Thursday, December 14, 2006

For the pessimists: The Global Poor Are Getting Richer, Faster

...and it's not God's work. It's our own and mostly attributed to free trade and globalization. from TCS Daily
In a report out today, The World Bank looks both at current economic growth rates and projections for the next 25 years. The report, Global Economics Prospects 2007 says "developing economies are projected to grow by 7.0 percent in 2006,more than twice as fast as high-income countries (3.1 percent), with all developing regions growing by about 5 percent or more." While these nations have only 22 percent of global GDP they accounted for 38 percent of the increase in global output. And they are expected to increase their share of global output by about 50 percent by 2030.
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The net result is that the income of developing countries "will continue to converge with those of wealthy countries. This would imply that countries as diverse as China, Mexico and Turkey would have average living standards roughly comparable to Spain today."

As good as this is the Bank says things could be even better. They believe their projections "are fairly impervious to all but the most severe and sustained shocks" but they also admit that "the possibility exists that the world will be even better than envisioned... thanks possibly to unanticipated technological improvements, more innovation in business processes that allow for an acceleration of globalization and widespread adoptions of good policies within countries."

Their "optimistic" scenario would lead to incomes 45 percent higher than today and a decline of absolute poverty from 20 percent of the world's population to 4 percent. So many people seem to intentionally look for bad news or invent it. It's a nice change of pace to find a report from a world body which says that the future is either bright or very bright.

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