New Hotspots in the World
The BRIC and the NEXT 11 Countries Will Be the New Powerhouses
The BRIC countries will be the new powerhouses, as their economies will grow by 7.9%. By 2030, they will account for 36% of global economic output, doubling their current share. Brazil, Russia, India and China are the future drivers of growth. From the perspective of FDI, India will be the most popular target, followed by the Brazilian, the Russian and the Chinese economies. By 2030, the Brazilian economy will overtake Japan.
It is worth noting that as a result of development, the middle class will be substantially strengthened in these countries.76 By 2025, 75% of the Chinese population will belong to the middle class, in contrast to today’s 40%. In India, the share of the middle class will increase from 7% to 57% by 2030, and in Brazil it will grow from 47% to 58%. According to the projections, the share of the Russian middle class will drop from 71% to 41%, but only because many will enter into a higher category.
In addition to the BRIC countries, we should also watch the next 11 promising countries in the world economy and the ASEAN-5, the ve leading nations in the ASEAN (Association of Southeast Asian Nations). By 2030, the economic clout of the “NEXT 11 countries” will increase by 5.9%, and the ASEAN-5 countries will also gain in strength. By 2030, the “NEXT 11” countries will represent 11% of the world economy, with the most growth in Mexico, Indonesia, Turkey and South Korea. With respect to exports, Mexico, Turkey and South Korea will be in the vanguard. Economic development will also have a social impact: 20% of the world’s middle class (760 million people) will live in these countries. In Asia, the largest economies will be Indonesia and Thailand, and the fastest growing country will be the Philippines ).
Figure 36 The Location of the BRICs and the NEXT 11 Countries
Source: Own illustration (green: BRICs, blue: NEXT 11 countries)
Asia 2050 – Seven Countries in Asia
According to a study by the Asian Development Bank,79 Asia’s develop- ment will be driven by seven countries: India, Indonesia, Japan, China, the Republic of Korea, Malaysia and Thailand. In 2010, the seven countries combined accounted for 78% of Asia’s total population and 87% of its GDP. By 2050, they will only constitute 73% of Asia’s total population, but they will generate 90% of its GDP. As a result, by 2050, together they will rep- resent 45% of the total global output, their average GDP per capita (PPP) will rise to USD 45,800, i.e. considerably higher than the world average of USD 36,600. Asia’s rapid rise has been one of the most successful economic transformations in the recent period. If the continent’s development continues as in the past couple of decades, by 2050, Asia may account for half of global GDP, investments and trade, and its per capita income may increase sixfold, thereby converging toward the current European income level. It may return to the dominant economic position it occupied 250 years ago, and the 21st century would be widely referred to as “Asia’s century”. However, this growth path is far from certain. Taking into account Asia’s diversity and complexity, great economic development not only holds opportunities but also risks.
Figure 37 Asia’s Development Will Be Driven by Seven Countries
Source: Own illustration based on Asian Development Bank
The study recognizes the challenges facing the Asian countries, and exam- ines the steps at the national, regional and global level that are necessary for successfully tackling these challenges. Instead of the usual short- and medium-term approach and the one-area or one-topic focus, the study concentrates on the long term and the region as a whole (Figure 37).
Three Country Groups
Since the countries on the Asian continent are highly heterogeneous, the above-mentioned risks and challenges a ect them di erently and to a varying extent. When analyzing the effects, Asian countries can be divided into three groups based on the general level of development they have achieved in the past 25 years and their potential for development:
1/ High-income developed countries: They have been developing dynamically since the 1950s, and they have managed to avoid the “middle-income trap”. In 2010, this group comprised merely 5% of Asia’s total population, while generating 43% of its GDP.
2/ Converging countries: They have been developing steadily and rapidly since the 1990s, they have reached middle income status, but it is still unclear whether they will manage to avoid the middle- income trap. This group constitutes 77% of Asia’s total population, and generates 51% of its GDP.
3/ Stagnating countries: They have a slow or moderate growth rate well below that of the second group. The 31 countries in the group represent 18% of Asia’s total population, and generate merely 6% of its GDP.