Prepare A 3 To 5-Slide Presentation For The Two Economies ✓ Solved
Prepare a 3 to 5-slide presentation for the 2 economies
Prepare a 3 to 5-slide presentation for the 2 economies selected by your team. Research each economy selected by your Team. Compare similarities and differences between your assigned countries/economies and how their economic, political, and cultural development since 1992 has influenced their economic growth and trade competitiveness.
Use tables and/or graphs to support your analysis of the following economic statistics/indicators of your 2 assigned economies through the most recent year available since 2009:
- GDP per capita growth over time
- Inflation rate over time
- Unemployment rate over time
- Exports as a % of GDP over time
- National government debt as a % of GDP
Evaluate the reasons why the economic growth of the 2 economies/countries varied. Discuss how international trade influenced the strength of each economy. Discuss the role of value chains and value-added production. Analyze how the failure to use value-added trade measures distorts trade statistics. Examine at least 2 industries that have provided each economy a comparative advantage in world trade. Cite at least 2 academically credible sources. Format your citations according to APA guidelines.
Paper For Above Instructions
The economies of Venezuela and Saudi Arabia both play significant roles on the global stage, primarily due to their status as the world's two largest sources of oil reserves. Despite their similarities in resource wealth, their economic, political, and cultural trajectories since 1992 have diverged considerably, leading to stark contrasts in economic performance and trade competitiveness. This presentation aims to compare and contrast these two economies across various dimensions, including economic indicators, international trade implications, value chains, and industry drivers of comparative advantage.
Economic Context and Indicators
Since 1992, Venezuela has faced a series of economic challenges deeply rooted in political instability, mismanagement, and over-reliance on oil exports. In contrast, Saudi Arabia has experienced economic growth driven by a more stable political landscape and strategic management of its oil resources. The following economic indicators provide a clearer understanding of the differences and similarities between these two economies:
GDP Per Capita Growth
As illustrated in the comparison, Venezuela's GDP per capita has experienced significant fluctuations, particularly during the economic crisis that began in 2014, precipitated by falling oil prices and political turmoil. Saudi Arabia, on the other hand, has maintained steady growth, largely attributed to its economic diversification efforts under Vision 2030, which aims to reduce dependency on oil.
Inflation Rate
The inflation rate in Venezuela has reached hyperinflation levels, greatly impacted by supply shortages and currency devaluation, contrasting sharply with Saudi Arabia's controlled inflation rate. This disparity underscores the economic instability in Venezuela compared to Saudi Arabia's more stable economic framework.
Unemployment Rate
Unemployment in Venezuela remains high, exacerbated by the economic crisis and migration patterns as citizens flee the country in search of better opportunities. Conversely, Saudi Arabia's unemployment rate has decreased as the government invests in job creation through diversification and local industry support.
Exports as a % of GDP
Venezuela's exports, primarily oil, account for a significant portion of its GDP, yet this has become problematic due to declining output and global price volatility. Saudi Arabia, while also heavily reliant on oil exports, is strategically working to increase non-oil exports, thereby enhancing its economic resilience.
National Government Debt as a % of GDP
Venezuela's national debt has soared amid economic mismanagement, leading to a crippling economic crisis, whereas Saudi Arabia has maintained a more prudent fiscal policy, although it has also seen an increase in debt due to investments in modernization and economic diversification.
International Trade and Economic Strength
International trade has profoundly influenced the strength of both economies. For Venezuela, international sanctions and falling oil prices have diminished trade competitiveness, leading to decreased economic strength. Saudi Arabia benefits from a strong trade network, particularly with powers like China and the U.S., enhancing its economic influence.
Value Chains and Value-Added Production
The importance of value chains in both economies cannot be overstated. Value-added production allows countries to improve the efficacy of their exports, yet Venezuela's economy is constrained by its lack of diversification. Saudi Arabia’s investment in technology and infrastructure aims to create value chains that enhance production beyond oil and gas.
Challenges in Trade Statistics
The failure to utilize value-added measures can distort trade statistics significantly. For instance, products like the Boeing 787 or the iPhone illustrate how modern trade benefits from complex international value chains. Saudi Arabia's efforts to diversify might mirror similar complexities and offer lessons for Venezuela in the future.
Comparative Advantage Industries
In Saudi Arabia, the oil and petrochemical industries provide a clear comparative advantage, while the growing focus on tourism and entertainment is aimed at expanding this advantage. In Venezuela, the oil sector is predominant; however, the agricultural sector, particularly in products like cocoa and coffee, presents potential for comparative advantage if cultivated effectively amidst the challenges faced.
Conclusion
This comparison of Venezuela and Saudi Arabia illustrates how different political, economic, and cultural developments can lead to vastly different outcomes in economic growth and trade competitiveness. While both economies are rich in oil resources, their reliance on this sector coupled with their distinct economic management strategies has resulted in divergent paths. Understanding these dynamics is vital for policymakers and stakeholders aiming for sustainable economic development.
References
- OPEC. (2020). World Oil Outlook 2020. OPEC Publications.
- World Bank. (2022). Global Economic Prospects. The World Bank.
- International Monetary Fund. (2021). Regional Economic Outlook: Middle East and Central Asia. IMF Publications.
- Statista. (2023). Oil Production in Saudi Arabia. Retrieved from Statista website.
- Central Intelligence Agency. (2022). The World Factbook: Venezuela. CIA Publications.
- Venezuela Analysis. (2021). Venezuela's Economic Crisis: Causes and Consequences. Retrieved from Venezuela Analysis website.
- Saudi Vision 2030. (2021). Vision 2030: An Overview. Retrieved from Saudi Vision 2030 website.
- The Economist. (2022). The economic effects of hyperinflation in Venezuela. The Economist.
- Bloomberg. (2023). Economic Diversification Efforts in Saudi Arabia. Bloomberg.com.
- United Nations Conference on Trade and Development. (2020). Trade and Development Report 2020. UNCTAD Publications.