THE WORLD IN 2025
FORUM FOR GLOBAL KNOWLEDGE SHARING
GLOBALISATION OF CHINESE AND INDIAN ENTERPRISES
MUMBAI, NOVEMBER 2-3, 2007
Françoise Pardos, Pardos Marketing
Economic trends and Gross National Income
Gross National Income GNI continues to grow. Total world GNI of 31 trillion dollars in 2000 is to grow an average long term rate of 2.5 % /year, to $ 57 trillions.
By 2025, the USA GNI will be $ 20 trillions, China will be $16 trillions, and India will be $9 trillions, the rest of the world, including Eurasia, $ 22 trillions.
According to the Annual Energy Outlook, AEO2007 reference case, the projected growth in real GNI, based on year 2000 dollars, is 2.9 percent per year from 2005 to 2030. The AEO2007 projections for economic growth are based on the Energy Information Administration, EIA, through 2030 and modified to reflect EIA view on energy prices, demand, and production.
With a total world GNI of close to 60 000 billion dollars in 2025, the world average per capita GNI, that was $ 5100 in 2000, will reach near $ 8000 in 2025.
The world economic boom has been driven by two factors.
In part it has been driven by a gradual liberalization of world trade and a liberalization of major third world economies like China and India. The average tariff level in a country like China has been lowered from 41% in 1992 to 6% in 2004. The liberalization of world trade has increased the scope of international division of labor and permanently helped raise growth in the world as a whole and in particular in third-world countries. If trade is freed even more, this factor should continue to help the world economy to prosper.
Another reason for the increased growth in emerging economies is the free market reforms implemented there with a country like China transforming itself from a destructive communist system to a virtual capitalist paradise with a seemingly endless supply of cheap but competent labor, with no welfare state and no unions and with many other emerging economies also undertaking free market reforms of varying radicalism. On the other hand, gloomy forecasts point out that China will be old before it becomes rich.
There also are darker sides to the current boom, such as the cheap money policy of the Federal Reserve in the US, of which many economies in the world depend. Moreover, world economic growth is also dragged down by structural lasting problems in Europe and in Japan.
The eradication of poverty is not seen in any long term horizon.
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