Boris Johnson & his acolytes opened the Wembley debate with some of their usual nonsense – “Only Antarctica is worse”.
Let’s just examine what this is about, it will take a moment or two and we’ll have to go a little deeper than the headlines.
The claim is that the only continent in the world that has lower growth than Europe is Antarctica.
Agreed Antarctica is a continent BUT it is not a nation state or even a union of nation states, it has no citizens, no manufacturing base or even a service industry, the only people that live there are visiting scientists, somewhere between 1,000 and 4,000 of them.
Antarctica has a GDP of ZERO and grows by ZERO percent. But that is no big surprise.
For a moment let’s be generous and assume that what the Quitters are actually referring to is that most continents have a faster growth rate than Europe.
BUT, we have to make sure we are comparing apples with apples and not apples with oranges.
There are two economically advanced continents: Europe and North America. These continents did all their fast growth becoming developed economies and now have lower rates of growth but on a bigger base. North America and the EU grow at about the same rate.
The other continents are considered to be emerging or developing economies. Emerging economies grow much faster as they seek to become developed economies.
Yes, I know Asia and Oceania have a some individual economically advanced economies but Boris and his crew were talking about continents.
There are also a few emerging economies that are below par; such as Brazil and Russia.
Growth rates are a bad indicator unless you are comparing like for like, back to that fruit basket again. But comparing apples with oranges is one of Boris’s specialities.
Don’t take my word for it, have a look at the International Monetary Fund report – http://www.imf.org/external/pubs/ft/weo/2016/update/01/
The rates of growth for emerging economies can be very high, that is why advanced economies want to trade with emerging economies, the opportunities are enormous: have a look at how much trade Germany does with China and India.