Opinion
Lord Digby Jones
we all need leadership!
When I joined the Confederation of British
Industry as its Director-General in January
2000 I was briefed on many things very
quickly. One set of predictions that stuck in
my mind was that China, then the world’s
7th largest economy, would overtake the
UK (then 4th) by 2010, catching Germany
to take 3rd place by 2015 and Japan by
2020, overtaking (if ever) the US by 2040.
Last month China was officially
recognized as the world’s second-largest
economy, overtaking Japan. The UK had
been overtaken by 2005 and Germany
dropped to 4th in 2008.
The smart money is on China becoming
the largest economy on the planet by 2020.
That really is some performance! For the
first time ever, it has been the developing
economies of Brazil and China, India and
South Korea that have led the world out of
recession. In fact, if it wasn’t for them, we
in the mature markets would still be deep in
the mire. According to the World Bank, by
2050 China and India will together account
for nearly 50 percent of global GDP, about
the same as the G7 group of countries do,
put together, today.
Emerging economies have certain
characteristics that mark them out as fit
for purpose in the globalization race that
is the 21st century, or more properly (and
with respect to Brazil which will, I believe,
become a real powerhouse over the next
few years) Asia’s century: High savings
rates, skilled people, innovative strategies
for growth, shrewd governments and large,
getting-richer domestic markets.
And what are some of the characteristics
of mature economies? Struggling to come
to terms with weak domestic demand,
pressures from overcapacity, stubbornly
high unemployment, more expensive
borrowing, potentially uncompetitive
tax and regulatory regimes, increased
protectionism and on a beggar-thyneighbour road to a further downturn and
big roles for governments crowding out
the taking of personal responsibility and
diminishing the perceived need to skill-up
to face the challenges of globalization.
So that’s alright then!
Now no one said that creating wealth and
jobs in the 21st century, be it in a mature or
developing economy, was going to be easy.
How do we measure growth in a changed
world?
What constitutes success? What about
living standards? Health? Education? The
environment? Security? These less precise
standards of measurement of a successful
economy are not as easy to define as raw
growth in GDP but many a developed
economy would say that they are up there
with the most important ones when success
is assessed.
For instance, success for the US in Asia’s
century will in part be defined by how
she accommodates China, India, Brazil
and others at the Top Table. Americans
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