Isobel Coleman

Democracy in Development

Coleman maps the intersections between political reform, economic growth, and U.S. policy in the developing world.

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Missing Pieces: The World in 2060, Middle Eastern Prospects, and More

by Isobel Coleman
November 16, 2012

Laborers work at a construction site of a commercial complex in Mumbai, India, April 26, 2012 (Vivek Prakash/Courtesy Reuters). Laborers work at a construction site of a commercial complex in Mumbai, India, April 26, 2012 (Vivek Prakash/Courtesy Reuters).
In this edition of Missing Pieces, Charles Landow reviews a newspaper piece, a scholarly article, and reports from the OECD and the IMF. Enjoy!
  • The World in 2060: Currently the United States produces 23 percent of global GDP against 17 percent for China and 7 percent for India. By 2060, says an OECD report, these shares will be flipped: China will account for 28 percent, India 18 percent, and the United States only 16 percent. Likewise, while China and India today combine for less than half the G7’s GDP, in 2060 their economies will total more than 1.5 times the G7’s. With this growth, GDP per capita in China and India stands to increase by more than seven times, the OECD says. But strikingly, this will not erase “significant gaps in living standards between advanced and emerging economies.” According to an Economist analysis of the OECD’s figures, GDP per capita in China will be just 59 percent of the U.S. level in 2060. For India the figure will be 27 percent, for Brazil about 40, and for Mexico about 50.
  • Middle Eastern Prospects: An IMF report evaluates the economic scene in the Middle East. Unsurprisingly, the major divide is between oil exporters and importers. While the former are growing robustly, the latter face serious headwinds: high global prices for food and fuel (which many countries subsidize), weakness in Europe, and lagging tourism and foreign direct investment. Importers’ growth should rise from 2.1 percent this year to 3.3 percent next year, but that is “far below what is required to address chronic and growing unemployment,” the Fund says. It advises countries to cut expensive, inefficient subsidies and pursue “targeted social safety nets” instead. Some of the savings can go to infrastructure and public services “to spur growth and reduce income inequality.” Moreover, the report says, oil importers “will need to aim for higher, sustained, private sector-led growth.” Reforms to the business environment, educational system, and labor market are all needed, as is better access to finance.
  • Transparency’s Side Effects: What could be wrong with transparency? Plenty, says an article in the American Political Science Review (also available in an earlier free version)—at least in the case of authoritarian legislatures. In a randomized experiment, the authors posted information online about the work of 144 of the 463 delegates of the National Assembly of Vietnam. Far from defending their constituents’ interests more vigorously, delegates subject to this transparency shied from “participating in legislative activities that could embarrass regime leaders,” including “direct criticism of ministers.” The authors argue that legislators “feared their comments may be revealed to the public,” which could disrupt their cozy relations with the regime. Delegates subject to the intervention also fared worse than others in the 2011 election, apparently because “their enhanced visibility was… threatening enough for regime and provincial leaders to keep them out of office.” As the authors conclude, “caution should precede all legislative transparency programs in authoritarian countries.”
  • Portuguese Emigration: The path of migration from Africa to Europe is well-trod. But Europe’s economic woes are sending some migrants the other way. The Washington Post reports that tens of thousands of Portuguese are seeking fresh starts in their country’s former colony of Mozambique. “Everyone is feeling the pinch of the economic crisis, and Mozambique offers a lot of opportunities,” the Portuguese consul general in Maputo says in the piece. Not everything is rosy: laws promoting the hiring of locals, bureaucratic delays, “unrealistic expectations,” and Maputo’s high cost of living drive many immigrants back home. Some Mozambicans also “see the wave of arrivals as a form of neo-colonialism.” Still, until prospects in Europe improve, the trend seems likely to continue. The IMF projects that Mozambique will maintain annual real GDP growth of more than 7 percent in the coming years while Portugal struggles to climb above 0. The BBC reported last year that Portuguese are flocking to Angola and Brazil, too.

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