Socio-cultural factors Choose four social indicators. Now that you have a little more experience with the research, go ahead and find ones that interest you. Make sure at least two are quantitative and can be plotted in a graph (similar to the economic wo

Module 2: Political and Economic Factors

TianMing Guo

IBM 4141

Prof. Ong

Module 2: Political and Economic Factors

Economic Data

Figure 1: Comparison of GDP per capita (Current US dollar value) trends in the four countries (Data retrieved from The World Bank, 2020a)

Figure 2: Comparison of GDP deflator percentages of the four countriesfrom 2008 to 2017 (Data retrieved from The World Bank, 2020b)

Figure 3: Presentation of Unemployment rates from 2010 to 2019 in the four countries (Data from Trading Economics, 2020a)

Figure 4: Comparison of Consumer Price Index (CPI) changes since 2010 (Data obtained from Trading Economics, 2020b)

In the economic data analysis, in addition to GDP poer capita, I included data on inflation as shown by the GDP deflator rates, unemployment rates, and consumer price index. GDP per capita is an indicator of the health of the economy through an analysis of the spending the people are engaging in (Mankiw, 2016). Therefore, it is crucial in determining whether the economy is growing or in a recession. Inflation, on the other hand, highlights the price stability of goods which is determined by supply and demand among other factors. Rates of inflation determine the stability of the economy against shocks and hence it is a crucial trend to review. Additionally, unemployment rates also reflect the health of the economy in providing jobs for the people. High unemployment rates may show that the economy is struggling and welfare of the people is also low. I also utilized CPI trends as a comparator of economic health. CPI is the weighted price of goods in a consumer’s basket including essentials such as food commodities, healthcare, and transportation. It reflects the cost of living in an economy and hence shows the effects of economic times on the people (Mankiw, 2016). Changes in CPI can determine how well the economy is working for the people. Therefore, it was included in this data analysis as a means of determining cost of living for people in the four countries under comparison.

The data analysis presented in the four charts presents trends between 2008 and 2019 for the different countries’ economic indicators. Some interesting trends can be observed from the presentation. First, there is a consistently huge difference between GDP per capita for Finland and United States when compared to India and Botswana. This difference delineates the label for developed and developing countries. Although these terms are relative, they seem to explain the gap as observed in figure 1 above. Secondly, while India and Botswana seem to also maintain comparatively high levels of inflation, Botswana has large inflation and defaltion rates hence indicating highly unstable prices (figure 2). The trends delineating India and Botswana from Finland and U.S are also observed in figure 4. However, I was surprised to find that despite poor indicator ranks in many categories, India has the lowest unemployment rates among the four countries. This is a surprising trend which shows that among the four, India has managed to maintain very low unemployment rates over the ten years.

Political Data

Country	Political Risk Index	Political Stability and Absence of Violence/Terrorism	Reasons
USA	80	61.90	President Trump’s policies and sentiments have heightened divisions and reduced policy certainty hence reducing political stability even amidst his impeachment inquiry (Friedman, 2019).
Botswana	72.5	83.33	Botswana has been ranked one of Africa’s most stable countries with peaceful elections. However, overdependence on the diamond industry threatens social stability in the long run (The World Bank, 2019).
Finland	78.8	81.90	Finland is generally stable due to its strength in preventing security threats and maintaining a stable government. The forced resignation of prime minister in 2019 presents doubt in the political stability of the country’s leadership (The World Bank, 2019).
India	67.7 (Marsh, 2020*)	14.70 (The World Bank, 2019*)	Although India has a stable government, the emphasis on Hindu nationalism threatens democracy and political stability (Abi-Habib, 2020). Internal and regional conflicts involving anti-Muslim terror are to explain for the low score on absence of violence and terrorism.

*Note: Reference captures all data in the column it has been placed in.

While comparing the political factors of these countries, I became aware of the main challenges facing United States and India as violence and terrorism. Contrary to popular thought, some African countries like Botswana have more peace and lower threat of violence than developed countries like America. In India, I was surprised to realize the low rank of political stability. However, the ranks reflected in this comparison are in line with findings in the news. For instance, the U.S has recently lost on its political stability rank due to the acts of violence and indecision of government policy. India is also experiencing similar problems but on a worse scale due to the level of violence. This data has been interesting in outlining the effects of various political and economic factors on the countries. Going forward, I would like to know more about India’s unemployment rates. Despite the high rates of poverty in the country, records show that unemployment rates are low. I would like to learn more about this contradiction and the credibility of data on the same.

References

Abi-Habib, M. (2020, March 5). Violence in India Threatens Its Global Ambitions. New York Times. Retrieved from https://www.nytimes.com/2020/03/05/world/asia/india-violence-diplomacy.html

Friedman, U. (2019, Dec. 16). America Is Making the World More Unstable. The Atlantic. Retrieved from https://www.theatlantic.com/politics/archive/2019/12/donald-trump-global-instability-cfr-survey/603631/

Mankiw, N. G. (2016). Principles of economics. New York, NY: Cengage Learning.

Marsh. (2020). Political Risk Map 2020: Trade Tensions Threaten Political Stability. Retrieved from https://www.marsh.com/us/insights/research/political-risk-map-2020.html

The World Bank. (2019, Sept. 20). The worldwide governance indicators, 2019 update. Retrieved from https://info.worldbank.org/governance/wgi/Home/Reports

The World Bank. (2020a). GDP per capita (current US$). Retrieved from https://data.worldbank.org/indicator/NY.GDP.PCAP.CD

The World Bank. (2020b). Inflation, GDP deflator (annual %). Retrieved from https://data.worldbank.org/indicator/NY.GDP.DEFL.KD.ZG

Trading Economics. (2020a). Unemployment rate. Retrieved from https://tradingeconomics.com/botswana/unemployment-rate

Trading Economics. (2020b). Consumer price index. Retrieved from https://tradingeconomics.com/botswana/consumer-price-index-cpi