New optimism

HONG KONG – Okay, okay, many of us got egg on our faces. Kabul has been liberated. We can again see the faces behind the burqas and beards. The Taliban is on the run, and if the mullahs want to sit it out in Kandahar waiting for the bombs to hit them then it’s fine with us. So far, the worst fears about the victorious Northern Alliance have not yet happened.

Best of all, with a $25-million price on his head, Osama bin Laden may finally be found. He has announced that he’d rather die than be captured, and he’s likely to get his wish – it’s no secret that the Americans prefer to see him killed than captured.

The swift developments have buoyed markets in America. How soon will the new optimism reach Asia? Even in the United States you can sense great caution in the optimism. The attitude seems to be that the world is safer – for now.

* * *

The fallout from the Sept. 11 terrorist attacks continues to wreak havoc on the global economy. Here in Hong Kong, which is being marketed as the "City of Life," 8,400 more people found themselves jobless in the three months to October, making the number of unemployed hit 194,000 for the first time since February last year. Underemployment is also up, according to figures released by the Census and Statistics Department.

The South China Morning Post reported that Hong Kong analysts see the unemployment rate peaking at 6.5 percent early next year, when restaurants that are faring badly usually close down after the Lunar New Year. The newspaper reported that when Japan Airline announced openings for 30 flight attendants, 2,000 applicants responded, with the queue forming as early as 6 a.m., three-and-a-half hours before the start of the interviews.

This is bad news for Filipinos here, most of them working as maids. Hong Kong residents are reportedly being urged to hire locals as domestic helpers. Pinoys are protesting a plan to cut their minimum monthly pay of HK$3,670 (about $470) by 15 to 20 percent. The pay had already been cut by five percent in 1999. The Filipinos are fighting arguments that their pay can be reduced anew because of the peso’s depreciation.

* * *

It’s tough to be a Filipino worker here these days. But this is a good time to be a tourist here. The mid-season sales have started, the discounts are substantial, and the economic downturn has greatly mellowed the notoriously rude Hong Kong sales clerks. Business has been so bad that retailers are engaged in fierce price wars.

The airline industry, battered by the terrorist attacks, is also embroiled in a similar war. Cathay Pacific has cut its fares by nearly a third on its Manila-Hong Kong route until Dec. 5 to compete with a new player that is offering flights at just $150.

American carriers are the worst hit. One is offering flights from Hong Kong to the US for only $200, but still few people are biting. Cathay has also cut its fares to the US from Manila by 50 percent, with few takers. Cathay carried 16.6 percent fewer passengers and 9.2 percent less cargo last month compared to the same period last year.

Hotels are naturally suffering. Sonny Ang, marketing director of the Holiday Inn Golden Mile – a favorite destination of Filipinos – says the hotel is 80 percent booked for November. But he’s worried about "panicky" executives in other hotels who have started a price war in the industry.

* * *

The Hong Kong Tourism Board appears undeterred by the slowdown. Boyd Fung, the board’s public relations manager for short-haul markets, told visitors from the Philippines yesterday that they had projected growth in the tourism sector for 2001. But after the Sept. 11 terrorist attacks, "we expect zero growth" in tourist arrivals.

Still, the Special Administrative Region is pushing through with a package worth HK$18 billion to further improve Hong Kong’s infrastructure, including expansion of airport facilities and an Exhibition Center costing HK$4 billion.

The tourism board, with a budget of HK$500 million this year, is also not waiting for the dark clouds to part. It is embarking on aggressive marketing programs, including a Christmas lighting program and street carnivals.

"We have to do better," Fung said. "We want people to come to Hong Kong and enjoy more."

He refuses to speculate on what lies ahead for the new year. With the noose tightening around Osama bin Laden, one finds it easier to feel optimistic these days. Even in the Philippines.