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Posts Tagged ‘geoeconomics

“How Africa’s population evolves, and how the continent’s economies develop, will affect everything people near and far assume about their lives today”*…

In these tumultuous times, there’s a lot of competition for one’s attention: Russia and its aggression? China and it’s ever-more-assertive rise? The tensions within Europe? The divisions within the U.S.? Indeed, as Adam Tooze argues, there’s so much going on that there’s a risk we’ll miss the most fundamentally important long-term dynamic of all…

Once you realize it’s scale, there is no global trend as dramatic today as the revolution in Africa’s demography.

Asia’s return to the center of the world economy dominates the headlines. But in the grand sweep of history that is a rebalancing or restoration not a revolution. Until the 18th century, the Pacific and Indian Oceans were the heart of sophisticated economic activity. That balance was grossly distorted in the “centuries of humiliation” by the rise of the West. Now, thanks to Asian economic growth, the centers of economic activity and population are realigning.

The same cannot be said for Africa. Despite optimism in recent years, the relative lack of economic growth in Africa is well-known. Less well-appreciated is the extraordinary historical novelty of its demographic development.

In 1914 according to the best estimates, Africa’s entire population was 124 million and that includes North Africa. Today it is 1.34 billion. Compared to Africa’s roughly elevenfold increase in population, Asia’s population increased by “only” between 3 and 4 times – China’s merely tripled and India’s increased by 4.5 times. Furthermore, whereas Asia’s population is beginning to stabilize – led by that of India and China – Africa’s population will, barring disasters, reach 2.4 billion by 2050 and will go on growing.

Longer term projections are hazardous, but a world with somewhere between 9 and 11 billion total population and close to 4 billion people living in Africa is what current trends would lead one to expect. That means that by 2100 the African share of global population will likely be between 35 and 40 percent. And in 2100 the population of several African countries – Chad, Mali, Niger, Nigeria, and South Sudan – is likely still to be growing.

That is something new under the sun. It means that in sheer quantitative terms Africa’s story increasingly drives world history…

Read on for a thoughtful unpacking: “Youth Quake. Why African demography should matter to the world,” from @adam_tooze in his newsletter Chartbook— in part a consideration of Youth Quake, by @EdPaiceARI.

See also: “We need to take a closer look at entrepreneurship in Africa,” from @sham_jaff in @whlwnews.

Howard French (@hofrench)

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As we pay attention, we might send dedicated birthday greetings to Joe Slovo; he was born on this date in 1926. A South African citizen from a Jewish-Lithuanian family, Slovo was a delegate to the multiracial Congress of the People of June 1955 which drew up the Freedom Charter. He was imprisoned for six months in 1960, and emerged as a leader of Umkhonto we Sizwe the following year. He lived in exile from 1963 to 1990, conducting operations against the apartheid régime from the United Kingdom, Angola, Mozambique, and Zambia. In 1990 he returned to South Africa, and took part in the negotiations that ended apartheid. He is probably best known for proposing the “sunset clauses” covering the 5 years following a democratic election, including guarantees and concessions to all sides, and for his fierce non-racialist stance. After the elections of 1994, he became Minister for Housing in Nelson Mandela’s government, a post he held until his death from cancer in 1995.

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“The whole of the global economy is based on supplying the cravings of two percent of the world’s population”*…

Perhaps that’s an oversimplification; but as a new McKinsey Global Institute study suggests, perhaps not by much…

We have borrowed a page from the corporate world—namely, the balance sheet—to take stock of the underlying health and resilience of the global economy as it begins to rebound from the COVID-19 pandemic. This view from the balance sheet complements more typical approaches based on GDP, capital investment levels, and other measures of economic flows that reflect changes in economic value… [and] provides an in-depth look at the global economy after two decades of financial turbulence and more than ten years of heavy central bank intervention, punctuated by the pandemic.

Across ten countries that account for about 60 percent of global GDP—Australia, Canada, China, France, Germany, Japan, Mexico, Sweden, the United Kingdom, and the United States—the historic link between the growth of net worth and the growth of GDP no longer holds. While economic growth has been tepid over the past two decades in advanced economies, balance sheets and net worth that have long tracked it have tripled in size. This divergence emerged as asset prices rose—but not as a result of 21st-century trends like the growing digitization of the economy.

Rather, in an economy increasingly propelled by intangible assets like software and other intellectual property, a glut of savings has struggled to find investments offering sufficient economic returns and lasting value to investors. These savings have found their way instead into real estate, which in 2020 accounted for two-thirds of net worth. Other fixed assets that can drive economic growth made up only about 20 percent the total. Moreover, asset values are now nearly 50 percent higher than the long-run average relative to income. And for every $1 in net new investment over the past 20 years, overall liabilities have grown by almost $4, of which about $2 is debt…

The rise and rise of the global balance sheet: How productively are we using our wealth?,” from @McKinsey_MGI

(Image above: source)

* Bill Bryson

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As we recalculate: we might spare a thought for composer, musician, director, and producer Frank “anything played wrong twice in a row is the beginning of an arrangement” Zappa; he died (of pancreatic cancer) on this date in 1993 at age 52.

“Politics is the entertainment branch of industry”

“The bottom line is always money”

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