If there is one “positive” piece of news in recent days that continues to amuse me, it is the study released by Hong Kong Shanghai Banking Corp. (HSBC) that forecasts the Philippines as a “fast-growth” economy with the potential of being the 16th largest economy in the world by 2050.
This is one of the best sides of being an economic analyst, i.e., of being able to fearlessly forecast in fancy terms how a country’s economy could (not would) fare 40 years down the road. Nevertheless, it does sound refreshing to be categorized as a “new emerger” rather than a “laggard.”
HSBC’s updated study, “The World in 2050: From the Top 30 to the Top 100” had been re-released last Jan. 11, 2012. From its year-ago version (released in Jan. 4, 2011), dramatic changes have been added because the world economy supposedly will undergo “a seismic shift.”
On the top this earth-shaking observation is the statement by the study’s author, Karen Ward, of “the striking rise of the Philippines, which is set to become the world’s sixteenth-largest economy, up 27 places from today.” The study also noted the Philippines as among 26 “fast-growth” economies.
It’s no surprise then that P-Noy’s “good news” machinery has picked up this piece lock, stock and barrel to disseminate the four corners of the world. I only wish most of us who have read this study would still be around 40 years from now to validate the prognosis.
Indicators and premises
So what did HSBC take into consideration to make such a bold prediction? According to the study, “fast growth” economies were picked for having “made great progress in improving fundamentals.”
One fundamental area mentioned was population size, where the Philippines undoubtedly easily outperforms many other developing countries. Now that’s the easy part. In fact, if we don’t curb our current birth rates, we could quickly become a major supplier of labor in the global market.
As the HSBC qualified further, the Philippines is in an enviable position by having a growing population, one which if “properly educated and trained, should help the economy generate more income over the next decades.”
Another requisite to seeing the Philippines attain emerging power status would be gross domestic product or GDP. Now that’s a bit difficult to muster, especially if historical figures and the latest 2011 estimates are used as a yardstick.
HSBC lists as a premise an average GDP growth of 8.4 percent for the current decade, 7.3 percent in the next decade, 6.6 percent from 2030 to 2040, and finally 5.8 percent from 2040 to 2050.
In 2011, the most optimistic estimates have never breached the four-percent mark. The previous year, in the last year of the previous administration, GDP was at 7.3 percent, largely from stimulus spending. In 1999 and 1998, GDP was at 1.1 percent and 3.7 percent, respectively.
Already falling short
What can we expect this year and till the end of P-Noy’s term? There are many estimates that are bandied about, but most are way below the average 8.4-percent GDP that HSBC has set as a premise for the Philippines to becoming the 16th most powerful economy in the world.
For sure, it’s going to be a tough act getting the growth that we need to outclass other competing economies even this year. In the meantime, let’s best enjoy this “very optimistic” forecast that a conservative company like HSBC has given us as a nation. This is one prediction that I will pass on to my grandchildren for them to validate.
Kung Hei Fat Choi
Today, the Philippines celebrates the Chinese New Year in honor of the millions of Filipinos with Chinese lineage. This yearly celebration has become more popular through the years not only because it is fun to watch the dragon/lion dance, but also because of the other rituals and practices that purport to bring good luck.
According to Chinese custom, this will be the year of the Dragon, one of the 12 animals in the Chinese Zodiac, considered by geomancers as the ultimate auspicious symbol signifying success and happiness.
2012, in particular, is the year of the Black Water Dragon. At a time when the world is still beset by uncertainties, Chinese zodiac experts are not unanimous or certain about upcoming economic prospects.
From 2012dragon.com, here are a few trivia worth repeating:
“To get an idea of the magnitude of events that might occur in 2012 it is helpful to look back on the last time the Water Dragon made an appearance, the year 1952. In February Elizabeth II became Queen of the United Kingdom, beginning a reign that still continues today.
“The UK was responsible for another amazing feat of longevity. In November Agatha Christie’s Mousetrap opened in London, eventually setting the record for the longest, continuously running production of a play in history.
“It is not really cause for celebration, but in 1952, the United States introduced two of the most destructive weapons in history, the hydrogen bomb and the B-52 bomber.
“On a more positive note, the field of medicine saw the first successful separation of Siamese twins at Mt. Sinai hospital in Cleveland, Ohio. And, to make the point that significant bad things can also happen in a Dragon year, in December a killer fog descended on London, one result being the invention of the word smog.
“Throughout history, parents in China have hoped to have children during Dragon years. What famous people will be born in 2012, and how will they change the world?
“The year 1952 claims world leaders including Vladimir Putin and Lee Hsien Loong. In the world of sport Jimmy Connors dominated the world of tennis and became one of the greatest players ever, while football coach Bill Belichick has struck fear into the hearts of opponents, winning four super bowls in the process. And, Craig Newmark, founder of Craig’s List, has revolutionized the world of advertising.
“In fact Dragons dominate the world of business. CEOs born in 1952 have run Coca Cola, Exxon-Mobil, Alberto-Culver, Time Warner, Colgate-Palmolive, Viacom, UPS, Radio Shack, Clorox, Tiffany & Co., Hershey, ITT, Macy’s, Xerox and Walgreens to name a few.”
For whatever the above trivia is worth, let me extend my greetings to all our readers. Kung Hei Fat Choi! A prosperous new year to us all!
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