Export Growth, Reciprocity, and the International Trading System - Essay Example

Economics Name Course Lecturer Date Unhealthy foods and unhealthy lifestyles Health is concerned with the level of metabolic or functional efficiency that is related to a living organism. In the human beings category, it refers to the general condition of a person’s body and mind, mainly attached to being free from pain, injury or illness. In a general view, the context in which a person lives is of a great value for both his/her quality of life and health status. According to the World Health organization, the primary determinants of health include the physical environment, the social and economic environment, and the person’s individual behaviours and characteristics. Some of the key factors that have been identified to influence whether people are living in a healthy or unhealthy way include: income and social status, personal health practices and coping skills, education and literacy, physical and social environments, biology and genetics, health care services, employment conditions among others. Socially, there exists an influence that has health implications by being impacted on the eating trends that has been adopted by others. This can be direct or indirect, conscious or subconscious, influence. The choice of food is influenced by the social factors, even privately, because habits and attitudes develop as we interact with others. When we are with our family and friends, research has shown that we eat more than when alone and the quantity of food consumed rises as the number of fellow dinners increases (Neira et al, 2013). The economic factors are also highly related to the way in which the lifestyles and eating programs are administered. The rate of unemployment, for example, affects greatly issues like domestic violence, physical illness, depression or abuse. Economic inequality have great impacts in the stress levels of the peoples, educational prospects, exposure to toxins, mortality rates, high-risk behaviour and access to services. Most of the cases of obesity are resultant from unhealthy eating and lack of proper physical exercise. The consumption of high amounts of energy in the diet while not burning off the energy through physical activity and exercise, this surplus energy is turned to fats. Obesity is not an overnight affair. It is a gradual development from lifestyle choices and poor diets (Story, Nanney & Schwartz 2009). These unhealthy foods could include: hat is eating fast or processed food that is high in fat, drinking too much alcohol, eating out a lot (high in fat and sugar food), eating more than necessary or comfort eating where out of depression or social pressures like low self-esteem makes a person to eat more to feel better. There are series of changes which the culture of having consumption of unhealthy foods and living unhealthy lifestyles is being associated with. The increased food supply, combined with the dynamism in the food production industry and the constant sophisticated utilization of persuasion and promotion have dramatically cut the price of calories and availed convenience food easily. There also changing living and working conditions meaning that few people are at a position of preparing traditional meals using the raw ingredients. At the workplace, there is less physical activity, high stress at the working places and job insecurities with long working hours. These lifestyle changes have resulted to the challenges like the obesity epidemic issues. Some of the policies that the government implement have also played a part inadvertently in this problem of unhealthy lifestyles and eating habits. Examples here includes inappropriate administration of taxation and subsidies policies (e.g. in agriculture) that affects the food prices; urban planning policies that leads to urban areas that are very deprived with many fast food outlets, few sports and playground facilities; transport policies encouraging the use of personal cars use and makes walking in the workplace an oddity. The government should assist people to have unhealthy lifestyles change. This is achieved by making new options to healthy living available and making those which are existing to be affordable and easily accessible. An alternative is to apply the use of information, education and persuasion to make the healthy options available more attractive. This is a gentle approach which is more expensive, hard to monitor and hard to administer. Regulation of and fiscal measures is a tougher approach but it reaches all the consumers indiscriminately. Welfare and political welfare costs May results. In addition it may be hard to enforce and organize and also have regressive effects. The governments are stepping-up efforts to promote a culture of right living and healthy eating. Initiatives are directed majorly to school-age children, like changes in school diets and the vending machines, improved facilities for physical activity, and health education. Following the above described measures, compared to the use of regulation and fiscal levers like “fat tax”, are more preferable. This is because complex regulatory process, probability of confrontation with key sectors and enforcement costs will be associated with these fiscal measures. Instead of tax imposition, government should ensure that food and beverage industry takes the necessary actions. They need to be regulated so as to avoid the production that makes use of particular ingredients that are unhealthy like saturated fats and too much sugar, provide menu alternatives that are healthy and reduction of excessive portion sizes. There should also be efforts to regulate advertising especially to groups that are vulnerable like children and having the consumers informed about the contents in a particular food. In conclusion, the solutions to the unhealthy lifestyles and unhealthy eating need to be addressed from many sides. The government should apply its monetary and fiscal tools to ensure solutions are obtained. However it needs to concentrate more with incentives to encourage healthy living. The consumers also have a role to play. They should make informed choices that regard the lifestyles and the food they eat. The food industry as well needs to facilitate in this by helping the consumer to make healthy choices. They need to aim at giving consistent , clear and honest product claims. They should promote health education at all levels, from medical schools to public schools, and bring about nutrition awareness at the consumer level. All these combined forces will be integrated to bring about a healthy lifestyle .Trade The Japanese exports grew rapidly in the 1960s and the 1970s, but there was a slow growth that occurred in the 80s. Over these decades, the reputation and the composition of Japan’s products changed profoundly. Japan is seen as a highly export-dependent nation due to the success it has on certain products. As an example, almost half of all automobiles that Japan produced were exported. There was a dramatic growth in in the Japanese exports during the 1960s and the 1970s. Starting in 1960 at US$4.1 billion, there was merchandise growth at an average annual rate of 16.9% in the 60s and at 21% average annual rate in the 70s. Export growth averaged 11.3% per year from 1981-1988. By the 1990, the merchandise, Japan exports were US$286.9 billion. (Nayyar, 2007) Share of Japans exports in world Exports between 1955-2000 This growth in exports can be explained in both the push and pull factors. The pull was a resultant of the increasing demand as the US and other foreign markets continued to grow and there was reduction of the trade barriers in major market countries. The price competitiveness of Japanese product was another pull factor. The price index of Japan’s exports increased by 4% showing the high productivity rate in the industries in manufacturing that produce export products from 1960 to 1970. The experienced inflation was higher in the 1970s, although the of export were still only 45% more in the 80s than 70s. This was at a less than 4% average annual rate growth which was even lower than the world’s inflation. In the 1980s beginning, there was a short inflation shoot due to the 1979 oil price increases. However, by 1988 the Japanese export prices became 23% less than 1980. This was able to offset much of the price increase that had been in the 1980s. The record that Japan set brought about enhancement of the international price competitiveness of the products from Japan. (Brown & McCulloch, 2009) During the 1950s, the products from Japan were thought to be of poor quality. In the 70s, however, there was a dramatic change in this reputation. The steel, televisions receivers, watches, semiconductors, ships, automobiles, semiconductors, and many other goods from Japan developed a reputation of high standard and strict control in manufacturing. This rise in quality progressively increased the demand for the exports from Japan. The manufactures contributed to the push factors. There was a global approach that was adopted where the manufactures concentrated on the domestic market (Husted & Nishioka, 2010). This was often protected from the foreign markets until they were able to compete internationally and the domestic markets had been saturated. The manufacturers were able to compete globally being helped by the large general trading companies. Concentration on gaining higher market shares was focused on and gained. On average, Japan has not imported very unusual amounts as a measure of its GNP. However, critical raw materials have been imported to Japan. It imports as a result of its energy need, iron, lead, copper and nickel. However, this heavy reliance on raw materials until the mid-1980s was a reflection of both their absence in Japan and the process of import substitution industrialization where Japan favoured domestic industries over import (Ahn, Fukao & Ito 2008). The OECD membership that Japan gained in 1964 had significance in three ways. The first consideration being historical where it signed the San Francisco Peace Treaty in 1954 and entered GATT in 1955 which was a sign of its successful establishment to be a fully industrialised economy. Secondly, Japan was able to promote various reforms domestically as supported by the OECD facilitation in analysis, recommendations and availed data like the liberalisation of capital movement. Thirdly, Japan has received a greater opportunity to in engaging with the international community and also ability to resolve global issues. Japan has progressively been able to be strategically active in the rule-making internationally in a diverse scope from macroeconomic policies and economic development to trade, tax and investment. The economy of Japan is currently now ranked third largest by nominal GDP, it’s the fourth largest by the purchasing power parity and it’s the world second largest developed country. It is the world’s largest automobile manufacturing country. It has been more reliant on trade than before where its manufacturing now focuses on high-tech and precision goods, like the hybrid vehicles, optical instruments, and robotics. It’s the world’s largest creditor nation. It runs an annual trade surplus have a considerable net international investment surplus. In 2010, Japan had a possession of 13.7% of the private financial assets of the world, second largest in the world, at an estimated $14.6 trillion. In 2013, sixty two of the fortune global 500 companies were in Japan. (Augello & Guidi, 2013) The economy of Hungary is a medium-sized, upper middle income. It is politically, structurally and institutionary an open country located in the Central Europe and is part of European’s Union’s single market. In 1990s, Hungary experienced a market liberalization in the early 1990s. This was part of transition to a market economy from a single economy. It’s a member of the World Trade Organization (WTO) since 1996 and also a member of the Organization for Economic Co-operation and Development (OECD) since 1995. It’s also a member of the European Union since 2004. More than 80% of the Hungarian gross product (GDP) is from the private sector account. There are cumulative foreign direct investment worth more than $70 billion resulting from the foreign ownership of and investment in Hungarian firms which is widespread. The main industries that are in Hungary are metallurgy, processed foods, mining, construction materials, chemicals (especially pharmaceuticals), textiles and motor vehicles. The main agricultural products in Hungary are wheat, potatoes, sugar beets, sunflower seed, corn, cattle, pigs, poultry and dairy product. From the 1940s, the Communist government had started to nationalize the industries (Gulyas, 2013). Only factories with more than a hundred workers were initially nationalized and later the number reduced to ten. The government started a program of collectivization in agriculture which ended up disastrously. Most of economic activity was then being done by the enterprises that were owned by the state. In 1968, the new economic mechanism as it was called replaced the self-sufficiency that was there previously. This reopened Hungary to foreign trade, allowed a number, though limited, of small businesses to operate in the services sector and gave some freedom to the workings of the market. Although Hungary benefited from being one of the most economically advance and liberal economies in the former Eastern Bloc, both industry and agriculture began to suffer due to lack of investment in the 1970s. This led to Hungary’s net foreign debt significantly rising from $1 billion to $15 billion in 1973 and 1993 respectively. This was due to consumer’s subsidies and unprofitable state enterprises. Following this stagnation, Hungary chose to further liberalization through passing a joint venture law, joining the International Monetary Fund (IMF), instating an income tax and joining the World Bank. Hungary was able to recover by 1988 and had developed a two-tier banking system and had enacted significant corporate legislation paving the way for the ambitious market-oriented reforms of the years after the communism era. (Casaba, 2013) As a result of these changes, particularly the trade patterns, there macrofactors of hungary were directly affected as the diagram below reveals. The key areas that contributed to these changes are the infrastructure development where transport and public utilities like electricity were continuously enhanced. Agricultural sector growth, health industry, automobile production, tertiary sector and tourism were given key attention. This enhanced a strategic positioning to the economy of Hungary to ensure that there was openness and competitiveness in trade affairs. The exports were boosted by the concentration in the production that gave the country a comparative advantage hence being able to specialise and concentrate on what it could do best. Reliance on the imports was reduced and this further enhanced the balance of payment of the country in general. The government privatization program ended on schedule in 1998: eighty present of GDP now is from the private sector, and foreign owner’s control 70% of financial institutions, 90% of telecommunications, 66% of industry, and 50% of trading sector. There have been strong export performances resulting to high GDP growth of $.4% in 1997. This was so as other macroeconomic indicators also continued to grow. In 2007, 25% of the Hungary’s exports were of high technology, which is the fifth largest ratio in the European after Malta, Cyprus, Ireland, and Netherlands. In the 2008-2009 financial crisis, there were experienced declining exports, reduced domestic consumption and fixed asset accumulation where Hungary was hit hard. This resulted to a severe recession of -6.4% which is one of the worst economic constraints in the country’s history. After the global financial crisis, Hungarian economy showed signs of recovery especially in 2011. This was resulted from decreasing taxes and a moderate 1.7 GDP growth. Starting from November 2011 until January 2012, all three major credit rating agencies downgraded the debt of Hungary to non-investment speculative grade. This was, in part, because the political changes created doubts about the true sovereignty of the Hungarian National Bank. The interest rates on the bonds of the government increased to near 10%. (Bod, 2013) The economic turmoil of 2007-2008 had effects on the Japanese economy in a mixed way. Heading into the crisis, the Japanese consumers and banks held much less debts than those in the United States and Europe. Following this, there was no major Japanese bank that collapsed during this crisis. In actual fact, some Japanese financial institutions were well placed to buy assets at a greatly reduced price as the crisis was in progress. However, Japan’s iconic automaker Toyota experienced the first yearly losses in history in the year 2008. The Japanese yen grew highly in value during the latter half of 2008 following reduction of interest rates by the international governments. This undermined the profitability of the ‘carry trade’ through which many investors had bet on interest rate differences. However, by April 2009 sagging global demand had been hard on Japan’s economy and Tokyo was led into its first trade deficit in 30 years. (Kuroda & Yamamoto 2014) This financial crisis started in the US housing market. In comparing the two countries: Hungary and Japan, it is clear that the developed country, Japan faced constraints like the deteriorating fiscal conditions but not with a big impact as did Hungary, a developing country. In the financial crisis, there were experienced declining exports, reduced domestic consumption and fixed asset accumulation where Hungary was hit hard. This resulted to a severe recession of -6.4% which is one of the worst economic constraints in the country’s history. However, Japan was able to pick up and absorb the shock. In fact, to some extent, it can be argued that Japan benefited from the global financial crisis that occurred. Following the crisis, there was some of substantial gating that can be identified to have resulted key among them being the macroeconomic measures that were introduced and enhanced. Most of these are in line with being more cautious with the trading issues. These are majorly the monetary and fiscal policies administered. In conclusion, it can still be observed that many of the countries have not been able to recover from the shock that was experienced after the financial crisis. Many of the countries which have recovered, majorly the developed countries, have put many indirect protectionism methods in fear of such a crisis reoccurrence. Even the associations and the merges being formed had in them a scheme of shielding. The concern to safeguard the economies of these countries can be associated with the reality of a gated globe. References Ahn, S., Fukao, K., & Ito, K. (2008). Outsourcing in East Asia and its impact on the Japanese and Korean Labour Markets (No. 65). OECD Publishing. Augello, M., & Guidi, M. (Eds.). (2013). Spread of Political Economy and the Professionalisation of Economists (Vol. 50). Routledge. Bod, P. Á. (2013). Crisis after Crisis–Any Lessons Learnt?. Hungarian Review, (02), 18-28. Bown, C. P., & McCulloch, R. (2009). US–Japan and US–China trade conflict: Export growth, reciprocity, and the international trading system. Journal of Asian Economics, 20(6), 669-687. Csaba, L. (2013). Hungary: the Janus-faced success story of transition. Fosu, A, 254-277. Gulyas, A. (2013). Democratisation and the mass media in post-communist Hungary. Media Development, 49(1), 33-8. Husted, S., & Nishioka, S. (2010). The rise of Chinese exports (No. 391). Kuroda, S., & Yamamoto, I. (2014). Is Downward Wage Flexibility the Primary Factor of Japan's Prolonged Deflation?. Asian Economic Policy Review, 9(1), 143-158. Nayyar, D. (2007). India's Exports and Export Policies in the 1960's (Vol. 19). Cambridge University Press. Neira, I., Arora, T., Taheri, S., & Higgs, S. (2013). Eating your feelings. Relationships between alexithymia and unhealthy eating habits in adolescents. Appetite, 71, 482. Story, M., Nanney, M. S., & Schwartz, M. B. (2009). Schools and obesity prevention: creating school environments and policies to promote healthy eating and physical activity. Milbank Quarterly, 87(1), 71-100. Read More