Citigroup chief economist names PHL as one of 3Gs

    CLARK FREEPORT – Here’s one for population growth busters.

    The Philippines has been named by the chief economist of Citigroup as one of the 11 countries, alongside China and India, comprising what he termed as 3G index as a “measure of economic progress.”

    In an article written by Patrick Allen of and published in USA today yesterday, Citigroup chief economist Willen Buiter said 3G stood for “Global Growth Generators”.

    “Using that index the nations to watch over the coming years are Bangladesh, China, Egypt, India, Indonesia, Iraq, Mongolia, Nigeria, the Philippines, Sri Lanka and Vietnam,” the article quoted Buiter as saying in a market research paper. “They are our 3G countries,” he said.

    Buiter said the 3G index is “a weighted average of six growth drivers” that measure domestic saving and investment, demographic prospects, health, education, quality of institutions and policies, and trade openness.

    “For poor countries with large young populations, growing fast should be easy: open up, create some form of market economy, invest in human and physical capital, don’t be unlucky and don’t blow it. Catch-up and convergence should do the rest,” Buiter added.

    “The world is going to become richer and richer as developing economies play catch up over the coming years,” Buiter said.

    But he warned of “booms and busts”, saying that “occasionally, there will be growth disasters, driven by poor policy, conflicts, or natural disasters. When it comes to that, don’t believe that ‘this time it’s different’.”

    But he stressed “there are some easy wins for poor countries with big, young populations.”
    “We expect strong growth in the world economy until 2050, with average real GDP growth rates of 4.6 percent per annum until 2030 and 3.8 percent per annum between 2030 and 2050,” Buiter also said in his paper.

    “As a result, world GDP should rise in real PPP-adjusted terms from $72 trillion in 2010 to $380 trillion dollars in 2050,” he wrote. PPP is purchasing-power-parity.

    The article’s author noted that “as the world watches oil prices rise sharply amid unrest in the Middle East, Buiter’s analysis of the world’s long-term prospects offer some hope that better times are ahead but if he is right power will shift from the West to the East very quickly.”

    “China should overtake the U.S. to become the largest economy in the world by 2020, then be overtaken by India by 2050,” Buiter predicted.

    “Developing Asia and Africa will be the fastest growing regions, in our view, driven by population and income per capita growth, followed in terms of growth by the Middle East, Latin America, Central and Eastern Europe, the CIS, and finally the advanced nations of today,” he wrote.


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