ADVERTISEMENT

ADVERTISEMENT

Nuggets in the News: Globalization issues reflect on diverse spending efforts

Can an act of violence change the world in the important fields of business and labor and eventually lead to a worldwide recession? Consider this fact. When 5,000 people, men, women and children working or just visiting in the Twin Towers of the ...

Can an act of violence change the world in the important fields of business and labor and eventually lead to a worldwide recession? Consider this fact. When 5,000 people, men, women and children working or just visiting in the Twin Towers of the World Trade Center on Tuesday, Sept. 11 in New York City, lost their lives, it was a senseless crime so dastardly and heartless that it must have been hatched in the dark mind of the devil himself.
Consider this: There was no need to stockpile explosives and incendiary devices beforehand, no need to sneak silently or covertly into the buildings avoiding discovery of the plan on some dark and stormy night. Nope! Just hijack a few big jetliners and crash them into the buildings during a day that will be remembered forever. Mopping up this tragedy and rebuilding will continue well into the future.
An important aside to all this is the fact that, in a way, the Sept. 11 tragedies have changed the future of big business by using procedures that could accelerate and strengthen policies worldwide, say leading news magazines. Let's review a report on dramatic changes that have already taken place in the world of business.
The sale of new cars is now featuring zero percent financing, and as sales remain sluggish, major banks are refusing to finance these cars and are simply depositing their money in other banks. In Argentina, the sale of new cars has dropped 40 percent in the past year. The popular Fiat automobile plants have been operating just one week a month.
Whatever has happened in the new car field, it has raised the specter of a worldwide recession. Taken as a group, the major economies of the world, including the United States, Canada, Japan and Europe, are gasping for breath while once red-hot economies of Asia and Latin America have fizzled.
The only nations that appear to be weathering the global downturn, India, China, Russia and some countries in Eastern Europe, are those that have resisted full integration.
The globalization of supply chains, producing parts in one place for assembly elsewhere, has turned areas of Mexico and Canada into economic suburbs of Detroit. Global distribution and marketing have linked national economies so they tend to turn up and down together. It's not just Wal-Mart, Coca Cola and McDonald's that have become powerful global brands, now there are others like Nokia, Toyota, Prada and De Beers. And after a decade of cross-border mergers and acquisitions, the biggest banks, chemical manufacturers and drug companies in Germany, Argentina, Singapore and the United States are largely about the same.
The attacks on Sept. 11 have revealed how important travel and tourism is to the world economy. Hundreds of thousands of waiters, taxi drivers and hotel personnel are out of work or earning half as much as they used to. Strolling the crowded streets and restaurants of Tokyo these days, it is easy to realize how deep the Japanese economy is stuck in the mud. It's their fourth recession in 11 years. China's economy continues to expand, but even its growth has slowed from an annual 8 percent increase to 7 percent.
Since 1997, Morgan Stanley Dean Witter says the pace of direct foreign investment in China and Hong Kong has more than doubled to $100 billion, while investment in other parts of Asia has fallen over $30 billion. There is just too much uncertainty now to risk investment, say the financial prognosticators.
It's a lot simpler to explain the sudden downshift of Mexico's economy that went from an annual growth rate of 6.9 percent last year to something like zero this year. Under the 1994 North American Free Trade Agreement, which has largely phased out trade barriers between the United States, Mexico and Canada, exports to the United States have become the high-octane fuel of the Mexican economy.
The electronic and textile plants, clustered south of the United States-Mexican border, have dumped at least 150,000 jobs this year. In addition, hundreds of Mexican shops and restaurants that cater to U.S. day visitors are reporting sales down by 50 percent or more as Americans opt to avoid border hassles.
Also weighing in on this economy is concern over the flow of money by Mexicans and Mexican-Americans working in the United States. Some reports show that it reached an annual record of $9 billion this year.
(Editors Note: Material in this column was taken from an article entitled "Globalization Turns Tourist Dollars into Big Money" written by Steven Pearlstein in The Washington Post national weekly edition.)

On the lighter side . . .
Two Eskimos sitting in a kayak were chilly, but when they lit a fire in the craft it sank -- proving once and for all that you can't have your kayak and heat it, too.
Two boll weevils grew up in South Carolina. One went to Hollywood and became a famous actor. The other stayed behind in the cotton fields and never amounted to much. The second one, naturally, became known as the lesser of two weevils.
Ole was planning a trip to Nome, Alaska. Lars reminded Ole that in Nome, it was common to serve reindeer meat.
"Dat's OK," said Ole. "I figger like da old saying, 'Ven in Nome, do as da Nomans do.'"
-- Ole and Lena

What To Read Next
The system crashed earlier this month, grounding flights across the U.S.