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Group 1

Comparison of the GDP &Comparison of the GDP &Overall Human DevelopmentOverall Human Development

(HDI) for last Five decades for(HDI) for last Five decades for

USA, SWEDEN andUSA, SWEDEN and

BANGLADESHBANGLADESH

Presented By –Presented By –

80118110007 – Arun Barua

80118110008 – Arunabh Bhandari80118110011 – Anand Chandan

80118110013 – Pravin Chavan

80118110015 – Bhuvnesh Chhibber

NMIMS EMBA GROUP - I

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1. UNITED STATES OF AMERICA :United States of America is a federal constitutional republic comprising of fifty states and a federal district andWashington, D.C., the capital district.

At 3.79 million square miles and with over 308 million people, the United States is the third or fourth largescountry by total area, and the third largest both by land area and population. It is one of the world's mostethnically diverse and multicultural nations, the product of large-scale immigration from many countries. TheU.S. economy is the world's largest national economy, with an estimated 2009 GDP of $14.3 trillion (24% onominal global GDP and 20% of global GDP at purchasing power parity).

2010 GDP

Real GDP increased 2.9 percent in 2010 (that is, from the 2009 annual level to the 2010 annual level), incontrast to a decrease of 2.6 percent in 2009.

The increase in real GDP in 2010 primarily reflected positive contributions from private inventory investment

exports, personal consumption expenditures (PCE), non-residential fixed investment, and federal governmen

spending. Imports, which are a subtraction in the calculation of GDP, increased.

The price index for gross domestic purchases increased 1.3 percent in 2010, in contrast to a decrease of 0.2

 percent in 2009.

Current-dollar GDP increased 3.8 percent, or $541.4 billion, in 2010. In contrast, current-dollar GDP decreased

1.7 percent, or $250.1 billion, in 2009.

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Last Quarter GDP :The Gross Domestic Product (GDP) in the United States expanded 3.1 percent in the fourth quarter of 2010over the previous quarter. From 1947 until 2010 The United States' average quarterly GDP Growth was 3.30 percent reaching an historical high of 17.20 percent in March of 1950 and a record low of -10.40 percent inMarch of 1958..

Interest Rate Growth Rate Inflation RateJoblessRate

GovernmentBudget

0.25% 3.10% 2.10% 8.80% -8.90

USA Growth Trends in Individual Sections (% of GDP)

Year AgricultureIndustr

yService

Per CapitaGDP (US$)

GDPGrowth rate

(%)

1960 .. .. .. 2881 --

1970 4 35 61 5053.17 --

1980 3 34 64 12249.04 0

1990 2 28 70 23197.70 2

2000 1 23 75 35251.93 4

2009 -- -- -- 45934.47 -3

Source : World Bank 

--- Not Available

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2. Sweden

SWEDEN’S ECONOMY

The economy of Sweden is a developed diverse economy, aided by timber, hydropower and iron ore. Theseconstitute the resource base of an economy oriented toward foreign trade. The main industries include motor vehicles, telecommunications, pharmaceuticals, industrial machines, precision equipments, chemical goods,home goods and appliances, forestry, iron and steel. Sweden’s economy encouraged a high standard of living incombination with high-tech capitalism and extensive welfare benefits. The country’s economy is heavilydependent on foreign trade. Heavily dependent on exports of autos, telecommunications, construction

equipment and other investment goods

Sweden is a neutral country and did not actively participate in the World War II, during the post-war era, thecountry did not have to rebuild its economic base, banking system, and country as a whole, like other countrieshad to. Sweden has achieved a relatively high standard of living under a mixed system of high-tech capitalismand extensive welfare benefits.

The post-war boom propelled Sweden to greater economic prosperity, putting the country in third place in per capita GDP rankings by 1970Beginning in the 1970s and culminating with the deep recession of the early1990s, Swedish standards of living developed less favorably than many other industrialized countries. Since themid 1990s the economic performance has improved.

As per 2007, total tax revenue was 47.8% of GDP, down from 49.1% 2006.

Crisis of the 1990s

In the 1980s, a real estate and financial bubble formed, driven by a rapid increase in lending. When the bust hitit hit hard. Gross domestic product fell 6% between 1990 and 1993, prompting a tide of bankruptcies thatthreatened to swamp the financial system.. The government took over nearly a quarter of banking assets at acost of about 4% of the nation's GDP. A $14billion restructuring fund and a takeover of Nordbanken, thehardest-hit player this was known colloquially as the "Stockholm Solution". Between 1990 and 1993 GDPwent down by 6 % and unemployment skyrocketed, causing the worst economic crisis in Sweden. In 1992 therewas a run on the currency, the central bank briefly jacking up interest to 500% in an unsuccessful effort to

defend the currency's fixed exchange rate. Total employment fell by almost 10% during the crisis.

In 1994 the government budget deficit exceeded 15% of GDP. The response of the government was to cutspending and institute a multitude of reforms to improve Sweden's competitiveness. When the internationaleconomic outlook improved combined with a rapid growth in the IT sector, which Sweden was well positionedto capitalize on, the country, was able to emerge from the crisis

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The crisis of the 1990s was by some viewed as the end of the much buzzed welfare model called "Svenskamodellen", literally "The Swedish Model", as it proved that governmental spending at the levels previouslyexperienced in Sweden was not long term sustainable Much of the Swedish Model's acclaimed advantagesactually had to be viewed as a result of the post WWII special situation, which left Sweden untouched whencompetitors' economies were comparatively weak.

However, the reforms enacted during the 1990s seem to have created a model in which extensive welfare benefits can be maintained in a global economy.

GDP SECTOR WISE

Agriculture, forestry, and fishing (2009): Approximately 1.5% of GDP. Products--dairy products, meat, grains(barley, wheat), sugar beets, potatoes, wood. Arable land--9 million acres.

Industry (2010): Approximately 26.6% of GDP. Types--machinery/metal products (iron and steel), electricalequipment, aircraft, paper products, precision equipment (bearings, radio and telephone parts, armaments),wood pulp and paper products, processed foods.

Services (2010): Approximately 71.8% of GDP. Types--telecommunications, computer equipment, biotech.

ECONOMY FACTS.

Sweden is an export-oriented mixed economy featuring a modern distribution system, excellent internal andexternal communications, and a skilled labor force. Timber, hydropower and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Sweden's engineering sector accounts for 50% of output and exports. Telecommunications, the automotive industry and the pharmaceutical industries are also of great importance. Agriculture accounts for 2 percent of GDP and employment.

The 20 largest Sweden-registered companies by turnover in 2007 were Sony Ericsson Mobile

Communications AB, Svenska Cellulosa Aktiebolaget, Electrolux, Volvo.

Sweden is a world leader in privatized pensions and pension funding problems are small compared to manyother Western European countries. Overall, GDP growth has been fast since reforms in the early 1990s,especially in manufacturing

World Economic Forum 2010 competitiveness index ranks Sweden 2nd most competitive, behind Switzerland.Sweden's investment into research and development stood, in 2007, at over 3.5% of GDP.

The largest trade flows are with Germany, United States, Norway, United Kingdom, Denmark and Finland.

The Swedish economic picture has brightened significantly since the severe recession in the early 1990s.Growth has been strong in recent years, and even though the growth in the economy slackened between 2001and 2003, the growth rate has picked up since with an average growth rate of 3.7% in the last three years. Thelong-run prospects for growth remain favorable. The inflation rate is low and stable, with projections for continued low levels over the next 2–3 years.

Since the mid-1990s the export sector has been booming, acting as the main engine for economic growth.Swedish exports also have proven to be surprisingly robust. A marked shift in the structure of the exports,

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where services, the IT industry, and telecommunications have taken over from traditional industries such assteel, paper and pulp, has made the Swedish export sector less vulnerable to international fluctuations.However, at the same time the Swedish industry has received less money for its exports while the import priceshave gone up. During the period 1995-2003 the export prices were reduced by 4% at the same time as theimport prices climbed by 11%. The net effect is that the Swedish terms-of-trade fell 13%

Changing Structure of GDP in Sweden

3. Bangladesh

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During the first decade after independence average GDP growth rate more or less remained below4% .Since the late eighties it started moving upward.

• In the nineties it grew at an average rate of 5%, between fiscal year 2001-2005 the economy posted an average growth rate of 5.4%.

• During the period 2006-2009, it

grew at an average rate of 6.4%.• If we start from the formation of 

the Bangladesh i.e. 1971 to 2009,the increase of GDP growth rateis 120%.

• Proposed average GDP growthrate from fy-10 to fy–14 will bestands at 6.8 %.

Commonly held belief is thatBangladesh could reach even a higher growth trajectory provided the growth constraints are kept toa minimum. The major constraints include:− Poor governance− Rampant corruption.− Infrastructural bottlenecks (electricity, energy shortage, poor sea and airport management

crowded roads).− Underdeveloped financial markets,

− Inefficient bureaucracy.− Failure to attract FDI. Bangladesh has made impressive economic and social progress in the

 past decade, despite frequent Bangladesh has made impressive economic and social progress in the past decade, despite frequentnatural disasters and external shocks. Poverty declined from 57% of the population in 1990 to40% in 2005. Broad-based private sector led growth and macroeconomic stability contributed tosignificant decline in rural and urban poverty. Bangladesh is on track to meet the MillenniumDevelopment Goal of halving extreme poverty by 2015.

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The average GDP growth over the last six years was over 6%. Bangladesh showed remarkableresilience to the global financial crisis, buoyed in part by remittances and garment exports.

The growth in the agriculture sector showed decreasing trend .During 1980-81 to 1994-95, but thesector grew almost at an average rate of 5% during 1995-96 to 1999-2000; fell to 2.5% average

growth during 2000-01 to 2004-05 period but over the last three years it grew at average rate of 4.4%. If we draw a base line from 1996 onwards and consider 1996 to 2000 as base then byinterpretation of the bar graph above we can make out following points.

• In year 2001- 2004 there is a sharp decline in the agricultural field that is 54%.

• Growth rate count 13% increase in industrial sector.

• Service sector also register a growth of 15%.

• Total GDP and per capita GDP trend shown decline 2% and 3% respectively.

• If we add up industrial sector andservice sector, they contributedalmost 30% growth.

Bangladesh has made commendable progress in social and human development.It has met the MDG for gender parity ineducation and universal primary schoolenrolment well ahead of time. Nearly 80%

of teenage girls today have completed primary education, compared to a similar 

Despite the good track record, with around56 million people still below the povertyline, Bangladesh faces considerabledevelopment challenges. It is one of themost vulnerable countries to climatechange and natural calamities like cyclones and floods-- 60% of the worldwide deaths caused bycyclones in the last 20 years were in Bangladesh. Inadequate power and gas supplies are a major constraint to growth. Only 47% of households have an electricity connection. Growing urbancongestion is reducing the benefits of urbanization. Malnutrition has been persistent, and the

quality of governance has hampered the effectiveness of expenditure and the delivery of publicservices. And the labour force is set to grow faster, posing a challenge of adequate employmentgeneration.

In the face of these challenges, Bangladesh has outlined a vision of becoming a middle incomecountry by 2021, which would require it to grow at 8% per year. For achieving this acceleration,Bangladesh will need to devise a strategy to absorb its growing labor force and raise its productivity by enhancing skills, and also invest much more, especially in infrastructure. Also,

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while addressing the other issues posed above, it will have to pay particular attention to thelooming challenge posed by climate change.

Overall HDI over last 5 decades

HDI is a composite statistic used to rank countries by level of development and is composed fromdata on life expectancy, education and percapita GNI collected at the national level

• In Education Indes Swedan is no one and fallowed by USA. Bangladesh is at bottom.

• In Helth Index USA is closely fallowed by Swedan banglades has shown substantialincrement in health index from 1970 to 2010.

• Income Index – USA is again leading fallowed by SWEDAN .BANGLADESH iscomparatively at bottom in income index and not shown steady growth in GDP.

• Bangladesh's HDI almost doubled since 1980, and out of the 95 countries for which data isavailable, Bangladesh was ranked third in terms of the improvement over that period.Bangladesh is one of the countries that has made the significant progress in HDI.

Year wise per capita GDP comparison-US, SWEDEN, BANGLADESH

Based on the d a ta – 

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• Sweden GDP was better than USA from 1070 to 1994.USA always had steady growth ratein GDP up to 2007 (subprime issue )

• Bangladesh GDP compared to USA and SWEDAN is lowest due to poor governance,corruption and failure to attract FDI and New businesses.

 Reference :

World Bank.

http://www.thedailystar.net .

http://www.businessnews-bd.com/index.

www.hdr.undp.org 

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