It began with the Tunisians toppling their authoritarian regime, which we soon realized was a catalyst for what many have labelled the “Arab Spring.” What we then saw was unprecedented – the power of collective action inspiring a suppressed generation across the Arab nations.See the Slide Show >>> In Pictures: 12 Fastest Growing Economies for 2012
Egypt disposed of their dictator Hosni Mubarak. Libya experienced a hostile armed struggle for months, before Muammar el-Qaddafi was eventually captured by rebels.
Japan was struck by successive disasters, namely the devastating Tsunami, followed by the equally devastating Fukushima nuclear disaster.
Financial markets didn’t fare too well either in 2011. Across major world indices, the numbers are mostly at a lower level than what they were at the start of 2011.
The United States recovered slightly from its 2008/09 subprime mortgage crisis which eventually morphed into a global credit crunch. Though the economic vital stats for the world’s largest economy are mostly showing signs of recovery, persistently high unemployment rates continue to plague the country.
Over in Europe, the governmental debt crisis saw the PIIGS crumble, with political leaders in Italy and Greece ousted from office for failing to adequately manage their nation’s finances. German Chancellor Angela Merkel recently called the crisis “Europe’s worst crisis since the Second World War.”
If you ask Dr. Doom, aka Nouriel Roubini, what to expect for 2012, this is what he has to say:
Roubini, who is famed for accurately predicting the U.S. housing market crash and global recession in 2008, is not alone in his warning calls. The Federal Reserve Bank is predicting a 50% chance of a U.S. recession in 2012, while institutions like the OECD and UBS have cut growth forecasts for the United Kingdom and eurozone.
But the outlook for 2012 is not all that pessimistic. Looking at the numbers pulled from our EconStats Database, the top 3 economies poised for growth next year (Niger, Iraq and Angola) are set to clock in double digit growth.
A further investigation reveals the growing strength of Asian and African economies.
Many doubts have been raised about the future of the Chinese economy. Some say the Chinese housing market is a bubble waiting to burst, while others point out that China’s inflation and overdependence on exports would eventually spell doom for its economy.
But as many other analysts have argued, China is most likely to experience a soft landing. As Stephen Roach, non-executive Chairman of Morgan Stanley Asia, writes:
(cont.) An increasingly unbalanced Chinese economy cannot afford persistent 10% GDP growth. Provided that there is no recurrence of the severe external demand shock of 2008 – a likely outcome unless Europe implodes – there is good reason to hope for a soft landing to around 8% GDP growth. A downshift to this more sustainable pace would provide welcome relief for an economy long plagued by excess resource consumption, labour-market bottlenecks, excess liquidity, a large buildup of foreign-exchange reserves, and mounting inflationary pressures.
For China, there is a deeper meaning to recent global developments. A second major warning shot in three years has been fired at this export-led economy. First, the United States, and now Europe – China's two largest export markets are in serious trouble and can no longer be counted on as reliable, sustainable sources of external demand. As a result, there are now major questions about the sustenance of China's long powerful export-led growth model.
Accordingly, China has no choice but to move quickly to implement the pro-consumption initiatives of its recently enacted 12th Five-Year Plan. Strategic transition is what modern China is all about. That’s what happened 30 years ago, when economic reform began. And it needs to happen again today. For China, a soft landing will provide a window of opportunity to press ahead with the formidable task of increasingly urgent economic rebalancing.
In terms of growth forecasts, China’s GDP is expected to reach $7.209 trillion in 2012 with a growth rate of 9.52 percent. In contrast, major advanced economies in the G7 are looking at a collective growth average of just 2.45 percent.
India too, is looking forward to a good year in 2012. GDP is forecasted at $1.858 trillion, a 7.82 percent increase from 2011. Home to the second largest population in the world, Goldman Sachs predicts that India would become the third largest economy in the world by 2035, just behind the United States and China.
Globally, companies have their eyes set on India as a rapidly growing nation that is full of opportunities. The sheer scale of development needed could drive growth for many years.
But in what would come as a surprise for many - It is indeed time for Africa.
In the article, Africa Rising: Can “The Dark Continent” Outshine Its Former Colonial Masters?, Economy Watch journalist Raymond Tham argues that “there has been a paradigm shift where African nations are now leading the world in economic growth and can more hold their own against their ex-colonial masters.”
And the numbers speak for themselves. Niger, Angola, Liberia, Ethiopia, Mozambique, Zambia feature in the 12 fastest growing economies for 2012.
According to Raymond, “While their former colonial masters were bickering over possible solutions for a debt crisis that is slowly eating away at the heart of Europe, some African states were quietly presenting their own structural reforms that have helped them to manage national debt and public finances.”
Things are different in Angola. Blessed with an abundant supply of crude oil, and now backed by Chinese money, Angola was forecasted to be the 7th fastest growing economy in the world for 2011 by the IMF, and looks ready to accept more and more Portuguese immigrants to their country.
It is not easy to be optimistic in the outlook for 2012, given all the gloom and doom we’ve witnessed this year. But as Raymond states, emerging economies led by Asia and Africa are assuming more active roles in determining the global economic path.
Could the Asian and African decade extend into 2012?
Looking at our real-time global consumer confidence index, both Asian and African regions are indicating optimistic outlooks for the next year. The same, however, cannot be said for Europe.
What is your outlook for 2012?
You can see our predictions in the slideshow, The 12 Fastest Growing Economies in 2012.
P.S. Well, with Christmas just around the corner, it wouldn’t be a surprise if many of us (adults) find ourselves asking Santa for more jobs, a stronger economy, and less socio-political turmoil around the world. But if Santa doesn’t grant you your wish come Christmas, it’s not because you’ve been bad this year – Santa’s probably lost his job too.