In 30 years, most of the world’s largest economies will be those that are emerging today, surpassing current behemoths such as the US, Japan and Germany.
By L Galloway
23 March 2020
Brexit, coronavirus, and trade tiffs may be making economic headwinds, but despite immediate challenges, the world economy is projected to keep growing at a rapid pace over the next few decades. In fact, by 2050, the global market is projected to double its current size, even as the UN forecasts the world’s population will only grow by a modest 26%.
This growth will bring with it plenty of changes. Though it can be challenging to predict exactly how the future will unfold, most economists agree on one thing: today’s developing markets will be tomorrow’s economic superpowers.
According to The World in 2050 report by international professional services firm PwC, in 30 years, six of the seven of the world’s largest economies will be today’s emerging economies, surpassing the US (dropping from 2nd to 3rd), Japan (dropping from 4th to 8th) and Germany (dropping from 5th to 9th). Even relativelysmaller economies like Vietnam, the Philippines and Nigeria will see huge leaps in their respective rankings over the next three decades, according to the report.
We spoke to residents living in five countries with hyper-growth potential to find out how they’re navigating the rapid changes already occurring, what benefits come with living in these places and the challenges they face as their countries climb the rankings.
As measured by GDP by purchasing power parity (PPP), which adjusts for price level differences across countries, China already has the largest economy in the world. The Asian behemoth has seen massive economic gains over the past decade, but economists promise that it is just the tip of the iceberg for what the future holds. The big economic changes are happening right in front of residents’ eyes. “My home for the last few years, the Industrial Park of Suzhou, is a glittering urban paradise of shopping malls, parks, restaurants and traffic. But when I first came to China [15 years ago], the whole area was swamp and farmland,” said Rowan Kohll, author of the 1-Minute Chinese books.“This is a very common story in China. The whole country is changing.”
The changes are attracting a brand-new set of entrepreneurs and others looking for financial opportunity amid the seemingly unstoppable growth. China’s largest city, Shanghai, is where many newcomers make their start.
“Shanghai is an entrepreneurial and very commercially minded city,” said American John Pabon, founder of Shanghai-based Fulcrum Strategic Advisors. “From the early-morning traders at the wet markets to honking motorbikes at traffic lights to late nights in the office, everyone is here to get ahead.” But unlike New York City, where Pabon lived previously and found people usually held their cards close to their chest, residents here are “always willing to listen and provide sound advice.”
In order to work and live here, however, expats must learn Mandarin. “It’s no longer a nice-to-have in China,” Pabon said. “Without Mandarin, you’re going to find your options pretty limited for work and in social and cultural circles, and you may not even be allowed in at all.”
The world’s second-most-populous country is expected to see massive growth over the next three decades, averaging 5% growth in GDP per year, according to the report – making it one of the fastest-growing economies in the world. By 2050, India is projected to be the world’s second-largest economy (overtaking the United States) and will account for 15% of the world’s total GDP. The positive outcomes of that growth have already started to make an impact for residents.
“From the end of 20th Century and start of 21st, I have literally seen India changing in front of my eyes,” said native Saurabh Jindal, who runs the app Talk Travel. “The economy growing has led to manifold changes in people’s lifestyles, from the vibes in the city to the attitudes in society and eventually the overall walk and talk of the country and its inhabitants.”
For instance, there has been a “major upgrade” in the quality of televisions, mobile phones and car brands over the past 15 years, he said, while air travel has become increasingly accessible, and houses have become “more posh and rich”.
Residents also advise not trying to replicate the creature comforts of home, but rather tune into how the country works. “Adapt to India,” said Jindal. “India will not adapt to you.”
This South American powerhouse is set to be the world’s fifth-largest economy by 2050, overtaking Japan, Germany and Russia in the process. With an abundance of natural resources, Brazil has grown its economy rapidly in the past few decades, but faces challenges as it struggles to control government corruption and inflation that has plagued the country in recent years.
“I witnessed all the euphoria regarding the economy in the late 2000s and early 2010s. A new middle class emerged in Brazil, and the country as a whole was feeling proud of this new, hard-earned reputation,” said Caio Bersot, who was born in Brazil. “But at the same time, large cities like Rio de Janeiro and Sao Paulo grew more unaffordable. It got to a point that it felt like Brazil was growing faster than it should. There weren’t enough trade corridors, rail lines, roads and ports to keep up with all that growth.”
Some of the challenges have enabled Brazil to be an early adopter of technology. “In many developing countries, high growth translates to high inflation. As a result of the high cost of protecting cash against inflation, Brazil became a fintech pioneer,” said intercultural strategist Annalisa Nash Fernandez, who previously lived in Sao Paulo. “Paypal and Venmo equivalents have been the daily routine in Brazil for 20-plus years, even before smartphones, via an ATM.”
A 2016 recession hit the country hard, but the economy is showing some signs of re-growth, and with a new presidential administration inaugurated last year, 2020 is posed to be a “make-or-break” year for Brazil, according to Reuters. “The country still faces economic challenges but is definitely working towards a bright future,” said native Silvana Frappier. “Brazil is one of the world’s giants of mining, agriculture and manufacturing, and it has a strong and rapidly growing service sector. I’m also seeing an increase in tourism investment.”
Regardless of the state of the economy, newcomers are typically welcomed here, especially if they learn the language. “Brazil is a very friendly country that loves to welcome foreigners. Brazilians are less individualists and more social people. They love when a foreigner shows interest in their culture and language,” said Frappier. “Learning Portuguese will make you feel right at home.”
By 2050, Mexico is poised to become the world’s seventh-largest economy, jumping up four spots from its current 11th place in the rankings. A focus on manufacturing and exports have driven much of its growth in recent years, though current economic conditions have hampered potential gains.
“For the past 10 years, Mexico’s economy has grown, but not as much as I thought it would and definitely not as much as it could,” said travel blogger Federico Arrizabalaga, who lives in Puerto Vallarta. “The price of gasoline has doubled in the last eight years [and] the Mexican peso’s value has dropped around 50% versus the US dollar in the past 10 years. But if you find opportunities and work hard, you can do very well, and your money still goes a long way compared to more expensive countries.”
If you find opportunities and work hard, you can do very well
Healthcare and transportation are notably more affordable here than they are in the US, Canada and Europe. “I was just in Mexico City and the cost of an Uber to go anywhere in the city was about US$4 to $10 [approx. £3 to £8],” said American Suzan Haskins, senior editor at International Living, who currently lives in Merida, Yucatan. As with many developing economies, infrastructure and road conditions can be challenging, but the government just unveiled a $44bn infrastructure investment, according to Reuters, to be spent over the next four years.
Each region of Mexico is very distinct in terms of climate and culture, so residents advise new expats to do their research and visit different cities before relocating. That said, the local hospitality makes fitting in a lot easier, especially when it comes to learning Spanish, a definite must.
“People here will go out of their way to help you over communication hurdles,” said Haskins.
One of Africa’s largest economies, Nigeria is poised to grow by leaps and bounds by 2050, at an average of 4.2% year-on-year, rising eight places from 22nd to 14thin the rankings. While the government has struggled with corruption, residents have an entrepreneurial attitude that keeps pushing the country forward. According to Global Entrepreneurship Monitor data, more than 30% of Nigerian residents are new entrepreneurs or the owner-manager of a new business, among the highest rate in the world.
“There is a ‘hustle and bustle’ culture in the air,” said Nigerian native Colette Otusheso, CEO of Accelerate TV, who lives in Lagos. “Nigerians are hard workers and it almost comes naturally for us to be working on several things at once, which means there is always something going on.”
Even the country’s challenges, like minimal public transportation, have segued into business opportunities. “We now have an app very similar to Uber for okadas (motorbike transport), which is the most used form of transport in Nigeria but in the past has not been very reliable,” said Otusheso. “Now we can track okada drivers and locations just as you do for transport and deliveries with Uber.”
There is a ‘hustle and bustle’ culture in the air
Residents mostly feel positive about the county’s future but are wary of government corruption and foreign investment. “We need to be careful what country we take money from, who we allow to help us improve our infrastructure and what strings are attached to it,” said Nigerian native Chizoba Anyaoha, Founder of TravSolo, noting their history of other nations taking advantage of their natural resources and raw materials.
Newcomers should settle in Lagos or Abuja, both big cities with good schools and great nightlife and food. Just like any big city, street smarts are key. “The best way to acclimate here is to know someone currently living here you trust,” said Anyaoha. “It is quite easy to identify expats, making them easy targets. Keep a low profile, take precautions, always be aware of your surroundings and the people in it.”