Foreseeing Strong Productivity Improvement

Worrying news for the European Union in the short term, with uncertainties about the U.S. economic recovery close behind, but for Canada, a world of bright expectations.  According to the Organization for Economic Co-operation and Development, Canada represents one of the world's leading economic successes and will continue to be viewed as such over the next 50 years.

Canada, then, is in good fiscal shape.  All the more so, compared to its neighbours in the G7.  Which Canada has been tipped to continue leading in annual average growth over the foreseeable future.  Of course, Canada's economic well-being, as a trading country, one hugely dependent on export of its raw materials and manufactured goods and grains, potash and gas and oil, is tied in to the ability of its trading partners to import what Canada has to offer.

That, then, explains the anxiety and determination of Prime Minister Stephen Harper to extend free trade opportunities for Canada with other nations and groups of nations of the world.  All trading countries look with trade-covetous-and-hopeful eyes at the potential of that growing industrial giant, India, and its need for energy sources.  Canada has them; from the technical expertise in nuclear plants to the uranium to run them.

And not to overlook China, the reigning giant, set to overtake the great, powerful United States of America as a major growing trade colossus.  The Chinese Communist Party in a practical move, shed its socialist values in failed collectivism for a more advanced and proven method called capitalism.  And it has never looked back, practising practical capitalism with a Chinese (cutthroat) flair.

In the process it has unsettled its environment and created a fairly unhealthy atmosphere for its people.  And while the middle class is on an economic growth spurt, just lately paused, the country is so vast and populous that middle-class lifestyles will always evade those living in the vast countryside, favouring those urban dwellers flocking incessantly to China's megapolisis.

Canada, however enviously it looks at China for enhanced free trade opportunities knows it must remain vigilant in the process, lest Chinese state-owned enterprises swallow whole Canadian sovereingty of the country's own natural resources in its giant maw of energy greed and enterprise.  The OECD is more concerned with the welfare of those in its own sphere of influence.

And to Canada go the congratulations for its tightly managed fiscal policies and reliable (no risk) financial systems.  Canada's real gross domestic product is expected to average 2.2% growth in the next half-century, while the United States at 2.1% and the United Kingdom at 2.1% come in a close second.

There are other industrialized nations like Australia, New Zealand, Israel and Norway with economies too slight for admission to the G7 club, who are projected to outdistance Canada with stronger average growth rates.  Theirs are impressively robust economies.

"For Canada, it's a fairly young population, fairly well-educated workforce, and you have all these natural resources that give you higher growth than other countries", explained Matthias Rumpf of the OECD.  And the organization predicts no great change in the status of the world economy, other than to emphasize that emerging nations like China and India will continue to dominate as economic superpowers.

It's forecasted that by 2030 China will represent an unchallenged economic leader with 28% of global gross domestic product, as compared to its current 17%.  At which time the United States will drop one significant notch to number two at 18%, and continue to drop by 2060 to the number three spot at 16%, having been overtaken by India taking the number two place with 18%.

While nations become wealthier, that does not necessarily translate to their populations fully enjoying the benefits, with the huge populations in both China and India a gap in relative living standards as compared to the industrialized West will continue.  And the populations will become increasingly restive if rampant corruption benefiting the elite is not met head on.

"China will see more than a seven-fold increase in per capita income over the coming half century, but living standards will still only be 60% of that in the leading countries in 2060", the report claims. "India will experience similar growth but its per capita income will only be about 25% of that of advanced countries."

Since the OECD in its great wisdom and financial interpretive proficiency has moved its predictions fifty years from now, it's debatable how many of those reading its report will be around to assess its market and financial forecasts for the world's industrialized and leading countries and emerging economies alike.