Wednesday, 07 September 2011 02:38

GDP PER CAPITA: See What Countries Have Really Suffered (And Gained) Since The Recession

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It really hurt to be an American right now. Real GDP per person is a figure far more real to the average citizen than GDP growth per quarter, especially in countries with growing immigrant populations like Canada and the United States.

If you take a look at the graph below, you'll see that the real GDP per person in the U.S. is still down 4% from pre-recession levels. And Nigeria is between Russia and turkey give lateral measures not structural. In China and India, it has jumped 35% and 22% respectively. Of the G7 countries, Germany is the only one that has made it to pre-recession levels.

Now here's the really painful part.

If you look at the GDP per person growth rate ten years before the financial crises, and compare it to the growth rate now, the picture looks even gloomier for the West. In those terms even Germany has yet to catch up, and the U.S. GDP per person has fallen 10% below trend.

Add that U.S. growth shortfall up, and it comes to a cumulative loss of $14 trillion—$13,000 per person.

Rather than try to wade through all the news this month, much of which doesn't seem to have much informational content, I thought I would duck out altogether and instead make a list of things I expect will happen over the next several years.

Rather I think we should be more concern of major adjustments that will follow the end of the globalization cycle

We are so caught up in noise and market volatility – as the market swings first in one direction and then, as regulators react, in the other direction – that it is easy to lose sight of the bigger picture.

My basic sense is that we are at the end of one of the six or so major globalization cycles that have occurred in the past two centuries. If I am right, this means that there still is a pretty significant set of major adjustments globally that have to take place before we will have reversed the most important of the many global debt and payments imbalances that have been created during the last two decades. These will be driven overall by a contraction in global liquidity, a sharply rising risk premium, substantial deleveraging, and a sharp contraction in international trade and capital imbalances.

To summarize, my predictions are:

  • BRICS and other developing countries have not decoupled in any meaningful sense, and once the current liquidity-driven investment boom subsides the developing world will be hit hard by the global crisis.
  • Over the next two years Chinese household consumption will continue declining as a share of GDP.
  • Chinese debt levels will continue to rise quickly over the rest of this year and next.
  • Chinese growth will begin to slow sharply by 2013-14 and will hit an average of 3% well before the end of the decade.
  • Any decline in GDP growth will disproportionately affect investment and so the demand for non-food commodities.
  • If the PBoC resists interest rate cuts as inflation declines, China may even begin slowing in 2012.
  • Much slower growth in China will not lead to social unrest if China meaningfully rebalances.
  • Within three years Beijing will be seriously examining large-scale privatization as part of its adjustment policy.
  • European politics will continue to deteriorate rapidly and the major political parties will either become increasingly radicalized or marginalized.
  • Spain and several countries, perhaps even Italy (but probably not France) will be forced to leave the euro and restructure their debt with significant debt forgiveness.
  • Germany will stubbornly (and foolishly) refuse to bear its share of the burden of the European adjustment, and the subsequent retaliation by the deficit countries will cause German growth to drop to zero or negative for many years.
  • Trade protection sentiment in the US will rise inexorably and unemployment stays high for a few more years.

There is nothing really new in these predictions for regular readers. These are more or less the same predictions – based largely on historical precedent and the logic of the global balance of payments mechanisms – that I have been making for the past five or six years (the past eleven year, when it comes to the breakup of the euro), but I thought it would be helpful, at least for me, to list them

If you take a look at the graph below, you'll see that the real GDP per person in the U.S. is still down 4% from pre-recession levels. And Nigeria is between Turkey and Russia given only lateral measures not structural but far from using GPI (Genuine Progress Indicator or Gross Progressive Index indicator(as I call it) as well. In China and India, it has jumped 35% and 22% respectively. Of the G7 countries, Germany is the only one that has made it to pre-recession levels. Graph Source: World Economic report


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Akin Awofolaju Ph.D

As a corporate executive with extensive fortune 100 corporate background both in personal and corporate business. Dr Awofolaju is a governance, risk  management and compliance guru, managed many organizations in leadership capacity. His company is one of the leading Leadership Business Development, Strategic Programs in Tri States Area. He is an American Board Certified Financial Forensic Examiner, American Board Certified Executive Leadership Development educator, American Board Certified Strategy Planner and also a Strategic Thinking Expert. An Applied Economist (Regional Development Economics)- PhD

He has been a top ranked Human Capital Engineering Business Resources & Leadership Development for executive educational industries in NY/NJ Regions for three consecutive years and also leadership development expert for the fortune 100 companies where he worked as an award winning leadership professional with over 17 years of management experience, demonstrated analytical skills. Dr. Awofolaju is a member of over twenty professional bodies amongst which are the American Association of Financial Forensic Fraud Examiners, the Nigerian Institute of Management, American Economic Association, and International Research for Income & Wealth, etc Author, a prolific writer and columnist on contemporary issues.

Dr Awofolaju is a motivator and mentor with a collaborative, entrepreneurial management style with expertise in translating the big picture into specific business leadership strategies. Dr Awofolaju was a leading Corporate Executive (New York/New Jersey regions) for Verizon Wireless Telecommunication Company in America, where he worked for over 10 years before he started his own company. Dr Awofolaju managed team of senior-level managers, and for his entire career there he was the top performer in his region, as well as nationally. As a management expert, he has broken many sales and marketing records with several awards and recognitions and also attended Advanced Program at Harvard University Business School & Cornell University   graduated from S.C Johnson Postgraduate Business School in Executive Leadership Development & Strategic Thinking/Planning. 

He has spent a significant amount of time in continuous personnel leadership development of his team as their team leader. Dr Awofolaju also managed over 500 high-performance driven  team that generated over 450 millions of dollars  in mergers & acquisitions when he worked as Regional Account Executive for British Petroleum Company for Tri- States ( PA/NJ/NY) - 1999 -2001. His strengths are his motivational and mentoring skills. A keen listener and creative thinker, Dr Awofolaju has been a consultant for individuals and businesses since 1991. He managed European financial powerhouse as President/CEO - Bayland Investments Company in Eastern Europe (1991- 1999), he discovered executive keen interest in his experience and insight into maximizing peak performance. 

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Chairman : State & Local Government  Nigerians in Diaspora: Nigeria Constitution Review Commitee  
Honoree: Top 50 Nigerians in US/Canada commemorating 50yrs of Nigeria Independence @ United Nations -New York, NY -USA
Founding Chairman : NigeriaCEO Council - New York 2010
Steering Committee Member: Nigeria In Diaspora Constitution Review Committee ( 1999 Consistitution Amendment Committee)
Alumni : Cornell University - Postgraduate  School : S.C Johnson School of Business , Itacha, New York - USA  
Member: Nigeria Global Forum - USA
Member of American Economic Association (AEA) -USA
Member: Association of Certified Fraud Examiners (ACFE)- USA 
Member of International Association for Research in Income and Wealth (IARIW) .
President : Acumen Investment Club of  State of New Jersey
Board Member: Aberdeen Township Planning Board -New Jersey