The global economy continues to grow apace with China and India leading the way with export led manufacturing and services industries. While the average standard of living in booming economies rises, so too does the number of poor people around the world, many of them moving from the countryside to unemployment in the city slums as part of a search for a better lifestyle.

Globalisation now comprehends the movement not just of physical goods, but also services, finance, people, information and ideas. As a result the world is becoming ever more interlinked putting pressure on global, national and local governance systems designed in a previous era by those with power and influence at the time. Economic power has shifted from the governments and companies of the USA and EU to those of the energy rich countries of the Middle East and Russia and of low cost Asian manufacturers and service providers.

While many countries of the world continue to report regular GDP growth, the growth itself is uneven within countries with the rich growing richer and the poor poorer.

In the sections below, we list some of the key statistics and developments for the two years prior to December 2007. To see how this fits into our global outlook, we refer you to our World overview. For more recent information, we suggest you refer to the MBendi Blog: Signposts to 2020.

World economic growth was 4.1% in 2003, 5.3% in 2004 and 4.9% in 2005. Global GDP is expected to double from US$ 45,000 billion in 2006 to US$ 90,000 billion in 2020.

According to the World Bank, at the end of 2006, the developing world accounted for 53.5% of global GDP versus 44.5% in 1975. China's share grew from 3% to 13%. In September 2007, the Asian Development Bank forecast 2007 Asian GDP growth, excluding Japan, of 8.3%, with growth forecast to be 8.2% in 2008. Further excluding China and India, representing 55% of developing Asia's GDP, 2007 growth is forecast to be 5.7% in 2007.

The IMF World Economic Outlook 2006 reported China contributing 29% of world's economic growth and 15% of world output. China's GDP growth is forecast to be 10% in each of 2006 and 2007. In 3Q 2006, Chinese GDP rose 10.4%. China's current account surplus is 7.2% of GDP and the country has foreign exchange reserves in excess of US$ 954 billion. Indian GDP growth was 8.9% in 2Q2006. China's GDP grew 10.7% in 2006 and 10.9% in 4Q2006. China's GDP was R 19.2 trillion versus R 21.3 trillion for Germany, third biggest behind USA and Japan. China's 2006 economic growth has been revised at 11.1% while foreign exchange reserves were US$ 1,330 billion at end June 2007. China's GDP growth was 11.5% in 3Q2007. China's economic growth is forecast to be 11% in 2007, but power usage could rise 16%. In November 2006, the World Bank reported that, while China's economy grew at 10% pa from 2001 to 2003, the average income of the poorest 10% of households dropped by 2.5%.

Goldman Sachs predicts the Indian economy will grow by 8% pa until 2020 overtaking the US economy in 2042. In May 2007, the McKinsey Global Institute predicted Indian consumer spending will quadruple by 2025 to US$ 1.5 trillion, making India the 5th largest market behind the USA, Japan, China and the UK. India recorded growth of 9.4% in the previous 12 months to June 2007, the highest for 18 years.

The UN Economic Commission for Africa forecasts African 2007 growth as 5.8%, following growth of 5.2%, 5.3% and 5.6% in 2004 to 2006. Angola, Mauritania, Sudan, Ethiopia, Liberia, Libya, Mozambique and Congo all experienced growth above 7%, while Cote d'Ivoire, Comoros, Swaziland and Seychelles hardly grew and Zimbabwe experience a 4.4% decline in growth. The World Bank's African Development Indicators 2007 reported average growth in Sub-Saharan Africa was 5.4% in 2005 and 2006. More than 40% of Africans live on less than US$ 1 per day. South Africa and Nigeria make up 54% of Sub-Saharan Africa GDP. In South Africa, 11% of people live on less than US$ 1 per day, in Nigeria 71%.

The 2006 World Economic Forum's Global Competitive Report rated Switzerland, Finland, Sweden, Denmark, Singapore and the USA as most competitive.

In August 2006, the US trade deficit widened to a record US$ 69.9 billion, of which US$ 22 billion related to trade with China. At the end of 2006, the USA ran a US$ 850 billion current account deficit, 6.6% of GDP and expected to grow to 7% in 2007. By contrast, the six countries of the Gulf Cooperation Council have seen current account surpluses increasing from US$ 87 billion in 2004 to US$ 167 billion in 2005 to a forecast US$ 227 billion in 2006.

The UK's trade deficit for 2006 was GBP 56 billion, more than 4% of GDP and comprising a good deficit of GBP 84.3 billion and a services surplus of GBP 28.5 billion. The UK recorded a goods surplus of GBP 6.3 billion with the USA, the only surplus with any G7 country, and a goods deficit of GBO 12 billion with China. A GBP 900 million 2004 surplus on oil trade became GBP 3.7 billion shortfall in 2006.

The US trade deficit in 2006 widened to US$ 763.6 billion. China replaced Mexico as the second largest trading partner after Canada. Exports rose to US$ 1.44 trillion, but imports rose to US$ 2.2 trillion. 2006 oil imports cost US$ 302 billion up from US$ 252 billion in 2005.

Japan recorded a Yen 19.84 trade surplus in 2006.

UNCTAD reported global FDI grew 29% in 2005 to US$ 916 billion with 59% going into developed economies and 83% coming from developed economies. UK, USA, China, France and the Netherlands topped the list of countries attracting FDI. An IBM study of company FDI in 2005 showed 39% (35% in 2004) of new plants and projects taking place in Europe, 31% (35% in 2004) in Asia Pacific and 18% in North America.

UNCTAD reported global FDI grew 34.3% to US$ 1,230 billion in 2006, with US$ 800 billion going to the developed world and US$ 368 billion to the developing world. African FDI increased by 26.5% to US$ 39 billion.

UNCTAD reported that 2006 FDI inflows rose 38% to US$ 1,306 billion, with 2007 expected to be a record high of US$ 1,500 billion. There were 172 M&A deals in 2006 worth more than US$ 1 billion. The USA was both the largest recipient and provider of FDI. FDI to developing countries rose 21% to US$ 379 billion, while FDI to Africa doubled between 2004 and 2006 to US$ 36 billion. Cross-border M&A in 1H2007 rose 58% to US$ 581 billion.

China's National Bureau of Statistics reports Chinese FDI in other countries rose 123% from 2004 to 2005, totaling US$ 12.3 billion. Foreign FDI in China was US$ 60.3 billion in 2005. 1Q2007 FDI in China was US$ 15.9 billion, up 11.6% on 1Q2006. In December 2006, China Development Bank announced plans to increase international investment, particularly in energy and minerals. In January 2007, China announced a policy shift on managing foreign reserves. In March 2007, China equalised the corporate tax rate paid by local and foreign companies.

During Hu Jintao visit in February 2007, China offered Zambia US$ 800 million in investment over next three years, including US$ 250 million for copper smelter, increased number of Zambian products that can be imported into China tariff-free and will allow Zambians to borrow from Bank of China. Zambia is to set up special economic zone in the Copperbelt.

During the first nine months of 2006, Indian companies spent US$ 7.2 billion on foreign acquisitions versus US$ 4.5 billion in 2005 and US$ 1.5 billion in 2004, while foreign companies spent US$ 8.6 billion on Indian acquisitions. In April 2007, Indian conglomerate Essar made separate bids for Algoma Steel and Minnesota Steel.

In April 2007, Russia announced plans to invest oil and gas revenues in equities on global markets. In March 2007, Russian prime minister Mikhail Fradkov visited Angola, Namibia and South Africa. South African exports to Russia in 2005 were worth US$ 106 million, while imports from Russia were worth US$ 18 million. Fruit is one of the main exports to Russia. South African multinationals are active in Russia's mining, banking, hospitality and brewing sectors. Russia has a contract to supply South Africa's Koeberg nuclear power station with fuel till 2010. Alrosa, already involved with Endiama in Angola and De Beers in South Africa, is also interested in power projects and onshore and offshore oil exploration blocks in Angola. In 2005, Norilsk bought 20% of Gold Fields, while Renova, owner of 49% of United Manganese of Kalahari, is now interested in prospecting for uranium, coal, platinum and other minerals. Other projects contemplated the Russians are a fertiliser plant in South Africa, uranium mining in Namibia and South Africa, use of Sasol / PetroSA technology for synfuels and an aluminum smelter. ANC funding arm Chancellor House is involved in the fertiliser plant.

The Qatar Investment Authority, having focused on investing in the local oil and gas sector, is now preparing to invest abroad. Saudi Arabia's Sabic bought European Base Chemicals and Polymers from Huntsman. In October 2006, the UAE announced plans to cut US$ holdings by 50%. In June 2007, Qatar and Dubai created a US$ one billion joint investment company looking for international and regional investment opportunities.

In December 2006, Russia and OPEC reduced their exposure to the US$ to the lowest level in two years, shifting oil income into Euros, pounds and yen.

In 2006 investment abroad of US$ 26 billion by Brazilian companies exceeded inward investment of US$ 18 billion for the first time. In January 2007, CVRD's purchase of Inco for US$ 17.6 billion made it the second largest mining company in the world by market cap.

According to the IMF, private capital flows to Sub-Saharan Africa have tripled since 2003, totaling US$ 45 billion in 2006. UNCTAD reports African FDI inflows in 2005 were a record US$ 31 billion. FDI should reach US$ 18 billion in 2007. A December 2006 World Bank / IMF report showed that China (US$ 5 billion), Kuwait, Brazil, India, South Korea and Saudi Arabia have become significant new investors in Africa. In June 2007, the US$ 5 billion China-Africa Development Fund announced it would invest exclusively in Chinese enterprises and their projects.

The IMF reported foreign holdings of US assets rising from US$ 1.2 trillion in 1994 to US$ 6.3 trillion in June 2005.

UN IFAD and Inter-American Development Bank calculated that migrant workers remitted more than US$ 301 billion to their home countries in 2006, much higher than the World Bank figure of US$ 207 billion. More than US$ 54 billion was remitted to Africa and the Middle East.

A study by the European Foundation for the Improvement of Living and Working Conditions concluded Western Europe was losing manufacturing jobs to Eastern Europe.

World trade in goods and services rose by 10.4% in 2004 and by 7.3% in 2005.

A World Bank study showed African exports to Asia increased by 20% per year during 2001 to 2006. The EU (32%), the USA (29%) and Asia (27%) are the biggest importers from Africa, Nearly 86% of African exports comprise oil and gas, minerals and raw agricultural products. African trade with Asia was balanced at US$ 40 billion each way.

A McKinsey study concluded France is losing share in global export market twice as fast as the USA and three times as fast as Germany. France buys 11% of (component) imports from low-cost countries, versus UK (15%), Germany (24%) and USA (35%).

In September 2006, China recorded its second largest ever trade surplus of US$ 15.3 billion. The trade surplus for the first 3Q of 2006 was US$ 110 billion. China's exports to the world rose 27% to US$ 969 billion in 2006. China's 2006 trade surplus was US$ 177.5 billion, up from US$ 102 billion in 2005 and US$ 32 billion in 2004. Exports grew 27% and imports 20%. The deficit with the USA was US$ 214 billion for the first 11 months. China's trade surplus increased to US$ 15.9 billion in January 2007, up 65% on January 2006. The full-year trade surplus was US$ 177.5 billion. China's exports increased by 33% and imports by 27.5%. China's trade surplus was a record US$ 16.9 billion in April, 2007, making the surplus for the first four months of 2007 US$ 63.3 billion, up 88% on 2006. China-Africa trade increased 40% in 2006 to US$ 55.5 billion. China is Africa's third largest trading partner.

During the first nine months of 2007, China overtook the UK as the largest source of Euro zone imports. Between 1976 and 1999, the EU import market share of the 79 countries of the Africa-Caribbean-Pacific (ACP) group dropped from 6.7% to 2.8% or from 14.8% to 4.1% of the EU's trade with developing countries. One third of EU imports from ACP countries comes from South Africa and 20% from Nigeria. Oxfam and others criticised EU trade deals with poor countries.

In January 2007, China signed a free trade agreement with 10 ASEAN countries covering 60 services industries. Trade between ASEAN, with a combined population of 550 million people, and China rose 23% in 2006 to US$ 160 billion. China is the largest exporter of services to Asean nations after Japan. In 2006, China provided Asean with US$ 750 million of low interest loans. Asean FDI was just under US$ 40 billion in 2006. Asean comprises Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Myanmar and Cambodia. In May 2007, China became the world's largest importer of softwood and hardwood logs. Prices rose 30% in the previous six months.

Trade between China and Africa in 2006 was worth US$ 55.5 billion, up 40% on 2005. China is Africa's most important trading partner after the USA and France, ahead of the UK. China is to provide US$ 3 billion in preferential credit over next three years. 2006 bilateral trade between China and Sudan, China's third largest African trade partner, was more than US$ 2.9 billion. Nearly 70% of Sudan's oil production goes to China. Exports to South Africa, mainly machinery and clothing, were up 51% at US$ 5.8 billion. Exports from South Africa to China, mainly ores, precious stones, metals and iron and steel products, increased 19% to US$ 4.1 billion. More than 900 Chinese doctors work in Africa.

Global exports from Sub-Saharan Africa rose from US$ 182 billion in 2004 to US$ 230 billion in 2005. During 2006 Nigeria (US$ 27.9 billion), Angola (US$ 11.5 billion), South Africa (US$ 7.5 billion), Congo (US$ 3 billion), Chad (US$ 1.9 billion) and Gabon (US$ 1.3 billion) were Africa's biggest exporters to the USA.

The volume of trade between members of Gulf Co-operation Council (GCC) and East Asia quadrupled from 1995 to 2005. Bilateral trade between China and Saudi Arabia increased 30% between 2005 and 2006. By 2030, China plans to purchase half its oil from the Middle East. Sinopec plans to invest US$ 100 billion in an Iranian oil and gas project. Total cross-border capital flows between the GCC and the rest of Asia are forecast to increase from US$ 15 billion at end 2006 to US$ 300 billion in 2020. The Middle East accounts for 46% of China's imports.

Brazil has the third biggest aircraft producing and exporting company in the world and has more car manufacturers than any other country, all of which export. Brazil is the world's largest exporter of sugar, coffee, orange juice, ethanol, soy, beef, chicken and tobacco.

The number of new sanitary standards that governments report to the WTO tripled between 2000 and 2007.

In September 2006, Singapore banned the sale and distribution of the Far Eastern Economic Review

The 2006 OECD annual development report shows G8 countries falling well behind pledges made at Gleneagles in 2005. There is disagreement over whether relief of debt, often worthless anyway, should be counted as aid. EU countries provided US$ 56 billion in aid in 2005, double that of USA.

In 2006 the EU provided Euro 48 billion in aid, 25% of which was one-off debt relief to Nigeria and Iraq. The 0.42% of GDP is less than the 0.5% of GDP promised.

In April 2007, the OECD reported that aid to Africa, excluding debt relief to Nigeria, fell 1.8% in 2006, despite promises made at the G8 conference in 2005. Aid from the EU rose by 5.7% but aid from the USA and Japan dropped sharply. UK aid increased 22%.

Footnote: If you are aware of any highlights we have missed, please contact us with details.