Looking ahead to a year of caution and mild dread
Better to toast the arrival of 2012 with chamomile tea rather than champers.
Predicting the future is a thankless task. If you're wrong, you're mocked, but if you're right, no one really appreciates it properly. And then, it's never very attractive to do the I-told-you-so thing.
That said, it's always a worthwhile exercise to cast forward at the start of a new year and consider some of the issues and events that will shape the months ahead.
Right off the top, expectations — and forecasts — for the year are overwhelmingly glum.
The recently-released poll, Global Barometer of Hope and Despair, skews pretty heavily to despair. The global consensus for 2012 is that, at best, things will stay the same. Which isn't exactly encouraging.
In particular, Canadians who were polled online expressed significant overall pessimism. Some 36 per cent expect 2012 to be economically difficult, 43 per cent expect no change, 16 per cent expressed some hope and five per cent were unsure.
With expectations and confidence so subdued, 2012 will not bring a flourish of consumer spending or a willingness to invest in anything with more than a plain vanilla risk profile.
On top of that subdued mood, politics will continue to play a principal role in business and economic fortunes in 2012. How governments respond — individually and together — to stagnant economies and sovereign debt crises, has a direct bearing on investor confidence and market performance.
To a great extent, domestic preoccupations will largely eclipse globalization and the international community over the next several months.
The most obvious point of political focus will be the upcoming presidential election in the U.S. With unemployment tracking to hit nine per cent next year, it's going to be a tough slog for President Obama. There's no chance he'll get to reprise the campaign of uplift and hope that swept him to office in 2008.
Even if he is re-elected, the political standoff with Congress will keep the current gridlock intact — Obama won't be able to rely on full support from other Democrats. That's likely to keep the U.S. turned inward, reluctant to engage internationally — which is not helpful for either domestic or international economic prospects.
(In the NAFTA context, there is also a 2012 election in Mexico. Whoever is elected president will have to grapple with the horrific violence that's been unleashed by the Mexican drug cartels — and the impact that's had on confidence in the country and the credibility of its government.)
China will also have a busy political agenda in the coming year.
In addition to the appointment of a new Chief Executive for Hong Kong and elections in Taiwan - which could bring in a less mainland-friendly government — a new Central Committee will be selected in October. Neither President Hu Jintao or Prime Minister Wen Jiabao — with whom Western leaders have become familiar, if not comfortable — will be in the mix.
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