Team Assignment
Assignment Content
- Prepare a 3 to 5-slide presentation for the 2 economies selected by your team. Cite the text as you compare and contrasts both economies. Suggestions are below. The team can write to cteeter@email.phoenix.edu with its choice.
Team 4: Venezuela vs Saudi Arabia (world’s 2 largest sources of oil reserves)
- Research each economy selected by your Team. Compare similarities and differences between your assigned countries/economies and how their economic, political, and cultural development since 1992 has influenced their economic growth and trade competitiveness.
Use tables and/or graphs to support your analysis of the following economic statistics/indicators of your 2 assigned economies through the most recent year available since 2009 (the trough of the last economic cycle). Whenever possible, plot the metric for both economies on the same chart.
- GDP per capita growth over time
- Inflation rate over time
- Unemployment rate over time
- Exports as a % of GDP over time
- National government debt as a % of GDP
- Evaluate the reasons why the economic growth of the 2 economies/countries varied. Discuss how international trade influenced the strength of each economy. Discuss the role of value chains and value-added production.
Analyze how the failure to use value-added trade measures distorts trade statistics. For example, Boeing and Airbus airliners, Apple iPad and iPhone production, and North American integrated auto and light truck manufacturing.
Examine at least 2 industries that have provided each economy a comparative advantage in world trade.
Cite at least 2 academically credible sources.
Format your citations according to APA guidelines.
World Economies Comparison Presentation
Venezuela vs Saudi Arabia
Team 4 – Theresa Alexander, Bibha Prajapati, James Tindell, Jennifer Cormier, Kareem Munir
ECO/535
November 9 2020
University of Phoenix
Christian Teeter
Introduction
Similarities & Differences
Venezuela was the third largest supplier of crude oil imports into the US after Canada and Saudi Arabia
The US is the primary destination for Venezuelan crude oil and receives 41% of its total exports
Saudi Arabia’s Eastern Province is home to the world’s largest oil field
Though Venezuela has 18 percent of world’s proven oil reserves and Saudi Arabia 16 percent, It is Saudi Arabia’s oil that is cheapest to extract
Difference: Venezuela’s fields are explored by weak investment while Saudi Arabia invests highly on exploration and production of oil reserves.
As mentioned above, the major difference between Venezuela and Saudi Arabia as one of the biggest oil exporters is the economy behind them that supports it. Venezuela is still a poor country despite its vast oil reserve which is not explored by the state-owned company whereas Saudi Arabia is also backed by its state- owned company but due to the cheaper cost to extract oil, Saudi Arabia exports more oil to the US and other countries. The other advantage for Saudi Arabia is that if there is a higher demand in oil then it can provide that amount instantly due to its massive preserves of oil but for Venezuela that is not an option as extracting heavy and extra heavy oil is expensive. The changing leadership is another factor that affect Venezuela’s economy and it’s oil production.
2
Industry#1 Venezuela
Industry#1
Saudi Arabia
Tables/Graphs
(World Bank Open Data, n.d.)
(World Bank Open Data, n.d.)
(World Bank Open Data, n.d.)
These graphs tell a very differing story about each country both of which have extremely large oil reserves. When looking at both countries GDP per capita growth you see a country like Venezuela which seems somewhat steady increases and decreases through time recently having relative fluctuations in the last two decades. Then you have Saudi Arabia who over time have seen drastic fluctuations in their growth and now are recently having somewhat steady increases and decreases in growth percentage. Around the 1980s you start to similarities in trends, but the fluctuations are not that consistently trending. Inflation and Unemployment are where you see the major differences between these two countries. Saudi Arabia’s steady inflation and steady but slowly rising unemployment are a start contrast to what is happening in Venezuela. Venezuela’s inflation rate skyrocketed and as of 2016 is 254.9 percent (World Bank Open Data, n.d.). Venezuela’s unemployment while it is now close to where Saudi Arabia’s percentage is, it has been extremely volatile. Even with a lot of years missing you can see sharp increases and decreases in unemployment over the decades.
5
Tables/Graphs
(World Bank Open Data, n.d.)
(Venezuela Government Debt to GDP, n.d.)
(Saudi Arabia Government Debt to GDP, n.d.)
These graphs of data compiled by the World Bank and the Trading Economics web site share and interesting insight about these two countries. While Saudi Arabia and Venezuela are in two completely different hemispheres you can see the similarities of trends when looking at each country’s exports. While Venezuela’s increases and decreases are not as high and as low as Saudi Arabia you can see that the increasing and decreasing trends, I wouldn’t call them parallel, but it is close. Even though both countries national debt to GDP are similar now you can see the differences of these countries’ economy over the years. While Venezuela’s debt to GDP is volatile and fluctuates Saudi Arabia’s debt to GDP is the opposite being overall very smooth not fluctuating much. So looking at these countries just based on these graphs alone you can tell they are dependent on their major export, that being oil.
6
Conclusion
References
Bibliography
Saudi Arabia Government Debt to GDP. (n.d.). Retrieved from Trading Economics Web Site: https://tradingeconomics.com/saudi-arabia/government-debt-to-gdp#:~:text=Government%20Debt%20to%20GDP%20in%20Saudi%20Arabia%20is%20expected%20to,according%20to%20our%20econometric%20models.
Venezuela Government Debt to GDP. (n.d.). Retrieved from Trading Economics Web Site: https://tradingeconomics.com/venezuela/government-debt-to-gdp
World Bank Open Data. (n.d.). Retrieved from The World Bank Web Site: https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG?locations=SA-VE
International. (n.d.). U.S. Energy Information Administration (EIA). https://www.eia.gov/international/analysis/country/VEN
Ng, N. T. (2020, April 19). Saudi oil official refutes claim that crude exports to the US rose last month. CNBC. https://www.cnbc.com/2020/04/17/saudi-arabias-oil-exports-to-us-skyrocketed-amid-coronavirus-lockdowns.html
Plumer, B. (2012, June 15). Why Venezuela won’t pass Saudi Arabia as the world’s biggest oil power anytime soon. The Washington Post. https://www.washingtonpost.com/blogs/ezra-klein/post/why-venezuela-wont-pass-saudi-arabia-as-the-worlds-biggest-oil-power-anytime-soon/2012/06/15/gJQAxJ2EfV_blog.html