Chapter 36......In Calmer Waters
As I write, it is mid 1993. The world economy has stalled with only the politicians suggesting any glimmer of hope. It is a quality they should know about, for it is the only ingredient they have to offer. It springs eternal. In America has come the changing of the guard. George Bush, who spent his term of office strutting the world stage, calling for the reduction of arms, whilst throwing smart weapons at Iraq, could not tame his own people who elected a new generation Democrat in William Jefferson Clinton. America, said Clinton, “must rise again and be great”. In recent times Japan has not only challenged that supremacy, but sent the world markets into a spin. Wall Street, witnessed the Japanese dominating the market, with US bonds and prime real estate, being snapped up by the yen. Japan like it or not were hollowing out whole industries, buying up whole neighbourhoods and seducing the United States for its technical know-how. Despite the warnings of eminent writers, historians and even ordinary citizens the pace of appropriation seldom faltered. In Australia, the outcry from citizens, was openly hostile, although more orchestrated than that of Hawaii.. In the American State however, the people elected those who spoke out to government. In Australia, the media along with public apathy, allowed those concerned souls to be methodically buried. For two years after the rest of the world slowed up, Japan gave all the outward appearances of ‘weathering the storm’. In truth the momentum of their tremendous trading surpluses caused a lag in their true position. Just as the economic slow down had brought the rest of the world to a depressed state, so too in Japan. First hit was the property market. That highly inflated sector of the Japanese market, that by its own set of parameters enabled investors to borrow on their assets. Property that climbed in value as much as 400%, saw investment capital lent on properties in America, Canada, Britain, Indonesia, Philippines, New Zealand and Australia. Japanese companies sitting on land, were able to pay dividends to shareholders, on the strength of rising land values only. This ballooning of land prices in Japan, saw massive investment in cash starved and land rich economies. Places like Hawaii and Australia, suffered as a result. Land the natural heritage of its people, was sold off at alarming rates by local real estate agents and developers, who saw quick and ready markets. This veritable flood of money saw local home buyers pushed out of the market, simply by virtue of being unable to compete with the yen. As a consequence of this land values surged to record highs, putting beyond reach, land that would under normal circumstances, not have been subjected to these sort of pressures. Whilst ordinary citizens gave vent to their feelings on the matter, governments, local governments, developers and speculators decried this ‘carry-on’ as being racist in origin. Federally the government saw opposition to ‘foreign land acquisition’ as being a threat to capital investment. Local government, encouraged the injection of capital investment, because it fed progress and enhanced its record of development, in this case with no real effort. It also created the spectre of increased land rates, that would wash over all land holders. Developers and speculators had it ready made. The Japanese were a ‘godsend’ ...but one day that bubble would burst. And burst it did! In Australia, where ‘flogging off land’ had gone on unabated for nearly five years, the early signs of a Japanese in trouble began to manifest itself. Koshin who had commenced a massive project on the Pacific Highway at Mudgeeraba, suddenly came to an abrupt halt. A scandal had encompassed the company as a result of it’s company chief being arrested on insider trading allegations, followed shortly after that by Jiro Tomishima, another director, being arrested in Australia. The impact of this was the freezing of offshore funds feeding the development, with the result that the project was initially shelved and subsequently placed in the hands of receivers. Today the land lies desolate, having been cleared of all vegetation, subjected to the elements of heat, water and wind. For the local council, it remains a problem, with no action being instigated for fear of‘ harming Japanese relationships’. Other plans no further than the drawing board, have simply been ‘shelved’. Three major development, have given cause for concern. Although, not much is being said or written about them Bond University, the Hope Island Resort and Palm Beach Golf Complex, must be a worry. Bond University, the brainchild of the once powerful and leading entrepreneurial Alan Bond, is in limbo, being under-pinned by the Bank of Tokyo. When Bond pursued and built the university, it was funded from Bond’s own resources. Among Bond’s world-wide activities’ it was as they say ‘small bikkies’. Yet it was more than just another project. To Alan Bond, the boy immigrant from Britain, the signwriter-cum-painter, the bubbly entrepreneur, who saw an opportunity and went for it, the University was a living memorial. Bond came from fairly ordinary stock. Not of the nobility, but tolerated by the establishment, he set out to build Australia’s first private university. When the crash caught Bond in its net, saw his castles began to fall. From Chile to London, from Hong Kong to Perth, the financial sands began to run away from the foundation of his empire. Bond University, at the cradle of its existence, that not only needed investment capital to expand, but more urgently require an ongoing commitment of operational costs. That undertaking was picked up by Takahashi Hanouri, the high flying corporate general of EIE. In Australia, it was the high profile likeable Dr Bungo Ishizaki, who acquired the novel university. At the time speculation was rife that the company, was interested in the capitalisation of the property for tourism potential, which seemed reasonable given it’s interest in hotels. Others believed that EIE’s interest was being driven by long term plans to turn the University into a faculty for foreign students, principally for wealthy Japanese. Whilst both of these options may have been reason for the speculative injection of funds which saw the company a 50% joint owner, other events closed in as well. In the meantime, the University began by closing down the Science and Research faculty, then one of the high performers of the unit. This was surprising, since the so-called, hi-tech program, was one of the reasons that the Japanese as a nation had prospered. Given the carrot that the MFP project on the Gold Coast held out, along with the continued press releases about, medicine, information and technical know-how, Bond university was being touted as an important part of the chain. Visions of a new Australia, at the forefront of 21st century technology, fired the imagination. The dream was Australian of course and hitched to the preponderance of the yen, the Hawke inspired rhetoric, of becoming the ‘clever country’, began to take hold. Alan Bond’s fortunes not only went from bad to worse, but his resources were no longer able to fund his university. For considerably less that the first 50%, EIE became owner.
It says much for the operational and administrative staff that the University was able to stay afloat. There were many changes, chancellors came and went. Problems became very public, yet those who had faith in the concept and quality of the establishment, soldiered on.
The University born out of the excesses of the entrepreneurial cowboys, seemed doomed to perish the same way. EIE, as a result of rapidly falling asset values at home, coupled to a trebling of interest rates, struck the wall and in the terminology of the day, ‘had to re-structure’. Unfortunately the restructuring was overtaken by the now escalating collapse of the glamorous ‘bubble economy’. EIE, were now like Alan Bond, at the mercy of the banks.
For two months, EIE, along with the Gold Coast University, sweated. Finally, the Bank of Tokyo, recognising the quality of Ishizaki’s portfolio of properties, instructed the company to divest itself of its non-core assets. In a niche of its own Bond University, survives at the pleasure of the Japanese banks. Today, it has settled into consolidation mode, producing high calibre students and this year spawning it’s first Rhode Scholar.
One cloud however hangs over Bond University; the name. Suggestions have been floated that it should be renamed. This has come about as a result of Alan Bond’s rapid fall from grace and subsequent jailing. An irate Alan Bond, claimed he was wrongfully incarcerated, a claim subsequently rejected by the court, yet the man who attracted Australia’s nobility, who had prime ministers, say, they would never desert their mates....and did, wears mud. Hail the king, crucify the villain, but don’t accept the responsibility of having judged a man on his material assets, rather than the individual. Alan Bond, the urchin, the uneducated, the opportunist, may have thumbed his nose at the establishment, may not have had the airs and graces of the ‘aristocracy’, but he gave us our first private university. He dreamed the dream. He created a solitary flower in the desert. In the gardens of Toorak, flowers may grow in abundance, tended by hired hands, paid by comfortable company directors; but the man with vision, pursued that dream. If that dream stand as a monument to Alan Bond, then I for one would be delighted. The world is full of mediocrity, of people who pontificate on the virtues of others. That critique is established on hindsight. When Bond brought the America’s Cup to Australia, he was the toast of a nation. When he built the university, he was the darling of the educationalists. Today he is yesterdays sullied hero, banished in the best traditions of Australian ockerism. Bond’s biggest crime was that he succeeded, in a country of mediocrity. Better to have tried and lost, than not have tried at all. Bond University, will put its stamp on this nation. Infamous or otherwise, let Alan Bond be remembered as the father of this fine institution. Let it remain the university that bears has name.
If Bond University, has sailed into calmer waters, then what of two other major developments. Hope Island Resort was always going to be a long term project. It had an incubation period longer than most, with established planners at the helm. When earthworks did commence, the area was akin to a war zone, such were the clouds of dust that billowed from the activity of earth movers. Heralded as a Venetian styled development, it too ran into funding cuts from Shinko’s head office. Today, standing like a mirage in a desert, a replica of a familiar bridge, spans a canal to a conglomerate of Venetian architecture. We are told that the project is in ‘administrative mode’ and one must deduce from that, that until funds free up, the project will remain shelved.
Further south, behind Palm Beach another development stagnates. Palm Beach Golf Resort. Formerly part of the Tally Valley Caravan Park, that had been home to 300 Australians, this land lies raped and denuded.. It stands as a silent sentinel to grandiose dreams, that were given fertile lands to breed, by local councillors, who decried those who tried to prevent it and defended Japanese developers by saying; that these people were highly sensitive to environmental needs. Sapphire Lakes, Hope Island resort and Palm Beach Golf Resort....all Japanese owned land.
Wander through Surfers Paradise and you will see graffiti daubed, flyer decorated hoardings that shield the sight of vast tracts of land, tied up ...all in Japanese hands. Drive up to Mainbeach. Grass covered ground, that formerly had been home to laughing children, providing much needed housing. Why? In the years to come, what will be the end result of this foolish path we went down? In the words of Max Christmas.....‘every thing comes from one thing, the ownership of land’.