Predictions that Europe will wither as global populations drive economic performance
By TruePublica Editor: In many ways, the start of 2020 largely resembles the start of 2019: the global economy is slowing amid rising geopolitical uncertainty. There is a longer-term crisis such as climate change, which is rapidly looking like it will change our world in many economic and political ways and societal ageing is A) going unaddressed and B) about to cause a serious funding issue in the democratic West. In the meantime, democracy is being fully tested and international cooperation is breaking down.
The dawn of a new decade has brought with it some notable predictions and pretty much all of them say the same thing.
US – Sino relations will dominate the global economy, which will continue to shrink. US President Donald Trump is set to be even more wildly unpredictable in an election year. The fracture of the EU as Britain prepares to leave will cause more problems, including economic downturns and then, of course, there is the ever-present climate crisis.
Diane Coyle, CBE, OBE, FAcSS is an economist and a former advisor to the UK Treasury and her prediction pretty much encapsulates what many are saying from a global perspective: “The US presidential election campaign will bring a new wave of turmoil. The complexities of the United Kingdom’s post-Brexit relationship with the EU and the wider world will have to be negotiated in the space of just a few months. Economies across the West will continue to wrestle with deep-seated structural problems (including the growing urban-rural divide and societal ageing). The dreadful consequences of climate change will become increasingly evident. To be sure, amazing technological advances are taking place. Yet, to the extent that they are transformational, they will also be highly disruptive, at least in the short term. All told, 2020 will be an unsettling year.”
Jim ONeil is a he is an Honorary Professor of Economics at the University of Manchester and former government minister. His prediction for Britain is: “In 2020, Boris Johnson will conclude a deal for the UK to leave the EU; but within weeks of this momentous step, he will ask for an extension of the transition period, making clear that a trade deal with the EU takes priority over pursuing a new arrangement with the US. More broadly, there is a strong chance that we will see the end – or at least a stall – of the multi-decade bull market in government bonds, owing to more expansionary fiscal policies in many parts of the world (notably Germany) and a realization that quantitative easing has outlived its usefulness. Indeed, some countries – possibly including the UK – will raise short-term interest rates.”
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For what it’s worth, I think if Trump becomes the first American president to be re-elected after having been impeached his instability in decision making will get markedly worse and one as economist put it – “If you think US-China relations deteriorated in 2019, just wait for what would happen in a second Trump term.” The truth is, the trade war is merely the beginning of a protracted rivalry between the two superpowers that may not end well. Both China and India will overtake the USA as the world’s biggest economy and there’s little America can do about that. And there’s a reason – demographics. The same demographics also demonstrate that the continent of Europe is set to lose out big time.
For centuries, the 28 countries that currently form the European Union have been a part of one of the world’s richest and most influential regions. African and Asian countries make up an ever-larger slice of the global economic pie thanks to rocketing population growth compared to the Continent’s shrinking demographics – and this will set the geopolitical agenda as wealth shifts from West to East.
Here is a fact that few people understand. The 28 countries currently in the EU accounted for more than a third of the world’s GDP in 1960. By 2100, they are collectively expected to make up just one-tenth. In the space of 140 years, demographics will have completely changed the world we live in.
Of the 10 countries expected to make the biggest relative gains in GDP by the end of the century, nine are in Africa.
China is expected to overtake the United States as the world’s biggest economy before the end of the 2030s, and India is projected to hold the top spot by the end of the century. Quite how America will cope or react as its global economic domination declines into third place is unknown – badly one suspects.
Europe is the only continent on earth set to lose population by 2100
In Europe, only eight EU countries are predicted to see a population increase between 2020 and 2100. Luxembourg is set to grow 60 per cent, Sweden 30 per cent and Denmark 19 per cent. But Bulgaria, Croatia and Lithuania are set to lose half of their current population.
The world’s population is predicted to rise by 41 per cent by 2100, but it could almost double its current size if it follows the high bar of U.N. calculations. Europe is the only continent set to lose population.
EU28 countries made up 13 percent of the word’s population in 1960, but they are set to only account for less than 7 percent in 2020 and 4 percent in 2100. Africa, meanwhile, will more than triple its citizens by the end of the century.
Brexit does bring a glimmer of hope in a report recently published in politco.eu. Currently, the UK ranks as 7th in global GDP and rather surprisingly is calculated to rise to number six by 2100. Demographic calculations see Britain overtaking Japan and Germany. However, in currently global percentages, Britain harvests 3.3 per cent of the global economy whereas in 2100 it will extract 1.9 per cent.
All of this does not mean much until that is manifested into living standards. If the living standards of the British increases then that’s fine but the reality is that with Brexit, Britain may do economically better but only a few will suck in the majority of gains whatever they may be. For instance, Singapore is the fourth richest country in the world but suffers the second-highest income inequality in the world and has a good percentage of households living in abject poverty.
Unfortunately, this is what Boris Johnson’s Brexit plan is – to turn Britain into Europe’s Singapore.