even a freshly minted acronym for this region: MENA, or Middle East
and North Africa.
These developments will lead the world to be a very different place
by midcentury. By making conservative projections of productivity
growth throughout the world and combining these assumptions with
the population data compiled by the U.N. Demographic Commission,
we can project the distribution of population, GDP, and equity capital by
midcentury, as shown in Figures 10-5a, b, and c.^13
As one can see in Figure 10-5b, the share of economic output in the
developed world will shrink dramatically: from more than one-half of
the world’s output to about one-quarter by midcentury. The United
States’ share will shrink from 19 to 12 percent, Western Europe’s from 19
to 9 percent, and Japan’s from 6 to 2 percent. Well before midcentury,CHAPTER 10 Global Investing and the Rise of China, India, and the Emerging Markets 179
(^13) Average productivity growth from 2006 through 2050 in the developed world, 2.5 percent ; China
and Indonesia, 5.0 percent; India, 5.5 percent; other Asia and Eastern Europe, 4.5 percent; Latin
America and Caribbean, 4.0 percent; Middle East and Africa, 3.5 percent. The value of equity was
determined by regression analysis of equity markets against the GDP.
FIGURE10–5a
The 2050 World Population