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Are you
looking for a full-time job for the next seven days?
It
doesn’t pay anything; in fact it will probably cost you
to take this job. But if you do not have anything
important to do for the next week and you would like to
spend eight hours a day doing something interesting, go
to the Mall of Asia.
You see,
if you spent just five minutes visiting each of the 700
shops, restaurants and entertainment venues at Mall of
Asia, it would take you more than seven eight-hour days
to complete the task.
The
reason I bring this up is that an article I recently
read cited the fact that of the 10 largest (based on
amount of retail space) malls in the world, eight are
located in Asia. More importantly, three of the 10 are
located in the Philippines and Mall of Asia is the
third-largest mall in the world. Another interesting
fact about these huge shopping centers is that six of
the top 10, including the top three, were all built in
the past three years.
How
large is large? Not including the walkways and open
spaces, the Mall of Asia comprises almost 400,000 square
meters of gross leasable retail space. By the way, in
terms of size, SM Megamall is fifth in the world and SM
City North Edsa is ninth.
If you
search the Internet, you will find that not everyone is
pleased with the SM group for having built the Mall of
Asia. The comments center on how can a poor Third World
country like the Philippines dare to allow a project
like that when millions of Filipinos are living below
the poverty level without adequate housing, education,
and other basic necessities. How much better that the
money be given to the poor.
In fact,
Henry Sy and his companies are doing more to alleviate
poverty in this country than all the NGOs and “pro-poor”
groups combined.
The Mall
of Asia was built at a cost of $130 million, or roughly
P6.5 billion. If that money had been distributed to the
economically lowest third of the Philippine population,
each of those people would have received about P230. In
concrete terms, that would have supplied each
individual’s rice needs for about one month. Then the
money would be gone.
Let’s
assume for a moment that the total number of employees
working at and for the Mall is 3,500, with an average
net wage of P200 a day. In one year, some P250,000,000
in wages result from that mall being built and those
jobs being created.
Those
who would prefer handouts and charity to jobs and
livelihood would say that it would take more than 20
years of paying wages like that to equal the P6.5.
billion spent to build that mall. Would it not be better
to have immediately infused that money into the hands of
the most disadvantaged rather than to wait for 25 years
for the money to flow into the economy? Would it not be
better to give the people money and then let them create
their own jobs? Unfortunately, the real economic world
does not operate that way.
It
requires approximately P50,000 of capital expenditure to
create one average job. In effect, SM’s investment in
the Mall of Asia has created 130,000 jobs. That includes
all of the support needed from transportation to food to
clothes to entertainment that the core 3,500 employees
will support with their wages from working at the mall.
Assume that each of those 130,000 people earn only P20 a
day from the trickle-down effect from the mall’s
existence, then we are talking almost P1 billion of
additional wealth creation a year from SM’s investment.
And that number will continue as long as the mall
operates.
Further,
the profit that the SM group and all the various retail
businesses make on the Mall of Asia will go to build
more enterprises that create more jobs and prosperity.
Free-market capitalism is the best system for wealth
creation for all sectors of an economy. Those oriented
and pushing for a more socialistic economy can never
show how wealth can be created from the bottom up.
Prosperity can only be created from the top down.
E-mail comments to mangun@email.com. |
