Category Archives: General Economy

Advancing renewable resources ( from Wikipedia )

Renewable energy is generally defined as energy that comes from resources which are naturally replenished on a human timescale such as sunlight,wind, rain, tides, waves and geothermal heat.[2] Renewable energy replaces conventional fuels in four distinct areas:electricity generation, hot water/space heating, motor fuels, and rural (off-grid)energy services. Direct geothermal for heating is also growing rapidly. Wind power is growing 30 % annually in the world. [3]Based on REN21’s 2014 report, renewables contributed 19 percent to our energy consumption and 22 percent to our electricity generation in 2012 and 2013, respectively. Some countries get most of their power from renewables, including Iceland (100%), Norway (98%), Brazil (86%), Austria (62%), New Zealand (65%), and Sweden (54%). Both, modern renewables, such as hydro, wind, solar and biofuels, as well as traditional biomass, contributed in about equal parts to the global energy supply. Worldwide investments in renewable technologies amounted to more than US$ 214 billion in 2013, with countries like China and the United States heavily investing in wind, hydro, solar and biofuels. Renewablebiofuels have contributed to a significant decline in oil consumption in the United States since 2006.[13] The 93 billion liters of biofuels produced worldwide in 2009 displaced the equivalent of an estimated 68 billion liters of gasoline, equal to about 5% of world gasoline production. [4]Renewable energy resources exist over wide geographical areas, in contrast to other energy sources, which are concentrated in a limited number of countries. Rapid deployment of renewable energy and energy efficiency is resulting in significant energy security, climate change mitigation, and economic benefits.[5] In international public opinion surveys there is strong support for promoting renewable sources such as solar power and wind power.[6] At the national level, at least 30 nations around the world already have renewable energy contributing more than 20 percent of energy supply. National renewable energy markets are projected to continue to grow strongly in the coming decade and beyond.[7]While many renewable energy projects are large-scale, renewable technologies are also suited to rural and remote areas and developing countries, where energy is often crucial in human development.[8] United Nations’ Secretary-General Ban Ki-moon has said that renewable energy has the ability to lift the poorest nations to new levels of prosperity.

( This quotation is taken from Wikipedia . )

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What makes a happy society? – Forum:Blog Forum:Blog | The World Economic Forum

https://forumblog.org/2014/11/makes-happy-society/?utm_content=buffer849e1&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

If you read this article , they are right that money and materialistic things alone do not not guarantee social happiness.  There are other factors like social welfare and social cohesion that make people happier. Social welfare like health insurance whether private or public , unemployment insurance and retirement transfers when people retire can increase level of happiness and trust in their countries  , so that employees will feel , happier, more productive and more secure. SOCIAL COHESION is the feeling of belonging to one’s country or
community. A person feeling love and cared about in his country or community will be happier and more profuctive in his social life and work as well.
     With respect to social welfare , Scandinavian countries like Sweden , Finland,  Denmark and Norway rank first in the world in terms of social welfare. They are right that health care and education give people more freedom and happiness , as they can help improve financial situation and quality of life. Educated and healthy people will have a better way of living including more freedom to choose to live the way they want. Many factors can contribute to happiness socially. Maybe we can achieve more happiness in the world due to improved standards of living worldwide even in developing countries in Africa, Latin America ,South and East Asia. We hope and wait to see a happier world to live in as time passes by.

The dawn of the 21st century

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      Some   oil and gas exporting countries , especially in this scientifically and technologically progressing world, should make economic and structural reforms  if they are to continue with a healthy and prosperous economy.
Hope that necessary steps of gradual reforms can be taken in these countries that can diminish reliance on Petroleum to generate income and make economic prosperity.  It is better for some countries that spend on subsidies much to reduce subsidies step by step and spend instead more on education and research and development to stimulate sustainable development. These countries should also invest in infrastructure to improve industry , agriculture, services and commerce. They ought to reform their educational systems .To diversify  and boost their economies , reseach and development ought to be more spent on and given more attention . For sure , they should watch out and suprvise how funds are used and how projects are implemented to get the best return out of them .All countries have certain potential capabilities whether used or not yet to further develop and evolve.

Because of the continuous development in technology used in both extracting oil and generating energy from renewable resources, prices of oil are dropping.  In USA , for example , due to scientific , technological and technical improvement , the production of shale oil and gas has increased a lot per day from 4 million barrels per day in 2005 to 8.7 million barrels per day in 2014. Figures of shale oil production can be further developed and raised. Consumption of oil in US has fallen since that time due to electricity that can be more cheaply generated from shale gas that can be increasingly extracted, produced and  reserved. Moreover, energy is being increasingly more produced from renewable  resources like hydroelectric,  wind, geothermal and solar energy in the US and the whole world which might push prices of oil down in the future.   Cost of production from renewable green resources of energy is being lowered year after year according to Wikipedia. Countries like USA, China and Germany are undergoing termendous development in terms of technology of renewable alternative energy. Moreover, 214 billion $ have been spent on research and development of green renewable energy resources in the world in 2013. In 2012 and 2013 , an estimated 19 % of energy consumed worldwide has come from renewable resources according to some sources from Wikipedia and are projected to steadily take off and multiply in the future. Hope that all countries in the world would benefit from such green technologies and other forms of technology.
Falling prices of oil in the 1980s was one primary reason why the Soviet Union has collapsed in the end of the 20th century.
However, lowering the prices of oil maybe has also political reasons that some countries want other oil exporting Countries like Russia and Iran to change their political directions , but technology can make a great shift in the consumption and production factors of oil and gas. We are in an era where technology and science is developing faster than before…   In the long run , we are going to have sustainable development, abundance of resources and greener economy improving our environment on earth partly due to alternative green energy which reduces a lot the use of oil just the way the discovery of vast resources of petroleum in the 20th century reduced consumption of coal a lot . Hope that the world would be more dependent on green energy resources giving sustainable development and clean environment in the coming years.

Blessings to our world…

Reasons of German economic success

      One of the programs that contribute to German success at being an economic hub in Europe
( especially in highly qualified industrial products ) is the combination or merge between theoretical studies and practical experiences of sudents in highschools before graduation.  They send students at the age of 15 or to 16 to practice what they are learning and get a real life experience and more into depth knowledge of their future career that they are studying or willing to study. For example, a student willing to study mechanical when at highschool mechanical  engineering is sent to a factory to work to get to know if he or she is fit to that job or not. If interested, he or she can receive pre -high school training before even going to college or university.In that manner, students will become more skilled at what they do and improve and increase German human capital which is important to sustainable development. This tradition goes back to more than a century ago in Germany, which inspires many other countries to adopt a similar training program for students. For sure, such a program has to be modified to suit that particular and specific needs and social customs  of each country.

      Germany  can be a reference and an inspiring example for industrial and overall economic success because
German products like cars, chemicals, electronics and utilities are well known for their high quality and greatly demanded overseas. Germany is the second largest world exporter of products and services after China.Many are the famous German companies operating globally like BMW ,Siemens and Faber Castle as only few examples out of many others. Moreover,  the German economy is the largest in the Europe with a GDP of 3,500 billion dollars recently, and greatest guarantee for the unified European currency called the Euro that was adopted  in 1999 for the first time. The European central Bank ( which enjoys relative independence, prints money and controls the financial issues of the EU ) is located in Germany as a sign of economic power of Germany in Eurpean Union and eventually in the world.

Another term that enhances German economic success is that almost 70 billion $ or 2.3 % of all German Gross domestic product
have been spent on research and development , which has been the fourth largest sum of funds in the world after USA, China and Japan in 2011 according to Wikipedia. German labor is innovative in general because it adopts and innovates new technologies.In addition, as far as 11% of German labor works in high technology , which is one the highest in the world according to some sources. This contributes to scientific , technological and thus economic development that attracts many highly skilled labor and highly educated people to stay and work in Germany which benefits from them in many ways.Due to well advanced infrastructure and contiuous structural reforms, this country creates a lot of job opportunities ,so many jobs have been created at all years even in 2008 & 2009. German unemployment rate was 5 % only in October 2014 which is one of the least unemployment rates in the world. Many reforms or corrective steps in the labor markets have been taken by Germany more than 10 years ago.Moreover,Germany like many developed countries has a unemployment ensurance that guarantees at least minimum standard of living. Generally speaking , many reasons make Germany a very brilliant star in the European Union and an economic heaven in the European and global atmosphere.

Reasons behind falling oil prices

    

      Globally, the price of petroleum is continously moving down and is moslty expected to slide down in a progressive trend in the future whether in short term, medium or long term due to several reasons. One of the reasons is the expanding supply of non conventional shale oil that is newly extracted and produced in North America, whether Canada or USA. In detail, one million barrel  per day is the increase  of the quantity of oil produced during one year from 2013 till 2014 in the United States of America. In USA, Supply of oil has increased by 50 % since 2008 till 2014. According to Forbes magazine, Mexican president has allowed constitutional reforms that allow private and foreign companies to invest and extract from crude oil fields in Mexico attracting ,in that manner, new technologies that have a potential to boost oil and gas production in Mexico that has around 60 billion barrels of oil reserves whether shale oil or conventional oil. In 2014 , oil producing countries especially OPEC members refused to reduce the amount of oil produced daily ( unlike the year 2008 when they reduced the amount produced when oil prices went down) , so this caused oil prices to drop down further.

Another cause
for the drop of oil prices is the widening new discovery of conventional oil in some countries like Brasil, Senegal and others. Moreover, there is also development and advancement in technology used to extract Petroleum, so perpetual growth of the quantity and percentage  of oil extracted from all fields and countries. In addition, there is more developed technology that can save energy consumed and so consequently oil consumed with time. As a vivid and clear examples are electric cars and petro-electric hybrid cars.
( Although hybrid cars has constituted  only 3  percent of all cars on the road in 2008 & 2009, their future outlook seem much better than before.) Another factor that can affect the supply and demand factors  on Petroleum globally is that alternative renewable energy sources are experiencing continuous forward development and improvement, because of accumulated experiences, technical know-how development and international itensive broadened research & development. The production of hydroelectric energy is escalating
Upward by 3 % each year according to a source from Wikipedia. Moreover,  the cost of producing geothermal energy ( from underground hear in the earth ) has diminshed by  25 % in the last 2 decades , which encourages further research, development and production in the coming future. Some countries like USA, Australia and Iceland currently use geothermal energy generated from hot springs and deep underground heat to produce electricity  warm up houses  in the winter. The cost of production of solar cells is reduced termendously these years
( 50percent in 3 years ) , which makes it more competitive and profitable to produce energy like heating water and generating electricity from solar sources available abundantly everywhere on earth. Some companies are using solar energy to try to produce crude oil from carbon dioxide and water in a process similar to photosynthesis (used by plants which absorb sunlight to transform carbon dioxide and water into sugar and oxygen. This is another potential renewable source of energy.) Electricity produced from renewable  sources like hydroelectric ( number one source in renewable energy ), wind, solar ,geothermal and bio fuels is projected  to grow gradually worldwide. In 2012 and 2013 , it was estimated that 19 percent of all energy consumed worldwide  and 22 percent of electricity generated globally has come from renewable energy sources mentioned above. As a sample of countries in 2009 , Canada and Norway produced 60 % and 93 % of their electricity from renewable resources especially hydroelectric because their lands are rich in water. In addition , worldwide overall investments in renewable technologies in 2013 has amounted almost 214 billion dollars in 2013 according to Wikipedia. Renewable energy technologies and projects are really expected to grow globally benefiting all countries on the planet enviromentally, ecomomically and socially. Will this progress make electricity supply available to all individuals on earth ? Will these renewable alternative energies be a true substitute source of energy for oil in the future? 

   It can benefit oil exporting countries as well because oil becomes a cheaper raw material and primary material for industrial products especially petrochemical industry and other kinds of industries that will boom and flourish.  In conclusion,renewable resources of energy that are developing can benefit all nations giving us cleaner environment and a more sustainable economic growth helping us live in a happier , more joyful and peaceful world.

A high value of domestic credit to private sector (% of GDP) is a sign of a strong economy!

One of the indications or signs (but not the only one), of economic development and prosperity is the development and increasing share (role) of private sector in the national economy or GDP of a certain country. Referring to data from the world Bank, an economic measure of so called domestic credit to private sector ( % to GDP ) means that financial resources like loans and non equity securities are provided to the private sector by financial institutions like banks and other financial corporations all measured as percentages with respect to GDP ( or national size of economy ) . The higher this measure is, the higher financial resources or financing is to private sector in a country and so the greater opportunity and space for the private sector to develop and grow. The better the private sector gets and bigger role it has in national economy , the better is generally the health and development of the economy of this country is. To illustrate taking examples from statistics done by World Bank, China in 2013 has the ratio of domestic credit to private sector / GDP at a rate of 133.7 % . This explains why China has succeeded in high economic growth because it allowed a space and opportunity for private sector to get financing and as a result emerge and grow leading to a mixed economy instead of just communism. Another examples in 2013, Australia, USA , and UK have indications of 122.4% , 183.6 % and 176.8 % respectively , which is one measure that these countries have well developed and advanced economies because private companies have great financing as US companies for example have 13,000 billion $ of loans . In contrast, with all respect to developing countries like Algeria in North Africa and Argentina in Latin America have this ratio of 14.5 % and 14.6 % respectively ( although both rich in minerals and natural resources like oil, metals and agricultural products) means that private sector have less role.( These countries in one way or another have recently military regimes with governmental dominance for some decades). In general, this is a one important ( but not the only one ) indicator or measure of economic degree of development and success because it shows the well being and goodness of private sector working hand in hand with public or governmental sector especially nowadays.

Argentina is the future of USA… no… not really!

I was browsing through macro economic material through the web and I came across this interesting video where the author argues that the future of USA ‘s economy is as gloomy as that of Argentina’s economy in our current days, please watch the video and then read my comment below.

 

Here is what I think and here is why I disagree with the video:

USA is different than Argentina at least in the few coming decades. First of all , US has much higher average income (a good way to reflect on personal income is by comparing the GDP per capita of both countries) and much larger economic size than Argentina (GDP Purchasing Power Parity). The US is the third largest exporter of goods and services in the world after Germany and China. Meanwhile the USA has More than 20,000 BILLION $ Invested world wide in stocks and financial derivatives in the world. Let us not forget, US $ is still most used currency in the world trade and the reserve currency in the world and so on.

United States has the highest research and development related spending in the world;  International talents are continuously seeking migration to USA and do finally find their way to reputable universities and big companies where most of the Research and Development usually takes place. The author of the video has a point that in years things will change because there are new emerging powers like China ,Turkey, India , South Korea and Brasil. Maybe in the coming 50 years , these rising economies will become super powers to surpass USA, the same way USA became a superpower stronger than France and Britain. Even then, USA will still have high economic relevance and competitiveness, the same way France and Britain are still of great importance to world economy.