Theme 4 Application Flashcards
Absolute Advantage
In 2024, Saudi Arabia produced 10.2mn barrels of oil per day
Comparative Advantage
India’s garment industry makes up 83% of its total exports
Containerisation
The costs of shipping have fallen virtually 100% since the 1950s
GDP / HDI difference
China 2nd highest GDP but 86th in HDI.
Impact of Emerging Economies
BRICS imported and exported $3.5tn in 2014 alone
Common Market
European Single Market
Customs Union
European Union
Quota
The US limits the volume of Canadian beef to 199,000 tons a year
Monetary Union
Eurozone
Tariff
Trump has threatened to impose 25% tariffs on EU goods
Trade war impacts
300,000 jobs were lost due to the China-US trade war in 2018
Non-Tariff Barriers
Many US pharmaceutical companies have patents and copyright protection
Protectionist Subsidy
The UK govt giving Rolls Royce £210M to develop aeronautical sectors and become more globally competitive.
Tariff / Trade War
Canada’s new president Mark Carney “vows” to win trade war with Trump through retaliatory tariffs on American goods.
Dumping
EU imported electric cars worth €11bn from China, 49% of its total electric car imports
Overdependence
Saudi Arabia’s oil exports make up 50% of their GDP
Tax Evasion (TNCs)
Italy has just accused
Amazon of evading
€1.2bn in VAT payments
External Shocks
The Russian invasion led to 13.9% inflation in Ukraine and decline in GDP by over 28%
Fixed Exchange Rate
Hong Kong Dollar pegged to US dollar at a rate of HK$7.80 to US$1
Floating Exchange Rate
US Dollar $
Benefit of Brexit
The UK paid £15.8Bn in 2018 to the EU budget which can now be spent on the NHS / SSPs
Managed Exchange Rate
Chinese Yuan
Competitive Devaluation
Bank of Japan kept interest rates negative (-0.1%) to depreciate the Yen and boost exports.
Cost of Brexit
GDP is estimated 6% lower than if we stayed in the EU
Role of the IMF
IMF provided $240Bn in bailout aid to Greece in exchange for austerity measures after their financial crisis.
Role of World Bank
Gave out $61 Billion in aid in 2016
Role of WTO
Trade Tariffs would be 32% higher without the WTo
Market Rigging
97 congressmen found to be insider trading in 2022
Primary Product Dependency
Rwanda’s primary exports are gold, coffee and tea (66% of exports)
Savings Gap
India’s national savings rate stands at 30% of GDP but investment rate is 35% of GDP
Foreign Currency Gap
Argentina’s foreign currency gap was estimated at $10bn in 2024
Capital Flight
$2.5bn left Venezuela in one quarter alone due to hyperinflation and political instability
Debt
Japan’s debt is 270% of GDP
Poor infrastructure
Haiti - EQ in 2010 worsened by poor housing, sewage system etc.
Weak Property Rights
There is over $9.3Tn of dead capital in the world.
Poor education
Only 40% of children in SSA complete secondary education
Tourism for development
Macau is the only place in China where Gambling is allowed thus attracting tourism and significantly developing the area.
FDI for development
India attracted $84Bn in FDI in 2024
Fairtrade for development
Rwanda pushing for fairtrade for Coffee and Tea farmers considering its their main export.
Infrastructure development
China’s Belt and Road initative - $4T in 140 countries.
Ports, airports, railways in developing countries.
Aid for development
Lesotho - 25% of 16-50 year olds have Aids / HIV.
Global Fund comitted billions to SSA to reduce HIV infections.
Debt Relief for development
Mozambique recieved $4.5Bn in debt relief in 2024
Highest GINI and Lowest GINI
South Africa - 0.63
Iceland - 0.25
Critique of Aid?
Dead - Aid /// Dambisa Moyo.
Increase in foreign aid to Africa does not help to cause economic growth because it makes these countries lazy / dependent and fosters corruption.
