Pageviews past week

Monday, August 31, 2015

Global "Growth"...Forget China or India, It's All About Africa (& Why That's Not Good)!!!

Many economists are just starting to catch on to the fact China, as a center of growth, is dead.  If you haven't got this  However, the real transition you should be thinking about is that from India to Africa and all the implications involved. 

First chart below, the world of populations of Africa, India, and China plus percentages of global population.

In the chart below, though these 3 entities represent 52% of earths population, they represent 65% of 2015 global population growth.  Of note,  Africa's annual population growth is double that of India and quadruple that of China. 

So, probably worth contemplating the relative impact of the ongoing changing source of population growth from higher income  to lower income Africa.  On any given day, Africa includes about 57 countries (give or take a few) and range in income from highest, Equatorial Guinea at approx. $21k/yr, all the way down to Congo or Burundi with incomes of approx. $300/yr (GDP/(PPP) per capita).  So, if you put it all together and weight it evenly...the average African income comes out to about $2,383/yr.  To put this in perspective, this is less than half of the average Indian's (per capita), less than 1/5th the average Chinese (per capita), or less than 1/20th the average American (per capita). 

So, the fact that higher income population growth is fading away and being replaced by very low income population growth coinciding with global economic slowdown shouldn't come as a surprise...and shouldn't be any surprises that global consumption and economic growth will continue falling.

The last chart (below) makes it very clear where all growth is trending (Africa rising, India fading, China turning outright negative)...and the implications will be understood by all but those paid not to understand.

Related articles...


  1. "Can we even agree that one problem is governments being at least ten times bigger than they should be?"

    From your own comment via your referenced post:

    Indeed, Government has become the real 1%. Despite declining worldwide populations they continue to consume wealth, never creating it. Your exactly right there will be an eventual worldwide default, then restructure.

    Here's the big question, after confidence and trust in government collapses, what system will the people chose to usher in to re-stabilize, if stabilization is even possible? A cashless digital currency perhaps where central banks/government tyrants can have full control seeing and knowing every transaction to confiscate surgically even more wealth, seems ironic after having bankrupted the world with their brain dead social engineering of spreading the wealth around. They won't even take responsibility for programming the ever dying Marxist historic ideology Socialism into the minds of the populace, a system that has always produced economic and societal misery. Seems they would be the least qualified to handle this mess a mess that they've created. I hope the masses are not that stupid and at least usher in a some form of democracy vs. tyranny. I believe the people are fed up with government and have a deep intuitive need for change.

    1. a melange of: 'the spirit is willing but the flesh is weak','the masses are asses','a dog returns to its vomit','absolute power corrupts absolutely', 'a sucker born every minute (may have to change the time period)' etc...

      the true big bang theory of human nature, an endless cycle unless ended by an external force

      have we really evolved?

      there is nothing new under the sun

  2. ....economic pain will force change as defined in histories past.

  3. It's the middle/upper classes (aka the "consumers") that matter, not just adding numbers to the population.

    Whilst your studies do have some value, viewed in the context of who consumes what and how much of it, the fact that the Chinese & Indian will host in 2030 more than half of the middle class population of the Earth will be highly significant.

    Despite not growing their population in absolute numbers, they will grow in terms of net worth, accumulating, saving, spending, etc, and do so explosively.

    I will give you a very simple example. Lets take China and India, 30-35 years ago. Back then, they were pretty much in a similar spot as Africa is today. On the other hand , Europe was already starting to decline in population and the US was becoming somewhat stable.According to your article, it should that Europe and the US were to be doomed following these lower rates of growth, especially Europe. Yet if we look at most countries in Western Europe, Central & Eastern Europe, they have been developing very well and with the few black sheep such as Greece they have become stronger economies. Countries with very low birthrates and overall stagnating or decreasing population are not doing so bad. Look at Singapore! Or some of European countries such as Romania, Lithuania...population dropping yet they are keeping up.

    A growing economy does NOT rely in growing one's population. That is the most crude and rather unstable way of hoping to generate growth. Its the increase in overall human development, education, innovation, etc that makes a country more competitive and ready to brace it's future.

  4. Looks like you need to evaluate some of Chris's other articles. Productivity + Population Increases + Increase in Credit = Growth

    Productivity has stagnated since the late 90s. We aren't seeing high productivity increases in the U.S. and are not projected to see them over the next 10-15 years. Population increases are not good as Chris has pointed out. Credit growth is also problematic outside of student loans and auto loans for private individuals.

    Corporations have really picked up the debt tab during this business cycle. Government and central banks have also stepped in. During the next business cycle individuals are likely to be tapped out, businesses tapped out, but the government and central banks cannot be tapped out without a loss of confidence from the public.

    So the hard question is: At what point does the public lose confidence in the central bank or government? A set central bank balance sheet as a % of gdp? A set government debt as a % of gdp?

    Hopefully we don't find out.

    1. You have it backwards. Rising energy input = growth.
      Worldwide problem now is slowing energy input.

  5. What causes the slowing of energy input? It certainly is not the capacity to produce energy.


Note: Only a member of this blog may post a comment.