I’ve been getting a lot of inquiries as to my view of 2012. Well, strictly speaking my view of this year is more ambivalent due to the many things going on, particular in the world economy. 2011 was a very eventful year, ballooning deficit on the US side, debt woes in the European front and lack-luster economic growth in the Asian sphere, particularly the Philippines. The stock market performed very well, only to wipe out its gains towards the later part of the year.

On the Philippine front, the Aquino government went on a all out war against corruption and the irregularities, while there is a view that the anti-corruption measures improved our situation, a lot of under-spending resulted to a sluggish economy, with forecasts being down graded fairly often.

It is not only economic woes that concerned the beginning of the new decade, the political landscape in the Middle-East is in a precarious situation. As that region controls a precious commodity, oil — the whole world is at its toes in fearful anticipation. Further, natural calamities seem to be more rampant and the damages it brings causes incredible losses as well as grief.

So what do we see for 2012? I am generally a very positive individual but I am also a realist at the same time. While my general view is on the bright side, it will be irresponsible for me to wantonly say that everything will be fine and dandy for 2012. Since my views on the matter really don’t hold much water anyway, who am I to be giving them in the first place, I thought of compiling the views of people who are really competent on their subject matters and asked them for their outlook. I opted to collect their views on post a series in my blog for the readers to peruse.

I will make my notes on the outlook and probably make mine in the last installment of this series. However, what I was able to gather from the experts are extremely insightful and very helpful to those asking what’s in store for 2012. I only asked from people that I personally know and all of them I truly admire and respect.

Catch this series!

You would often hear about the term ‘pump-priming’ whenever economic topics are being discussed or written about. What is pump-priming? It is the action taken to stimulate an economy, usually during a recessionary period, through government spending, and interest rate and tax reductions. The term ‘pump priming’ is derived from the operation of older pumps; a suction valve had to be primed with water so that the pump would function properly. As with these pumps, pump priming assumes that the economy must be primed to function properly once again. In this regard, government spending is assumed to stimulate private spending, which in turn should lead to economic expansion.

A good combination of monetary and fiscal policy should be able to provide stimulus for economic growth. In theory, a properly executed ‘pump-priming’ will stimulate growth in the economy and push it towards recovery. Well at least in principle.

There are mixed results from ‘pump-priming’ efforts in many governments, including ours. In today’s global environment, ‘pump-priming’ activities can be a case of scale issue… like using an eye dropper to fill a pail. Further, the inter-dependencies of economies is proving to be a daunting task to influence the economy more and more.

While pumping and priming the economy may bring in some results, sustainability can only be achieved with sound fundamentals. An economy that is freer seems to result to better performances. Further, too much government intervention often results to havoc or at least, breeds inefficiencies. I believe that government intervention in the economy should be limited to ensuring fair play, regulations against excesses/abuses and ensuring a level playing field. Our government has way too many corporations and agencies that compete with private ones and yet said government corporations are severely inefficient and some are carrying huge losses. Further, the size of the government should be small relative to the size of the economy. While many administrations have announced privatization efforts, it seems that we are taking forever in privatizing them. Seriously, will it take 50 years just to privatize government corporations & agencies? Will Noynoy’s regime be any better? I pray so.

Up until we thoroughly work on our economic fundamentals which include, political & social concerns, no amount of pumping and priming will result to any sustainable economic performance.

My 2 cents.

In my many talks & seminars, I often remind the participants that the biggest problem of the nation is poverty. While my nationalistic ego is bruised every time I talk about our national quality of life, I need to constantly remind as many as I can that this situation of ours is something we should not accept — it should be something we must rally against.

I believe that education is key in solving most of our problems … the more we educate, the better our chance to improve our lives. Of course, when I say education, it goes beyond schools and books — it’s about education in every aspect of our lives.

Another consideration we should also look at is our economic freedom. I subscribe to the belief that if there is more economic freedom, there will be greater chances for better lives. Does economic freedom actually result to a better life? Watch the video below and you be the judge.

Thanks Dennis Sy for recommending this video to me.