[PEN-L:1889] Far Eastern Economic Review: Top 10 Multinationals; Globalization Gurus Recognize Need for Regulation

[Michael Eisenscher <meisenscher@xxxxxxx>]

IN THIS MESSAGE:   Far Eastern Economic Review: Top 10 Multinationals;
Globalization Gurus Recognize Need for Regulation


Review 200 -- Asia's Leading Companies

 Top 10 Multinationals

 12/31/98
 Far Eastern Economic Review
 Page 56
 (Copyright (c) 1998, Dow Jones & Company, Inc.)



 1. Microsoft

 Microsoft may be tussling with the U.S. Justice Department in a
 widely publicized anti-trust suit, but its chairman and founder, Bill
 Gates, can still afford to smile. The Redmond,
 Washington-based software giant kept a firm grip on its No. 1
 standing for overall leadership. And it's still ranked first in three
 key categories: innovation, long-term vision, and a company
 others try to emulate.

 The U.S. government charges that Microsoft is using its virtual
 monopoly in software products to bully other players and stifle
 competition. Microsoft itself estimates that 80% of the world's
 personal computers use some version of its Windows operating
 system. Gates dismisses the charges, though. It's a "case of trial
 in error," he says.

 As the trial grinds on, Microsoft's revenues from sales of its new
 Windows 98 continue to climb: 1998 revenues rose nearly 30%
 over a year earlier, to $14.5 billion. Profits represented more
 than a third of that, or $4.5 billion.

 About 15% of Microsoft's sales are in Asia. Early this year,
 Gates visited Malaysia, Singapore, Philippines, India, and
 Australia, where the company has significant investments in
 software development.

 ---

 2. Coca-Cola

 This year marked a milestone for Coca-Cola. Sales of
 Coca-Cola and the company's other beverages exceeded 1
 billion servings per day. That's about 2% of the overall drinks
 market.

 Almost one-third of those sales are in Asia. The key to
 maintaining them in the downturn, says Coca-Cola China
 President John Farrell, is to be "highly flexible and quick to
 change to meet the realities in Asia." When Hong Kong's
 property market took a tumble and potential buyers stayed away
 from new developments in droves, Coca-Cola teamed up with a
 local developer to offer a lucky draw: A Coke purchase gave the
 consumer a chance to win a new flat. About 650,000 Hong
 Kongers -- or 10% of the population -- participated in the draw.

 Coca-Cola notes in its annual report: "Even as we sell 1 billion
 servings of our products daily, the world will still consume 47
 billion servings of other beverages every day. We're just getting
 started." Little wonder it rose a notch for long-term vision, to No.
 5.

 ---

 3. Citibank

 Since 1995, Citibank has consistently advanced in the overall
 leadership category. This year, Citibank ousts McDonald's from
 third place. Its parent company, Citicorp, merged with
 U.S.-based Traveler's group this year, to form Citigroup.

 As one of the biggest lenders to emerging markets, Citibank
 itself has a positive image throughout Asian countries: 10 out of
 11 countries ranked Citibank among their top 10 non-Asian
 leaders. And Citibank is the only financial-services group
 consistently represented in the REVIEW 200's top 10
 multinationals.

 The company made significant advances in key categories. For
 long-term vision, it rose 15 places to No. 4 from No. 19. For
 being innovative in responding to consumers needs, it climbed
 to No. 4 from No. 17. And for high-quality services and products,
 it soared 20 places, to No. 34 from No. 54. How can it beat that
 stellar performance next year?

 ---

 4. Intel

 In October, Intel, whose products act as the "brains" for most
 personal computers, unveiled its newest, fastest technology: the
 Pentium II "Xeon" processor that runs at 450 MHz. What's more,
 it costs 26% less than its slower, 400 MHz predecessor. This
 year, the Santa Clara, California-based hi-tech innovator moves
 into the top five and advances three places in the category of
 high quality services and products, to No. 16.

 The company's chief executive, Matthew Barrett, visited India
 earlier this year. There, he announced Intel's desire to supply
 venture capital to promising start-up software firms. As one of
 the world's largest venture-capital suppliers to hi-tech start-ups,
 Intel invested $500 million in small companies this year. This
 didn't figure into its ranking for financial soundness, however,
 where Intel slipped seven places, to No. 38.

 ---

 5. McDonald's

 Imagine: It's just before dawn in Hong Kong, and already lines
 are snaking around whole city blocks as customers wait hours to
 buy -- a three-inch Snoopy figurine dressed in an ethnic
 costume? Clearly, McDonald's is more than just a burger giant.
 Its clever marketing and a partnership with Walt Disney attract
 millions of customers to its famed golden arches daily.

 Despite its marketing savvy, McDonald's suffered a setback in
 the REVIEW 200 this year: For the first time, it dropped out of
 the top three, to No. 5. In the category of high-quality products, it
 witnessed its steepest drop in four years, to No. 70 from No. 44.
 It did register significant improvement for financial soundness,
 though, rising 12 places to No. 21. McDonald's is still seen as a
 company others try to emulate, retaining its No. 3 ranking in this
 important category.

 ---

 6. Walt Disney

 When rumours of Walt Disney's plans to build another Asian
 theme park hit the press, Hong Kong's business community was
 ecstatic: Could Mickey Mouse be the cure for the Asian flu?
 Hong Kong sparred with nearby Zhuhai, in China, over where the
 next Disney park would land.

 Alas, Disney dismissed the reports, dashing both cities' high
 expectations. But the Burbank, California-based entertainment
 giant did announce the 2001 opening of an addition to its Tokyo
 location: "Tokyo Disney Sea."

 Disney captured more than Asian imaginations; it also captured
 a No. 6 finish in overall leadership, up from No. 10. Its ranking for
 financial soundness rose, too, to No. 33 from No. 41. Since
 1995, Disney has ranked No. 4 as a company others try to
 emulate.

 ---

 7. IBM

 A wearable computer that's small enough to fit into your hand
 and light enough to be hooked onto a belt may sound like an
 innovation for the new millennium -- but it's expected to appear
 on store shelves early in 1999. IBM's novel innovation, from its
 laboratories in Japan, will pack a lot of punch, too, with as much
 computing power as its popular ThinkPad laptop.

 Who needs it? Workers, like aerospace engineers, who must
 squeeze into tight spaces but need to consult technical data.
 The computer is expected to weigh less than a can of Coke. A
 transparent eyepiece, to be clipped around the head or onto a
 pair of glasses, will project the magnified image of a colour
 display screen. The user will be able to call up information
 through voice commands, or by using a handheld mouse.

 Innovations like this are helping IBM to sharpen its image as a
 hi-tech leader. In this year's survey, IBM made improvements in
 key categories. For long-term vision, it rose six places, to No. 6.
 In financial soundness, it soared 25 spots, to No. 23. Despite
 these improvements, stiffer competition actually knocked IBM
 down a notch for overall leadership, into seventh place.

 ---

 8. BMW

 German car maker BMW roared into the top 10 for the first time
 this year, parking itself at No. 8.

 BMW plans to introduce up to two models a year into the next
 millennium. It succeeded in that goal this year, with the release
 of its new 5 and 3 Series sedans and Z3 coupes. It also agreed
 to buy the brand name of Rolls-Royce of Britain for $66 million.

 Renowned for its high-quality products and services, BMW
 slipped one place in this category, to No. 3. It also made a
 37-place advance in financial soundness, to No. 35. It had its
 best performance yet in the category of long-term vision, soaring
 to No. 12 from No. 66.

 ---

 9. General Electric

 "The path to greatness in Asia is irreversible, and GE will be
 there," General Electric told shareholders. Indeed, this maker of
 lightbulbs, aircraft engines and lots in between has a significant
 Asian presence. Asia provides about 9% of its sales, roughly
 half coming from Japan.

 Earlier this year, General Electric's financial-services unit, GE
 Capital, announced plans to buy Lake, Japan's fifth-largest
 consumer lender. And it bought Toho Mutual Life Insurance, one
 of Japan's largest. It's also mulling a $7 billion purchase of the
 failed Japan Leasing Corp., an affiliate of the now-nationalized
 Long-Term Credit Bank of Japan.

 Japanese respondents ranked GE second for overall
 leadership, but in the survey as a whole it slipped a notch, to No.
 9. At the same time, its mean score rose to 5.67 from 5.58 and
 it climbed in the long-term vision ranks, to No. 3 from No. 5.

 ---

 10. Daimler-Benz

 It made an unprecedented sprint to No. 10 from No. 32, its
 22-place dash the largest move into the top 10 by any other
 multinational. Still, you won't see Daimler-Benz on the REVIEW
 200 next year: Its improvement coincides with the car maker's
 landmark merger with Chrysler (ranked No. 87). No one will be
 surprised to see the new union , DaimlerChrysler, among the
 leading companies, though.

 Are two heads better than one? Over the next three years, two
 CEOs will lead DaimlerChryler: Jurgen Schrempp of Daimler
 and Robert Eaton of Chrysler.

 Daimler made its biggest move in the category of long-term
 vision, to No. 13 from No. 35. While it slid 22 places, to No. 87,
 in the category of innovativeness in responding to customer
 needs, it did pip its rival BMW to the No. 2 post for high-quality
 services and products.

 Copyright © 1998 Dow Jones & Company, Inc. All Rights Reserved.

=============================================
Gurus Recognise Need To Regulate

12/28/98
Canberra Times
Copyright The Federal Capital Press of Australia Pty Limited.
All rights reserved.



AT LAST the gurus of globalisation and the free market have
woken up to the fact that some regulation is needed in world
capital markets. Unfortunately, it has taken a great deal of pain
before they have come to this conclusion.

People in less well off countries like Indonesia and the
Philippines have been hard hit in the past year by the fallout from
large movements of capital on financial markets. The steady
economic gains made in South-East Asia in the past decade
have been laid waste. Now, at least in Australia, there is
recognition that some sort of international regulation in financial
markets. Three obvious things appear to have reached the
consciousness of leading people in government and financial
institutions.

The first is that capital is extremely mobile, unlike goods and
services which are far harder to move from one country to
another. Second, that the leverage gained by hedge funds and
other institutions puts them in command of larger amounts of
capital than available to some nation states. And third, that this
in turn can threaten a whole currency which in turn can threaten
other currencies and, indeed, the whole global financial system.
There is a circle of paradox here. Market theorists were so
committed to markets and free trade they would not brook any
regulation of international commerce. But by failing to recognise
that capital was different from goods and services, they allowed
it to go unregulated, which in turn led to a financial crisis that did
more to jeopardise free trade than permitting some regulation.
Prime Minister John Howard set up a task force on international
financial reform which reported last week. It argued that the
hedge funds should be regulated in some way. It has supported
a suggestion by the G-22 nations to establish a Fi nancial
Sector Policy Forum. Mr Howard intends to send copies of the
report to world leaders. The task force hopes that some new
method of regulating international capital flows, particularly hot,
short-term flows can be devised.

This will be a difficult task. Some method will have to be devised
so that development investment can be distinguished and
excluded from short-term speculative capital transfers which aim
to make quick profit from currency rises and falls that have
themselves been created by the profiteers capital movement. It
will need the support and participation of all the world's major
economies. Perhaps one of the best methods to put a
disincentive on speculative movements of capital would be to
put a small transaction tax on it. But as we have seen in with the
Australian states, it is too easy for one country (or state) to offer
tax holidays. Unless such a tax were universal, it would not work
very well. The task force suggested that the International
Monetary Fund and the World Bank act in closer coordination
and be given the wherewithal to act more quickly and flexibly to
impending financial disasters. It called for new short-term
funding facilities for the IMF and World Bank.

Some observers, however, feel that the IMF and the World Bank
are part of the problem, rather than part of the solution. They
point out that the vigorous pursuit of tradable commodities in
third world countries may well bring greater profit to corporations
from the developed world, but do little to help the people on the
ground in poorer countries. Overall, however, it is good to see
greater recognition of the self-destructive danger of unregulated
capital transfers and the need to do something about it before it
undermines the obvious benefits of free trade in goods and
services.