Reflection
6/5/14
a. Since my time at K, one year, this has been my favorite class so far because the material is so applicable to future endeavors. The class was structured around a combination of hands on activities, lectures, and class discussion. This was the first discussion based class I have felt comfortable expressing my ideas in. I attribute that to Chuck as well as the course material. I think that transportation costs and backhaul is the topic we covered that is most directly applicable to understanding how the world works. It helps us understand a lot about the world economically and why some places are more developed than others.
b. I am interested in learning more about the evolution of globalization and transportation. I enjoyed learning about transportation costs and backhaul, I think this is partly because it is a great way to understand how the world works. I enjoy learning about why some places are developed while others can seem to escape poverty traps and are stuck in an underdeveloped state. Learning more about how the transportation and distribution of goods works will help me to better understand underdevelopment.
c. Next year I will be staying on campus, with the possibility of study abroad in the spring. Next year will be challenging partly because a lot of my friends and peers will be away on study abroad. Another challenge will be deciding if I will go on study abroad in the spring. Being a transfer student from the University of Colorado, I have already missed a full year of being on campus. Honestly sometimes my time at Colorado feels like my own little "study abroad(away)". It's going to be a difficult decision to decide if I want to travel abroad my junior spring and miss even more time on campus. I look forward to coming back to K in the fall knowing what to expect and knowing people on campus. I have yet to have the experience of coming back to a school I am already familiar with, so in terms of , next year should be a lot easier than my previous two years of school.
Thursday, June 5, 2014
Thursday, May 22, 2014
City Analysis Assignment
5/22/2014
1. Caracas is Venezuela's capital and largest city. The city is the country's center for commerce, culture, economics, and the base for tourism. It is listed as the 6th biggest city in South America. As of 2011, the country has a population of about 2.1 million. Being a capital city and the 6th largest in South America, Venezuela is a Regional Metropolis. An attributing factor to this cities size is it's distance to the coast, about 25 miles. This makes it an ideal city for tourism, shipping, and connectedness to the world. The largest city in South America is Sao Paulo, Brazil. Caracas is about 6,779 miles from Sao Paulo. Sao Paulo is a national metropolis, it has the largest GDP in the southern hemisphere and a strong international influence. The country is the center of commerce in South America and has the second largest stock exchange market in the world, in market value. La Guaira is port city in Venezuela and is located about 20 miles from Venezuela. La Guaira is a small coastal city that has a focus on shipping and transporting goods from the ships to large cities like Caracas.
2. Being the 6th largest city in South America, Venezuela offers a lot and has many resources that make it an easy place to live in regards to smaller cities. The Capital offers many different stores, internationally and locally based that you can't find in smaller cities in Venezuela because the demand and population needed to support the stores is not there. However, Venezuela does not have some of the international influence that larger countries, such as Sao Paulo have.
5/22/2014
1. Caracas is Venezuela's capital and largest city. The city is the country's center for commerce, culture, economics, and the base for tourism. It is listed as the 6th biggest city in South America. As of 2011, the country has a population of about 2.1 million. Being a capital city and the 6th largest in South America, Venezuela is a Regional Metropolis. An attributing factor to this cities size is it's distance to the coast, about 25 miles. This makes it an ideal city for tourism, shipping, and connectedness to the world. The largest city in South America is Sao Paulo, Brazil. Caracas is about 6,779 miles from Sao Paulo. Sao Paulo is a national metropolis, it has the largest GDP in the southern hemisphere and a strong international influence. The country is the center of commerce in South America and has the second largest stock exchange market in the world, in market value. La Guaira is port city in Venezuela and is located about 20 miles from Venezuela. La Guaira is a small coastal city that has a focus on shipping and transporting goods from the ships to large cities like Caracas.
2. Being the 6th largest city in South America, Venezuela offers a lot and has many resources that make it an easy place to live in regards to smaller cities. The Capital offers many different stores, internationally and locally based that you can't find in smaller cities in Venezuela because the demand and population needed to support the stores is not there. However, Venezuela does not have some of the international influence that larger countries, such as Sao Paulo have.
Tuesday, May 20, 2014
New Summary #3: Airlines Grounded in Venezuelan Malaise
Author: Andres Schipani
Published: May 20, 2014
This article continues to discuss Venezuela's never-ending economic misfortunes. The country is in a dismal downward-spirling tunnel of economic hardships. Schipani attributes high inflation, price controls and good shortages as the major sources of problems. The article quotes Professor Steve Hanke of John Hopkins University when he says that Venezuela is easily the most miserable country in the world. The article continues by saying that the economy is reeling as steel production, cement production, investment, spending on machinery & other capital goods, and oil production are all falling and shrinking. One of the biggest problems, according to the article, is that tightening of fiscal and monetary policy us required to overcome economic distortions, however doing this will further damage the economy.
How can an economy survive when all of it's sources of GDP are shrinking? In class we discussed the GDP equation, GDP = C + I + G + (Ex-Im). When thinking about the Venezuelan economy in regards to this equation, it is hard not to be pessimistic about the situation. As inflation increases, demand for US currency increases, and as a result there is a shortage of US currency. Because of the currency shortage, the country is unable to import as many goods resulting in goods shortages. Goods shortages leads to decreased consumption as consumers are unable to purchase their desired goods. This weakens the economy and weakens future expectations leading to a decrease in investment, internally and externally. Also leading to pessimism is that these are not small decreases in consumer spending and investment, they are large drastic decreases leading to large fluctuations in the economy and recessions, as GDP decreases.
How can an economy escape this downward spiraling demise? A major factor Venezuela needs to overcome is corruption in the government and an end to the political violence that results. Another thing that would seem to help would be an increase in government spending that would combat the decreased consumer and investment spending. However, the government has already tried to pump more money, bolivars, into the economy which has lead to further hurt with increased inflation. Maybe the government should try investing in business and other sources of infrastructure to try and stimulate the economy and create jobs. Somehow, someway, the government needs to try and greatly reduce inflation so that currency shortages and goods shortages are reversed.
Author: Andres Schipani
Published: May 20, 2014
This article continues to discuss Venezuela's never-ending economic misfortunes. The country is in a dismal downward-spirling tunnel of economic hardships. Schipani attributes high inflation, price controls and good shortages as the major sources of problems. The article quotes Professor Steve Hanke of John Hopkins University when he says that Venezuela is easily the most miserable country in the world. The article continues by saying that the economy is reeling as steel production, cement production, investment, spending on machinery & other capital goods, and oil production are all falling and shrinking. One of the biggest problems, according to the article, is that tightening of fiscal and monetary policy us required to overcome economic distortions, however doing this will further damage the economy.
How can an economy survive when all of it's sources of GDP are shrinking? In class we discussed the GDP equation, GDP = C + I + G + (Ex-Im). When thinking about the Venezuelan economy in regards to this equation, it is hard not to be pessimistic about the situation. As inflation increases, demand for US currency increases, and as a result there is a shortage of US currency. Because of the currency shortage, the country is unable to import as many goods resulting in goods shortages. Goods shortages leads to decreased consumption as consumers are unable to purchase their desired goods. This weakens the economy and weakens future expectations leading to a decrease in investment, internally and externally. Also leading to pessimism is that these are not small decreases in consumer spending and investment, they are large drastic decreases leading to large fluctuations in the economy and recessions, as GDP decreases.
How can an economy escape this downward spiraling demise? A major factor Venezuela needs to overcome is corruption in the government and an end to the political violence that results. Another thing that would seem to help would be an increase in government spending that would combat the decreased consumer and investment spending. However, the government has already tried to pump more money, bolivars, into the economy which has lead to further hurt with increased inflation. Maybe the government should try investing in business and other sources of infrastructure to try and stimulate the economy and create jobs. Somehow, someway, the government needs to try and greatly reduce inflation so that currency shortages and goods shortages are reversed.
Tuesday, May 13, 2014
Reading: Chapter 5 of "Junkyard Planet"
Author: Adam Minter
1. While India and China are both rapidly industrializing counties with a large demand for resources, a large majority of US scrap metal goes to China. This is because of the amount of exports that China sends to the west coast of the United States and the idea of backhaul. Trade is extremely imbalanced between China and the United States, we hardly export goods to China but we import a lot from them. Therefore manufactured goods flow heavily in one direction, from China to the US, and lightly going the opposite direction. Shipping companies don't want to send empty ships back to China so in order to accomplish this they offer discounts to companies such as scraping companies that generate millions of pounds of product a year and has customers in China. The US doesn't import nearly as much from India, therefore the trade imbalance is not there and shipping countries don't offer as high of discounts to scrapping companies trying to export their goods to India.
2. A specific section of the reading says "All of this globalized scrap, every last hunk, moves according to who wants it most, and who can ship it most cheaply." While this is important in the creation of globalization, it can have negative aspects. The imbalances in trade and trade markets can create a lot of inequalities in the world. For example in Brass City, Jamnagar, brass manufacturers want to get scrapping material from the US but because shipping costs are so much higher in comparison to China, they can't tap into the market. This leads to lower wages for employees which lowers the standard of living and furthers inequality.
3. More generally speaking, modern transportation has been significantly influenced by history. By relating this reading with Jared Diamond's themes in "Why Did Human History Unfold Differently On Different Continents For The Last 13,000 Years?" Historically, settlers moved to areas on or near the ocean because ports provided good economic benefits. Large ports were mainly created on the east side of the US because of the proximity to Europe and settlers first arrived on the east side. However as the world developed, and China became a chief exporter, ports on the east side of our country were too far flung. The Panama Canal was created to evolve with the changing world.
Thursday, May 8, 2014
Reading: Chapter one of "The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger"
Author: Marc Levinson
1. A section from this chapter I found particularly interesting was where Levinson talked about the just-in-time manufacturing technique. Just-in-time manufacturing is when a supplier only makes the goods a customer wants as the customer needs them. Only when the customer needs them is when the good is shipped and delivered on time. Levinson explained that companies such as Toyota and Honda use this technique to reduce inventories which leads to immense savings because supply is constantly moving. This made me think about how easy it is to ship things today. It made me realize how much we rely on shipping and low transportation costs because of how much we buy things online and pre-order items that are then shipped to a later date. Containers paved the way for the future by lowering transportation costs and proving that long distance transportation of goods is beneficial even with low cost goods.
2. Levinson sees the development of the shipping container to be a large contributing factor to the increase of globalization. He says that shipping containers played a large role in connecting the global market because they allowed for cheap transportation of all goods, even inexpensive goods. This greatly increased trade as producers could reach all parts of the world at a low transportation cost. The competition that came with this increase in trade, held down the prices of goods creating relatively similar prices on goods throughout the world.
3. Overall, I see the entire global economy benefiting from the transformation of global transportation. Producers were able to expand internationally and consumers benefited because of the emergence of trade. Trade kept prices of goods low and allowed consumers to receive a larger variety of goods. Small companies not looking to expand globally lost from this transformation of global transportation. Their high prices could not compete with the low prices of goods coming into their community as a result of foreign trade.
Author: Marc Levinson
1. A section from this chapter I found particularly interesting was where Levinson talked about the just-in-time manufacturing technique. Just-in-time manufacturing is when a supplier only makes the goods a customer wants as the customer needs them. Only when the customer needs them is when the good is shipped and delivered on time. Levinson explained that companies such as Toyota and Honda use this technique to reduce inventories which leads to immense savings because supply is constantly moving. This made me think about how easy it is to ship things today. It made me realize how much we rely on shipping and low transportation costs because of how much we buy things online and pre-order items that are then shipped to a later date. Containers paved the way for the future by lowering transportation costs and proving that long distance transportation of goods is beneficial even with low cost goods.
2. Levinson sees the development of the shipping container to be a large contributing factor to the increase of globalization. He says that shipping containers played a large role in connecting the global market because they allowed for cheap transportation of all goods, even inexpensive goods. This greatly increased trade as producers could reach all parts of the world at a low transportation cost. The competition that came with this increase in trade, held down the prices of goods creating relatively similar prices on goods throughout the world.
3. Overall, I see the entire global economy benefiting from the transformation of global transportation. Producers were able to expand internationally and consumers benefited because of the emergence of trade. Trade kept prices of goods low and allowed consumers to receive a larger variety of goods. Small companies not looking to expand globally lost from this transformation of global transportation. Their high prices could not compete with the low prices of goods coming into their community as a result of foreign trade.
Tuesday, May 6, 2014
News Summary #2: "Maduro: Universal Welfare Aim of Venezuela's Socio-Economic Model"
Article By: Ewan Robertson
Published: May 1st, 2014
Article Link: http://venezuelanalysis.com/news/10657
In this article, Robertson discusses President Maduro's plans to turn around the dismal economic situation in Venezuela. Maduro illicit's that his policymaking is focused around guaranteeing universal welfare. Robertson defines Venezuela's main economic problems as "overvalued currency, shortages of some basic foodstuffs, and annual inflation of 57%." He notes that Maduro's opponents blame the government for the black market saying that it is causing basic items such as food to have high prices and shortages. Robertson says "that insufficient dollars have been granted to companies through currency-exchange controls for imports and production." One new initiative Maduro has put in place is called PDVAL Obrero. This is a food store with regulated prices set for Caracas metro workers and their families. The Maduro administration has also put in place policies to reform currency control, prevent contraband, and combat hoarding and price speculation. Overall, the administration is hoping to turn around the economic situation by implementing policies to control the prices of basic and necessary items such as food.
While reading this article, my mind shifts back to a class period when we talked about arbitrage and international markets. We said that arbitrage occurs when there is a price opportunity because of price differences in different areas or countries. The impact of arbitrage is the law of one price which states that because of international trade, we will eliminate price inequality. However, this law of one price doesn't work for everything and therefore doesn't completely eliminate price inequality which could be a major reason as to why Venezuela is seeing shortages and high prices in basic goods. While it may seem obvious that Venezuela should trade for food items that are cheaper in other countries, it becomes obvious as to why they don't when we look at costs such as transportation costs, restrictions on imports/exports and subsidies.
It is difficult to pinpoint the exact reason as to why basic goods in Venezuela are in shortages and have high pries. One theory I have is the countries focus on their main source of GDP which is the oil industry. Too much focus on one sector of the economy can not only lead to monopolies and unequal distribution of wealth but also to a lack of support and government help in other sectors such as manufacturing and food production. To resolve the problem the government needs to continue to implement strategies to eliminate price inequalities and good shortages.
Article By: Ewan Robertson
Published: May 1st, 2014
Article Link: http://venezuelanalysis.com/news/10657
In this article, Robertson discusses President Maduro's plans to turn around the dismal economic situation in Venezuela. Maduro illicit's that his policymaking is focused around guaranteeing universal welfare. Robertson defines Venezuela's main economic problems as "overvalued currency, shortages of some basic foodstuffs, and annual inflation of 57%." He notes that Maduro's opponents blame the government for the black market saying that it is causing basic items such as food to have high prices and shortages. Robertson says "that insufficient dollars have been granted to companies through currency-exchange controls for imports and production." One new initiative Maduro has put in place is called PDVAL Obrero. This is a food store with regulated prices set for Caracas metro workers and their families. The Maduro administration has also put in place policies to reform currency control, prevent contraband, and combat hoarding and price speculation. Overall, the administration is hoping to turn around the economic situation by implementing policies to control the prices of basic and necessary items such as food.
While reading this article, my mind shifts back to a class period when we talked about arbitrage and international markets. We said that arbitrage occurs when there is a price opportunity because of price differences in different areas or countries. The impact of arbitrage is the law of one price which states that because of international trade, we will eliminate price inequality. However, this law of one price doesn't work for everything and therefore doesn't completely eliminate price inequality which could be a major reason as to why Venezuela is seeing shortages and high prices in basic goods. While it may seem obvious that Venezuela should trade for food items that are cheaper in other countries, it becomes obvious as to why they don't when we look at costs such as transportation costs, restrictions on imports/exports and subsidies.
It is difficult to pinpoint the exact reason as to why basic goods in Venezuela are in shortages and have high pries. One theory I have is the countries focus on their main source of GDP which is the oil industry. Too much focus on one sector of the economy can not only lead to monopolies and unequal distribution of wealth but also to a lack of support and government help in other sectors such as manufacturing and food production. To resolve the problem the government needs to continue to implement strategies to eliminate price inequalities and good shortages.
Saturday, May 3, 2014
Venezuela Country Profile Part 5: Transportation
Water Transportation
- A large portion of Venezuela is bordered by the Caribbean Sea and the Atlantic Ocean. The coastline is about 2,800 km long. Their extensive coastline provides many economic benefits as it helps with trade, transportation, and tourism.
- A major port in Venezuela is Puerto Cabello. Puerto Cabello is about 210 km west of Caracas, the capital city. It is the largest and busiest port in the country and is an important component of the large oil industry.
- A country with many rivers, the Orinoco is the biggest and most important. To get an idea for the size of this massive river, it is the third largest in South America falling behind the Paraná and the Amazon Rivers. As well as providing transportation, oil is exploited from the Orinoco Delta. Connects major industrial cities such as Ciudad Guayana to the Atlantic Ocean.
Land Transportation
- Railroad system
- The railway system in Venezuela is limited. It has no rail connections to any outside cities in other countries.
- The East-West Railroad connects eastern and western Venezuelan cities. This railroad provides cargo transport as well as passenger transport.
- Caracas has a metro system that is used for passenger transport.
- Highway and Road network
- Comparative to other South American countries, the Venezuelan road and highway systems are more extensive and in better conditions. About 1/3 of the countries roads are paved and road travel is extremely popular and common because Venezuela has some of the cheapest gas prices in the world.
Air Transportation
- Venezuela's main connection to the world is through the air and Venezuela boasts a number of airports. Over 60 airports in Venezuela.
- International Airports
- Some of the major international airports include:
- Simon Bolivar International Airport of Maiquetia
- Santiago Mariño Caribbean International Airport
- La Chinita International Airport
- There are 2 military airports:
- El Libertador Air Base
- Generalissimo Fransisco de Miranda Air Base
Sources
- http://www.mongabay.com/reference/new_profiles/554.html
- http://www.country-data.com/cgi-bin/query/r-14559.html
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