The World Series of
Economics 2013
I just can’t believe it.
It’s only the 4th week in April and our Cleveland Indians have dropped
to fourth place in the America League Central.
Just look at these statistics!
Team
|
Won
|
Lost
|
Percent
|
Games Behind
|
Last 10
|
Streak
|
Home
|
Away
|
Kansas City
|
10
|
7
|
.588
|
-
|
6-4
|
W-2
|
4-2
|
6-5
|
Minnesota
|
9
|
7
|
.563
|
½
|
5-5
|
W-5
|
5-3
|
4-4
|
Detroit
|
9
|
9
|
.500
|
1 ½
|
5-5
|
L-4
|
4-2
|
5-7
|
Cleveland
|
8
|
10
|
.444
|
2 ½
|
5-5
|
W-3
|
2-6
|
6-4
|
Chicago
|
7
|
12
|
.368
|
4
|
3-7
|
L-4
|
4-5
|
3-7
|
This, of course, is our signal that it’s time to turn our
attention to the World Series of Economics.
Instead of teams, we rank countries, and instead of wins and losses,
games behind, and batting percents, we use six key economic statistics. For example, take a look at Spain, and the
explanation of the stats that follows:
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Spain
|
28.5
|
-1.63
|
-8.1
|
.919
|
32.0
|
90.1
|
GDP/c (Gross Domestic Product per capita) –
an indicator of the average individual income in the country for the most
recent year studied, in thousands of US dollars.
Ann % Growth (Average Annual Percentage
Growth in GDP/c) - the average annual percentage growth in individual
income, excluding inflation, over the past five years; that is, are the people
getting richer or poorer?
NEFP (Net Ecological Footprint per person)
- an indicator showing how efficiently the country’s people are making use of
natural resources. A positive number
means the average person uses fewer acres of natural resources than are
available in the country. A negative
number means he/she uses more than are available.
HDI (Human Development Index) - a
quality of life index encompassing the life expectancy of each individual plus
the average and the expected levels of education. An index of .919 for Spain reflects a life
expectancy of 81.6 years, average years of schooling of 10.4 and expected years
of schooling of 16.4.
IE (Income Equality) - an indicator of
income equality. 0 would mean every person makes the same amount, 100 would
mean one person makes all the money. The
greater the value, the greater is the difference between the richest and
poorest segments of the population.
DBT% (%Debt to GDP) – the percentage of
public debt to GDP; an indicator of financial stability. Too much debt stifles investment and
therefore growth. It places extreme debt carrying charges (i.e., interest) on
future generations.
The World Series competition includes 118 countries with
populations of 5 million or more. They
are grouped into nine divisions; four in the Western League, five in the
Eastern League. Winners are determined
by the number of top 3 finishes in each of the 6 categories. You can find complete definitions and sources
in the notes section at the end of this article. If you just can’t get enough of this and want
to see the entire database and scoring, just e-mail me at dgoep1@gmail.com.
This year the division winners are:
Western League:
North/Central
America-Canada, South America-Chile, Western Europe-Sweden, Eastern Europe-Belarus.
Eastern League:
N
Africa/African Horn-Algeria,
Sub-Saharan Africa-Ghana, Middle
East-Saudi Arabia, Central/South
Asia-Kazakhstan, Far East/Oceana-Australia.
How did these countries achieve winning status in their
division? As you read about each you’ll see some common themes:
Educating a healthy work force
Building effective infrastructure
Stable Democratic government
Focus on International free trade
Financial Conservatism
Intelligent use of natural resources
Ability to attract foreign investment
Belief in free market economies, private enterprise
Here’s a recap of the winners by division:
WESTERN LEAGUE
North America
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Canada
|
51.0
|
.27
|
21.0
|
.934
|
32.1
|
87.5
|
Division Average
|
13.5
|
1.12
|
0.0
|
.752
|
46.7
|
49.1
|
World Average
|
14.1
|
1.88
|
1.9
|
.725
|
39.8
|
48.1
|
Canada is again
first in this division. Canada’s strong
points are high GDP/capita with steady growth, an excellent net economic
footprint, a high human development index, and a good spread of income. Canada takes pride in its modern physical
plant and skilled labor force, with an eye toward maintaining natural
resources. The nation focuses on
infrastructure building, healthcare.
Notable Country:
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
United States
|
49.9
|
-0.26
|
-8.2
|
.958
|
45.0
|
107.2
|
It’s not hard to see here where the US needs to focus. Grow incomes by making more of the stuff the
world needs. Facilitate increased
domestic and international commerce with improved infrastructure. Get our debt down. Use resources efficiently.
South America
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Chile
|
15.7
|
2.45
|
1.2
|
.863
|
52.1
|
11.4
|
Division Average
|
8.6
|
2.84
|
10.7
|
.779
|
49.9
|
32.3
|
World Average
|
14.1
|
1.88
|
1.9
|
.725
|
39.8
|
48.1
|
Chile is still
the winner – with firsts in GDP/c, HDI, and debt to GDP. Chile has a commitment to democratic
government, sound economics, and an emphasis on foreign trade. Argentina was a strong second with high GDP/c
growth, human development, and a respectable spread of income.
Western Europe
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Sweden
|
57.2
|
.71
|
9.4
|
.940
|
23.0
|
37.0
|
Division Average
|
48.8
|
-0.36
|
-4.8
|
.919
|
29.6
|
76.6
|
World Average
|
14.1
|
1.88
|
1.9
|
.725
|
39.8
|
48.1
|
Sweden repeats as
hands down winner – showing a top 3 standing in all categories and number one
in income distribution and low debt ratio.
Sweden’s secrets: a focus on
international/free trade, an educated/skilled workforce, fiscal conservatism,
many natural resources and effective use of them, and an armed neutrality
concerning foreign affairs.
Eastern Europe
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Belarus
|
6.0
|
5.47
|
-1.5
|
.830
|
27.2
|
38.3
|
Division Average
|
11.2
|
1.31
|
-2.8
|
.844
|
32.2
|
50.1
|
World Average
|
14.1
|
1.88
|
1.9
|
.725
|
39.8
|
48.1
|
Belarus is the
repeat winner - followed by Slovakia and Russia. Belarus has an outstanding
growth in GDP per capita, a good use of resources, respectable spread of
income, and a healthy debt to GDP percent.
The country has a strong manufacturing base. It’s focused on free international trade,
privatizing more of the previous state run industry, and increasing foreign
investment.
Notable Country:
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Greece
|
23.7
|
-4.17
|
-8.2
|
.899
|
33.0
|
170.7
|
It’s easy to why there’s always a hubbub about Greece in the
European Union.
EASTERN LEAGUE
North
Africa/African Horn
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Algeria
|
5.5
|
0.81
|
-2.7
|
.755
|
35.3
|
8.6
|
Division Average
|
2.1
|
1.15
|
-0.7
|
.532
|
38.5
|
47.9
|
World Average
|
14.1
|
1.88
|
1.9
|
.725
|
39.8
|
48.1
|
Algeria is the
repeat winner here with strong showings in total GDP, Human Development Index
and a conservative debt ratio. Gas and
oil reserves are this country’s largest asset.
It has strived to maintain a consistent multiparty government despite
unrest and civil war caused by extremist efforts. Its infrastructure is a problem – unreliable
water supplies and electricity. New
improvement programs have been started and the government is trying to attract
foreign investment.
Sub-Saharan Africa
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Ghana
|
1.6
|
5.99
|
-1.1
|
.646
|
39.4
|
44.9
|
Division Average
|
1.3
|
2.11
|
.6
|
.484
|
46.1
|
39.9
|
World Average
|
14.1
|
1.88
|
1.9
|
.725
|
39.8
|
48.1
|
Ghana beat out
South Africa, Nigeria, and last year’s winner Angola to win this tough
division. Even though rich in natural
resources, the countries of Sub-Saharan Africa have many barriers to economic
growth. Bad roads and lack of
electricity, lack of communications, health issues, diverse languages and
religions are all impediments to economic wellbeing. Ghana scored high in GDP/c, growth in GDP
per capita, and Human Development. Its
strengths are a strong stable government and a competitive business environment. Extensive oil reserves are expected to add
growth.
Middle East
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Saudi Arabia
|
24.8
|
2.24
|
-8.3
|
.774
|
32.0
|
5.5
|
Division Average
|
17.2
|
1.53
|
-6.2
|
.727
|
38.7
|
42.8
|
World Average
|
14.1
|
1.88
|
1.9
|
.725
|
39.8
|
48.1
|
Saudi Arabia is
the solid winner here with top three finishes in 5 of the 6 categories. While oil contributes greatly to the economy,
the government is supporting diversified private enterprise and is
concentrating on educating its younger population in order to employ more Saudi
nationals in its efforts. Social
Development, foreign investment and infrastructure are priorities.
Central/South Asia
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Kazakhstan
|
11.4
|
3.42
|
-1.6
|
.791
|
26.7
|
12.4
|
Division Average
|
2.7
|
4.62
|
-1.0
|
.647
|
34.7
|
39.6
|
World Average
|
14.1
|
1.88
|
1.9
|
.725
|
39.8
|
48.1
|
Kazakhstan is the
winner again, followed closely by Turkmenistan and Uzbekistan. These countries here have benefitted by
moving to market based economies and improving infrastructures. Kazakhstan’s growth and GDP levels are very
good and its debt level is conservative.
It is rich in fossil fuels and minerals.
While the government is a republic with three branches, it remains under
authoritarian rule. It’s making a
concerted effort to diversify its economy into pharmaceuticals, transport,
telecommunications, and food processing.
Electricity and telecommunications are structural problems. Landlocked, it must efficiently get its
products to neighboring country seaport.
Notable Country:
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
India
|
1.5
|
5.73
|
-1.0
|
.575
|
36.8
|
67.6
|
India’s 1.2 billion people have an average income of just
$1500 dollars per year. Its HDI
represents a life expectancy of just 66 years and average years of schooling of
4.4.
Far East/Oceana
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Australia
|
70.0
|
1.35
|
19.5
|
.978
|
30.5
|
27.1
|
Division Average
|
16.7
|
3.29
|
22.4
|
.744
|
41.5
|
50.8
|
World Average
|
14.1
|
1.88
|
1.9
|
.725
|
39.8
|
48.1
|
Australia
continues to be the juggernaut of the Pacific, having a very high GDP/c, a
remarkable net ecological footprint, a stellar human development index, a fine
spread of income and a very low debt to GDP %.
Australia’s democratic government supports open international trade and
a free market economy. It exports food
and its natural resources are abundant: coal, iron ore, copper, gold, natural
gas, and uranium.
Notable Country:
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
China
|
6.2
|
8.28
|
-3.1
|
.728
|
48.0
|
22.2
|
While China has a long way to go, its rate of income growth
is pretty spectacular.
World Series
Champion!
Who’s the World Series champ? Eastern League champ Australia outscored Western League
heavyweight Sweden, trumping Sweden
in 5 of 6 categories.
Championship
|
GDP/c
|
Ann % Growth
|
NEFP
|
HDI
|
IE
|
DBT%
|
Sweden
|
57.2
|
.71
|
9.4
|
.940
|
23.0
|
37.0
|
Australia
|
70.0
|
1.35
|
19.5
|
.978
|
30.5
|
27.1
|
World Average
|
14.1
|
1.88
|
1.9
|
.725
|
39.8
|
48.1
|
Congratulations!
NOTES:
Definitions of the 7 Categories of
Statistics
|
|
Population: Source:
http://en.wikipedia.org/wiki/List_of_countries_by_population. Based on the
most recent estimate or projections by the country'sl census authority where
available. Where updated national data are not available, figures are based
on the 2012 estimates by the Population Division of the United Nations
Department of Economic and Social Affairs.
|
|
GDP per Capita - This number represents an estimate of the
total output of goods and services by the nation (Gross Dometic Product)
(https://www.cia.gov/library/publicatios/the-world-factbook/fields/2195.html)
divided by the population of the country at mid
year(http://www.census.gov/ipe/www/idb/tables.html). It equates to the income earned by the
average person in the country regardless of whether or not that person is in
the workforce. Source is the CIA World Factbook acessed on March 2 2013.
|
|
GDP per Capita - Average annual
real growth 2005 to 2012. This is the
compounded average annual growth between the two numbers. Source of the numbers are the ERS
International Macroeconomic Data Set updated 11/03/2012. Stated in 2005 dollars.
|
|
Net Ecological Footprint per
person. The Global Footprint Network (www.footprintnetwork.org) publishes for
each country for 2012: 1) The ecologiocal footprint per person (how many
hectares of natural resources are used by the average person in the country)
and 2) the biocapacity for each person within in that country (how many
domestic hectares of natural resources are available for each person in
2012). The Net Ecologicsl Footprint
per Person is 1-2, in other words the surplus(-excess) of resources used by
each person in the country over that available in the domestic country. Hectares are converted to acres here (one
hectare = 2.47 acres). For Example, in
2012, the average Austrialian consumed 6.68 hectares of resources, but 14.57
hectares were available for that person.
The net surplus ecological footprint was therefore 7.89 hectares or
19.5 acres.
|
|
Human Development Index. Source:
The Human Development Report 2013
(http://hdr.undp.org/en/reports/global/hdr2013/). The Human Development Index Non Income HDI
is an index of the development of people in that country. For example Norway has a life expectancy of
81.3 years, a mean years of schooling of 12.6, and an expected years of
schooling of 17.5. This converts to an
HDI of .977. Afghanistan has a life
expectancy of 49.1 years, a mean years of schooling of 3.1 years and an
expected years of schooling of 8.1.
This translates to an index of .393.
|
|
Income Distribution: This index measures the degree of
inequality in the distribution of family income in a country. The source is the CIA GINI coefficient.
(https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html).
The more nearly equal a country's income distribution, the lower its Gini index,
e.g., Sweden with an index of 23. The more unequal a country's income
distribution, the higher its Gini index, e.g., Zambia with an index of 51. If
income were distributed with perfect equality, the index would be zero; if income were
distributed with perfect inequality, the index would be 100.
|
|
%Debt to GDP - This is a measure of
the amount of debt the nation has compared to its output of goods and
services. The source is Government
gross debt, International Monetary Fund, October 2012 World Economic Outlook
Databse.(http://en.wikipedia.org/wiki/List_of_countries_by_public_debt#cite_note-2). Gross goverment debt is the cumulative
total of all government borrowings less repayments that are denominated in a
country's home currency.
|