Welsh Economy Essay
A number of factors determine the regional economic development such as: 1. Unemployment: High rates of unemployment lead to different problems among youth. Human resources of a country are the most valuable asset contributing to its growth. More people working imply superior living conditions, more spending power of people, happiness and good health. If the consumers will have money, only then they will be able to spend it in the market and lead to the growth of various products and industries which in turn will create more jobs.
On the other hand unemployment increases depression, loss of motivation and inspiration among the youth raising the rates of crimes and substance misuse. Official records of unemployment rate are issued by the government of any country and serve as a warning sign to the health of the nation and society in core. Different countries can use any of the several methods available for calculating the unemployment rate. For e. g. UK uses the Claimant Count method and the Labour Force Survey (LFS) method to determine the unemployment levels in the country (Lecture Slides). Causes of unemployment can be many such as:
Frictional Unemployment: It impacts the market for a very short period of time. Conditions such as failure of a company or firm, growth of other companies, freshly educated people entering the market and the aged persons retiring from work lead to some labour turnover in the markets and hence short term frictional unemployment may result (Lecture Slides). ? Structural Unemployment: Structural unemployment results from the long term demand and supply changes in the market. Change of technology or product used for a particular application may need people with different working skills making the earlier ones unemployed.
Origin of new products and industries, change in product preferences of people and decline of product or production technology may lead to structural unemployment in a region, market or profession (Lecture Slides). F Fig. 1 and Fig. 2 (Labour Market Statistics February 2008: Wales, 2008) ? Technological Unemployment: The changes in the technology used for a particular product may lead to unemployment of people who are not equipped with the latest skills required in the market. If the work force is able to adapt and learn new technologies it can lead to boost up of the economy and further create more jobs leading to a low unemployment rate.
USA and Japan are the perfect examples of this adaptation and a low number of jobless people (Lecture Slides). ? Seasonal Unemployment: Seasonal unemployment results when a product or service is in demand for a particular short period of time like Christmas tree, bells and decorations are in high demand at the time of Christmas only, tourism of a particular place is high during some seasons of the year and so on. Seasonal changes in the demand of a product or service lead to particularly high rates of unemployment in some areas like west and north Wales, Scotland etc (Lecture Slides).
Fig. 1 and Fig. 2 demonstrate employment statistics for Wales. From the period Oct to Dec 2007 employment in Wales was 71. 5 % down by 0. 3 percentage points from previous year (Labour Market Statistics February 2008: Wales, 2008). Fig. 3(Al-Nuaimi, 2005). 2. Low Participation/Employment/Activity Rates: It is the measure to indicate the number of people who are not economically active that is even though they are not employed but they do not look up for jobs like the retired persons or married or child bearing women.
In Wales the difference in the skill levels of workers and the demand of skills in the market has led to high number of people who do not participate in the market actively. Health related and cultural issues may also be the possible causes for low activity (Lecture Slides). Fig. 4 shows the economic inactivity rate (working age) in Wales was 24. 6 per cent during the period Oct to Dec 2007, 0. 5 percentage points up from previous year (Labour Market Statistics February 2008: Wales, 2008). Fig. 4 (Labour Market Statistics February 2008: Wales, 2008).
Table 1 (Labour Market Statistics February 2008: Wales, 2008). 3. Low Per Capita GDP: GDP is a measure of the size of the economy of a region, analysed on per head basis. It indicates the working efficiency of the economy and people. “Per capita GDP in West Wales and the Valleys represented 80. 3% of the average for EU272 as a whole in 2004. The equivalent figures for East Wales and Wales as a whole were 122. 9% and 95. 8% respectively. ”
However “. . . over the three years 2000-024, per capita GDP in West Wales and the Valleys represented 73.8% of the EU25 average – below the eligibility threshold of 75% of EU25 average” (Stokes, 2007). Another gauge is Gross Value Added (GVA). Basically it is measure resulting from the deduction of subsidies on products from the sum of GDP and taxes. Out of all the regions in UK, Wales has the lowest per capita GVA (Lecture Slides). Table 2 (Stokes, 2007). 4. Inadequate Infrastructure: The transport and the communications network play an important role in the economic development of a region providing easier, sophisticated and timely access to different resources.
Well developed infrastructure allows markets and dealers expand their horizons and cater the demands of wider community. A lot of time and money is saved. Resources from far off areas become accessible and the people in distant places can use different products of other regions easily. Well developed communication facilities like telephones, internet facilities, fax and so allow people come together, interact and stay in touch and up to date very easily (Rodrigue, 2008). The transport infrastructure of Wales lacks on various fronts.
Different areas like freight opportunities through rail routes and air traffic need to be developed systematically to make full use of their potential. An attractive, fast, easy and reliable infrastructure is fundamental in drawing new investments and prospects in the country. Up gradation of road network is vital for the growth of rural economy. Rail, road and air access need dedicated attention for inviting new opportunities to the country and the progress of its economy (Overall the framework is weak, being based on purely aspirational objectives for transport provision in Wales, n. d. )
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 14 February 2017
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