economics and finance (Essay Sample)

FRANCE AND EGYPT-COMPARATIVE ECONOMIC GROWTH By Student’s Name Code+ Course Name Professor’s Name University Name City, State Date France and Egypt-Comparative Economic Growth According to economic researchers, the economy of France is ranked fifth among the largest economies around the globe. A fifth of the European Union region’s Gross Domestic Product (GDP) constitutes France’s economy. Approximately 70% of the country’s GDP is currently associated with trade in services (FocusEconomics, 2020). Besides, France has one of the leading manufacturing industries with the best automotive and aerospace industries in Europe. The country also has highly skilled and educated labor. On the other hand, Egypt has been ranked position 47 in the world regarding nominal GDP. The country is facing high levels of unemployment as well as unsurmountable poverty. Most of the young Egyptian citizens are faced with an unemployment crisis and inflation of food prices. Statistics signpost that almost half the Egyptian population lives under or slightly above the poverty line. Notably, within the last decade, the poverty rate in Egypt rose by 6% (Economic, 2018). These two countries demonstrate completely different economic growth rates and strengths. The standards of living for citizens in these countries are diverse depending on the strengths of the economies. Factors such as Gross Domestic Product per capita, GDP growth rates, and poverty among the population in both Egypt and France are crucial in the evaluation and comparison between the two economies. France’s GDP growth According to the World Bank database, within the last decade, France has recorded a gradual increase in the rate of growth of the Gross Domestic Product. Figures indicate that between 2010 and 2018, France’s GDP grew from $2.65 trillion to over $2.9 trillion. Besides, the country has also recorded significant positive annual GDP growth rates. For instance, in 2019, the annual growth rate was 1.3%. This is a clear indication of the positive growth in the economy of France. It is also enough evidence to support the fact that the country’s economy is one of the top 10 strongest economies globally. France’s GDP growth since 2010. Source: World Bank (2020) Notably, statistics indicate that current France’s economic growth is driven by several main sectors in the economy such as industry, agriculture, energy, tourism, and external trade. To begin with, shipbuilding, construction, and civil engineering, automobile, pharmaceuticals, and telecommunications are the main leading industrial sectors in the country. These industries gained popularity around the world for their competitive nature in the respective markets. In the agricultural sector, France is ranked sixth among the largest agricultural producers in the world. It contributes to approximately 35% of the available agricultural land in the European Union. Its competitive advantage in the international market results from the global popularity and high quality of agricultural products such as wine and cheese. Foreign exchange linked to this sector serves as the main drive to the economic growth of France. France’s energy sector is also another significant contributor to the growth of the country’s economy. The country is the world’s leading producer of nuclear energy through international energy companies such as Areva (Marques, Fuinhas, and Nunes, 2016). Recently, nuclear power contributes to about 78% of France’s electric power production. The country has the capability of producing over 700TWh which is enough energy to run the economy (Mbarek, Nasreen, and Feki, 2017). Regarding tourism, France is one of the most preferred tourist destinations. For instance, in 2014, the country recorded over 83 million tourists. Corresponding figures have also been recorded in recent years. Tourism has, therefore, proved to be the main contributor to the economic growth of the country through foreign exchange. Finally, external trade is another main sector that has contributed to the economic growth in France in the last decade. The country has recently been ranked the second-largest in trade in the European Union. Numerous transactions with foreign countries through imports and exports have highly contributed to the growth of the country’s economy. Egypt’s GDP growth According to the World Bank database, between 2010 and 2018, the gross domestic product figure of Egypt rose from $218.9 billion to &302.356 billion. These figures generally indicate slow growth in the economy of the country. However, in 2018, Egypt recorded an annual GDP growth rate of 5.3%. The country has a positively growing economy which is depicted by the recent annual GDP growth rates. Egypt’s GDP growth from 2010. Source: World Bank (2020) Notably, the significant increase in GDP figures of Egypt’s economy in the last decade can be attributed to the main economic sectors in the country which include agriculture, energy, industrial, and the service sector. To begin with, according to the Food and Agriculture Organization of the UN, in 2016, statistics indicate that Egypt is the largest producer of dates globally, fifth-largest in tomato and watermelon production, fourth-largest in strawberry production, and second-largest in the production of figs. These agricultural products contribute largely to exports from the country. Notably, irrigation has played an important role in the reclamation of arid areas in the country to acquire agricultural land. This has led to the growth and sustainability of the agricultural sector with the Aswan High dam irrigation project serving vast agricultural land. As a result, Egypt’s agricultural sector has proved to contribute to the growth of the economy. The energy sector in Egypt is also classified as the main sector contributing to the growth of the economy. The country has an installed generation capacity of 24,700MW of electricity. This is enough energy suitable for powering the industrial sector and the economy of the country. Regarding the industrial sector, Egypt has some of the most attractive industries that drive the economy. For instance, in 2018, the country was 21st among the largest steel producers globally with a record of 7.8 million tons. Steel companies such as EZDK, which is the largest in Egypt and 87th among the world steel companies, have highly contributed to the growth of the country’s industrial sector. Besides, textiles and clothing have also proved to be one of the main exporting processes. This manufacturing sector has created vast employment opportunities for Egypt’s local population. Thus, the growth of the country’s industrial sector directly influences the growth of the economy. Similarly, the services sector in Egypt including tourism, transport, and communications, is the main contributor to the economic growth of the country. Egypt’s government actively supports foreign tourism which is a vital sector in terms of foreign exchange and high employment ( Tang and Ozturk, 2017). Advanced transport in the country, which is centered around the country’s capital (Cairo), is also considered one of the main service provision sectors. In addition to domestic road and air services, the country has established a reliable overseas network to major tourist destinations. Besides, Cairo is considered the largest broadcasting and publishing center in the Arab region. This has consistently placed Egypt as the informational and cultural center of the region. Living standards in France Markedly, statistics indicate that in the past decade, the living standards of France’s population have remained almost constant. About half of the population lives on an income of over $24,000 annually. According to France’s national statistics agency, INSEE, these figures for disposable household income are considerably higher compared to the previous decade. Moreover, according to a report released by the agency, the French population is enjoying considerably higher standards of living. However, since France’s financial crisis in 2008, the poverty level has been rising over the decade. Certainly, the percentage of Franc’s population living in poverty has fluctuated between 13% and 15%. For instance, the country recorded a negligible drop of 0.2% in the number of people living below the poverty line between 2015 and 2016. According to the national statistics agency of the country, the recent number of citizens living in poverty is about 8.8 million. Living standards in Egypt Over the past decade, Egypt has recorded an improvement in the average living standards of the population. This is derived from the trend indicated by the disposable household income in the country. Statistics signpost that, the average disposable income in Egypt has increased from $1,301 in 2010 to $3,764 in 2018. Conversely, the rise in the gross domestic product per capita in the country has not been reflected in the improvements in the poverty level in the country. According to a report released by the Central Agency for Public Mobilization and Statistics, about 32.5% of Egyptians lived in poverty in 2018. This is a 4.7% rise in the poverty rate in the country as compared to 2015. About 6% of the population was reported to live in extreme poverty. Notably, approximately 20 million Egyptians live in substandard housing, a clear indication of the low levels of standards of living in the country. Since the unrest in 2011, Egypt has been struggling to rebuild its economy. In the process, the government has slashed subsidies on services as well as fuel, floated the country’s currency, and enforced a value-added tax. This reform program has contributed to the achievement of macroeconomic stability and recovery in economic growth. However, this reform program has affected the middle-class and poor Egyptians regarding inflations in prices (Habashi, 2019). Comparing eco...