Hope is like a road in the country; there was never a road, but when many people walk on it, the road comes into existence. — Lin Yutang
Impossible is a word only to be found in the dictionary of fools. — Napoleon Bonaparte
This writer predicts recovery in the world economy in 2010 and that it will start here in our dynamic, resilient, resource-rich, ancient civilization-heavy and vast region of Asia. I came to this conclusion based on my studies of current international economic news and of history.
Despite my optimism for 2010, we in Asia shouldn’t be complacent but brace ourselves for difficulties and uncertainties throughout 2009.
Why a world economic recovery next year? I can think of many reasons, but here are some reasons (not in any order) for this cautiously bullish forecast:
• The Obama presidency - The morning after the inaugural of US President Barack Obama, Philippine STAR readers and DZRH 666 AM radio station hosts May Binauhan and Dennis Antenor interviewed me by phone for a half hour about my assessments of that historic event and the new leader’s possible impact on the global economy.
It is my belief that there’s no way to go for the world’s still-largest economy, the US, but up, and the only question in my mind is whether Obama will go down in history as a good president or as a great hero. I asked in the radio interview, how could anyone on earth possibly do worse than former President George W. Bush?
I have supreme confidence in the leadership of the highly educated Obama based on how he efficiently and almost seamlessly managed his once-ragtag election campaign into a phenomenal, cash-rich, high-tech grassroots machinery that routed political legends like Hillary Clinton.
More than his intellectual and strategic mind, Obama inspires trust, and the US, as well as the whole world, now needs to bolster confidence in our banks and a better future.
• The US$850-billion economic stimulus for America - It is not only the far-reaching impact of the proposed $850 billion to a trillion economic stimulus package and tax cuts that I am bullish about, it’s the way President Obama is going to wisely allocate these funds into productive, reform-oriented catalysts such as better roads and infrastructure, alternative energy, upgrading US schools, overhauling the health care system, environment-friendly technologies and others.
• The four-trillion yuan ($586 billion) economic stimulus for China - The first major economy on earth to unveil a huge economic stimulus plan is China, with a visionary plan for massive state spending on better infrastructure and social welfare modernization. The stimulus is more than double that of the 27-nation European Union (EU).
In health care reforms alone, the government of China has announced 850 billion yuan ($124 billion) in spending for three years. The objective of the economic stimulus isn’t just to bolster economic growth but also to fundamentally strengthen the physical, technological and social infrastructure of the world’s third biggest economy for long-term economic global competitiveness.
• Record-low world oil prices - In early 2008, when world oil price kept on surging to record levels, some of the best international analysts shocked us by predicting a long-term price of $200 per barrel! Today, world oil prices are reaching record lows, which is good news for many economies, including that of the Philippines.
This global economic slowdown will hopefully dampen oil demand and the new ecologically conscious US President Obama will hopefully spur huge research and development of alternative sources of energy to make the world less dependent on fossil fuels. Germany and China are now leaders in alternative energy innovations.
• Financial reforms to stabilize credit markets - Government reforms of the financial industry worldwide, capital infusions or even outright state takeovers of banks and other financial institutions, more stringent regulations and improved transparency of finance firms — all these will hopefully soon bolster public faith and stabilize our credit markets.
True, there are now dark clouds of uncertainty and potential cataclysmic storms on the economic horizon. We should work harder, lessen corruption in government, and lessen waste in the private sector. We must be resourceful in increasing overall national productivity and creating more jobs.
I urge everyone to plan for the worst but hope for the best!
It is ironic that we in the Philippines were often laggards in the past when it came to the economic boom of our Asian neighbors. Fortunately, our economy is once again a laggard now in suffering the full negative effects of the global economic slowdown.
However, we should put our house in order, push structural and systemic reforms, even over the objections of the many selfish politicos, and invest more in modern infrastructure and better education so that the Philippines can benefit from what I strongly believe will be a global economic turnaround by 2010.
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Thanks for your letters, all will be answered. Comments welcome at willsoonflourish@gmail.com.