Oil Crises of 2008 - Case Study Example

New entrants join the business arena and created new jobs thereby playing their vital role in reducing unemployment. Indeed, the advance economies with extensive financial and monetary resources were among the actual winners as they intensified their growth and garnered maximum benefits for long term sustainability. The purchasing power in advance economies also increased substantially in past 2 -3 decades because of constant economic growth. Developing countries, at the same time, had also recorded phenomenal growth rates following the developments and advancements in Western nations.

They considerably increased production and exports of relatively inexpensive consumer goods to meet the demand of Developed Countries. The reason behind this is the fact that labor costs in advanced economies are extremely high thereby forcing them to either transfer their production facilities to third world nations or to simply purchase and import consumer products from emerging Asian, African, Central European and Latin American economies. Consequently, the Gross Domestic Product and consumer purchasing power in developing nations have also increased considerably and somewhat helped in tackling the monster of unemployment and poverty.

It is worthwhile to mention that economic growth is determined from an increase in Gross Domestic Product, Foreign Direct Investments, Exports / Imports, development of primary (agriculture), secondary (manufacturing or industrial) and tertiary (services) sectors. As a result, this growth in the economy increases the consumption of oil and petroleum-related products. The demand of oil increases because of a surge in consumption of oil for energy and power creation, for industrial use (in production machinery and generators), traveling (airlines), defense (in fighter aircraft, in tanks, military vehicles) and domestic use (cooking and automobiles).