Miamis Global Links Increasingly Vital In Licking Recession
Written by Michael Lewis on August 4, 2011
By Michael Lewis
If outsiders grope to grasp what makes Miami-Dade’s economy tick, it might be because they’re guided by how the rest of the United States works.
To echo our long-gone tourism catchphrase, the rules are different here. While most of the nation looks to Washington to set the economic pace, Miami must keep one eye on a large slice of the globe.
So when we reported last week that our housing recovery was vastly outpacing the rest of the nation, the reason was evident: foreign buyers who target Miami for investments.
That should have surprised no one: for decades, political turmoil abroad, the dollar’s exchange rate and the economic winds in other nations — both weak and strong — have blown substantial investments our way.
When things have gone well in Latin America, funds always flowed to Miami. And when things there went poorly, both people and funds flowed our way.
While that trend has continued, both flows — money and people — have been augmented in recent years from Europe and increasingly Asia. More and more, the flow has brought business ties beyond imports and exports — long a Miami staple — to business interrelations and creations.
Last week, our lead story added another step: restaurant chains from abroad moving into our market. Giraffas, a 375-location Brazilian chain, rooted its US headquarters firmly in Doral and has opened the first of its US restaurants here, with a plan to hit four sites by year’s end and a perhaps-grandiose target of 4,000 US locations.
Whether or not that foray ever numbers 4,000, the conclusion is that Miami has become the de facto gateway to the US for many businesses from abroad — think a casino operator from Malaysia buying the Miami Herald site and Hong Kong’s pioneer Swire multiplying its Miami efforts with a massive Brickell Avenue development.
In recent weeks we’ve reported on the Beacon Council’s mission to add business ties with France, TAP Portugal’s new air links to Miami, Haiti’s presidential visit to drum up more business relationships, Trinidad and Tobago’s aim to open a chamber of commerce here and far more.
If Miami were ever cut off from the business of the globe, we’d be just another beach town — and, frankly, not the best of them. It’s the global links that set Miami apart, and often ahead.
For that reason, it’s more central to us than most in the US that Washington deal wisely with immigration, that we lower visa barriers with potential visitors and business partners in Brazil and elsewhere, and that banking rules don’t constrict to keep out vital foreign deposits along with the tourism, real estate, investment and entrepreneurial gains that those depositors bring us.
Trade treaties with Colombia or wherever are also vital. Elsewhere in the US they’re nice, but to us they can spell the difference between an expanding South Florida economy and a continuing bulge in unemployment.
In South Florida, any legislation that brings the globe nearer is advantageous. Rust Belt protectionist sentiments are understandable — wrong, but understandable. Here, they should be unthinkable.
Miami leverages its global connections in creative ways, such as the Greater Miami Chamber of Commerce adding 20 members based abroad in trade commission offices, offshore chambers of commerce and the like. International business doesn’t just happen, it’s carefully planned.
But we have no guarantees that Miami’s massive advantages in building global links that expand our local economy will last forever.
The Florida Foreign Trade Association last week reported a 1.4% drop in Miami International Airport’s global air cargo tonnage for the first half of this year and said "we are looking at MIA ending the year with tonnage figures below 2010."
As for the future, international air cargo ties here are imperiled.
Our airport, the association said, "is faced with strong competition from new gateways which are springing up in the US, as well as from airports in Latin America…. Today we are faced with aircraft that no longer have to stop at intermediary points en route to their final destination." Miami has been that linkage point for many cargo-laden flights.
So even as the weakened dollar continues to strengthen Miami’s tourism and housing sales, our ability to restore and build jobs — the single most important step to economic growth — rests not only on the health of our own nation but the ability to grow our business ties abroad.
It is that interlocking nature of Miami-Dade’s economy on a global level that sets us apart from the rest of our nation and that is most likely the prototype for the future of the other 49 states.