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Citibank's Regional Dynamos

04 March 2011
Find out which Middle East countries make it to Citibank 's list of the fastest growing economies in the world. Hint: it's not Qatar.

It may seem difficult, but look beyond the current political crisis engulfing the Middle East. Much beyond.

Citigroup 's list of Global Growth Generators looks at economies beyond 'emerging markets' and 'BRICs'. In fact, the U.S. bank bristles at these terms, suggesting they are outdated.

"The expression 'Emerging Markets' is clearly past its sell-by date... The use of the term 'Emerging Markets' is very common - so common indeed that it has become hard to get around it - but clear definitions are few and far between and useful definitions are virtually nonexistent," writes Willem Buiter in the report.

So, Citibank has come up with its own list of Global Growth Generators - an unlikely grouping of mostly troubled countries that Citibank says could lead global growth.

No BRICs, emerging, submerging or advanced economies for Citigroup . Instead, it has coined its own '3G' economies - the triple Gs standing for Global Growth Generators.

The Citibank mantra is: start poor, start young, open up, adopt a market economy, don't be unlucky and don't blow it.

By that logic, it has picked Egypt and Iraq as part of its exclusive club of growth drivers.

Read what Citibank says about Egypt's growth prospects: Egypt A Global Economic Dynamo Over Next 40 Years: Citibank

Read what Citibank writes about Iraq's growth prospects Reconstruction & Peace To Boost Iraq Growth: Citibank

Here are the key points of the report:

Citibank expects strong growth in the world economy until 2050, with average real GDP growth rates of 4.6% per annual until 2030 and 3.8% between 2030 and 2050 - as a result, world GDP should rise in real PPP-adjusted terms from $72 trillion in 2010 to US$380 trillion in 2050.

Developing Asia and Africa will be the fastest growing regions, in our view, driven by population and income per capita growth, followed in terms of growth by the Middle East, Latin America, Central and eastern Europe, the CIS, and finally advanced nations of today.

'This time it's different: many EMs have either opened up already or are expected to do so, and have reached a threshold level of institutional quality and political stability.

Bangladesh, China, Egypt, India and Indonesia, Iraq, Mongolia, Nigeria, Philippines, Sri Lanka and Vietnam have the most promising per capita growth prospects - they are Citibank 's 3G countries.

Institutions and policies are more important for growth once countries have achieved a fair degree of convergence.

Growth will not be smooth. Expect booms and busts. Occasionally, there will be growth disasters, driven by poor policy, conflicts, or natural disasters. When it comes to that, don't believe that 'this time it's different'.


Overall, the Middle East contribution to global GDP will be 4% by 2030, similar to its current contribution today, pushing it up to 5% by 2050.

Interestingly, Citibank expects Saudi Arabia to emerge as the sixth largest GDP per capita by 2040 at $77,018.

Find out which countries Citibank 's is forecasting as the Ten Richest Economies By 2050 (in terms of GDP per capita).

© AlifArabia 2011