The Four-Tiered World of 2050

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Goodbye to the North-South gap: Hello to something worse

by James Wolfensohn

"In a complex world divided into four different stages of development rather than the familiar rich North, poor South, former World Bank President James Wolfensohn argues that Europe must play an increasingly important role as the driver of new development strategies..."

"... the forces of growth and globalisation have also splintered the world into new segments. In other words, we are leaving the old North-South divide behind and moving from a Two Speed World to a Four Speed World which separates its members into four tiers of different levels of growth and prosperity.

"The first tier is comprised of the most affluent countries, notably the United States, Europe, Australia and Japan whose combined populations of 979m have per capita gross national incomes (GNI) greater than $14,600. These traditional powers exhibit the highest living standards, but as their share of global income decreases (from 90% in the mid-20th century to 80% in 2005), their dominance is contested by the emerging economies.

"These emerging economies, comprising a second tier of about 30 poor and middle income nations with per capita GDP growth rates of over 3-5% and a total population of 3.2bn, are rapidly learning how to leverage the global economy. With sustained economic growth of 7% or more per year and at 3.22bn in 2006 around 50% of the world's population, countries like India and China will soon become de facto global leaders.

"A third tier − a much larger number of national economies, more than 60 in all, with a combined population of 1.1bn − have experienced growth spurts, but also periods of decline or stagnation, especially once they hit middle income country status. From Latin America to the Middle East, these economies are neither poor enough to warrant special aid, nor sufficiently large and fast-growing to be major players in the global economy. Yet, close to a fifth of the people in the world live in them.

"The fourth tier, comprising more than a billion people, represents the poorest countries per capita GNI less than $875 and GDP per capita growth rates of less than 3.5%, which continue to stagnate or decline. Mostly in sub-Saharan Africa, these countries gain little from globalisation but are among the most vulnerable to its adverse effects. (((New World Disorder. Non-Integrating Gap. Al-Qaedastan.))) The daily human suffering experienced by individuals in this vast group is a grave concern and represent probably the most important political, economic, and moral challenge for the rest of us.

This emerging world is a world of deep imbalances. (((Boy, I'll say.)))

" While tier 1 nations continue to increase their wealth and living standards and tier 2 one are catching up, the majority of people in tiers 3 and 4 are either stagnating or falling behind. The ratio between tier 1 and tier 4 nations' per capita incomes has increased from 45 in 1965 to 78 in 2005. (((!)))

At the same time, the trend for tier 2 nations has been the reverse, as they have significantly reduced the per capita income gap with tier 1 nations during those years.

The world our children will live in will differ significantly from the one we know.
(((Assuming the current economic tree grows straight to the sky without black swans and horrific diebacks, that is.)))

By 2050, the world's GDP will have increased by more than four times to $216,000bn, and the global population will have risen from 6.5bn to 9.2bn. (((Nine point two billion with something like a billion billionaires... okay, yeah, sure, maybe.)))

Most of this increase will have an impact on the third and fourth tiers, whose countries will add almost 2bn people to their ranks.

At the same time, the first tier will see its share of global income reduced to around 40%, and will be home to only 12% of the world's population.

Europe's relative wealth will also shrink from its current 26% to 12% of global GDP, while the UK and France will each account for only 2% of the world's wealth. ((("Britain: The Two-Percent State.")))

Second tier nations, on the other hand, will, by 2050, account for almost 50% of global income, led by China and India whose combined shares will have soared to 39%.

While these demographic and economic changes will create new opportunities, they will also bring about geopolitical and development challenges... (((That world is less than fifty years away and yet is practically unrecognizable.)))