Report on Economic Power
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Added on 2019-09-24
Report on Economic Power
Added on 2019-09-24
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1 | P a g eEffect of Economic Power Shift from Europe to Asia on UK Banking“A Report on comparison between three Banks”
Table of ContentsCHAPTER 1 - INTRODUCTION.........................................................................................................11.2: Overview..............................................................................................................................11.2: Focus and Purpose................................................................................................................41.3: Research Questions...............................................................................................................51.4: Framework and Analysis......................................................................................................51.5: Potential Significance...........................................................................................................7REFERENCES................................................................................................................................8
CHAPTER 1 - INTRODUCTIONEconomic Power is a condition, in which there is enough availability of productiveresources with the economy so that it can effectively employ them to their full capacity and thus,can implement economic decisions related to deployment of these resources and sharing ofservices and products with other economies.1.2: OverviewIn the present world, the key moving force is the economic power. But, before understandingeconomic power, it is very important to understand the meaning of power. Earlier power wasassociated with only political scientists, but in reality, power is very subtle term. Generallypower is considered as force to influence other so that they obey the society exercising power.But, it is very difficult to define power in terms of economy as it depends on many parameterssuch as size of the economy; whether the power is exercised directly or indirectly in the economyand many other factors (Hannabuss, 2010). Thus, that economy can be considered as economicpower which achieves growth in all the aspects of economy such as its currency power, itsindustrial growth, surplus balance of payment, developed society, etc. There are three mainelements which govern the economic power; these are:Size of the economyWillingness of other economies to corporate with the powerful economySoft power consideration or reputational power (The great thrift shift: a survey of theworld economy, 2006)In last few years, the world economy has faced lots of movements. Many nations of theworld which were considered to be the world power have seen lot of turmoil in their economyand many other activities. In the views of many economists, the economic power is going to beshift from Organization for Economic Co-Operation and Development (OECD) countries to theNon-Organization for Economic Co-Operation and Development (NOECD) countries. OECDcountries include the current world power such as the United Stated and the European Region,while, NOECD countries include India, China, Brazil, Turkey, Nigeria, etc. Earlier, US and UKwere considered to be the most powerful nations of the world just because of their developedeconomy and prosperous society. These countries have ample of resources and were capable1 | P a g e
enough to exploit these resources, not only to fulfill their requirements, but needs of many othercountries as well which were dependent on them. But some recent activities in those countrieshave shattered their economy and these countries are still struggling to overcome from the effects(Weerakkody, 2012).In such scenario, economies of India and China, among all the developing economies, areleast affected and are performing well consistently. Presently, China is considered as marketleader in the field of global manufacturing. On the other hand, India has emerged as internationalhub and is delivering its services to the entire world. India has made some huge development inthe field of information and technology and has evolved as one of the biggest outsourcing marketin the world. India’s information and technology and outsourcing market accounts forapproximately US$50 billion (Weerakkody, 2012). Growth in the economies of these countrieshas opened ways for many other economies also such as Pakistan, Thailand, Indonesia, Vietnam,etc. They are also emerging as manufacturing market apart from China (Kunnanatt, 2011).Many recent reports show that the contribution of emerging powers from Asian regionhas been huge in the world economy. According to them, presently Asia Pacific region hascontributed around 38% in the world economy, followed by Europe at second position and NorthAmerica at third. More specifically, India, China and Japan are the three main contributors fromthe Asia Pacific region and out of 38%, majority of the contributions have been made by them(Cox, 2012).So after assessing the contributions made by the eastern countries in the world economy,it can be sensed that economic power is shifting from east to west once again. Five centuries ago,there was dominance of Asia on the world economy. Near about 50% of the world’s grossdomestic product was represented by the India and China, while the contribution from the NorthAmerica and Western Europe was only about 20%. But, then came the industrialization, the eraof industrial revolution shifted the balance of economic power from these Asian regions toWestern Europe and North America. In 1950, the contribution of western region in the world’sproduction was around 50%, while China and India accounted for only around 8%. At that time,Japan was also emerging as a key player in the world economy and by 1980 there was completedominance by the developed economies (Das, 2009).2 | P a g e
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