A year back, Lehman Brothers, the icon of Wall Street and all that it stood for, came crumbling down, in almost prophetic fashion ushered in the worst economic recession that the world has ever seen. The event was not the crash of Wall Streets premier bank, but it was perhaps the proverbial straw that broke the camels back. Economies around the world felt the economic tsunami that ensued, wave after tidal wave of what was bad news. The GGC economies, who had on the back of their liquidity, weathered previous recessions of global proportions without more than a sneeze, suddenly realized the interlinking of economies was perhaps more closely knotted than one would have imagined in the past.
The issue is what does it feel for a recession to be one year old? Well in large measure some people would say 'miserable' while others, who are prone to seeing the forest rather than count the trees, would say well 'value was created'. Indeed, its all about perspectives and its not like the world came to a standstill, even though belts were tightened and a difference emerged between those who hope it will all go away, and those who did something about it. China and India shrugged off the recession with remarkable ease, Germany and France has shown more grit than was expected. The United States has been a bit of a struggle but the stock markets are off their bottom levels, the impending collapse of some banks has been averted and in a sense there is evidence that things do have the thinest of hopes for a better recovery.
As bizarre as this may sound my guess is that the slide in the market will be arrested now and we may begin to see signs of a gradual recovery. It is more likely that this recovery will be slow with some stops and starts. In the context of the GGC and specifically the UAE I feel a little more optimistic given that liquidity levels have improved and the banks are beginning to see they have a more positive role to play and this will translate into a better economic performance. The recovery will not be euphoric but more cautious and this will be good for the overall health of the economy.