Business of terror main event of year
Eric Ellis London.

December 31, 2001

THE Biggest Event on the 2001 business calendar? Well, that depends which way you look at it. Or, perhaps, whose calendar you are using.
It's obviously impossible to go past September 11.
From an event whose relationship to business came solely from its geography - a strike on one of capitalism's holiest temples - it spans three of the corporate world's top 10 events of 2001.
From that fateful Tuesday followed the biggest single-day stock-market plunge in 14 years when Wall St opened a week later. It heralded the end of 40 successive quarters of growth for the world's biggest economy; the failure of at least two airlines (Swissair and Belgium's Sabena); the last straw for several other carriers (Ansett, Air New Zealand and probably any US airline were it not for a $70 billion federal bailout) and a useful excuse for the collapse of a myriad of poorly performing companies.
Add to that line-up the sideshow of the Incredible Shrinking Interest Rate. The US economic dynamo was fizzling out as the residual effects of last year's tech wreck rippled out from Silicon Valley into a middle America grown rich and complacent on seemingly never-ending stock gains.
As stock portfolios turned pear-shaped with anything but irrational exuberance, traders regarded each of Federal Reserve chairman Alan Greenspan's pre-September rate cuts with scorn, driving markets and economic statistics down to levels not seen for years.
And when it seemed it couldn't get worse, it did. And by more than anyone could have possibly imagined. Even Osama bin Laden's network, it was reported, made some smart money by shorting airline and insurance stocks before the attacks.
By year's end, Greenspan's Fed had adjusted rates 11 times in a calendar year, the most in modern capitalist history. And always down.
And, a buoyant retail Christmas season notwithstanding - this was the year one was implored to Shop for America - most economists contend there's another rate cut to come in a month.
It may just be because September 11 remains so recent but no other date in history requires its simple evocation for all the explanation necessary.
December 7, of course, is a date that lives in memory. Likewise November 22. But that's mostly if you are American and even then these dates require the contextual addition of 1941 and 1963 respectively.
But to the Chinese, another 11th, December 11, was the bigger event of 2001.
That's the date the world's most enduring communist government - the world's biggest chamber of commerce, really - joined the World Trade Organisation.
Pass you by? It did most of us, as we assessed the carnage in New York, Washington and Kabul. But ironically enough, it's this event that could be the antidote to the tragic matters lingering on from September.
September 11 immediately changed the world but, in time, we'll all get over it.
But the world has yet to experience the effects of China's WTO accession. If the world's most populous country plays by the rules, it could become the global economic engine, outstripping even the US by sustaining current rates of growth through 2030.
G8 membership for Beijing can't be far away. If economic size is the measure, a persuasive argument can be made for China over Canada and Russia.
And China, already the developing world's largest recipient of direct foreign investment, joins the WTO with the world's biggest pile of foreign reserves - a staggering $US200 billion. That's a big enough number but then add in Hong Kong's $US120 billion and, at a political pinch, Taiwan's $US120 billion.
With China throwing that sort of cash around - and with a WTO-fuelled boom underway off a still-low economic base - it could only be a few years away when financial markets strain to decipher not only Alan Greenspan's elliptical utterances but Dai Xianglong's, governor of the People's Bank of China.
Elsewhere, Japan's industrial output slumped to 14-year lows, racking up the dubious distinction of enduring three recessions in a decade. Much of Asia outside China did likewise, with normally do-no-wrong Singapore likely to be the region's worst performer after Afghanistan. In one year, Singapore has gone from 9.9 per cent growth to a 5.5 per cent decline. Still, Japan remains the world's second biggest economy, which is more than one can say for the one-time global power, Argentina.
Evoking the worst days of Latin America's economic collapses of the 1970s and 1980s, the Buenos Aires' $US130 billion sovereign debt default has already claimed one presidential scalp, a national currency and several protesters' lives. It is dragging on to become one of the 10 biggest events of 2002.
Kenneth Lay of Houston, a friend to many in the Bush Cabinet, can lay claim to stewarding one of history's biggest corporate collapses; the $US80 billion demise of electricity giant Enron.
Bill Gates had a wacky year. He maintained the title of World's Richest Man as Microsoft stock jumped 50 per cent after his annus horribilis of 2000.
Although he hails from heavily Democratic Seattle, Gates was glad to see the back of the Clinton Administration, whose Justice Department had pursued him since 1996. He was gladder still to see the retirement of "Hanging" Judge Thomas Penfold Jackson who had ruled that he was a monopolist trying to corner internet access and wanted Microsoft dismembered.
The Bespectacled One may have beaten the Justice carve-up during 2001 but there seems little danger of Microsoft dominating the internet. Most users thought Microsoft's new operating system was pretty enough but still way too buggy.
As Gates celebrated his software success, Big Technology hardware makers also booted up a massive deal, the $US25 billion merger of Hewlett Packard and Compaq.
The proposed deal creates the world's biggest maker of computers, leap-frogging Dell but it is by no means a done deal, largely because the market remains less than convinced that HP boss Carly Fiorina is as good a manager as she is a presenter. The heirs to the two HP family fortunes are likewise unimpressed. The market is tipping that Carly's deal will falter, marking Compaq down 15 per cent in recent weeks. Expect Carly's job at HP to follow soon.
The first year of the millennium was monumental for global business, one which most corporate road warriors would say was rather too much so. Let's hope 2002 is rather less so.