West may fall in economic might

Since then, however, its economy has revived considerably. Devaluation discouraged imports and encouraged domestic production. Oil prices rose, boosting export revenues. Reforms in tax policy and regulatory systems stimulated business.

At present Russia's gross domestic product is a bit smaller than that of Canada. But Russia's GDP, when adjusted for inflation, could grow 6.5 percent this year and 6 percent next year, predicts Al Breach, chief economist in Moscow for Brunswick UBS Warburg, an investment banking firm.

That growth rate is triple the likely US growth rate at the moment, but still below the official 8 to 9 percent growth rate China has enjoyed for more than a decade.

China has had the advantage of attracting $445 billion in foreign investment, almost $53 billion last year alone. This has had a "transformative effect" on the country's production, says Nicholas Lardy, an economist at the Institute for International Economics (IIE) in Washington.

Is a more stable Russia under President Vladimir Putin likely to attract more foreign investment and zoom forward?

Russia could become more competitive in world markets in products other than raw materials, such as oil and gas.

But it's doubtful it will emerge as a "great economic power," says Mr. Kupchan. "It is generally going in the right direction. In some places it is stuck between the old and the new."

One key problem is that alcoholism, disease, and a low birth-rate are rapidly reducing Russia's population. The nation, though, does have a relatively well-educated population and a potential for reforms that could bring greater economic success.

John Odling-Smee, a Russia expert at the International Monetary Fund, sees "a tremendous will, especially among younger generations, to make up for the time that Russia has lost and the missteps taken in the past decade, not to mention during communist times."

Only 13 years ago, Japan inspired unease in the US as a rising economic power after 50 years of steamy growth. Book after book speculated that Japan might overtake the US as the dominant industrial economy.

But real-estate and stock-market bubbles broke at the start of the 1990s. Since then, Japan has experienced only slow growth. "Japan is an absolute disaster," says Charles McMillion, an economic consultant in Washington.

Despite the country's relatively stagnant economy, the standard of living of the Japanese people has not declined, and for many it has even risen a little.

Experts hope that a change last month in the governor of the Bank of Japan could bring an even looser monetary policy that, combined with major financial reforms, might restore some economic momentum. If so, Japanese competition in world markets could again prompt tremors.

In other world markets, Latin America overall has suffered stagnant living standards (real per capita GDP) for at least a decade. Argentina hit a severe economic bump in 1999.

Mexico and Brazil have established a "stable basis" for economic progress, notes Michael Mussa, a former research director at the IMF. But many wonder if they will capitalize on that promise.

Meantime, Africa south of the Sahara, hit by political troubles and AIDS, has suffered falling per capita GDP for 40 years. Some analysts despair of the continent getting its economic/political footing in the coming decades.

Finally, many of the Asian nations struck by the financial crisis of 1997 have bounced back to their prior economic level. South Korea's economy, for instance, is growing 5 to 6 percent a year. But Mr. Mussa, now with the IIE in Washington, doubts these Asian "tigers" can maintain their astonishing pre-1997 growth pace.

As nations advance economically, their growth rates eventually slow. A former World Bank economist, William Easterly, doubts even China can maintain its break-neck pace indefinitely. Over the long term, and with temporary deviations, industrial economies grow in real terms about 2 percent a year per capita, Mr. Easterly has calculated. But if, as demographers now suspect, global population stabilizes in about 50 years, the global economic consequences will indeed be unprecedented.

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