Demographics and World CommerceEssay Preview: Demographics and World CommerceReport this essayDemographics and World CommerceWhy are some countries wealthy while others boarder on poverty? What are the contributing factors that impact global commerce? Both world demographics and topography have their respective relationships with regional and world commerce.
Large countries in the mid-altitudes with ample technology and fertile environments will experience higher economic success as compared to those smaller countries with insufficient technology and infertile environments. J. Vernon Henderson writes, “High-income regions are almost entirely concentrated in temperature zones, 50% of world GDP is produced by 15% of the world’s population and 54% by countries occupying 10% of the worlds land area. The poorest half of the world population produces 14% of world GDP and 17 of the poorest 20 nations are in tropical Africa.” (p. 81-105)
Dissemination of ideas and technology impact global commerce as well. The transition from the industrial age to the information age has impacted commerce much as it has societies in general. Advances in telecommunications, satellites, and computer-based information processing promise to create fundamentally new ways of communicating. The technology creating the most change in commerce would have to be the Internet. An example of the Internets impact on commerce was best described by Vincent Johnson (2005) as: “Specifically, in the late 1990’s, trade finance was rapidly going “paperless” … which was earth chattering. A typical export arrangement goes something like this: (1) Japanese buyer opens a letter of credit (LC) with an international bank based on instructions from US supplier (price, product, delivery, etc.), (2) international bank wires this LOC to US bank, (3) US banks accepts LC and notifies US companies local bank, (4) US company ships products and creates shipping documents per LC instructions, (5) the US company or our export company submits documents to both international banks and the buyer, (6) once documents are accepted by both banks, the Japanese buyer claims product from port and the US company gets paid. Until recently, this process operated almost exclusively through original paper documents and signatures (with the only exception being the wire of the original LC) and could take 25 days. Today, it can happen almost exclusively electronically and the whole process time is reduced — a most importantly, with no effect on the LCs main function of insurance and payment risk hedging.” The final outcome of the current revolution is unpredictable, but its global impact on commerce will depend on how the revolution creates more efficient information dissemination opportunities.
Let’s take a look at relationships among ideas, events, social climate, and commerce. Ideas and technology are not disseminated solely by electronic means. Fellman-Getis-Getis (2002) states, “Diffusion is the process by which an idea or innovation is transmitted from one individual or group to another across space.” (p. 56) An example of this is Relocation Diffusion, in which ideas are brought to a new culture by migrants. Such ideas could include improved farming techniques, which could improve crop productivity, and ultimately improve regional economics by introducing larger export quantities to the world market. Socially speaking, and perhaps economically speaking, countries with flourishing higher education systems tend to succeed economically as compared to countries without. Presumably, the United States ranks as one of these benefiting countries-based on its 95% literacy rate and a world leading $11.75 trillion dollar Gross Domestic Product.
The Future
One of the major issues that the Federal Government can control is future economic trends. Economists such as M.J.C. Koehler and L.M. Rydholm have said it is vital that the economy adapt to new technologies to the world economy after they are adopted. While they are working on a report on the future of global trade in goods to be prepared later this year, M.J.C. Koehler and L.M. Rydholm have identified the following five potential trends for the future for US trade with the developing world:
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The US will experience increases in natural gas prices as a result of natural gas production in India. R. L. Martin, a climate scientist, commented, “It would be bad for the world if the developing world moved away from coal-fired to clean energy (coal is a huge competitor to natural gas in the U.S.), and we must adapt. That is why we are making investments in a wide range of renewable technologies. As long as we are able to meet our energy needs, all our energy use will remain low, making economic sense.”
R. L. Martin, a climate scientist, commented, “It would be bad for the world if the developing world moved away from coal-fired to clean energy (coal is a huge competitor to natural gas in the U.S.), and we must adapt. That is why we are making investments in a wide range of renewable technologies. As long as we are able to meet our energy needs, all our energy use will remain low, making economic sense.” •
R. L. Martin, an climate scientist, commented, “It is necessary to expand the development potential of large-scale renewable energy sources. Such energy comes from plants and other source with an active market and an incentive to sell back at least part of the electricity produced and on other renewable sources. A new way comes about that we need to start investing in both renewable and natural-gas power generation facilities: first of all to increase the efficiency of the grid, then of the renewable sources like tar sands development along the coast. This is done under a few different models of grid structure, and it allows for much more flexibility and the expansion of what we have now as a country. That is why we are developing wind and solar.”
Renewable Energy Developments
The federal government is working on three new energy technologies for future energy. The new technologies include the new biofuels technology, which is designed to replace coal-burning power plants with wind generators. The biofuels technology is designed to substitute large-scale natural gas use for coal in order to offset the increased costs associated with natural gas transmission. The biofuels technology converts natural gas from methane into methane, thereby dramatically reducing pollution from heavy industry.
R. E. M. Dyer reports that the biofuels technology is developed for high-performance hydrofracturing of carbon monoxide. Dyer reports that the biofuels technology may produce up to 1.5 metric tons of methane gas per year, which could greatly improve US greenhouse emission reductions. The U.S. is already using a similar technology, for the same reasons mentioned.
The biofuels technology is built as a cost-effective biofuel plant.
The biofuels technology uses the biomass-based fuel called biogas, and it produces biofuels while reducing the energy use of the methane.
The biofuels plant has not been developed in a commercial capacity. The company is still working on the biofuel process and for future production. In April 2010, the Obama administration finalized permits for biofuels development.
The biofuels
Perhaps two of the more significant events occurring in world history that impacted global economics were the Great Depression and World War II. . Davidson et al in their book Nation of Nations state “As Germany struggled to recover during the Great Depression, so did all of Europe”. (p. 750) While discussing World War II, the authors go on to say “War debts imposed at Versailles shackled Germany’s economy.” (p. 750) Where-as in the United Stated; “The Government relied on large firms such as Ford and General Motors because they had experience with large-scale production. Thus, war contracts helped large corporations increase their dominance over the economy.” (p. 767)
The Economic Reversal of the Great Depression
Source: The Great Depression In the aftermath of 1933, many Germans and Austrians lost a lot of money and political power. This “German Great Recession” of 1929-31 did the effect that many thought was already in play when Germany lost that battle. Â In the following ten years, the German economy was growing at an unusual rate. According to the Institute for Research of Social Change (ISRC), only the top 30 percent of the workforce produced more than one million dollars in profits back in 1929 (Source: Source, Bureau of Labor Statistics), but the rest of the population lost half their dollars. The bottom 20 percent lost money in just under six years of the Depression. With the end of the first wave of German economic recession, this would have had an effect upon the economy’s ability to grow.
This second recession has not only devastated the German economy, it is also created an economic depression which resulted in significant loss of income. Â Germany, at the time of its current decline and the current one, still had more than 200 million tons of gold in circulation (Source: Bureau of Labor Statistics)
Source: the Great Depression: How the Great Recession Affected German Business
Since 1928 Germany had had around 11 percent unemployment, making the nation extremely vulnerable in any crisis. Â As the Depression began, the economy continued to grow. Even as wages were rising, the numbers of people worked decreased. Â Unemployment increased dramatically, and the unemployment rate also increased. During the 1930s, the country experienced a “global” economic downturn. The German economy was in a highly vulnerable position. Despite the financial stimulus offered by the war, German trade revenues were below replacement levels. Â By the end of 1932, the unemployment rate was 9.6 percent. Â The unemployment rate also exceeded normal levels that year, rising to 11.6 percent by the end of the 1933 general election. A similar economic slump had happened during the period the Great Depression took root. (Source: Bureau of Labor Statistics)
The Economic Crisis of 1931
Source: Economic Recovery of Germany
The 1930s have been a period of enormous economic and social damage from the Great Depression to its people and for the political and economic elite. Â While the Great Depression was still largely under control, the population exploded. Â From 1933 to 1939, population growth was not as fast and the economy suffered massive economic
c. The study of demographics relates to the distribution of population and other characteristics. According to the Britannica Student Encyclopedia (2005), “Although the word demography was not in use until about 1880, the science originated in the second half of the 17th century with the work of John Graunt in London. It also includes population changes-movement from place to place, trends in fertility rates, and birth- and death rates.” (Article 208217) A review of CIA statistical data available from The World Factbook (2005) shows the following demographic and economic information for one or more countries on five major continents with coastal boarders:
Birth Rate*Death Rate*Net Migration*Population Growth RateAlgeria17.13-0.371.22%$212.3 BillionAustralia0.87%$611.7 BillionBrazil16.831.06%$1.492 TrillionChina13.140.58%$7.262 TrillionGermany10.55$2.362 TrillionUnited States14.140.92%$11.75 Trillion* Indicates per 1,000One can only speculate the future trends of regional demographics, but based on these statistics alone, one could hypothesize that Algeria’s high birth rate, low death rate, negative migration rate, and high population rate, will certainly lead to overpopulation in a country already considered to be a third world country. Given the amount of attention the Chinese economy is getting in American media, one could also speculate this countries $7.62 trillion dollar GDP will soon rival that of the United States estimated to be $11.75 trillion. Should these demographic statistics hold true for the foreseeable future, it would be my prediction that the United States will continue to demand its place at the top of the free market world. Interesting of note is China’s negative Net Migration. This potentially indicates the possibility of a reduction in the labor force, possibly in certain key