billion in bonuses to its employees, it did so after paying off its debts. AIG shocked the world by paying out $165 million in retention bonuses to its executives, when it clearly was not out of the woods yet. The Treasury Secretary was so furious he asked his legal team to try to wriggle out of the bonus pledge to the top executives of the company. No deal. They couldn’t cancel out on the promise.

Comes now another rosy picture out of the gray mess that this global fiasco has left us. The US automobile industry was among the hardest hit when the crisis struck last year. Ford, GM, and Chrysler had to fight for survival, and in the end, GM and Chrysler had to beg for government loans to bail out their reeling companies. Ford opted not to, and with astonishing operational discipline and some strategic moves, Ford has emerged as the lone survivor of Detroit. Mind you, it is not out of the woods and like any other US auto company, is still bleeding dangerously. However, with cunning engineering, it is slowly finding its way out. By 2010, it will be selling small cars. They have disposed of Jaguar and Land Rover which India’s automobile giant Tata bought in 2007.

On another front, if Iceland distinguished itself in this financial meltdown as the country that became a hedge fund, Ireland is close at its heels. The reversal of fortune came a little late, but the country is feeling it now more than ever. In the last ten years as a member of the European Union, Ireland has been enjoying tremendous growth, mainly from its exports of electrical equipment, components, plastic molding and even pharmaceuticals. Viagra, Lipitor and Botox are among the drugs manufactured in Ireland. Among the big foreign investors with established presence there are Intel, HP, Microsoft, Dell, Pfizer and Apple.

Now, this erstwhile fastest growing major member country of the E.U. has its worst fiscal shortfall in over a decade, and is looking at 15 percent unemployment by next year. Just a couple of years ago, they were on a hiring binge, there was an unprecedented construction boom. Now, Apple has moved its production of circuit boards to Indonesia and Eastern Europe where labor is cheaper, Dell has moved its computer manufacturing operations to Poland and its lap top to Taiwan. After 14 years of immigration, there is now an exodus of workers, and the Irish government is in need of international bailout, dashing confidence on its competitiveness.

In Asia, the gaming business has not been spared. Macau, which only last year was teeming with people, is feeling it too. Many Filipinos working in the glitzy hotels have been laid off, and if you check, it’s easier now to get bookings at the Venetia. Of course, Las Vegas is bleeding quite heavily, and work has been abandoned in some high-rise hotels and casinos, with the smaller ones just folding up or swallowed by the few hardy steadfast gaming establishments.

However, here at home, we’re all set for the multi-billion dollar Bagong Nayong Pilipino-Entertainment City Manila, a project started last April 2008. The stretch of prime land where this fully-integrated entertainment complex will soon rise is the land between Roxas Boulevard and Manila Bay adjoining Mall of Asia complex.

Entertainment City will be all of 120 hectares of premium land, and development is estimated to be in the vicinity of $15 billion, which makes it to date the most ambitious and most expensive project in the country. There will be six hotels, amusement parks, shopping malls, a stadium and several convention halls, race tracks, and of course gaming centers. There will be residential villages as well, and an educational and cultural complex. In other words, it is a virtually a self-contained city in itself.

The stakeholders who have firmed up their commitment to join the consortium of developers of Entertainment City are known in the global gaming and entertainment arena for their mega bucks. Each developer will invest at least $1 billion in the project. One of the proponents, ARUZE Corporation has been operating in Las Vegas and Macau with ties to the Wynn Resorts and will construct the Okada Resort Manila Bay which has about 2000 rooms and 300 VIP suites.

Our own SM Investments Corporation will also put up a luxury hotel and sports arena at their Mall of Asia which is adjoining the Entertainment City complex.

Malaysia’s Genting Berhad Group and its partner Star Cruises will build several hotels, a world-class theme park and a museum. Word has it that they also plan to build a tower which they claim will be world’s tallest tower.

All these are supposed to boost our country’s thrust to be the top leisure destination in this part of the globe. Very ambitious project indeed, but if we can pull it through, it just might propel us out of the rut we’re in right now.

Mabuhay!!! Be proud to be a Filipino.

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