Australia vs. Saudi Arabia
2800354810760James Sara?|?Economics?|?March 14, 2016950000James Sara?|?Economics?|?March 14, 20161371602834640Australia vs. Saudi ArabiaBy James Sara950000Australia vs. Saudi ArabiaBy James SaraAustralia Vs Saudi Arabia The Australian economy is a free market system that has a very high expansion rate and is rated among the most highly developed countries in the world. The Saudi Arabian economy has a strong based planned economy with a large amount of government restriction. Both the Australian and Saudi Arabian economies are extremely strong being among the top twenty largest valued gross domestic products (GDP) in the world. These two economies share two very different government and financial systems and these characteristics are present through:The economic growth and quality of life Employment and unemployment Distribution of income Environmental sustainability The role of government in health care, education and social welfare. Economic Growth and the Quality of Life Australia Australia has a continuously growing economy with a low unemployment rate and a high quality of life. With a population of only 23 million, Australia has a large gross domestic product of $1,400 billion U.S dollars making it the thirteenth largest economy in the world. Australia is rich with natural resources which attracts foreign investment. The Australian economy is thriving on the allocative efficiency of these naturally rich resources in order to satisfy consumer needs to maximize profit. Australia had a 2.5% GDP growth rate in 2015. The main factors of growth were through industry such as iron ore and coal mining. The gross domestic product of a country measures the income and distribution of the economy of a country. The Human Development Report 2015 calculated a Human development index(HDI) based on life expectancy at birth, mean years of schooling and gross national income per capita for 187 countries. Australia’s HDI value was 0.935 ranking it the 2nd in the world. Statistics recorded from the World Bank show that: - The life expectancy at birth was an average of 82 years. - Australia had a gross national income (GNI) per capita of $64,000 in 2014.Saudi Arabia Saudi Arabia a large oil based economy and rely heavily on the export of this good. In 2014 Saudi Arabia has a growth domestic product of $746 billion U.S dollars making it the nineteenth largest economy in the world. Saudi Arabia has a population of 30 million people and has a rapidly growing economy with a 3.6% Growth Domestic Product growth rate in 2015. The main factors of growth for Saudi Arabia were through the Oil industry and a large government investment in telecommunications, natural gas exploitation and generation sectors. Saudi Arabia has a Human Development Index(HDI) of 0.837 ranking it 39th in the world. Statistics recorded from the world bank show that The life expectancy at birth was an average of 74 yearsSaudi Arabia had a gross national income per capita of $25 000 in 2014.Australia Vs Saudi ArabiaIn comparison statistics show that the GDP growth of Saudi Arabia -3.6% is higher than Australia’s – 2.5%. Although Australia has a much larger Growth Domestic Product of $1.400 Billion U.S dollars compared to Saudi Arabia’s GDP of $746 Billion U.S dollars. The quality of life in Australia is much higher than Saudi Arabia’s. Australia had a Human Development Index of 0.935 ranking 2nd in the world as opposed to Saudi Arabia’s 0.837 only ranking 39th in the world. 3171190623633500Employment and Unemployment Australia with a total population of 23.7 million people has a total workforce of approximately 11.9 million individuals, with a male working age participation rate of 71.8%. The unemployment rate in Australia is 5.9%. In comparison, Saudi Arabia with a larger population of 30.7 million people has a workforce smaller then Australia’s, with an employed workforce of 11.6 million persons. Saudi Arabia has a higher unemployment rate of 11.4% (Statistic is recorded for Saudi Males only) and a much larger male participation rate of 78.3%. This difference in male participation rate is due to the extreme low participation rate of Saudi Arabian woman because of unequal employment opportunities. Saudi Arabia has a very low female participation rate of 20.2% compared to Australia’s much higher 58.8%. The Australian total participation rate is a higher 65.2% as opposed to Saudi Arabia’s total participation rate of 55.2%. This is due to a more equal employment opportunity with a higher amount of female employment in primary industry, services and manufacturing. (See Table Below)Table: Workforce Data for Australia and Saudi ArabiaWorkforce Statistics AustraliaSaudi Arabia Total Population 23 700 00030 700 000 Male Participation Rate 71.8%78.3%Female Participation Rate 58.8%20.2%Unemployment Rate 5.9%11.4% (Males Only)Total Participation Rate 65.2%55.2%Distribution of Income Australia The distribution of income is the equality in which income is dealt. The Gini index refers to the distribution of incomes among individuals and households in a specific country. Absolute equality is represented by a value of 0, whereas a value of 100 is absolute inequality. Data recorded from the world bank shows that the Gini Index of Australia is 35. The distribution of income in Australia is made more equal through the operation of government systems such as welfare payments and the successful taxation methods used in Australia. Data (recorded from the world bank. See Graph Below) Shows that the poorest 10% of Australia received 2% of the national income. The poorest 20% earned 5.9%. The Richest 20% earned 41.3%. The Richest 10% earned 25.4% of the national income. Saudi Arabia Statistics show that although Saudi Arabia is among the richest countries in the world through the Oil trade, a large 20% of the population live in harsh poverty conditions. Accessing Data to represent the distribution of income is extremely difficult because of Government laws and regulations. Compared to Australia, Saudi Arabia offers little to no financial assistance. Saudi citizens must rely on private handouts instead. The Financial Distribution differences in Saudi Arabia are very distant, with groups of individuals that share in great wealth and even larger groups that lie in poverty. Information on Saudi Arabian poverty is hidden from the world. Australia balances the distribution of income through taxation, Saudi Arabia does not. Environmental Sustainability Whilst the Australian population has 100% sustainable access to sanitary drinking water, only 89% of the Saudi Arabian population have access to sanitary water. Environmental issues in Saudi Arabia are largely because of the demand for petroleum reserves to satisfy their exporting needs. The lack of water bodies in Saudi Arabia prompt sea water desalination facilities. In Australia approximately 19% is forested, compared to Saudi Arabia’s extreme low 0.1% because of its mostly desert characteristics. This makes annual deforestation in Australia a lot higher then Saudi Arabia at 0.37%. Oil reserves in Saudi Arabia are responsible for the large decline in Marine habitants due to oil pollution from spills. Carbon Dioxide emissions are formed through the burning of fossil fuels such as oil, coal and natural gases. Australia had 16.6 metric tonnes of carbon dioxide emissions per capita, whereas Saudi Arabia had 18.1 metric tonnes per capita. Emissions in Australia are from things such as Motor vehicles in major cities such as Melbourne, Sydney and Brisbane Factory emissions from fossil fuels such as coalSaudi Arabia experiences emissions from Large oil reserves Consumption of petroleum Quality of Environmental sustainability in Australia and Saudi Arabia are reasonably high due to rules and regulations.Indicator AustraliaSaudi Arabia Access to sanitary drinking water 100%89%Forested Area19%0.1%Carbon Dioxide emissions per capita (metric tonnes)16.618.1(NOTE: If the value is equal to 0 it means it is very low. If the value is equal to 100 it is very high) Air pollution is high in Saudi Arabia at 72.16 compared to Australia’s low 27.6. This is apparent with the air quality of Australia being 72.34 making it a lot higher then Saudi Arabia’s low 23.1. Figure 1 The Graph Shows the Relationship Between Air Quality and Air pollution in Australia and Saudi ArabiaThe Role of Government In both Australia and Saudi Arabia, the government plays a vital role in the economy. In a market economy such as Australia, the government is concerned with the following:Income Distribution Inflation Unemployment Resource Allocation The government of Australia must tax income earners based on their individual income and allocate scarce resources to maximize efficiency. The Saudi Arabian government has strong control over most economic activity. Tax revenue refers to the compulsory transfers from government for public purposes. The current tax revenue of the GDP for Australia is 23.7%. Health CareThe Australian government allocates $66.9billion (16.1% of total government outlays) to healthcare, spending more on health then Saudi Arabia at $42.7billion (18.6% of the budget). This spending is mainly directed to medical, hospitals and social affairs.Figure 2 Represents the differences in spending allocations on health care between Saudi Arabia and Australia Education The Saudi Arabian government allocates $57.9billion to education and training compared to Australia’s allocation of $31.9billion. Saudi Arabia aims to rehabilitate over 500 schools and sports centers, open 3 new universities and finish several college campuses. The Saudi government allocates money to support scholarship programs and a large percent was dedicated to building new technical colleges. Social Welfare The Australian government dedicates a large 35.1% of government spending at $145.7billion to social welfare and security. A large amount of the Saudi population relies on the governments subsidies. The Saudi government allocated $32billion to social welfare.Conclusion Both Australia and Saudi Arabia have many differences and similarities throughout their economies. These differences and similarities are seen throughout things such as Economic Growth and the Quality of lifeEmployment and Unemployment Distribution of Income Environmental Sustainably The Role of Government Although the Australian economy and the Saudi economy share similarities they are two completely different economics. The Australian economy is a free market system as opposed to the extreme government planned economy of Saudi Arabia. Australia is a larger economy as opposed to the Asian economy of Saudi Arabia. BibliographyBody Responsible for Creation Title Web address Trading EconomicsSaudi Arabia GDP and Growth Rate The World BankAustralia The World BankSaudi Arabia United nations development program International human development indicators Trading economics Australian labor force participation rate UNdataSaudi Arabia Nation master Compare countries on just about everything United nations development programIncome Gini coefficient NumbeoPollution in Saudi Arabiapollution/country_result.jsp?country=Saudi+ArabiaCentral Intelligence AgencySaudi Arabialibrary/publications/the-world-factbook/geos/sa.htmlSaudi Business Council Saudi Arabia’s 2015 Budget Maintains Strong Spending, Diversification Initiatives Australian governmentRevenue and Spending CDIACSaudi Arabia Fossil Fuels Countries QuestLand and ResourcesEnvironmental issues ................
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