THE FUTURE OF THE GLOBAL ECONOMY
The 20th century was marked by the growth of the United States of America as an economic and military superpower. This was the reason that the 20th century is known as the century of America. The subjugation of the Nazis in World War II and the fall of the Soviet Union in the Cold War made the self-styled ‘first-world countries’(American allies) economic mammoths around whom the global economy revolved. Countries with much bigger populations like China and India only played a small role in the 19th-century economy while smaller countries like Japan, which had only one-eighth the population of China or India, had over 4 times their GDP!
However, the 21st century is already being called the century of Asia. Experts predict that the economies of countries like China and India are set to retake their spots as the leaders of the global economy. As seen from the graph, up till the 19th century, India and China both contributed around 35% of the global economy. This was completely turned on its head by European colonialism. Both countries’ share fell to 5%. Now the two giants are coming back to take their crowns. While China is already halfway there, India has started its journey.8520
Another feature that will be visible in the upcoming century is the growth of African countries. Despite the ongoing violence there, African countries are experiencing unprecedented growth, and countries like Nigeria, Ethiopia, and Sudan are expected to become prominent players.
To get a macroscopic overview of the future of the global economy, we need to look at 3 economies – the US, China, and India.
United States of America
The current economic dominance of the United States can be traced back to the two World Wars. Before them, European countries like Britain and France imposed the horrors of colonialism upon the world to accumulate wealth. The anguish and terror unleashed by the World Wars in Europe destroyed their economies and decolonization put the final nail in the coffin for European dominance. Meanwhile, The United States provided the Allies with weapons and ammunition which drastically increased their exports. The USSR emerged as the ideological bête noire to the US and in the ensuing Cold War, the US emerged as the victors as the Soviet Union crumbled due to internal pressure.
The current economy of the United States has matured. Thus, it is expected to only grow 2 and a half times in the next 80 years. As a comparison, the Indian economy is projected to grow over twenty times during the same period I think this is the reason that the US is now facing more and more inwards as it is generally seen that the international influence of diminishing superpowers erodes and it starts focusing on internal issues. The US still holds two major advantages. Its advanced military is still far superior to that of China, and the biggest companies in the world, such as Amazon, Google, and, Apple, are situated here. The US is the paragon of the economic future of developed economies.
China is a country on the verge of economic dominance. It is projected to become the largest economy by 2028 and hold that post for over 100 years. This massive growth can be traced back to the mid-1970s when Mao Tse Tung (also called Mao Zedong), the chairman of the Chinese Communist Party (CCP), died along with his disastrous policies. The new chairman, Deng Xiaoping began unravelling Mao’s policies and opened the economy slightly. This resulted in massive growth that is still underway today.
However, China’s growth poses a massive threat to the democratic world. Its expansionist motives, genocide on Uyghur Muslims, and the parties’ authoritarian policies have shown to be of great concern. Despite having the biggest military, it is still far behind technologically. The biggest problem that China faces is a demographic collapse caused by the one-child policy, a severe water crisis, and a terrible international reputation. All said, China is waking up from its slumber and nothing can put it back to sleep but its own internal issues.*/8*
In 1991, the then Finance Minister of India, Dr. Manmohan Singh, reversed years of protectionist policies and started India’s growth. India witnessed humungous growth, becoming the fastest growing country, between 2004 and 2008, during the financial crisis.
However, since 2009, bad loans and scandals have come back to bite the economy. The decision of the government to strip the 500-rupees and 1000-rupee notes (which constituted 86% of the economy) proved to be an economic disaster and has caused an economic decline for the past 5 years also failing to accomplish any of its promises. Further aggravated by the covid mismanagement, India’s economic growth is predicted to go back by at least 10 years.
Despite these setbacks, India is still expected to become the third largest economy by 2050 and the second largest by 2075.
The rise of authoritarian and totalitarianism leaders in these three countries proves as an exceptionally tough challenge for democracy. The election of Donald Trump and the Capitol Riots in the US, the dictatorial attitude of Xi Jinping, and the dismantling of free press and free judiciary in India are just precursors of the above fact. While the US and India are slowly moving towards fascism, China is moving towards a communist dictatorship. It seems that the 21st century might also be the century of authoritarianism.