An Evaluation Framework - Economic Policy and Human Rights by Radhika Balakrishnan and Diane Elson

By Philip Spires

Economic Policy and Human Rights by Radhika Balakrishnan and Diane Elson apparently declares an intention to compare and contrast fiscal and monetary policy, public expenditure consequences, taxation, trade policy and pension reform in Mexico and the United States of America. The choice of countries is justified on several levels: they are of comparable size, differ in level of development, contrast in governmental approaches and, crucially, are both signatories of NAFTA, the North American Free Trade Agreement which, itself, suggests a commonality in certain policy areas. At the outset, the authors declare that the neoliberal economic assumptions that have dominated policy choice for thirty years have not worked, ostensibly because their main result has been the current crisis.

The authors thus attempt to illustrate this claim by examining a range of social, employment and economic indicators to assess the impact of the current paradigm on particular groups within both Mexico and the United States. But Balakrishnan and Elson also declare the intention of doing much more than this, in claiming that the framework they adopt could become transferable to other places and contexts. Their choice of framework appears to achieve exactly what they intend, and it does so quite spectacularly. And it is a position that could have benefited my own work a couple of decades ago, if only it had then existed.

My own research on education's role in Philippine development found that increased use of market forces and privatisation in an education system already heavily reliant on the private sector produced distortions that undermined some of education's potential and desired objectives. After the debt decade of the 1980s, increased reliance on market forces in Philippine education placed most high quality educational experience beyond the reach of anyone but the economic elite. And yet, declared policy stated that the promotion greater equality was one of the education system's explicit goals. In the future, work intending to identify such contradiction will benefit from employing the universal reference point of the transferable framework identified in Balakrishnan and Elson's superb study.

The authors begin with a short discussion of the Universal Declaration on Human Rights. Importantly, the rather general goals that this advises have been rendered more specific by subsequent declarations. And, by signing up to these, governments - presumably - declare their desire to see the declared goals achieved, both at home and abroad. Such general aims have thus become more specifically objectified via the Convention on the Elimination of All Forms of Racial Discrimination, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights and the Covenant on the Elimination of All Forms of Discrimination Against Women. Thus policy objectives, if not timetables for their achievement, in the areas of race, gender, employment and several other areas can be specifically identified as having been espoused by governments because they have willingly signed up to these treaties, even though that might have been prompted more by political expediency than commitment.

Using these objectives as a framework for evaluation, the book's individual papers conduct a near-forensic examination of a range of Mexico's and the USA's recent economic and social policies in the specified areas in order to examine whether the agreed objectives have been furthered or hindered. Almost without exception, neoliberal policy conformity is shown to undermine these agreed objectives and often to impact differently from their declared intent on specific and identifiable target groups within the population. This evidence makes a strong case for greater and more active accountability of government action and thus also questions declared commitment to previously agreed - and politically convenient - principles. In more than one area, there is strong evidence to suggest that policies are mere populist window-dressing in that their stated objectives are in line with identified and desired goals whilst their implementation can only undermine their own stated intent.

Economic Policy and Human Rights thus provides much more than an examination of particular policy prescription in Mexico and the United States. Indeed it may even present an evaluative framework that could be applied by progressive analysts to any state or region that has adopted the objectives of these quite specific treaties. As such it will surely provide an important and enduring contribution to any debate on social and economic policy.

Philip Spires
Author of Mission and A Fool's Knot, African novels set in Kenya
http://www.philipspires.co.uk
Migwani is a small town in Kitui District, eastern Kenya. My books examine how social and economic change impact on the lives of ordinary people. They portray characters whose identity is bound up with their home area, but whose futures are determined by the globalized world in which they live.

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http://EzineArticles.com/?An-Evaluation-Framework---Economic-Policy-and-Human-Rights-by-Radhika-Balakrishnan-and-Diane-Elson&id=6817100

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Chinese Nationalism and Foreign Business Boycotting in China

By Lance Winslow

Well, it seems that China is expanding its territorial waters to include the oceanfront property which was either considered international waters, or the territorial waters of its neighbors. There have been disputes with Japan, Korea, Vietnam, Philippines, and Taiwan. There is also a rather significant problem brewing as citizens from these different nations become angered. When this happens they tend to boycott products from the other nation, and that causes trade flow imbalances.
Worse, when citizens of one nation get angered due to their government-sponsored media or a feeding frenzy of commercial media outlets which pander to propaganda then we have citizens uniting in nationalism against other nations. Just recently, a group of Chinese angered over a dispute between Japan and China over territorial waters took action into their own hands, and that group of citizens attacked and damaged the property of Japanese companies operating in China.
Will this happen if the United States tries to help Asian nations negotiate their own territorial waters? The United States supports Taiwan, Philippines, Korea, and Japan and we've worked to help Vietnam build up its nation and economy too. We also support China, as they are our largest trading partner. What happens if all the citizens in China start boycotting US products, and rioting and burning down US companies? That could be a rather big problem, and it would immediately knock China off our preferred trading partner list.
Would Chinese citizens working in factories purposely poison food products being shipped the United States? These are all questions that should be asked because that could easily happen right now today with China, it could easily happen between the US and China, and it appears China doesn't want to do anything about it in the case of Japan. In fact the Chinese communist government released a statement about the attacks of its citizens on Japanese businesses within China. They said that they understood why their citizens were angered, and took law into their own hands damaging Japanese properties.
What is that supposed to mean? It's obvious that that means China doesn't feel it necessary to police its own citizens for damaging property if it belongs to a foreign nation that is currently having a dispute with the Chinese. Wow, can you see how big of a problem this could be in the future? If this happens with US companies, quite a few of the largest corporations in America have factories in China, and it would hurt our stock market temporarily, but it would also perhaps cause the United States to turn around every single shipping container coming this way.
If that happened China's economy would crumble quickly, and then they might blame the United States and our own citizens for boycotting Chinese products, and then we would escalate a trade war into a larger scale dispute, until which time bullets were fired. That's not into do anyone any good, and that could be a real hard fall for China, and a devastating thing for humankind. Please consider all this and think on it.
Lance Winslow is the Founder of the Online Think Tank, a diverse group of achievers, experts, innovators, entrepreneurs, thinkers, futurists, academics, dreamers, leaders, and general all around brilliant minds. Lance Winslow hopes you've enjoyed today's discussion and topic. http://www.WorldThinkTank.net - Have an important subject to discuss, contact Lance Winslow.
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http://EzineArticles.com/?Chinese-Nationalism-and-Foreign-Business-Boycotting-in-China&id=7287601

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Pakistan's Economy

By Raja Imran Khan

Pakistan is a South Asian country of 180 million people with $164 billion GDP, contributing 19.6%, 26.8% and 53.7% respectively by agriculture, industry and services. Per Capita income is around $1022 and Human development index (HDI) is 0.52, Pakistan is the 6th populated country having 5th biggest army in the world; acquired area is about 803,940 km2, the external debts are around $50.1 billion.

This country has exceptional potential for growth, as it has achieved a growth rate of 6.8% in 2006-7 currently it is at 2%. Pakistan's Economy is based on agriculture, textile, cottage industry, and foreign remittances. Service industry has grown up rapidly in last two decades particularly telecommunication industry got tremendous boom.

Different sectors are supporting Pakistan's economy with a pivotal role of agriculture sector as depicted by its national emblem; this country has marvels treasures of natural resources, having four seasons, fertile lands, best irrigation system, some of largest natural resources mines, highest mountain ranges, 1050 mile coastline, vast deserts and the best fertile lands; surely is one of the most blessed countries on the earth. Despite having all these qualities the political and economic conditions are worse.

This country has 70% population linked with rural sector but the area is neglected and underdeveloped and performing well below its capacity. Proper planning, organizing, management and monitoring is needed.

Major issues are easy to understand, here is a glimpse of some common problems. The annual budget for 2009-2010 is approximately $33.1 billion for whole country; the big portion is consumed by defense and forging debt services which is $13.09 billion divided $9.2 billion and $4.07billion respectively; remaining amount is left for all other sectors.

On the other side some $2.02 billion is looted by politicians, and around $2.2 billion is on record written offs as bad debts in last 13 years, beneficiaries are the elite class of the country. This influential class is not willing to transfer the basic right of the people to the common men especially in the rural areas. Particularly they don't want common man to be educated.

Without going deep into the figures, in general, it's an open secret that conditions are not favorable, but still not that much worse as perceived and depicted on different platforms. Here we come directly to the some directive measures which can help to guide the things in right track.

First of all Pakistan needs:

o To understand that agriculture is the strength of Pakistan's economy and need to be taken seriously by government and public sector.

o To give farmers easy excess to the market

o To train and manage human capital

o To its media play its role to boost the economy

o To give considerable attention to the management and utilization of resources.

Education sector is the most neglected and badly managed area and one of the root causes of corruption, incapability, inactivity. This sector should be:

o Reformed in terms of education syllabus and system

o Adopted a fair and long term policy managed by a transparent system

o Change the dual education standards to one equal syllabus for everyone.

Energy crises is the current biggest problem for country and badly affecting the manufacturing sector, the solution is:

o To hire capable efficient and honest people (Management Staff)

o To add new power generation plants

o To manage existing power housed effectively

o To make timely payments to the rental power plants.

Many issues have direct and indirect effects on the economy and need an immediate consideration which can be studied in their subjective domain.

Thank you.

Raja Imran Khan
MBA (Finance)

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http://EzineArticles.com/?Pakistans-Economy&id=3489752

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The Brazil Economy - 5 Reasons Why It's Booming

By Joel A Higginbotham

When most of the people think of Brazil they consider Carnival, they don't think of their economic system. That's why it is surprising to hear that the Brazil economy is the 7th largest on earth. That puts it above nations like Canada, and Italy. Not only is it certainly one of the largest economies in the world, it's also certainly one of the fastest growing.

To put Brazil in context with the rest from the globe, it's the 5th most populated nation. The US is 3rd. Sao Paulo, the biggest city in Brazil, is the 8th biggest city on earth, ahead of Shanghai and Delhi.

You will find a whole lot of things that go into making South America's most significant country certainly one of the world's greatest economies.

All-natural Sources. Large oilfields have recently been discovered off the coast of Brazil. That is bringing a great deal of large oil corporations into Brazil to exploit. That's creating numerous jobs for locals. Brazil is also among the greatest exporters of iron ore. Iron is actually a required ingredient of steel. Steel is in substantial demand for construction needs as well as 1000's of other uses. It's also the biggest agricultural exporter, ahead of the United States. To help their agriculture production to develop they have invested heavily in scientific farming techniques.

Foreign Investing. The Brazil economy is genuinely inviting towards foreign investment. Countries like China and Iran are commencing to invest in Brazil as a result of their foreign policies. Brazil does not involve themselves with domestic policies of other countries, so nations see Brazil as an excellent location to invest.

Infrastructure. All those individuals and all these sources have to have the ability to get around. Brazil includes a big infrastructure and the government is willing to invest in it. There are a several reasons that this helps improve the Brazil economy. One particular reason is that it gets individuals functioning. The unemployment rate in Brazil may be the lowest in South America. Enhancing infrastructure also shows that the government is growing and happy to invest in their country.

Internal Demand. As the Brazil economy continues to increase the people have a lot more income. As they continue to have a more income than they need for basic survival they desire to obtain a lot more things. That means that many Brazilians are buying their own residences and their initial automobiles. This also signifies that the nation includes a developing middle class. When individuals have additional dollars to invest on luxuries that assists to stimulate the economy. When demand goes up supply does as well, which will in turn create a lot more jobs.

Tourism. Tourists don't need to come to a nation that is unstable and with a poor economy. Although Brazil does nonetheless have some problems with crime, tourists don't run the risk of becoming kidnapped like in some other countries. Carnival has become a huge tourist draw. But ecotourism is turning out to be a big enterprise and has assisted develop the Brazil economic climate. Brazil has a good amount of areas to go and see the natural wonders, from scenic beaches to tropical rain forests. Ecotourism can also be helping to preserve Brazil's organic wonders.

All of these items go into generating the Brazil economy into one of the fastest on earth, that is quickly pushing Brazil into 1st world territory.

Joel Higginbotham currently lives in Rio de Janeiro, Brazil and created his website www.BrazilCultureAndTravel.com to give everyone a taste of this amazing country. For more interesting Brazil facts click the following link to discover more about the Brazil tourist visa.

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http://EzineArticles.com/?The-Brazil-Economy---5-Reasons-Why-Its-Booming&id=6519917

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The Importance of Fuel Economy and Solutions

By Wallus Benzin

Governments are starting to take notice of the importance of fuel economy. They are starting to establish actual guidelines that will regulate fuel efficiency in the future. In 2012 the European Union has stated that their gasoline cars must get at least 47mpg rating and their diesel cars must have a minimum of 52mpg rating. While this is great for European cars made, the United States continually produce cars that are not meeting environmental standards and this is discouraging their production and causing a severe issue for employees being laid off due to production. The United States taxes their vehicles not meeting expectations and it is said that taxes and penalties will increase rapidly over the next few years.

Engineers around the globe are working to find ways to help with fuel efficiency. Because there are several factors that affect fuel economies, these engineers are having to alter in those factors to try and produce efficiency in their vehicles.

The weight of a vehicle is the biggest factor out there. Larger vehicles and SUV's are killing the fuel economy standards. Companies around the world are trying to create lighter vehicles to meet those guidelines and to help with the growing problem of fuel economy.

Currently, the answer to our fuel economy problems have been thrown at the consumers to purchase a hybrid vehicle. Yes, hybrids are the best option available to consumers right now who want a car and better fuel economy. Most hybrid vehicles on the road are combining fuel and electrical options. The advantage of hybrids and their importance in fuel economy is their engineered thinking. They recapture wasted energy while you are braking by shutting off the gasoline powered engine and turning on the electrical components. They also do this during any idling period which not only is a huge gas saver, but environmental saver also. The master engineering in hybrids allow the vehicles to use gas and electric power together to reduce the amount of fuel consumed. The average mpg in a hybrid is 50, and it lowers the emissions within the air by over 70%.

Purchasing a new hybrid isn't an option for everyone, but we need to remember every time we go to drive that we are effecting the fuel economy in some way. It's up to us as drivers and responsible people to do what we can to help the fuel economy and find other options available to us.

Many motorist are saving gas and money by using hydrogen mixed with their gas. For more information on this interesting method check http://www.squidoo.com/carruns-onwater to see how this works. Many call it Run Your Car On Water but it is a hybrid system. Read more to find the results and facts.

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http://EzineArticles.com/?The-Importance-of-Fuel-Economy-and-Solutions&id=1562780

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Banking on Sharia Principles - Islamic Banking and the Financial Industry

By Linda Eagle

There are an estimated 1.61 billion Muslims worldwide, making Islamic banking one of the fastest growing segments of the financial industry. Banks serving the Islamic population must comply with several very specific principles of Islamic law if they hope to retain existing customers and attract new ones. Banks must be ready with specialized products and services and they must put programs in place to train their personnel to support these products and services in order to exist in this competitive marketplace.
The basic principle of Islamic banking follows the laws of Sharia, known as Fiqh al-Muamalat (Islamic rules on transaction). The term "Islamic banking" is synonymous with "full-reserve banking" and "Sharia-compliant banking." The most prominent feature of these laws is usury - the prohibition of paying or collecting interest on funds. The Islamic terminology for this is riba or ribaa. The Sharia also forbids engagement in investments that include financial unknowns such as buying and selling futures, as well as businesses that are haraam - dealing in products that are contrary to Islamic law and values such as alcohol, pork, gossip or pornography. These principles apply to all individuals, companies and governments.
Banks that comply with Islamic law are forbidden to charge interest or late payment fees, which is also considered a type of riba. To minimize risk, banks will often require a large down payment on goods and property, or insist upon large collateral. It is lawful for the Bank to charge a higher price for a good if payments are deferred or collected at a later date since it is considered a trade for goods rather than collecting interest. Sharia-complaint banking products include Mudharabah (profit sharing), Wadiah (safekeeping), Musharakah (joint venture), Murabahah (cost plus) and Ijarah (leasing). Another way that banks work within Islamic laws while trying to turn a profit is by buying an item that the customer wants, and then selling the item to the customer at a higher price.
The Mudharabah is a partnership between an entrepreneur and the bank. The bank is known as the rabal-maal and the entrepreneur as the mudarib. The bank provides all of the necessary capital to start a business and the entrepreneur does the work of managing the business. Profits are split at an agreed ratio until the initial funds of the rabal-maal are paid off. The rabal-maal is also compensated with additional funds based on the profits of the business in terms previously agreed on. In the event that the business folds, the rabal-maal shoulders the cost and the mudarib is not compensated.
Musharakah is similar to Mudharabah, in which an entrepreneur seeks funds for a business venture and pays the bank back with a ratio of profits. However, there are often more than two parties who contribute funds and become partners who can influence the business depending on the amount of money invested. The entrepreneur also contributes funds and shares in the risk. Any loss is proportional to the amount of capital invested in the business.
Wadiah is a system in which a person deposits money into a bank and receives a "gift" from the bank. The bank is the keeper of the funds and will refund the entire amount at the demand of the depositor. The bank rewards the amount of time the depositor keeps the money in the bank with a hibah or gift, which is not guaranteed. The hibah is similar to interest, but lawful according the Islamic law.
Murabaha governs the issuing of home loans or any other type of goods needed by a borrower. An Islamic bank does not lend money to a borrower to buy properties; rather, the bank will purchase the property at the borrower's request at a freely disclosed price, and mark up the price for the borrower to pay back, therefore making a profit from the investment. The borrower is named on the title and allowed to utilize the property immediately and pays the bank back in installments.
Another type of loan is the Ijara, in which the bank buys the home or item and leases the property to the borrower while retaining ownership of the property. The borrower can either use the property for a pre-determined period of time, or pay off the purchase price and buy out the Bank to attain full ownership of the property.
There are occasionally controversies surrounding the interpretation of the riba, which certain scholars argue was meant to prevent petty money-lenders from abusing borrowers, rather than a modern bank charging a reasonable, agreed upon interest. The general consensus, however, is that any interest is a direct violation of the law of Sharia and therefore unethical.
While each Islamic bank has its own board which rules on ethical banking principals, Islamic banking organizations have been establishing standard regulations and policies. The Islamic Development Bank has been working on international standards, policies and procedures, and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Islamic Finance Service Board (IFSB), International Islamic Financial Market, Liquidity Management Center and International Islamic Rating Agency are in development to ensure accurate and fair banking practices.
Today, Islamic financial institutions exist worldwide, participating in the $180 billion/day industry. In 1975 there was one Islamic bank; today there are over 300 in more than 75 countries. Islamic banks have become more prevalent worldwide and can be found in high numbers in such countries as Indonesia, Pakistan, Bangladesh, Nigeria, Egypt, Turkey, Iran, Sudan, Algeria, Morocco, Iraq, Uzbekistan, Afghanistan, Malaysia, Saudi Arabia, Yemen, Syria and Kazakhstan. The total amount of deposits in Islamic institutions, balance sheets, assets under management and private wealth are growing at a rate of 25-40% annually.
Because oil prices and liquidity are expected to stay at the same levels throughout 2007, budget surpluses will remain high, pushing both public and private sectors to be involved with the Islamic market. Many Islamic countries are investing in large infrastructure projects, creating more than a trillion dollars in investments. There is also a huge potential customer base. According to Standard and Poor's surveys, 20% of the customers in the Gulf Area and Southeast Asia would choose an Islamic banking product over a similar conventional product. There are significant middle-class urban and suburban populations that already use conventional banking, and therefore present ripe opportunities for Islamic banks. Most important to note, outside of the religious and political allure of Islamic banks, is that people are choosing their services for the safeties they offer. The evidence is clear: Islamic banking is big business and it is growing every day.
However, in order for Islamic banks to be competitive with conventional products and attractive to customers, Islamic financial products must meet the risk/reward profiles of investors and issuers while fulfilling the tenets of the Sharia and remaining sufficiently cost-effective. Additionally, Islamic banks must educate their personnel to understand the tenets of Islamic law that pertain to banking, and to train them to comply with Sharia as they serve their Islamic customer population
Dr. Linda Eagle is Founder & President of The Edcomm Group Banker's Academy-a 22-year-old education and consulting firm dedicated to serving Banks, Credit Unions, Money Services Businesses (MSBs) and all areas of the Global Financial Community with thousands of generic and customized training programs in areas such as BSA/AML, Regulatory Compliance, Teller Training, Systems Training, Sales and Service Training, and many more.
The Edcomm Group Banker's Academy is headquartered in New York, NY. For more information, email linda.eagle@edcomm.com or call +1.212.631.9400.
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http://EzineArticles.com/?Banking-on-Sharia-Principles---Islamic-Banking-and-the-Financial-Industry&id=2453393

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The Japanese Economy and the Forex Market

By Nobuji Kanai

A huge earthquake recently hit Japan. The already stagnating economy of the Far Eastern ex-powerhouse country is facing major challenges. How will this country and its forex market perform? Below is an insider view.

Further adverse effects on the Japanese economy seem inevitable from these earthquake-related damages in addition to the financial problems to which Japan has already faced. Many foreign experts have expressed pessimistic opinions that self-recovery of Japanese economy is unlikely. At the same time, Barron has expressed a bullish view of its economy and certain stocks. Is the recovery of Japanese economy hopeless? Did Japanese yen become a currency that would not be worth investing?

Let us, first, analyze the commentaries of overseas expert on Japanese economy right after the earthquake, they all are pessimistic, such as Japanese economy would not be recovered as strong as before any more, or Japanese yen should not be bought, but should be sold.

Nobody would be able to deny the negative effects from the earthquake, the tsunami, radio contamination from the nuclear plant accident, and the electricity shortage in the greater Tokyo area. However, the opinions, such as hyper-inflation would occur due to excessive issue of national bonds, energy of the recovery would not be strong due to Japanese population aging, or human resources escaping from Japan to foreign countries, are the science-fiction-like imaginations, rather than economic analysis.

Those who imagine would have their freedom, but they would underestimate the power of Japan, an advanced country, whose living standard and education level are high. Japan has been and still is economic power whose expertise is high-tech with many experienced and skillful expert human resources. Japanese foreign currency reserve should not be also ignored.

There are reasons to believe that the Japanese economy will recover from the damage stronger than ever and begin another period of growth. This is because:

1. There is a unique cooperative relationship between the Japanese financial sector and industrial sector. One of the characteristics of the Japanese economy is that the financial sector and industrial sector have kept their cooperative relationship, established during the recovery from the first energy crisis in the 1970s. Although the stock market right after the oil crisis had dropped to be 3,355 yen on October 1974, the market recovered and marked high, 4,564 yen, on May 1975, seven months later than the steep drop. This unique system has worked to enable recovery from past difficulties as the oil crisis. It should work well for similar recovery from the current damage.
   
   
2. The world economy will not survive without the Japanese economy. The world has observed and recognized that components supplied by Japan, in fields such as automotive and electronics, could not be replaced very easily. American research institute, HIS Automotive reported on March 22, that due to short supply of auto parts from Japan, the production of automobiles worldwide would drop by 35%, equivalent to five million cars. In the electronics field, there was an announcement that one-fourth of silicon wafer supply was stopped because of the earthquake. Wall Street Journal on March 11 reported that Japanese share of the semiconductor market is 20.8%, and the share of electronics components is 13.9%. Therefore, the impact of the supply shortage by the earthquake on global electronics market shall not be underestimated. Japan is also an important market for exports from countries including China, the US, and many European nations. It is, therefore, useful for other countries to support the recovery of the Japanese economy.
   
   
3. The Japanese outlook is effective with regard to overcoming difficulties such as the current earthquake situation. Japan has overcome many difficult situations including oil crises, higher-yen-evaluation, and previous natural disasters like the Kobe earthquake. The Japanese people are skilled in scheduling recovery, and focusing on their individual roles, and will continue their efforts until they attain their goals. Many enterprises have already proved this point by quickly re-opening production after the earthquake. According to The Institute of Statistical Mathematics in Japan, in its regular report issued on every five years, the top image of Japanese characteristics is diligence. It has been diligence which recovered Japanese economy from various crisis in the past. There is no reason it does not work this time. It will work this time, as well.

According to news sources from Japan, Japan has started to plan more than simple recovery from the damage. Tohoku District is planning to build a new city which is strong against natural disaster. Some of them have started drawing blue print to build new concept cities. Instead of plunging the Japanese economy, even this natural disaster would trigger the new recovery and growth of the economy of Japan.

The Japanese Yen continues to be one of the major currencies on the forex market. However, the country and its economy have not been well understood by the outside world. This country has a history of recovering well from disasters. The people have inherited strength through their genes. The current situation will once again prove this to be true.

Nobuji Kanai is the owner of Millionaire Institute Inc. in Japan, a prominent educator of foreign currency exchange investment. You can learn about the author, Kanai, his business, and this article in his web site. Please feel free to visit his web site for more information or questions: http://www.fxgaitametoshi.com/en/.

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http://EzineArticles.com/?The-Japanese-Economy-and-the-Forex-Market&id=6232172

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Investing In A Developing Economy - A Possible Solution To Global Financial Crisis

By Azeez Olawale-Arish Yusuff

INTRODUCTION

If there were security problems in Nigeria, no businessman would go to the country to explore opportunities, companies like Celtel, MTN, Etisalat, would not have ventured into security risk country to do business. Those who spread rumour about security and corruption problems in Nigeria are saying so to stop others from making money in the country. Figures don't lie. They are the biggest testimonies for how conducive Nigeria's environment for business and opportunities are. If you want to do business in Africa and record good returns on your investment, I welcome you to come to Nigeria. The political environment in Africa, particularly in Nigeria is tremendous.

Dr. Hamadoun Toure,
Secretary General,
International Telecommunications Union,
Cited in the Punch Newspaper, May 13, 2008)

What is happening currently with the Nigerian financial system is far from being affected in any way by the global credit crisis. At global level currently, the banks are under-capitalised, but Nigerian banks are over-capitalised. And I do not think this is a problem at all. I believe that Nigerian banks are under pressure from other economies within Africa continent that are affected by the credit challenges.

- Gordon Smith,
Head of Research, Africa and the Middle East, International Consilium,
(Reported in the Punch Newspaper, June 30th, 2008).

The foregoing statements aptly connote two understandings of the state of Nigerian economy. These understandings show that, the economy is one of the fastest growing economies in Africa and in the world. Although Nigeria has had hash economic history, it has undergone and still undergoing economic reforms, which are aimed at making Nigeria the Africa's financial hub and one of the twenty largest economies in the world by the year 2020. Needless to say that the country has experienced political instability, corruption, and poor macroeconomic management in the past, this was responsible for unpleasant and harsh economic situation. The government relentless efforts to reposition the economy have translated into a remarkable economic growth and development. Several mechanisms have been put in place to sustain this growth and development, capable of balancing the interests of stakeholders. Perhaps, this view must have influenced Gordon Smith submission. He described Nigeria as the most dynamic market in Africa, which is under severe pressure from some countries in Africa to serve as a cushion against the effects of global turbulence. He also noted that some countries like Ghana, Malawi, Mauritius, among others were depending on her at the moment due to global risk exposure and that the country's economy, led by the consolidated banks, was far from being affected by the global credit crisis currently rocking the world's financial giants. He stressed further that foreign investors, who will be patient enough to weigh the Nigerian financial system on the credit risk perspective relative to global events, will find the nation's financial sector more interesting to invest and raise capital from.

Faced with numerous challenges, Nigerian government is determined to strengthen, diversify and make the economy attractive and investment-friendly to both local and foreign investors. The government has adopted total liberalization and globalization as the economic policy, instituted privatization and commercialization programmes of public enterprises, provided total security for business and people, extended invitation to domestic and foreign investors, abolished laws inhibiting competition, embraced and fine-tuned policies to ensure quick realization of growth and development of all sectors of the economy. The effort is already paying off as Nigeria is now the focus for foreign investment thereby increased exponentially Foreign Direct Investment (FDI). Scores of economic missions and delegations from developed and developing countries have visited Nigeria, thus accelerating the growth of the economy at a very fast rate.

It becomes pertinent to direct the course of this discussion to embrace the second understanding of the above statements made by Hamadoun Toure and Gordon Smith. However, it becomes more pertinent to enumerate the inherent investment opportunities in Nigerian economy before discussing the issue of security as raised by Toure.

INVESTMENT OPPORTUNITIES AND SECURITY ISSUE IN NIGERIA

No doubt, Nigeria is an investment haven with countless and lucrative investment opportunities including oil and gas, solid mineral, agriculture, tourism, telecommunication, power and steel, transport, trade processing zone, financial sector, real estate / property, manufacturing, sport and entertainment, and fashion industry. Investors have a wide range of opportunities to choose from. It is important to note that the rate of growth of investment is fantastic and exponential in any of these sectors. Investors are at advantage of presenting their products and services to already-made market taking advantage of the population of over 140 million.

In telecommunication, statistics reveals that mobile phone users in Africa were about 280 million, overtaking United States and Canada with their 277 million users in the opening quarter of 2008. With 70 million connections in 2007, the Continent became the fastest growing region in the world, representing a growth of 38 per cent, ahead of the Middle-East (33 per cent) and the Asia-Pacific (29 per cent).It was also revealed that the fastest growing markets are located in northern and western Africa, representing altogether 63 per cent of the total connections in the region. The record showed that Nigeria, Zambia, Tanzania, The Democratic Republic of Congo, Kenya, Algeria, Tunisia, Ghana and South Africa are highly competitive markets in the Region. The record further contends that two-third of Africa's telephony are in their early phase of development, with penetration rates below 30 per cent at the end of 2007.In percentage terms, it was noted that Africa is the fastest growing market in the world, but also the second smallest in terms of connections after Middle-East.

As Nigeria accounts for 57 per cent of the West Africa mobile phones, the country is acknowledged as the leading and the fastest growing telecom market in Africa. With mobile phone users at 44,932,181 and 734,444 for GSM and mobile CDMA respectively, her contributions to West Africa and Africa's telecommunication growth can not be overemphasized. While the overall economic growth rate stands at 7% per annum, the mobile telephony is about 35-50%. Assuming that each of these connections was busy for a minute in a day, the country telecoms market has the capacity to generate over USD 16 million per day (USD16, 666,667) and close to USD 6 billion per year (USD 5,833,333,300). This is why telecom companies such as Visafone and Etisalat quickly joined the likes of MTN, Globacom, Celtel and other telecoms service providers in exploiting opportunities in the country.

Early this year, one of the main GSM service providers with a subscriber base of over 15 million announced a profit after taxation of USD650 million (78 billion naira) for the year 2007.Putting all these together, one can easily understand Toure's submission describing Nigerian telecoms market as the best investment destination in Africa.

Recognizing the fact that the Nigeria telecoms industry is enormous and there is need to further exploit the sector to its fullest, the Nigeria Communication Commission (NCC) and the Ministry of State for Information and Communications have made their positions clear by extending invitation to global investors for active participation in the sector as they are willing to grant pioneer status and license for prospective applicants for various undertaking such as Fixed telephony, Mobile telephony, Fixed satellite (VSAT),Paging, Payphone, Internet and other value added services.

With the above facts, one can safely conclude that Nigerian telecom sector offers fantastic and lucrative investment opportunities to global investors. And putting into consideration 40% GSM market growth rate in the first quarter of this year (2008), there is potential for high return on investment in this sector.

Agriculture, the dominant sector of Nigeria economy, engages about 70 per cent of the population directly and provides nearly 88 percent of non-oil foreign exchange earnings. It contributes about 41 per cent of the GDP of the country. The sector recorded an overall growth rate average of 7 per cent in the last three years, a major improvement from under 3 per cent in the 90's.

Statistically, 91 million hectares of the country's total land area of 92.4 million hectares is adjudged to be suitable for cultivation. Approximately half of this cultivable land is effectively under permanent and arable crops, while the rest is covered by forest wood land, permanent pasture and built up areas. Among the states, which have the most abundant land, areas are Niger (7.6 million hectares) and Borno (2.8 million hectares).

Agriculture crops in Nigeria are grouped into cereals, root and tuber crops, grains legumes and other legumes, oil seeds and nuts, tree crops, and vegetable and fruits. Governments and the Ministries of Agriculture have made land acquisition easy, encouraged agricultural practices, extended (still extending) invitation to foreign investors and have put in place several incentives to stimulate growth in the sector. Despite, the agricultural potential of Nigeria is barely being tapped and this explains the inability of the country to meet the ever-increasing demand for agricultural products and her rank as 55th in the world (although first in Africa) in farm output.

As the world experiences food crisis and persistent rise in fuel price, the country's agriculture offers unlimited opportunities for foreign investors and the world at large to provide solutions to these crises. Foreign investors will find investments in cultivation of sugar cane, sugar beet, sweet sorghum, starch (corn/maize), palm oil, soybeans, jatropha, and algae. These products are lucrative as they are potential for biofuels, a good substitute for fossil fuel. Presently, there is a very high demand for these crops from the developed economies.

Solid Mineral is another sector with great investment opportunities. Nigeria is endowed with numerous mineral resources. Recent policy reforms have brought the solid minerals sector to the fore. The emphasis is on encouraging massive foreign investors' participation in this sector as less than 0.5 per cent is contributed to the Gross Domestic Products from Solid mineral sector. However, the Ministry of Mines and Steel and the Ministry of state's focal attention in the last one year is to strategically place the country in a better position to explore and exploit just seven minerals in the plethora of minerals so as to increase Gross Domestic Product to 5 per cent within the next few years. The seven strategic minerals are coal, bitumen, limestone, iron-ore, barite, gold and lead / zinc.

Coal can be found in Enugu, Benue and Kogi. Within these three districts 396 million metric tones can be demonstrated using JORC classification criteria, while an additional 1,091 million tones of inferred and hypothetical coal resourced for the areas studied is 1481 million tones.

Knowing fully that development of coal will assist in the realization of energy, the Government and the Ministries are inviting foreign investors to participate actively in the exploration and exploitation of the mineral. Companies such as Denver Resources and Western Metals have already committed US$10 million and US$15 million respectively for two coal fields in the country. Another Chinese firm, Grid Xin Yuan International Investment Company that is providing more than half of China's electricity needs is also in the country, indicating their interest in the development of a coal field in Kogi State.

The Bitumen reserve in the country is estimated at more than 27 billion barrels of oil equivalent while iron-ore is estimated at over 5 billion inferred reserves with presence in Kogi, Enugu, Niger, Zamfara and Kaduna States. Gold in just 10 locations is estimated at 50,000 ounces, barites 10 million metric tones and limestone at 2.3 trillion reserves.

Talc with an estimated reserve of over 100 million tones can be found in Niger, Osun, Kogi, Kwara, Ogun, Taraba and Kaduna States.The colour of the Nigerian talc varies from white through milky-white to grey. The talc industry represents one of the most versatile sectors of the industrial minerals in the world. The exploitation of the vast talc deposits in Nigeria would therefore satisfy not only the local demands but also that of the international market as well.

The national demand for table salt, caustic soda, chlorine, sodium bicarbonate, sodium hydrochloric acid and hydrogen peroxide exceeds one million tones. A colossal amount of money is expended annually to import these chemicals. There are salt springs at Awe (Platue State), Enugu, and Uburu ( Imo State), while rock salt is available in Benue State. A total reserve of 1.5 billion tones has been indicated. Government, to ascertain the quantum of reserves, is now carrying out further investigations.

In the same vain, large bentonite reserves of 700 million tones are available in many states of federation ready for massive development and exploitation, over 7.5 million tones of barite been identified in Taraba and Bauchi states, and an estimated reserve of 3 billion tones of good kaolinific clays has also been identified.

Gemstone mining has boomed in various parts of Plateau, Kaduna and Bauchi States for years. Some of these gemstones include Sapphire, Ruby, Aquamarine, Emerald, Tourmaline, Topaz, Gamet, Amethyst, Zircon, and Fluorspar, which are among the best in world. Good prospects exist in this area for viable investment. Understanding that this sector requires urgent investment, the Ministry has directed miners who are still in small artisan levels to form cooperatives so as to benefit from World Bank US$10 million assistance. Apart from this, three Nigerian Banks have also established solid minerals desk with fund of over US$ 8 million each for the development of the sector.

Foreign investors will find this sector worth-investing on as Nigerian governments have put in place various incentives and strategies for investment such as 3-5 years tax holiday, deferred royalty payments, possible capitalization of expenditure on exploration and surveys, extension of infrastructure and provision of 100% foreign ownership of mining concerns.

Recognizing that only a sustained macroeconomic environment and a sound and vibrant financial system can propel the economy to achieve the country's desire to become one of 20 largest economies in the world by the year 2020, on the July 6, 2004 the Federal Government through the Central Bank of Nigeria (CBN), under the leadership of its Governor, Professor Charles Soludo launched a 13-point reform agenda to restructure, refocus and strengthen the Nigerian Financial System. To complement this agenda, another comprehensive long-term reform agenda for the Financial System (the Financial System Strategy 2020-FSS2020) was launched. The grand objectives of these agendas are substantially being achieved. The country financial system now comprises of strong, efficient and internationally competitive banks with an eye for global markets, a capital market with highest returns on investment, in dollar terms, a sound and rewarding insurance industry and other competitive financial participants.

Gordon was right in his submission to have described Nigeria as the most dynamic market in Africa. His view that "foreign investors, who will be patient enough to weigh the Nigerian Financial System on the credit risk perspective relative to the global event, will find the nation's financial sector more interesting to invest and raise funds from" x-rays the truth about the country's financial sector.

The country's banking system is the safest and the soundest it has ever produced in history. It is the fastest growing banking system in Africa and one of the fastest in the world. In fact, the most outstanding contribution towards realization of the country's dream came from this sub-sector. Economic analysts have observed that it has taken Nigeria less than 3 years to achieve what it took South Africa 20 years to achieve in the area of banking. In a short word, a world-class banking system has emerged in Nigeria.

Statistically, banking sector contributes 10 per cent to the Gross Domestic Product (GDP) and represents 60 per cent of the stock market capitalization, while there was a reduction in the number of banks from 89 to 25, the number of banks branches rose by 33 per cent from 3383 in 2004 to 4500 in 2007. The total asset base of banks rose by 104 per cent from $ 26.8 billions ( 3.21 trillion naira) in 2004 to $54.7 billion ( 6.56 trillion naira) by mid 2007; capital and reserves rose by 192 per cent from $2.72 billion (327 billion naira) to $7.98 billion ( 957 billion naira); capital adequacy ratio rose by 42.6 per cent, point from 15.18 per cent to 21.6 per cent and ratio of non-performing loans total loan improved massively by 51.3 per cent, point from 19.5 per cent to 9.5 per cent. The sector has also remained one of the most profitable in the country's capital market. It was noted that 13 out of 21 quoted banks on the Nigerian Stock Exchange recorded returns in excess of 100 per cent since January 2007.

According to the April 2008 edition of the African Business, (the best-selling Pan-African Business Magazine published in London) 18 out of 28 West African Companies with market capitalisation of more than $1 billion are Nigerian Banks. The magazine stated that First Bank Nigeria Plc with market capitalization of $7.4 billion remains the largest company in West Africa. Two other Nigerian banks namely Intercontinental Bank Plc and United Bank for Africa (UBA) remain the second and the third largest companies in the sub-region with market capitalization of $6.2 billion and $4.6 billion respectively.

Apparently, the rising tide of banks in the country from all indications has made the sub-sector very attractive, not only to local investors, but also to foreign investors, and in particular, foreign banks. For instance, the consolidation of Regent Bank, Chartered Bank and IBTC to form IBTC Chartered Bank attracted the interest of the Standard Bank Group, the largest financial institution in Africa with a market capitalization of $ 17.8 billion, whose subsidiary Stanbic Bank, also of South Africa has just sealed a Merger deal for the latest Merger in the country, Stanbic IBTC Bank Plc. In this direction, other foreign banks have started making enquiries with CBN of a possible Merger or take-over.

To further substantiate the opportunities the banking sub-sector offers the global investors, a cursory look into Intercontinental Bank Plc will reveal the success of banking system in the country. Intercontinental Bank Plc is known to be the second largest companies in West Africa to have recorded a phenomenal growth in gross earnings, which stood at $1.45 billion ( 173.5 billion naira) in 2008. This is an increase of 99 per cent over the $728 million (87.4 billion naira) in 2007, profit after tax grew by 102 per cent to $380 million ( 45.6 billion naira) as against $188 million (22.6 billion) in 2007, while the capital base rose to $1.67 billion from $1.31 billion. The bank deposit base soared to $8.75 billion ( 1.05 trillion naira), an increase of 126 per cent from $3.9 billion (468 billion naira) in 2007, while the total assets also recorded a quantum leap to $14.2 billion (1.7 trillion naira), representing a growth of 108 per cent from $6.86 billion( 823 billion).

The bank is also in strategic partnership with BNP Paribas, the world leading energy financing bank, Afrexim Bank; Export Development Canada (EDC); Finance for Development (FMO); China Exim Bank; Export-Import of United States; International Finance Corporation in financing projects in different sectors of the economy. However, it is relevant to say that the success recorded by Intercontinental bank is a good example of the Nigerian banks' strength and prospects, and a testimony to opportunities available to global investors in the country' financial sector.

Apart from the above, Nigerian Capital Market offers viable opportunities as it is positioned to help companies to raise capital, and to generate high returns on investment. Its total market capitalization has grown by over 4000 per cent to $100 billion (12 trillion naira) in March, 2008, up from $2.39 billion (287 billion naira ) in August 1999.Among emerging markets, the Nigerian Capital market remains one of the most viable in terms of returns on equity. Historically, the market has delivered 28 per cent returns.

Insurance industry is not an exemption to this growth and development the country's financial sector is witnessing. Although there are few black spots on the regulatory handling, the industry has equally recorded success in their reforms and operations. With the inflow of robust capital, insurance companies are now faced with the challenges of delivering returns to shareholders, maximizing value and exploring overseas markets. Their presence can be felt in countries like Ghana, Liberia, Sierra Leone, Sao Tome, South Africa among others.

Although Goldman Sachs' report titled "New Market Analyst" with issue number 08/09 released on March 13, 2008 (cited in the Thisday newspaper March 19,2008) posited that Nigeria is a better economy than South Africa, International Monetary Fund (IMF) reported that Nigeria and South Africa got close to 50 per cent of the $53 billion private equity and debt flow to Sub-Saharan Africa in 2007. This underscores the growing confidence of International bodies and foreign investors in country's financial sector and economy at large.

Furthermore, Fitch Rating Agency and the Standard and Poor rated Nigeria BB-(minus) in the area of sovereign credit, high in development of local currency debt market, and low in the areas of debt to GDP ratio and inflation. The opportunities for growth in Nigeria financial sector are still strong as the underlying fundamentals driving the growth are still present. All these and more, position the financial sector and the country at large as a leading and most dynamic market in Africa and present viable investment opportunities to global investors.

Needless to say that the opportunities presented above are typical examples and an evidence of opportunities awaiting foreign investors in other sectors of the economy.

Nigeria is the largest producer and exporter of oil in Africa (although recently placed second behind Angola in the latest OPEC report as a result of Niger Delta Crisis) with a production of 2.5 million barrels and above a day. Besides, the Nigeria is the 7th world's gas reserve holder and the highest flaring nation in the world, with the potential to become a major player in LNG export. It has annual gas flares' capacity to generate over 12000 MW of electricity needed to catalyze the growth of any economy. Although it currently flares an average of 1.2 TCF of gas annually, the sector has the potential to generate great returns on investment.

One of the greatest opportunities awaiting foreign investors is Real Estate / Property. For instance, Lagos Metropolis with a population of about 18 million has attained mega city status. The State has one of the highest urbanization rates in the world according to the World Bank. Consequently, there is an insatiable demand for housing delivery, which has necessitated the introduction of the New Private Estate Developers Scheme. Under the programme, the government will make large parcels of land ranging from 1 to 25 hectares available to corporate organizations capable of undertaking development and delivery of housing units. Such organization must however demonstrate that they have the financial capacity and technical expertise to deliver quality and affordable housing units.

Among other sectors of the economy that foreign investors will find viable and worth-investing on are Transport, Sport and Entertainment, Tourism, Power and Steel, Export Processing Zones, Privatization. And available records reveal that the rate of returns in these sectors is as high as in the sectors discussed above.

Apart from the opportunities mentioned above which our office is strategically positioned to maximize opportunities for the benefit of prospective investors. We also offer consultancy services in the areas of general management, manufacturing, marketing, finance and accounting, personnel, research and development, packaging, administration, international operation, specialized services and other value-adding services. And our strategic partnership with national and international companies put us in position to deliver quality service and high returns on investment.

Nevertheless, there have been fears raised by international observers, agents and bodies that Nigeria is a high-risk nation for investment and other business transactions. This development is attributed to security, multiple taxation, epileptic power supply, bad roads and poor work environment.

It may appear that doing business in Nigeria is challenging because of the activities of a few untrustworthy Nigerians who are unscrupulous. But such are simply characterization of human nature; as it can be found anywhere else in the world. It must be said emphatically that the world has been biased in their judgment and treatment of Nigeria security issue. There have never been terrorist attacks, suicide bombings or kidnapping until recently when the issue of Niger Delta came on board.

Niger Delta region-the source of nation's oil wealth- has become an area of perennial tension, agitation, and recently, militancy. However, a confluence of factors such as environmental damage by oil exploitation, failure to develop the region, lack of job opportunities and sense of deep deprivation from the low share of derivation revenue accruing to the states in the region, has led to the present situation. Acknowledging their situation, the Federal Government has organised a Summit, to be chaired by Professor Ibrahim Gambari, the United Nations Under Secretary General, to provide everlasting solution to the crisis. Frankly speaking, Nigeria is a safe and investment-friendly place and Nigerians are accommodating and industrious.

Cyber Crime is another fearsome crime, which often put-off prospective investors from involving or investing in the business opportunities in Nigeria. This crime was actually imported into the country by expatriates. It has never been part of Nigeria culture. It is perpetrated by a few section of the population. Their operations are carried out via Internet and their targets are people who transact business via the medium. They pose as government officials and sometimes as businessmen with United Kingdom identity who deal in digital products. However the list of their tricks and operations is not exhaustive. With the help of Economic and Financial Crime Commission (EFCC), Independent Corrupt Practices and Related Commission (ICPC), and other Anti-Criminal Agencies, Cyber Crime and their perpetrators are under control and disappearing.

The grand objective of the present administration, as encapsulated in VISION 2020, is to make Nigeria a major industrial and economic power, and one of the 20 largest economies in the World by the year 2020 by providing enabling investment and business environment and maximum security for active participation of local and particularly, foreign investors. The realization of these aspirations had informed the radical and pragmatic reforms designed to increase the attractiveness of Nigeria's investment opportunities and foster the growing confidence in the economy. In this direction, the Federal Government has provided incentives and strategies for investment such as 3-5 years tax holiday, deferred royalty, possible capitalization of expenditure and provision of infrastructures such as road and electricity, just to mention a few.

African economy is witnessing the strongest growth in 30 years; no doubt, Nigeria is one of the major contributors to this development. Most commentators have observed that the opportunities for business and investment in the country look increasingly rosy with GDP growth of 7 per cent in 2007 and 13 per cent in the next 12 years. The International Monetary Fund (IMF) forecast of 9 per cent growth rate for Nigeria in 2008 (which is second to India 10 per cent and ahead of China 8 per cent) lays credence to their observations.

Furthermore, the increase in Foreign Direct Investment, the entrance of multinational companies, the strong financial sector, the favourable and tremendous business environment, the government support, the abundant natural resources, and the population of over 140 million people, among others, put Nigeria in a comparative ( and possibly absolute) advantage over other African countries.

Just as it is difficult to ignore China as a market in the global arena, (one out of every five persons in the world is Chinese) so is it very difficult to ignore Nigeria as a market in Africa (one out of every three persons in Africa is Nigerian). With a population of over 140 million people and its economic potential, Nigeria still remains Africa most important market.

IMPACT OF GLOBAL FINANCIAL CRISIS IN A DEVELOPING ECONOMY

Unlike China and India, African economy(developing economies) is yet to be integrated into the world economy. This is as a result of slow rate of integration and globalization at which the economy is being fixed into the global economic and financial system. Consequently, developing economies will only suffer a limited financial impact from the credit crunch. However, this is not to say that developing economies are in isolation and totally free from the crisis.

To grant a point, this paper will continue to use Nigerian economy for its analysis as it represents a paradigm of a developing economy with valid and considerable variables.

According to the report from a recently concluded Bankers Committee Meeting, which ended on October 20 th, 2008 , the Nigerian banks are safe as they operate at 22 per cent capital adequacy ratio( 14 per cent above the world 8 per cent requirement) and the financial sector is far from being affected by the current global financial crisis. The report also posits that any bail-out scheme is unnecessary as the situation that warranted bail-out schemes in developed economies- poor quality assets and heavy loan losses resulting from exposure to inadequately collateralised mortgage loans- is absent in Nigeria. To underscore its point, the report noted that, as the Direct Foreign Investment in Nigerian banks is comparatively low and the banks connection with their foreign counterparts is loosely fixed, the impact of the crisis will be limited and indirect.

Conclusion

The words of Mr. Dominique Strauss-Kahn, the Managing Director of International Monetary Fund, at a meeting in Washington D.C are the corner stones of the concluding thoughts of this paper. He stressed as follow:

We meet at an extra-ordinarily difficult time- a time of uncertainty and insecurity, with a danger that those fears push us away from- not towards- a more inclusive and sustainable globalization....At its best, multilateralism is a means for solving problems among countries, with the group at the table willing to take constructive action together. When multilateralism is dysfunctional, globalization can be a Babel of Tower, with competing national interests colliding to benefit none. The new multilateralism, suiting our times, is likely to be a flexible network, not fixed system. It needs to maximize the strengths of interconnecting actors, public and private, profit-making and civil society Non-Governmental Organisations (NGOs). The multilateralism must respect state sovereignties while solving interconnected problems that transcend borders...The private sector cannot restore confidence on its own. Macroeconomic policy measures by governments cannot restore confidence on their own. Piecemeal measures on financial markets will not restore confidence on their own. What will restore confidence is government intervention which is clear, comprehensive and cooperative among countries..The world must act quickly, forcefully and cooperatively to contain the ongoing financial and economic downturn.

Thus, the position of this paper is that the confidence will only be restored if "government intervention which is clear, comprehensive and cooperative" is complemented with investment in developing economies with less or no crisis impact as "flexible multilateralism" and cooperative and sustainable globalization is solution that suits our time, not" economic isolationism".

Azeez Olawale-Arish Yusuff,
Speaker, Human Right Advocate, Tutor, Entrepreneur, International consultant,Economic analyst, Founder/Manager, Cyber Crime Solution Providers Network.

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Oil Price Crisis Or the Next Bubble - 7 Things to Consider About High Oil & Gas Prices to Save Money

By Chris Swain

Are you sick and tired of the so called "experts" telling you what is causing the rise in oil prices? There seems to be a reoccurring theme when it comes to their thinking. They talk about seven reasons for the sharp rise in oil prices. This short article summarizes them in no specific order.

Global Politics is the Culprit

This sounds like a cop-out to blame it on political instability in the world. Hasn't there been a war going on in the Middle East for a couple of years? Currently, the focus is on an Israel's impending conflict with Iran.

Then there is this production disruption in Nigeria caused by political unrest as to who owns the oil rights. Nigeria is the largest oil producer in Africa, the eleventh largest producer of crude oil in the world and a member of the Organization of Petroleum Exporting Countries (OPEC).

U.S. Politics: Blame the Politicians

There are two primary political issues causing this to impact oil prices. The first is the political clout of environmental groups and their opposition to any new drilling. Their alarmist views have also caused politicians to tax and regulate the production and consumption of oil beyond belief. For the first quarter of 2008, the average state gasoline tax is 28.6 cents per US gallon, plus 18.4 cents per US gallon federal tax making the total 47 cents per US gallon.

The second is the 2008 political elections. There is a whole lot of pandering and saber rattling going on from both parties. These ramblings are having a negative psychological effect on the confidence of consumers.

Why the Sagging Dollar is Causing Oil Prices to Soar?

There is not a one to one correlation, but a falling dollar usually is associated with a slowing economy. When the Federal Reserve started lowering interest rates last August oil was trading for $70 a barrel. Since then the value of the dollar (.DXY Index) has declined about 10% while the cost of oil has doubled.

Economic Fundamentals

How does the economy hold up? The answer will really depend on the employment. So far the monthly jobless numbers and unemployment rates have held up remarkably well.

The Fed has on balance has managed interest rates, employment, the economy's growth and inflation on a tight rope. Their bet is that their current policies impact on industrial production will cause a decrease in oil prices.

What's This Supply & Demand Talk

This by far is the most confusing part to the rise in oil prices. There is this theory that global demand is up in developing nations, India and China. But just how much is what the disagreement is about.

The International Energy Agency report out on July 1, 2008 reports "Global oil demand is forecast to expand on average 1.5 million barrels a day, or 1.6%, to reach 94.1 million barrels a day by 2013. In comparison, last year's report forecast annual demand growth of 2.2% a year." While "Global oil-supply capacity is projected to rise to 96.2 million barrels a day in 2013 from 90.4 million barrels a day this year."

From the report, you can see if there is projected demand for 94.1 million barrels and anticipated supply of 96.2 million. Where is the shortage and what's the crisis? What about the growth of oil alternatives - ethanol, wind, solar, coal, etc. and their impact on demand and supply?

Speculators Causing the Problem?

Speculators can amplify trends but can't change directions or create those trends. To do so would repeal the law of supply and demand. Speculators (commodity traders) are two parties entering a trade in which is a zero sum gain.

There is a "mirror trading partner" for each trade. There is a buyer and a seller of the trade. Each trader is hedging a bet that the price will go up or down. So, a buyer thinks the price will go up and the seller thinks it will go down.

What Do The Charts Say?

When you look at the price of oil over the last year, you see it went from $70 a barrel June 2007 to $140 a barrel in June 2008. Looking at the cumulative impacts of the other six reasons for the increase in price, ask yourself does that makes sense. Back in the 1990's internet stocks could double in a day. Recently, housing prices could double in a couple of years. Did the prices for internet stocks and home prices remain at those levels?

Does it really matter what the experts say the cause of high oil prices are? How would you like a free ebook giving you over 50 tips to help you save a bundle at the pump? To learn these secrets on how you can get more out of every drop of gas in your car with little effort on a shoe-string budget, I invite you to visit http://www.chrisswainrecommends.com/gastips to get your free copy today.

Chris Swain - Wealth Coach

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The USA Major Banks Meltdown Today in the Middle of an Unstoppable Downward Major Financial Crisis

By Wayne Miller

Day Traders, this could be an "opportunity of a lifetime" for you. When billions of real US Dollars are leaving the Bond markets monthly, and when major banks are losing billions monthly also, do you think there is a unique opportunity there for higher than normal profits right now? You bet there is so read this article.

Are you a Day Trader or even a regular trader of the Stock and Commodity markets who needs an educational adventure of a lifetime that could make you seriously wealthy fairly soon?

The better news is, you can keep on making serious money by finding trade after trade for yourself with new trading trends for the rest of your life with the correct trading education and certain secrets. You might want to find out what is causing the USA financial crisis today. To do so, takes a whole lot of research and I am one trader who has done the research. Did you know the trading world is all inter connected?

Did you know that what affects just one major US Bank losing billions (and trust me on this, lots of the major ones are losing billions), it will effect the world and the US economy soon? And in a bad way.

Case in point: The sub-prime meltdown of today. To find out what to do next, you really need to read a book titled "The US Financial Crisis of 2007". This financial crisis alone has already effected every major bank inside the USA and a lot elsewhere and it may even be more important and at a minimum just as important as the $600 billion war expenses already spent on the Iraq war already today.

Many different things affect the markets today for Day Traders. The recent forest fires really do provide super trading events also if you know where to look for quick profits. Another thing is the current Iraq war as it has an important effect on many different markets inside and outside of America.

So much so, you can easily take advantage of a lot of money making situations that today are affected by this ongoing war.

Now, all you have to do is apply time-tested and time-proven trading methods on mainly key research by taking action once you get educated.

Want to learn how to become a millionaire? That is what becoming an easy millionaire or even a multimillionaire is about and do not get me wrong. It is tough to get there and I am not saying that you can do it day trading although one day Warren Buffett made $1 billion dollars within 24 hrs, but then he is already a mega-billionaire.

If you get the right trading education, you can make yourself "big money". In other words, after learning certain trading secrets that I can lead you to, you will have an "unfair advantage" over 99% of the world of traders and trust me when I tell you this; 80% of traders out there are dummies.

Once you learn about these secrets of trading that deal with sometimes multi-trillion dollar daily trading markets by mega-billionaire investors, it's fairly easy to get your slice of the money pie.

Let me tell you, after following in the footsteps of these billionaire guys as a trader myself for more than 20 years now, they do not lose to often and you can take that to the bank. If you are a Day Trader, you already have enough risk capital to trade with as it does require you to have a minimum amount.

Even the smallest of traders can now follow and trade side by side these billionaires right here inside the USA and trust me, until recently that just was not the case as you had to have the very deep pockets "like a million dollars minimum trading account" to even break this financial private barrier. That is simply not the case today as the average Joe can trade right along side the big boys.

Today, what you must realize is that the USA is in the middle of a major financial crisis due to the sub-prime meltdown and Foreign investors are pulling out mega billions per month from our US markets. What you need to learn is certain trading education so you can take advantage of this situation as a day trader.

You must find out where this money is going and more so you need to learn how to profit by it quickly with your timing efforts. That is key to day traders and knowledge you need so you know where to put your risk capital for the highest potential reward. Forget about making 10 or 20 percent a year, I am telling you right now that if you have enough risk capital to trade with, the real life potential of generating over 2,000% over the next six months to a year due to the current USA Financial Crisis mess we are into today is not only possible, its predicable.

What you have to understand is this. With the correct information in your hands, even you might join the ranks of the rich and powerful soon if you simply apply what you learn and tag along with these billionaires without their knowledge. It's that serious of a trading education to learn how to trade for the most profits, where to look for the most profits and when to take action.

Timing is always important to trading and the time to act is now to pull in millions in profits later.

You will need to learn how to open the front door to higher profits. All you have to do then is to open the door of the right financial vehicle yourself and apply what is learned in order to grab your own share of the easy and fast loot that is very possible as a day trader.

That is all for now,

[http://www.youtube2dollarad.com] by Wayne Miller, author

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Why China and India Will Soon Dominate the World - Will Our Political Class Do Anything About it?

By Bruno Korschek

If you look at some statistics from the U.S. Census organization, the CIA Fact Book, and several other credible sources and put them together in a "what-if" analysis regarding the future economic power of Russia, China, India, and the United States, you can develop the following statistical measures:

- The current population of the United States is about 310 million people, the 2050 estimated population is expected to grow about 42% to 439 million, the current GDP of the United States is about $14.43 trillion dollars which yields a current GDP to current population ratio of about $46,561 per person ($14.43 trillion divided by 310 million people).

- The current population of Russia is about 143 million people, the 2050 estimated population is expected to shrink 23% to 109 million people, the current GDP of Russia is about $1.24 trillion, yielding a GDP to population ratio of about $8681.

- The current population of China is about 1.34 billion people, the 2050 estimated population is expected to grow about 9% to 1.46 billion people, the current GDP of China is about $4.8 billion, yielding a GDP to population ratio of about $3,595.

- The current population of India is about 1.2 billion people, the 2050 estimated population is expected to grow about 53% to 1.81 billion people, the current GDP of India is about $1.1 trillion, yielding a GDP to population ratio of about $925.

Not unexpected, the United States is the richest country in the world as measured by gross GDP and GDP per citizen. However, the growth of the United States economy is pretty steady and conservative vs. countries like China and India. Let's play some games with these base numbers:

- Let's assume, and there is no reason to believe otherwise, that China continues to grow very quickly over the next forty years. If the Chinese are able to get their GDP to population ratio up to half of what the current U.S. ratio is, then the total size of the Chinese economy as measured by GDP (in today's dollars) would be over $34 trillion, almost two and half times the size of the U.S. economy.

- Let's do the same thing with India but assume that the ratio is so low that they can only get their ratio up to one quarter of what the current U.S. ratio is, then the total size of the Indian economy as measured by GDP (in today's dollars) would be over $21 trillion, 50% larger than the size of the U.S. economy.

- We will not do the same analysis for Russia since given how fast its population base is shrinking, its economic impact in the world economy will be less and less over time.

Thus, the upside for both the Chinese and Indian markets are very high based on the sheer number of citizens in each country and their governments' desire to aggressively grow their economies. Before we know it, both economies could be approaching and/or surpassing the size and power of the United States economy.

If you do not believe these calculations, consider a recent article from the Financial Times that was summarized in the July 30, 2010 issue of The Week magazine. According to the Financial Times, China is now the biggest consumer of energy, passing the United States last year as reported by the International Energy Agency. As late as the year 2000, the United States used twice the energy that China used. Now, China is using at least 4% more than us.

Another source. In a recent feature section in Fortune magazine, Goldman Sach's was quoted as estimating that by the year 2050, the size of the Chinese economy will be about $70 billion while the size of the U.S. economy will be only about $40 billion and just barely ahead of the Indian economy. By 2050, Brazil, Russia, India, and China will exceed the greenhouse emissions of the rest of the developed world.

All of these numbers point to the same conclusion: namely that China and India will become much, much stronger in the coming years and much more competitive, both for raw materials, finished products, and markets to sell their products. The United States needs to take some long term strategic actions in light of the coming tsunami of stronger economic rivals:

- We cannot hope to compete in the future economic landscape if we do not find a way to better educate our children for this new reality. The United States consistently ranks in the bottom half of worldwide student testing and education. This will not make for a strong economy if our workforce is outsmarted by other countries that also have the advantage of numbers on their side.

- We cannot hamstring our own economy with Obama's cap and trade policy while the rest of the world, including the bigger and bigger energy users of China and India do not agree to stringent and trackable carbon emissions programs. If the United States goes it alone in this area, our economy will suffer at the hands of these economies that do not, resulting in lost jobs, lost industries, and lost economic strength since any carbon savings we incur will be overwhelmed by these new economic powers.

- We cannot continue to police the world, draining our economy through our military budget. Better to focus on getting our own economic house in order rather than deploying troops around the world to protect against enemies that do not exist anymore, enemies that cannot do any direct harm to us, or enemies that are better handled by other countries or the United Nations. We need to bring home our 54,000 or so troops from Germany since the Iron Curtain no longer exists, we need to bring home the 90,000 or so troops from Iraq as Obama the campaigner promised to do, we need to bring home our 50,000 or so troops from Japan since Japan is not going to hit Pearl harbor again and 50,000 troops are useless in the face of 2,000,000 Chinese troops in the neighborhood, and we need to bring home our 28,000 or so troops from South Korea and let them handle their own security, their economy is strong enough to handle it. Our focus on defense needs to be much more narrow and much more focused on those that could actually harm us and we need to bank the savings and strengthen those areas that will enable is to better compete economically.

- We need to finally develop and deploy a sane national energy program that makes us as self sufficient as possible, given that the hungrier economies of India and China will start to compete with us for raw energy sources. The less we spend on energy, as with defense, the better and stronger our economy will be against the onslaught of the growing economic powers in the world.

- We need to start getting our national debt and government spending problem under control now. The more capital and investment dollars that can be funneled into American businesses, the better off we can compete with China and India and the rest of the world. If all of our available capital is going to the government, where it is used on wasteful, inefficient government programs or used to pay the interest our national debt, the less flexible and competitive American businesses will be and less economic health our citizens will enjoy.

Bottom line, what is needed is a long term strategic plan for dealing with the new world order in the areas of national defense and economic strength. Do we think that the American political class is ready for such a comprehensive analytical and strategic task? Consider what our politicians have been working on over the past year or so:

- A Congresswoman and her staff worked on legislation that would regulate the sound volume of television commercials.

- A Congressman and his staff worked on legislation that would ban the airing of ED commercials on television.

- A Congressman and his staff worked on legislation that would provide a tax break for pet owners who might have to give up their pets in these hard economic times.

- The entire U.S. Congress and the entire Federal financial regulatory network was completely blind sided by the biggest economic malaise since the Great Depression, not realizing what was coming until it hit them in the face.

- Politicians in both houses of Congress worked on a bill to regulate how Division One college football teams decide a national championship.

- The current New Mexico governor is working on whether or not to pardon Billy The Kid, who died over a hundred years ago.

- A Georgia Congressman, at a Congressional hearing, worried in public on whether the island of Guam could tip over in the ocean.

- At least two sitting Congress people are likely to shortly face ethics charges and potential trials in the House Of Representatives for numerous financial and ethics offenses.

- Nancy Pelosi, Speaker of the House, has publicly stated the insane concept that unemployment is the best way to create jobs.

As you can see, we have not elected the most forward thinking, strategic brains in the country. They are so entwined in the daily political infighting and just absolutely trivial matters that time is slipping away while other countries are quickly growing their economies to compete with us, our companies and our citizens.

If long term, strategic thinkers were running this country, they would not be working on the above trivial matters but instead would be focused on the following:

Step 1 - start reducing the size of the Federal government by 10% a year for five years to get our national debt and spending under control and to leave more capital in the private market for investment against other economies.

Step 2 - find a way to finally make us more energy self sufficient and to bring other nations into a world wide, trackable process that reduces carbon emissions equally, not allowing any economy to gain an economic edge at the expense of others and the environment.

Step 3 - develop a ground up approach to overhaul, improve, and revolutionize American public education processes to prepare our kids for competition in the new economic world order.

Step 4 - bring home most, if not all, of our foreign deployed forces to begin the downsizing of our military budget in order to get our national debt under control and to provide capital to grow our private sector of the U.S. economy.

Step 5 - end the Cuban embargo immediately. After fifty years, most sane people would conclude it has not worked and ending the embargo would open up a new market for American businesses just ninety miles from our shores.

Step 6 - the most important step, institute term limit for all politicians. Given that none of these needed strategic steps have happened to make us better able to compete in the new economic reality and that most of the sitting politicians have been sitting in the same seats for decades while nothing happened, we cannot assume that all of a sudden they will do the right thing. We need to continually refresh those serving in Congress and the government with new people that are more fully aware of what is going on in the world and are not tied to old ways of thinking and spending.

We can succeed, we just need some visionary thinker and leaders to make it happen. India has its own problems, a large part of its population is still dirt poor, possibly providing social unrest problems unless they somehow can bring more people into their economic growth. The Chinese population will age quickly, as a result of their one child per family policy, putting strain on their economy in the coming years. All is not lost. In fact, if executed right, a long term strategic plan, as proposed above, could make the United States even stronger since new markets would open up in these growth economies. I guess the political class will get to this strategic plan as soon as the fix that pesky college football playoff system.

Our new book, "Love my Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" is now available at http://www.loathemygovernment.com and online at Amazon and Barnes & Noble. Our daily dialog on freedom in America can be joined at http://www.loathemygovernment.blogspot.com.

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The World in 2050

By Harold Forbes

PriceWaterhouseCoopers (PwC) is an international accountancy and management consultancy that has published a series of reports about how the world might look, economically, in 2050. They make interesting reading.

According to their latest updates Britain and other developed countries may spend the next four decades in the slow lane of the global economy unless their businessmen can break into the fast-growing markets of Asia and Latin America. The consultancy group believes that if the developed economies continue with over-reliance on customers in Europe and North America they will gradually slide down the international economic league table between now and 2050. By then even the mighty US will have lost its crown as the world's biggest economy, not only to China but will also have been surpassed by India. The UK will have slumped from 7th to 10th largest while Brazil will move from 9th to 4th. Mexico and Indonesia will all also have claimed a spot in the top 10.

Political leaders from the UK have led high-profile trade missions to Asia in recent years in an attempt to emulate the success Germany has had in breaking into the markets of the leading emerging economies. UK companies are encouraged to take advantage of the fall in the value of the pound to seize the opportunities provided by rapid industrialisation and increasing consumer spending power in China and India in particular. But John Hawksworth, PwC's chief economist, says there is little evidence they are being successful, even though the leading emerging economies have bounced back quickly from the deep downturn caused by the collapse of western banks in the financial crisis of 2008 and are currently growing three or four times as fast as the US, Japan or the leading eurozone nations. The latest forecasts from the International Monetary Fund suggest that China will grow by 10.5% this year, India by 9.7%, Brazil by 7.5% and Russia by 4.0% - yet the four economies combined account for 7% of UK exports, the same as for crisis-ridden Ireland.

Britain suffered its longest and deepest recession of the post-second world war era in 2008 and 2009, but is still ranked as the world's sixth biggest economy. International comparisons between economies can either be made using market exchange rates or "purchase power parity", which takes account of the relative buying power of the currency in its home market. Using either measure, China will be the biggest economy in the world by mid-century, the report says.

If we look beyond the aggregate numbers to look at what it might mean for individual people, it paints a very different picture. Using the GDP data from the report and combining it with UN World Population Prospects 2008 edition, it is possible to calculate the Purchase Power Parity GDP per head of the main countries for 2010 and 2050. This changes the way the top 20 economies look quiet dramatically. Australia, which wouldn't feature in the top 10 by total economy size, is revealed as the second richest country, a position it manages to retain by 2050. The UK, which is the 4th richest per capita slips to 6th while the progress of the developing countries is less spectacular with China stepping up just one place from 18th to 17th although South Korea does jump from 10th to 4th.

The most spectacular changes take place in the spread of GDP per capita with the number of countries at half or less of the US per capita number falling from 11 to 7 with Vietnam's relative wealth per head jumping from 7 to 38% of the US level while China goes from 15 to 45%. This narrowing of the wealth spread does give some support to the idea that economic growth is good for everyone but somehow I suspect that we will see few of these projections come to pass.

The tendency for humans is to predict the future as much the same as the past but with growing or decline influences from predictable impacts e.g. large numbers of women entering the workforce. Thus PwC look at growth in the labour force of working age, average education levels across the adult population, growth in the physical capital stock and total factor productivity growth, all pretty much standard current economic levers. Much of human behaviour (and hence economies), is driven by what it perceived to be "normal", so today's paradigm of energy intensive economies with country specialisation and free flows of international capital is probably the underlying thinking. What is considered to be "normal", however, is more difficult to predict; just a year after Roger Bannister achieved the "impossible" 4 minute mile, three men ran sub 4 minutes in the same race, before Milgram's electric shock experiments he asked colleagues what percentage they thought would administer the "fatal" shock level and they predicted 1% when in fact two third went all-the-way.

Over the next 40 years of idea of what are "normal" conditions is going to be challenged in the extreme. The current course of carbon emissions means that we will be well on our way to a 4 degree Celsius increase in average temperatures, a level that Rachel Warren points out in a Royal Society paper "The role of interactions in a world implementing adaptation and mitigation solutions to climate change," means,

In such a 4 degree world, the limits for human adaptation are likely to be exceeded in many parts of the world, while the limits for adaptation for natural systems would largely be exceeded throughout the world. Hence, the ecosystem services upon which human livelihoods depend would not be preserved.

In a companion paper to the one in your report, PwC have a report titled "Can rapid global growth be reconciled with moving to a low-carbon economy?" which envisages a situation where global warming is avoided by reducing current emissions levels to about half their present level through increased efficiency in energy use, greater use of renewable and carbon capture and storage, and reduced deforestation. The cost of their projections is just one year of global GDP growth i.e. the world reaches the same level of GDP in 2051 as might otherwise have happened in 2050. What they have not calculated is how much wealth destruction, like the estimated $13 billion cost of damage in the Australian floods of earlier 2011, will be caused if steps are not taken.

A 50% reduction is not quite as far as the climate scientist are currently saying is needed but this report suggests the world has a bright future. To put that at risk by further prevarication on taking meaningful, global action borders on being criminal activity. The solutions to climate change are available and eminently affordable; it just needs the political will to implement them.

You can download a free PDF of the PwC report from their website.

Harold Forbes is Author of "How to be a Humankind Superhero: a manifesto for individuals to reclaim a safe climate". Read chapter summaries at http://www.hksuperh.com or download the first chapter as a FREE PDF at http://bit.ly/freehksh

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