Poor Nations Grew 2 times as Fast in 00s as 90s, Bruce Econ PhC

Economics Index and Qualifications
By Richard Bruce BA, MA, and PhC in Economics
Former Instructor St. John's University, New York City

Developing Nations Grew Twice as Quickly
in the Aughts as the Nineties

The per person economic growth rate of the developing nations roughly doubled in the first decade of the new millennium compared to the last decade of the previous millennium.

In the 1990s the per person economic growth rate of the developing countries was roughly two and a half percent per year, in the first eleven years of the new millennium it was about five percent per year. Five percent growth per year is fairly rapid, with compounding it means doubling every 14 years. Check notes at bottom for my sources.

The long run average for very rich nations like the United States, Japan, Germany, France, and the United Kingdom is about two percent a year per person, which with compounding yields a doubling time of thirty five years. So the new accelerated growth rate of the developing world will result in a narrowing of the gap between rich and poor countries if it continues or accelerates.

The accelerating growth of the developing nations was not just a Chinese, or Asian phenomena, it was wide spread. The World Bank divides the developing nations into three income categories, low, lower middle and upper middle. All three categories had positive economic growth per person, and all three groups had faster annual growth in the 2000-2011 period than the 1990-2000 period.

The World Bank also divides the developing nations into six geographic areas, (1) East Asia and the Pacific, (2) Europe and Central Asia, (3) Latin America and the Caribbean, (4) the Middle East and North Africa, (5) South Asia, and (6) Sub-Saharan Africa. Once again all six geographic areas had positive economic growth per person, and all six areas had faster annual growth in the 2000-2011 period than the 1990-2000 period.

There were individual countries where the per person output of the economy fell, but the general trend for the developing countries as a whole and the many divisions based on income and geography were all positive.

The success of the developing nations stands in stark contrast to the slower growth rate of the developed nations, and of course the economic slump that the developed nations suffered in the last several years of the eleven year period, and which continues today. The economic slump is slowing the growth of the developing nations. But it has not stopped their growth.

When the developed nations start to really recover from this slump, presumably the developing countries will resume, and perhaps exceed the rapid growth they achieved before the slump.

If this new higher level of growth can be maintained, or even increased the developing world will rapidly join the developed world. From a humanitarian point of view this is very good. If the developing country is democratic, or can make the transition to democracy it is also good for the cause of peace because democracies with developed economies are very stable and always at peace with other developed democracies. A world of developed democracies will be a world at peace. Furthermore as war is very bad for the ecology, peace is green.

On the other hand we in the developed world face the challenge of reinventing the high income life style so that all the people on the planet can share a high income life style without wrecking the ecology.

Notes on how I got the above figures

The figures for the first eleven years of the new millennium, 2,000-2011 were taken from two world bank web pages, one for GDP and the other for population. You will have to scroll down to the bottom to find the figures for developing countries. The world considers high income countries developed. Low and middle income countries are developing countries. The total economic growth rate was 6.3%, the population growth rate was 1.3%, so the per person or per capita growth was 5%.

The total growth figure for the low and middle income, developing, countries in the 1990s is right next to the figure for the first eleven years of the new millennium. It is 4.2%. But I had to estimate population growth. I used Infoplease figures on population growth. The world's total population growth was about 1.5 percent a year. I noted that in the first eleven years of the new millennium the developing world's population was .1% higher than the world as a whole, so I assumed about a 1.6% growth rate, which I then subtracted to get 2.6% economic growth per year per person. This is roughly half the per person growth rate for the later period. Exact figures are not necessary, because gross domestic product figures are not exact and are controversial, and my only point is there was a rapid acceleration of growth. A tenth of percent one way or the other is hardly relevant to my point.

How will the 3rd world develop? This popular web page lays out the growth path.

Here is an index to my other pages on economics, and a short review of my qualifications in this field.

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Last updated Sept. 23, 2013