Economic indicators: USA vs. Zimbabwe Background of U. S Economy The United States has a capitalist mixed economy, which is fueled by rich natural resources, a well-developed infrastructure, and high productivity with a per capita GDP of $47,200. According to the International Monetary Fund, the U. S. GDP of $15 trillion constitutes 23% of the gross world product at market exchange rates and over 20% of the gross world product at purchasing power parity. Though larger than any other nations, its national GDP is about 5% smaller than the GDP of the European Union at PPP in 2008.
The country ranks ninth in the world in nominal GDP per capita and sixth in GDP per capita at purchasing power parity. The U. S. dollar is the world’s primary reserve currency. The United States is the largest importer of goods and third largest exporter, though exports per capita are relatively low. In 2008, the total U. S. trade deficit was $696 billion. Canada, China, Mexico, Japan, and Germany are its top trading partners.
In 2007, vehicles constituted both the leading import and leading export commodity. China is the largest foreign holder of U.
S. public debt. In 2009, the private sector was estimated to constitute 55. 3% of the economy, with federal government activity accounting for 24. 1% and state and local government activity (including federal transfers) the remaining 20. 6%. While its economy has reached a postindustrial level of development and its service sector constitutes 67. 8% of GDP, the United States remains an industrial power. The leading business field by gross business receipts is wholesale and retail trade; by net income it is manufacturing.
Chemical products are the leading manufacturing field. The United States is the third largest producer of oil in the world, as well as its largest importer. It is the world’s number one producer of electrical and nuclear energy, as well as liquid natural gas, sulfur, phosphates, and salt. While agriculture accounts for just less than 1% of GDP, the United States is the world’s top producer of corn and soybeans. Coca and McDonald’s are the two most recognized brands in the world. In August 2010, the American labor force comprised 154. 1 million people.
With 21. 2 million people, government is the leading field of employment. The largest private employment sector is health care and social assistance, with 16. 4 million people. About 12% of workers are unionized, compared to 30% in Western Europe. The World Bank ranks the United States first in the ease of hiring and firing workers. In 2009, the United States had the third highest labor productivity per person in the world, behind Luxembourg and Norway. It was fourth in productivity per hour, behind those two countries and the Netherlands.
Compared to Europe, U. S. property and corporate income tax rates are generally higher, while labor and, particularly, consumption tax rates are lower. Background of Zimbabwe Economy Zimbabwe’s economy is a mixed economy with a dominating public sector. Traditionally, the Zimbabwean economic profile used to be one of the strongest in Africa. However, increasing cases of money embezzlement at the administrative level has led to the rise of a severe economic crisis. Mineral exports, agriculture, and tourism are the main foreign currency earners of Zimbabwe.
The mining sector remains very lucrative, with some of the world’s largest platinum reserves being mined by Anglo-American and Impala Platinum. The Marange diamond fields, discovered in 2006, are considered the biggest diamond find in over a century. They have the potential to improve the fiscal situation of the country considerably, but almost all revenues from the field have disappeared in to the pockets of army officers and ZANU-PF politicians. Zimbabwe is the biggest trading partner of South Africa on the continent. Zimbabwe maintained positive economic growth throughout the 1980s (5. % GDP growth per year) and 1990s (4. 3% GDP growth per year). The economy declined from 2000: 5% decline in 2000, 8% in 2001, 12% in 2002 and 18% in 2003. The government of Zimbabwe faces a variety of economic problems after having abandoned earlier efforts to develop a market-oriented economy. Problems include a shortage of foreign exchange, soaring inflation, and supply shortages. Zimbabwe’s involvement from 1998 to 2002 in the war in the Democratic Republic of the Congo drained hundreds of millions of dollars from the economy.
The downward spiral of the economy has been attributed mainly to mismanagement and corruption of the Mugabe regime and the eviction of more than 4,000 white farmers in the controversial land redistribution of 2000. Zimbabwe was previously an exporter of maize but has become a net importer. Tobacco exports and other exports of crops have also declined sharply. Tourism was an important industry for the country, but has been failing in recent years. The Zimbabwe Conservation Task Force released a report in June 2007; estimating 60% of Zimbabwe’s wildlife has died since 2000 due to poaching and deforestation.
The report warns that the loss of life combined with widespread deforestation is potentially disastrous for the tourist industry. The economy of Zimbabwe has shrunk significantly after 2000, resulting in a desperate situation for the country and widespread poverty from among others 94% unemployment. The participation from 1998 to 2002 in the war in the Democratic Republic of the Congo set the stage for this deterioration by draining the country for hundreds of millions of dollars. Hyperinflation has been a major problem from about 2003 to April 2009, when the country suspended its own currency.
The economy deteriorated from one of Africa’s strongest economies to the world’s worst. Government spending is 97. 8% of GDP. It has partly been financed by printing money, which has led to hyperinflation. State enterprises are strongly subsidized, taxes and tariffs are high. State regulation is costly to companies, starting or closing a business is slow and costly. Labor market is highly regulated, hiring a worker is cumbersome, firing a worker is difficult and unemployment has risen to 94% (at the end of 2008; the figure was 80% in 2005). AGRICULTURE IN ZIMBABWE
Zimbabwe is mostly dependent on agriculture and mineral resources. Agriculture contributes 15% to the Gross Domestic Product and the sector provides employment for some 70 percent of the population, and about 60 percent of all raw materials for the industry. About 45 percent of the country’s exports are of agricultural origin. The major agricultural products of Zimbabwe are corn and tobacco and cotton. Cotton and tobacco are the two agricultural products which are exported. Some other agricultural products include tea, wheat, sugarcane, coffee, peanuts, etc. |
Recent droughts have caused the agricultural sector to experience crop failure and livestock losses, this greatly undermining the national herd now stands at 4,9 million and the eviction of more than 4,000 white farmers in the controversial land redistribution of 2000. Zimbabwe was previously an exporter of maize but has become a net importer. Tobacco exports and other exports of crops have also declined sharply. U. S Agriculture Agriculture is an important industry in the United States and the country is a net exporter of food. The U. S. share of the global market for agricultural goods averages just over 20 percent.
Since U. S. farms produce far beyond domestic demand for many crops, maintaining a competitive agricultural system is critical to ensuring the economic viability of U. S. agriculture. At the same time, U. S. agriculture is a diverse economic sector. Differences in commodity type, farm size, operator and household characteristics, even goals for farming, affect the competitiveness of individual operations and ultimately of the sector as a whole. As of the last census of agriculture in 2007, there were 2. 2 million farms, covering an area of 922 million acres (3,730,000 km2), an average of 418 acres (1. 9 km2) per farm. Agricultural sector compose 1. 1% of total economy of U. S. A. Comparison:- In agriculture sector we can observe that Zimbabwe is more dependent on agricultural sector as it is contributing around 15% of GDP whereas it contribute 1. 1% of USA GDP. Some political and natural factors affect adversely on agriculture of Zimbabwe economy recently. U. S. A is using advance technology in agricultural sector to increase their production as the arable land are decreasing day by day for urbanization. GDP of Zimbabwe (purchasing power parity) (Billion $)
Country| 1999| 2000| 2001| 2002| 2003| 2004| 2005| 2006| 2007| 2008| 2009| 2010| Zimbabwe| 26. 5| 28. 2| 28| 27| 24. 03| 24. 37| 25. 69| 25. 36| 2. 34| 1. 93| 4. 16| 5. 46| GDP of USA (purchasing power parity) (Billion $) Country| 1999| 2000| 2001| 2002| 2003| 2004| 2005| 2006| 2007| 2008| 2009| 2010| United States| 9,255| 9,963| 10,082| 10,400| 10,990| 11,750| 12,310| 13,130| 13,780| 14,260| 14,120| 14,660| GDP – real growth rate of Zimbabwe (%) Country| 1999| 2000| 2001| 2002| 2003| 2004| 2005| 2006| 2007| 2008| 2009| 2010| Zimbabwe| 0| -6. 1| -6. 5| -12. 1| -13. 6| -8. | -7. 7| -4. 4| -5. 5| -14. 1| -1. 3| 9| GDP – real growth rate of USA (%) Country| 1999| 2000| 2001| 2002| 2003| 2004| 2005| 2006| 2007| 2008| 2009| 2010| United States| 4. 1| 5| 0. 3| 2. 45| 3. 1| 4. 4| 3. 2| 3. 2| 2| 1. 1| -2. 6| 2. 8| Current Account Balance of Zimbabwe (US$) Country| 2006| 2007| 2008| 2009| 2010| Zimbabwe| 264,600,000| 649,000,000| 659,200,000| 807,500,000| -1,503,000,000| Current Account Balance of USA (US$) | Country| 2006| 2007| 2008| 2009| 2010| United States| 862,300,000,000| 731,200,000,000| 673,300,000,000| 378,400,000,000| -561,000,000,000| | | | Comparison:- Now we are looking on national income accounting, here we can observe that the U. S economy has the largest GDP with around US$15 trillion whereas Zimbabwe has only US$ 5. 46 billion. Economic freedom in US is 3. 2 and in ZM it is only 0. 6. In US economy they have a higher GDP that is around 510 times larger than Zimbabwe. Although U. S. A is facing some economic problems recently but they have a sustainable and strong economic growth. For the US economy they have a very high GNI per capita comparatively it is very lower in Zimbabwe economy.
In US economy they have a sustainable economic growth which is one of the most important macroeconomic goal where as the economy in Zimbabwe is not sustainable. For the fiscal policy in US economy recently suffering in high debt as the government spent a huge amount of money in the economy than it earned. But now they are taking decision to reduce government spending and increase. Zimbabwe’s chart topping inflation reportedly at 24,000 % qualifies the nation as experiencing hyper inflation. Compare that to the next highest inflation of 40% in Burma. Balance of payments Zimbabwe
Zimbabwe’s balance of payments position has deteriorated significantly since 2000 from the combined effects of inadequate export performance and reduced capital inflows. Foreign exchange reserves declined as a result, from US 830m representing three months import cover in 1996 to less than one month’s cover by 2006. The foreign exchange shortages severely constrained the country’s capacity to meet foreign payment obligations and finance critical imports such as drugs, grain, raw materials, fuel and electricity. There has been a significant build up in external payments arrears.
Total foreign payments arrears increased from US$109m at the end of 1999 to US$2. 5bn by the end of 2006. The worsening of the country’s creditworthiness and its risk profile has led to the drying up of sources of external finance. The withdrawal of the multilateral financial institutions from providing balance of payments support to Zimbabwe has also had an effect on some bilateral creditors and donors who have followed suit by either scaling down or suspending disbursements on existing loans to the government and parasternal companies.
Prior to these developments, Zimbabwe had an impeccable record of prompt debt servicing and was highly rated in the international financial markets. The capital account, traditionally a surplus account, has been in deficit since 2000. As such, international investors preferred other countries for investment, thus depriving Zimbabwe of much-needed foreign direct investment. Sanctions have also affected the image of the country through negative perceptions by the international community.
Zimbabwean companies are thus finding it extremely difficult to access lines of credit. As a result of the risk premium, the country’s private companies have been securing offshore funds at prohibitive interest rates. The sanctions have adversely impacted on Foreign Direct Investment (FDI) to Zimbabwe. Investors are shying away and FDI inflows have collapsed from US$444. 3m in 1998 to US$50m in 2006. In addition, Anglo-American companies have been strongly discouraged from investing in Zimbabwe by their home governments. Balance of payment USA
The extent of the imbalances in the global economy and the fact that normal growth patterns will not correct them has been underlined by the latest US balance of payments deficit. The current account deficit reached $225 billion in the fourth quarter of 2005, up from $185. 4 billion in the third. For the year 2005 the deficit was $805 billion, equivalent to 6. 4 percent of gross domestic product. The latest figures show that rather than being closed, the payments gap is widening. This was the seventh year out of the last eight in which the deficit hit a new record.
Total US exports would need to increase by 70 percent to eliminate the payments gap. “This is clearly not going to happen,” Ashworth continued. “Instead it will require big dollar depreciation alongside much weaker domestic demand for imports. ” In other words, the only way the deficit would start to fall is through a major recession in the US. On the one hand, big dollar depreciation” would almost certainly lead to a sharp interest rate rise, as international banks and financial institutions demanded bigger compensation for placing their funds in dollar assets.
And a significant interest rate rise would bring a downturn in the economy. On the other hand, “weaker domestic demand for imports” could be achieved only by a severe contraction of the US economy. This is because the very structure of the US economy, in which imports of goods and services are some 59 percent higher than exports, means that normal economic growth automatically increases the deficit. Investments overseas are higher than the income received by foreigners investing in America. But this positive balance has started to turn around.
Foreign earnings on US assets rose to $132. 3 billion in the fourth quarter, up from $115. 9 billion in the previous three months. Income on overseas assets held by US investors rose to $129. 8 billion, up from $120. 8 billion. This left a deficit of $2. 4 billion on investment income, compared to the $4. 9 billion surplus in the third quarter. National Income of Zimbabwe Adjusted net national income is GNI minus consumption of fixed capital and natural resources depletion 2005 4,731,344,000. 00 2006 4,240,179,000. 0 2007 3,950,755,000. 00 2008 3,287,329,000. 00 2009 4,631,708,000. 00 National income of USA ($ billion) Year| 2006| 2007| 2008| 2009| 2010| National income(billion USD)| 12,031. 2| 12,396. 4| 12,557. 8| 12,225| 12,828. 2| Personal income| 11,268. 1| 11,912. 3| 12,391. 1| 12,174. 9| 12,546. 7| MANUFACTURING INDUSTRY IN ZIMBABWE | | | | | | The manufacturing sector, currently operating at an average of 45% capacity owing to limited capital inflows and high operating costs, last year grew by 2. %, a distant third from agriculture and mining which averaged 30%. In 1998, Zimbabwe was the world’s thirteenth-largest producer of gold, which is the country’s biggest mineral export. Mining contributed 13 percent of GDP in 1997 and generated US$900 million of export revenue in 1995 (amounting to 45 percent of total value of exports), up from US$623 million in the previous year. About 90 percent of mining production is exported. In 1997, gold constituted 14 percent of the value of exports, followed by ferro-alloys at 7 percent, then nickel, and asbestos.
Coal is mined for domestic power generation as well as for export, iron ore to supply the steel industry, and phosphate rock for fertilizer production. Zimbabwe has one of the largest, most diversified, and integrated manufacturing sectors in sub-Saharan Africa, partly due to import substitution policies implemented after the 1965 declaration of independence. The Zimbabwe Steel Corporation (Zisco) is the only full-fledged sub-Saharan Africa steel producer outside South Africa, producing from its Kwekwe plant alone more than 700,000 metric tons annually.
Other major industries include Zimbabwe Alloys, which produces ferro-chrome for export; a number of heavy engineering companies working for the mining industry and railways; Dunlop Zimbabwe which makes tires and tubes; car and truck assembly plants; a large pulp and paper firm; and several plastics companies. The removal of protective measures under the 1990 Enhanced Structural Adjustment Program (ESAP) has caused manufacturing’s output to contract and its share of GDP to decline to about 18 percent in 1997 from around 25 percent in the 1970s.
However, about 40 percent of Zimbabwe’s exports are classified as manufactured products, and the recent decline in the value of the Zimbabwe dollar will serve to make Zimbabwean manufactures more competitive at home and overseas. MANUFACTURING INDUSTRY IN THE UNITES STATES The notion of the slow death of the US manufacturing sector has been an ongoing point of debate since the onset of the recession in 2008. GDP grew by an annualized rate of 1. 8 percent, which was lower than the 2. 0 percent growth that was expected.
Relative to 2010, personal consumption, durable and nondurable goods production, and exports were all down. Prices, however, went up. Food and energy were among the chief culprits for higher prices. The damage the recession visited on the US manufacturing sector is hard to ignore. Manufacturers, between 2008 and 2009 more than $1 trillion bled out of the US manufacturing sector. Nearly 20 percent of America’s manufacturing activity simply vanished. While there has been significant rebound in 2010 and into 2011, manufacturing output is still well below pre-recessionary levels.
Industrial production in the manufacturing sector grew nearly 6 percent in 2010 over 2009 levels, but 2009 was a pretty deep trough. In fact, excluding 2008 and 2009, average annual manufacturing production in 2010 was the worst it’s been since 2002. Differences in manufacturing sector Zimbabwe United States of America 21. 6% of their GDP is coming from manufacturing sector, in 2008 the GDP for went down to an -19. 7% which even made the economy worse. | About 21. 9% of their GDP is coming from manufacturing sector, in 2008 GDP grew by an annualized rate of 1. percent, which was lower than the 2. 0 percent growth that was expected. | US Inflation The inflation rate in United States was last reported at 3. 8 percent in August of 2011. From 1914 until 2010, the average inflation rate in United States was 3. 38 percent reaching an historical high of 23. 70 percent in June of 1920 and a record low of -15. 80 percent in June of 1921. The late-2000s financial crisis (often called the Global Recession, Global Financial Crisis or the Credit Crunch) is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s.
It contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U. S. dollars, and a significant decline in economic activity, leading to a severe global economic recession in 2008. The financial crisis was triggered by a liquidity shortfall in the United States banking system in 2008. The collapse of the U. S. housing bubble, which peaked in 2007, caused the values of securities tied to U. S. real estate pricing to plummet, damaging financial institutions globally. The primary job of the Federal Reserve is to control inflation while avoiding recession.
It primarily does this by tightening or relaxing the money supply, which is the amount of money allowed into the market. Tightening the money supply reduces the risk of inflation, while relaxing controls on the money supply increases the risk of inflation. Hyperinflation in Zimbabwe (2004-2009) ZIMBABWE’S chart topping inflation reportedly at 24,000 % qualifies the nation as experiencing hyper inflation. Zimbabwe began experiencing severe foreign exchange shortages, exacerbated by the difference between the official rate and the black market rate in 2000.
In 2004 a system of auctioning scarce foreign currency for importers was introduced, which temporarily led to a slight reduction in the foreign currency crisis, but by mid-2005 foreign currency shortages were once again chronic. The currency was devalued by the central bank twice, first to 9,000 to the US$, and then to 17,500 to the US$ on 20 July 2005, but at that date it was reported that that was only half the rate available on the black market. Reasons for hyperinflation in Zimbabwe:- * Massive and rapid increase in the amount of money which is not supported by growth in the output of goods and services. An imbalance between the supply and demand for the money (including currency and bank deposits), accompanied by a complete loss of confidence in the money, similar to a bank run. * The enactment of legal tender laws and price controls to prevent discounting the value of paper money relative to gold, silver, hard currency, or commodities, fails to force acceptance of paper money which lacks intrinsic value. Zimbabwe’s hyper-Inflation is a result of the monetary authority irresponsibly borrowing money to pay all its expenses and funding quasi-fiscal activities (which are normally left to Central Government).
Unemployment in Zimbabwe Zimbabwe is facing a rapidly increasing unemployment crisis is evident in the percentage drop of the total population formally employed, which dropped from 18 per cent in 1965 to 11 per cent in 1996. Currently, even the best unemployment estimates suggest that it is not less than around 60 per cent. Thus, the problem of unemployment continues to worsen. The formal sector employment growth has shown a declining trend since 1980, with a growth of 2. 7% between 1981 and 1990, 0. 24% between 1990 and 1996, and a decline of –0. 17% between 1998-2002.
Formal employment has progressively declined since 1999 in line with economic decline. Two-thirds of the people employed in Zimbabwe are below the age of 25 and at the same time the highest concentration of unemployment of 40. 7% of the total unemployed is between the ages of 20-24 years which reflects high unemployment among the youths. In cumulative terms, 81% of the unemployed people are the youths aged between 15-29 years of age. Unemployment is further worsened by the fact that the formal economy only absorbs 20 000-30 000 from the 200 000-300 000 school-leavers per year.
Unemployment is Zimbabwe has been caused by quite a number of factors. Most of these are mainly because of political reasons. The following are some of the factors that are causing unemployment: * Sluggish investment and growth * Weak export performance * Poor macroeconomic policy environment * The investment/business climate is unfriendly * Population growth rate/age structure * The growth path – reliance on primary products – is suboptimal * Geography (proximity to South Africa, no direct access to the sea) * Tertiary Education Data of unemployment in Zimbabwe Country| 1999| 2000| 2001| 2002| 2005| 2009|
Zimbabwe| 50| 50| 60| 70| 80| 95| . Unemployment in U. S The unemployment rate in the United States was last reported at 9. 7 percent in August of 2011. From 1948 until 2010 the United States’ Unemployment Rate averaged 5. 70 percent reaching an historical high of 10. 80 percent in November of 1982 and a record low of 2. 50 percent in May of 1953. The labor force is defined as the number of people employed plus the number unemployed but seeking work. The non labor force includes those who are not looking for work, those who are institutionalized and those serving in the military.
This page includes: United States Unemployment Rate chart, historical data and news. Loading Chart. Please Wait. Data of unemployment in USA Country| 1999| 2000| 2002| 2003| 2004| 2005| 2006| 2007| 2008| 2009| 2010| United States| 4. 2| 4| 5. 8| 6| 5. 5| 5. 1| 4. 8| 4. 6| 7. 2| 9. 3| 9. 7| | There are approximately 154. 4 million employed individuals in the US. Government is the largest employment sector with 22 million. Small businesses are the largest employer in the country representing 53% of US workers. The second largest share of employment belongs to large businesses, which employ a total of 38% of the US workforce.
A total of 91% of Americans are employed by the private sector. Government accounts for 8% of all US workers. Over 99% of all employing organizations in the US are small businesses. The 30 million small businesses in the USA account for 64% of net new jobs (jobs created minus jobs lost). 70% of jobs created in the last decade were by small business. Differences in the unemployment rate for Zimbabwe and USA ZIMBABAWE USA The formal sector employment growth has shown a declining trend since 1980, with a growth of 2. 7% between 1981 and 1990, 0. 4% between 1990- 1996, and a decline of –0. 17% between 1998 and 2002. Formal employment has progressively declined since 1999 in line with economic decline. Two-thirds of the people employed in Zimbabwe are below the age of 25 and at the same time the highest concentration of unemployment of 40. 7% of the total unemployed is between the ages of 20-24 years which reflects high unemployment among the youths. | The number of unemployed persons, at 14. 0 million, was essentially unchanged in August, and the unemployment rate held at 9. 1 percentThe median household income in the US as of 2008 is $52,029. 84,000 working people in the US have two full-time jobs and 7. 6 million have a part-time job in addition to their full-time employment| Main trade partners of Zimbabwe Main export partners: South Africa 36. 4%, (China, Japan, Zambia) 7. 3% each, Mozambique 4. 7%, (US, Botswana, Italy, Germany, Netherlands) 3. 6% each (2006) Imports USD $2. 059 billion (2005 est. ) f. o. b. Export goods: Cotton, tobacco, gold, ferroalloys, textiles/clothing. Main import partners: South Africa 43%, China 4. 6%, Botswana 3. 3% (2005) Public finances. Import goods: machinery and transport equipment, other manufactures, chemicals, fuels.
Main trade partners of USA Export goods:- Agricultural products (soybeans, fruit, corn) 9. 2%, industrial supplies (organic chemicals) 26. 8%, capital goods (transistors, aircraft, motor vehicle parts, computers, telecommunications equipment) 49. 0%, consumer goods (automobiles, medicines) 15. 0% (2009). Export partners:- Canada, 13. 2%; Mexico, 8. 3%; China, 4. 3%; Japan, 3. 3%. (2009). Import Goods:- agricultural products 4. 9%, industrial supplies 32. 9% (crude oil 8. 2%), capital goods 30. 4% (computers, telecommunications equipment, motor vehicle parts, office machines, electric power machinery), consumer goods 31. % (automobiles, clothing, medicines, furniture, toys) (2009). Import partners:-Canada, 13. 2%; Mexico, 8. 3%; China, 4. 3%; Japan, 3. 3%. (2009) * | Service sector Service sector is the main source of GDP of USA. About 76. 9% of their GDP is coming from this sector. (2009 est. ). It is also the main source of GDP of Zimbabwe. From this sector the economy is earning 61. 6% of their GDP (2007). Human capital Labor force in USA:- 154. 5 million (Includes unemployed) (2009 est. ). Labor force by occupation:- farming, forestry, and fishing: 0. 7% manufacturing, extraction, transportation, and crafts: 20. % managerial, professional, and technical: 37. 3% sales and office: 24. 2% other services: 17. 6%. Labor force in Zimbabwe: – 4. 23 million (2004 est. ). Labor force: by occupation Agriculture: 60%, Services: 9%, Wholesale, Retail, Hotels, Restaurants: ~4%, Manufacturing: 4%, Mining: 3% (2003) Factors responsible for the development of an economy * Political factors: * Economic factors: * The level of inflation should be low. * Unemployment should be decreased. * The level of economic growth should be sustainable. * And international trade and investment should also be sustainable. * Social factors: Technological factors: * Environmental factors: Conclusion From our research we can observe the following reasons that are affecting the economy of Zimbabwe adversely. 1. ) Zimbabwe has the “highest unemployment rate in the world”. For the year 2019, 90% of Zimbabwe’s population is unemployed. 2. ) This country has the “lowest GDP – Gross Domestic Products (PPP) per capita in the world”, 200 Int. $. 3. ) Zimbabwe has had the “Worst GDP decline in the world”, -14. 10% according to CIA World Fact book in 2008. 4. ) It has the “lowest environmental happiness in the world” according to Happy Planet Index.
It had a score of 16. 6 in 2009. 5. ) Zimbabwe had the “world’s highest annual inflation rate”, 11,200,000. 00% in 2008. 6. ) This African nation had the “highest central bank interest rate in the world”, 975. 00% in 2007. 7. ) Zimbabwe had the “highest commercial bank prime lending rate in the world”, 578. 96% in 2007. 8. ) This African country is the “world’s highest public debt as percentage of GDP’, 241. 20% in 2008. 9. ) Zimbabwe has the “worst industrial production decline in the world’, -14. 70% in 2008 according to CIA World Fact book. 10. This country, which is obviously not a good country to live in or to visit, has the “lowest level of innovation in the world” according to Global Innovation Index, it has garnered a score of -1. 63 in 2009. 11. ) Bad economic governance perpetrated by President Mugabe and his team. Excessive government spending and a series of wrong policy choices, such as price controls and fixed exchange rates, have crippled the productive sectors. 12. ) The failure to uphold the rule of law created chaos and uncertainty, which eroded business confidence, led to the misallocation of resources and depressed economic output. 13. Illiteracy, Zimbabwe has the height % of illiteracy in southern Africa that is around 90%. On the other hand, since the 1960s, the United States economy absorbed savings from the rest of the world. The phenomenon is subject to discussion among economists. The US is by far the most heavily invested-into country in the world, with foreign investments made in the US measuring almost $2. 4 trillion, which is more than twice that of any other country. The US is also by far the largest investor in the world, with US investments in foreign countries totaling over $3. 3 trillion, which is almost twice that of any other country.
Like other developed countries, the United States faces retiring baby boomers that have already begun withdrawing money from Social Security; however, the American population is young and growing when compared to Europe or Japan. The United States public debt is in excess of $14 trillion and continues to grow at a rate of about $5. 48 billion each day by direct calculation between December 31, 2010 and July 31, 2011. Total public and private debt was $50. 2 trillion at the end of the first quarter of 2010, or 3. 5 times GDP. Domestic financial assets totaled $131 trillion and domestic financial liabilities totaled $106 trillion.
Due in part to the amount of both public and private investment, the economy of the United States is regarded as a type of mixed economy. The American labor market has attracted immigrants from all over the world and in 2009 ranked 16th in terms of net migration rate. The United States is ranked fourth, down from first in 2008–2009 due to the economic crisis, in the Global Competitiveness Report. The country is one of the world’s largest and most influential financial markets, home to major stock and commodities exchanges like NASDAQ, NYSE, AMEX, CME, and PHLX.
So, my opinion for this two countries economic status, the economy of the United States has maintained a stable overall GDP growth rate, a low unemployment rate, and high levels of research and capital investment. It has been the world’s largest national economy since the 1870s though recently they are facing some economical problems. Mineral exports, agriculture, and tourism are the main foreign currency earners of Zimbabwe. Traditionally, the Zimbabwean economic profile used to be one of the strongest in Africa, but there are too many factors that have become the obstacle on their way of progress.
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