May 4th, 2015

Groovy Kol

The Asian century

In 1950, the world looked quite different from what it is now. Exhausted from the war, Germany and France relinquished their leading positions as economic juggernauts, and minor countries like New Zealand and Venezuela joined the pack. But none of those turned into a world leader - and for a reason.

Fast-forward to 2050, and the world will certainly look very different from today. A recent PricewaterhouseCoopers research (*.pdf) forecasts that the G7 countries will have handed their primacy to that part of the world which commenter Fareed Zakaria would call "The Rest". China and India are on their way to becoming the leaders in terms of GDP (at market-price estimates).

The reseach has examined the world's 32 largest economies, which produce 3/4 of the world's wealth. But there's one thing its authors may've overlooked. It's the question whether economic weight necessarily means political influence and leadership. That's what's causing both hopes and concerns to the 7 largest developing economies (Brazil, India, Indonesia, China, Mexico, Russia and Turkey, called "E-7" by the PwC). For instance, before fulfilling the predictions of the analysts about "Asia's Century", the likes of China and India would have to find long-term solutions to seemingly trivial problems like education, hygiene, public health, and sustainable development. In China's case, there's also the pressing issue of the smooth transition from a planned economy to a market economy. The more these economies grow (and their appetites for global leadership, respectively), the bigger these problems will be getting.

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