The secret to (ridiculously) fast economic growth

Rapidly Expanding Economies (REEs) are nations that have consistently achieved a GDP growth rate of 6% or more per year over the past two decades. Currently, there are 25 such nations worldwide, including Panama and Guyana as the sole representatives from their region. In stark contrast, the overall economic growth of Latin American and Caribbean economies has been sluggish, averaging at a mere 2.4% per year during the same period.

Investment emerges as a crucial catalyst driving the remarkable growth of REEs. In half of these 25 countries, investment rates stood at 30% or more of their GDP over the past 20 years. Panama, for instance, has consistently invested an annual equivalent of 31.2% of its GDP. In comparison, Latin America and the Caribbean have fallen behind with an average investment rate of only 19.4% of GDP.

One intriguing aspect of investment in REEs is the significant role played by the private sector. Although not all 25 nations provide statistics on private investment, in those that do, it comprises an average of 74% of the country’s total investment. Panama stands out with 84% of its investment classified as private.

REEs thrive on three key elements to fuel their growth. Some, like Qatar and Guyana, rely on their oil production, which has been strategically transformed into highways and public utilities. Another small group, including Uzbekistan, Bangladesh, and Uganda, benefit from the demographic dividend resulting from a young population entering the workforce. The remaining countries prioritize investment, particularly investment driven by private companies, to stimulate their growth.

Related

Global Tourism Industry on Track for Full Recovery by 2024

The global tourism industry is set to reach, and possibly surpass, pre-pandemic levels by the end of 2024, according to the World Economic Forum (WEF). Five years post-COVID-19, the sector is experiencing a robust resurgence driven by a surge in international travel, improved air connectivity, and strong rebounds in key regions. However, global dynamics must be managed carefully to ensure stable and continuous growth. In 2023, international tourism reached 88% of its 2019 levels, a significant recovery favored by the reopening of Asian markets, as highlighted by the United Nations World Tourism Organization (UNWTO). The Middle East led the way, surpassing pre-pandemic levels by around 20%, with Europe, the Americas, and Africa following close behind at approximately 90% of their […]