Saturday, April 16, 2011

World Economic Forecast in 21st century and after


The map above explains the volume of the future economic growth in different regions in the world. The predicted volume of economic growth shown in this map is measured by the variables shown in as follows:

A1. The overall market potential indices (Click the link to read what this word means).

A2. Geographic advantages such as the short great circle distance from economically active regions, capability to have a good dock, being neither landlocked nor island nation (not significantly affecting developed nations and Asian emerging nations, but significantly affecting majority of least developed economies).

A3. The growth in productive population growth relative to the unproductive population growth (reasonable birth control, affordability of general education and parental love for children, and adjusted population growth to economic growth and land-capability).

A4. The human capital development (E.g. Education, Individual Liberty and Right, and Rationality). This affects the speed of learning newly introduced technologies in the world, adapting them to produce and sell newly introduced goods and services created, and ability to invent an original new technology themselves by referring to existing technologies.

A5. The natural resource reserves, which create a trade surplus. The impact of benefit from it is bigger in emerging economies and least developed economies than developed economies, but some developed economies are able to develop further more than the other developed economies due to the extra surplus by extracting natural resources.

A6. The political and social stability in both the present and the future time period.



On the top of these variables applying to scaling the predicted economic growth of all kinds of economies, there are the other variables which only scale a particular kind of economies. There are two main different characteristics of economic regions introduced in this essay, the Northern economies and the Southern economies.

The Northern economies, shown in Blue, are those whose economic growth is mainly stimulated by the variables shown in as follows:

N1. European rationalism and strong egalitarianism (except for Russia) which influence the level of intelligence per head,

N2. Newly introduced trade integration such as the Eurozone economy which benefits to the Eastern European nations,

N3. Philosophy influenced by ancient Greco-Roman philosophies and Christianity which are ones of the remarkable variables implanting the spirit of capitalism, such as contract, fairness, honesty, ideality, individuality, trust, and unity, into ordinary individual citizens' mind,

N4. Various scientific innovations. Majority of them are innovated in the Western civilisations including the former USSR block excluding Islamic areas. The currently most notably advancing Western civilisations are Germanic and Scandinavian nations.

N5. Not suffering from negative assets of the past imperial period. Not only Spain, Portugal, England (So, exclude the other regions in the United Kingdom), and France, but also Japan (Not only before and during the world war 2 but also the post war period economic imperialism) and the United States of America (USA). These three following things are the negative side effects of their past imperialism haunting on them:

n5.1 The economic sunk costs caused by a rapid decline in their holding power,
n5.2 Inattentive and negligence due to their arrogance of the old glory,
n5.3 Mobocracy of the mobs spoiled by a habit of extracting their wealth from the wealth accumulated in the past (The over expansion of economy causes a severe downturn in the future. The bigger nations are less likely to avoid this situation than the smaller nations)

* The Soviet communist regime can also be seen as another form of imperialism. But, this imperialism had never brought any significant prosperity enough to leave these three pathologies. In another word, the communist imperialism has failed to be a prosperous imperialism so that it was an unsuccessful imperialism.



The Southern economies, shown in Red, are those whose economic growth is encouraged by the variables shown in as follows:

S1. The strong politically and socially cohesive policy, which is remarkable to support a strong but sustainable economic growth by uniting all different cultural identities and economic and social backgrounds of citizens by selecting one charismatic political authority as the opinion leader. A strong but sustainable economic growth resulted by this policy has been seen in the Eastern world for a long time and is recently introduced in many South American and some African nations.

s1.1 Some nations use the development dictatorship based on rational-secularism which is most notably seen traditionally in Asia, and recently in Latin America and some African nations;
s1.2 The other nations use the common religious value as a symbol of unification such as theocracy in almost all Middle-Eastern nations and majority of African nations.


S2. Stable urbanisation process. This variable is related to the variable A3 (The growth in productive population growth) the variable A4 (The human capital development), and the variable A6 (The political and social stability). Nowadays, thanks to the globalisation encouraged by the rapid information technological growth, people in emerging and least developed economies have become able to copy the newly introduced knowledge and technologies, and use them to produce better goods and services. But, in order to grow their economy by this process, they need to fulfil these three following conditions:

s2.1 They need to improve and develop their education system to become able to copy the newly introduced technologies.
s2.2 They need a huge population in either their homeland or neighbourhood countries, or both, to sell these goods and services faster to grow their business.
s2.3 In order to accomplish these two objectives, the political and social stability is significantly required.

All in all, these nations require an urbanisation of their economy, which means increasing population density, which enables people to exchange information and physical resources each other fast. The urbanisation requires a huge population already existing. Therefore, an already highly populated nations tend to have an advantage.

Furthermore, the urbanisation lowers the cost of developing human capital because the speed of exchanging knowlegde and technology becomes faster as the place become urbanised. The cost of developing human capital used to be a big obstacle for least developing nations when there was a huge barrier of exchaning the information. The Cold War used to block flexible information flows in the globe, and the ongoing political unrest disrupted people in these nations united. Nonetheless, both The end of the Cold War and the rapid information technological growth since then brought a globally free exchange of information flow. In addition, the knowledge and the wisdom gained from this flexible information flow have enabled people there to become harmonised with themselves. This aspect of the globalisation has made the harmonisation and the urbanisation tremendously easier than the past

Unlike the North economies where people have been already unified under the strong common identity and the stable political and social environment, the Southern economies tend to lack of the unification seen in the Western economies. In order to concentrate people together into one area, the political stability and the community harmonisation are highly required. In particular, in these Southern economies, the conflict between different identities tends to be an obstacle of their urbanisation process. Therefore, the variable A6 (The political and social stability) is a key element to achieve their urbanisation.




S3. The power to monopolise the geographic advantages. This variable is related to the variable A2 (Geographic advantages) and the variable A3 (The growth in productive population growth). The typical example is Singapore before Malaysia built a large scale industrial port. At this time, Singapore was only the country in the strait of Malacca so that Singapore could monopolise the revenue coming from the logistic industries, the processing industries, the financial industries (at this time, it needed to rely on geographic advantage far more than nowadays) and the tourist industries. However, since Malaysia built a new large scale industrial port in the own land, the market in the strait of Malacca has become oligopoly so that Singapore has become no longer able to exploit the monopolistic power there.

In already developed nations (In 20th century) such as Western Europe (some Central and Eastern European nations became developed in 21st century though), North America, Australia, New Zealand, and Japan did not hugely have to rely on the geographic advantage because these developed nations already had a self-sufficient domestic economy. By contrast, nations of both emerging economy and least developed economy need to rely on the revenue come from the international trade before they are fully developed enough to have a reasonably self-sufficient domestic economy.






The overal summery of these economic predictions is that all economies depends on the Market Potential (i.e. Geographic advantages, the high demand volume of exports from these economies, and the high human capital development ration) without a doubt. The Northern economies is strongly affected by whether or not past imperial experience haunts, and has better potential if they are located North much as possible (More North tends to be more human capital). The Southern economic growth is significantly correlated with their population more than any variable, and the some geographic advantages such as having a good location to build a good large scale industrial port and having natural resource reserves.