Looking forward

A decade has passed. Today, on this particular last day of the year, we are prodded to go back to the last 10 years and revisit what had transpired. Foremost in our mind will be that big downhill ride that the world’s economy had experienced for being so brazen and gutsy, as well as foolish and reckless.

The turn of the century ushered in the collapse of the dotcoms. As much as the world was mesmerized by the invention of the telephone towards the end of the 1800s, the ripening of the Internet age electrified the business community with its limitless possibilities.

As new ventures were speedily formed to finance dotcom companies’ promise of quick and big profits, a huge bubble of bloated and empty expectations was likewise created. We all know how many people got burned when this balloon burst.

But no one wanted to step on the brakes. In trying to recover losses and spurred by more perceived income opportunities, investment and financing houses came up with the dreaded derivatives.

As Warren Buffett, chairman and chief executive of Berkshire Hathaway wrote in his letter to stockholders in the 2002 annual report, derivatives “are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

True enough, the derivatives market with its many forms of securitization instruments, created another bubble, one that eventually brought to its knees or death many of Wall Street’s giant institutions including the 158-year old Lehman Brothers Holdings Inc.

Given the extent of Lehman’s exposure to debt, its declaration of bankruptcy and filing for Chapter 11 protection under the US Constitution in 2008 caused ripples far and wide, plunging the world into a financial crisis. The global economy just sunk deeper into the abyss.

Winners

If there is any country that had managed to keep afloat despite the financial turmoil dubbed as the Great Recession, it was China. In fact, if one were to judge nations’ bottom line performances, this country and its 1.3 billion-strong population emerged as the decade’s unanimous winner.

As Europe, Japan and more so the US fought to keep their citizens from literally sleeping in the streets, most Chinese workers found gratification for still having jobs in manufacturing complexes that promised cheap products for the 21st century consumer-driven world.

China managed to pull through, chalking continued growth that was integral to feeding its huge population and keeping its economy afloat during the global crisis.

We want to remember the decade also for the rise of Facebook, Twitter, and other similar platforms that have changed how humans interact with each other. They continue though to be more social rather than financial phenomena.

The decade has also brought technology revolutions - the Smart mobile phone, MP3s, IPods and IPads (and other versions from competitors), Broadband, WiFi, GPS, tablets, flat screen LCD televisions, digital cameras, cable and HD transmission, and so many more.

Future change

The world is flirting with 3D for gaming and communications even as telephones are morphing to becoming video phones. Without doubt, inroads by technology are proceeding at breakneck speed and changing human lives beyond its wildest imagination.

In the meantime, environment issues continue to exert pressure on us. And this will only be all the more highlighted in the coming decade. The continued high cost of petroleum fuels will force the world to consider other forms of renewable energy, and this will be a good thing for the survival of Mother Earth.

By 2015, the world will pause to assess how it has fared against a set of poverty-elimination aspirations, better known as the Millennium Development Goals. This action plan was signed by majority of the world’s countries with high hopes that it will help reduce poverty for many people in a major way.

Wishes

As we make that one last step today to the new decade, let us not forget the basic elements that govern our existence in this crazy, complex world: food, water, clothing, shelter, health and love for one another.

With these in mind, I wish all a better year, a better decade, a better life. And with the same fervor but hoping not to sound too naïve, I’d like to pray and hope for a world truly at peace.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.