Chapter 15: Emerging Trends and Issues in Economics

This refers to new issues that are coming up as far as economic issues are concerned.

  • Use of advanced technology-computers which have come up with new changes ranging from less paper work and many people are unemployed.
  • Emergence of automatic teller machines. Emergence of mobile banks.
  • Emergence of customer care services department to handle financial matters only.
  • Emergence of m-banking
  • Globalization: this is a process whereby different systems and parts of a related trade, function as a closely-knit system at the international level. Communication and transport have vastly improved and affects many aspects of economics from competition policy to monetary policy and agricultural policy.
  • Mergers and joint ventures of institutions so as to increase the institutions capital base. HV aids and drug abuse menace.
  • Pollution: air, water, noise and solid waste due to drastic economic changes.
  • Environmental Corruption.
  • Depletion of natural resources.
  • Rogue economics: recent credit crisis shows how financial deregulation and globalization has contributed to many new problems which leave economies vulnerable to financial speculation.
  • Pressure on commodities: the world is used to dealing with a situation of abundant supply of raw materials, but diminishing supply and growing demand threatens to change that. Oil prices are rising due to speculation and due to fact demand is simply rising faster than supply.
  • Shifting balance of global economy: in post war period, US economy was dominant. The old phrase when America sneezes, the rest of the world catches a cold was very much appropriate. Sleeping giants have risen.
  • Dealing with commodity shortages there is the introduction of government quotas, tariffs, protectionism etc. Growth of china economies. HIV aids menace.
  • Emergence of consumerism movements: this is an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers
  • Destruction of environment e.g. lumbering, desertification etc. Emergence of fraudsters who produce counter fake products.
  • Emergence of environmentalism movement: this is an organized movement of concerned citizens and government agencies to protect and improve people’s current and future living environment.
  • Liberalization: this is removal of trade barriers-i.e. free trade. Regional economic integration- e.g. EAC, COMESA, PTA boundaries become irrelevant. Emergence of export processing zones-this are areas set aside by government where industries can set up firms to process goods for export at little or no charge.
  • Enactment of new government policies ranging from quotas, rules, regulations and law enactment e.g. media bill, mututho bill and tobacco bill in Kenya

Approaches To Manage Emerging Economic Trends and Issues

  • Restriction of lending capacity of money to citizens, to address the challenge of increased money supply in economy.
  • Huge taxation to address the challenge of increased demand of level of goods.
  • Control imports to solve the problem of imported inflation.
  • Rationing of foreign exchange to address the challenge of imported inflation.
  • Control exports to deal with the challenge of shortage of domestic market product.