8 February 2017

The US strike in Yemen against an al Qaeda outpost resulted in the death of one American soldier and as many as 20 civilians.  It was described by the US government as an intelligence operation, but that description is incomplete.  The strike was also an attempt to prop up the Yemeni government in exile that was ousted from power by Houthi rebels in 2014.  That larger objective is more problematic.  Saudi Arabia supports the Sunni government in exile and Iran supports the Houthi rebels.  The US is siding with Saudi Arabia in this struggle, and the US strike in Yemen deepens this commitment.  It is not clear, however, that the US should be more directly involved in this particular struggle, and the Star in Malaysia raises the issues of concern. 

The travel ban imposed by the US Administration is supposed to be temporary, but the effects of the ban may be more long-lasting if immigrants to the US believe that the US no longer welcomes immigrants or that a precedent has been established for future restrictions on immigration.  If immigration does decline because of the ban, the harm to the US economy could be seriously affected.  Immigration is not a random process–people immigrate either because their home country has become too dangerous or because they have talents and skills that can be unlocked in opportunities that only exist in the US.  This latter consideration is critical to dynamic economic growth and the US has benefited tremendously by the influx of talented people from abroad. 

PriceWaterhouseCoopers (PWC) is a global accounting firm that often projects its analyses into the future.  Its most recent forecast, “The World in 2050”, is fascinating.  The projections suggest a rather dramatic shift in the distribution of global economic power with emerging economies becoming significantly more important by 2050.  Some of its findings include:

 

  • Emerging markets (E7) could grow around twice as fast as advanced economies (G7) on average
  • As a result, six of the seven largest economies in the world are projected to be emerging economies in 2050 led by China (1st), India (2nd) and Indonesia (4th)
  • The US could be down to third place in the global GDP rankings while the EU27’s share of world GDP could fall below 10% by 2050
  • UK could be down to 10th place by 2050, France out of the top 10 and Italy out of the top 20 as they are overtaken by faster growing emerging economies like Mexico, Turkey and Vietnam respectively
  • But emerging economies need to enhance their institutions and their infrastructure significantly if they are to realise their long-term growth potential.

 

Graphics: GT

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Posted February 8, 2017 by vferraro1971

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