FRUITFUL DECADE FOR MANY IN THE WORLD
January 5, 2010
It may not feel that way right now, but the last 10 years may go down in world history as a big success. In economic terms, at least, the decade was a remarkably good one for many people around the globe, says Tyler Cowen, an economics professor at George Mason University.
The raging economic growth rates of China and India are well known, though their rise is part of a broader trend in the economic development of poorer countries. Ideals of prosperity, freedom and the rule of law have probably never been more resonant globally than they've been over the last 10 years, even if practice often falls short. And for all of the anticapitalistic rhetoric that has emerged from the financial crisis, national leaders around the world are embracing the commercialization of their economies, says Cowen.
Putting aside the United States, which ranks third, the four most populous countries are China, India, Indonesia and Brazil, accounting for more than 40 percent of the world's people, and all four have made great strides, says Cowen:
- Indonesia had solid economic growth during the entire decade, mostly in the 5 percent to 6 percent annual range.
- Brazil also had a consistently good decade, with growth at times exceeding 5 percent a year.
- Elsewhere in South America, Colombia and Peru have made enormous progress and Chile is on the verge of becoming a "developed" country.
- To be sure, in Africa, there is still enormous misery; nonetheless, overall standards of living rose in a wide variety of countries there, with economic growth for the continent as a whole at more than 5 percent in most years.
One lesson from all of this is that steady economic growth is an underreported news story -- and to our own detriment, says Cowen:
- In a given year, an extra percentage point of economic growth may not seem to matter much.
- But, over time, the difference between annual growth of 1 percent and 2 percent determines whether you can double your standard of living every 35 years or every 70 years.
- At 5 percent annual economic growth, living standards double about every 14 years.
Source: Tyler Cowen, "Fruitful Decade for Many in the World," New York Tines, January 2, 2010.
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