I love Olympic sports, especially athletics, or track and field as we Americans call it. What I like is the vast representation of skills on display. Sprinters are explosive; high jumpers tall and lithe; hammer throwers bulky yet balletic; pole-vaulters crazy daredevils. Athletics is the sport that closely resembles the global marketplace, a carnival of color and comparative advantages. An Ethiopian marathoner doesn’t have to prove her merit in the shot-put ring. A software designer isn’t judged for his ability to appraise real estate value. In athletics, as in the market, you develop your talents for the highest return.
A curious thing about athletics is that progress is not evenly paced across events. Here in the 2020s, we see bursts of progress in some events and stasis in others. World records, men’s and women’s both, have been smashed in the 400-meter hurdles. But the 400 meters sans hurdles is stagnant. The men’s world record dates from 2016, the women’s from 1985. That’s hard to explain. Here’s another odd one. This year has seen a boom in men who’ve run under the world-class standard of 3:32 in the 1,500 meters—some say due to today’s spikes with bouncy carbon fiber inner soles. Yet the world record of 3:26 dates to 1998, predating today’s spikes.
Likewise, people, companies and countries in global economic competition sometimes have great bursts of progress. Then they go flat or decline. In athletics and economics both, every time you try to create a formula that can predict steady outcomes for years or decades, you’ll be frustrated. There are too many variables. The conditions that cause people, companies, and countries to thrive or wither look, in theory, easy enough to identify. But in the real world, the finest theories are sure to be co-opted by ideology and biased measurement. Even if you get the theory right, successful implementation faces political, regulatory and monopolistic hurdles.
In today’s global economy, it would appear to be Southeast Asia and India’s time. Will that be proven true? Let’s explore and see. China looks to be at its relative peak or slightly past it. By relative peak we mean China’s ability, since 1978, to outperform the global economy for more than four decades. This has culminated with China’s total GDP more or less matching the U.S. and the EU—an astonishing feat. But just as China reached parity, it decided to rein in some of its iconic entrepreneurs, particularly in consumer internet and finance. This coincided with the world’s most restrictive Covid-19 policies that only future historians will know was wise or foolish. In any event, China’s GDP has reverted to the global average. China’s 45-year economic boom appears to have peaked.
The EU hasn’t matched global GDP growth since the 1970s. While still growing, the EU has suffered a relative decline. By this measure, Japan peaked in the late 1980s, even though it has grown and thrived since then. America’s relative economic power peaked in the 1950s, then remained on its high plateau for the rest of the 20th century. America’s growth, in its technology and entrepreneurial sectors, puts the EU to shame. But it’s also true that America’s economic peak has been in relative decline during the 21st century.
Southeast Asia and India—which some lump together as “Altasia”—is the only economic region of size in the world that can outgrow the global GDP between now and 2050. That sounds like a prediction, and this column earlier warned about the futility of prediction. But Altasia has all the ingredients. It’s like an athletics team with competitive athletes in every event: sprints, distances, jumps and throws. Singapore is becoming the global financial hub of Asia, soon to be at par with New York and London. Vietnam is like China in the 1980s and 1990s. The Philippines is prospering again. Indonesia excels in energy and entrepreneurs.
And India now has connected scale. We highlight the word connected, a prosperity motor India once lacked. India’s new powers of connection since 2010 can’t be overstated.
Two facts: India’s investments in roads and rail have soared roughly tenfold. Internet users have grown from 100 million to 750 million.
This is new, and it is something.