Tuesday, December 22, 2009

Economics: 2009 Highlights & 2010 Forecasts

In every respect 2009 has been a real bitch!
I will not be surprised if, a few years from now, the number 2009 becomes synonymous with nastiness, catastrophe and bad omen. The superstitious bunch will do everything to avoid that number like a plaque. 2009 shall forever be remembered as the year the bottom fell out of the global economy setting an unprecedented chain reaction of business failures the like of which has not been seen in modern times.
All the vital socioeconomic indicators of the year have been abysmal.
There is absolutely no doubt in my mind that when the hard statistics of 2009 are finally computed and analysed, the extent of devastation in terms of cost and human capital will be substantial. Millions of workers, investors and entrepreneurs have already lost their livelihoods and, with it, the middle class lifestyle they have built over the years for themselves and their families.
2009, in a major positive way, will be benchmarked as the starting point of a new global economic order. So as the year screeches to an eventful end, it is hoped that the many victims of what has been the annus horribilis of the global village will find some reasons to expect a quick recovery of fortune.

The Global Economy 2010
With the death of the laissez faire free market franchise, the birth pangs of the evolving global economic consensus will continue to be felt in 2010 and beyond.
The emergence of the new global economic order and with it the shift of economic momentum to the East will continue to accelerate, breathing new life into the economies of the global South.
However, the economic prospects of many emerging economies and developing countries alike will continue to experience some form of constraints or even deterioration in the short to medium term as a result of diminished demand for their exports in the United States, Europe and Japan.
My expectation is that the present positive momentum will cause the tide of the global economy to rise significantly in 2010 and lead to a deepened optimism among consumers in the northern hemisphere and subsequently a rebound in global economic activity. Consumption in the East will pick up considerably.

Obama’s America in 2010
The resurgence of the global economy will not happen to the extent that it should until the economy of the United States is up and running. There are already tangible signs of an up-tick in economic activity. The most plausible scenario is that the new health care bill will pass and there will be a steady increase in employment coupled with some easing of the tough credit regime by financial institutions. These and other measures will unleash positive sentiments which will inevitably lead to increased consumption in 2010.
Having said that, 2010 will still be a pretty difficult year for the American economy in general. Barack Obama and his economic team would need the wisdom of the gods, the political acumen of Dwight D. Eisenhower and the economic wizardry of Franklin D. Roosevelt to get the economy booming again.

China, India and The East in 2010
China and India will continue to consolidate their emergence as the flywheel of global economic development in 2010. The role of the two countries in the economies of the developing world will gain momentum in 2010. You can count on their ferocious appetite for natural resources to boost commodity prices in the second half of 2010 as the momentum of global demand begins to pick up. China and India will once again grow at breakneck speeds.
And China will once again be at the forefront of investing in Africa’s infrastructure projects and in the acquisition of large chunks of her natural resources.
I foresee some simmering tension in the relationship between America and China as the weight of Chinese influence continues to grow in 2010 and beyond.

Africa’s Economy in 2010
The emerging tigers of Africa will keep on doing well.
A 5% continental growth average is the conservative forecast.
With the recent reforms in Africa's agricultural sector, the productivity and output of the sector is expected to increase in 2010.
Africa’s infrastructure development will continue to occupy the centre of economic planning and development. Chinese companies have proven themselves as reliable partners in the provision of basic infrastructure across the continent and will continue to get the bulk share of such projects in 2010.
The inexplicable dearth of big American and European non-oil investments into Africa is not expected to change in 2010. Little to no change is expected of the traditional and conservative we-will-come-if-you-do-what-we-tell-you approach by investors from the northern hemisphere towards Africa despite the unprecedented and growing profit margins Africa offers compared to other parts of the globe.
The rate of growth in trade between Africa and China is expected to grow faster in 2010 than in recent years with the maverick, China, expected to overtake the pace of US investments in the continent.
Sadly the overwhelming reliance on her trade with China will inevitably lead to economic security issues sooner or later for Africa. African countries will need to diversify not only their produce but also their international trade arrangements to offset the unhealthy dependence on big brother, China.
I predict that a great deal of political security issues will continue to bedevil the usual suspects in our corner of the world. The Guinean crisis, the Zimbabwean turmoil and the challenges in Niger and the DR Congo as well as the political quagmire in the Cote d’Ivoire will linger on throughout 2010.
Expect some erosion of economic development in these places by the end of next year.
Expect little change in the economy of Ghana in 2010.
Expect the Oil money to begin to trickle in by 2011.

Wishing you and yours a blessed twenty thanks!


sunnyside said...

I agree with u. . The ecönomy has been really bad this yr. And everyone is complaining. . Yet no matter how good or bad the economy is . , people will still complain. , so what can i say

posekyere said...

Yes. Hoping 2010 will bring better news.
Have for your beautiful self a merry Christmas and a happy new year.

Darko Antwi said...

This chapter bears some meaningful analysis of the immediate past events. And the predictions are even significant to the years ahead.

Posekyere, you can make a book out of this - if you will.

posekyere said...

A book? Gee DA!
Have never thought of writing a book. Thanks for such words of encouragement in these early days of 2010.
Bless !!!