Gates: Developing nations improving economically
—Growing global income is an opportunity for American ag
When governments release reports and statements on their economies, it is normal to pay attention. But what about people and organizations that rival the economic power of countries?
If the Bill and Melinda Gates Foundation were a country, it would rank as the 108th wealthiest country in the world (using the Foundation’s 2010 assets of $36.79 billion versus the estimated 2012 GDP of the world’s 229 nations).
The enormous charitable foundation, begun by Microsoft co-founder and continuously ranked world’s richest person Bill Gates, recently released its annual letter. Though the letter topics often vary across the myriad of issues addressed by the foundation, this year’s letter addressed several myths regarding developing nations, including the thought that poor nations are doomed to remain poor, foreign aid is a waste, and saving lives will lead to overpopulation.
As the World Economic Forum was kicking off in Switzerland last week to discuss the state of the world economy and its future, Gates was making a bold prediction regarding the future of the world’s poor.
“By 2035, there will be almost no poor countries left in the world,” he said optimistically, defining “poor” as current definitions set by the World Bank of “low income” countries.
According to the World Bank’s most recent data, 31 of the world’s 35 poorest nations—based on the portion of the population under the international poverty line of living on $1.25 a day—are African nations. However, 17 of the world’s top growth countries are also African nations, with many overlaps between the poorest and the top growth countries.
“Almost all countries will be what we now call lowermiddle income or richer,” continued Gates. “Countries will learn from their most productive neighbors and benefit from innovations like new vaccines, better seeds and the digital revolution.”
Income and protein
The improved economic health of developing nations is, of course, increasingly part of the American agricultural economic landscape.
The U.S. exports significant amounts of agricultural produce, crop and meat alike, and expectations exist that the globalized market for food will only grow. With regard to beef, according to the U.S. Meat Export Federation, the U.S. exports between 15-19 percent of the beef it produces. Competing beef-producing countries export considerably more of their beef.
It has been well documented that one of the first things to come with increased incomes across a population is increased demand for better food. This often means a diet with more protein.
As the population also grows in addition to the overall income growth expected, both challenges and opportunities are likely. On the one hand, it mandates improvements in food production around the world. It will also put increased demands on food, particularly protein in the form of beef and pork, exported from already efficient producers such as the U.S.
“Our competitors also see that there’s going to be over 9 billion people in 2050. They also see global economic development that’s definitely going to be a demand driver around the world,” said Philip Seng, President and CEO of the U.S. Meat Export Federation, speaking of the U.S.’ international beef exporting competitors at the recent International Livestock Congress.
Seng also pointed out that the majority, roughly 80 percent, of the world’s buying power is outside of the U.S.
“When talking about the future, we talk about the global middle class. This is that buying power. This is these people switching from buying cereals to protein, to beef, to pork, to poultry, whatever. But you can see in the Asian Pacific, this is going to be the percentage of the global middle class,” he said, referring to a chart that is reproduced in Table 1.
A growing middle class and overall improvements in global incomes, combined with increasing populations living in those projected higher incomes, will mean greater demand for beef and American products.
In closing his letter, Gates offered a hopeful outlook for the future.
“We all have the chance to create a world where extreme poverty is the exception rather than the rule, and where all children have the same chance to thrive, no matter where they’re born. For those of us who believe in the value of every human life, there isn’t any more inspiring work underway in the world today.” — Kerry Halladay, WLJ Editor