HL Economics

IB1 Econ System Report

1. Three Nations, Three Articles

Laos – Communism

In economic systems of communist countries, the state determines the resource allocations and consists of central planners, where people are told what and how much to produce. Strengths involved in command economies include its rapid growth/development and reduction of poverty. Yet after reading the article Laos Stock Market Opens to Boost Economy, it is evident that the system is not functioning well and in fact brought the country to become one of the world’s poorest nations. The nation’s inefficient usage of its money or the lack of incentives for the creation of good quality goods may have caused the country to lead to an economic failure. According to the article, the country is lacking in infrastructure as the “majority of the population is engaged in subsistence agriculture.” Thus, the country may be resource rich, but with the delay of it’s developing it’s infrastructure, the economic income in very low. Presently, the country is hoping to opening a new stock market, which may help the investment in the nation as well as enriching its people and country itself. Overall, it is apparent this communist country is currently pressuring more on the countries rapid growth in power rather than the people’s health.

Bangladesh- Mixed Economy (Market Leaning)

Bangladesh is known as having one of the most common economic system, the mixed economy. In a mixed economy, both the state and market force are in participation of allocating resources. This economic system is basically between the two  systems of communism and capitalism. Although most economies of the world consist of a mixed economy, they differ of government involvement.

Bangladesh thrives in it’s achievement of following in the Millennium Development Goals as well as developing the industry to produce a larger income. According to the article, this nation has been able to reduce poverty below 40%, gain gender equality, strengthen education levels and maintained relative political stability. The big success in Bangladesh may have resulted from their shift in economy from agriculture to industrial technology and communication. With the development and reconstruction projects, like disaster preparedness, constructing infrastructure of roads/cities, and completion of earthquake safety methods, the nation has been following new innovations which helps the country ongoing in their present economy. Such new projects like increasing the construction of hydropower generators allow the country to be gifted with sustainable renewable energy. Yet the most beneficial factor for Bangladesh is to be in the delta-region, consisting of many rivers, because of its use to easily perform imports and exports which help ease the trading between foreign countries. The freedom for the individuals in markets, and the nation equally working to embrace the citizens health and power of the nation brings success to Bangladesh. In a nutshell, Bangladesh’s mixed economy has made greater successful achievements especially with the reduction of poverty than communist countries, who’s system is to reduce poverty yet with the lack of freedom for individuals, the flow of the economic system is malfunctioning.

Brazil Capitalism

Capitalist countries, including Brazil, has a system in which the forces of demand and supply significantly determines the allocating of it’s resources. People have the freedom to produce and consume whatever they desire, without any forced exclamation by the government. Although this market economy is known for the efficiency and effective coordination within the economy, the inequality is thought to cause poverty and unemployments.

Brazil consists of vast amounts of natural resources, such as minerals and freshwater, and also the many developed transportation on water in order for trade of resources and transport of people. Since Brazil has also just found a great supply of oil and gas, it has brought the nation to become more likely to increase it’s economy, as well as the PPC level because of the encounter of more resources to produce goods or perform services. With the constant discovery of sustainable oil and resources, it helps the economy’s growth but Brazil continues to face problems such as high taxes, protectionism, weak infrastructure, corruption, crime, and poverty. Compared to the communist country China, Brazil has a low population yet makes up for the lack of people with the production of high quality products which result to a high purchasing power for the population of Brazil, thus a successful economy. Currently, Brazil is working to increase public transportations, constructing homes for the poor, and alteration in the nation’s complex tax system. As Brazil has been putting much effort in increasing power and poverty and inequality began to rise, the nation has generally been putting much effort into these problems. This article was able to show a fine example of an ideal capitalist nation with a market economy which has a high efficiency in production of resources however face the problem of poverty and inequality.

Citation 

Bangladesh’s Rising Income Potential. (April 18, 2012). The Huffington Post. Retrieved September 3, 2012,
from http://www.huffingtonpost.com/nake-m-kamrany/bangladeshs-rising-income_b_1435674.html

Laos stock market opens to boost economy. (n.d.). BBC – Homepage. Retrieved September 2, 2012,
from http://www.bbc.co.uk/news/business-12160402

Smale, W. (n.d.). BBC News – Brazil’s economy marching to samba beat.BBC – Homepage. Retrieved September 3, 2012, from http://www.bbc.co.uk/news/business-16407585

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