Economic growth, debt and inequality

GDP (PPP) (US$) Source: Statistics Canada

What causes economic growth? Companies’ increased productivity Investment growth Increased international trade (new markets) Improved production techniques Population growth (more labour, more consumer demand) Increased consumer purchasing power Education and qualification of the labour force

Source: http://trueeconomics. blogspot

Uneven growth Not all countries experience economic growth equally. After WWII, North America, Western Europe and Japan experienced strong growth. Since the 1990s, China, Russia, Brazil, India and Mexico have been gaining influence in the world. Source: http://www.gac-china.com/China_Insight/China_Facts/China_Major_Industries/china_major_industries.html

Disparity in the World

Developed Countries Countries with a HDI of at least 0.8 GDP per capita of over US $ 8000 Includes most of Europe, North America, East Asia and Oceania

Developing Countries Countries with a HDI greater than 0.5 but less than 0.8 Includes many countries in the southern hemisphere. Many developing countries are involved in manufacturing or production.

Least-developed Countries Countries with a HDI lower than 0.5. GDP per capita is under US $ 900. Many LCDs are in Sub-Saharan Africa.

DEBT Despite their best efforts, states do end up in debt. Canada’s foreign debt: 1.4 trillion US $ (2016) State spending can lead to budget deficits which means the government is in debt.

DEBT Infrastructure costs, public services, military expenses, etc. = $$$$ States can get loans from IMF, World Bank, other States, financial institutions, and citizens. Source: http://media.salon.com/2012/06/money.jpg

The effects of debt on a State Reconsideration of social programs (ex: cutting spending on education) Privatization (ex: private healthcare clinics) Bigger gap between rich and poor Greater economic dependence on foreign aid

Which countries have the highest debts? Source: http://www.worldpoliticaleconomy.com/site/wp-content/uploads/Debt-levels-copared-600x423.jpg

Debt crisis in the European Union

Inequalities Even within countries, wealth isn’t distributed equally. Greater inequalities in developing countries than in industrialized countries. In emerging economies, people in cities generally earn more than people in rural areas.

Annual rural income by province in China (2011) Where are the wealthier regions in China?

Gini index It is the indicator of income inequality in how income is distributed. Goes from 0 (perfect equality) to 100 (perfect inequality)