I am a great fan of 19th century author Charles Dickens, whom we studied at school, oh so long ago.
Always taken with his word choice, and strong literary characters, in his books.
There was Mr Micawber, whose “economic philosophy” was simple.
“Annual income 20 pounds, annual expenditure 19 (pounds) 19 (shillings) and six [pence], result happiness.
Annual income 20pounds, annual expenditure 20 pounds (no shillings) and six (pence 5 cents), result misery.”
And early assessment, of living beyond one’s means.
Mind you, Mr Micawber, throughout his life, based on a real character in David Copperfield, had the philosophy that in the midst of challenge, “something will come up,” to always look on the bright side.”
And that appears to be the philosophy of many in Bahrain, where the growth indicators, with frequent stories, that major investments, are “a-coming,” the economy now buoyant and promising.
The large accumulated debt, is being reduced, through a combination of government actions, reducing subsides, introducing a VAT, sensible use of the “package,” recently delivered by Kuwait, the UAE and Saudi Arabia.
Bahrain is conducive to good lifestyle, sound economic infrastructure, a good regional banking and financial basis, attracting plenty of investor interest.
Why shouldn’t it be optimistic?
Well, prudence suggests, the global economy, seems to be running out of momentum, some of the economic indicators, are deteriorating.
And that involves the ability to invest.
The South Korean KoSP-100 stock exchange, the German DAX are feeling concerns, equity index is down 7 per cent, down from its earlier peak of 24pc in October last year.
According to Press reports, even the US stock market, despite the earlier global stock market crash, and despite the stimulus given by the Federal Reserve, has been fully absorbed, and now many businesses, which reacted to the low interest rates, are now struggling with rising interest-rates.
The OECD “composite indicator” of stocks, has fallen to low levels, and the Indian stock market is also showing decline.
Although these things are, but signs, there are “uneasy beliefs,” among numerous economists, that the “financial Bulls” are slowing down and the markets becoming more “Bear like,” and withdrawing to their financial caves.
All these “indicators,” for that is what they are, are a warning to be vigilant, and prepared, for a possible, “GFC” anew.
Australia in the 1990s, enjoyed a huge mineral boom, people in Western Australia purchased property, much of it in large homes and mansions, and in Perth and elsewhere, and many properties were heavily mortgaged.
When I was in Perth recently, plenty of places with For Sale signs.
The performance of the Bahraini economy, through more astute policy in reducing debt, and financial assistance from neighbours in the GCC has been vital.
The country is again booming.
So enjoy the good times while you can, but have a Plan B for any collapse in any global changing economic circumstances.
For it will affect investment regimes.
Fingers crossed!
Just don’t over commit on expenditure!
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