Christina Economic n Finance

According to diplomatic and other sources, a new group of people with sophisticated arms like AK47 had taken over charge of the hostages from them. One of the hostages after being released said that the leader of the new group was a 42-year-old highly trained Chakma, had spoken good English, known among his followers as ‘Captain’. He said that the ‘Captain’ was a former ‘Shantibahini Officer’ highly regarded by his followers for his thorough erudition of the Chittagong Hill Tracts and guerilla warfare. During their captivity, the hostages were made to walk at nights through intensive forest and hills to new hideouts of the group and sometimes they could even see the light at hilltop army positions ‘not very far away’. The new captors were well disciplined and they had to change guards at regular intervals. Although at the beginning, some of the captors claimed themselves to be members of the United People’s Democratic Front (UPDF), later they told the hostages that they had not been involved in any political activities but wanted money for the “Welfare of Chakma People”. Tim Selby said, “although the hostages were in absolute consternation, he felt helpless during the whole period”. But it is interesting to note that the captors had shown them being foreigners much regards and nobility of manner.

The authorities have protracted communication with the abductors through local UP chairmen and leaders working as intermediaries. The abductors, in a note, demanded withdrawal of Army Cordon as a precondition for negotiations. The authorities had frizzed army movement in the ‘Red Zone’ area at Kalapahar but refused to withdraw the cordon. The rescue operation started as soon as the troops became ensured about the presence of the kidnappers at Chakma and Marma villages of Nakshachhari and Daijjyapara in the remote inaccessible hill forest, six km North of Kashkhali. Army raids extended up to four villages in the red zone area and nabs some 28 relatives of the abductors. Kalparanjan Chakma and Dipanker Chakma were designated to conduct the negotiation as the coordinators on February 25. On February 27, an authority has received a letter abruptly dated February 22 from the hostages. Three negotiation experts including two from Scotland Yard had joined the authorities on the next day and made all efforts to make a negotiated end to the crisis.

The radiant officers were astonished having observed the attitude and feelings of the kidnappers at midnight. The gang numbering about seven fired back when they had made some blank shots. As the kidnappers felt that they were being encircled, the kidnappers gave up and fled after the exchange of fire for about 12 minutes and consequently, a thorough search afterwards in the area resulted in rescue of the three hostages. The captors cautioned the three foreign engineers in the evening of March 16 about their imminent release. Sources exclaimed that the group had united around the hostage and presented them home woven Chakma ropes and bags for their wives and family members. Then they had begged apologizes to the three foreigners for ‘All the troublesomeness caused to their families during those days’ and bade them farewell. At about 8 that night, the hostages, led by the ‘Captain’, had to walk for about six hours before reaching a place where three ‘ordinary looking’ men in white shirt were waiting. The three men introduced themselves as members of Bangladesh Red Crescent Society. Then the ‘Captain’ shook hands with the hostages and disappeared into the dense forest. At about 5: 00 PM, in the next morning, the three foreigners had seen a man crossing a paddy field with a torch in his hand. As soon as that man came nearer, the Red Crescent men and the foreigners were led into a ‘cabin’ and asked to wait. After closing the door of the ‘cabin’ from outside, the four men disappeared. About half an hour later, at about 6:00 AM, Army troops entered the cabin with bags of orange, grapes and cans of coke and announced, “ You have all been rescued by the Army”.

The kidnappers had earlier demanded a ransom of Tk. nine crore, later reportedly reduced it to Tk. one crore and finally to TK. 40 lakh. However, it could not be corroborated. The concerning officials had denied any dealing with the abductors. The three Europeans, after a three-day medical check-up at the Combined Military Hospital in Dhaka, had gone to their respective countries on 19 March 2001. The hostage drama finally concluded but it has left many questions vacillating. There is no denying the fact that the flagitious intricacies occurred with the honorable foreigners in Chittagong Hill Tracts is nothing but a threat and threadbare against the economic development of our country. In future, we should learn one thing that peace and tranquility are pre-condition for economic prosperity and political stability in a country.

Contemporary world politics make it necessary for nations to integrate into international unions in the interest of their own national security and economy. In these international unions, which are usually based upon geographic location, such factors as natural resources, trading blocs, and even cultural values play an important role. Many neighboring countries combine their resources under the auspices of such organizations, create defensive alliances, and cooperate on a wide array of issues. The goal of such unions is to preserve peace, control the arms race, resolve disputes through diplomacy, promote socioeconomic development, and protect fundamental human rights and democracy. At the present time, NATO, the OSCE, the EU, NAFTA, OPEC, ASEAN, the G-8, the D-8, and APEC are the foremost international political, military, and economic unions.

These institutions are subject to organizational reforms because of new members or a widening of scope. All of these organizations, formed in the aftermath of the Second World War, have contributed to creating stability and order in the world and have played a major role in global socioeconomic development. Member nations protect their economic and military interests, and also acquire a stronger regional and international position. Even the developed world perceives the necessity of such partnerships. The creation of free trade zones, regional trade agreements, abolished customs controls, and even a common currency (as in the EU) safeguard the future of member states. Defensive pacts enable member states to reduce military expenditures and to divert those resources to cultural and educational fields.

A similar organization will provide considerable benefits to Muslim nations. For those that are desperate for technological as well as economic development, the foremost step toward stability is the creation of a central organization or, in other words, a unified Islamic world under the auspices of the Islamic Union.

Economic Development and Increasing Prosperity

Economic cooperation is necessary on two counts: stability and development. Muslim nations must bring stability and solidity to their economies. Developing industries and making the required investments is vital, as is the need for a comprehensive development plan and the simultaneous development of education, economy, culture, science, and technology. While various sectors are developed technologically, the labor force’s educational levels and standards must be raised accordingly. Society must be motivated to become more productive, and the resulting economic cooperation will play a major role in eradicating poverty, illiteracy, the unjust distribution of wealth, and other socioeconomic problems rampant in Muslim countries. This partnership can be formed only by the creation of free trade zones, customs unions, and common economic areas.

Most Muslim countries have geostrategic importance as well as rich natural resources (e.g., natural gas and crude oil). These resources and strategic opportunities, however, are not being used effectively. In the Islamic world, 86% of the population’s living standards fall below $2,000, 76% under $1,000, and 67% under $500 per year. When the Islamic world’s total resources are considered,(1) this is quite a paradox: Roughly half of the petrol consumed in the West is exported from the Islamic world, as is 40% of the world’s agricultural production.(2) Many economists and strategists freely admit that the world economy depends upon the Islamic world’s oil and gas exports, in particular those of the Persian Gulf.(3)

The Persian Gulf holds two-thirds of the planet’s discovered crude oil reserves. Data obtained from research concludes that Saudi Arabia alone holds 25.4% of the world’s oil reserves, or 262 billion barrels. A further 11% is found in Iraq, 9.6 % in the UAE, 9.2 % in Kuwait, 8.6 % in Iran, 13% in other OPEC member states. The rest is distributed across the remainder of the world.(4) Research commissioned by the U.S. Department of Energy shows that between 2000 and 2020, oil exports from the area will increase by 125%.(5) This means that the world will continue to meet most of its energy needs by imports from the Gulf region. Moreover, the Middle East has 40% of the global natural gas reserves; 35 % of these reserves are in the Gulf region.(6) Algeria, Libya, and other North African countries have 3.7 % of the world’s reserves.

The Caucasus and Central Asia are also rich in oil, natural gas, and other natural resources. For instance, Kazakhstan has between 10-17.6 billion barrels of proven oil reserves, and its natural gas reserves are estimated at between 53 and 83 trillion cubic feet. Turkmenistan hasbetween 98 and 155 trillion cubic feet of natural gas reserves, making it the fourth largest producer.(7) Some other Muslim countries have valuable mineral resources. For instance, Uzbekistan and Kyrgyzstan are two of the world’s leading gold producers. Turkey has one of the world’s richest boron reserves, only recently discovered to be very important, and Tajikistan has the world’s largest aluminum producing facilities.

These advantages will become more important in the twenty-first century, which some have already christened the “energy century.” Energy is an essential element of modern society in terms of the military, industry, urbanization, and transport. Given that economic activity and manufacturing depend primarily upon energy, nations will do their best to achieve control over these energy resources. The Islamic world is not using its resources effectively, for many of its members lack the infrastructure and technology to increase the production and use their natural resources to develop their industries. Therefore, the resources’ contributions to the country’s economy are limited to export earnings. These countries do not have the means to process their own crude oil, use it in their industrial complexes, or to develop their industries. Worse still, some Muslim nations do not even have the necessary means to explore and research their natural resources or to discover and extract them. Explorations undertaken by foreign companies reveal that other Muslim nations have oil and gas reserves, but they cannot benefit from their resources.

Naturally, the ineffective use of natural resources is not the Islamic world’s only economic problem. However, solving this problem can begin the process of solving many other problems. The economies of Muslim nations contain differences in structure and functioning. Some nations’ economies depend upon mineral resources, such as the members of OPEC, while other nations’ depend upon agriculture. These differences are also reflected, to some extent, in their social structures, such as the widely varying degrees of rural and urban populations. Developing complementary relationships and helping each other in their respective areas of expertise can turn these differences into a source of riches. All of this will be possible with the Islamic Union.

Joint ventures and project partnerships will be an important step in the right direction, for they will enable countries to benefit from one another’s experiences and the income earned from investment projects will benefit all of the participating countries. Such mutual financial support is compatible with Islamic morality, for helping the needy and having a sense of social responsibility are important characteristics that Muslims strive to acquire. Many verses in the Qur’an remind Muslims to watch over the needy.

Society’s internal cohesion must be extended to international relations. As international cooperation within a partnership cannot be one-sided, employment and income levels will rise in both countries. For example, one country will produce oil and another one will process it, and agriculturally dependent countries will be able to import the food they need from agriculturally developed countries. A manpower-poor country’s need will be met by another Islamic country, while rich countries will be able to invest in and help out a manpower-rich country that does not have enough jobs for its people. This will be to the benefit of both. Sharing know-how and experience will increase prosperity, and all Muslims will benefit from technological developments.

Joint ventures that realize the Islamic world’s unification of opportunities and means will enable Muslims to produce hi-tech products. The Islamic common market will enable Muslim-made products to be marketed in other Muslim countries without the hindrance of customs, quotas, and other cross-border obstacles. The marketplace will grow, the market share and exports of all Muslim nations will rise, industrialization will speed up, and economic development will bring progress in technology. The living standards and wealth of Muslim nations will increase, and their existing inequalities will disappear. Some free trade agreements are already in place between countries in the Gulf, the Pacific Rim, and North Africa. Trade agreements signed by Turkey are already operational in the Islamic world. Bilateral cooperation exists in some regions; however, their scope must be widened. Such cooperation will safeguard the rights and interests of all Muslim nations and lead to all of them becoming developed—a result from which all of them will derive a far greater benefit than if they do not cooperate with each other.

All of these can be realized only under a central authority’s leadership and coordination. Achieving this will be possible if Muslim nations adopt the Qur’an’s values and the Prophet’s (May God bless him and grant him peace) Sunnah, or, in other words, if they adopt Islamic culture. The Islamic Union must lead the way to this cultural awakening, as well as the resulting political and economic cooperation.

Mutual cooperation among Muslims, part of the Islamic code, must be adhered to by all Muslims, for God commands people to refrain from avarice and to guard the needy and support one another. In fact, destitute people have a due share of the believers’ wealth (Qur’an, 51:19). As the Qur’an proclaims:

Those of you possessing affluence and ample wealth should not make oaths that they will not give to their relatives, the very poor, and those who have migrated in the way of God. Rather, they should pardon and overlook. Would you not love God to forgive you? God is Ever-Forgiving, Most Merciful. (Qur’an, 24:22)

He who has plenty should spend from his plenty, but he whose provision is restricted should spend from what God has given him. God does not demand from anyone more than He has given it. God will appoint ease after difficulty. (Qur’an, 65:7)

Our Lord also reveals that believers are one another’s guardians (Qur’an, 9:71). The word “guardian” conveys such meanings as friend, helper, mentor, and protector. It also expresses the importance of cooperation and solidarity between Muslim nations. The cooperation that will arise from this fraternal awareness between Muslim nations will bring prosperity and wealth to Muslims and eradicate poverty, an important problem of the Islamic world. Societies that follow the Qur’an’s values will not experience famine, destitution, and poverty. Muslims will develop their nations by following rational and long-term policies, establishing good relations with other nations and people, valuing trade and development, and learning from other cultures’ experiences.

Important appropriateness of  development of modern economy is its cycled  character. Puriny every structural crisis of the world economy new opportunities are formed. Capital of the countries, which were leaders during last cycle, is being devaluated. Qualification  of lab our forces in field using old technologies are being ruined, while the countries, which managed to create innovational potential proved to be in the center of attracting capital which is independent from the old production. Consequently, the countries that implemented  scientific-technical and industrial capital investment policy in prospective fields will be given a competitive advantage. The realization of  this policy in the phase  of structural crisis gives its authors the opportunity to achieve  economic growth on the  basis of competitive advantage.

 

Basic scientific and radical innovations are recognized as the main means of overcoming structural crisis, that are implement thought acquiring new achievements and rising the effectiveness of traditional development .

 

In order to move to the stable stage of economic develop it’s important to increase innovational-investment act vitas and to involve new technological directions and basic technologies at trajectory  of firm economic development. The economic policy that is oriented at encouraging  investment, in innovations provide modernization of economy, also gives rise to its competitiveness.

 

Innovative way of development in investment policy. Thus, the main importance is given to the innovative type of development, that implies the growth of government role in exercising investment policy. Highly development countries. Take the responsibility of financing fields like fundamental  science and high-risk research, as well as the development of scientific research infrastructure. Spreading new ideas and educating population. The implementation of this functions takes place against the background of high-scale investments. that creates favorable conditions  for production growth on the basis of scientific innovations.

 

Currently, the government tries to develop institutions that will support vestment in new  technologies, stimulate innovative activities, encourage progressive technological changes, that unities financial tab our and informational recourses.

 

Currently government  tries to create development institutions , which will support investments in new technologies, stimulate innovative activities, encourage progressive technological changes, that unites financial, lab our and informational resources. The state may avoid the responsibility of developing   the production activities , where special markets and competitive relations are formed. At the same time it must encourage new, high-risk directions of investment activities, that pave the way to creating production on the   basis introducing scientific and technical achievements.

 

For example the wave of economic regulations that spread from developing countries in the late 8 th lost century covered the traditional branches of economy but it had no connection with high-technological sector, conversely the importance of direct state support institutions for innovation activities were risen. At the same time, the importance of working out state strategy for scientist technical and social economic development grows. The state aims at creating enterprises , that will manage to gain com putative advantage over the companies of inner and foreign markets. They  must consentrate their resourses on prospective  fields of production.

 

The direct instruments of state influence are oriented at supporting  private initiatives and innovative enterprises that will stimulate investment activities in certain fields and production initiatives.

 

The necessity of financing science and its current condition:

 

Active investment process, especially in scientific and technological fields, innovative and scientific-technical activities lays in the foundation for economic growth. Nowadays the decline in scientific technical potential is caused by  the fact that there is no more unity between scientific researches and their usage  former. scientific staff has been dismantled  and number of intellectuals have left the country.

 

Consequently, the country becomes more dependent on foreign trader.

 

So, in order to create favorable conditions for economic growth capital renewal is essential, but it’s very complicated, because of  the decrease in state financing and absence of ordering production, Science and education have no inner resources for development.

 

During the last few years there has been significant  reduction of scientific and educational research expenditures. As a result, the share of expenditures in GWP spent on science in 1999 amounted to 0,97%, which is twice less than in 1990. In 2006, the expenses spent on educational field amounted to only 1,5% of the GWP, which is the lowest index among the transitional countries.

 

Significant reduction of company’s demand on innovations resulted in increase of financing Scientific field from the state budget. Budgetary expenditures on scientific-research and construction work have been absolutely reduced and they are tend to decline against the GWP as veil as the budgetary share of the expenses. The degradation of Scientific potential is proved by sharp decline in expenditures used in research and construction work pond it resulted in dropping behind highly developed countries. Expenditures on Scientific research in the USA (1998) amounted to 794% per person, in Japan – 715. in Germany 511 and 611in Russia, whilst in Georgia it only amounted to 2,8%.

 

Due to the sharp decline in financing the Scientific field, renovation of scientific facilities detoriorated. The salaries in Scientific field were decreased, The coefficient of renewing main foundations in Scientific technical field significantly dicreased. According to the latest statistical data, 311 ml. Gel was invested in renewing main capital, that amounted to 60% of all the capital invested, in Georgia Instead of renewing Countrys technical market, most of the capital was invested  in activities connected to local market. 29% of this capital was invested in real estate and construction worth.24% in transportation and communications The problem of heeping, supporting and developing fundamental and research centers of science aggravated. During the Soviet era 20% of production was created in the USSR, but now Georgia’s shave in the  World scientific production in only 0,3%.Implementation of innovations require a wide range of activities, from doing research to producing new output. Priorities of innobative activities change at every stage of economic development.

 

In order to achieve economic growth in current conditions in the country. it is necessary to develop scientific innovations that create new and don’t take into consideration current directions of technological development This lays the foundation for putting so-called innobative multiplication into motion. which is connected to investments and results in production increase. that creates improved scientific innovations. They exchange old technologies. Introduction of this innovations is exercised by new investments, that encourage the further growth in production. Thus, innovative multiplication makes good influence on production growth and takes the economy out of depression and leads it to a long-term development stage.

 

Distribution of investments on Scientific – technical works.

 

It’s relatively typical for developed countries to distribute private and state capital investments even on scientific and technical works. For example, The USA’s private investment share in innovative market amounts to 50%. Similarly, according to the figures of state Expertise, 10% of innovations is given a strategically important status and accordingly they are financed from government sources. Japan finances 33% of all scientific research, 73% of scientific-research and constructive works is implemented on the basis of self – financing in the USA, in Germany this index amounts to 70%, in Japan and UK 62%, France and Italy 57%, So the only possible mechanism for promoting social and economic development is it’s technical modernization and move to innovative type of development.

 

Technical modernization of equipments and their reconstruction requires attracting important investments in innovative field. Here it is important to activate state policy on scientific and technical branches and to work out important directions for scientific-industrial development of economy. AT the same time, the state, that takes important part on technical modernization of the economic sector must take the responsibility of financing fundamental sector of science and high-risk researches, restore activity of  science financing from the state budget and develop scientific infrastructure. In order to define the proportions of sharing investments its essential to focus on cyclical development of economy and, on Intensive types of re-production, that is reflected on the statistical law of dividing expenditures, for example, spending on fundamental research, applied work, capital investment amounts to 1:3:9:27.

 

Statistical law of resource division in accordance with scientific-technical potential is used at the production development stage where scientific and technical progress is achieved by practical laws, which help to solve the problems of production stabilization and development.

 

The reason of decrease in scientific potential the decrease in scientific potential in post communist countries is  caused by lack of restructuring  scientific organizations privatization of research centers has   not brought any desirable results. The reason for this is that enterprises don’t order them to do research. Simultaneously,  scientific staff has got older, the last tend years science suffered from loosing its intellectual potential. In this case, it will  be reasonable to merge different scientific organizations and some research institutions must be transferred to enterprises to manage , in this way  scientific technical potential will become much  stronger.

 

The sources and ways of funding science restructuring research institutions and dividing it into firms with developed financial, economic marketing and commercial infrastructures will increase the practical use of research work results. Contract based applied science makes the realization of  scientific technical projects they will be implemented at the expense of the state budget, non state expenses attracted by Ventura, sharing  other financial mechanisms. The question of mobilizing these sources  can be solved on the basis of aimed, scientific and technical programs on regional and federal levels in accordance with the market demand.

 

They can be implemented in the    form of portfolio investments using stock marked tools. Providing  the state with grants and sale guarding institutions by investment agency and trust management has practical  us eye. For forming non budgetary recourses for financial    innovations it is necessary  to use amortization funds on renovation in the part, where production expenses, especially those. spent on research and innovations. are taken into consideration as well as the expenses of wearing out financial expenses , that is included  in the production cost and is reflected on the production prize. In addition to that revenues that  came from selling scientific-technical production, or having the right to own intellectual and industrial units as well as the revenues from scientific and technical units and selling the right to own them must  be considered, too.

 

The role of innovation foundations .

 

Practical usage of abovementioned sources is implemented according to the special rules and amounting , on the basis of used methods. The expenses received from these sources are transferred  to a separate  sub account `innovation foundation”  Greeting. State funds for innovations which is aimed at realizing prospective directions  of science  and technical development enables to  work out modern competitive production and organize its production. besides using state budgets expenses,   other  market mechanisms for attracting investments are used as well .

 

Nowadays mechanism for investing in innovations are used only in case banking structure , which mobilizes recourses and regulates this use in science is taken  into consideration banking  structures directed at investments, accumulate vast sums through creating consortiums and other financial and investment institutions, in order to attract own funds for innovative programs of investment. On condition of Budgetary deficit banks au the phases of innovative   cycle and provide insurance service. Participation of banks in the field creates extra   stimulus for different firms. No other structure manages and controls innovative recourses as the banks.

 

Effective use of stock market instruments provide opportunities  to attract investments in innovative field. Its main aim is to divide investment recourses among fields and provide inner and foreign  investment flows in more prospective sectors of national economy. Transitional economy doesn’t provide the conditions for populations to transform their savings  into innovative investments and provide economic growth. Monetary potential saved in the country is practically unused. According the same data the amount of savings is much more higher than in the USA and west European countries. In order to invest funds existing in the country in essential sectors of economy it is necessary to make the forms of collective investment perfect, it includes. investment share  funds, credit contacts joint stack and commercial funds . After that government should control their activity and they must draw their . attention to new forms of scientific-innovative and investment forms.

 

Main stages of innovative development.

 

Innovative development of economy as any process must be oriented at its stages, levels and phases. First of all the technological basis of the field  whose production has more demand on the market must be renovated. At the  same time the market is expanding  with importing goods, introducing innovations that is oriented at modernizing  recourse-saving technologies and improving consuming qualities. So at this stage our main aim is to create infrastructural and institutional grounds for firming scientific technological  potential. than we have to organize the enterprises that produce and sell new technological range-that enables the country  to restore its positions on the world market of scientific technologies.  Simultaneously the role of the country in production and investment activities that is directed at commercializing innovations must be strengthened. Little  by little of will move from supporting  quantity aspects of scientific technical field to quality aspects and to new  forms of engineering, that use  modern informational technologies.

 

Main directions of state investment innovative policy of the state in future main directions of  state innovative investment policy are: 1. choosing national priorities of innovative field development for realizing innovative projects, choosing the projects of technologies that influence production growth and rise in country’s  competitiveness. 2. Coordination of activities of  legislative and  executive bodies to work out complex approach to solve this question concerning country’s innovative development, effective functioning of innovative systems and implementation of state’s innovative investment strategy.

 

3. maintaining and developing scientific and industrial-technological potential of fundamental science, working out employee’s training system for maintaining and developing modern scientific and technological level and developing science to a higher level.

 

4. Providing favorable economic and financial conditions for activating innovative works, developing ventral, engineering and investment-industrial activities and for rising competitiveness creating  favorable conditions for investing in innovation field enables  modernization of scientific and technical basis of national industry as well as rising the competitions of the country.

 

New directions of innovative activities and priorities of innovation policy consists of three stages. At on initial stage the main goals are reproduction of the technical basis of the field whose production has stable demand on the market than market expands by producing the goods that replace the imported ones  innovations  are oriented  at modernizing the enterprises, that  use the recourse-saving technologies and improve consuming qualities. So at first it’s necessary to create economic infrastructural and institutional basis for moving to investment stages of state development. At the second  stage the enterprises  that realize the technological order are created. After that the production is introduced on inner and foreign markets that  makes production competitive in the sector where national product were not presented before, and it creates new scopes for demand, where national products dominates to must the demands. At this stage country’s activities are directed at attracting high-scale private investments, creating necessary infrastructure for investment-development their support and perfection.

 

At the third stage the following important questions must be solved. Country’s support for innovative infrastructure, creating conditions for demand on national products, informational support to enterprises making stable contact with science and industry.

 

New ways of implementing scientific-innovative  and engineering activities.

 

A State focuses on new forms of scientific innovation and engineering, that use modern informational technologies and little by little they move from quantity aspects to quality ones, that are implemented in the following way:

 

1. Maintaining and developing scientific and industrial potential and using them in achieving modern technological level.

 

2 Choosing rational strategy and priorities for developing innovative field. Implementation  of critical technology and innovative projects in the fields that  influence the effectivness of production and their competitiveness.

 

3. Creating favorable economic and financial condition for activating innovative works, legal industry and competitiveness.    

 

-           To implement this measures following practical activities must be exercised:

 

The process of providing information must be radically improved and commercial structures must be involved in developing scientific educational and innovative activities.

 

- reconstructing the part of research and project institutions and closing the places working ineffectively.

 

- Creating the system at venture investment. state support of venture business in scientific technical field is necessary until the industry get interested in them.

 

- Developing the system of noon. state innovative risk and private  supplly, creating insurance groups within the framework of financial-industrial groups, that will undertake high-risk insurance, that is linked with creating innovative production. insurance companies, together will share the risk.

 

- Using modern methods for prognosing engineering and scientific production marketing.

 

-  Developing small innovative business by creating favorable conditions and infrastructure for setting up small enterprises and their functioning.

 

- Creating suitable legislation, that will regulate relations in intellectual  property field, work out normative acts that are directed at exercising state policy. It foresees involving the results of scientific-technical results in industrial circulation, that is implemented at the expence of the state budget.

 

- making typical state contracts in order to balance legal interests of the participants in the process from the point of using scientific-technical results.

 

Thus, following the innovative way of development, must not be the only factor white  working out investment policy. In connection to that, the role of country is defined by creating the mechanisms, which forms national innovative system and develops innovative production.

 

Creating favorable conditions for developing innovations provides modernization of technological basis of the economy and grows the competitive of national production.

 

- Preparing typical state contract for balancing legal interests of those who participate in the process of using the results of scientific-technical work.

 

So the main factor while working out investment policy is to move economy to the innovative way of development. In this regard a country’s main role is to create the mechanisms, that will provide the formation of national innovative system and development of innovative business, that will make the modernization of economy’s technological market of the economy possible and will give risk to competitiveness of national production.

 

The formation of adequate investment activity model in the market system of economy provides replacement of investment recourse division with new forms of investments. For its part it has to work out the investment policy, that will accord with changed economic conditions.

 

Official concept of reforming Georgia’s market economy is based on simple monitory principles. Their realization was expressed in size minimizing the country’s role, robotizing foreign economic activities, privatizing state property and forming market structures.

 

The principles, boundaries and forms of state participation in investment activity

 

Analysis of Georgian-economic conditions shows that solving important problems in country’s investment development is impossible only on the basis of self regulation, that is distinguished with its low quality. A state needs to strengthen its role in the field of investments, correct economic policy.  At the same time state participation boundaries in the investment process must be defined by taking the way of economic development, that is characteristic to the period of moving to market economy, into consideration conditions of strengthening the state role in the investment process.

 

Analyzing the possibilities of strengthening state role in investment process, we must take into consideration the fait, that counting’s participation in the process has same boundaries, these boundaries are defined by real financial possibilities, on  the other hand the country must encourage the process of attracting investment rather than blocking them. State participation in investment process is not the same as turning economy to administration process. It implies the increase of a long-term policy of the state, effectiveness of particular activities in the conditions of encouraging investments.

 

The topic of state participation pineapples in the investment activities is closely linked with limiting necessary financial potential for investment promotion Approximate calculations show that in order to restore the amount of investment to the pre-reform level, foreign investment growth is possible. According to 2002-2012state program in the next five years 10 $ are expected.

 

As we have at ready mentioned the role of the country as the investor in the market economy is maintained for the fields that are vital and important. More importance is given to regulating the investment process in the way, that creates favorable regime for private investors activities.

 

The conditions existing in Georgian economic investment strategy is oriented at moving from stable investments to creating necessary investment environment for private investors. These two parts that are essential for the state investment policy must support prosperous fields of production and the policy must have systematic character. 

 

Defining strategic priorities of investments.

 

 On defining strategic priorities we must take into consideration competitive advantage exiting on the world market, that is reflected on high-technologies. The brunches which maintain potential advantages are: energy sector, turism, agricultural machines and technologies, food etc .

 

Investing in innovative production will encourage new directions for investment flow, rising production level and encouraging economic growth. This approach is well known in the world products. Our priority must be effective programs that meet inner needs in economy, in this regard we  have to support national enterprises, and the development of vital brunches of economy.

 

At the same time it must be taken into account that in the world integrated economy, development of investment cannot be stable and increasing source of profit in producing rival products only in the inner market.

 

Significant  condition of effectiveness in the state investment policy is to work out the conception of structural alteration in industrial sector. It’s especially concerns about such prioritative approaches according which must be defined the reform strategy and mechanism of industries from different groups, supporting forms and methods from the state, organization models of industrial structures in accordance with real, amongst them institutional conditions in the world economy.

 

The basis of economic growth and quick development can be large corporations, that have scientific – technical potentials in mobilizing resources and effective  integration possibilities in the world industrial unions. Small business industries, that have really important meaning for the function of market economy, nowadays are singled out with extremely low technical level and lack of investment resources, that make it necessary  to quest  their place in industrial chains of the large structures. The formation of stable and effectively developing, diversificational, corporative unions and financial-industrial groups demand state supporting reinforcement of corporative circle from the state, amongst  them even by means of participation of corporations in the capital. Development of corporative forms will help the realization of long term industrial programs, and create conditions for the stable economic growth.

 

Stirring to activity of stake investment politics. At a modern stage, stirring to activity of stake investment about the stable economic growth in the basic condition of Georgian economy. Essential approaches of stake investment politics are: the reinforcement of supporting in prroritative tendencies of economic development formation of justifiable and economic conditions of stimulating the interest of investments in the real sector of economy and the agreement between central and regional investment politics.

 

State investments and supporting in prioritative tendencies of economic development. The realization of up-to-date tasks of economic development demands more active state backing of investment field. Simultaneously, the importance of state investment must be growing up not as mush from the standpoint of size of centralized sources, but from the positions of state guarantees, insurance and orient list of private investors.

 

The problems of investment budgetary financing. Budgetary financing of investment activities has still been happening on the basis of these approaches that essentially limit the state influence on the course market alterations and structural changings in economy.

 

Herewith, these shortcomings are not as mush conditioned by restricted possibilities of budgetary system, as by complicated and wrong strategies of sharing centralized investments and the lack of effective control of their usage.

 

Failures in the state investment politics make it necessary to solve this problem, as afterwards not having orientation or having defective one becoming the problem investors. Analysis confirms the existence of distinct dependence between state priorities and investment motivations of private investors. that must surely be taken into account while working out on perspective tendencies of investment politics. Otherwise  it will be impossible to make ground for stake investment politics and for the agreement of investors’ interests of different levels. Reserved dimensions will again have more passive character and will not guarantee planned results. It must also be mentioned that insufficient or unsystematic backing of separate manufacturers or regions, falls down stimuli of accumulation and afterwards self-financing process and it prevents the formation of business executives market behavior.

 

While analyzing the problem about the possibilities of manufacturers’ investment support it is impossible not to take into consideration the extreme restriction of budget/ At the same time, modern conditions, the increase of levels in the realization clearness and confirmation of investment politics and consideration of budget planning reality are not less important.

 

In Georgian economy. where unreliable forms of calculation dominate. it is difficult to male real prognoses about the mass index of money. Budgetary politic is being worked out in the conditions of complicated factors, that aggravates the difficulty of real budget formation and fulfillment of the received one.

 

State investments, as in the realization of economic growth of prioritative factor; usage of international experience will not be perspective without mentioning up-to-date conditions of Georgian state finances and the inevitability of budget  system alternation. e.g. one of the successful example of economic reforms is the experience of Germany. Its budget system is well formed and it is manifested clearly in the distinction of current and investment expenses in the control of pure usage of budget sources in establishment and protection of maximum size of budget deficit financing at the expense of credits with the sum of for seen investments expenses. This method is called “golden rule” and is established the 115th article of the basic law of Germany.

 

In Georgian economy, as it is clear from the results of reforms, the compensation of the growth of state non-productive expenses was not happening, correspondingly with the growth of budget investment expenses. On the contrary, it was one of the factors, that conditioned the reduction of state centralized investments and weakening of state investment function. In accordance with, the usage of state investments as the factor of economic growth, requires essential changing’s in the organizations of budget politic and budget system.

 

While working on the budget, it is necessary to define the prioritative tendencies and use the forming principle of the normative that define the levels of budget, according to the singled out tendencies; division of current and investment budget on the normative basis, denial the possibility of exceeding expenses over incomes while planning the budget; strict definition of sources, how to cover the investment budget deficits. It is also necessary of budget on the usage of sources in control realization technology, in order to reinforce the frscal role of budget fulfillment.

 

An  important problem, connected to the usage of state investments is their low effectiveness compared with the private ones. While sharing the state Financial resources, used tendencies do not help to increase the effectiveness of investment and restructure national economy.

 

In the organization of investment process, lack of systematic ground and insufficient quality of budget planning caused permanent  failures in financing the state investment programmers.

 

This fact approves  that, it is necessary to reinforce the role of selective approach, gather state investments towards the strictly defined prioritative approaches, keep strict control and select competitive projecting during state investment.

 

Selecting mechanism of investment projects on the basis of competition/ In market economy, where basic criterion of investment is the effectiveness of investment, it is impossible to use the old technologies of sharing unpaidly, among enterprises in centralized capital investments, which don’t stimulate industries to improve their effectiveness, as direct state investments are less effective compared with the private ones. Thus, the most acceptable approach is the state supporting to private investments.

 

State supporting to private investments is realized in these investment  projects by means of the partial participation of the state, which have passed the competitive casting. The goal of centralized investment resources on the competitive basis is the reinforcement of investment assets, mobilization of private national and foreign investor’s capital towards the prioritative approach in economic development, and the growth of effectiveness in all forms of property such as commercial, budgetary and national-economic investments.

 

A new rule of financing investment projects in the financial ensuring of investment competent project, gives the right to investors to choose the participation forms. These forms can be as follows:

 

State investment revocable two year-term credit; its payment percent for the usage, compiles ¼ of central banks refunding rate;

 

to strengthen the port of these shares of an oncoming enterprise in the state property, that is sold in the market from the income of investment project during two years and the income obtained in this way goes to the state budget.

 

While taking decision about giving funds from central budget, a leading criterion is to insure the setting of object (industrial powers) into action in the given term, in the conditions of decreasing funds, attracted from the state budget and to increase the effectiveness of the usage of centralized resources.

 

The obligatory conditions, to present investment projects for the competition are:

 

In the total amount of money, spent on project realization, the share of centralized investment resources must not be exceeded more than 20%, it must be ensured at the expense of private investor’s own, attracted and borrowed funds.

 

In total amount of common expenses, investor’s own share mustn’t be less than 20%.

 

In the field of investors’ supporting, new approaches such as connection to the certification of investment projects, giving state guarantees, creating the budget for development are used.

 

Certification of investment projects, defines the possibility of increasing state supporting share up to 50%, while such analogies are not producing industrial products for exportation about 30% – for importation, with less price.

 

In the conditions of budget funds restriction, many investors consider the state guarantees of certified projects, as the most desirable form of state supporting. Guarantees secure about refunding not the total amount of money of risk, but part of it, in case of failure the effective investment project realization, due to the reasons that are not in investor’s compensation; On its side, investor must present counter-guarantees, amongst-mortgage.

 

Development budget can be formed as the special instrument, that collects investment resources of state budget in order to finance investment projects and attract the funds of private investors.

 

Development budget resources can be used for partial financing of investment projects, at the initial – competitive, valuable and refundable stages, also the borrowed funds for giving state guarantees on the competitive basis. (When upper limit of guarantees compiles 40% of borrowed funds).

 

In the competition of procuring the funds for development budget, such investment projects should be taken, that satisfy the following conditions:

 

Correspondence of development budget to the goals;

 

Security of positive meanings of pure discounting income;

 

In the total amount of money for project realization, investor’s own share mustn’t be less than 20%, but for large projects (more than 50 million $ – less than 30%.)

 

In the countries of developed economy, as a rule, examination of investment projects is made by experts, invited by investors themselves or by the participant financial institutes of project financing.

 

Selective, restricted supporting of prioritative approaches in industrial development by governments and the competitive selection of effective projects gives distinct results. Foreign experience proves that, such measures, as a rule is an efficacious stimulus of investment attraction and helps to realize projects.

 

Governance of state property in the state economic sector.

 

Governance of state property, as the factor of investment effectiveness in the state economic sector. Activation of the state role in the investment field, implies the development of state governance, reaching quantitatively higher level, restructurization of state sector and development for investment providence.

 

In must be said that, in the countries even under developed market economy, the governance of state sector is fulfilled under strict state governance control, from the interests of national economic development. State sector fulfillers the supporting function only for vitally important and unprofitable industries, but also stimulates local industries.

 

State sector, must distinctly occupy the leading positions in achieving priorities of economic development and form the potential of economic growth. Simultaneously, investment projects of state industries must be drawn up according to the demands of competition and effectiveness. It is essential that, invested funds to be used purposefully and the movement of financial flows be controlled strictly by the state.

 

Herewith, while realizing state activities in the real field (amongst in the field of investments), stimulation in  the activities of analogical faces in  non-state sector and not their restriction must surely be taken into account, as enterprises under  the state support are stable on the one hand, but less effective on the other side.

 

Activation of the state investment role must not be manifested only in effective investment projects of science-capacious industries, high technologies and vitally important fuelds by direct participation. More important constituent part of investment supporting of society in the conditions of market relation development is the encouragement of economic subjects’ investment activities and it must be oriented on progressive structural alteration. This implies the working out of optimum methods of economic regulation, development of accumulation mechanisms and active assistance to turn them into industrial investments.

 

Formation of institutional-legal and economic surroundings for the stimulation of investments in the real sector of economy.

 

Greating the available conditions for increasing investment actives by the state, requires purposeful influence on reproductive processes at macro and micro-economic levels. This. most important sphere, where the activation of the state investment role must be manifested effectively and in a new manner, at a new stage of economic reforms is – monetary-credit field.

 

Monetary-credit methods for investment stimulating. Insuring the growth of stable investments, first of all implies the augmentation of economic monetarism, era diction of money disproportions, reduction of interest rate, renewal of taxation system, depolarization of national currency and its role augmentation.

 

The increase of economic monetarism is possible by means of restriction of monetary-credit emission. While defining the level of danger of its inflation results, it must be mentioned, that inflation can also be caused by the other factors, besides emission. Thus, struggle against it, cannot be defined only at the basis of emission restriction. First of al it is necessary to provide the functioning of manufacture solidly. The growth of monetarism level in the real sector of Georgian economy is the most indispensable condition, that on its  side is the leading, deflationary factor.

 

Essential condition to protect against  the inflated results of monetary-credit emission is to create and put in motion such mechanisms, that change macroeconomic conditions and direct money-flows for supporting manufacture. During the process of using such approach, the size of emission defines the objective demand of industrial sector of economy, expert the funds moved to financial markets.

 

While defining the parameters of purposeful growth of money, calculation of the structure of money delivery is vitally important. Different channels of money emission have heterogeneous sensibility towards the inflation.  Therefore, expansion of money delivery is possible by payment of promissory notes of non financial industries, by means of banks refinancing and under the purposeful direction of emitted sources to finance the industrial investments. Less inflation channel of emission  is financing industrial investments by the state institutes of development.

 

Basic instrument for the regulation of money flows, is purposefully the state influence on the dynamic of interest rates. e.g Project supporting of the most importantly acknowledged industries for the purpose of investment activation is possible with preferential rates and by credits. Movement of preferential credits, this time must be realized by state banks system of development and the strict control establishment must expel the usage of funds aimlessly and financial speculations.

 

Experience of the countries under market economy shows that, regulation of interest rates is generally effective method to reinforce business activity in the period of crisis, when disbalance of economic systems situation is deepening. After achieving balanced progress in economic balance and financial sectors, generally the necessity of state interference in economy is lessening and accordingly the role of state influence on the dynamics of interest rates, formed on money markets is also decreasing.

 

The usage of state regulation is distinctly cyclic. In the conditions of sharp structural disproportions, when the working of market mechanism can’t provide the keeping, on the one hand, development  of surplus production and devaluation of main capital off, but  on the other hand augmentation of investment activity, the role of state influence on economy, amongst in the field of purposeful control on money flow is expanding, but while moving to the stable growth of economy-decreasing  . It is proved  by the practical analysis about getting over the structural depressants  (post war) in Western European countries and in the USA, and by the restoration of economy in France and Germany.

 

State regulation of interest rates was applied in the countries, under developed market economy (post war-in Japan, during along period –in France and in the USA during the period of so called `Roosevelt’s new policy, as well as the range of those developing countries , that showed the solid high tempers of economic growth (India, China, South – Eastern Asian countries etc). Important scales of accumulation here was reached for the purpose of national manufacture development, as a result of active influence on interest rates ( on its side, accumulation made it possible to hasten the speeds of economic development) also, for this purpose, direct and indirect methods for the purposeful regulation of money flow and inner accumulations convert into investment were used, namely for the formation of development state banks, loan-saving association and other  specialized credit institutes, through founding district  normative of credit politics for non-state banks and rates of preferential taxation.

 

For example, in Japan, investment financing and production growth conditions were formed through the state control strengthening on using the population savings and interest rates, which were gathered in postal-saving institutions and banks, afterwards their remittance to the state institutes, long-term crediting banks and truste savings banks took place.

 

Savings transt formation mechanism into investments in the USA was based on the wide development of loan-savings associations, that attracted the savings of private sector for giving purposeful credits to the range of housing construction and industrial branches.

 

In many developing countries, stable growth of economy was conditioned by localization of the greater share of money flow in the state banks, that locate mobilized savings in industrial investments and crediting resources, in accordance with the installed priorities of social-economic development.

 

Improving the structure  of mass of money is also connected to the cutting down  the share of cash, that is in circulation, for what it is necessary to set up strict  restrictions about the cash payment in all the field of economy, to continue calculation through computers and widen barren forms of  payment circulation. Taking these measures will expense the business economic field of banking sector and will be propitious for investment potential growth of the banks.

 

One of the basic task of payment system, at modern stage is its complete renewal, restriction of barter transaction, driving a great part of taxation means out of circulation, as they don’t  play a part of complete recourse in the formation of saving potential. Main ways to solve this problem are following: realization of inter imputation for financing fixed and circulating capitals, reduction the price of credit resources and security of plural debts.

 

For increasing the regulation effectiveness of money circulation and expel the activation possibilities of such emissive mechanisms, which are not accompanied with the expansion of goods delivery, it is necessary to strengthen the control and currency regulation.

 

Formation of effective infrastructure of financial market.

 

A) The influence on the investments activity of banks.

 

Looking through the previous system of regulation (in accordance with the selective priorities of economic politics) requires changings of the forms and methods in the banking sector and restructurization of banking system in economy, by meant realization of investment functions of the banks. Restructurized banking system must comply the requirements of armful investing  through high trustworthiness and guidance. It must also ensure the appropriate level of credit delivery resources by means of available interest rates for manufacturing fields.

 

In the growth of investment activity of banking system, it is essentially important to create the system of investment encouragement and insurance. State guarantees existence is one of the condition just for this. Cutting down the normatives of reserve assignments and preferential taxation are also belonged to these activities.

 

B) Creation of the system of deposit guarantees.

 

World experience shows that, the establishment of deposit guarantees is the inevitable component for vast mobilization of the population savings. It potentially increases separate institutes as well as the liquidity of the whole system and is the reliable means against taking deposits unexpectedly and frequently out of the banks.

 

One of the first systems for deposit insurance was formed in the USA in 1933-34, as a result of additional stabilizers investigation in marketing economy. Nowadays, these systems operate in the range of developing countries (Argentina, Colombia and so on).  Herewith in Great Britain, in the USA and in Canada, they are performed with independent state corporations, but in France and Sweden and private banking links. In Austria, Great  Britain and the Netherlands in the case of broken credit organizations, private deposits are given; In Germany deposit delivery of credit institutes are addressed to, while in Canada – deposit delivery, managing the property of bank and giving crediting guarantees are addressed to.

                                                          Economic Dr of Science,

 

                                                          professor Lamara Qoqiauri

 

China will not suffer from a “post-Olympic recession”, senior officials said Sunday, because of the scale and potential of its economy.

“The Olympic Games won’t be a watershed for China’s economic growth,” Wang Yiming, vice-president of the Academy of Macroeconomic Research, said. The academy is affiliated to the National Development and Reform Commission, the country’s top planning body.

“The fundamentals propelling the country’s economic development over the past 30 years will remain” even after the Games, he said.

The country’s economy grew 11.9 percent last year. But after the growth slowed to 10.1 percent in the second half of this year, it raised concern that the economy could suffer after the Games, which in some ways has acted as booster.

The direct impact of the Games has been limited because of the size of country’s economy, Wang said.

China won the right in 2001 to host the 17-day event, and its economy has grown at an average rate of 10.5 percent since.

A number of factors, such as the nation’s entry into the WTO and the Olympic-related investment boom, have boosted the economy and made it the world’s fastest growing.

To prepare for the Games, Beijing spent about 13 billion yuan ($1.89 billion) to build sports facilities and 280 billion yuan ($40.75 billion) to improve urban infrastructure.

Such investments helped Beijing’s economy grow an estimated 10 percent faster in the past seven years, said Yang Kaizhong, president of Beijing Economic and Social Development Research Institute.

But the 293-billion-yuan bill, hefty as it is, only accounted for 0.55 percent to 1.06 percent of China’s fixed asset investment between 2005 and 2008, the peak time for Olympic-related investments, Wang said.

And Beijing, the main recipient of Olympics-related investment, only accounts for 3.6 percent of the country’s gross domestic product.

Officials say China will continue its substantial investment in infrastructure even after the Games and that would help sustain the economy’s growth momentum.

Beijing has plans to add six more lines covering more than 360 km to its tube network by 2015 to ease traffic congestion and improve connectivity to its suburbs. The investment will be more than what the city put in to build 149 km of subway in run-up to the Games.

Other mega-events, such as the 2010 Shanghai World Expo and the 16th Asian Games to be held in Guangzhou the same year, are also likely to boost the economy, Wang said.

Earlier, the central government said it would strive to maintain a stable and fast economic growth while curbing inflation.

The country, especially its exports sector, has already felt the pinch of a falling growth rate and rising costs of labor and raw materials. More than 67,000 small- and medium-sized enterprises have reportedly had to shut down in the first half.

“Growth is likely to slow after the Olympics” but not because the Games would be over, Wang Tao, an economist with UBS Securities, said.

In case of Pakistan, it is an urgent requirement to study and understand the origin and upraising systems of individuals as Pakistan is facing lot of problems, crisis and unpleasant situations from last six decades. Pakistan’s society have drawbacks at all levels hence it is important to catch the roots of such problems. Fortunately now Pakistan has independent media and judiciary which both play a vital role in improving the upper social and political setup of Pakistan. But there is also a need to understand the problems at bottom line social groups which mostly includes middle and lower income class families. The behaviors and attitude of these two classes also underpin and create lot of hindrances in the developmental process of Pakistan. There is a lack of tolerance, lack of compromising attitude, lack of responsible nature, lack of impartial behaviors in the individuals of these classes. This type of behaviors and attitude of individuals generate and developed in their early grooming stages through their families. 

In Pakistan mostly there is a joint family system in which there are grand parents, uncles, aunties and lot of cousins. Although this family system is undergoing a radical change with a greater influence of media and education but people of Pakistan do not feel this change a good one. Because while living in a joint family system a lot of emotional attachments enhanced and they feel that by separating in neutral family system their relations will damaged and family ties will be weakened. Lot of research work has been done in this regard in Pakistan. Researchers highlighted various issues at household level which create disturbance and unrest in the society. Joint family system is basically a form of organization. In this organization there are defined norms and values to follow strictly by all the members. All the members have their defined tasks and responsibilities to perform. There is equal share of each and every member of the family in the available resources in the form of money, food and other requirements. If all the requirements and regulation of this organization fulfill impartially then it is the most successful system but unfortunately this not happens. Definitely it is impossible for any human being to stuck with defined strict norms and values even in his/her own home where he/she wants to take rest and live freely according to his own will after completion of his/her office duties which are in current era are as much tough and busy. 

This living style of joint families effects badly the socio-economic development of Pakistan by increasing poverty in various ways. In a joint family systems now lot of crisis emerge on the issues like distribution of household tasks, allocation of financial responsibilities among different members, division of resources in the form of food and money. There are various reasons of each emerging issue in joint family system. Firstly; members of joint families have no income security. As if a person has surety that whatever he earned it is his own then he could become ready to invest and entrepreneurs for the economy of the country through proper savings. Economically and financially independent individuals could work more confidently for the development of the country which not only could minimize poverty but also gloom up the economy of the country. On the other hand while living in a joint family system an individual could not save regularly from his earnings and hence could not confidently participate in the investment process of the country. Because he know that whatever he earned it will be added in the joint fund of whole family for family expenditures from where those members of family also benefit who are able to earn for them but become lazy due to such financial support from family. Huge amount of our youth become irresponsible and lazy and also adopt extravagance activities only due to this joint family system. As they do not have to face difficulties of managing home financially and they do not have any heavy responsibilities on their shoulders so they do not become responsible in all walks of life.  

Secondly improper division of financial responsibilities arises lots of financial issues in joint family system. They mostly emerge because at some times newly married couple does not want to share their earnings in the whole family expenditures, they want to spend their income independently. On the other hand they are part of a joint family system they eat from the earnings of other and do not share their own. In most of the homes the most elder guardian of the family ( may be a grand father or most elder brother) is responsible for all sorts of expenditures of the home which includes all sorts of bills, monthly fuel consumption expenditures and monthly food consumption items in addition also responsible for educational expenditures of various children in the home. In this way a burden crossed the limits on one individual of the home. Therefore after retirement or expiry of such a huge supporting guardian then whole family split in neutral families as a result of lot of disputes. That’s why now various families prefer to settle in neutral families before such a bad end.

Thirdly; division of household tasks or we can say division of labour within home also increasing disputes and argues and they mostly emerge between women of the family. Because most of domestic tasks performed by females of the family. In eastern families mostly daughters in a law (wives of sons) are responsible for all work. Sometimes disputes occur between these daughters in law on the division of household tasks that is cleaning, washing, cooking, and dealing with children, husbands and parents in law. Most of the families in Pakistan and India do not like to involve their unmarried daughters in household tasks and therefore these girls also become burden on daughters in law of that family. In addition such girls become lazy and irresponsible and when these girls become married themselves they become unable to tackle with various responsibilities immediately after marriage. Also daughters in law feel this very injustice and partial behaviors of the in laws and then it creates psychological dissatisfaction in the daughters in law which ultimately affects badly her children and husband. At various time married girls stir up to demand for separate home to live happy and independent with her children and husband and her this demand impacts the whole family badly and the crack occur due to such. Therefore now various families prefer to leave newly married couples independent before occurrences of such dispute in the family. And it looks more effective and good to minimize family conflicts and dispute and to make everyone responsible. 

Joint family system also creates problems in children rearing. As among various loving relations mostly it becomes impossible for parents to prohibit their children from various bad habits, improper attitude and wrong behaviors. Loving relations like uncles, aunties and grand parents do not like to prevent children strictly. They do not like to chide or rebuke their young grand children and hence they bring up in a wrong support of their loving relations which impacts their whole life badly and therefore they do the same wrong deeds in their mature life and hinder their own career and give loss to the country’s economy also. When little boys and girls groomed up in such an environment where there are people who support them for wrong deeds then become irresponsible individuals of the country who contribute to prevent developmental process. As these boys and girls also supported financially even after they completed their education careers and often at sometimes after they get married so they do not bother to work hard to overcome all their needs themselves also they can not decide well for their future life they are not mentally independent to put forward any step they are strictly dependent and are not able to decide according to the time. In this family system young boys and girls become too much emotionally attached with their families and they become unable to live without their parents and family away from home to work more in the current era of competitiveness. They mostly prefer to do jobs at low salary packages and less competitive environment in their own villages and areas to remain attached with the family. In this way there is a lack of passion for higher education and seeking advanced skills as they mostly available at big cities or abroad. 

Most of population of Pakistan prefers joint family system just because of their parents. This is because of Islamic teachings about serving parents in their old age with full responsibility and love. In case of nuclear family system the problem occurs for adjustments of old aged parents. In west this problem solved by making old houses but Pakistan cannot adopt this policy as it is against its religious teaching. Hence old aged parent’s rights should preserve within Islamic boundaries. Various joint families though that if they split in neutral families then any one of us have to take full responsibility of parents which at sometimes any single couple feels burden. But in various families a new system adopted that all brothers split in neutral families and parents live with that couple which they prefer themselves to live with permanently and visit homes of other sons frequently according to their will this system suits the parents too much and it is the true Islamic system. Otherwise in a joint family system sometimes parents feel insulting when they get expired to give more for family expenditures. As after the end of his financial contribution his participation in family decision also effected badly. There occurs a shift in power within the joint family system which disturbed the old aged parents too much. But in case of neutral family system all are independent in their own decisions so there is no shift in power happens. Also when the families separated in neutral family system then they become financially independent and at most time in such a system they attract their old aged parents towards them which make the parents also happy as they feel their importance within their children. 

Joint family system is successful in rich class of Pakistan but the boys and girls groomed out such family system are not economically fit for the country as they are highly pampered by their elders. Whereas in middle class families this system is going to be failed and a large change is happening now. And in case of lower class families this system is increasing more and more poverty due to its lots of drawbacks and shortcomings discussed earlier. I have gone through various articles regarding joint family system and while writing some of the authors relate neutral family system to western family system. Whereas neutral family system is a true Islamic system in which wife is responsible for taking care of his husband and children first and then parents in law if they are disable. It is not fair in our society to make a newly married girl responsible to take care of even young brothers and sisters of her husband. 

Being an Islamic country, people of Pakistan prefer to adopt Islamic systems in their life styles so it is important to inform Pakistani people that joint family system is strictly prohibited in Islam. It does not like mix living of girls and boys in a form of family. There are limitations by Islam to control unlawful intimate relations. Some families in Pakistan are use to live in Joint family system but trying to follow this religious tradition in wrong way. This creates a lot of problems in women’s life. Even in strict Islamic joint families (which are against to Islam) mostly males bound their females to their rooms only. They do not allow them to move freely in the home even in the loans of the home. In this way females are bearing too much problems in living freely. Therefore it is more effective to live in neutral family system to have obscure living style. It is really looking awful that a newly married young girl often have to take care of all sorts of clothes and other personals of young brother in law also. Which is totally wrong and unislamic tradition, even a son can not force to his wife for take caring of his parents.

Holy book, Al-Quran explains women duties towards husband in following verses;

 “O Mankind, keep your duty to your lord who created you from a single soul and from it created its mate (of same kind) and from the twain has spread a multitude of men and women” (Quran 4:1).

Again it is narrated in Quran

“He it is who created you from a single soul and made there from its mate, so that you might comfort in each other” (7:190).

These two verses of Quran clearly show that to each male Allah has created her mate and she is responsible only for her husband not for the whole family. Sometimes the age of brother in law is nearly equal or little less or more than the new bride and her responsibilities towards him often create misunderstandings in the couple. As on one hand new bride is responsible for all the family members in a joint family system but on the other hand loose talk with young brother in laws may create problems in her life with husband. When Islam is not allowing for co-education system, where male and female can take education in one place, then how can Islam allow for joint family system? In west now separate education institutes for girls and boys are preferred and establishing now, it is also basically an Islamic norm just like neutral family system.

While considering all above discussed problems we can conclude that joint family system increasing poverty in Pakistan by influencing directly or indirectly. This system exists in Pakistani areas before independence. Some of the experts relate this system as a heritage of Sub-continent. It is good to preserve patrimony but if any tradition cause problem and becoming unfit then it is certain to change it according to needs. Joint family system hinders various tracks towards development. It prevent the individuals to decide radically according to present competitive world, it abolish the women rights, it creates problems in preparing generation for the upcoming needs of the country, and its increases unrest and dissatisfaction of persons which disable them psychologically. Various developmental activities also hampered due to this system.

In 1983 a workshop conducted on a Methods of Measuring Intra-household Resource Allocation, funded by UNAID. In this workshop understanding intra-household issues, dynamics and related constraints make compulsory in order to achieve maximum positive outputs of developmental projects implemented in developing countries. Before implementing any project especially related to provision of micro credits or other income related projects, it is important and most effective to understand the family system of the particular locality. The project implementers should know that what are priorities of target families, how they allocate and distribute resources, goods and responsibilities and what are their consumption patterns among the members of their family. These intra-household variables are directly related to the overall social setup therefore if any organization tried to understand and improve intra-household issues at government level then it could inculcate and assist development projects to achieve maximum output. 

Government should put forward policies related to family systems so that people could be bounded to take care of rights of all family members equally. It should declare some packages for old aged parents and also for widows to make them economically strong and independent. Although government and banks of Pakistan have announced various financially supporting packages but unaware and rural population of Pakistan failed to understand the official process to access such facilities. Government should spread mobilizing teams to make them aware of these facilities. In addition such facilities are mostly difficult to avail due to attached conditions and constraints and also due to requirement of submitting huge amount of money at initial stage.  

In Pakistan lot of work have been started to eradicate poverty, mostly includes provision of education and skills, through both government and non-government organization. But on one hand to avail educational opportunities again there is a need of money as there is not provision of totally free education. People have to buy books, uniform and stationary also. Also there are transport expenditures to overcome. Hence there is a dire need to wipe deep social constraints in the society which also includes reducing trend of joint family system. It is important to provide financial security to old aged parents and pressurizing people legally to take responsibility of their parents according to their will and pleasure. Widows should especially offer for jobs to make them financially independent to overcome their personal expenditures including her children.

Any person could decide well for his/her future if he/she is totally independent in terms of finance, decisions related to expenditures priorities and about children’s future. If the financial and physical labour responsibilities at home divided equally in each family member through a neutral family system then it could enhance responsible attitude of individual towards society. Neutral family system could minimize pressure on women as number of males over her will be reduced, then she can decide about her life and career without any pressure. Neutral family system minimizes the number of argues by decreasing number of family members. This system empowers the persons more then in joint family system to think well and decide well. In neutral family system parents could give more time to their children and children will also find more time to share their worries and decisions. Little bit shortcomings of neutral family system could be overcome by adopting by effective policy measures that have suggested earlier related to old aged parents and widows. As neutral family system minimizes lots of social constraints that prevent the individuals to perform actively and passively towards development therefore it could contributes to lessen poverty directly or indirectly. 

A case study of Economic Development Agency (EDA) initiated in 1966 with $23 million, Jeffery L. Pressman and Aaron Wildavsky (1984) provide a critical account of the study of implementation and the challenges faced by this program and the underlying causes of the failure of this program. EDA was an agency established by the Congress which aimed at providing employment opportunities to minorities in cities. However, Oakland was chosen as experiment in showing how the provision of public works and building loans can provide incentives for employers to hire minorities (Pressman & Wildavsky 1984: xx). The project aimed at creating 3000 jobs for the Oakland’s Black-American minority basically. Although there was a high sense of urgency at the beginning of the project, but sooner, the doubts about the success of the program became evident.

Eugene Foley, the Assistant Secretary of Commerce for Economic Development, was the early initiator of the program who wished to initiate “a massive experiment in solving the principle urban problem, unemployment” in Oakland (Pressman & Wildavsky 1984: 2). He believed that the huge injection of needed funds ($23 million) was the most important component for the success of the project (though he resigned in 1966). After examining the “torturous course of the program”, Pressman and Wildavsky (1984) have given the account of frustrations of the program characterized by underlying reasons adding to frustrations and the “difficulties of translating broad agreement into specific decisions, given a wide range of participants and perspectives” (p. 6), blockage and delay, underlying economic theories etc. the authors point towards these “technical details” of the project which had to be worked out closely for the effective implementation of the project.

One of the characteristics of the program’s requirements was the compulsion for employers wishing to receive EDA business loan to draw up an employment plan specifying how these companies would hire the long term unemployed Black residents of Oakland. For this purpose the EDA was required to work in collaboration with other local, state and federal agencies for creating training program. This added to the complexity of joint agreement between broad number of actors who further diverge in mutual consensus, sense of urgency and levels of priority. This accounted for the unanticipated consequences which interfere with effective implementation. Pressman and Wildavsky noted that “when perspectives differ, so also do measure of success” (p. 98). As for instance, the job creation for blacks was the main goal and criteria of success for the original EDA leaders, while the criteria was different for other participants of the program; the expansion of its facilities was the main objective of the Port of Oakland; on the other hand the Department of Health, Education, and Welfare was forcing for increased funding for its established skill centre.

There were 30 decision points identified by the authors who stress that there was a time at which one or more participants had to reach agreement before the project proceeded. For this purpose, 70 agreements were needed by various stakeholders. Hence the authors concluded that if the probability of agreement at each clearance point were 0.99, the probability of success of the whole project would be less than 50%. It the probability of agreement was only 0.09 at each clearance point, then the probability of success would drop to barely one percent (p. 108). The authors contend that to minimize the chances of delay and divergence of interests, the “essential policy problem is how to provide incentives to change low to high intensity or more accurately, how to maintain high positive intensity through the lengthy delays” (p. 120).

They also discussed the change of intensity of commitment by pointing the change of officials at different stages, as for instance, Foley was a very passionate about the program who was replaced (due to his resignation) by officials who had far less intensity of commitment to the project. Linking policy formulation with implementation is important for the successful implementation without delays; “although those who design programs might not generally enjoy the less exciting work of directing their implementation, a realization of the extent to which policy depends on implementation could lead such people to alter their own time perspectives and stay around for the technical details of executing a program” (Pressman & Wildavsky 1984: 146). By explaining the reason for delay, they argue that consensus between several decision makers is difficult to achieve due the bargaining between administrators and stakeholders. The problem is not the “no” at any decision point by the decision makers, but the challenge is achieve the “yes” of several actors.

The writers also contend that “the use of resources is a direct function of intensity of preference” (Pressman and Wildavsky 1984: 117). The desired outcome is easy to achieve if the intensity to achieve the outcomes is high and vis-à-vis. Pressman and Wildavsky (1984) also spoke about the importance of bureaucracy is to ensure a “high probability that each and every actor will cooperate” (p. 132). Similarity of goals and objectives is very imperative. By coordination, the authors mean that it is about the “ability to enforce agreements on employers when you are unable to do so; compelling federal agencies and their component parts to act in a desired manner at the right time, when achieving this purpose is precisely what you can not do” (Pressman & Wildavsky 1984: 134).

In essence, EDA’s Oakland project, which was basically an urban development agency, has shown that “implementation should not be divorced from policy” (Pressman & Wildavsky 1984: 143). The EDA project was initially seen as not very complex; as all the goals were set and funds committed but the complexity and multiplicity of several actors, agencies, bureaucracy, firms, and other stakeholders had added to the complexity, delay and failure of the project. Hence, the major problem is to make implementation problems as part of initial policy formulation process. “Implementation must not be conceived as a process that takes place after, and independent of, the design of policy” (Pressman and Wildavsky 1974: 143).

Reference:

Pressman, L. Jeffrey & Wildavsky, Aron (1984) “Implementation: How great Expectations Are Dashed in Oakland” (University of California Press: London)

Entry of private insurance players has brought alternative distribution channels to suit customer’s needs.  Today’s interface between the customer and long-drawn meeting with the insurance agent no longer characterize the insurance company.  New companies are emphasizing on speed, convenience and ease of transactions.  At present insurance sector is expected to be sold just about anywhere.  This paper deals with Life Insurance of present future trend and issues. The insurance sector is set to see a sea change in the way business was traditionally done, with new innovative products, distribution network etc.  Changes in the external environment for the life insurance market will have to be suitably understood in order to avoid excessive selling & mis-selling out of over enthusiasm. Insurance sector is now experimenting with direct marketing plans to attract the attention of customers.  Internet and direct mailers are the easiest ways to reach the consumers.  The future of insurance depends upon the company’s ability to create more innovative, novel way of distribution & channel systems so as to reach and match the customer’s expectations more effectively.

Although different sectors of the economy do not grow in isolation and contribute to each other’s development, yet the development experience in both developed and developing economies disclose that as the economy progresses, the service sector assumes a prime role and its share in the national income rises.

The financial sector constitutes one of the foremost apparatus of the services sectors, and within that sector, insurance services assume vital significance.  The role of insurance services in contributing to the course of economic development has not been properly valued in economic text.  While a large number of studies and research material are available on the role played by other services such as banking, transport, communication, public administration, defence, etc. in accelerating the national income of an economy, there is a dearth of material on inter linkages between economic  development on the one hand and insurance services on the other.

CONCLUSION

The main objective of this paper is to make the participants familiar with the role of insurance in economic development and to expose them to the major issues concerning the role of insurance in developing countries in general and India in particular.  The paper also attempts to evaluate the insurance penetration achieved in the country as compared to world standards and traces further scope for this sector as a facilitator for economic and financial development of the country.

In this article I have tried to analyze the concerns of India by evaluating the costs of reducing Carbon emissions and the costs of not reducing Carbon emissions, and base my conclusions on the differential costs between the two. To reiterate I am considering the following costs:
1. Costs incurred for Not reducing Carbon emissions – CN
2. Costs incurred for Reducing Carbon emissions till 350 ppm – CR
Comparing the above two costs If CN > CR Then reducing Carbon emissions would have a negative impact on India’s Objectives of development and eradicating poverty
Else If CN < CR Then reducing Carbon emissions will have a positive impact on India’s objectives and India should aim at reducing Carbon emissions.

1.Costs incurred for not reducing Carbon emissions – CN

According to a study released by the group Economics of Climate Adaptation – ECA [Swiss Re, Mckinsey & Company, ClimateWorks, the European Commission, Rockefeller Foundation and Standard Chartered Bank make up the ECA working group] under climate change scenarios, the climate related disasters can result in 9-13 percent of loss of India’s GDP by 2010 and 19% loss of India’s GDP by 2030. Accordingly the Costs for not reducing Carbon emissions till 2030 i.e, CN is 19%. However there is a potential for this loss to be increased as the long term effects of climate related disasters are serious on the economy.

To examine how much loss a natural disaster may cause, let’s take a case study of the floods that recently hit North Karnataka in October 2009, and examine the losses incurred as a result of the disaster. This would give us an idea of the approximate losses that would incur if a natural disaster of similar severity happens due to the climate changes resulting from not reducing Carbon emissions, which could have been avoided otherwise.
Following are some of the significant losses caused by the floods: >> 194 people died
>> 10 million homeless. This means that the Govt had created 10 million poverty people at an instant by letting the disaster happen.
>> Losses totaled to 18,000 crore, according to the State government estimates
>> State govt sought 9,000 crore flood relief from the Central govt.
>> State demanded for the release of 1.5 lakh metric tonne food grains under BPL rates for the affected people
>> 25 lakh hectares of crop area affected. This amount of land would not be productive for a few months which is a Loss. The investments in terms of labor, resources, subsidy provided by the govt on fertilizers from citizen’s taxes are totally wasted, A  very big loss again.
>> Supply chain disruption. Industries, Businesses, Prices, Markets in other areas which  were reliant on the flood hit area are affected. The standstill region wouldn’t be able to supply any goods or services which it was supposed to, to other businesses.
>> Inflation figures during this period.
Vegetable prices up 50%, potatoes up 81%, sugar up 44% and rice up 19%. Food prices were more broadly up by 16% compared to the previous year. Although floods weren’t the only reason, they were significant in contributing for rising Inflation.This is a serious impact. Higher inflation would reduce the buying power of people and would create more poverty
>> The state’s machinery and resources are dedicated for flood relief works which would  have otherwise been dedicated for other Productive works
>> Chances of spreading of epidemics are very high. More spending on health.
>> Affects both the physical and mental health of the people in the flood affected region. The implications of this are very serious.
>> Job losses
>> The list runs

All the above effects which would be caused because of ignoring the climate change disasters have eventually resulted in hampering development and creating more poverty which would have been avoided otherwise.

2. Costs incurred with spending on Reducing Carbon emissions – CR

There will be some significant costs associated with spending (or rather investing) on reducing Carbon emissions. The following are the areas where the government has to chiefly spend if it makes a commitment for Carbon emission reduction.

1. Spending on newer energy resources
India should start spending (investing) in newer energy resources which are more energy efficient so as to reduce it’s over dependence on burning of fossil fuels like coal which is less energy efficient and results in more Carbon emission.

2. Spending on building more energy efficient products
This would apply to a wide range of products from almost every sector.India needs to build Energy efficient engines, Energy efficient commercial and residential buildings, Energy efficient transportation of all forms, Machines and Technologies that enable energy efficiency.

3. There would be costs incurred due to reduced economic development taking into consideration the reduced economic development taking into consideration the factors such as unemployment, Industries spending on equipments, technologies for reducing Carbon emissions, policies, administrative and legislative costs and more

So what would be the likely total cost for accomplishing all the above stated spending at reducing Carbon emission?
Unfortunately as of now [5-Dec-09] I have not been able to find any data released by Indian govt about the costs estimates for reducing its Carbon emissions. I urge the Govt of India to release its estimates for costs associated with reducing Carbon emission at a particular target.Had this been released our work would have been easier. But that shouldn’t stop us from continuing further as the cost estimates on reducing Carbon emissions are available from many other sources. Various academic and research groups like Economics for Equity and Environment network (E3), groups from European universities have tried to estimate the costs for attaining emission reduction till 350ppm. One group starts from the (realistic) assumption of high unemployment, and finds that long-run employment and economic growth would be increased by a program of public investment in green technology and emissions reduction that leads to 350 ppm. The other three groups adopt the common assumption that short-run unemployment can be ignored in long-run models. They generally find that the needed emissions reductions will cost an average of 1 to 3 percent of world economic output, for some years to come. Studies from other groups such as Greenpeace, Union of Concerned Scientists (UCS) have arrived at more optimistic estimates where the savings from fuels would be more compared to the spending. They assume high oil prices at 140$ per barrel (Greenpeace). Now considering Mckinsey’s estimates (Non conservative and pessimistic compared to the estimates of Greenpeace and UCS), it would cost 2.3% of India’s GDP to halve the Carbon emission growth by 2030. Hence the Costs for Reducing the Carbon Emission – CR would be 2.3% of India’s GDP.

Comparison of the Costs between reducing and not reducing Carbon emissions

As already reasoned before, the value of CN is 19% of GDP and the value of CR is 2.3% GDP. The Difference Costs of CN and CR = 19 – 2.3 = 16.7 % of GDP
India would actually save 16.7 % of GDP subjected to the reasons presented above if it aims at reducing Carbon emissions. These savings can eventually be used for economic development and reducing poverty. The earlier reasons from Indian govt that reducing Carbon emissions would reduce economic development and increase poverty would hence needs to be strongly suspected.

According to the 2006 military data released by Central Intelligence Agency [CIA, US], India’s military expenditures cost 2.5 % GDP annually. These military expenditures are effectively the safety needs of the country to protect the citizens from deaths and losses.If the climate changes are allowed by not reducing the Carbon emissions, the resulting climate change disasters would eventually lead to more deaths and homeless people. This is indeed a basic safety and physiological need for the country. The costs for mitigating this is spending on reduction of Carbon emission [ CR ] which is 2.3 % of GDP. Comparing the Annual 2.5 % GDP costs on military expenditures with 2.3 % GDP costs till 2030 for the safety needs of similar importance, the spending on Carbon emissions looks very meager. Again India need not bear all the costs [ 2.3% of GDP ] for reducing Carbon emissions alone. India can actually make a case for contributions from other developed nations. India has now started pressing the developed nations for contributing 0.5 % of GDP to fund its costs.

Based on the reasons presented in the article, I conclude that India should target for reducing Carbon emissions so as to pursue with its objectives of economic development and eradication of poverty.India should focus on building newer energy sources and energy efficient products towards its pursuit for greener world. I hope to see a positive move from India towards this end in the Copenhagen Climate Conference.

Global warming Skepticism
With the leaking of emails and the documents from the Climate Research Unit (CRU) at the university of East Anglia, UK the skeptics of Global warming who are arguing that climate change is not man-made have found new reason to support their claim. What if the skeptics were right? Should India be not bothered at all about reducing carbon emissions? Watch out in the next post.

The trio of social, economic and political development requires striking a balance and prioritisation of goals. An essential knowledge of these three forces is imminent so as to focus on achieving and accomplishing envisaged results. One of the most important is the abundance of food in an optimal, sustainable manner and must come first which should serve as a driving force to advance further to strategic thinking for problem solving at higher levels. The use of focus groups is a very viable way in this respect. The positive understanding of associated connections between economic conditions and social development, economic power and political power, and between economic life and intellectual life-the practical and efficient use of political means to achieve economic ends is significant if, balanced with foundation theories, targeted at growth and prosperity with respect to realities and peculiarities of the environment in a gradual, organic pattern relative to specific indices, environments.
A case in point is China’s paced achievement through a period of sixty years from the Cultural Revolution era to modernity spurred by the reforms of 1978, to bring rapid development and prosperity to her large population. Theirs has been phenomenal-achieving a global position of fourth in gross domestic product, third in trade volume as well as first in foreign reserve rankings respectively! The fundamental catalysts for this dynamic success need be replicated by all nations and individuals, businesses likewise that desire and aspire to reach greater heights.
A gradual, constructive application of critical factors and specialized knowledge, always delivers astounding results in generic as well as specific cases. For example, China found the best route with Chinese characteristics distinct from others and gravitated on stability and continuity of policy, using five year target plans as a blue print for economic development coupled with opening up to other countries for cooperation -with self reliance as a pivot point. Through these, a quantum leap with advanced silver lining for the future has been made possible.This also holds true for countries like Brazil, Malaysia and Singapore. Individuals and small, corporate businesses can also replicate these feats in like manner. Indeed, the periods of backwardness can and should be transformed in a strategic, customized approach thereby skipping rut stages that are not necessary by minimizing the time frame but in a sustainable, practical way.
In the case of nations, many are centuries behind without necessary acknowledging or understanding that fact and must get all the ingredients necessary to evolve from the alien state to an attainable, contemporary development status like developed nations. There is a lot of fake development going on in many sectors which in real terms is nothing short of a mirage, exhibited by bind imitations, consumerism and the like which doesn’t necessarily constitute real development. Failure to consider these factors always manifest in apparent short gain and long term downfall.There is a lot of evidence to prove this.
The economic giants passed through stages of evolution from the medieval periods to modern times via a conscious but slow process, step by step, progressed with all the intricate inter-relationships and baffling complexities. Others can however attain and even surpass by applying all relevant techniques efficiently- easier, using unbiased information and constructively too. It is a question of how to..The knowledge is the potential power while the positive application thereof provides the enzyme for success-from the generic concepts through the scopes of training and development, planning for sustainable development, leadership development, career path development and action plan development.
Economic development being all encompassing requires all essential components for success without exclusion. The right orientation, focus, determination for goal actualization and success are imminent coupled with the right attitude, behavior and personality traits, and discipline and requisite values. So, the bottom line is for all out there to be pragmatic and utilize the available resources with the key resource being the intellect of manpower. Motivation, inspiration and positive dynamic influences play a vital role by using the right tools in an articulate and scientific manner.
Anyone can be a winner just like any nation can be a giant. Envision-imagine it, work it out and you are there. The world is yours. Get and be the best you rightly deserve to achieve prosperity with purpose. See you there!

Over the past decade, a powerful private sector funding trend has emerged.  Forward-thinking and successful chambers across the country have increasingly moved from an annual membership model to a multi-year investor-based approach when it comes to funding their economic development programs.  In doing so, these leading organizations have dramatically increased funding levels, developed more engaged volunteer leadership, begun generating greater long-term benefits for their communities and, in general, become more focused, measurable and accountable.

The membership model typically charges annual dues at specified levels and is certainly appropriate for funding general membership services.  Its implication is that the business will have joined an organization, will receive services in exchange for the dues and will be supporting a worthwhile mission.  That’s perfect for typical chamber activities.  But for major special initiatives like long-term economic development programs, a campaign to secure long-term investors makes more sense.  Funding levels through membership dues are naturally limited.  Companies do not generally want to pay the kind of big money necessary for successful economic development when it is couched as dues for belonging to an organization.

A membership model of funding not only limits initial funding levels, but can constrain an organization’s ability to significantly increase funding in the future.  Increasing funding this way can only be done in small increments.  Most members will balk at paying a dues invoice that doubles or triples their current rate.  However, many businesses have enthusiastically increased their funding commitments tenfold or more through an investor-based funding campaign.

An investor-based model of funding is clearly more effective.  Organizations taking this approach first develop a long-term, comprehensive program of work.  They identify specific, measurable goals and then determine the projected economic impact of attaining those goals.  As part of a well-planned, well-organized and professionally implemented funding campaign, the organization secures large multi-year investments in the program.  The businesses in turn are able to hold the organization accountable for long-term goals and to reap the benefits of a tangible return-on-investment (ROI).

This approach resonates with business leaders.  It produces a mentality conducive to much more substantial funding.  Business leaders become more engaged, taking ownership of the program as invested stakeholders.  The program becomes more focused and better funded, ultimately resulting in greater community impact.

The transition from a membership model to an investor model requires much more than merely changing labels.  It is a major undertaking that sets the organization and the community on a bold new path to success and prosperity.  If done right, the results can be stunning.

I have seen many times just how dramatic this transition can be.  As one example, an economic development campaign in Florida attained unprecedented results by adopting the investment campaign model under my direction.

The organization previously had been asking companies to pay annual dues specially designated for economic development ranging from a few hundred dollars to $12,500.  I worked with the organization to develop a four-year strategic plan with a specified budget and measurable goals.  We secured sufficient four-year funding to implement the program by making customized investment proposals to major businesses in the region and projecting individualized ROI.  Previously, the most anyone had paid over a four-year period to the economic development fund was $50,000 ($12,500 annual dues over four years).  With this new model, we ended up with several dozen pledges between $100,000 and $500,000.  Moreover, we substantially broadened the economic development program’s base of support and ultimately secured about $18 million in total four-year public and private sector funding.

Experience in many similar instances, with organizations and communities of all sizes, indicates that businesses across the country are willing to provide substantial funding for multi-year community initiatives that are well-defined, bold, strategic, focused, relevant and measurable.  Businesses find this kind of investment much more compelling than merely providing financial sustenance to yet another needy organization.  Once an organization is able to position program investment as a good business decision, we find that it can tap into the much vaster resources of corporate business development and marketing budgets, as opposed to the more limited membership and contributions budgets that every community organization and cause has their eye on—and which is already funding regular chamber membership.

While launching or transitioning to an investor-based model of funding consistently yields impressive results, it can often seem to be a daunting task. That’s why most chambers that have done so successfully have relied on firms such as Sage Fundraising Solutions to manage the process.  Organizations with vision and ambition recognize that by enlisting help to launch a bold new funding initiative they can greatly increase their budgets, expand their programs, address new challenges and opportunities, fill unmet needs, and ultimately create far greater prosperity for their communities.