Possibilities for lasting investments

The Issue: Is there possibilities for major and lasting investments in these isles in the next millennium?

Our View: Maybe and just maybe, provided we get our acts together in forging stable investment policies.

The NMI pines to rebound to better days in much the same way it enjoyed its short-lived abundant late eighties as a beneficiary of the Japanese bubble economy. Those days are gone and would only serve a melancholy walk into nostalgia not so much for what we did, but what we didn’t do–plan ahead.

We nervously dilly-dallied with uncharted economic measures apparently oblivious to a plan by the world’s second most economically powerful country–Japan–now forging a Free Trade Zone that embraces the entire Asian block. As tiny and insignificant as we may be when mirrored against the Asian FTZ, a new concept we seem to treat as the ultimate solution, the focus of multinational investments has descended in the People’s Republic of China. Consider the following, specifically, where does the NMI fit in the train of investments where all roads lead to China:

It is known as the Pearl River Delta, an economic powerhouse established in 1984, that stretches from Guangzhou to Shenzhen just north of Hong Kong. At first, investors came in by trickles which turned into a flood when further trade reforms were instituted. “Thousands of Hong Kong businessmen came to make their fortunes in this land of opportunity.”

“Next came the multinationals, Pepsi and Procter and Gamble, Mitsubishi and Korea’s LG. China didn’t offer the cheapest labor in the region, but it developed a gung-ho spirit and reliable level of quality that made it many multinationals’ top investment choice. From 1990 to 1998, foreigners invested $463 billion in China: 20 percent went to Pearl River Delta. ‘It is ;the first place to get special authority to get things done easily’ says George Lin, author of ‘Red Capitalism in south China’. ‘And its connection with Hong Kong, the gateway to the West and overseas, spurs its growth’.”

“Fifty kilometers southeast of Guangzhou lies Dongguan, once a sleepy town and now an industrial power in the making. Since 1989, Dongguan has attracted $9.6 billion in foreign investment. Giant industrial blocks have sprung up with money from Hong Kong (garments), Taiwan (paper mills) and Japan (electronics). The Pearl River
Delta’s robust growth looks unstoppable for the moment. But with Shanghai challenging its role as the gateway for investment in China, the delta is seeking ways to extend its gains.”

Seriously, with competing forces of investment instability–assault of the Asian Crisis and federal takeover scheme–not to mention our penchant for midstream change in boat, fueled by protectionist measures, there really isn’t much hope for lasting investments up ahead. Only we can change unworkable paradigms so to re-establish stability of these isles as a conducive venue for investment. Si Yuus Maase`!