Last Updated 27 Jul 2020

Comparing Economies

Words 1182 (4 pages)

To see how well a country has developed, people mainly judge by the total GDP value, there are also many type of indicator, such as the HDI, number of mobile per person etc. In this essay I have mentioned 3 countries- Kenya, Hong Kong and UK, to see how they have developed in the past 10years and what is the problem that hinder its improvement. Kenya is a tropical country which lies on the equator. Agriculture and tourism are two of the most flourish industries, they bring the country with the major part of income. 5% of the Kenya population made their living by taking part in the primary production, but their income can merely support the cost of living of the whole family.

In 2008, total nominal GDP was $30. 2 billion and $857 for GDP per capita. With exchange rate considered, the total GDP in Purchasing Power Parity was $60. 4 billion. Human Development Index of Kenya in the year of 2006 was only 0. 491, which stated an extremely low civilised level in this country, people could not receive proper education and the life expectancy were comparatively low.Unemployment rate reached 40% in 2009; the main cause is the increasing population.

Economic reform and liberalization began to carry out in the early 90s. Kenya government undertook a series of economic measures with the assistance from the World Bank and the International Monetary Fund. However, in the 2000, the bad weather condition made the economy to slow down. Furthermore, as the government didn’t carry out action to meet the commitment, the IMF and World Bank refused to give financial support. The Kenya Economy was in a depression at that age.The situation was slightly improved in the next few years when the new president Kibaki took up the post. Various economic reforms were put into practice and had finally resumed the cooperation.

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In the recent years, Kenya government has been more ambitious. The annual growth rate keep on increasing from the 2005, they are now in a growth by encouraging agricultural production and more public and foreign investment. Kenya developed quite a lot in the past 10 years as the government began to made use of the natural resources and even further expand them.Besides, they started to sign partnership arrangement with other country to gain more trading opportunities, like the oil exploration contract with China in 2006 which was series of deals designed to keep Africa's natural resources flowing out. Hong Kong is autonomous capitalist region of China, it is known as the Global Metropolitan and International Financial Centre. The composition of Hong Kong GDP is special, re-export contributed a lot to the figure by distributing the imported goods mainly from the China to the rest of the world. Nominal GDP of Hong Kong in 2008 was $223.

7 billion and $31,849. In terms of PPP, the figure was $293. billion and $44,413 respectively. Hong Kong managed to be one of the top 10 countries by GDP at PPP per capita. HK also ranked the 22nd in the year 2008 on the HDI table. It has an index of 0. 942 in 2006, which shows it did well on life expectancy, literacy, educational attainment and GDP per capita.

All of these indicators show that people in Hong Kong enjoy a high living standard. Unemployment rate in the end of 2008 was only 3. 8% that was quite low when comparing with rest of the world. Most population in Hong Kong is employed in the tertiary production, like retails and tourism, thus largest part of the GDP.Primary and secondary productions only take up a tiny proportion, due to the limitation of resources and high running cost. Stock Exchange in Hong Kong is also world famous, because of the free market economy and low taxation system. The government adopted a passive attitude towards the industry; power is left to the market forces and the private sector.

This policy attracts a huge inflow of foreign investment to the local market. From the late 90s onwards, with a rapidly growing Mainland China as its hinterland, the paramount location enables it to serve as a point of entry for investment flowing into the mainland.The China and Hong Kong Closer Economic Partnership Arrangement signed on 2003 ensured favorable trade and investment co-operation for both sides and promote joint development; it helped to gain enterprises and investors faith in the local market. However, Hong Kong's inflation rate is markedly varying in the past 10 years, the challenges of economic globalisation from China and the outbreak of SARS led to a deflation from ’99 to ’04. The situation was soon improved afterwards.The problem which hinders HK development is the lack of raw resources, so the volume of import is huge which lower the value of GDP and even held back the development of other aspects. The total output of HK is over-relied on the tertiary production, especially the financial market.

When there was once a financial crisis, the whole economy fall into a distress. United Kingdom is the sixth largest economy in the world and the third largest in Europe. Nominal GDP of this country in 2008 was $2. 7 trillion and $43,785 per capita; $2. 2 trillion and $36,523 respectively when expressed in PPP. Its HDI calculated in 2006 was 0. 42, which ranked just above Hong Kong; this additionally shows the high literacy rate and long expectancy.

There was 7. 6% of the work force in UK was unemployed in July 2009. And a Gini coefficient of 36 shows the inequality of income and wealth, although more resources are held by the rich, the problem is not so serious. UK was a strong country ever since the Industrial Revolution started, yet it began to lose its competitiveness in the 20th century when other countries also develop. The role in the global economy of UK became more stable at the start of 21st century, due to the huge GDP and the influential power on finance of London.Services industry is now the major sector in UK, it makes up more than 70% of the GDP. Like Hong Kong, financial services and tourism are the dominant part of the whole country.

The country capital- London is an international business centre, which also has the world’s largest Stock Exchange transactions. After a recession, UK had achieved a growth in every year from the late 90s until the year 2007. The UK managed to maintain a strongest economy between all European countries, both on interest rate, inflation and unemployment.The boom is then ended because of the global financial crisis and the rising commodity prices as well, the UK economy was seriously harmed. Many companies and even banks failed and became nationalised, this also bought the country with a deficit in finished goods and commodities. The UK is still facing a hard time now, the GDP for 2009 is forecasted to decline by 3. 8%, the negative growth may continue until early 2010.

The UK economy was already well developed, so the government should undertake fiscal policies to modify the market and improve the efficiency.

Comparing Economies essay

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