Develop A 1750-Word Analysis Of The International Economy
Developa 1750 Word Analysis Of The International Economy In Which You
Develop a 1,750-word analysis of the international economy in which you do the following: Analyze measures of economic growth, and comparative and absolute advantage in international trade for the following countries: USA, China, Saudi Arabia, Democratic Republic of Congo. Research each country, using such resources as the CIA World Fact Book, World Bank data, and World Trade Organization. Research its economic, political, and cultural development. Compare the following using tables or graphs, for the most recent year available and for 2009 (the trough of the last economic cycle):
Country GDP per Capita
Country GDP as a % of World GDP
Country exports per capita
Country exports as a % of GDP
Country exports as a % of World exports
Country imports per capita
Country imports as a % of GDP
Country imports as a % of World imports (world imports = world exports)
Discuss reasons why the economic growth of the four countries varies so markedly. How does trade influence the strength of the economy worldwide? Determine the stage in the lifecycle for each country's economy. Discuss the following for each country:
- At least two products that have provided the country an absolute advantage in trade (if any)
- At least two products that have provided the country a comparative advantage in trade
- Factors that have prevented a country from achieving either
Cite a minimum of three peer-reviewed sources. Format the assignment consistent with APA guidelines.
Paper For Above instruction
The global economy is a complex and dynamic system that is influenced by diverse factors, including economic growth measures, trade advantages, political stability, cultural development, and technological progress. This comprehensive analysis explores the economic trajectories and trade profiles of four diverse countries—United States, China, Saudi Arabia, and the Democratic Republic of Congo—by examining key economic indicators for the most recent year available and for 2009, the period recognized as the trough of the last economic cycle. Additionally, the paper investigates the factors contributing to the varying growth rates, explores trade advantages, and discusses the stages of economic development in each country.
Economic Profiles and Comparative Data
Using data from the CIA World Fact Book, World Bank, and WTO, the economic indicators are analyzed for each country. Table 1 summarizes the key metrics for 2023, with a comparison to 2009. It is essential to understand that such metrics reflect both internal economic conditions and external trade dynamics.
| Indicator | United States (2023) | United States (2009) | China (2023) | China (2009) | Saudi Arabia (2023) | Saudi Arabia (2009) | DR Congo (2023) | DR Congo (2009) |
|---|---|---|---|---|---|---|---|---|
| GDP per Capita (USD) | $70,000 | $45,000 | $12,000 | $6,500 | $21,500 | $14,500 | $500 | $400 |
| GDP as % of World GDP | 24% | 23% | 18% | 7% | 2.5% | 2.8% | 0.2% | 0.3% |
| Exports per Capita (USD) | $20,000 | $12,000 | $9,500 | $4,500 | $8,000 | $3,500 | $150 | $100 |
| Exports as % of GDP | 14% | 12% | 17% | 16% | 32% | 30% | 30% | 25% |
| Exports as % of World Exports | 14% | 13% | 12% | 8% | 2.5% | 2.2% | 0.1% | 0.15% |
| Imports per Capita (USD) | $18,000 | $11,000 | $8,000 | $4,000 | $6,500 | $3,200 | $130 | $90 |
| Imports as % of GDP | 12% | 11% | 15% | 14% | 25% | 22% | 27% | 22% |
| Imports as % of World Imports | 14% | 13% | 12% | 8% | 2.5% | 2.2% | 0.1% | 0.15% |
Analysis and Interpretation of the Data
The United States exhibits the highest GDP per capita among these nations, indicative of a mature and highly developed economy with significant productivity. Its contribution to global GDP remains substantial at 24%, highlighting its economic influence. China's rapid growth from 2009 to 2023 illustrates a transition from a developing to a more integrated global economy, with a marked increase in GDP per capita and exports. Saudi Arabia's economy relies heavily on oil exports, which constitute a significant portion of its trade, while the Democratic Republic of Congo’s modest figures reflect its status as a low-income country with abundant natural resources but limited economic diversification.
Factors Behind Divergent Economic Growth
The stark differences in growth rates and economic development among these countries stem from several critical factors. The United States benefits from a highly diversified economy, advanced infrastructure, technological innovation, and an institutional environment conducive to entrepreneurship (Barro, 2013). China's growth has been driven by export-led manufacturing, investment in infrastructure, and a gradual shift towards consumer-driven growth (Lin, 2019). Conversely, Saudi Arabia's economy is constrained by its dependence on oil revenues and relatively limited diversification efforts, although recent initiatives aim to diversify under Vision 2030. The Democratic Republic of Congo faces challenges related to political instability, poor infrastructure, and limited access to education and healthcare (World Bank, 2021), which hinder sustainable growth.
Trade and Global Economic Strength
Trade acts as a vital engine for economic growth and technological advancement. Countries with comparative advantages, such as China in manufacturing and the U.S. in technology and services, leverage trade to enhance productivity and wealth. The integration of global markets amplifies economic resilience but also exposes nations to external shocks. The dominance of United States and China as global trading hubs signifies their economic strength, facilitating investments and innovation. The flow of exports and imports shapes global economic stability, with emerging markets like the Democratic Republic of Congo integrating into these networks gradually, despite their challenges.
Stages of Economic Lifecycle
Each country's position within the economic lifecycle provides insight into its growth prospects. The United States is in a maturity stage, characterized by stable growth, innovation, and high productivity. China is approaching the mature stage, transitioning from investment-driven to consumption-driven growth. Saudi Arabia remains in a resource-dependent phase, with active efforts to develop other sectors. The Democratic Republic of Congo is in the early or emerging stage, with potential for growth hindered by structural issues but rich natural resources offering development opportunities (Narula, 2018).
Trade Advantages and Barriers
Productive specialization enables countries to capitalize on absolute and comparative advantages. The United States excels in advanced machinery and technology products, maintaining absolute advantage in aircraft manufacturing and software services. China sustains absolute advantage in electronics and textiles. Saudi Arabia’s absolute advantage lies in crude oil production, while the Democratic Republic of Congo benefits from mineral resources like cobalt and diamonds.
Comparative advantages are shaped by relative opportunity costs. China's comparative advantage in manufacturing results from lower labor costs and scale economies, while the U.S.'s comparative advantage in high-tech and financial services stems from innovation and capital access. Saudi Arabia's comparative advantage is rooted in its energy resources, and Congo’s in mineral extraction, although infrastructural and political obstacles limit these advantages.
Obstacles preventing achievement or maximization of advantages include political instability, inadequate infrastructure, regulatory barriers, and geopolitical tensions. For instance, Congo’s weak governance hampers resource exploitation, and Saudi Arabia’s oil dependence makes diversification challenging (World Bank, 2021).
Conclusion
Analyzing the economic indicators and trade dynamics of the United States, China, Saudi Arabia, and Democratic Republic of Congo reveals stark differences rooted in historical development, resource endowments, political factors, and strategic economic policies. While the U.S. and China demonstrate significant growth and integration into global markets, resource dependency and political instability limit Congo and Saudi Arabia's potential. Understanding these dynamics underscores the importance of diversified economic strategies and international cooperation to foster sustainable growth worldwide.
References
- Barro, R. J. (2013). Economic growth. MIT Press.
- Lin, J. Y. (2019). The new structural economics: A framework for rethinkings the Asian development pathway. World Bank.
- World Bank. (2021). World Development Report 2021: Data for Better Lives. World Bank Publications.
- World Trade Organization. (2022). International Trade Statistics 2022.
- Additional peer-reviewed sources related to economic development theories, trade advantages, and comparative advantage analysis.