Burlington
High School
Burlington, Kansas
Teacher: Devra Parker
Economic
Freedom
By
Jessica Standley
12th grade
Economic freedom means, to me, the ability to make and spend money freely. I live in a country, the United States, where all people take this ability for granted. Now, from my recent focus on other countries economic status, I have learned there are many places that do not have the money like we, as Americans, do. Different factors come together to make a nation economically free. It is interesting to compare the economic freedom of the countries of Sweden, Mexico, Honduras, and Venezuela.
My first country of topic is Sweden, which is considered to be in the top 15 countries to be considered “free.” Sweden is considered to be free because it is a very industrialized country. Its agriculture has massive forests, rich iron ore deposits, and hydroelectric power, which are the natural resources. Through technology and organization, this has made it possible for Sweden to become a leader as a producing and exporting nation.
In comparison with other European countries, Sweden kept an unemployment rate between two and five percent through the 1980’s; this was accompanied by elevated and escalating inflation. In the early 1990’s, the rate of unemployment rose to more than eight percent. In 1996 a goal to reduce the amount of unemployment rate to four percent by the year of 2000. During 2000 the employment rate rose by around 90,000 people, which was the greatest increase in over 40 years. This goal was met by Fall of 2000. Also, in that same autumn the government set its new target. This was to get around 80 percent of the working age population to have regular jobs by 2004. So far, they are up to around 76 percent. Reaching this target was difficult because so many people were on disability pensions, people listed as chronically ill, and many were students. Many people think that meeting this target may come at a cost in the way of higher rates of wage increases.
Next is the country of Mexico, which is a country that is not as lucky to be free on the economic side of the factor. Mexico has a free market economy, which is a mix of modern and outmoded industry and agriculture which is dominated by a private sector. Since 1982 the number of state-owned enterprises in Mexico fell from more than 1,000 to less than 200 in 1999. Private consumption became the leading driver of growth, which was accompanied by higher employment and higher wages. Back in 2000, the government was trying to start a conservative economic policy to avoid an end-of-term economic disaster, but its still project an economic growth rate of up to 4.5% due to the sturdy U.S. economy and high oil prices.
In Latin America, Honduras is one of the poorest countries. In the 1960’s it was the lowest nation of the region. Agriculture is the base of the economy, which accounts for 22 percent of its gross domestic product as of 1999. One of the leading exports is coffee for 340 million dollars, which is around 22 percent of the total Honduran export revenues. Honduras has a widespread amount of mineral resources, forest, and marine, although a lot of slash and burn agricultural methods destroy Honduran forests. Unemployment is estimated to be around four percent, although underemployment is a lot higher. At the turn of the century in 2000, the economy of Honduras grew 4.8 percent, regaining strength from the hurricane Mitch, which induced recession (-1.9 percent) in 1999. By 2001 the economy was expected to grow four to five percent due to rebuilding projects which were funded by foreign funds. The Lempira (currency) has moderately devalued due to inflation and payments from Hondurans living abroad, mostly in the United States, which rose around 28 percent to 410 million dollars in 2000.
Of all the countries in the world Venezuela is one of the last ones on the “rich and free” list. The economy in this country is horrible; all they pretty much have to rely on is the oil. Consequently, they cannot really depend on this because the supply has to end or get low sometime. The economy of Venezuela is based on oil, even though a sector of manufacturing consumer goods still exists. Due to the sturdy export of oil, the positive sign of the economy has been a balance of payments surplus. Higher oil prices during the second half in 1999 took pressure off the budget and money. The petroleum sector dominates the economy, accounting for about one third of GDP, which are approximately around 80 percent of export earnings and over half of government in service revenues. In Venezuela, the economy grew by a stunning 16.8 percent in 2004 compared to the previous year, but this was led by the non-petroleum sector.
The percent of the poor and really poor in the Venezuelan population increased from 39.4 percent in 1995 to an astonishing 48.1 in 2002. This number keeps going up due to lower wages given to employees by their employers and so many people not having jobs.
I am and always will be proud to live in the United States of America because I think it is economically stable. After studying the four countries of Sweden, Mexico, Honduras, and Venezuela, I have learned that my theory is true compared to most other countries.
Because of Sweden’s industrialized economy, it has more freedom than a nation like Venezuela, which can only tout oil as its industry. Having jobs for citizens is a huge factor in making a nation like Sweden economically free; it must be frustrating to live in Honduras or Venezuela. People must understand what it takes to make a nation stable. Economy is vital and important and nations like Sweden and Mexico are showing that.
Answers To Questions Prompted By The Required Reading
The
Benefits of Free Trade
Q1- Be the Devil's Advocate and counter Benjamin Franklin's statement that
"No nation was ever ruined by trade."
When I read Benjamin Franklin’s statement “No nation was ever ruined with trade” I think about how he is wrong because there are many countries that have been ruined. For example the United States, I say this because the United States is so far into debt because it trades out and doesn’t make the money for its items of ‘foreign’ trade.
Q2- Name five countries whose ranking surprised you.
The five countries whose rankings surprised me were Luxembourg, Bahrain, Botswana, Trinidad, and Tobago.
Q3- Write one sentence each to explain why you chose the countries you did in Q2.
The reason why I choose these countries is because they are so high on the high ranked groups, and I have never heard of them and did not know where they were.
Q4- the USA was not ranked first in any of the years exhibited online in the Annual Report nor in the 2005 Index. List the twelve countries that ranked higher on the Index and the countries that out ranked the USA in the eight Annual Reports.
The twelve countries which are ranked higher than the United States are Hong Kong, Singapore, Luxembourg, Estonia, Ireland, New Zealand, United Kingdom, Denmark, Iceland, Australia, Chile, and Switzerland.
Q5- The Index uses 50 variables in 10 categories. The Report shows 21 variables in 5 categories and lists 24 sub-variables in its online charts.
As a class, we investigated the ten categories of the index. However, we could not gather enough information to answer this question.