Economy of the America's Largest Export Continues

President Obama met Wednesday with corporate leaders today in an effort to control America's leading export over the past couple of decades, namely jobs. But what will be the result?

With unemployment rates stubbornly high and large businesses sitting on record piles of cash, the it is expected that the president will exhort business leaders to begin hiring again. However, structural changes to how business is done may preclude that.

While the American economy is dependent on consumer spending for growth and jobs, American businesses increasingly no longer need that same domestic spending for growth, thanks to their international sales. International sales account for about 47 percent of their revenue, according to a survey of the Standard & Poor's top 500 index.

Many of these companies have off shored and outsourced in order to seek lower wages, leading many to assume that it isn't possible to compete with low wages and regulations. However, Germany, one of the world's leading exporters, pays its manufacturing workers an average of $48 per hour (including benefits).

Reforming our economy is clearly possible without moving to a service economy or sacrificing wage rates. Manufacturing is an important part of any developed nation. If a nation is simply exporting raw materials (as the United States is the world's largest food exporter), and is importing all of its finished goods, then it is essentially a colony state for mercantilist producers, also known as a banana republic.

Manufacturing has declined from making up over 20 percent of employment a couple decades ago, to less than ten percent today, according to the Bureau of Labor Statistics. It is impossible to support a middle class without a strong manufacturing base to provide quality jobs. Our present economic trajectory is resulting in a polarization of wealth, and the top earners in America continue to own a larger percentage of total wealth.

President Obama must realize these facts as he works to turnaround the American economy. A good place to start if by choosing a replacement for the outgoing director of the National Economic Council, Larry Summers. As Wall St. and big businesses profit off of trade policies that fail the average American, these cannot be the voices whispering in the president's ear. There are many qualified economists and manufacturing CEOs who could do a much better job.

If change is to come to our economic policies, our leaders must stop listening to those who currently profit from them. Voicing your support for such policies will also help. If only lobbyists, bankers and the executives who routinely outsource jobs are the only people speaking out, then we will remain on track to becoming a ruined nation.

Ecomony of the People's of Indonesia

The Republic of Indonesia is an archipelago of over 18,110 islands, of which 6,000 are inhabited. After China, India and the US, it is the fourth most populated country in the world with around 230 million people. It is also home to the largest Muslim population in the world. Jakarta is the capital city of Indonesia. Malaysia, East Timor and Papua New Guinea are its closest neighbors.

Indonesia became independent after World War II, following Dutch colonialism for three and a half centuries. Periods of swift economic change, corruption, natural disasters and a democratization process have made Indonesia a turbulent nation. Its wealth of natural resources is a pillar of its economic strength. However, poverty is the biggest challenge to the Indonesia’s economy. Around 53% of the inhabitants earn less than US$2 a day. Indonesia lacks infrastructure development, except in Jakarta and Bali. Indonesia can be easily reached by air. Its major airports are Ngurah Rai (DPS), Juanda (SUB) and Soekarno-Hatta (CGK). One can also reach Indonesia via ferry from Singapore and Malaysia.

Indonesian Economic Profile: Statistics
Indonesia is a member of the G-20 major economies. It features a developing market economy, with strong influence from the government. Over 164 state-owned enterprises are run by the government. The prices of many basic products, such as rice, electricity and fuel, are administered by the government.

 Domestic consumption is one of the major driving forces behind the country’s economic growth. The economic growth slowed considerably during 2007-08. However, like India and China, Indonesia recorded higher growth during the global financial crisis, compared to the other G20 members.
 

GDP (purchasing power parity):

(All figures are in US dollar billion.)

GDP (official exchange rate): $514.9 billion (2009 est.)
GDP - real growth rate:

    * 4.4% (2009 est.)
    * 6.1% (2008 est.)
    * 6.3% (2007 est.)

GDP - per capita (PPP):

    * $4,000 (2009 est.)
    * $3,900 (2008 est.)
    * $3,700 (2007 est.)

GDP - composition by sector:

    * Agriculture: 14.4%
    * Industry: 47.1%
    * Services: 38.5% (2009 est.)
    * Literacy rate: 92.0%

G20
Indonesia is part of the G-20, Group of Twenty.

Economy of the People's Republic of China

In the modern era, China's influence in the world economy was minimal until the late 1980s. At that time, economic reforms initiated after 1978 began to generate significant and steady growth in investment, consumption and standards of living. China now participates extensively in the world market and private sector companies play a major role in the economy. Since 1978 hundreds of millions have been lifted out of poverty: According to China's official statistics, the poverty rate fell from 53% in 1981[6] to 2.5% in 2005. However, in 2006, 10.8% of people still lived on less than $1 a day (purchasing power parity-adjusted). The infant mortality rate fell by 39.5% between 1990 and 2005, and maternal mortality by 41.1%. Access to telephones during the period rose more than 94-fold, to 57.1%.

In the 1949 revolution, China's economic system was officially made into a communist system. Since the wide-ranging reforms of the 1980s and afterwards, many scholars assert that China can be defined as one of the leading examples of state capitalism today.

China has generally implemented reforms in a gradualist fashion. As its role in world trade has steadily grown, its importance to the international economy has also increased apace. China's foreign trade has grown faster than its GDP for the past 25 years. China's growth comes both from huge state investment in infrastructure and heavy industry and from private sector expansion in light industry instead of just exports, whose role in the economy appears to have been significantly overestimated. The smaller but highly concentrated public sector, dominated by 159 large SOEs, provided key inputs from utilities, heavy industries, and energy resources that facilitated private sector growth and drove investment, the foundation of national growth. In 2008 thousands of private companies closed down and the government announced plans to expand the public sector to take up the slack caused by the global financial crisis. In 2010, there were approximately 10 million small businesses in China.

The PRC government's decision to permit China to be used by multinational corporations as an export platform has made the country a major competitor to other Asian export-led economies, such as South Korea, Singapore, and Malaysia. China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity. The government has also focused on foreign trade as a major vehicle for economic growth. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and that the extent at which China is dependent on exports is exaggerated. Nevertheless, key bottlenecks continue to constrain growth. Available energy is insufficient to run at fully installed industrial capacity, and the transport system is inadequate to move sufficient quantities of such critical items as coal.

The two most important sectors of the economy have traditionally been agriculture and industry, which together employ more than 70 percent of the labor force and produce more than 60 percent of GDP. The two sectors have differed in many respects. Technology, labor productivity, and incomes have advanced much more rapidly in industry than in agriculture. Agricultural output has been vulnerable to the effects of weather, while industry has been more directly influenced by the government. The disparities between the two sectors have combined to form an economic-cultural-social gap between the rural and urban areas, which is a major division in Chinese society. China is the world's largest producer of rice and is among the principal sources of wheat, corn (maize), tobacco, soybeans, peanuts (groundnuts), and cotton. The country is one of the world's largest producers of a number of industrial and mineral products, including cotton cloth, tungsten, and antimony, and is an important producer of cotton yarn, coal, crude oil, and a number of other products. Its mineral resources are probably among the richest in the world but are only partially developed.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories. The technological level and quality standards of its industry as a whole are still fairly low, notwithstanding a marked change since 2000, spurred in part by foreign investment. A report by UBS in 2009 concluded that China has experienced total factor productivity growth of 4 per cent per year since 1990, one of the fastest improvements in world economic history.

China's increasing integration with the international economy and its growing efforts to use market forces to govern the domestic allocation of goods have exacerbated this problem. Over the years, large subsidies were built into the price structure, and these subsidies grew substantially in the late 1970s and 1980s. By the early 1990s these subsidies began to be eliminated, in large part due to China's admission into the World Trade Organization (WTO) in 2001, which carried with it requirements for further economic liberalization and deregulation. China's ongoing economic transformation has had a profound impact not only on China but on the world. The market-oriented reforms China has implemented over the past two decades have unleashed individual initiative and entrepreneurship, whilst retaining state domination of the economy.

Wayne M. Morrison of the Congressional Research Service wrote in 2009 that "Despite the relatively positive outlook for its economy, China faces a number of difficult challenges that, if not addressed, could undermine its future economic growth and stability. These include pervasive government corruption, an inefficient banking system, over-dependence on exports and fixed investment for growth, the lack of rule of law, severe pollution, and widening income disparities." Economic consultant David Smick adds that the recent actions by the Chinese government to stimulate their economy have only added to a huge industrial overcapacity and commercial real estate vacancy problems.