We collect some socio-economic data from several countries that are in different stages of development, not with the aim of reaching any particular conclusion, but above all to make a quick composition of how things are today.
First parameter to consider. External Debt , or what a country as a whole owes to the rest of the world. If we put in relation to the external debt per capita (what the citizen of a country owes to the rest of the world on average) and the GDP per capita (average income of a citizen) we can distinguish two clearly differentiated blocks.
On the one hand, developed countries . All of them (except Japan) with high levels of External Debt. For example, while the average income of a Spaniard is about USD 30,500, he owes USD 54,700 abroad. If Spain dedicated all its GDP to pay its foreign debt, it would take almost two years to return its debt.
Developing or emerging countries, low external debt levels, traditionally the world’s outcasts, have had the “luck” that no one lent them, or lent them at very high interest rates. Result today if foreign debt is low. For example, the average income of a Colombian is about USD 10,600 but it only owes USD 1,600 abroad.
A first reflection. Perhaps the development of the so-called first world, has been something artificial or has based its prosperity on increases in debt levels at a low cost that probably as a whole is not sustainable.
Artificial well-being based on unsustainable consumption levels fueled by debt? It may be, but for now it seems that we continue to insist on the same model, but ask the Central Banks who are doing intervening interest rates to leave them close to zero. Escape forward.
Attention to Europe, individually, the parameters of Spain, Germany and France are worse than those of the USA. Probably as a large part of its external debt is intra-countries, together the European Union external debt figures are much more positive … while we are still waiting for our politicians to decide on total integration, the figures are what they are.
An old man’s paradise
Another fact that catches my attention. The average age of the population. Again, again two clear blocks. On the one hand the developed countries, middle ages that exceed 40 years. For other emerging countries, with an average age between 28 from Colombia or 34 from Chile.
Being old has an advantage for the system. Nobody starts a revolution at 40. However, sustaining an aging population so quickly is a problem, there is less and less vital sap, less energy. Many people are against immigration … because they have had more children, because if they continue at this rate, developed countries in 10 or 20 years will beg for immigrants to work in their countries, someone will have to take care of the old.
Attention with China, and the policy they applied for only one child. I have not collected the data but it may be a country where its population suddenly ages.
Posts to give debt, with the rest of the same conditions I would prefer to give it to a person of 28 years than a person of 40, the first one in principle you have more years of working life ahead.
Public debt and tax pressure. Again two differentiated blocks. With some exceptions. Developed countries, the Europeans, high percentage of the share of state revenue over GDP. The data is from 2011, so Spain will already be quietly above 40% and after the bailout of 100 billion euros to the bank and the deficit generated in 2012 on 80% of GDP in terms of public debt, it is say at the levels of France and Germany.
Japan simply leaves the tables, the result of spending the public sector absorbing private debt derived from the economic crisis of the 90s. USA, a relatively lower level of debt and more room for maneuver due to a lower weight of taxes, leaving cost side of absurd wars, is the result of having a state with lower social benefits.
Emerging or no longer emerging countries, in general, low tax pressure and low indebtedness. Attention to the case of Chile, Public Debt of only 9.4% of GDP with low tax pressure, a case to be studied carefully.
Well, Uganda does not exist, or we could say that it does not exist as a State, that said, we better not compare ourselves with Uganda, in terms of levels of indebtedness, this is practically non-existent, the advantages of being poor … nobody lends. The other advantage is that probably if it were a country that will begin to manage well it seems to have the potential to start, at least it does not have a heavy slab of debt on its head.
WHERE TO INVEST?
Obviously, to decide in which country to invest, or which one can have a more favorable evolution in the medium term, in the absence of taking into account other factors, it seems clear that countries with the economic parameters of Chile or even of Colombia or Russia, it seems that structurally It has a greater potential for economic development, than the countries that are currently considered developed.