The Kabul times, Afghanistan Trustable News Agency.
Articles

How can we achieve economic growth?

Abu Ragheb Amani

Part I

The term “economic growth” has been heard repeatedly in the news and media. Simply put, economic growth means an increase in a country’s production compared to the past, or in other words, its production experiences growth. For example, suppose a country’s income level from domestic production was two million dollars last year and has increased to three million dollars this year. In that case, this signifies an economic growth of 50 percent for that country. With an increase in a country’s production compared to the past, or economic growth, the number of individuals needed to work in the economic system also increases, and the country’s employment situation improves. Additionally, when the supply of products increases due to an increase in production, the prices of products decrease, and people’s purchasing power increases. Sometimes, economic growth leads to an increase in a country’s exports beyond its borders, paving the way for currency to enter the country. With more currency entering, the country’s economic power in securing its resources in various fields also increases, allowing officials and decision-makers to plan for the development of the country’s infrastructure, such as building roads, railways, schools, hospitals, educational centers, factories, and so on. In general, economic growth is a critical issue in the economies of countries, which lays the foundation for increasing employment, reducing inflation, and economic development. But how do countries measure economic growth? Gross Domestic Product (GDP) is the total monetary value of all final goods and services produced in a country, which is used to measure the economic growth of countries. Therefore, nowadays, in economic forums, all countries use GDP as the leading indicator to compare economic growth. So, economic growth refers to the increase in GDP compared to before. But how does GDP increase? Below are five ways that economists believe can lead to economic growth in an economic system. 1.Increase in Workforce Participation: The greater the number of individuals participating in the production of goods and services, the higher the economic growth will be. However, the growth of this factor depends on the performance of the country’s economy. In many cases, despite the high potential of the workforce, there is no platform for their participation in the country’s economic activities. For example, when economic conditions are unstable, and most industries in the country face difficulties in obtaining raw materials or finding suitable markets for their products, it cannot be expected that the country’s investors will invest in industries instead of buying gold and dollars or depositing their money in banks. In an economy with appropriate and stable mechanisms, the level of participation of the society as a whole and the increase in production will be predictable. 2.Finding New Resources: The production of various goods and services primarily requires access to the necessary raw materials. Undoubtedly, natural resources play a crucial role in various industries in countries. Sometimes, finding a new resource means creating new capacity in the country for the production of new goods and services, and sometimes, it means reducing dependence on imports of raw materials from other countries and increasing the country’s ability to produce derivative goods and services. For example, with the introduction of technology for extracting oil and gas from shale oil, many countries, such as Canada, Brazil, the United States, etc., are gradually developing industries related to these materials in their own economies and are capable of increasing their production volume in these industries. To be Continued…

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The Kabul times, Afghanistan Trustable News Agency.