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EconomyPolitics 2011
10 year GDP growth rates
By Taylor R. Cottam, CFA, FRM
This is the second in a three part series where we identify the most attractive international investment
opportunities for the next ten years. We start out by looking at economic efficiency, i.e. the
fundamental freedoms and legal framework, which facilitates successful investing. Second we look at
growth rates and finally we look at places where economic opportunity will be taking place.
When you look at future growth rates, it is a function of economic freedom and GDP per capita. All
other things equal, high economic freedom and low GDP per capita, both lead to high economic growth.
EconomyPolitics Methodology
Estimating next year’s GDP growth is hard to get right. To an investor looking to place capital, it is easy
to confuse next year’s economic growth with long term potential. As we are no likelier than the next
economist to “get it right” in the short term, we have chosen to focus on longer–term trends, i.e. the ten
year growth rates, which in the end dominate.
We forecast how long it would take for a country to reach the prosperity level of the United States as
measured by GDP per capita. If a country was free and open, they become on par to the United States
in 40 years. After World War II, Europe was poor and destitute and its infrastructure was destroyed, but
it was relatively free and open for business. Many of the more open ones caught up in terms of GDP per
capita to the United States in about 40 years.
So where are the places that will grow the most over the coming decade? The continent that stands as a
bright spot for growth. This is the second year that we have highlighted Africa as a continent of hope.
Regional Differences
The region that should grow fastest is Africa. We have projected the 10 year growth rate for Africa at
6.32%. Africa’s young population is growing fast, they are very poor and they are finally starting to end
the cycle of war and replace it with a system of good governance. All those things increase economic
growth and bode well for economic growth.
Asia follows close behind. They come in at 5.92%. Their population growth comes in lower than Africa,
and their standard of living is greater, but they also have a greater degree of economic efficiency.
Latin America follows at 5.32%, but would be much higher were it not for Hugo Chavez and his circle of
Social Autocrats in Venezuela, Ecuador, Bolivia and Argentina.
The Middle East came in a 5.04%. That number could either come in way below, or could surprise on
the upside, should the region’s recent turmoil blossom into good governance. But, the truth is no one
knows the outcome of Egypt and the rest of the Arab world.
Oceania follows mostly because growth in Indonesia is pulling the rest of the countries up and finishes at
4.18%. Europe’s expected growth is 3.12%, but it is a mishmash of the heavily indebted PIIGS which
lower growth and Eastern Europe which raise growth. North America’s expected growth comes in last
place at 2.67%. However, the region is the least diverse and consists only of the US and Canada. There
are no undeveloped countries, the population, while not as old as Europe’s, is not as young as Africa’s.
Regional Data
1 Rwanda 10.52%
2 Uganda 9.98%
3 Ghana 9.84%
4 Zambia 9.49%
5 Kenya 8.98%
7 Madagascar 8.38%
6 Kyr.gyzstan 8.54%
14 India 7.77%
15 Vietnam 7.76%
16 Bangladesh 7.73%
17 Mongolia 7.63%
18 Philippines 7.44%
21 Thailand 7.11%
22 Pakistan 7.03%
30 China 6.66%
36 Sri Lanka 6.37%
43 Malaysia 5.86%
45 Nepal 5.77%
63 Kazakhstan 4.51%
91 South Korea 3.04%
103 Hong Kong 2.51%
105 Japan 2.47%
24 Nicaragua 6.91%
25 Peru 6.87%
27 Guatemala 6.78%
28 El Salvador 6.76%
31 Paraguay 6.65%
32 Honduras 6.57%
37 Chile 6.27%
41 Colombia 6.01%
46 Panama 5.55%
49 Mexico 5.37%
50 Costa Rica 5.23%
53 Jamaica 5.04%
60 Brazil 4.70%
61 Bolivia 4.67%
68 Dominican Republic 4.27%
71 Uruguay 4.18%
73 Guyana 4.10%
86 Ecuador 3.36%
96 Argentina 2.80%
121 Venezuela 1.17%
9 Jordan 8.23%
10 Georgia 8.14%
26 Morocco 6.79%
34 Egypt 6.55%
35 Armenia 6.51%
42 Tunisia 5.86%
51 Turkey 5.21%
55 Oman 4.94%
62 Azerbaijan 4.63%
67 United Arab Emirates 4.32%
19 Indonesia 7.31%
59 New Zealand 4.75%
89 Australia 3.09%
117 Singapore 1.57%
29 Moldova 6.66%
48 Albania 5.46%
52 Macedonia 5.19%
64 Romania 4.41%
65 Cyprus 4.39%
66 Lithuania 4.36%
70 Bosnia and Herzegovina 4.19%
72 Bulgaria 4.10%
75 Estonia 3.97%
76 Latvia 3.96%
78 Montenegro 3.81%
79 Serbia 3.77%
81 Slovakia 3.54%
82 Poland 3.48%
83 Hungary 3.47%
85 Portugal 3.40%
87 Ukraine 3.21%
88 Ireland 3.10%
92 Croatia 3.01%
93 United Kingdom 2.97%
94 Denmark 2.88%
90 Canada 3.07%
112 United States 2.27%
For media inquiries into the EconomyPolitics Index of Economic Efficiency, please contact
economipolitics [at] gmail [dot] com. Please feel free to use the full index, but must source back to
EconomyPolitics.