Evaluate World Economies Factsheet

This report examines the economic characteristics and issues faced by Afghanistan, a least developed country. It analyzes the factors contributing to its classification as an LDC, including low GDP per capita, poor infrastructure, and the impact of transnational companies. The report also explores the challenges and opportunities presented by Afghanistan's economic landscape.

CHARACTERISTICS AND ISSUES FACTSHEET AFGHANISTAN
LEAST DEVELOPED COUNTRY
Microsoft
SEPTEMBER 2014
UK INTERNATIONAL FIRST BANKING GROUP PLC

Assessment Front Sheet
Assessment Title Evaluate world economies (LO 3 - FACTSHEET)
Qualification Module Code and title
HND in Business F86E 35
Economics 2 - The World Economy
Student Name and ID Assessor’s Name
Hasina faizal 01000133 Mrs. Ishanka Weerasinghe
Cohort Deadline Submitted on
01st September 2019 14th September 2019
LO
No. Learning Outcome Task no
3 Evaluate world economies
Learner Declaration
I certify that the work submitted for this Assessment is my own and research sources are
fully acknowledged.
Student Signature: Date: 14.09.2019
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Contents
Characteristics and issues Factsheet – Afghanistan...............................................................................3
Introduction.......................................................................................................................................3
Characteristics of a least developed country.....................................................................................3
Economic issues faced by Afghanistan..............................................................................................4
The impact of transnational companies in Afghanistan.....................................................................4
Bibliography...........................................................................................................................................5
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Characteristics and issues Factsheet – Afghanistan
Introduction
Afghanistan is located in southern Asia bordering china, Iran, Pakistan, Tajikistan,
Turkmenistan, and Uzbekistan which makes it a land locked country. Afghanistan also has a
controlled economic system where the central government directs the economy regarding the
production and distribution of goods. Afghanistan is also a member of the south Asian
association for regional corporation (SAARC) where they get to enjoy free trade between its
member countries.
Afghanistan economy was mainly based on agriculture and animal husbandry, however due
to the three year drought resulting famine, ban on opium production, blocking of trade via
Pakistan and the enormous displacement of population has led to an economic state of
collapse in Afghanistan. And according to the UN global human development index which
ranks countries considering their citizens economic income, life expectancy and literacy rate
Afghanistan has been ranked the fifth least developed country in the world.
(Kabul, 2007)
Characteristics of a least developed country.
Least developed countries are usually low income countries going through sever structural
barriers to achieve sustainable development. These countries are also highly exposed to
economic and environmental shocks and have low levels of human assets. (United Nations ,
2019)
There are many characteristics which should be determined before classifying a country
between a least developed country and a newly industrialised country, the economies which
are told to be least developed processors high birth-rate and relatively high death rates, low
life expectancy levels, increased population growth and dependency ratio. Low GDP per
capita, low living standards, low population enrolled in education, poor access to nutritious
food and health care services. (DineshBakshi, 2019)
Relating to Afghanistan the GDP per capita in 2015 was $578, a 5.77% decline from 2014, in
2016 was $547, and a 5.4% decline from 2015, in 2017 was $556 a 1.66% increase from
2016, in 2018 was $521, a 6.36% decline from 2017 which makes Afghanistan a LDC.
(Macrotrends , 2019)
Secondly comparing life expectancy to Afghanistan in 2018 is: male 61.0, females 64.5 and
total life expectancy is 62.7 which give Afghanistan a world life expectancy ranking of 157
(Worldhealthrankings, 2019)
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Economic issues faced by Afghanistan
Poor infrastructure is an issue faced by many least developed countries around the world.
According to Afghanistan many remote areas never had any infrastructure due to decades of
war and harsh climate. So infrastructure is one of the economic crucial areas in the present
state of affairs in Afghanistan. This lack of sufficient infrastructure includes lack of roads,
bridges, tunnels, power generation facility and transmission grids, hospitals, sufficient urban
housing, sewerage and solid waste management systems, railway and water supply systems in
both rural and urban areas and this has led to significantly slow down and dettoriated the
economic development of Afghanistan, so due to these poor infrastructure issues
Afghanistan faces major challenges in transit / transport and is facing many challenges in
regulatory and trade activities. They are also finding difficulty in transporting goods from one
location to another, and due to lack of water system industries are unable to introduce
capitalisation in order to function machinery so this also makes it a less industrialised
economy leading to create negative multiplier effects on the economy. (daily outlook
afghanistan , 2019)
In contrast Singapore’s infrastructure has been ranked 12th the infrastructure measures in
Singapore involves electricity, water availability, info communication networks, public
transport systems, traffic congestions and airport effectiveness. The stability and efficiency in
Singapore’s infrastructure boosted the city- state and moved forward towards the European
cites. Due to the excellent availability in infrastructure this has increased the quality of life
leading to increase living standards of the Singapore community, this also makes the country
an attractive city in the world and this is what provokes investors into Singapore. The
Singapore government has also invested heavily in the development of aviation; it also has its
telecommunication services under control which makes it an efficient and an effective
economy.
The impact of transnational companies in Afghanistan
As Afghanistan is more involved in the primary sector their main industry is agriculture,
manufacturing raw materials such as cotton, wool, skins and hides and fruits and also mining.
So the impact of transnational companies on Afghanistan will lead to damage the
environment because in order to locate the firm deforestation may have to take place
exploiting natural resources and the harvest of the Afghans. And also as Afghanistan
purchasing power parity is low and they earn low incomes these transnational companies will
be attracted to cheap labour and locate themselves and exploiting employees by paying low
wages which would deploy the employee morale. When these transnational companies come
into Afghanistan attracted to the natural resources such as cereal production which accounts
for 80% and wheat production which brings in 2.69 million tonnes which is 67% these
transnational companies will probably export these goods instead of manufacturing locally.
And as there are no much job opportunities in Afghanistan transnational companies are able
to benefit by paying them low wages through poor employment condition as they have no
choice. However the transnational companies could also impact Afghanistan positively as this
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could help enhance local infrastructure, because there is low infrastructure facilities the
distribution of goods and transportation of goods from one location to another maybe time
consuming so in order to enhance this company may invest which would help benefit
Afghanistan as a whole. (Economics , 2019)
Bibliography
daily outlook afghanistan , 2019. Infrastructure as the Basic Need for Afghanistan
Development. [Online]
Available at: http://www.outlookafghanistan.net/editorialdetail.php?post_id=23145
[Accessed 14 09 2019].
DineshBakshi, 2019. revision notes. [Online]
Available at: https://www.dineshbakshi.com/igcse-gcse-economics/developed-and-
developing-economies/revision-notes/134-characteristics-of-a-less-developed-economy
[Accessed 13 09 2019].
Economics , 2019. What Are The Biggest Industries In Afghanistan?. [Online]
Available at: https://www.worldatlas.com/articles/what-are-the-biggest-industries-in-
afghanistan.html
[Accessed 14 9 2019].
Kabul, 2007. the new humanitarian. [Online]
Available at: http://www.thenewhumanitarian.org/report/75365/afghanistan-fifth-least-
developed-country-world
[Accessed 13 09 2019].
Macrotrends , 2019. Afghanistan GDP Per Capita 1960-2019. [Online]
Available at: https://www.macrotrends.net/countries/AFG/afghanistan/gdp-per-capita
[Accessed 13 9 2019].
United Nations , 2019. least develped countires (LDCs). [Online]
Available at: https://www.un.org/development/desa/dpad/least-developed-country-
category.html
[Accessed 13 09 2019].
Worldhealthrankings, 2019. afghanistan : life expectancy. [Online]
Available at: https://www.worldlifeexpectancy.com/afghanistan-life-expectancy
[Accessed 13 09 2019].
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