The world in 2030

Although it is almost impossible to predict how some of the developments underway in the world right now will end up, many economists are doing their best to make forecasts, which are as precise as possible.

The retired German economist Bert Rürup and Dirk Heilmann, the chief economist of Germany's leading business newspaper Handelsblatt, describe the world economy 2030 in their book "Fette Jahre - Warum Deutschland eine glänzende Zukunft hat."

This translates roughly as "great years - why Germany has a bright future". But the writers have not only looked at Germany in the book; they describe a future in which the US will still have the largest GDP, at $21.2 trillion, and will be followed closely by China, with a GDP of $19.4 trillion. The third and fourth places, they say, will also be occupied by Asian countries - with Japan ahead of India. Germany, which at the moment is the fourth largest economy in the world, will slip down to sixth - right behind Brazil.

"If one were to form a new G7, all of the BRIC countries would be part of it but only three of the old members," they write. Germany would be the only European country in the club of the largest economies.

For his part, the director of the German Development Institute Dirk Messner, predicts that the rest of the 21st century will not be dominated by the West. He says it's important to look back in time to understand the future.

"From the beginning of the Industrial Revolution to 1960, only two economies grew faster than Western industrial countries. The Industrial Revolution was a process that led to the rise of the West."

However, he points out that from "1960 to 1990, around 25 countries grew faster than Western countries. "In the past 20 years, 75 developing countries have grown twice as fast as the old industrialized ones."

The role of globalization

That means that globalization has enabled members of the Organization for Economic Cooperation and Development to catch up to the industrialized countries, Messner adds.

As little doubt as he has that China will be the world's largest economy as soon as 2030, he cannot be so certain that the country will have experienced a subsequent "gradual political liberalization."

China is entering a phase in which its population is prospering and demanding to have a say, he points out.

"History has shown that - aside from a few economies based on oil - no economy with a GDP of over 7,000 dollars per capita has remained an autocracy," he says.

European crisis

As Europe suffers rough times, it is anyone's guess how the debt crisis will end. The premise for Rürup and Heilmann's glowing scenario is that the eurozone will get banks and finances straightened out. But what if they don't? What if the eurozone breaks up?

"That would be devastating for Europe;" says Heilmann. "In terms of economic output. It would be a defeat that would require at least 10 years to recover from. But it would also have an impact on the world economy."

African growth

The debt crisis gripping the industrialized countries has hardly had an effect on the countries of the African continent, which have seen an average annual growth of between 5 and 7 percent.

However, Heilmann says it would be a misconception to assume the continent is booming, although high growth rates are forecast to continue in the medium term.

"The problem is that Africa's population continues to grow very rapidly," he says. "Africa would need above-average growth just to remain where it is today."

Messner also points out that Africa's economic growth is still very resource-based. "We have seen a lot in the past that a boom in resources and an increase in cash flowing in has often led to more corruption and in many cases even to conflict. Economists refer to that as the resource curse."

Latin America and social disparities

Messner is also of the opinion that Latin America is experiencing a similar problem - just at a higher level. Economies there are also driven by resources, but the question is "whether Latin America will manage to take its high returns and its export surplus and invest it in social development. Because Latin America still has the greatest social disparities in the world."

"In our scenario, Latin America does quite well, but not as well as Asia."

The effects of climate change

All the bright forecasts could be undermined by one factor - climate change.

"If it goes on as it is, 2030 will be greatly affected - worldwide water supplies, food resources; we will see extreme weather conditions that we have never seen in modern times," Messner predicts.

For him the question of how worthwhile it will be to be on the planet in the year 2030 depends on whether or not governments manage to work together to contain the effects of global climate change and globalisation, which will have a massive impact on international financial markets and migration processes.

Author: Zhang Danhong / sb
Editor: Anne Thomas