When I Hear “Fastest Growing” I Reach for XKCD

You may have heard of Christiane Amanpour. She’s the Chief International Correspondent for CNN. She probably has a dedicated room in her house to store all the journalism awards she’s won. Math awards though, she probably has none. Yesterday she opened her segment with a question:

“What is the fastest growing economy in the world? If you said China, you’d be wrong.”

And offered some insightful speculation:

Its staggering rate of more than 17%-a-year growth last year may explain why U.S. Secretary of State Hillary Clinton made a pilgrimage to Mongolia, along with Vice President Joe Biden and before him George W. Bush.

Wow, is Mongolia the up-and-coming economic powerhouse of the world? Not so fast. Its GDP is about $8B, which is about the same Apple’s profits for one quarter (obviously that’s tiny for a country). China’s GDP is larger by three orders of magnitude, and it’s also ahead in per-capita GDP. In other words, Mongolia plays a negligible role in the world economy. Small and poor, it can grow or shrink very fast. Its economy depends largely on a handful of minerals, so it has no diversification. It became a market economy in 1992. This is how it has performed since then (with China for reference):

China’s growth rate looks extremely stable in comparison, doesn’t it? We might as well be comparing Apple, Inc. with a fruit stand. This recent XKCD comic fits perfectly:

Fastest-Growing

Someone please get Christiane Amanpour a copy of Innumeracy, or A Mathematician Reads the Newspaper :) [actually, I’m not joking]

 

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