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Monsoon rains hit Manila this week while a tropical storm – the ninth this year – roared nearby. The schools, the courts and the senate were closed for two days; the roads were flooded; public transport was affected.
It could have been worse.
That the Filipino capital is a great ocean wave away from disaster is not news for climate scientists or economists. After analyzing 393 cyclone-vulnerable coastal cities in 31 countries, World Bank economists concluded that 40 percent of the burden of storm-related disasters would fall on just three Asian cities – Manila, Karachi and Jakarta.
Unlike the former British rulers of Pakistan and the former Dutch masters of Indonesia, the Americans fortunately left the Philippines a viable alternative. Clark Air Base played an important role during the Vietnam War. It remained under American control until 1991.
But what the United States has left behind offers a chance to build something new and sustainable for at least the next 473 years. (The nearby volcano of Mount Pinatubo has a tendency to burst once in 500 years, the last explosion took place in 1991, accelerating the American departure.)
The highest point of the metropolis is 40 meters above the level of the sea; in New Clark City, where office buildings are built to move a host of government departments of the congested capital, the maximum altitude is 800 meters. Royal Pineda, the architect who rushes to meet tight deadlines for the construction of a sports complex before the Southeast Asian Games next year, says that the good metaphor for Clark is iCloud – a backup for when Manila fails.
Clark should have been remodeled a long time ago, Vivencio Dizon agrees. The Bases Conversion and Development Authority, headed by Dizon, has already tasted success with Fort William McKinley. Bonifacio Global City, Manila's financial and lifestyle district that replaced the former military base, was developed by Metro Pacific Investments Corp., the magnate of Manuel Pangilinan, who sold it in 2002 to Campos Group and Ayala Corp. among the handful of family conglomerates that controls economic life in the Philippines.
Breaking the inattention of the magnates towards Clark is Dennis Uy, a businessman from the home province of President Rodrigo Duterte. The president's boyfriend is now a large-scale negotiator who has even managed to make the partnership the flagship investment arm of billionaire Henry Sy, the Philippines' richest man. Last year, he bought the firm that builds a $ 177 billion shopping and business center in Clark 's Free Zone, a billion dollar deal.
Other investments are coming. Chinese Internet entrepreneur Jack Ma can set up a fully automated 20-hectare warehouse next to Clark Airport for his Lazada Group SA's e-commerce business, if negotiations on rental rates go up conclude successfully.
For now, however, the Chinese are overwhelmed at Clark by the Koreans, who came en masse after Asiana Airlines Inc. began a flight in 2003 between Incheon and Clark. What first attracted them, is the opportunity to play golf on a course made famous by a young Tiger Woods. But now, there is also the game at Widus Hotel and Casino, whose Korean owner Daesik Han will soon open a Marriott-branded hotel.
In the works: an integrated Widus complex. Meanwhile, more than two-fifths of the $ 7 billion in exports from the Franco-Port area come from a South Korean chip producer. SFA Semicon Co. began manufacturing integrated multimedia cards, used in smartphones and GPS systems, during the expansion of its factory early in the year.
Why do I think Clark will succeed when many other planned cities – from Putrajaya and Cyberjaya in Malaysia to Lavasa in India – have been failures? Clark's most obvious result is that it solves a real problem: the lack of connectivity. The 2,300 hectares of land dedicated to the airport left by Americans are five times larger than the narrow Manila Airport. But even with this benefit, Clark is not a crazy model of "build-and-they-will-come," where vast, empty infrastructure is waiting for tenants.
It is only now that 158 international flights and 338 domestic flights are taking off. Clark announces each week that the construction project for a new terminal is underway. The free-port area, which includes the airport, is being developed first so that it can serve as the nerve center of the new city of Clark, which extends on an area six times larger. In addition, the Dizon bases conversion authority has both the power and the ability to execute large projects. The 949 business tenants get all the regulatory approvals and daily services from Clark Development Corp. The paperwork is minimal, says Evan McBride, CEO of Global Gateway Development Corp., the builder now owned by Uy.
Finally, the project is pushed at once by pushing and pulling. Duterte promotes Clark, but for many of the 13 million inhabitants of Metro Manila, there is enough attraction to put a little distance between them and the fury of nature.
Contact Andy Mukherjee at [email protected]
To contact the editor responsible for this story: Matthew Brooker at [email protected]
This review does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Andy Mukherjee is a columnist for Bloomberg Opinion covering industrial enterprises and financial services. He was previously a columnist for Reuters Breakingviews. He also worked for Straits Times, ET NOW and Bloomberg News
© 2018 Bloomberg L.P.
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