THE AFTERMATH OF CLIMATE CHANGE TOWARDS ECONOMICS

INTRODUCTION

The global climate change has drawn worldwide concern as they are more aware of its potential impacts and consequences particularly to the agricultural sector. As the world experiencing a severe drought condition, impacting the harvest production such as other staple corps to decrease. An article by the Natural Resource Defence Council says that the drought has definitely affected the supply of crops as the plant needs water to grow well. Subsequently, lack of water resources, makes corps hard to grow as well as make the already grown crops became dried. As a result, there will be short supply on food while demand keep increasing as food is a basic needs.


SITUATION ANALYSIS


 In United State, it shows that the supply of foods has decreasing rapidly because of drought, as a result, the current situation will cause the supply curve to shift leftward (Crutchfield, 2013)  Supply is the quantity of goods and services  firms willing to produce or offered for sale at a particular time or particular place at a certain price (McConnell et al. 2012, p.51).  As shown in the Diagram 1 and 2, though supply is decreasing, it is totally on opposite for demand as it kept on increasing as foods are basic necessity.  A demand is effective if the desire and ability of consumer to consume certain quantities of goods and services at a certain prices at a particular point of time. After analysing, the current situation shows that the demand curve will shift rightward as food are a needs for people to be able to live.



Hence the curve will look as below when the market effects of simultaneous changes in supply and demand :




      1)  Shifting of supply to the left as less  product are being product in result the supply to decrease.


     2) Demand will shift to the right indicating that demand is still high despite less product are being supplied.







As foods are the basic needs, there will still be a higher demand for other staple corps. Producers will take this opportunity to increase the price to generate higher profit which leads to price elasticity of demand equal to zero.  An elasticity is a measure of the sensitiveness of people to changes in economic variable (McConnell et al. 2012, p. 14).  Price elasticity of demand is measuring the relationship between percentages change in quantity demanded over the percentages change in price. According to Times article, price of groceries in United State was increased by up to 50% as a result of the drought conditions. The  situation was fairly inelastic because consumers accepted the price changes as the goods are of necessity (Sanburn, 2012).  A perfectly inelastic demand occurred when consumers are insensitive towards the price changes although it increases drastically.






As seen in Diagram 4, the original price (P0) move up to a new price (P1) indicating there’s increasing in price, but the demand line (red line) remain unchanged. This shows that, a change in the price brings about no change in the demand.









A shortage towards corps might occur if the situation on going. A shortage is when consumer is willing to buy more than what the producer is willing to sell.  It occurs when the market price is lower than the equilibrium price while the demand is higher. According to The Guardian article, drought has definitely a threat to food supply in the Middle East as it is hard for the producer to produce enough food because of the dry and damage corps (Vidal, 2013).  As a result, supply decrease, but the demand keep on increasing as food are basic necessities. 





According to an article from The Wall Street Journal 2012, the current situation shows that there is a shortage for both corn corps and soybeans because of the drought. Supply will drop as there will be a decrease in production of both goods, leading to demand-pull   inflation.  Demand-pull inflation occurs when excess demand that could not be met by its supply thus forcing the price to increase. Analyzing the article in paragraph 4, it says that if there are a healthy supplies, shortage and demand-pull inflation will not occur. With healthy supplies of rice and wheat plus low oil price it will not affect the price to increase. However, if the shortage of productions persist and depends on rice and wheat as their supplementary foods, the shortage of supply might took place eventually toward the supplementary foods and lead price increase for the goods (Pleven, 2012).


FINDINGS AND CONTROLS




Diagram 6 shows a market equilibrium happens when the supply (red line) intersect the demand (orange line) showing it equal between quantity supply and quantity demanded.







The climate change that occur could cause an effective maximum price or also known as a price ceiling. A market equilibrium is a situation where quantity supply is equal to quantity demanded with no tendency for price to either increase or decrease. A price ceiling sets the maximum legal price a seller may charge for a product or a service. A price which is higher than what is set by the government is considered illegal; while price at or below the ceiling is legal. This is to prevent the supplier engaging in charging outrageously high price for limited goods (Hammond,2008) (Taylor,2006).




For example, in order to maintain the price of a certain good, the government imposed a price ceiling of RM10 by giving subsidies due to excessive demand. Hence, price of the goods can be controlled and is beneficial to the consumers as well as to contain inflation's.


RECOMMENDATIONS

The public is concerned as to how food crisis can be averted in the future. Article from Voice of America stated that a simple method that had been use in Nigeriens where the community had come together and built very simple holes in the land so that they could plant seeds and fertilize them so that when it rains, the seed don’t wash away, and they have a better chance of growing more food (Lewis, 2012). They did this even before the drought as they already expecting the heat wave. Alternatively, the use of modern technology should be in used. Forbes highlighted few methods using the technology that can help when situation like this occurs with lower production cost leads to lower price goods for consumer (Perlut,2012). Energid Technologies harvesting system that automatically finds and removed fruit at a lower cost than manual harvesting and Visual Robotics that will use stereo vision-based robots to picks, prune and other tasks on specialty crops (Perlut,2012).Another method that has been use in South Korea where they use investment and industrial relationship method (Elgin, 2012) . Presently more Korean money is being used to farm undeveloped lands in places like Australia, to further enhanced land fertilization. Korean ownership in Australian farmland has reportedly more than doubled within the last twelve months since August (Elgin, 2012).


CONCLUSION

Food crisis due to drought can be averted by educating consumers to used substituted goods as well with more use of modern technologies. For example, instead of eating rice we can substitute it with bread. This can prevent the consumer from demanding for just one particular goods and can shift it to another substitute goods.

In conclusion, there are still ways and means that the crisis can be handle provided the right measure and steps is taken by the authorities concerned and consumers at large.



SMARTPHONE MARKET STRUCTURE

INTRODUCTION




The historic patent war between Samsung and Apple has finally comes to an end with Apple suing its rival, Samsung. However, the argument between what types of market structure both of these two kings of smart phones has yet still remains a question. Is the smart phone market a monopolistic competition or oligopoly?








ECONOMIC INFLUENCE FACT- OLIGOPOLY AND MONOPOLISTIC COMPETITION


Many people wondered what would have been the type of market models in the smart phone market recently. An oligopolistic market have large amount of companies that produce smartphones in the industry all over the world. There are only a handful of firms offering the great product such as Apple, Samsung, HTC and so on. Meanwhile, a monopolistic competition would occur if there were thousands of companies out there making smartphones as it certainly involve large number of suppliers. As for the type of products, they are differentiated in terms of features in the smart phones since the phones are differentiated in the Oligopoly system. It is also difficult to enter the industry due to high barriers such as patents, copyrights, advertisements and also economic of scale. Oligopoly is hence characterized by mutual independence and strategic behavior. Price implementing, quality, service and advertising strategies are parts of the market structure to expand their profits. Unlike the monopolist which has no rivals, the oligopolist have to consider how its rivals will react to any change in price, output, product characteristic and other in terms of mutual independence. Furthermore, Oligopoly system is also to be said as few number of firms that well aware of each other and anticipates each other’s moves.



CONCLUSION

Hence, after analysis the situation I believe that a smartphone is an Oligopoly. The smartphone market is similarity dominated by a handful of companies. These companies have deep relationship with the handset provides and are relationships become self-reinforcing as they grow




TIE UP WITH HONDA SET TO DRIVE PROTON AND HAVE HUGE SPILLOVER

EFFECT ON LOCAL AUTOMOTIVE INDUSTRY

INTRODUCTION- PROTON & HONDA JOINT VENTURE PARTNERSHIP [click to read article]




The recent partnership of Proton and Honda might just be a prelude to an extensive plan laid out for Proton that would ripple through the entire supply chain and vendors of the local automotive.
Having the right to control Proton, DRB-Hicom had also indirectly dictated the plans of some of its subsidiaries that are Tier-1 vendors and suppliers in the local automotive supply chain.
Not only do these subsidiaries supply to Proton, they also control a huge portion of the supply chain for key original equipment manufacturer (OEMs) like Perodua, Volvo and Toyota and also boast Toyota Saudi Arabia as a customer.



MACROECONOMIC INFLUENCE FACTORS- EMPLOYMENT AND ECONOMIC GROWTH



Proton’s growth will send a huge spillover effect to the local automotive supply chain besides creating more jobs market as well as also sees new breath of business opportunities for vendors and suppliers.
   


The arrangement may pose a challenge towards Perodua and Toyota in terms of market leadership in Malaysia as both has reaped the rewards of having a strong foreign partner. Its cars are selling well and it manages to get access to newer technology from its relationship.

Sharing platforms, product line-ups and technology can lower the cost and offer a more competitive price. This is important as competition and the ever increasing liberalization of auto industry means that the pricing gap can narrow. An example is a Nissan Almera which is priced from RM66,000 to RM80,000 is within touching distance of what Proton’s cars are priced at.
Without the economics of scale and lower manufacturing cost, it will be difficult for Proton to compete in the affordable car segment as rivals encroach on the price comfort zone that the national car maker has enjoyed for years. Also, with Honda’s transfer technology to Proton, opportunities are there for Proton to develop some engine jointly for local market and go global with Honda.


CONCLUSION



  

The important aspect of the tie-up is to ensure Proton survives and continued to exist as Proton is essential under National Automotive Policy. The carmaker is an employer that influence directly and indirectly the welfare of a great number of workers and their families. In the end, the partnership should be about the progression of Proton. It should use the deal as a means to grow itself as an original equipment manufacturer, a maker of cars not just for the domestic marker but one that is exported around the world. 



MALAYSIAN 30 000 UNEMPLOYED GRADUATE STUDENT.

INTRODUCTION


Despite the fact that Malaysian unemployment rate drop to 2.9% from last year and Malaysian have been producing more graduates than ever before, the number of unemployed graduate student seems to keep on increasing. Thirty thousand graduate student, roll that figure for a moment in your head and you’ll realise it’s a big number that has many of us state of rising panic. Why can’t they find jobs? Why is it graduate student can’t find the job they desire?



ECONOMIC INFLUENCE FACTORS-UNEMPLOYMENT





Graduate student who might have less education or do not have the right qualification of education is most likely to have a higher unemployment rate. Firm conclude that people who have a lower education is usually associated have less skill and is always in-between-job. Example, graduate student are most likely to work at a fast-food joint or work as waiter before getting a proper job.


Nowadays firms are willing to employed people that are older compare to graduate teenager. This is because graduate student are lack of skills and experience in working in big firm or professionalism. Graduate student (or teenager) also have the tend to follow their heart and emotion making them easy to quit their job more frequently then adult does or doing the job as they desire. 

For example, KFC likes to employed student and graduate student as their stuff but unfortunately it seems that their decision back fire when in February 2012, a customer and i-City KFC incident where the staff had got into a fight which also received international attention. As result of the staff bad judgement, KFC got sued by that customer and also bring a bad reputation to the company.



CONCLUSION




Hence the analysis shows that firm makes decision on not employing young or freshly graduate student to their firm to minimize problem. Unfortunately, this would lead to student taking a job different from what they study to be as a result not enjoying what they’re doing. Also, student might find it hard to find an experience and skill require when most firms only employed people how already had at least a 5 years experiences. In my opinion, small government and private sector should give an opportunity to graduate student to gain experience and improve their working skill. For example, more internship - student work just for the purpose of getting experience and don’t expect to get paid - or part-time job - student can expect little salary but get to improve their working skill- creating a ‘win-win’ situation for both firms and graduate student. As for graduate student, they should learn how to be a good employer, be more appealing to do their work and be a professional.




THE MARKET ECONOMY TOWARD DEVELOPED COUNTRY

INTRODUCTION 


Economic systems are one of the most important that every society needs to develop in each country. Economic systems are an organized way in which a nation allocates its resources and distribute fairly their goods and services in the national community. There are three main types of economic system in the world which are the market economy, the command economy, and the mixed economy. Each country has to decide which economic systems that they are going to practice.


ECONOMIC INFLUENCE FACTORS-THE MARKET SYSTEM 



      As we know, a market economy is being practiced within the developed countries such as Hong Kong, Ireland and United States. In market system, most of the property resources owned by private individuals and firms. Market economy is also based on supply and demand with little or no government intervention. The role of the government is only limited to controlling the law and to ensure that reasonable price is charged by the sellers to consumers. In the other words, market economy gives the absolute power to prices in determining the allocation and distribution of goods and services that have been provided in the country. Economic systems are one of the most important that every society needs to develop in each country. Economic systems are an organized way in which a nation allocates its resources and distribute fairly their goods and services in the national community. There are three main types of economic system in the world which are the market economy, the command economy, and the mixed economy. Each country has to decide which economic systems that they are going to practice.


CONCLUSION


Practicing the market economy is actually good as there is great competition between different firms within the country to increased efficiency. Next, there is more innovation can be created as firms look for new and latest products and services that can be provided. Foreign investment also can be attracted as there are new opportunities for them to earn profit. Furthermore, a wide variety of goods and services are provided and become available for those who have the money to buy them.

POSITIVE OUTLOOK FOR FUTURE MALAYSIAN PHARMACUTICAL INDUSTRY



INTRODUCTION


As far as the Malaysian Government’s plan and policies go, 2013 appears to offer good prospects for pharmaceutical companies with the increase in allocation for healthcare in 2013 Budget that provide imputes to the industry. With the average 1.8% annual increase in the country’s population, the upward trend of chronic disease prevalence, the rising of people entering senior years, and the industry looks set to enjoy positive growth over the next few years.

ECONOMIC INFLUENCE FACTORS – FISCAL POLICIES, NATIONAL INCOME & GOVERNMENT POLICIES:


 The industry that serves 28 million people that currently worth RM5 billion and is estimated to hit about RM5.5 billion by next year. Malaysia is poised to be the best place as a generic hub within the region in terms of accessibility, geographical location, and the government’s open policies. These couple with a strong domestic demand with the biggest consumer is the Malaysian Government itself.

   
As Malaysia is a relatively small market by population size, the growth of the industry is expected to be powered by its rapid economic growth, demand for better health products and services, as well as the government’s plan to position the country as a clinical trial hub, generics exporter and healthcare tourist destination. 

CONCLUSION

Since the sector was earmarked as one of 12 National Key Economics Areas,  Malaysia had increase clinical trials significantly from 160 in 2007 to 320 currently and aspires to generates RM50 billion from the healthcare by 2020 (contribution of RM16.6 billion from the pharmaceutical industry) . Malaysia is also set to increase its pharmaceutical exports to other country such as European Union, Australia and Canada.

Despite the challenges, the industry is expected to grow in the medium to long term. While population growth and increased health awareness and government open policies would provide opportunities to the manufacturer. Thus, industry players, multinational and locally can be assure it has the government backing to bring the industry forward.     


HOUSE VS CAR?




INTRODUCTION
In order to own a car, consumers nowadays have to work harder due to the increase in price of a car. Apparently, the problem occurred when the price of a car is almost the same price of a house. 











 ECONOMIC INFLUENCE FACTORS- OPPORTUNITY COST
Opportunity costs are the benefits forgone by choosing one alternatives from the opportunity set which refers to the alternative action that are available to a decision maker. Because consumers cannot have everything, they have to decide what they will have and what they must forgo. In order to obtain one thing, society forgoes the opportunity of getting the next best thing as that is what we call as opportunity cost. Nowadays as a fresh graduate, it is difficult for a person to buy a car due to the changing in society which highlights the price increase of a car. It will somehow create a second thoughts in human mind to make a decision that satisfies them. For instance, the local car in the market recently costs around RM 50, 000,000 while an international car will costs around RM 120, 000, 000. Meanwhile at the same time the price of a condominium costs around RM 250, 000 ,000. It is hard to earn that much of money in short run nor long run. Those fresh graduates need to take an opportunity costs either  to buy a car or a house because the time lapse to return the loan is pretty long.




CONCLUSION

Government have to improve the public transportation such as the bus and LRT for instance. This is because when our country provides better transportation system, many foreigners will be attracted to visit our country, Malaysia. Furthermore, it will certainly increase our country’s economy system. Consumers could save more money despite having to pay for petroleum expenses, car services and so on.