Post on 08-May-2015
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Capital for the Future
Capital for the Future
Which countries will drive investment in a
multipolar world?
Capital for the Future
Will an aging world run out of saving to fund investment?
Which countries will drive investment in a
multipolar world?
Capital for the Future
Will an aging world run out of saving to fund investment?
Which countries will drive investment in a
multipolar world?
How will savers and investors be matched
in the future?
Developing economies will be major investors in the world economy, accounting for 60 cents of every
investment dollar by 2030
Developing economies will be major investors in the world economy, accounting for 60 cents of every
investment dollar by 2030
Developing economies will be major investors in the world economy, accounting for 60 cents
of every investment dollar by 2030
0
5000000000000
10000000000000
15000000000000
20000000000000
25000000000000
30000000000000
0
20000000000000
40000000000000
60000000000000
80000000000000
100000000000000
120000000000000
Developing
High income
World investment
World GDP
Total investment in the developing world will overtake
high-income countries…
I (USD tril-lions)
Y (USD tril-lions)
Developing economies will be major investors in the world economy, accounting for 60 cents
of every investment dollar by 2030
0
5000000000000
10000000000000
15000000000000
20000000000000
25000000000000
30000000000000
0
20000000000000
40000000000000
60000000000000
80000000000000
100000000000000
120000000000000
Developing
High income
World investment
World GDP
Total investment in the developing world will overtake
high-income countries…
I (USD tril-lions)
Y (USD tril-lions)
Developing economies will be major investors in the world economy, accounting for 60 cents
of every investment dollar by 2030
0
5000000000000
10000000000000
15000000000000
20000000000000
25000000000000
30000000000000
0
20000000000000
40000000000000
60000000000000
80000000000000
100000000000000
120000000000000
Developing
High income
World investment
World GDP
Total investment in the developing world will overtake
high-income countries…
I (USD tril-lions)
Y (USD tril-lions)
Developing economies will be major investors in the world economy, accounting for 60 cents
of every investment dollar by 2030
10
15
20
25
30
35
40
45
Russian Fed.
Brazil
Indonesia
India
Sub-Saharan Africa
High income
Despite declining investment rates, their growing size means that global
investment remains stable
I/Y (%)
0
5000000000000
10000000000000
15000000000000
20000000000000
25000000000000
30000000000000
0
20000000000000
40000000000000
60000000000000
80000000000000
100000000000000
120000000000000
Developing
High income
World investment
World GDP
Total investment in the developing world will overtake
high-income countries…
I (USD tril-lions)
Y (USD tril-lions)
Developing economies will be major investors in the world economy, accounting for 60 cents
of every investment dollar by 2030
10
15
20
25
30
35
40
45
Russian Fed.
Brazil
Indonesia
India
Sub-Saharan Africa
High income
Despite declining investment rates, their growing size means that global
investment remains stable
I/Y (%)
0
5000000000000
10000000000000
15000000000000
20000000000000
25000000000000
30000000000000
0
20000000000000
40000000000000
60000000000000
80000000000000
100000000000000
120000000000000
Developing
High income
World investment
World GDP
Total investment in the developing world will overtake
high-income countries…
I (USD tril-lions)
Y (USD tril-lions)
While there will undoubtedly be demographic pressures, the world will not “run out” of
saving in the future
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2.6
HIC
EAP
LAC
SSA
Asynchronicity in evolvingdemographic pressures…
Working/non-work-ing popu-
lation
While there will undoubtedly be demographic pressures, the world will not “run out” of
saving in the future
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2.6
HIC
EAP
LAC
SSA
Asynchronicity in evolvingdemographic pressures…
Working/non-work-ing popu-
lation
While there will undoubtedly be demographic pressures, the world will not “run out” of
saving in the future
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2.6
HIC
EAP
LAC
SSA
Asynchronicity in evolvingdemographic pressures…
Working/non-work-ing popu-
lation
10
15
20
25
30
35
40
45
50
High income
East Asia
Sub-Saharan Africa
Latin America
…implies heterogeneous decline in saving rates, with only SSA bucking
the trend
S/Y (%)
While there will undoubtedly be demographic pressures, the world will not “run out” of
saving in the future
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2.6
HIC
EAP
LAC
SSA
Asynchronicity in evolvingdemographic pressures…
Working/non-work-ing popu-
lation
10
15
20
25
30
35
40
45
50
High income
East Asia
Sub-Saharan Africa
Latin America
…implies heterogeneous decline in saving rates, with only SSA bucking
the trend
S/Y (%)
Developing countries will increasingly be the main savers and investors. Indeed, they will become key
players in the international financial arena
Highincome
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0
5,000
10,000
15,000
20,000
25,000Developing countries will become
important financial intermediaries…
Developing countriesAdvanced countries
Gross cap-ital inflows($ trillions)
47%
53%
Developing countries will increasingly be the main savers and investors. Indeed, they will become key
players in the international financial arena
Highincome
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0
5,000
10,000
15,000
20,000
25,000Developing countries will become
important financial intermediaries…
Developing countriesAdvanced countries
Gross cap-ital inflows($ trillions)
47%
53%
Developing countries will increasingly be the main savers and investors. Indeed, they will become key
players in the international financial arena
Highincome
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0
5,000
10,000
15,000
20,000
25,000 …and more so, in a scenario with rapid convergence in institutions
Gross cap-ital inflows($ trillions)
60%
40%
Developing countries will increasingly be the main savers and investors. Indeed, they will become key
players in the international financial arena
Highincome
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0
5,000
10,000
15,000
20,000
25,000 …and more so, in a scenario with rapid convergence in institutions
Gross cap-ital inflows($ trillions)
60%
40%
Developing countries will increasingly be the main savers and investors. Indeed, they will become key
players in the international financial arena
Highincome
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0
5,000
10,000
15,000
20,000
25,000 …and more so, in a scenario with rapid convergence in institutions
Gross cap-ital inflows($ trillions)
60%
40%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0
2
4
6
8
10
12 And the scenarios are conservative
HistoricalLinear (Historical)Gradual convergence scenarioRapid convergence scenario
Gross cap-ital flows to developing countries(% GDP)
9%
6%
11%
These outcomes will only be realized if policymakers take active steps in
terms of policy and institutional reform.
For example, even though saving will be more equally distributed across countries, within them savings may still be concentrated amongst few richer households, unless education opportunities are given to everyone
Household saving rate, Mexico
2010 2015 2020 2025 2030 2035 2040 2045 205010
11
12
13
14
15
16
17
18
Demographic effect
Demographic + education effect
For example, even though saving will be more equally distributed across countries, within them savings may still be concentrated amongst few richer households, unless education opportunities are given to everyone
Household saving rate, Mexico
2010 2015 2020 2025 2030 2035 2040 2045 205010
11
12
13
14
15
16
17
18
Demographic effect
Demographic + education effect
www.worldbank.org/CapitalForTheFuture