WORLD ECONOMY

SUMMARY

This world economy description shows that economic development and well being are linked to freedom and democracy.

This correlation is the key that explains our world society:

Freedom => Knowledge => Technical progress = Economic development

Warning : About the sources of tables and stats, we invite you to report to : Economic stats-World Bank: www.worldbank.org/data. Population stats: UN: www.un.org/esa/

The world economy analysis is based on the GDP. The Gross Domestic Product (GDP) is the sum of the entire final production obtained in a given year by a country. GDP measures the economic power of a given country. However, the figures in this survey are based on the GNI (Gross national Income) in accordance with new World bank definition: Go to www.worldbank.org/data

1. ECONOMIC POWER AND WELL BEING - 2. CORRELATION BETWEEN FREEDOM AND DEVELOPMENT - 3-CORRELATION BETWEEN FREEDOM AND KNOWLEDGE - 4 THINKING TIME

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1-ECONOMIC POWER AND WELL BEING

11-World GNI

The world GNI attains 39,305 $Billion in 2004.

The world economy relies on three main regions:

USA: 12,150

EUROPEAN UNION ( 25 countries): 12,000

JAPAN:4,750

The USA, the European Union and Japan represent 73,5% of the world GNI (72.5 in 2001). The world economic power is highly concentrated. You may take notice that the above regions only represent 13% of the world population.

12-Main economic powers

The fifteen main economic powers are the following in 2004:

USA: 12,150; Japan:4,750; Germany: 2,490; China: 2,130; United Kingdom: 2,020; France: 1,860; Italy: 1,500; Canada: 900; Spain: 880; Mexico: 700; India: 680; Korea: 670; Brazil: 550; Australia: 541; Netherlands: 515. These countries represent 82% of the GNI and 55% of the world population.

-China stands far behind the US.

-Because of 70 years of communism, Russia is a small economic power. Russia has 140 million inhabitants, but its GNI is quite equal to that of the Australia with only 20 million inhabitants!

13-Income repartition

The Global GNI pictures the economic power. GNI divided by total population gives GNI per capita. This indicator represents the well being of the population. However, it is an average that does not take into account inequalities of income within a country. Nevertheless, it enables us to make comparisons and to measure the capacity of a society and an economy to satisfy its citizens’ needs

According to the World Bank, the world economy is divided into the following income groups (In % of World population):

1-Low Income= $825 or less:------------------- 37%

2-Lower Middle Income= $826 to $3,255:-------- 38%

3-Upper Middle Income= $3,256 to $10,065:------ 9%

4-High Income= $10,066 or more:----------------16%.

High and Upper Middle income groups represent 25% of the world population. The percentage of poor people (Lower Middle Income en Low income) attains 75% and concentrate in South Asia and in Africa. For example, the situation in Sub Saharan Africa is catastrophic: The GNI per capita only reaches $355 in 2004 (Except South Africa)

In fact, Freedom and knowledge are the only factors that explain these differences between GNI per capita.

1. ECONOMIC POWER AND WELL BEING - 2. CORRELATION BETWEEN FREEDOM AND DEVELOPMENT - 3-CORRELATION BETWEEN FREEDOM AND KNOWLEDGE - 4 THINKING TIME

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2-FREEDOM AND DEVELOPMENT.

We shall show that a constant correlation exists between level of freedom and level of development.

Out of the 6.5 billion inhabitants that make up the world’s population in the year 2004, 2.3 billion live in free societies, 1.5 in partially free societies and 2.2 in countries ruled by dictators or totalitarian regimes.

21-Positive correlation

Whatever the region or the culture, every country with a GNI per capita above $3,250 ( Upper Middle Income ) is a free country ( With the exception of Saudi Arabia ).

These countries are found in:

-North America (USA, Canada) and Western Europe.

-South Asia and the Pacific : Japan, South Korea, Taiwan, Singapore, Hong Kong, Australia and New Zealand.

-Latin America : Mexico, Chile, Argentina and Uruguay.

-Central Europe : Croatia, the Czech Republic, Hungary, Slovenia and Poland.

Among the free countries, the only big one that is far to be developed is India

22-Negative Correlation

With the exception of China, all countries ruled by dictatorships cannot even be included in graphs because their value is too insignificant.

The lowest GNI per capita are found in countries that have suffered or are still suffering from dictatorships.

-African countries in the sphere of influence of the former USSR recorded catastrophic results (GNI per capita 2003 in $: Source Worl Bank Atlas):

-The same applies to South East Asia, where the 3 countries with GNI below $ 500 are communist or former communist countries.(GNI per capita 2003 in $: Source Worl Bank Atlas)

-The same applies to the former USSR countries. Whilst Marxism claimed to improve the people’s happiness, we can see the catastrophic results of 70 years of communism in the table below.(GNI per capita 2003 in $: Source Worl Bank Atlas)

Obviously, economic development and well being are linked to freedom.

Go to www. freedomhouse.org . This site provides with an updated overview and regional surveys of freedom in the world.

1. ECONOMIC POWER AND WELL BEING - 2. CORRELATION BETWEEN FREEDOM AND DEVELOPMENT - 3-CORRELATION BETWEEN FREEDOM AND KNOWLEDGE - 4 THINKING TIME

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3-FREEDOM AND KNOWLEDGE

Why would the degree of freedom explain the levels of development? It is because freedom is closely related to knowledge and therefore also to technical progress, which is the source of economic power. Of course Individuals deprived of freedom cannot create.

We have 5 criteria by which to measure knowledge:

31-Education rate

It is impossible to use this criterion. In fact, authoritarian regimes indoctrinate young people, and schools are often privileged locations for this indoctrination to take place. These countries thus have statistics indicating high education rates, but they have no relation to reality.

Children who spend 10 hours at school every day, listening to teachers belonging to unique political party, receive less education than children who spend only one hour at school per day, but who are taught in a positive way.

32-Number of scientists per 1 000 inhabitants

The second criterion must also be interpreted with caution because the stats about the number of scientists are issued by the States themselves. What is more, scientists who work in dilapidated laboratories are not as effective as those working in pleasant environments.

Bearing this reservation in mind, this criterion gives us the following results for the top 10 countries (In 2001):

	Number of scientists and engineers per million inhabitants
Japan	4 909
Sweden	3 826
USA	3 676
Norway	3 664
Russia	3 587
Australia	3 357
Denmark	3 259
Switzerland	3 006
Germany	2 891
Finland	2 799

These countries include three out of the five principal world powers: the United States, Japan and Germany. We can see that all these countries are free and enjoy high levels of development ( Except Russia)

33-Illiteracy rate

Illiteracy rate generally distinguishes rates for men and women. We have established a single rate without such discrimination (2001):

	Highest rates as a % of total population
Nigeria:	85.0
Burkina Faso:	77.5
Afghanistan and Gambia:	65.0
Senegal:	64.5
Ethiopia:	64.0
Guinea Bissau:	63.0
Mali and Benin:	61.5
Nepal:	60.5
Bangladesh, Cambodia and Chad:	60

All these countries are just emerging from dictatorships or remain ruled by dictators. All suffer of very low levels of development

34-Numbers of computers connected to internet for 10000 inhabitants (In 2001)

USA:	1 939		Austria:	338
Finland:	1 218		Great Britain:	321
Norway:	899		Belgium:	313
New Zealand:	703		Israel:	225
Sweden:	670		Japan:	208
Denmark:	631		Germany:	207
Australia:	567		Estonia:	206
Canada:	540		Hong Kong:	162
The Netherlands:	517		Ireland:	159
Singapore:	452		France:	131
Switzerland:	429

Once again, these figures show the excellent performance achieved by the Scandinavian countries.

35-Countries that export the most technology (In 2001)

Country	% of exports of advanced technology
Philippines:	71
Singapore:	59
Malaysia:	54
Ireland:	45
USA:	33
Thailand:	31
Netherlands:	30
Great Britain:	28
Rep. of Korea:	27
Japan:	26

Countries such as the Philippines, Malaysia and Thailand export the most advanced technology. This means that they accept to acquire knowledge through foreign investments in their economy. It also means that these countries are still in the race for progress. As a result, they benefit of high growth rates. All these countries are free or partly free.

According to the five criteria, we can conclude that Knowledge is linked to freedom.

1. ECONOMIC POWER AND WELL BEING - 2. CORRELATION BETWEEN FREEDOM AND DEVELOPMENT - 3-CORRELATION BETWEEN FREEDOM AND KNOWLEDGE - 4 THINKING TIME

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4-THINKING TIME

1-Some western leaders say that freedom and knowledge depends upon development: You have to be rich before to be free or educated. This claims is a perfect non sense. With Universal history, we have seen that technical progress depends upon freedom. Of course Development also depends upon technical progress. Powerful Countries are developed because they are free. Others countries are undeveloped because they are former or actual dictatorships.

2-This survey also help us weigh up the value of theories that try to explain the poverty of certain countries through other factors:

-Third world activists often underline different causes such as North South divide, raws materials, and so on. All these explanations do not stand under a close examination:

The North South divide is not valid unless we consider the South American countries as not belonging to the South! 320 million Latin Americans (zone between 4 and 10000$) have an income per head that is higher than that of 320 million Europeans.

Raw materials do not explain the different levels of development either. Japan, the 2^nd most powerful economy in the world, has no raw materials. Africa has a large supply of raw materials, but most African countries are poor. Income per head in countries with abundant petrol supplies in Africa and the Middle East is mostly below 2500 $.

-Some scholars say that poor countries are "landlocked": In fact the three highest GNI per capita are those of landlocked countries: Liechtenstein, Luxembourg and Switzerland! (between 40 and $50 000 per capita).

-They tell that poor countries suffer from international exchange and need to develop in a self concentrated way by avoiding international trade: In fact, African countries that have put these ideas into practice are today some of the poorest countries in the world.

It is clear that the real connection is the following:

Freedom -->Knowledge --> Development

This trilogy is the basic equation for development.

Global leaders have to repeat again and again this golden rule.

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