Who Will Be the Next Economic Superpower?

Posted in World Affairs by Kevin | Tags: , , , ,

“The sun never sets on the British Empire” was a popular phrase heard during the Victorian era in Britain. For many years leading up to World War I, the phrase held true, the British navy controlling the sea, using imperialistic tactics in dominating global commerce, and allowing British at home to enjoy the merits of a powerful state.

After the First Great War, there was no real power as Europe tried to recover from the devastating damage to infrastructure, the loss of a generation, and a Spanish flu virus which killed more people than the war itself. The United States began its dominance at sea, but surely, we weren’t the only power. During the 1920s- 1940s, the world suffered a global depression that was many times worse than today’s economic collapse and clearly and no country could be classified as a “superpower.”

World War II left the United States and the Soviet Union as clear global powerhouses. During the 1960s, the American society enjoyed affluence due to noncompetitive outside markets and prospered like no other group of people ever had. The Soviet Union benefited from a broken down Europe and increased its influence all the way to East Germany until its collapse in the early 1990s.

After the dissolution of USSR, the United States was the only superpower in the world, both economically and militarily for the first time in its history. The Dot Com boom generated jobs and for a few years the United States had a budget surplus, the lowest poverty rates in its history, and the most years of consecutive sustained growth. Living in the 1990s it would be hard to imagine an America so.. ill.

With that said, it is possible to predict the influence of countries in the near future based on recent economic performance and potential for future growth. Countries are ranked in order of current GDP and given a score out of 10 based on certain criterion. All numbers are based on December 2008 figuresn. It is important to note that pre-recession numbers are accounted for in the growth rate because its likely that when the recession does end, similar growth patterns will be seen. Finally, red items are causes for concern and green items are the definite advantages.

1) The United States of America
Gross Domestic Product (GDP): $14.58 trillion
Real Growth Rate:  1.4% (2007-2008)
National Debt: $12.25 trillion
Population Growth: 0.883%
Other: America is still the most influential country in the world, with a diversified economy and very high per capita GDP. After the recession, American’s will spend less money and waste less, reducing public debt and forcing economic realignment. A quick end to the war(s) in Iraq and Afghanistan will provide more money for domestic purposes. The US is still the leading power as the global economic crisis affected every country.
Superpower Potential: 8.5

020608chinagraph1
2) Japan
Gross Domestic Product (GDP): $4.48 trillion
Real Growth Rate:  0.7% (2007-2008)
National Debt: $1.492 trillion
Population Growth: -0.139%
Other: Japan economy plunged 3.3% last quarter and the GDP will slip at about 10% annually. Leading exporters are cutting jobs on a grand scale and the most successful companies are posting losses in the billions. Also, Japanese consumers are cutting back faster than American counterparts. Couple this with a negative population growth and an upside down population pyramid (more older people than young), Japan will see heavy declines in the upcoming decades.
Superpower Potential: 2.5

pyramid
3) China
Gross Domestic Product (GDP): $4.22 trillion
Real Growth Rate: 9.8% (2007-2008)
National Debt: $420.8 billion
Population Growth: 0.629%
Other: A labor force over a billion people,  a rapidly growing economy, and vast land resources will allow China to prosper and influence the world in many ways. In understanding the Chinese rise to superpower status, one has to understand its main source of income, exports. If exports drop, China drops. In fact, due to recent decreases in demands, over 10 million Chinese were laid off last year. When China begins to be more diversified, then the world has reason to fear.
Superpower Potential: 7.0

19990125_img3

4) Germany
Gross Domestic Product (GDP): $3.8 trillion
Real Growth Rate: 1.7% (2007-2008)
National Debt: $4.5 trillion
Population Growth: -0.044%
Other: Germany’s overwhelming national debt will stand as a problem in ever gaining leverage against other countries. Also, Germans have a very large public debt, similar to the United States. However, Germany had diverse exports and was second only to China in 2009 in total export value.
Superpower Potential: 4.0

germandebt1

5) Brazil
Gross Domestic Product (GDP): $1.665 trillion
Real Growth Rate: 5.2% (2007-2008)
National Debt: $236 billion
Population Growth: 1.3%
Other: Many people talk about China and India as superpower hopefuls in the 21st century, yet there is not much talk of Brazil. Oil, soy, and coffee exports have allowed Brazil to enjoy a quarter century of spectacular growth after the lost decade in the 70s. Brazil has vast mineral resources and has several huge international corporations (Petrobras, Vale, etc). The only negatives are a smaller population (althought growing fast) and less military power.
Superpower Potential: 5.5

brazil_economic_indicators

6) Russia
Gross Domestic Product (GDP): $2.25 trillion
Real Growth Rate: 6.0% (2007-2008)
National Debt: $571 billion
Population Growth: -0.478%
Other: With tens straight years of growth at 7% annually since 1998 and a progress minded people hoping for the pre-Soviet collapse stability allowed Russia to jump into the world scene. The war in Georgia showed the West that Russia wants its respect back. Russia has oil and energy and provides up to 40% of the natural gas to Europe. Russia (largest land area) also has nuclear weapons, a powerful arsenal of advanced weapons, and untapped mineral resources in Siberia.
Superpower Potential: 7.0


6 Comments to “Who Will Be the Next Economic Superpower?”

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  • Interesting thesis, however the ratings are too simplistic. It would be stronger to include other items including:

    1. Access to natural resources
    2. Access to energy e.g. crude oil, green tech, etc.
    3. Science and technology industries
    4. Manufacturing industries
    5. Number of goods produced at home versus the imported natural resources to make the goods
    6. How many trading partners/treaties does a nation have?

    et cetera.

    I believe this will give a more realistic image of what will be the next emerging, economic superpower.

  • Thank you for the great feedback Douglas, I will take your ideas into consideration and make a new ranking next week incorporating some of your specified items and a better ranking system.

    Kevin

  • Check your Japan numbers. Japan is screwed. Debt is about 170% of GDP.

    http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

  • Dear Jack,

    Thank you for taking the time to check my numbers. However, the URL you submitted is for the public debt, which is how much the public (not government) owes. You can take a look at the external national debt here:

    http://en.wikipedia.org/wiki/List_of_countries_by_external_debt

    Also, I completely agree with Japan’s economic condition being very sub par. However, in terms of the public debt, one must realize that Japan’s population has a higher saving rate than the US, so a large public debt is not of grave concern.

  • Why isn’t India in this list?

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