Economics Research

Answer

Economics Research

Question Three

Brief Overview of Canada

Canada is located in the Northern part of America, and is one of the largest countries in the world.  The country extends from the Atlantic Ocean in the Eastern side of Pacific and to the Pacific Ocean on the western side, which is on the northward or the Arctic Ocean. The country is governed through a parliamentary s democracy system, with its own political and social institutions. Historically, Canada has enjoyed political stability (Devlin & Frame, 2019).  The industries within the country vary from one location to another, although like other many developed countries, the country’s economy is dominated with the service sector.  This therefore makes people to closely link Canadian economy with that of the United States, although Canada has its own independent economic institutions.

On a global scale, Canada is rated at number 11 in terms of economic size, and nominal Gross Domestic Product (Devlin & Frame, 2019). As a result, the country has been able to maintain an inflation rate of less than 2% in the past 2 decades.  The country is a member of the Organization for Economic Cooperation, as well as Group Seven, hence considered one of the most stable economies across the world.  Canada also enjoys a well-developed social safety for its citizens, which is used to protect its citizens from financial exclusion.

Overview of South Korea

            South Korea is based on the Eastern Asia, and it occupies the Southern half of the whole of Korean Peninsula.  The county borders Japan, Yellow Sea and North Korea, and has numerous hills and plains, which gives it a unique climatic condition.  South Korea is governed by presidential systems, and it is composed of 6 cities and 9 provinces, which have independent administrations (South Korea, 2020). The president, who is elected after every five years for a single term, is the overall head of state and the commander in chief. South Korea has managed to achieve the largest economic development in the past 60 years, owing to its geographical size and natural resources. Notably, the country has invested heavily in technology leading innovation such as Samsung phones. Industrialization contribution to the country’s GDP is 35.1% and it has employed approximately 24.8% of the aggregate work force. The agricultural sector, on the other hand, only contributes 1.9% of the GDP and employs about 4.6% of the total workforce. Service sector is the largest, with a GDP contribution of 53.5% and employing 70.4% of the aggregate labor force (South Korea, 2019).

Overview of China

China is located in Eastern Asia, and it is the world’s most populous nation with a population of 1.404 billion.  The country has a multi-unified ethnic group, although Hans are the dominant group.  Moreover, it has 22 provinces, and is governed by a hierarchical electoral system.  The local people elect the congress, while all the higher levels of people’s congress, up to the National People’s Congress (NPC), as well as the legislature are indirectly elected by the people’s Congress. China has historically enjoyed political stability, which has made it to make huge strides in terms of economic development. Although it is rated as an emerging economy, it’s the second largest economy in the world after the United States. As such, the country has been ranked as an upper-middle income country. 

               China’s economy is predominantly industrial in nature, with a GDP of over $ 10 trillion.  In the past 5 years, China has been able to maintain a low inflation rate of less than 2.5, while its unemployment rate has remained less than 5%. Due to its high level of innovation, China manufactures a number of devices, some of which are consumed locally as it has ready market, while others are exported. This makes it one of the chief suppliers in the world market.  Due to its communism, and conservatism, China has very minimal foreign direct investments.  However, its openness to International Trade rose significantly between 1996 and 2006. Since then, its openness to International Trade has not been stable.

Overview of Belarus

             Belarus is a landlocked country located on the Eastern side of Europe. Some of the neighboring nations to Belarus include; Russia on the North Easters, Ukraine on the Southern, Poland on the Western among others. The country has a distinct ethnic identity and language known as Belarusian. Since independence, the country has been able to maintain close ties with its neighbors, especially Russia. Belarus gained independence in 1991. Since then, the country has been governed by Unitary Democratic welfare state, which is purely governed by the rule of raw. The country faced a consistent economic growth between 1996 and 2013, before experiencing a recession. The growth in GDP was also accompanied by a consistent fall in poverty levels and an increase in the rate of human development index (HDI). Unfortunately, the factors which stimulated Belarus’ growth are no longer at play. This has adversely affected capital accumulation initiative.

             Overview of Bhutan 

            Bhutan is a small landlocked country which is sandwiched between India and China. The country is known for its philosophy of Gross National Happiness (GNH), which is the foundation for its development. Hydropower availability is one of the key stimuli for its economic growth.  The country has had a consistent economic growth in the past two to three decades, as a result of fiscal revenue from hydropower.  For instance, the revenue from hydropower has been used to improve human capital and health care systems, hence increasing the human development index (HDI). The country is governed through monarchy systems, while the executive powers are executed by the council of ministers, who are headed by the prime minister. Due to its political stability, the country has been able to reduce extreme poverty as well as reduce its inflation rate to less than 4%. Similarly, the country has been able to maintain a consistent growth on its Human Development Index (HDI). However, there is little foreign direct investment in this nation, which would otherwise improve its economic growth. The country has remained more vulnerable to terrorism due to its geographical location. 

               Overview of Kyrgyz Republic

               Kyrgyz is a landlocked country in the northern side of Kazakhstan and eastern of China.  The country has a population of approximately 6.5 million. Despite its rich endowment with the natural resources, the country has lagged behind economically due to political instability since independence in 1991. This made the country to adopt a new constitution in 2010, which limits the presidential term to six years.  The country’s governance is still ranked low as a result of its past political leadership. Its GDP mainly depends on gold mines, which very susceptible to market shocks. There is, therefore, the need for diversification of economic sectors.  Due to rich natural resources, the country’s GDP has faced a consistent growth in the past 3 decades. However, its human development index, as well as Gini coefficient have faced a very minimal rise. Similarly, Kyrgyz’s human development index (HDI) has also risen in the past 3 decades.  However, its governance indicators, such as adherence to the rule of law, war on corruption have remained considerably low.

         Central African Republic

         Central African Republic is a landlocked nation which neighbors Chad, Sudan, South Sudan and Congo DRC. The country has historically faced political instability which came to an end in 2016.  Central African Republic is governed through a presidential system. Until 2012, the country faced a consistent growth on its GDP.  In 2013, however, a major recession was faced, which the country has been working towards recovering from. Due to poor economic development, the country has had a low Human Development Index (HDI). Similarly, the governance indicators have also remained negative. Due to these factors, the debt rate for this country remains high, as well as life expectancy. Similarly, school enrolment and openness to international trade indices have also remained low.

           Overview of Nepal

           Nepal is landlocked country located on the Southern part of Asia, bordering India to the South and China to the North.  Until 2006, the country had a serious political instability. However, a peace deal in 2006 has led to drastic changes, including constitutional review in 2015. The country is governed by a three-tier government namely; local, state and federal. Nepal is one of the poorest nations in the world, courtesy of its political instability. Despite a consistent growth on its GDP in the past 2 decades, the country’s human development index has remained below 0.6, and the economy is mainly sustained through debts and imports.  Similarly, the governance indicators remain very low, as it still in the process of economic recovery.

Question Four

                Summary of Economic Variables

1. Relationship between Socioeconomic Variables and Development Indicators

             Socioeconomic factors refer to interaction of elements that have an influence on the economic state. These mainly revolves around the governance indicators in a nation. There is a positive relationship between the socioeconomic factors and the economic variables (Devlin & Frame, 2019).  For instance, Canada and Korea which have high index on the governance indicators, such as rule of law and control of corruption among other factors have a high HDI with a very stable GDP. This is unlike Nepal and Central African Republic, which have negative governance indicators. Consequently, these nations have a low GDP and HDI.

1. Relation and Development

          From the data, the relationship does not change even as the rate of development rises. Notably, a rise in development leads to a rise in socioeconomic factors, while a fall in development leads to a fall in socioeconomic factors.

1. Coherence with Theories Learnt in Class

          It is true that the statistics are coherent with the theory we learnt in class. Socioeconomic factors have a positive influence on development of human capital.  Consequently, a positive movement in socioeconomic factors would lead to a positive movement in development factors. This state does not change even with the rise in economic development, which is shown by rise in the GDP, GDP per capita and human development index (HDI).