An in Depth Study of Finland, Australia, Luxembourg, Canada and Japan
This research is aimed to compare the economies of Finland, Australia, Luxembourg, Canada and Japan. The study is broken down into a number of areas
Purchasing Power Parity (PPP)
This is a table of all 227 nations in the world to illustrate where each nation lies in regard to the national earnings. As it is simply a table, it does not take into account the size of the population, but there are some surprises in the table.
- Japan ranks number 4 in the world with $4.21 trillion (US)
- Canada is next at number 15 with $1.33 trillion (US)
- Australia ranks number 18 with $882 billion (US)
- Finland ranks 56th with $186 billion (US)
- Luxembourg ranks 98th with $41.09 billion (US)
Gross Domestic Product (GDP)
The countries have widely varying economies and it is reflected in the GDP of each country. Countries are ranked in order of the percentage growth rate.
- Japan leads the way again with $5.49 trillion (US). Growth rate 3.9% ranking 101st
- Luxembourg has a GDP of $54.95 billion (US) but a growth rate of 3.4% ranking 112th
- Finland has a GDP of $239 billion (US). Growth rate 3.1% ranking it 121st
- Canada has a GDP of $1.574 trillion (US). Growth rate 3.1% ranking 123rd
- Australia has a GDP of $1.23 trillion (US). Growth rate 2.7% ranking 130th
GDP Per Capita
It is important to look at the average salary in each country. They rank as follows;
- Luxembourg ranks 3rd globally with $82,600 (US). It is also the smallest labor force of the five nations (205,000). The country gains much benefit from being sandwiched between the two economic giants of the European Union, Germany and France, also the free flow borders within the union and its central location greatly benefit the country. However, the entry into the EU has had some drawbacks and some of the benefits of ‘Tax haven” status has been laid aside, so that the country could enjoy membership of the ‘club’. Not all of them were, however, and the country remains a ‘tax haven’ for some.
- Australia is the second in this group with $41,000 (US) ranked the 18th globally. It has the 3rd largest labor force in the group with 11.87 million. Australia has massive mineral resources of many metals, some of which (Aluminium) can only be found in Australia. Also, one of the main driving factors of the Australian economy is the diversity that it has maintained. Mineral wealth isn’t the only driving force, there is also a large agricultural sector and Australia is a major exporter of foodstuffs. However, the bulk of its revenue comes from the service sector. Its banks faired well during the recession of 2008, largely because of tighter banking regulations in Australia, than in many other countries. They have benefitted from the long standing agreements with the major economies like China, Japan and the United States.
- Canada comes in third with $39,400 (US) ranking the 22nd globally. The second largest labor force with 18.53 million. Canada benefits much from both its neighbors, due to the 1989 free trade agreement with the USA and the NAFTA (North American Free Trade Agreement). In the last fifty years Canada has transformed itself from a largely agrarian society to a thoroughly modern, industrial and urban one. The financial sector in Canada weathered the recession of 2008 really well and came out as among the strongest banks in the world.
- Finland is the fourth with $35,400 (US) ranked the 34th globally, but with the second smallest labor force (2.62 million). Finland’s economy is very diverse, but primarily technology driven. She doesn’t enjoy the benefit of mineral resources like some of the others, with most of the raw materials needed to be imported. Finland does, however, export around 30% of its GDP, mostly in the form of high tech devices such as Mobile Phones (Nokia is named after the village where the company had started). Finland’s location means that agriculture is little more than achieving the ‘self sufficiency’ and is not a major export earner; the only exception to this would be Timber.
- Japan may have the largest labor force of the five (62.97 million), but is ranked the lowest with average earnings of $34,000 (US). Since WW2 Japan sought to rebuild economically using some unique features, it capitalized on the loyalty that is inbuilt into the Japanese culture by creating ‘jobs for life’, but expecting the Japanese work ethic. This coupled with a very small defense budget helped Japan build a highly sophisticated economy. Archaic banking and financial structures meant that Japan had to deal with the problems in the financial sector in the 1990’s and was not heavily exposed to the banking situation that caused the problems in 2008, but a slowdown of demand for Japanese goods did take it’s toll. However, it must be pointed out that the full effects of the Tsunami and meltdown of the Fukishima Nuclear plant have yet to show up in economic data.
Not surprisingly Japan has the lowest of the unemployment figures of the five countries outlined with 5% unemployed. The majority of the labor force works in the service area (73.8%) with industry (24.9%) and agriculture (1.4%). According to the Japanese ministry of Health report of 2009, 15% of the population lives below the poverty line.
Australia has the second lowest figure outlined with 5.2% unemployed population. Services are the biggest employer with 75% working in this sector. Industry is the next (21.1%) and agriculture (3.6%). There are no figures for people below the poverty line in Australia, but it is known to have a very good social welfare system.
Luxembourg has an unemployment rate recorded as6%. The proximity to France and Germany means that Luxembourg can rely on the cross border workers for its labor force. This gives the advantage that people on lower wages don’t have to live in the country; they commute on a daily basis. Luxembourg was hit by the financial crisis and has had to address the issue.
80.76% of the labor force work in services (such as banking) with industry (17.2%) and agriculture (2.2%) making up the rest. There are no figures for people living below the poverty line, but both France and Germany (the neighbors) are known to have very generous welfare systems.
It has an unemployment rate outlined with 8%. It also has a more diversified workforce, or at least it shows up more in the statistics. Services make up 76% of the labor sector followed by Manufacturing (13%), Construction (6%), Agriculture (2%) and others making up the rest (3%). It is estimated that 9.6% of the population live below the poverty line.
It has the highest unemployment of the five nations surveyed with 8.4%. The remote location away from the main centers of the global network works against Finland, but in building a high tech economy they have partially overcome this. Finland’s economy is much more diverse than any of the others with the largest part working in public services (32.8%) followed by commerce (19.4%), industry (16.7%), finance (12.8%), construction (7.1%), transport and communications (6.3%) and agriculture/ forestry (4.9%). There are no figures for people living below the poverty line.