Population · IGCSE Economics

Uruguay fact file 2023 population 3.5m gross domestic product (GDP) $77.0bn government revenue $10.7bn government budget deficit $2.5bn In 2023, the Uruguayan Government raised the retirement age from 60 to 65. There are concerns about the current high government spending on pensions and it is expected that life expectancy in the country will continue to rise. A higher retirement age will have an impact on the country’s labour force, with most workers employed in the tertiary sector. The average age of Uruguay’s population is increasing due to a fall in the birth rate and emigration of young workers. Many Uruguayan workers emigrate to the United States (US) where wages are higher. However, income inequality is considerably lower in Uruguay than in the US. The tax system in Uruguay is more progressive than in the US, and the Uruguayan Government spends a higher percentage of GDP on education and healthcare. In both Uruguay and the US, there is increasing demand for swimming pools. These use a large amount of water. Demand for some luxury items, such as swimming pools, is increasing in Uruguay. Demand for healthcare is also rising which is likely to increase the number of doctors in Uruguay. Table 1.1 shows the number of doctors per thousand people and life expectancy in selected countries. Table 1.1 Number of doctors per thousand people and life expectancy in selected countries in 2023 doctors life expectancy country (per 1000 people) (years) Angola 0.2 62 Bangladesh 0.8 74 Chad 0.1 53 Indonesia 0.7 68 New Zealand 3.5 83 Uruguay 6.2 79 In 2023, Uruguay experienced its lowest inflation rate for eighteen years. This low level of inflation encouraged investment in the country. It changed the international competitiveness of the country’s products against its main trading partners, which had higher inflation rates. It also had an impact on the cost of debt in the country and firms’ willingness to increase their output. Prices change at different rates in different markets. In several markets in Uruguay, there is only one firm. All of Uruguay’s monopolies can set the price of the products they sell. Having monopoly power can also affect the firm’s average total cost and the quality of what they produce.

Economists identify global cities as those with large populations, many multinational companies (MNCs), global financial markets and significant involvement in international trade. Shanghai, the largest city in China, is one of these cities. Nearly a thousand MNCs, including commercial banks, have their headquarters there. The city also has the world’s biggest container port which exports and imports large volumes of goods.

The birth rate has fallen in many countries. However, the birth rate has risen in Denmark where fathers take on more childcare responsibilities than in many countries. Some Danish firms provide free childcare. These firms can have elastic or inelastic demand for their products. A relatively high proportion of Danish adults work in the public sector and most of them belong to a trade union. Some governments prevent workers from joining trade unions.

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Senegal fact file 2023 population 19m gross domestic product (GDP) $31bn workers’ remittances as a percentage of GDP 9% Human Development Index (HDI) value 0.517 Senegal, a north‑east African country, has some of its workers employed in other countries. These workers send a percentage of their wages home to relatives. This money is known as workers’ remittances. Due to their relatively low incomes, most Senegalese households spend all of these remittances. However, some households do not spend all of the money they receive when interest rates are high or when confidence is low. A relatively high proportion of workers in Senegal are employed in agriculture. The crops grown in Senegal are affected by extreme heat and droughts. These weather conditions are one reason why the country grows the crop, sorghum, which does not need much water during its growth. Sorghum is low in calories and so can help people who consume it to lose weight. Senegal is a net exporter of sorghum. It is also the largest African exporter of rice after Nigeria. Greater use of capital equipment in the production of both sorghum and rice could affect productivity. This may reduce the deficit on the current account of Senegal’s balance of payments. The Senegalese Government wants to develop the country’s secondary and tertiary sectors to improve the country’s economic performance. It also expects that this will reduce poverty as measured by those living on $6.85 or less a day. Table 1.1 shows GDP per head and the percentage (%) of population living in poverty in selected countries. Table 1.1 GDP per head and percentage (%) of population living in poverty in selected countries in 2023 percentage (%) of country GDP per head ($) population living in poverty Canada 55 520 0.7 Iceland 73 500 0.0 Papua New Guinea 3 010 80.0 Romania 15 820 7.1 Senegal 1 600 75.6 South Africa 6 770 40.1 A related aim of the Senegalese Government is to increase the country’s HDI value. Governments can use fiscal policy measures to improve the three components of their HDI value, including life expectancy. Changes in fiscal policy can also affect the markets for Senegalese products including gold. Among the influences on the price elasticity of demand for gold are changes in income, the availability of substitutes and the extent to which gold is seen as a luxury.

Street vendors mostly operate outside of the formal economy to avoid government regulation. However, many are now entering the formal economy. This has led to more government revenue, increased productivity and higher economic growth. Some governments plan to take measures to increase the number of firms in the economy.

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Japan fact file 2022 Population 125m Total labour force including foreign workers 70m Foreign workers 1.75m Inflation rate 2.5% % of income saved 29% Japan has a high average age of population and a varied economic performance. It has a low birth rate, low inflation rate, good healthcare, high life expectancy and low unemployment rate. Fewer Japanese people enter the labour force each year. It is predicted that Japan’s labour force will fall by 10 million by 2040. Many young Japanese people emigrate to Australia, Canada and the US in search of higher wages. However, Japan now experiences net immigration although foreign workers are currently only a small proportion of Japan’s labour force. To achieve an annual economic growth rate of 1.2%, it has been estimated that the number of foreign workers would have to increase to 7 million by 2040. Some foreign workers are discouraged from working in Japan due to the requirement to pass a Japanese language test. Only the most skilled are allowed to stay for more than 5 years and to bring their families with them. Many Japanese industries are affected by labour shortages and the country’s decline in population. For example, the fall in population has affected the quantity of furniture traded. It has also influenced the country’s air transport industry. Air travel is the most important method of transport in Japan for foreign travel and long-distance internal travel. Japan’s air passenger numbers follow a similar pattern to global air passenger numbers. Table 1.1 shows global GDP per head and global air passenger numbers between 2016 and 2022. Table 1.1 Global GDP per head and global air passenger numbers 2016 – 2022 Year Global GDP per head ($) Global air passenger numbers (billions) 2016 10 217 3.8 2017 10 745 4.1 2018 11 289 4.4 2019 11 356 4.5 2020 10 884 3.3 2021 12 350 2.2 2022 13 200 3.7 Demand for goods and services, including air travel, is influenced by how much people save. Japanese people save a relatively high proportion of their income. This has affected the country’s inflation rate, current account balance of the balance of payments and its economic growth rate. Japan’s macroeconomic performance is also influenced by the mobility of its labour force. There are several reasons why the mobility of Japan’s labour force may change in the future. These include its ageing labour force and possible changes in education and training, house prices and the quality and price of transport.

The Central African country Chad has a triangle-shaped population pyramid and a high level of poverty. It regularly has an overall deficit on the current account of its balance of payments. Chad usually has a surplus on its secondary income. However, its trade in goods, trade in services and primary income are all usually in deficit. Some economists suggest that the Chadian Government should impose import quotas to reduce its trade in goods deficit.

In 2023, the Canadian Prime Minister said that his country’s aim was to increase immigration to half a million a year. This was because the country was experiencing labour shortages and an increase in life expectancy. More workers in Canada would increase the tax revenue available to spend on pensions, and more workers would also increase consumer spending. An increase in the immigration of both skilled and unskilled workers might affect the country’s car industry.

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The shape of Colombia’s population pyramid is changing. The income distribution of this South American country, however, is not changing significantly. The country has one of the most unequal income distributions in the world. Some Colombians work in its footwear industry which produces shoes, sandals and boots. Although footwear is produced in the private sector, Colombia has a mixed economic system.

In 2023, India became the country with the largest population. This may affect the government’s macroeconomic aims. In 2018, the Indian Government cut the country’s corporation (corporate income) tax rate from 35% to 25%. Between 2019 and 2022, India’s inflation rate averaged 6%. Some economists suggested that to achieve its central inflation rate target, the government should cut its spending.

In 2022, more than a quarter of a million workers, including doctors, left Sri Lanka to work in other countries. This was largely due to economic problems, including an inflation rate of 50% and a concern that unemployment might rise. The Sri Lankan Government increased direct taxation. It also encouraged some public sector workers to work abroad temporarily. People who work abroad often send money home to relatives.

In 2023, the Chinese Government said that it would aim for an economic growth rate of 5% and a steady increase in both exports and imports. It was expected that higher output would be caused mainly by an increase in household spending, although this could also result in inflation. Another aim of the Chinese Government was to keep the unemployment rate at around 5.5%. China has an ageing population and an ageing labour force.

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Romania fact file 2022 Current account deficit on the balance of payments (percentage of GDP) 9% GDP $300bn Unemployment rate 5.2% Economic growth rate 4.8% Inflation rate 13.8% Percentage of women of working age in the labour force 42% Between 1990 and 2022, Romania’s population fell from 23 million to 19 million. The country’s birth rate and death rate both fell over this period. Some workers from other countries, including Sri Lanka and Vietnam, came to live in Romania. However, more Romanian workers left the country to work and live mostly in other European countries. If the Romanian economy continues to grow at its relatively high rate, fewer of its people may emigrate and more immigrants may be attracted. Recent economic growth has been driven largely by increases in household spending. Romanians have become wealthier, more confident about their future and have experienced low interest rates. In April 2022, the Romanian Government placed a maximum price on electricity. Romanians spend a relatively high proportion of their income on electricity and on food. Table 1.1 shows selected countries’ GDP per head and average spending on food as a percentage of total household spending. Table 1.1 GDP per head and average spending on food as a percentage of total household spending in 2022 Average spending on food as a % of Country GDP per head ($) total household spending Belgium 52 100 13 Cambodia 1 800 42 Egypt 3 850 33 Ethiopia 960 56 Norway 89 200 11 Romania 15 000 26 USA 70 500 6 The poor are particularly affected by changes in electricity prices and food prices. Romania has a relatively high level of poverty. To reduce poverty, some economists have suggested that the government should attract more foreign multinational companies (MNCs) to Romania. More MNCs may affect poverty because of the possible effects on unemployment and prices. Another way to reduce poverty would be to encourage more women to work. The proportion of women in Romania who work or seek work has fallen in recent years. There is a range of influences on whether women enter the labour force. These include social attitudes, female education and whether childcare facilities and part-time work are available.

Finland is a high-income country that usually has a higher value of exports than imports. It has a strong commercial banking sector which has increased its lending in recent years. The country has an ageing population, with more than a quarter of its population aged over 65. In 2022, Finland’s Government had a budget deficit with government spending exceeding tax revenue.

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