Wednesday, June 11, 2014

World Economic Cup: Australia Versus the Group of Death

The World Economic Cup
June 2014
It has been a long wait, but the time is almost here for the kick-off of the World Economic Cup. Australia has been drawn in the same group as the Netherlands, Chile and Spain. Urban Economics takes a look at the teams and their prospects.

World GDP Ranking (2012): 12th

The clear favourite in this group, Australia continues to kick economic goals on the world stage. Since aligning themselves with the Asian economic leagues, the team has dramatically expanded their export volumes, although they tend to be over-reliant on their mining midfield. The foundations of the team remain solid, having stable governance and incremental economic reforms over many years. With the financial sector as safe as a bank at the back and the always underrated education export sector providing variety in attack, Australia should be able to overcome a lack of depth in manufacturing and will be optimistic of finishing on top of this group.

They are not without their concerns though. Questions remain whether their star-studded mining line-up is past their peak and there is the on-going controversy whether some of Australia’s mining players even qualify to represent the nation. Australia’s high currency remains a concern and their new manager, Tony Abbott, has come in for some heavy criticism regarding his new tactics.

World GDP Ranking (2012): 18th

The match-up between the energy sectors of the Netherlands and Australia promises to be one of the highlights of the tournament. The Netherlands has a strong gas sector, both on-shore and from the North Sea and the team is the fifth largest natural gas exporter.
While the Netherlands may be small in size and population, they have a strong track record and punch well above their weight on the world economic stage. They are the sixth largest exporter (by value) in the world, benefitting from being in the EU. The Netherlands is the second largest exporter (by value) of agricultural products behind only the United States by establishing itself as the world’s leader in the high-end cut flower and live plant export markets.
The team is bolstered by very competitive corporate tax rates. Netherlands will field a side including several players that star in the biggest leagues of the world and will be relying on the bankable ING, the fluidity of Heineken and the guidance of TomTom. This team has the work ethic, resilience, economic structure and big names to go far in this tournament.

World GDP Ranking (2012): 13th

While ranked only one place behind Australia, Spain is a team in turmoil. Repeatedly smashed by Global FC in 2008 and 2009, Spain fell into a deep recession and has yet to substantially recover. Unemployment is rampant, the economy has collapsed and the government’s debt is massive.
Worryingly, this team is notorious for having no energy meaning it must import all its fuel requirements, making it vulnerable to shocks in this sector. Further adding to the nation’s woes, Spain’s youth team has barely gotten onto the economic playing field, with youth unemployment at a staggering 57.7%.
While major troubles continue to plague the team, the sheer volume of their economy, their experience and the backing of the EU mean that this team may well yet be a threat. Spain will be relying on manufacturing and tourism to overcome the resource-based strengths of the other countries in the group. Spain has a large car and car parts manufacturing sector, with major European brands having sizeable plants in Spain. In 2012, Spain was ranked fourth in the world in the number of international visitors, attracting some 57.7 million visitors, almost 10 times that of Australia.

World GDP Ranking (2012): 37th

Don’t let the GDP ranking fool you, this nation is on the rise and is a South American powerhouse. Another team that is dominated by miners, it produces one third of the world’s copper output. A leader in the South American conference, Chile has the highest standard of living and per capita GDP in Latin America.
Even more reliant on their miners than Australia, Chile has been criticised for being too one dimensional in attack. However, with a growing and increasingly influential middle class and bolstered by agricultural exports, particularly wine and fish products, the Chileans will be confident of causing some upsets in this group. Santiago is a thriving city with a growing reputation for innovation.


We predict that Australia will finish on top of this group, with the Netherlands just holding out Chile for second. Spain is unlikely to get a point and will finish last. This, unfortunately, is the exact inverse of our tip for how the group will fare in the football World Cup. Prove us wrong Socceroos!!!

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