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Assignment on Current economic issues facing world economies-comprises of modern infrastructure &high standard of living

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Current economic issues facing world economies

Introduction

Gross domestic product (GDP) per capita, Human development Index and the degree of industrialisation are three basic metric tools for determining the type of economies, viz., advanced, developing and least developed. Advanced economies comprises of modern infrastructure with high standard of living. The GDP per capita for an advanced economy is genially high, and the GDP includes everything (goods and services) produced by a country within a specific time. The advanced economies are found to be fare strongly on HDI (Human development Index) (Lukiyanova, Anna, and Nina Vishnevskaya, et al, 2015). For example, Switzerland is an advanced economy country having the GDP per capita as $80,189.70 (2017) 

On the other the developing economies have low GDP per capita as compared to that of the advanced economies. It includes those nations who have fare poorly on the HDI. Thus these economies are considered to be less developed as compared to the advanced economies. One of the major defining feature of this economy is the low per capital real income, which results in low investments and low savings. This creates a situation of poverty in the nations having developing economies. High population growth rate and increased rate of unemployment also defines developing economies. In these nations, approximately 75 percent of low income population are rurally based. They are mostly dependent on other nations for the export of primary commodities (Shahbaz, Muhammad, et al, 2018). According to WTO, most of its members are of the developing nations. For example, Russia is one of the developing nations having GDP per capita as $ 10,743.10 (2017).   

Finally, the least developed economies are those nations having the least GDP per capita from all other economies. They have the low fare on HDI also. The nations included in this economy have the low-income population with high rate of unemployment. This economy is defined by three basic factors viz., poverty, massive economic vulnerability and minimum human resource (Schumpeter, Joseph, et al, 2017). These factors make the countries to define them as the poorest nations of the world. They are being classified as least developed by the UN on the basis of ow GNI (gross national income), high degree of the economic vulnerability and the weak human assets. For example, Uganda is one of the least developed nations having GDP per capita as $604.04 (2017). 

Economy of Russia

Russia is the largest nation in the globe in terms of its geographical area. The GDP of Russia is found to have increased 1.7 percent in 2018, and is forecasted to increase again by 1.7 percent in 2020. The population of Russia in 2017 is approximately 144 million, with a GDP per capita of $ 10,743.10. The public burden of the country is equal to 17 percent to that of the GDP. The economic growth (annual variation percentage) of the nation is 1.5 percent for the year 2017. The annual variation in the stock market for 2017 is -5.5 percent. The import and export of Russia is approximately $ 238 billion and $ 353 billion respectively. Unemployment rate in Russia for 2017 is found to be 5.2 percent. In Russia, petroleum products, crude oil, and the natural gas comprises of approximately 58 percent of the total exports of the nations. Its major imports represents the foods and the ground transports which is approximately 13 percent and 12 percent respectively. Russia holds a free exchange rate system for both US dollar and the euro, which resulted in the end of two exchange arte control (Sassen, Saskia, et al, 2018). The economic freedom score for Russia is 58.2 which is considered as the 107th freest within the 2018 Index. It is ranked as the 41st among the 44 European countries. The personal income tax rate and the top corporate tax rate are 13 percent and 20 percent respectively for Russia. Most of the employment in Russia is limited due to the rigid and out-dated labour codes which ultimately also limits the productivity rate. The prices of most its commodities have been liberalised by the government but have enhanced the subsidies towards farmers after the imposition of sanctions by US and EU (Coale, Ansley Johnson, and Edgar, et al, 2015). 

Comparison between US and Russia economy

On contrary, it is evident that the US economy is huge in comparison to that of the Russia. The current GDP per capita of United States is $ 59, 531.66. According to the report of U.S. Department of Commerce, the GDP of US in 2016 was approximately $18.1 trillion whereas the GDP of Russia in the same year was only $ 1.3 trillion. In 2015, the military expenses of US was 3.3 percent of its GDP, whereas for Russia it was 5 percent of its GDP. Russia is still in the top five list of military spenders of the world, whereas its military expenditure is approximately 10 percent of the military spending done by US (Furtado, Celso, et al, 2018).   

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