Bill Gates made the following prediction in this year’s annual letter from The Gates Foundation:
“By 2035, there will be almost no poor countries left in the world. Almost all countries will be what we now call lower-middle income or richer.”
He went on to say that he only added the “almost all” caveat because there are a few countries (like North Korea) where politics will get in the way of ending poverty. Effectively, he was saying that there is no good reason why any country should be poor in 2035.
This struck us as a welcome, well-founded and unusually positive prediction about the future. At the turn of the millennium emerging markets only accounted for approximately 20% of global GDP. Forecasts suggest they will account for 50% of global GDP by 2020, with the current figure standing at around 35%. Importantly, Sub-Saharan African, the world’s poorest region, is forecast to have the highest growth rate of any global region from 2018 onwards. With compound growth, even modest growth rates of 2.5% pa would see economies double in size in Gates’s twenty year forecasting period, so his bold forecasts do not seem that outlandish.
But we would like to add two caveats of our own. Gates is clearly thinking of poverty in ‘absolute’ rather than ‘relative’ terms. For all its growth in the last 20 years it is worth noting that China’s GDP per head still hovers around just US$6,000 pa (compared to over US$44,000 pa in Germany, for example). Finally, and perhaps most importantly, how will all the consumers in newly enriched countries consume sustainably? Achieving sustainable growth is the key global challenge now and in Gates’s post-poverty world. Those gathering in Bonn this weekend for the UN Conference on Climate Change have important work to do.
Perhaps it should start with those economies that are already rich leading by example?