Economic growth rate entails a measure of the annual rate at which the income of a particular nation increases. Precisely, it provides an explanation of the direction and magnitude of the overall growth of a country’s economy. The paper gives insight to the average economic growth of Japan, United States, Ethiopia, and China for the last twenty years. Similarly, comparisons of the main factors that led to the different growth rates are outlined. Lastly, the paper explains the distinct government policies for each country that resulted in their unique economic growth.

The four countries have recorded different rates of economic growth over the last 20 years. However, China has recorded the highest annual economic growth with an average rate of 9.58%. Similarly, Ethiopia has an average economic growth rate of 7.855%; the United States has 2.465% while Japan recorded the lowest with 0.86% (The World Bank, n.d). The above countries portray distinct characteristics that make them have different growth rate. A country such as China has the world’s largest population that offers cheap and abundant labor. Similarly, the country has fewer labor regulations, and the large pool of skilled and unskilled workers provide the requirement for economic growth. Initially, China had a closed centrally planned system; however, the government moved to a more market-oriented system that has helped it to play the major global roles (Chen, & Feng, 2000). As a result of operating as a market-oriented system, China established itself as the world’s largest exporter in the year 2010.

Also, the country’s growth success came as a result of its entry into the World Trade Organization (WTO) and participation in foreign direct investment (FDI). China implemented the policy of freedom to invest. The cities were given freedom to invest their resources and generate revenue by monetizing land assets. Also, they retain 25% shares of the value added taxes. After China had joined World Health Organization, it reformed its policies. The government canceled the policy of forced technology transfer. The open-door policy encouraged foreign investments, and it allowed the decisions of technological cooperation to be made independently by businesses.

On the other hand, the United States has the world’s largest and technical economy due to its diverse resources and operations. The US exhibits market-oriented economy and private firms and individuals with businesses make most of the decisions. The work of the federal and state government is to buy the required goods and services in the private marketplaces. Similarly, the firms operating in the United States enjoy flexibility in their decisions to develop new products, to expand their plants, innovation and to lay off surplus employees (Panizza, & Presbitero, 2014). Recently, the US faced severe economic crisis and recession that led to the country recording a deficit and a double-digit rate of unemployment. The Unites States is unique in the sense that it has a history of bouncing back in case of economic crisis. Therefore, the government and various business communities will respond with measures to encourage growth and reduce costs. The country has the largest agricultural base in the world, and the farmers produce almost a half of the world’s corn. The United States has human capital development policy whereby the country invests in human capital. The country does so by allocating the resources to training and education of the citizens. Therefore, the policy provides individual with the necessary skills and knowledge to improve the productivity of the country. Second, the country has a strong dollar policy. The policy is based on the idea that a stronger exchange rate of the dollar is for the interest of everyone. Therefore, the policy encouraged foreigners to buy more Treasury securities.

Japan is a developed country made up of four small islands. The Americans occupied Japan after the World War II and laid the foundation that led to the modern economic success and political society that exist in the country. Japan relies heavily on imports since it has few minerals and energy resources. The country is ranked in the world as the largest importer of raw materials that include lumber, copper, zinc, oil, iron ore and coal. However, the country has high-skilled workforces that excel in high-tech industries (Kiyota, & Okazaki, 2010). Precisely, the country deals with electronics, automobiles, chemicals, and machinery. Japan’s import policy helped the country to boost the transfer of technology from other developed countries. After the World War II, Japan reduced the cost of importing technology, and this led to rapid industrial growth. Japan does not depend on agriculture; however, the government established a policy to reform the regulations in agriculture. The policy motivated farmer and boosted the agricultural output of the country.

Lastly, Ethiopia is a developing country and it is ranked as the fifth largest economy in the Sub-Saharan Africa. Similarly, the country is recording the fastest growing economy in Africa and third in the world. The country’s economic growth is due to the government’s projects of achieving the Millennium Development Goals (MDGs). Moreover, the objective of the country is to attain a middle-income status by the year 2025. The country has a grand transformational plan that enhanced the manufacturing sector such as agro-processing and textiles (Scully, 2014). The country has a policy of non-tolerance to corruption and stable government policies. The two policies have stabilized the economy of the country, and Ethiopia is now on the move to be a regional economic powerhouse. Ethiopia’s foreign policy gives priority to economic diplomacy. It has enabled the country to have bilateral and multilateral economic agreements with various countries in the world. Therefore, the foreign policy enhances the country’s trade relationship with others.

In conclusion, the four countries have shown what it takes to have a stable economy. However, the United States of America remains the largest economy in the world, and it accounts for about 25% of the world’s gross domestic product. Despite the wealth of the US, more than 12% of the country survives under the poverty line. China’s large population has helped the country with cheap labor. Also, the country encouraged the growth of rural enterprises and implemented the open-door policy that boosted its productivity. Japan is an industrial nation with an extremely skilled worker. However, it does not depend on agriculture because the country does not have enough land. Its import policies and post-World War II reforms have helped the country to grow economically. Lastly, Ethiopia has shown Africa and the world that it has the potential to grow economically. The foreign policies, non-tolerance to corruption and stable government policies have enabled the country prosper economically.
References

Chen, B., & Feng, Y. (2000). Determinants of economic growth in China: Private enterprise, education, and openness. China Economic Review, 11(1), 1-15.

Kiyota, K., & Okazaki, T. (2010). Industrial Policy Cuts Two Ways: Evidence from Cotton-Spinning Firms in Japan, 1956–1964. Journal of Law and Economics, 53(3), 587-609.

Panizza, U., & Presbitero, A. F. (2014). Public debt and economic growth: is there a causal effect?. Journal of Macroeconomics, 41, 21-41.

Scully, G. W. (2014). Constitutional environments and economic growth. Princeton University Press.

The World Bank. (n.d). GDP growth (annual %). Retrieved from http://www.data.worldbank.org.