Trends and factors that could affect Arizona’s economy


By Karl Reiner

The global consumption of energy has grown by 30% during the past 10 years.  Almost all of the increase was in the developing nations.  Due to conservation and increases in efficiency, energy demand appears to
6a00d8341bf80c53ef0191040816be970c-pihave stabilized in the developed countries. Economic growth drove the increase in usage in the developing lands.  The developing countries now consume a larger share of the global energy supply than the developed nations.


China’s economic development has made it the world’s second-largest economy.  The U.S. and China trade on a large scale, China holds a vast amount of American debt.  China’s development moved 680
6a00d8341bf80c53ef01901e12220a970b-pimillion people out of poverty during the last 22 years.  The country’s extreme poverty rate was reduced from 84% in 1980 to around 10% in 2013.  China’s workforce of 795 million is more than twice the size of the entire U.S. population.

The United Nations estimates that the world’s population will increase from 7.2 billion today to 8.1 billion in 2025.  Most of the growth will be in the developing nations, with over 50% projected to occur in Africa.  Despite the increase, the number of people living in extreme poverty (subsisting on $1.25 per day) in the developing world is declining.  Since 1990, the rate has fallen from 43% to 21% of the population, a change affecting about a billion people.

The concentration of carbon dioxide in the atmosphere has reached 400 parts per million.  Long considered a contributor to global warming by climate scientists, the effect of the rise in the carbon dioxide level remains a hotly debated political topic.  The warming trend is projected to shift weather patterns, making Arizona hotter and dryer.

Mexico’s economy continues to chug along at a 3% annual growth rate.  Arizona’s merchandise exports to Mexico could reach $6.6 billion this year, an increase of $400 million over 2012. The potential demand for
6a00d8341bf80c53ef0192abd16056970d-800winew homes in Mexico is estimated at 11 million over the next 20 years.  The government hopes to shift emphasis to high-rise units that will be closer to city centers, utilities, ease traffic congestion and reduce commute time.

Humane Borders is a charitable organization that maintains emergency water stations for migrants in Arizona’s desert region.  Pima County funds the organization at $26,500 per year.  What some residents consider an inappropriate use of funds is a worthwhile investment because the county is obligated to perform autopsies on all human remains found in Pima County.  It cost $2,700 for an autopsy and cremation.  In addition to the humanitarian aspect, the county benefits when the water stations keep people alive.

In the recently released KidsCount 2013 report, the well-being of Arizona’s children was ranked 47th in the nation. Arizona was ahead of Nevada,
6a00d8341bf80c53ef019104081c36970c-piMississippi and New Mexico.  The percentage of children living in poverty in Arizona stands at 27%.  Cuts in state funding for kindergarten and preschool plus the ravages of recession contributed to Arizona’s dismal ranking. The heartrending situation will have a long-term effect.  It will hobble development of the educated workforce the state’s economy needs.

The immigration bill has passed in the U.S. Senate and has moved to the House of Representatives.  Along with laudable changes to current immigration policy, the bill contains billions of dollars for spending on border security technology and an additional 20,000 Border Patrol agents.  THe measures were added to placate conservative demands for tighter border security.  While it may not be the most efficient use of funds, a portion of the spending will filter down to Arizona if the bill survives in the House.

Unfortunately, nothing has been said about supporting economic development in Mexico and Central America, the source of the majority of economic migrants.  In times past, Presidents Kennedy and Reagan denounced the wall in Berlin, a wall that hemmed people in. While ignoring economic development needs, the U.S. will now spend extra lavishly on barriers to keep people out.