Asian Renaissance: To draw a map of the new global economy ..

Asian Renaissance: To draw a map of the new global economy ..

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There is a shift in the balance of global economic powers in favor of emerging countries economically, particularly Asian countries to become the Asian century par excellence, in the light of what will be achieved by the economies of its countries of growth rates and high developmental shifts.

This is what has been concluded by the unit of research of the British «Economist» group, in a special report recently published about the general economic patterns in the world until 2050.The Economist Group is the leading source of analysis on international business and world affairs . The Economist Group is providing forecasting and advisory services through research and analysis, such as monthly country reports, five-year country economic forecasts, country risk service reports, and industry reports.

The report is based in its economic forecasts over the next few decades  on the recent studies that have used a model to predict trends for long – term growth until 2050, It was the use of the annual census of the international Monetary Fund for 2014 that  the  GDP for each economy is estimated  as a basis point for  this prediction, as well as some of the factors involved in the structure of the model , such as demographics, the rate of  the growth of labor force , and the increase in human and physical capital, and total productivity growth based on technological advances element.

Continuing for «phenomenon of Asian renaissance», the report expected by that year, China to be economically the strongest, based on the renaissance and its rise, and that India occupies the second place, ahead of the United States; to become both (China, India, and the United States) are the three biggest states economically in the world, where the United States will lose first place to retreat for the benefit of the Asian poles to the third place.

The professional company (PwC)  , specialized to the economic affairs has concluded to the analysis  to draw a form of the global economy after 33 years  starting from today which means by 2050, where  the economic centers of power in the world  will be changed, noting that the analysis includes   , that its content published by  British newspaper «Independent» ,  the ten  strongest economies  in the world, the following chart shows those expectations

 

 

If we take the economic indicators of the growth of each country, we will notice the following:

China: its economy to achieve a growth by more than 10% per annum, and it seemed clear that it is in an upward path since its economy is scoring in 2014, a leading position to become the largest economy in the world, according to the average of purchasing power (PPP), and the rate of the market exchange rate (MER), It is expected that Beijing fully overtake the US by the year 2028.

Although as some of analysis regarded China ‘s economic growth slowing, the global GDP reached by 16.5% in 2014, and there are expectations that up to its highest level, which is 20% in 2030, to decline again and stabilize at 19.5% in 2050.

China owns a plan to stimulate the economy and adjust its economic growth, which is the thirteenth five – year plan, and the success of the overall economic and social plan , which covers the years 2016 to 2020 is crucial for China if it wants to avoid a recession , which prevents its transformation into a state of incomes above average”, and include a plan to increase health insurance coverage rates of 100%, and build fifty new airport, and the expansion of high – speed rail lines, air pollution reduction of 25%, and the eradication of poverty in the countryside, connecting 98% of villages of high – speed Internet access, and create 50 million new jobs in cities. There is a great interest in employment in China.

Reports indicate that it is possible for the rest of the world to take advantage of China’s sustainability strategy as “Made in China” means the transformation of the “cheap and fake” to “reasonable and reliable.”

India: Indian economy has achieved a growth rate of 7.9% during the first quarter of 2016, based on agricultural development, which in turn led to a substantial rise in exports of food, and the improvements witnessed by the health sector and the development of services and medical care has also led to a large demographic diversity, with expectations that India will soon become the largest workforce in the world and the most youthful.

India has been able in recent years to attract a large number of international companies that belong to different sectors and industries ranging from pharmaceutical production, through to the mining industry and space technology, which has led to the achievement of this great economic revolution in the second largest country in the world’s most populous.

And reports refer that New Delhi has the potential to become the second largest economy in the world by 2050, according to the rate of purchasing power, and occupies third place according to the rate of market exchange. And “to achieve an annual growth rate of 9 percent over the next decade, India needs to greater improvement in the human development rates and speed up privatization and political stability”.

And India is currently enjoying with financial and economic stability significantly compared to the early nineties, in addition to the successful integration into the global economy of some the most advanced manufacturing industries such as software.

India is working to achieve its ambitions to access by exports to 1% of total world exports by 2007, and to attract $ 10 billion a year of foreign investment, and to achieve an annual growth rate of 9% over the next ten years.

This requires the existence of an ongoing program of sustainable structural reforms, as the share of India arrived from global GDP 7% in 2014, and is likely to reach 13.5% in 2050, as India will surpass the European Union’s share of global GDP in 2044, and also it exceeds the share of the United States in 2049.

Indonesia: a population of 240 million, and today has a dynamic economy, is expected to enter in 2050 the list of super powers globally, and become the fourth largest economy in the world, and their positions on the way towards positive change.

Experts predict within two decades , the birth of the Asian economic giant sits on the throne of seventh economic power in the world noting the Western reports indicate that the economy of this country has achieved spectacular growth in the past ten years reached 6% in 2012, and it is today more economically stable than China, Russia, India and Brazil. World Economic Forum refers to the development of Indonesia’s economy as it was ranked in the (2012) the 29th among 139 countries after it was ranked 89th in 2007.

For comparison, the Brazil, despite being an emerging economic powerhouse, was ranked 26th and India ranked of 99. if we take the gross national production, Indonesia is ranked 16 as economy power now in the world, and that if the growth of the Indonesian economy continued in this way and without significant obstacles, it would jump out to the seventh place in terms of the size of the economy in 2030, ahead of the United Kingdom and Germany, which constitute two of the seven largest economies. Is this miracle will be achieved? And Indonesia will be the miracle of the economic world by 2030, because it is opposed to economic tigers in the region such as China, South Korea and even Japan, whose economies rely heavily on exports, the Indonesian economy is heavily dependent on the service sector, the export of raw materials which constitute 16% of the national production and exports in general, and contributes to 35% of it.

Brazil: Brazil seeks to boost business investment, improve employment and other means, as the Brazilian Finance Minister Henrique Meirelles noted: “that the goal of the country this year 2017 is the recovery of the economy and financial adjustment to lay the foundation for economic growth.”

The latest results of a survey of the Central Bank of Brazil has shown that the market expects the Brazilian economy to grow by 0.8% in 2017, and work is underway to reach 1%, and Brazilian companies are making efforts to cope with all eventualities.

Russia:
Russian economy since 2012 seemed to enter the deficit stage, revealing a severe weakness in the fortification against the sessions of volatile global economy amid expectations for a large decline of cash reserves , which accumulated in the years of the oil boom by not long ago which is the year 2017.

The World Bank warned that the poverty rate in Russia is rising sharply, due to the reasons of the economic sanctions imposed by the European Union and Washington, against the backdrop of Russia’s annexation of the Crimea in 2014, leading to damage to the financial sector and the sectors of energy, defense, to deepen the impact of low oil prices on Moscow ‘s economy, while the Russian currency , ruble , that it fell about 50% against the dollar since August 2014, and the economic situation is creating pressures that changed the standards of living standards in the rest of Russia, noting that the weak ruble means higher cost of imports and, by contrast Moscow banned the export of some food products, resulting in a shortage of global supply and thus a rise in the prices.

And the cost of military intervention in Syria cost another burden on Moscow, which it spent $ 482 million until 2016, according to The New York Times.

On the other hand, Russian reserve was fallen, which is supposed to fortify the country in a time of crisis about 45% since September 2014, as a result of the continuing deficit ever recorded by the government, so that the Russian Finance Minister Anton Siluanov announced that the country’s reserves is eroding slowly, warning that it could run out entirely by 2017.

Russian official revealed that his country may resort to withdrawal from other financial reserves as a fund’s sovereign wealth related to the salaries, which worth more than $ 73 billion, as the government has already started using its money in spending on infrastructure projects and save local banks from bankruptcy.

Mexico : the country is known by poverty, corruption and crime gangs, today it became one of the strongest economies in the world, as it is the fifteenth in the world in terms of nominal value, and atheist ten in terms of purchasing power parity, according to the World Bank in 2015, with an estimated gross domestic product of about $ 1.29 trillion noting that Mexico has entered into agreements to liberalize trade with the 44 country, the number is larger than those of any other country in the world.

Export value has reached more than 380 billion US dollars, mostly medium and high technology products, Mexico is the largest silver producer and the sixth Electronics Factory in the world after the United States, China, Japan, South Korea and Taiwan, and constitute the electronics industry about 30% of Mexico’s exports. And the costs of production during the 2014 equal or lower than it is in China.

Mexico is the second largest exporter of cars in the United States and occupied the position fourth globally among the largest exporters of cars in the world during 2014 noting that the largest car companies in the world such as Nissan, Mercedes, BMW and Volkswagen have factories in Mexico, some dating back to 1930, as the inexpensive labor and proximity to the huge US market constitutes an attraction factor for many of these giant companies. And Mexico has become in recent years , a great example to diversify sources of income, having been heavily dependent on oil exports, which accounted for 60 % of the country ‘s exports in 1980 , we find today that oil constitutes only 10% of its exports and it is the sixth – most country in the world that contains archaeological places registered in UNESCO , where its number is 32 locations, making it a major tourist country despite all the danger and insecurity, noting that it is ranked 128 globally in the security and safety aspect, but nonetheless is the tenth country in the world in terms of the number of tourists, which numbered about 30 million .

A number of analysts believe that Mexico – which continues to record steady economic growth in recent years-will advance and become one of the largest economies of the world, where it is expected that the Mexican economy will double almost triple by 2020, according to reports by Goldman Sachs, the US bank, and Mexico will be by the year 2050 among the world’s biggest economies.

The value of foreign direct investments in 2015 reached to more than $ 25 billion, making it occupies ranked the 15th to be considered as the largest investor of the countries in the world and first in Latin America, while attracted more than $ 35 billion US dollars of direct foreign investments.

The success lies in the experience of Mexico that the economic reform process does not exclude an area or sector of the sectors where going in parallel in all directions.

Japan:
the Japan Center for Economic Research “JCER” published on 19 December results of its expectations for its survey ESP for the month of December , based on a survey of 40 economists from the private sector, who predicted real growth at the rate of 1.19% in the GDP , (nominal growth 1.21%) for the financial year 2016 , which ends March 31 – 2017 and a real growth of B1.19% (nominal growth of 1.37%) for the financial year 2017. they expected decline annually in the consumer price index up to its lowest level in annual quarter that extends from July to / September 2016, paving the way for a slight increase in the quarter extending from January to March 2017. They expected inflation based on amount of 0.24% in the fiscal year 2016 to rise to 0.73% in the fiscal year 2017.

Under the new accounts, the estimate of nominal GDP calculated for the period between April and September 2016 is 536 trillion yen, the highest according to the records. According to this figure, the annual nominal growth rate of 2.3% makes the GDP of Japan’s 595 trillion yen, by the second half of 2020; and 602 trillion yen by the first half of 2021. This is a more realistic from nominal growth by 3%, which was it must be achieved to reach the government’s target to 600 trillion yen by 2020, almost, which is already much lower than the nominal growth rate of 2.8% recorded in 2015 and thanks to the adoption of the latest standards of accounts across the country for the economic recovery and to get to achieve its goals.

Germany:
German economic research institutes experts see on the expected development of the German economy, stressing that the German economy is stable, and that growth in it continues, but somewhat less than that was at a rate adopted early in 2016, and the report called the German government for the investing more in the education sector, and reduce taxes on workers and employees in the country to encourage more consumption.

The experts of German economists predicted in their report, which placed it at the request of the German government, that the German economy to continue in the process of growth without significant adjustment, and the remaining of labor market to flourish, and the continuing of consumer desire to continue to purchase and exchange, and this will be an important factor for growth in 2016 as in 2015. This positive image did not prevent experts to confirm that promoting growth requires the government to adopt meaningful economic policy based on a more investment – for the care and education starting from kindergarten to the university, as well as in infrastructure as well. And the experts reduced the expectations of the last autumn for rates of expected growth of this year slightly from 1.8% to 1.6%, and in the following year in 2017, from 1.7% to 1.5%.

The report said that the drive to cut the expectations of growth is the weakness which appeared in the economies of foreign countries with the beginning of 2016, especially in China, and added that German experts do not expect in the next few months more vulnerable performance in the countries concerned, which means dispelling anxiety and fear, which hit the German economists during the last period.

the experts ‘ report hinted to the rise of wages and pensions significantly in the country at a time of prices the needs remain unchanged, which means the biggest rise in the purchasing power of citizens, and expects that the rate of domestic consumption to rise for the year 2016 by 2.1%, from 2015.

The report said that the total number of employees in Germany amounted to 43.5 million at the end of 2016, an increase of up to half a million people in 2015, a record number, adding that the number will rise in 2017 to almost 44 million. And because more refugees will enter the German labor market the unemployment will rise next year in 2017 from 2.7 to 2.8 million unemployed person, but it will remain clearly below the line of 3 million.

In this regard, experts of economy called on the government to work on tax cuts for workers and employees to encourage more and more consumption, and investment in education and training of refugees and immigrants as an investment for future aims to ensure the success of their integration into German society and in the labor market.

Britain:
Britain’s economy managed to achieve good results after the vote in favor of secession from the European Union in June 2015, but does not seem that this will continue in 2017. And the British economy grew by 0.6% in the last three ending months above the average of growth rate in the long term, and more than forecasts of many experts.

The economist expert Philip Shaw K. predicted for ” the economy of Britain, which broke away from the European Union in June 2016 to be the year 2017 a challenging year for the economy and, in particular, regarding the evaluation of traditional imbalances in the current account balance, Economists forecast that the growth of the British economy to fall to less than half in the next year at 1.1%.

Experts expect Britain to descend economically over the next 33 years to become the tenth position globally, rather than its current position as the fifth largest economy in the world.

USA:
US economic writer (Todd Wood) says: in an article in the newspaper (US Washington Time), 05.09.2015: «The US economy stands on the brink of collapse, and the current state of the US economy really annoying, there is a foreign debt on America amounted by nearly 20 trillion dollars, while foreign debt owed to the United States is increasing at very fast pace.

He adds: «The Washington may wake up soon to find itself in the world – that it has become bankrupt in it – and described the United States that it is (broken), pointing out that the only thing that keeps the US economy at the moment is the (Federal Reserve) which intervened to keep the prices of interest rates at low levels. »

Quoting from (CNN) at the 02/06/2015 «The Economic Researcher (Nouriel Roubini ; a professor of economics at New York University), which the nickname of him is (Dr. of disasters) warned about the major financial and economic disaster in the world, including the recession of 2008, and among other factors , he said they interact in the global markets currently, and may lead to the emergence of new crises linked to the levels of available cash, «Roubini added that« liquidity is the lifeblood of financial markets, and is measured by the ease of selling the shares and bonds by investors in exchange for cash in , but when investors are afraid to sell their shares, concern is spreading in the markets, which could lead to its collapse, « the crisis that the United States experienced today, is the economic crisis, and public debt which owe is not only to individuals and local governments, companies and banks, but now extends to worldwide countries, the most important is China , which have debt on the US government estimated by $ 3.2 trillion.

Roubini wonders: «How can we imagine how tough the collapse in case of US announcement about its bankruptcy, I do not think that this day is not far away».

(Ulrich Schaefer) , author of the book ( the collapse of capitalism, 2010) says : (The world will live in the coming days , an era of negative growth rates ; a decline in production levels by about absolute and violent ways noting that the dangers which are around the global economy exceeded all the risks that plagued it earlier in time, the future of the capitalist system depends on how the change will be introduced to the morals prevailing in society, but if the community ignored this fact; the market economy would be exposed to the same fate suffered by the Socialism (collapse and disappear from existence).

Shatha Khalil
Unit Economic Studies
Translated by : Mudhaffar al-Kusairi

Rawabet Center for  Research and Strategic Studies