Forbes and The Economist both felt compelled recently to evaluate the economies of the world, but according to two different measures.
Forbes has listed the 10 worst economies of the world, with Madagascar ranked as having the worst economy according to the magazine’s somewhat arbitrary criteria (which includes, for example, measures of political corruption that somehow condemns Nicaragua but celebrates Zimbabwe?). An excerpt explaining why it’s picking on Madagascar:
It’s manmade problems like this that landed Madagascar on the top of the Forbes list of the World’s Worst Economies in 2011. There are worse basket cases (see: Somalia). But among the countries with relatively complete data tracked by the International Monetary Fund, Madagascar, sometimes called the “Eighth Continent” because of its natural diversity, stands out for political mismanagement, corruption, poverty and lack of growth.
The Forbes top 10 worst economies:
The Economist has taken a different tack to ranking economies of the world. The British magazine has identified the 27 most overheated emerging economies of the world. I’m not really sure what “overheated” means or why they identified 27 nations as opposed to 25 or 30 nations. But here’s their chart:
The article in The Economist tries to explain what it means by overheating:
There are seven hot spots where a majority of the indicators are flashing red: Argentina, Brazil, Hong Kong, India, Indonesia, Turkey and Vietnam. In particular, the growth in credit is sizzling in all seven. Argentina is the only economy where all six indicators are on red, but Brazil and India are not far behind. China, often the focus of overheating concerns, is well down the rankings in the middle of the amber zone, partly thanks to more aggressive monetary tightening. Russia, Mexico and South Africa are in the green zone, suggesting little risk of overheating.
The only country to make both lists is Venezuela. I wonder how it can be both overheating, according to the Economist, and also in the tank, according to Forbes.
Also, I thought Brazil’s economy was supposed to be doing pretty good, compared to many other counties. Is the Economists’ metrics emphasizing growth in credit really the most critical measure here? Why no discussion of debt? And isn’t heating better than cooling?
I like lists and charts. The web (and so the media) loves lists and charts
I’m just not sure if these lists and charts actually tell me anything I can take to the bank.