Economy.

Economy - Money Matters.

The word economy is used in many contexts. It is used to suggest the economic situation of a country. This includes all industries and trades and all economic activities of a country which make income for citizens and revenue for the government. Economy also means efficient use of resources like money, fuel, water, electricity etc. with the objective of saving them.

Factors Affecting the Economy.

The economy of a country is a vast and complex subject to study and understand. The complexities have to be carefully analysed to find solutions for pressing problems. Every country faces economic problems. Some may be easy to solve and some very difficult. Some problems might be unique for a country and some will be common for all. Many factors contribute to the growth of a nation and its economy.

Some factors which determine the economic development of a nation are:

(1) The availability of usable natural resources: The earth is the sole source for raw materials for man's creations. The availability of natural resources like rivers, forests, ores of metals and minerals, oil reserves etc. have made many countries rich. The construction of roads, bridges, dams, buildings and other man-made equipment like automobiles, ships, aeroplanes, trains, spacecraft etc could not have been possible without natural resources. Everything that we see around us have been derived from nature. Every country owes a lot to nature due to its sheer contributions in building the economy.

(2) Population of the country: The population of a country affects the economy in a major way. Human resources are like capital for a country. A country is made by her people and so they matter a lot. The development of a country depends much on the quality of manpower. Productive manpower is an asset for any country. However, over population is a problem because it creates congestion, chaos and mismanagement.

(3) Food security: Food security is most important. No progress is possible without it. It is needed to ward off hunger and starvation. Hunger and starvation are caused due to two probable reasons:

• No food available anywhere.
• No money to buy food.

Non availability of food is a grave situation and this would indicate failure of the state administration and the policies of the government. No money to buy food indicates poverty and unemployment. A food security plan should be able to address these two issues effectively. Hunger and starvation are an impediment for human progress. Food security should be at the top of the list of priorities for any government.

(4) Employment: Employment saves human beings from poverty. It helps people to get out of stagnation and gloom. A nation progresses when its manpower is employed for a productive cause. Human resources are valuable. People should be employed in the most suitable manner to avoid disparity. Employment is the best way to avoid poverty and other evils.

(5) Healthcare and sanitation: Health is important for all. Good health is possible only in a clean and safe environment. Sanitation helps to maintain clean and hygienic surroundings which is necessary for controlling infections and diseases. Primary healthcare is important in this regard. Health is wealth. Healthy people are more productive and they contribute more to the development of economy.

(6) Literacy and education: Education helps cultivate intellect and literacy is the first step for this. Literacy is the ability to read and write. The aim of literacy is to make a person capable enough to read and write at least one language. Usually, the mother tongue is given more preference for this, because it is easier to learn.

Literacy alone is not enough. Basic education is required for improving the understanding and awareness of common things. Primary education is very important in this regard, because it is the foundation for secondary and higher education. Quality education is the key to success. It opens the door for employment and brings contentment in life.

(7) Transportation: Transportation is indispensable. Safe, reliable and affordable transportation facilities are a must for development. Public transportation is needed for the internal development of a province or state. Good transportation facilities could help improve infrastructure, trade, healthcare, education, sports, tourism, culture etc. and thereby boost economy.

(8) Ecology and ecosystems: Ecology of a country is as important as development itself. No country can sustain progress for too long by neglecting ecology. Economic development should not harm ecology. The ecosystem should be such that it protects nature and also sustain progress.

(9) Law and order and peace: Law and order ensures peace. Progress is possible only in a peaceful environment. Peaceful countries have better economy.

(10) Government policies: The policies of the government are the ultimate factor in the development of economy. The government makes policies and implements them. Clean and transparent policies bring confidence in people. Transparency in governance improves administrative efficiency.

Native Participation.

The participation of native people in the development of a country is always huge.

• Agriculture as native occupation: Agriculture has always been a native occupation for most countries. When countries produce enough food grains to feed their population, they become self-reliant. This has many positive effects on the economy as it helps to keep prices of food grains under control and also provide opportunities to people to make a living out of it.

• Native industries: Native industries help develop native economy. Native industries usually employ local people and use indigenous raw materials for producing goods. This helps promote indigenous skills and develop local trade.

• Native trade and commerce: Native trade and commerce help local economy to grow. People benefit when trade and commerce have participation at grassroots level.

International Cooperation.

Every country has to cooperate with other countries to develop their own economy. No country can remain self-reliant in economic matters all the time. Economic cooperation generally involves imports and exports.

• Imports: Imports help to solve the problem of scarcity. If a country doesn't produce the goods it needs, it could import them from a country which produces them. This solves the problem of scarcity for the importing country and at the same time, gives business to the country which exports them.

• Exports: The imports of one country will be the exports of some other country or countries. If a country produces a commodity in excess, it could export it to some other country which needs it. Exports bring revenue in the form of foreign exchange which is good for the country.

Challenges in Economy.

Every country faces economic challenges of some kind. No economy remains stable all the time. There are many ups and downs in economy. Growth is cyclic and so ups and downs are inevitable. Challenges come in many ways and push progress backwards. Some of them are:

• Overcoming economic recessions: When economy slows down due to recession, the government doesn't have funds to undertake its duties, which is really pathetic. Recessions manifest due to variety of negative factors from internal and external sources and usually take a lot of time to recover. Recessions impede economic progress and so are the biggest challenge for a nation.

• Reducing fiscal deficit: Deficits of any kind is bad for the economy. Fiscal deficit is a big problem for the government because it affects the exchequer badly. Reducing fiscal deficit is another real challenge for a country.

• Clearing debts: Government borrows money for various purposes just like people do. Like people who borrow, the government sometimes faces difficulties in repayment. When debts are too high, clearing them becomes a challenge.

• Spending for welfare activities: The government has the responsibility of protecting citizens, particularly children, women, senior citizens and people who are needy. The government has the obligation to spend for welfare activities. Government usually pays pension to people who retire from government jobs. However, when the economy is in a poor state, continuing such obligatory duties becomes challenging for the government.

• Attracting investments: Attracting investments, both domestic and foreign is considered good for the country if it fulfills the purpose of generating revenue for the government and provide employment opportunities to people without harming the existing socio-economic equilibrium of native economy. However, getting such investments is indeed a challenge.

• Building infrastructure with limited resources: Building infrastructure is a challenge when resources are limited. A lot of money is required to build infrastructure and to maintain them. A poor country will always struggle to build infrastructure.

Planning the Economy.

Economy needs planning. Planning the economy of a country is not an easy task. It is an intricate and painstaking job. Economists, the government and everybody who are in this job have to gather all relevant data and go through the seemingly never ending task of designing an implementable plan.

They have to consider each and every aspect of the country like GDP, population, demographics, social and political background and so on to work out a plan for the country. This is a massive task which requires gathering accurate and complex data from reliable sources and analyzing them to get an idea about past and current situation of the economy. A plan will be based on these findings.

No matter how good a plan is, the chances of some shortcomings or even failure exists. Some plans may not work because, by and large, the economy is unpredictable and volatile. Yet, this doesn't reduce the importance and significance of planning.

Building Economy.

The economy functions like nature. In nature, everything has a place and everything has its significance too. The same is true about economics. In economics, everybody and everything is important. Everybody has a rightful share in it.

The economy of a nation is built by the collective efforts of people. People inadvertently build the economy when they work for themselves. Building economy is all about implementation of plans. Implementation is as crucial as planning. In fact, it is more important than planning.

The economy is not built in a day or two. It takes time. In nature, growth is a continuous process. If something hinders, the growth slows down or stops completely. The same is the case with economy. It too slows down or may even stop due to obstacles.

To overcome obstacles, we have to work regularly as nature does. Building the economy is an ongoing process and this process should not stop.

Managing Economy.

Managing economy is even more difficult than planning. Managing the economy would mean implementing plans in absolutely unpredictable scenarios in such a way that the economy improves in comparison to past performances.

The economy of a country functions much the same way as an individual works to build his career and life. The difference is in the volume and scale and of-course, in the complexities involved, which is many more times greater for a country than for an individual.

As mentioned at the beginning, the word economy also mean saving resources through efficient use. The common man is more likely to use this word in the context of savings. No matter which context it is used in, the word economy encompasses the micro and macro aspects of the subject and still remains common and simple for all to understand.

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