Although Australia was confident enough to raise its interest rates last week - the first G20 nation to do so - and although we have previously lauded Canada as the best run advanced economy in the world, these two countries have been saved a big contraction thanks both to restrained banking systems and strong commodities exports. They both, however, are badly affected by property prices falling and the fragility of the western financial markets of which they are an integral party.
It is probably also not a surprise to learn that in the latest Reuters Poll of economists, China and India were forecast to lead the Asian recovery in 2010. The forecast for China has been raised to 9 per cent and India to 7.5 per cent. Singapore is expected to ride a recovery in exports to be the third fastest growing economy in Asia at 5.7 per cent, with Taiwan and Korea also gaining. The latter is expected to be the second G20 country to raise interest rates, while India's RBI, worried that the Consumer Price Index is creeping back up to 12 per cent inflation, is also like to raise rates.
Before sharing these figures, let us first state that they are slightly out of date. These figures come from the IMF's World Economic Outlook released in July 2009. However that only means that the forecasts are understated, since almost all growth forecasts have been raised since then. No new forecasts have been published for some of the smaller nations shown here, so we will use this as a baseline.
Here is the forecast for the Top 12 Fastest Growth Economies in 2010, taken from IMF figures and tabulated in EconomyWatch.com's Economic Statistics Database:
Fascinating, isn't it?
Only one of the top 12 is a G20 nation. We all know that China is a high-growth country. Indeed, if you just read the press you might be forgiven for thinking that China is the fastest growing country in the world, or indeed the only high growth country. That is simply not true. Many countries have been growing faster than it has over the last decade.
Qatar is also expected to lead economic growth tables for 2009 at an even faster clip of 17.98%, it led world economic growth in 2008 at 16.39%. Azerbaijan led 2007 economic growth like a rocket, with a 23.38% figure and it also scorched 2006 economic growth clocking an amazing 30.55% GDP growth stat.
Indeed if you look at recent years, countries like Qatar, Azerbaijan, Turkmenistan and Angola have consistently joined or beaten China at the top of the growth pile, while in recent years Timor Leste, Afghanistan, Iraq, Rwanda, Congo, Equatorial Guinea and Malawi have regularly featured.
So what can we learn from these trends? What gives? Let's look at the key points.
In examining these trends, remember always the maxim that our Chief Political Economist, David Caploe PhD expounds: in the structure of the world economy, countries either export to the US, or they export to countries that export to the US.
1. The insatiable demand for energy. That has been the big story for much of this decade. A higher standard of living, cheaper international travel, and the proliferation of electronic gadgets in the western world leads to ever higher per-person energy consumption in advanced economies. As massive countries like China, India and Indonesia grow, their citizens become richer and aspire to the same lifestyle, leading to ever greater energy needs. Countries like Qatar, with the world's largest natural gas reserves, and Azerbaijan with its vast oil fields, have boomed as a result.
2. 2010 - 2020 will be the African Decade. In economic terms, Africa has long been written off as a basket case of corruption, war and poverty. But things are changing. Better governance is emerging, particularly in countries like Ghana, mobile telephony is helping to bring remote areas into the modern era, and the Chinese are helping to build modern infrastructure in return for - you guessed it - energy and commodities. (so China grows by exporting to the US, and much of Asia and Africa is growing by exporting to China and similar 'primary' exporters).
3. The economic bonanza of peace. Countries who export arms (chief among those being the US) have an economic benefit in war, but the countries themselves, and those who trade with them, witness enormous gains from reconstruction and development following war. It happened in Europe after World War II and the Marshall Plan, and it is happening now in countries like Iraq, Afghanistan, East Timor and Rwanda. Let us hope that economic growth can help keep the peace in those countries.
4. When you start from a lower base you can grow more. This naturally helps countries in Africa and Central Asia, and it has helped China which still has large underdeveloped inland provinces, although the law of dimishing returns will soon hit the Middle Kingdom.
5. Population growth. These are countries with amongst the highest rates of population growth in the world, further boosting economic growth. As they become more prosperous, both population and economic growth will tend to slow.