Article Brief 4 – Morocco’s Struggle in Agriculture

Morocco’s Struggle in Agriculture

The majority of African countries, including Morocco, depend heavily on agriculture as a source of income. Through statistics of over 20 years, it is also seen that the weight of agriculture on GDP for Morocco is higher than that of other European or Asian countries. In fact, 65% of Africa’s labor force is employed in the agriculture sector and for these countries agriculture accounts for 32% of their GDP.

Climate is undoubtedly Africa’s biggest enemy in terms of its negative affect on agriculture. Over the years, harsh climate has caused Morocco to float between 15% of GDP in comparison to an average of 32% for other African countries. The severity of climate change is illustrated with Egypt’s projected 15% loss in wheat production by only a 2 degrees Celsius change. Though more than half of the GDP depends on services, Morocco’s agriculture is in danger. Lahouari Bounoua claims that the agricultural performance has improved, but the recorded amount is still not enough to satisfy demand. The issue with agriculture most definitely does not reduce hunger and prevents maintaining a sustainable level of food security.

Expected rich rainfall has launched a massive agricultural project in Morocco. Arguably suffering and unable to reach its potential gain from agriculture, Morocco aims to hit a record of 11 million tons of cereal harvest this year.gdp-composition-breakdown

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The display above shows how much of the country’s land is solely dedicated to agriculture; yet, still the potential gain is not met. Now why is that and what is has to be done? As briefly mentioned earlier, the climate and more specifically little rainfall and temperature change has really disabled crops to grow. Weather, I think we can all agree, cannot be controlled to favor and benefit a certain area. Agriculture Minister Aziz Akhannouch has however, supplied more than 250,000 crops with drip irrigation systems and is planting 13 million fruit trees. Though these numbers may not be great ones at the moment, if the project may continue, it may result in great positive changes for the Moroccan economy.

By 2030, the projected figures for Morocco’s agriculture sector is not very bright. The climate is to go worse and temperatures are to increase as they have never before. It is absolutely crucial to make this project successful because otherwise, Morocco will also lose their 15% agriculture portion on GDP. World Hunger is also affecting Africa the most. Africa has the greatest number of malnourished people and also has a very fast growing population along with very few resources. It is absolutely crucial that the country copes with this.

Works Cited:

“Morocco’s Cereal Harvest Reaches Record 11 Million Tons.” Morocco World News RSS. N.p., 12 May 2015. Web. 18 May 2015. <http://www.moroccoworldnews.com/2015/05/158283/moroccos-cereal-harvest-reaches-record-11-million-tons/>.
“Comment: Climate Change Is Hitting African Farmers the Hardest of All.”SBS. SBS, n.d. Web. 18 May 2015. <http%3A%2F%2Fwww.sbs.com.au%2Fnews%2Farticle%2F2015%2F05%2F12%2Fcomment-climate-change-hitting-african-farmers-hardest-all>.

Data Collection 1 – Morocco

Data Collection – Morocco

GDP (Gross Domestic Product): GDP is a very important indicator when measuring and analysing the development in a country. The data presented for this indicator is a sum of the total expenditures for all good and services in a given period of time.

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Looking at a time span of 20 years, it is seen the there is an increasing trend in Morocco’s GDP. Starting from 34 billion U.S dollars in 1996, the GDP increased all the way to 104.37 billion U.S dollars in 2013 (Trading Economics 2014). This great increase in only two decades illustrates the economic development in the country. Although there are some slight decreases in some years, they are not great downfalls; therefore, taking them into consideration is not necessary. It is noteworthy to point out that until 2008, Morocco’s GDP had been growing a very high rate; however, the global economic crisis put an end to it. Although until 2011 the value did not change too much, it is important to note that Moroccans dealt with it well and the GDP growth is resumed.

Composition by Sector:

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Morocco_GDP_Sector

 

This indicator shows the distribution of Morocco’s GDP into three sectors: services, industry and agriculture. As presented in both displays, services account for more than half – 55.8% – of the country’s GDP. Industry also accounts for a large portion of GDP: 29.6%. Lastly, Morocco’s GDP depends least on agriculture. In graph 2, it seen that in 1980, as opposed to today, Morocco used to be less dependent on services and a little bit more dependent on agriculture. Over the years, the dependency switch is seen between the two: Services increasing from 51 to 55.6% and Agriculture decreasing from 19 to 14.6% and even 11% in 2000 (IEU). The dependency range for industry has not changed much; over the past 35 years, the percentage has only ranged between 29 and 31%.

Population:

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Since 1995, Morocco’s population has been increasing at a steady rate, having reached 33.3 million people in 2014 (Trading Economics 2014). Statistics regarding population are necessary for assessing many factors of development, unemployment rate for example. As this indicator is in a rate form rather than number of unemployed people, the figures presented take into account the population as well. The increase in population will be beneficial for Morocco’s economy. Although over the years a large portion of the total population has been a youthful population, this will benefit Morocco’s economy in the coming years: as this population grows, they will fit in the economically active population.

Unemployment Rate: This indicator is the measure calculated with the number of people actively looking for a job as a percentage of the labor force.

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As seen in the data above, the unemployment rate in 2013 was 9.9%. This value is fairly high. As explained earlier for the population indicator, the youthful population affects this indicator too. As the youthful population is a large portion of the total population, the unemployed youths increase the unemployment percentage.

Inflation Rate: Inflation rate is the measure of general prices for goods rising, and therefore the purchasing power falling. Central Banks undoubtedly try to stop too much inflation, but at the same time want to prevent deflation. Inflation can be caused by a country printing more money than is justified by the countries wealth. This will result in the value of the currency to decrease.

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As seen in the graph above, the inflation rate during the past 6 years has fluctuated greatly. The rate ranged all the way from -1.8 to 5.1% and now is reaching an ideal rate of 1.7%. According to investopedia, most countries’ central banks will try to keep their inflation rate between 2-3%. During 2008 and 2010, due to the global economic crisis, Morocco’s inflation rate dropped to -1.8%. The general price was much lower than usual; thus, affected expenditure immensely.

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This indicator is the percentage of total GDP owed. The ratio for Morocco is relatively high as opposed to developing and developed countries. Although the numbers have been decreasing, they are still relatively high. Also, after 2010, the ratio increased once again to 61.70%.

 


Passenger Pigeons SEE

Passenger Pigeons SEE

The extinction of passenger pigeons is an ideal example of Garret Hardin’s theory, Tragedy of the Commons. The theory that individuals act independently and rationally according to self-interest, and these behaviors are contrary to the best interest of the whole group is presented with this case. Not only individual hunters, but also passenger pigeon companies (commercial hunting) led to the extinction of 4 billion passenger pigeons within only a few decades. Because this meat was cheap, it was a popular choice in slavery. Another crucial reason was deforestation; in the early 1800’s when Europeans settled into North America, in order to build infrastructure, habitats were destroyed. This case is considered a market failure because the demand for the common resource, passenger pigeons, was higher than that of its supply. Moreover, this factor led to the depletion of this resource.

Statement 1: One of the primary negative externalities of the extinction of passenger pigeons is the environment.

Evidence: The extinction of nearly any animal always impacts the food chain to a certain extent, and passenger pigeons are a great example of this. These birds were vital in the feeding of numerous carnivores such as foxes, raccoons, marten and mink, and lynx. Also for several raptors, which include falcons and hawks. As the pigeons are secondary consumers, their extinction would create difficulty for Tertiary consumers as well, for example snakes. (Bagheel.com)

Evidence 2: The cause of the extinction, as mentioned earlier, was also because of deforestation. In the 1800’s the enormous deforestation, which was well over thousands of hectares, had consequences in the environment. Although trees are vital for our lives millions of them were cut down – though maybe it was not as a big as a problem then; however, the results are the important part. This great deforestation disabled biodiversity. It ruined habitats for numerous species and caused many, if alive, to migrate to other areas.

Statement 2: The depletion of this common resource has also had an externality on the economy.

Evidence: After the 1870’s as the passenger pigeons were nearly extinct, it could not be consumed anymore. Because slavery had ended around the 1860’s this did not significantly impact it; however, it did impact individual consumers. More importantly, it impacted the demand for other food resources. Although passenger pigeons did not have any perfect substitutes, some resources were favored in the replacement: these include rice and bread. Simply due to the depletion of a food resource hunger was not an option; therefore, individuals specifically consumed the ones listed above. As the demand of these resources increased, so did the price and therefore the company revenues increased. This was economically beneficial for rice and bread companies but also was catastrophic for those who depended on passenger pigeons.

Although no actions could be taken to solve the problem with passenger pigeons because it already extinct; however, this case should be scrutinized and precautions should be taken to prevent the extinction of other species. A few decades after the extinction in 1870, some laws and rules were set. These included hunting seasons, catch size, and catch quantity. It is possible to see this in the fishing industry. Several economies are dependent on their fishing revenue; therefore abuse the supply. There are many species near extinction and these include Blue fin tuna and Cod. There are universal laws that catch per year should not exceed a certain ton. The ICCAT set this number to be 13 tons in 2014. Also, hunting/catch seasons enable the species to reproduce during the times when hunting/catching is not allowed.

For example, in 1992 when Cod was nearly extinct, the Canadian government declared a cod moratorium. Although the shorts term impacts severely impacted people economically, in the long run it was a very successful project. Fisherman lost their jobs for a certain period of time; however, the specie reproduced and was abundant as before. In addition to this, some areas around the world are being treated with care. For example cutting down trees in some areas are not permitted. Construction of infrastructure is not allowed and this will help sustain the species and even be beneficial for reproduction. (WWF)


Article Brief 3

Article Brief #3       Syllabus Section 1           Word Count: 516 Written: March 20, 2014

Source: “Montana Says No to Cyanide Poison in Mining – The Progress Report.” The Progress Report. N.p., 13 Jan. 2002. Web. 19 Mar. 2015.

http://www.progress.org/tpr/montana-says-no-to-cyanide-poison-in-mining/

Concepts:   Market Failure, Negative Externalities

Diagrams:   Negative Externalities of Production

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Brief Summary of Issue: Helping extract and process more than 90% of the gold around the world, cyanide is poisoning people – even killing some. Making the process faster and cheaper, this chemical is used all around the world and is creating extreme health concerns for the third party, locals that take no part in the transaction.

Economic Linkages: This issue illustrated the negative externalities of production by showing the health consequences on people.

Production externality is costs of production that a party other than the producer or service has to pay for. They are usually unintended and can have social, economic and environmental effects. Gold, a mineral which 78% of it is consumed for jewelry purposes requires great processing and is very expensive. The article also states that 90% of gold is processed using Cyanide. Firms have been using Cyanide to ease processing the gold; however, this chemical has poisoned countless workers and locals.

Application of Concepts: A negative externalities of production diagram that shows the market failure in processing gold. The diagram illustrates the market failure by the socially optimal being lower than the market.

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As this is an externalities of production diagram, the marginal social cost (MSC) and the marginal private cost (MPC) will not be equal. The processing of gold causes more cost to society.

Due to the external cost, the marginal social cost is higher than the marginal private cost. Here, the market failure is illustrated as the difference between socially optimal (Qso) and the market (Qm). Qso < Qm à Market failure.

The equilibrium point of MSC and MSB is the socially optimal, the best allocation of resources. The blue area is the welfare loss.

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With regulation as a solution, the marginal private cost will shift to the left. This shift represents the cost of production increasing.

The shift equates the marginal private cost to the marginal social cost. Then, the equilibrium points meets the socially optimum; therefore, as the difference between socially optimum and market is eliminated, there is no more market failure.

Evaluation: Market failure teaches us about the failure in allocative efficiency and externalities teach us about the costs the third party is obliged to pay for. Understanding this crucial concept is important for countless real life situations. By looking at the equilibrium of both, it is possible to make conclusion such as, goods whose production creates a negative externality are overproduced and are sold at low prices. Also, because marginal costs are not equal to marginal benefits, resources are being misallocated.

Solutions regarding this issue are controversial. Taxes may potentially reduce the demand, but not enough to reduce the negative externalities. The problem is not with the high demand to supply raito, but is with the production. A possible solution is regulation; the government could take a step in and prohibit the use of the chemical Cyanide. This use of this chemical is not a must, but certainly eases the process. Using other, non toxic chemicals will perhaps cost more and perhaps take longer to process, but will certainly not be as harmful as Cyanide – people will not be poisoned. This potential solution will be effective because this will increase the cost of production, equating the marginal private cost to the marginal social cost. Having equated these two, the equilibrium will meet the socially optimum, eliminating market failure.

Already such actions are being taken; however not all around the world. It is a general tendency that more economically developed countries seek this mineral in less economically developed countries due to regulations. MEDC’s already seem to have some regulations regarding the use of poisonous chemicals; therefore, LEDC’s such as Mali and Niger are targeted to process with Cyanide.


Article Brief 2

Article Brief #2       Syllabus Section 1           Word Count: 552 Written: Jan 26, 2015

Source: http://www.bbc.com/news/business-29643612

Concepts:   Scarcity, Opportunity Cost

Diagrams: PED

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Brief Summary of Issue: Arguably the most striking news nowadays is the decrease in oil prices and the impact it has had on the Russian economy. After Ukraine and Russia entered the war, the Russian economy has not had very bright days: due to the extreme decrease in their main income, energy sources, the worth of rubel has decreased by 100% in the a few months. Every 1 dollar decrease in oil prices per barrel, Russia loses 2 billion dollars form its revenue!

Economic Linkages: This issue clearly illustrates the concepts of scarcity and opportunity cost which are central to economics.

One of the most scarce resources, oil, has had massive impacts on economies. As it is scarce, the demand and of course the price is very high. This creates a massive income for such countries such as Russian, but when the prices go down, it creates a massive crisis. After the decreasing prices, the Russian economy lost great amounts in revenue, which led to the massive decrease in the worth of rubels. Globally, buyers aren’t in the best economic shape; therefore, do not buy the resource at the same prices they bought previously anyways. In addition to this, the U.S refusing to buy oil has lowered prices even more. The opportunity cost here is the income and the supply. As producers cant stock this resource, they are obliged to sell it at very low prices.

Application of Concepts:   This is a PED graph, which show the responsiveness of demand to the change in price. We see a near vertical demand curve, which suggests the demand is inelastic; or, in other words, not responsiveness to the price change.
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The demand curve is not perfectly inelastic, but has a demand curve close to vertical. As this good is inelastic, the change in price percentage is certainly greater that that of quantity demanded.

Russia here for example, as they depend heavily on energy such as gas and oil, no matter how low the buyers are willing to pay, they have to sell it. Oil is a resource that cannot be stocked; therefore, they are obliged to sell it at very low values. The oil prices have decreased from 110 dollars per barrel to below 48 dollars. It is also important to note that this is a great impact on the Russian economy because for every one dollar decrease per barrel, 2 billion dollars is cut from revenue.

P is the initial price at 100 dollars per barrel a few months ago and P1 is the price today at 48 dollars. There is a very small change in the demand due to price. By calculating the revenue by price x quantity, we can calculate the impact it has on revenue.

Evaluation:   It is extremely important to understand why oil prices are decreasing and the consequences it has on economies. As it has impacted the Russian economy immensely, the rubel value has decreased a lot. As most companies have their income in rubels and pay the producers in another currency such as euros, the consequences are great. Due to this reason, many companies have gone bankrupt due to debt. Understanding how prices work can help countries take important measures – such as the production of oil.

It is also important for the individuals to understand this trend and what factors affect what. Russian companies in Russia could keep their production at low rates until the time of the crisis. Or else, large investments can result in bankruptcy. Understanding opportunity cost and making appropriate decisions are vital too. Cutting oil prices to sell their already produced oil has had great impacts on revenue. This is the reason for why rubel has decreased by more than 100% in the past few months.


Article Brief 1 – World Cup Host

Article Brief #1       Syllabus Section 1           Word Count: 433       Written: Nov 20, 2014

Source: “Qatar Cleared but England Criticised.” BBC Sport. N.p., n.d. Web. 20 Nov. 2014. <http://www.bbc.com/sport/0/football/30031405>.

Concepts:   Scarcity, Trade-off, Opportunity Cost, Resource Allocation

Diagrams:   Production Possibilities Model

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Brief Summary of Issue: Recently there were the 2022 World Cup elections, which Qatar was elected to host. Shortly after it, there were rumors regarding bribery to FIFA officials for favoring the country to host with the number of votes. Within a weeks time, the claims were confirmed to be true and the article analyses the aftermath for FIFA officials and Qatar. Shocking however, the bans and fines don’t seem too be extreme at all. The elections of the 2022 World Cup will effect the economy of both Qatar and the countries that were not selected.

Economic Linkages: This article clearly shows the concepts of scarcity and trade-off which are central to economics. It also illustrates opportunity cost with the money Qatar has accepted to bribe with. In return for this, they won the elections. However, they may face serious consequences now.

Money is scarce; although not as scare as a natural resource like oil, the world population works for it. The trade-off and opportunity cost in the issue are presented with the money Qatar has bribed with – 3 million pounds. They have accepted this by assuring them winning the elections. The 3 million pounds seem to be worth it to host this massive event in 2022.

Application of Concepts:   A Production Possibilities Model, which shows the resource allocation of Money between money for Public transportation, and Money for Sports Facilities. For such as large event, these two are vital to have.

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Point A and point B on the diagram illustrate alternatives that could be considered “best” alternatives. The range and meet the maximum resource. They neither exceed nor are short.

Point B for example seems to be a very appropriate point because it divides the money between the two variables almost equally. 20 million ¥ to 20 million ¥

Points C and D however are certainly not the “best” choices. Point C shows how all of the resources are not being used and taken advantage of to their full extent; which is crucial in economics. Point D is using more than the available resource.

Evaluation: Choices and resource allocation is crucial in understanding and working with economics. This matter of choice and allocation meets in a common point known as opportunity cost, where sacrifices are made to get hold of another. It is the choice of the “best” or “next best” alternative. It is when society splits the resource in two or more different areas; this resource can range between grain to oil to money. As seen with the 2022 World Cup elections, Qatar was willing to give up 3 million pounds to host the event. Now however, with the bans and fines they will receive, the opportunity cost can be much different than they initially planned. Economics can help us see the consequences of our “best” alternatives as well as other ones, similarly to the bribery cost for Qatar.


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