Chair of Rockefeller International Ruchir Sharma has observed Canada to be leading the way in once great economies that are “now breaking down.”The head of the institution that “served the Rockefeller family and institutional investors for generations” singled Canada out for its rapidly declining GDP, the inability for the nation’s young people to buy homes and its lagging in technological advancements. In an article headlined A warning from the breakdown nations and published in the Financial Times warning nations on the “fates of former ‘model’ economies,” Sharma argues there are lessons to be learned for “current stars” on the world stage like the US and India from countries that once had thriving economies but since have shrunk. Beginning with Canada, Sharma lists the examples of these “breakdown nations” and advises they “carry a lesson” — “growth is hard, sustaining it even harder, so the stars of today are not necessarily the stars of tomorrow.”“It is worth looking at nations that not too long ago were billed as star performers but are now breaking down,” writes Sharma. “Led by Canada, Chile, Germany, South Africa and Thailand.” “All are among the world’s 50 largest economies and, so far this decade, have suffered both a sharp decline in real per capita income growth, and a fall in their share of global gross domestic product.”“Take Canada first,” Sharma writes, recalling how Canada was once “widely admired for how it weathered the global financial crisis of 2008” but the nation “missed the boat when the world moved on, driven by big tech instead of commodities.”Sharma notes Canada’s per capita GDP has been declining each year since 2020 by 0.4%, which is worse than any developed country in the top 50. He further attributed any new investment and job growth “being driven mainly by the government.”“Private-sector action is confined largely to the property market, which does little for productivity and prosperity. Many young people can’t afford to buy in one of the world’s most expensive housing markets,” writes Sharma.“Pressed to name a digital success, Canadians cite Shopify — but the online store is the only tech name among the country’s 10 largest companies, and its shares are trading at half their 2021 peak.”Sharma poses hope at the end of his Financial Times opinion piece. The takeaway is to be wary of “hidden traps (that) line the path of development and can spring on nations.”“Any country can find itself stuck — until it finds the leadership and vision to chart a way out,” he concludes. “For current stars, the message is a warning: don’t take growth for granted.”
