Good point! Could not agree with it more! Absolute number of people barely matters, or matters more for developed economies to keep going, like Japan. But for emerging countries the structure of population or distribution of wealth matters more.
George Mason Universitys Jack Goldstone tosses out the decade old skeletal structure of BRICS and says that new significant trends have changed which nations will be up and which down. He suggests that TIMBIs be the new acronym — Turkey, India, Mexico, Brazil and Indonesia.
Goldstone tosses out Russia and China on demographic grounds, arguing that labor force growth will determine which economies are most fast-growing and vibrant. Russia’s population is shrinking while China’s workforce will age fairly rapidly.
The argument I find more compelling, however, is that the density and breadth of a country’s middle class — more than the size of labor force — may determine whether a rising nation jumps up to the level of a stable, enduring, high-wage job generating economy.
Two must read treatments of this subject are first, The Bridge to a Global Middle Class by Sherle Schwenninger and Walter Russell Mead published in 2003 by the Council on Foreign Relations; and second, an OECD Development Centre Working Paper titled “The Emerging Middle Class in Developing Countries,” by Homi Kharas published in January 2010.
What Schwenninger and Mead argue is that the development of stable financial instruments and social support structures that hold and direct capital to productive investment in a country — like a stable (not corrupt) home mortgage framework.
Other middle class-oriented structures include the creation of retirement savings systems and broadly deployed health care networks.
What he argues is that while there are serious structural constraints facing the super sizing of China’s and India’s middle class — both are poised to grow this segment of their economy faster than nearly any other part of the world in the decades to come. Kharas writes that China’s 157 million person middle class is now only second to the United States in absolute size. China is now the world’s largest user of energy, the largest vehicle market, the number one cell phone market. Kharas also argues that “China’s new middle class is eager to become the world’s leading consumers” nothing that Chinese consumers shop 9.8 hours per week compared to 3.6 hours a week for the average American.