3G COUNTRIES (Global Growth Generators)

INTRODUCTION
3G countries or Global Growth Generators countries are 11 countries economies which have been identified as sources of growth potential and of profitable investment opportunities
This research was done by Citi Investment Research & Analysis division of Citigroup Global Markets Inc.

The Citi report, prepared by analysts Willem Buiter and Ebrahim Rahbari

INTRODUCTION

Analysts forecasted that growth in the world economy until 2050, with average real GDP growth rates of 4.6% pa until 2030 and 3.8% pa between 2030 and 2050 as a result, world GDP should rise in real PPP from 73 trillion USD in 2010 to 377 trillion USD in 2050. The most promising growth prospects countries are Bangladesh, China, Egypt, India, Indonesia, Iraq, Mongolia, Nigeria, Philippines, Sri Lanka and Vietnam are our 3G countries

INTRODUCTION

Fastest growing regions: developing Asia and Africa China will overtake the United States to become largest economy in the world by 2020, than India will overtake by 2050. Followed by the Middle East, Latin America, Central and Eastern Europe, the CIS, and finally the advanced nations of today.

INTRODUCTION
The forecast is based on three sources of information for 58 countries accounting for 85% of global GDP prepared by the 50 economists on Citis Economics team.

A set of individual country forecasts of GDP (real GDP using PPP exchange rates and dollar GDP using market exchange rates) per capita GDP inflation and market exchange rates

GROWTH DRIVERS
Domestic

capital formation (as a share of GDP) Gross domestic saving (as a share of GDP) Human capital, demographic, health and educational achievement. Quality of institution and policies. Trade openness. the initial level of per capita income.

DOMESTIC CAPITAL FORMATION

Gross fixed capital formation, as a percentage of GDP, obtained from the World Bank World Development Indicators A high rate of domestic capital formation is therefore a precondition for sustained high rates of growth. Domestic capital formation can be financed out of external savings (through a current-account deficit on the balance of payments, that is, through capital inflows).

GROSS DOMESTIC SAVING

The saving/investment variable is constructed by taking an unweighted average of 2006 2009 averages of gross national savings

In practice most countries that have achieved and sustained high domestic investment rates have financed the bulk of this out of domestic saving

HUMAN RESOURCE AND HUMAN CAPITAL

Human capital is another key ingredient for generating growth. Human resource and human capital further divided into

Physical and mental ability Demographics Population

Institutions and Policies

Policies and institutions matter for growth, including:

The rule of law, stability and predictability of regulation and taxation Political and Social institutions Microeconomic and Macroeconomic Policies

Measures of Income and Income Growth

Per capita income, also known as income per person, is the mean income of the people in an economic unit such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross national income) and dividing it by the total population.
Report focuses on GDP and GDP per capita, measured at constant 2010 purchasing power parity adjusted to US dollars.

Trade openness
The two dimensions of openness that matter most for growth:

Trade in goods and services. Foreign direct investment.

Other potential drivers of growth

HISTORY, GEOGRAPHY AND CULTURE FINANCIAL ENDOWMENTS EDOWMENT OF NATURAL RESOURCES THE STRUCTURE OF PRODUCTION

The Global Growth Generators

In the previous section, we presented the main drivers of growth. In this section, we consider a few countries that stand out in terms of their growth potential over the next four decades.

BANGLADESH
GDP per capita: $1735 Average growth 2010-2050: 6.3% 3G Index Score: 0.39
2010

CHINA
GDP per capita: $7430 Average growth 2010-2050: 5.0% 3G Index Score: .81
2010

EGYPT
GDP per capita: $5878 Average growth 2010-2050: 5.0 3G Index Score: .37
2010

INDIA
GDP per capita: $3298 Average growth 2010-2050: 6.4% 3G Index Score: 0.71
2010

INDONESIA
GDP per capita: $4363 Average growth 2010-2050: 5.6% 3G Index Score: 0.70
2010

IRAQ
GDP per capita: $3538 Average growth 2010-2050: 6.1% 3G Index Score: 0.70
2010

MONGOLIA
GDP per capita: $3764 Average growth 2010-2050: 6.3% 3G Index Score: 0.63
2010

NIGERIA
GDP per capita: $2335 Average growth 2010-2050: 6.9% 3G Index Score: 0.25
2010

PHILIPPINES
GDP per capita: $3684 Average growth 2010-2050: 5.5% 3G Index Score: 0.60%
2010

SRI LANKA
GDP per capita: $4988 Average growth 2010-2050: 5.5% 3G Index Score: 0.33
2010

VIETNAM
GDP per capita: $3108 Average growth 2010-2050: 6.4% 3G Index Score: 0.86
2010

Potential 3G countries
Iran and North Korea could catch the 3G countries if they achieve political transitions and open their economies. Some might add Argentina, Myanmar, and Venezuela. Whether Mexico, Brazil, Turkey and Thailand will catch 3G countries depends on increasing their domestic saving/investment rates substantially. Some developed countries, such as Ireland, Canada, Australia and the USA could also become 3G countries.