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Columbia Global Centers Santiago, Chile Julio 3, 2018 Alonso Martinez Senior Lecturer Columbia Business School am3638@columbia.edu
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Emerging Markets at a turning point Columbia Global Centers - - PowerPoint PPT Presentation
Emerging Markets at a turning point Columbia Global Centers - - PowerPoint PPT Presentation
Emerging Markets at a turning point Columbia Global Centers Santiago, Chile Julio 3, 2018 Alonso Martinez Senior Lecturer Columbia Business School am3638@columbia.edu 0 Emerging Markets at a turning point Emerging markets in my lifetime
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Rural / urban development – my simple model
poor poor Rural Urban Population Income/ capita middle class
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$0 $20.000 $40.000 $60.000 $80.000 $100.000 $120.000
Rural Urban
$0 $500 $1.000 $1.500 $2.000 $2.500
Urban
Population vs. GDP/Capita PPP 2010 (US=100)* GDP/Capita %Population Mexico India 24% 76% 70% 30% Rural %Population
Rural / urban development – examples
36 31 16 12 6 3 * Estimates based on The Economist Intelligence Unit, Price Waterhouse Cooper and country statistics average average GDP/Capita
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Rural/ urban development – some key variables
poor poor Rural Urban Population Income/ capita middle class Agricultural productivity x arable land Rural population Job creation and productivity In industry and services Urban migration
Education
Technology
, ,
Fertility
, ,
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Urban wealthy Rural poor
The world in 1960
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1960 – 1980 Japan/Korea and Brazilian miracle
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The world in 1980
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1980 – 2015 The rise of China
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The world today
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The world today – still a way to go
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Changing landscape
Jan 21, 2017 Nov 19, 2016 Jan 17th 2017
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Emerging Markets at a turning point
Past 25 years Fast rise of China Collapse of USSR A poor rural EM world Too many young Green Revolution Securing oil Next decades Uncertain China Steady rise of India/Africa An aspiring urban EM world Too many old Scramble for food End of oil/ biofuels
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China´s five year plan -- from land-driven to people-oriented urbanization
Key Priority
Leaving from the rural farmland Transferring the land-use right Migrating into the urban city Integrated into the basic public services Reform on the Hukou (household registration) system Prospect Flow from the rural to the urban area, and vice versa
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Connecting inland China
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China vs. Brazil models and challenges
poor poor Rural Urban Income/ capita middle class Agricultural productivity x arable land Rural population Job creation and productivity In industry and services Urban migration Education Population growth and demographics Technology
, ,
Brazil´s challenges China´s challenges
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Possible pathways to China’s Future
Neo-Totalitarianism Hard Autoritharianism Soft Autorirarianism Semi-Democracy
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The changing landscape
GDP growth by region and factor
10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Chin a India Africa OEC D Other Productivity Population 1990- 2016 2016- 2040
- 80% of the expansion in
world output will be driven by emerging economies
% per annum
GDP is projected to grow at a similar rate to past 25 years… At 3.25% pa growth, total output of the world will more than double by 2040
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Emerging Markets at a turning point
Past 25 years Fast rise of China Collapse of USSR A poor rural EM world Too many young Green Revolution Securing oil Next decades Uncertain China Steady rise of India/Africa An aspiring urban EM world Too many old Scramble for food End of oil/ biofuels
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The world will be increasingly urban – 2.5 billion more
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https://www.unicef.org/sowc2012/urbanmap/
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India´s urbanization challenge – good or bad for development?
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A slum in Mumbai
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The big challenge: urban poverty…
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…coupled with income inequality
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Inequality and violence
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Emerging Markets at a turning point
Past 25 years Fast rise of China Collapse of USSR A poor rural EM world Too many young Green Revolution Securing oil Next decades Uncertain China Steady rise of India/Africa An aspiring urban EM world Too many old Scramble for food End of oil/ biofuels
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USA demographic pyramid vs. Nigeria’s “youth bulge”
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Aging China vs. India´s demographic dividend
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Living longer and having less children as countries develop
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Emerging Markets at a turning point
Past 25 years Fast rise of China Collapse of USSR A poor rural EM world Too many young Green Revolution Securing oil Next decades Uncertain China Steady rise of India/Africa An aspiring urban EM world Too many old Scramble for food End of oil/ biofuels
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Food is, after energy, the largest global resource challenge…
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Available arable land
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All the BRICs are heavily involved in the African scramble
Brazil China Russia
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Global warming impact -- may actually help
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Emerging Markets at a turning point
Past 25 years Fast rise of China Collapse of USSR A poor rural EM world Too many young Green Revolution Securing oil Next decades Uncertain China Steady rise of India/Africa An aspiring urban EM world Too many old Scramble for food End of oil/ biofuels
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Oil production/consumption by region
Million barrels daily
Production by region Consumption by region
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2 4 6 8
201 202 203 204 E U China US
The passenger car parc grows substantially, but becomes more efficient...
0. 5 1. 1. 5 2. 2.5 0.0 2000 2010 2020. 2030 2040 *ICE vehicles includes hybrid vehicles which do not plug into the power grid Battery electric Plug-in hybrid ICE*
Passenger car parc by type
**Based on the NEDC (New European Drive Cycle), gasoline fuel
Billions of vehicles Litres/100km** Fuel economy of new cars
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350 300 250 200 150 100 50
- 50
- 100
2000- 2005- 2010- 2015- 2020- 2025- 2030- 2035-
- 2005. 2010. 2015
- 2020. 2025. 2030
- 2035. 2040
India China Other non-OECD OECD Total
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2000 2010 2020 2030 2040
Other* Electricity Gas Oil
Transport demand continues to be dominated by oil, but decreasing
Mtoe *Other includes biofuels, gas-to-liquids, coal-to-liquids, hydrogen Billion toe
Transport energy consumption growth by region Transport energy consumption by fuel type
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The increasing share of renewables is led by China and OECD...
Growth of power generation, 2016-2040
6 5 4 3 2 1
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OEC D China India & Other Asia Other Renewables Nuclear Gas Hydro Coal Oil
Thousand TWh
Shares of power generation, 2016 and 2040
0% 20% 40% 60% 80% 100% 2016 2040 2016 2040 2016 2040 2016 2040 Non-fossil Ga s Coal & oil OEC D Chin a Indi a Other Asia
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Distribution of proved oil reserves: 1996, 2006 and 2016
Percentage
The world still has abundant oil reserves…loosing value and power
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Emerging Markets at a turning point
Past 25 years Fast rise of China Collapse of USSR A poor rural EM world Too many young Green Revolution Securing oil Next decades Uncertain China Steady rise of India/Africa An aspiring urban EM world Too many old Scramble for food End of oil/ biofuels
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