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How can innovations for the circular economy in The Netherlands be promoted?
The Dutch policy program “From waste to resource” aims to develop a circular economy. An important tool in this program is to stimulate innovations. This project assessed the technological innovations for three sectors (plastic, electronics and electronic appliances, and building) that are needed to further develop a circular economy, and the financial instruments that the Dutch government can use to promote these innovations. It provides recommendations on the optimal use of current and possible new instruments.
Key findings of the research can be summarized as follows:
- Improve the communication on existing instruments that can be used for stimulating the circular economy. Increased familiarity with the instruments can increase their use and impact.
- Aim the used instruments more at circular business models and social acceptance. Stimulating technical innovations will not succeed if there is not sufficient public support and financial benefits for circular business practices.
- Define clear quantitative policy indicators for the circular economy. It remains unclear what criteria must be fulfilled and what degree of decoupling resource use from economic activity should be realised.
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Congratulations on your choice to start using solar panels. Solar power is an excellent way to save money on your bills and saving the environment. The information that follows can give you advice when dealing with regards to solar energy.
Your solar power system’s ability to produce power depends on several factors, such as the efficiency of the panels and how many you purchase. Calculate how many you need. If you can use less solar panels, think about buying the higher performance panels.
To gain more from solar panels for a business or home, opt for installations that are independent of the sun’s movement. This is helpful if you use lots of power in your home at nighttime.
Start out small when you begin using solar power. There are outdoor lights that are completely run on solar energy. You can find these at most major retailers. They are as easy to install as any other garden light.
You can do your part to save the environment by using solar panels to heat water. You can choose from several different option for solar heated water. You can install one in a location with full sun.
In order to maximize the potential from your solar panels, try and find a system that doesn’t directly rely on the schedule of the sun. More recent solar panels can gather energy from the sun and allow you to use it whenever you would like. If you use a lot of energy at home in the evening, this is a good thing.
If you are thinking about leasing solar panels, make darn sure that you can transfer your lease if need be.
You don’t have to worry that you’ll be tearing up your whole roof if you decide to use solar power. You will need to start with the outside lights and replace them with solar powered lights. These lights stay on all night and then recharge the following day.
Purchasing solar energy systems can save money, but keep in mind that they are a long-term investment. Solar panels represent an important financial investment and it could be years before your equipment is paid off. If you’re not prepared to settle down, solar panels probably aren’t the best decision.
You should consider investing in solar energy if you are interested in long-term investments.Solar panels represent an important financial investment and a long-term investment. You need to make sure your financial situation is stable before you invest in solar energy only if you’re settling down.
If you’re thinking about investing in a solar power system, stay away from high pressure salesmen. Know what you’re looking for before ever setting foot in the shop. A high pressure salesperson can make you make a not so great choice and end up wasting your money.
Don’t give in to a high pressure sales pitch when you anything. You need time gathering information together in order to make a good choice. Buying on the spot from a high pressure salesperson may result in making the wrong decision and importance of your hard earned money.
If you have installed solar panels, check the inverter regularly. Look to be sure that the indicator light is solid green. When blinking, you will need to call someone for a fix. Diagnosing a solar panel issue is generally outside the expertise of owners. If your solar energy system has a good warranty, your service visits should be included.
Crunch your numbers before investing in solar energy. Depending on your location, solar panels may be too costly when you consider the overhead costs mixed with the potential output.
When you want to start small, begin with a solar attic fan. The fan will have a temperature sensitive gauge and switch itself on when necessary. This can help reduce energy costs by removing heat. As a bonus, being solar powered, it will not add to your power bill.
It is best that you purchase a solar panel system after you have already paid off your home. If you are currently making payments, you are just adding an additional monthly cost which could put you in serious financial trouble.
Check the inverter frequently if you add solar panels. You should see a solid green light that is not flashing. Call a professional if you see some blinking lights or off. Most people do not know how to troubleshoot problems with solar panels.
Make sure you have realistic expectations about your water heater system that uses solar power. While they do produce some energy savings, even the most efficient only use one third less energy than convectional water heaters. Early morning showers are not necessarily going to be freezing cold. Water that is heated by the sun should maintain its warmth for a full day.
If you’re still paying off a mortgage, you may be taking on too much by purchasing a solar energy system.
Get your set-up checked twice yearly. Your solar technician will examine connections and readjust the angle of your panels for the best performance of your system.
Regardless of the system you choose, it’s important that the panels always face towards the sun.
Before purchasing solar panels from a company, do a background check. You’ll want use a company that will still be in business 20 years down the road. You want this for the sake of warranty coverage so that you know you can get replacement panels if needed.
Change the angle of your solar panels with the seasons; ideally, or four times per year.The amount and direction of sunlight changes with each season. When you take care to adjust your panels accordingly, you ensure that they are running as efficiently as possible throughout the year.
A sun tracker will increase your ability to capture solar energy. This can adjust the solar panels automatically for the best angle. This device is pricier than standard solar panels, but they will pay off in the long run.
You should avoid putting your weight on a solar panel. If you have to walk over your panels, then ensure you do not walk on their ends because the ends are the most fragile parts of solar panels.
Grid tied solar systems can help you realize even better savings. Using a grid-tied system allows you to sell extra energy that you do not need back to the power company. Doing this can help you offset installation costs and it’ll pay for itself much quicker.
A sun tracker can be the most efficient way to get the greatest amount of solar energy. This device will automatically adjust your solar panels so they always get the maximum amount of sunlight. Though they cost more than fixed panels, the energy increase will outweigh the cost.
When you pay a lot for power and yet you get tons of sunlight every day, solar energy is for you. In this case, your investment in purchase and installation will be well worth it.
Solar panels are responsible for much more than provide light. Solar power can also heat your home and your water as well. This means a solar system can lower your overall electric bill. the cost you pay on your electricity.
Do some investigation on the space you have and how much sunlight you receive before picking out panels. You need to invest in a solar energy system that is adapted to your needs and location.
Remember that solar powers don’t need not go on the roof. Using adjustable mounts and also tracking systems can help you get more exposure than regular mounted options.
Check the solar panels regularly for best results. Solar energy panels don’t need much maintenance, but you should still check them to be sure they haven’t been damaged and aren’t dirty. You do not want to find out something is wrong when you get a huge energy bill.
Think about installing a grid-tied solar panel system to boost financial savings. This should help you offset expensive installations costs.
Hoses are a good option for cleaning solar panels. Clean your panels once a week to keep them free of debris at all times. Also, you won’t have to worry about scratching your solar panels either.
Clean your panels by rinsing them off with a hose. Doing this once a week means you avoid climbing on the roof to clean the panels. It will also keeps the panels without having to worry about scratches.
Look into leasing your solar panels. Leasing the solar energy system can help you enjoy the benefits of the system, while slowly putting money into a permanent system. Leases are more frequently available today, allowing you to get the solar panels you need for less.
There are products available to help you can use to quickly clean off your solar power system. Nano-cleaning products will get your system clean systems without using solvents being used.
If you own a pool or hot tub, you might want to get a solar water heater. This type of system gathers heat from the sun in conjunction with energy from the sun to heat and maintain the temperature of your pool and hot tub.
This can let you achieve your goals without a lot of maintenance.
Solar panels must be kept clean. You might have to hose your panels on a weekly basis if you live in an area where dust might cover your panels. Regardless of air born dirt and dust, you should do a through cleaning every couple months. Keep in mind that the cleaner your solar panels are, the more sunlight you will absorb.
When you are installing solar panels, be sure and keep the batteries close to the solar panels. When kept far away, you’ll find a lot of energy is lost.
By now, you should be convinced that investigating solar energy is worthwhile. Solar energy helps save you money as well as significantly lowering the amount of pollution that impacts the environment. These are three key reasons why you should make the conversion.
Your solar panel vendor’s reputation is key. Check online reviews, references and BBB ratings. If the reviews are bad, then the deal probably really is a “steal”.
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Customers of a small bank in West Virginia recently discovered that their accounts are now under different ownership.
In early April, the Federal Deposit Insurance Corp. (FDIC) closed the First State Bank of Barboursville and allowed another institution to acquire its branches and deposits. The First State Bank is the second bank to fail in 2020 and the first to shut down amid the coronavirus pandemic.
The bank failure comes at a time when the economy — which had been expanding for over a decade — is headed in the opposite direction.
As consumers cope with surging unemployment and other major financial strains, many are wondering whether the money in their bank accounts is safe. The months ahead will likely be rough, but banks are more financially healthy than they were during the Great Recession. And as long as deposits are federally insured, bank customers have little to be anxious about.
Lessons from the last financial crisis
The trials U.S. banks faced during the 2007-08 financial crisis are a not-so-distant memory.
Economists say the problems began outside of the traditional banking system with the rise of so-called shadow banks, institutions that borrowed, invested and engaged in other activities like banks without being subject to the same rules. When they ran out of the funds needed to continue, they didn’t have the Federal Reserve to fall back on.
Meanwhile, commercial banks bought risky mortgage-backed securities and repackaged pools of loans to sell to other investors. Bank balance sheets were filled with certain loans, including residential construction, land and development and commercial real estate (CRE) loans, said Carl White, senior vice president of supervision at the Federal Reserve Bank of St. Louis. “Banks with lower concentrations of CRE loans tended to perform better than highly concentrated ones.”
Tim Yeager, a professor at the University of Arkansas, also recalled in a recent report that the community banks most impacted by the financial crisis were those with many customers who had taken on construction and land development loans, particularly in bigger, urban portions of the country.
Dealing with bad loans became a problem when consumers who couldn’t repay what they owed left banks on the hook for the defaults. Banks used their own capital to cover loan losses and were then more hesitant to lend money to other banks.
The result? Ultimately, many banks failed, with more than 300 shutting down between 2008 and 2010.
Today’s banks: more regulated, better prepared
The current banking system is less fragile than before. With the Dodd-Frank Act in place, banks have strict guidelines designed to help ensure the mistakes of the past won’t be repeated.
Banks haven’t been fond of tougher regulations. But some provisions — like expectations for big banks to be well-capitalized — are proving to be useful.
“They may or may not admit it that way, but I’m sure they’re almost grateful that they were required to hold this level of capital because they’re able to enter this new crisis in far better health,” Yeager says.
Yeager, a former economist at the St. Louis Federal Reserve, created a stress test model and used it to predict how community banks could fare in a coronavirus-fueled crisis, assuming they experience the same losses today that they did between 2008 and 2012. He and a doctoral student concluded that the financial shock from the virus could be more intense initially, possibly resulting in more bank failures relative to those that happened early on during the financial crisis. That’ll likely change, though, over time.
“Banks, however, weather the COVID-19 scenario much better than the financial crisis scenario over the five-year horizon because the economic recovery is much quicker,” the report says. “Just 68 banks (1.5 percent) are projected to fail by 2024 in the COVID-19 scenario, but 237 banks (5.3 percent) are projected to fail from the financial crisis scenario.”
The outcome could be different of course, considering that the same loans that were problematic during the last recession may not be as much of an issue today. Yeager points this out, noting that the excessive amount of debt households and firms are carrying leaves our economy vulnerable to financial shock. Liquidity is also an issue, he says.
“I have a suspicion that just kind of is lurking that our financial system is vulnerable to liquidity runs, not bank-centered, but it will affect the banks,” Yeager says.
Consumers have little to fear
Banks will struggle to an extent as a result of a COVID-19-triggered downturn. Community banks — which Yeager notes make up 95 percent of the banking industry — are mostly in good health but are in a riskier position than the country’s regional and biggest banks. Overall, the outcome shouldn’t be nearly as bad for banks this time around, even if economic conditions return to where they were in 2007 or 2008.
“They’re not going to have good profits, they may have to cut dividends and they’re going to suffer a lot of losses,” Yeager says. “But I don’t think that they’re going to be threatened with insolvency the way that they were during the financial crisis.”
One bank may have failed so far, but bank customers have little to worry about.
“The bank that failed did not fail because of the coronavirus,” says White from the St. Louis Fed. “It was a problem-bank long prior to the coronavirus pandemic, and happened to be closed by regulators during this crisis.”
Consumers with funds in a federally insured bank should have few concerns, even if their bank closes down. Insured funds are safe regardless of what happens. If your deposits exceed the $250,000 limit, opening a savings or checking account at another bank or credit union backed by the FDIC or the National Credit Union will provide the protection you need.
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BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
If the oceans continue to warm at a predicted rate, financial losses caused by hurricanes could increase more than 70% by 2100, according to a recent study.
The study, co-authored by David Rosowsky, a civil engineer at the University of Vermont in Burlington and the university’s provost and senior vice president, said the calculation is based on warming trends predicted by the Intergovernmental Panel on Climate Change, a United Nation-sponsored group that assesses climate change research.
“The heat in the ocean is the fuel for these storms,” Mr. Rosowsky said, “what causes these things to strengthen is warmth.”
The study did not find that warming oceans will lead to more frequent hurricanes, he said, only that warmer seas will lead to higher wind speeds and storms that are greater in size, and therefore cover a larger area.
“What we’re finding … is that the storms are getting bigger,” Mr. Rosowsky said. “It’s less that we’re seeing a big increase in frequency, it’s just that these storms are more intense, which means they have higher peak wind speeds and they’re larger, which means they cover larger areas. So you can appreciate as we look at more, larger storms, we have more of the built infrastructure inventory is exposed and at risk.”
The losses are calculated based only on wind and wind-driven rain and do not include the large financial impacts of storm surge or flooding, according to the report.
The results of the study, which focused on 13 coastal counties in South Carolina located within 50 miles of the coastline, are drawn from a model simulating hurricane size, intensity, track and landfall locations under two scenarios: if ocean temperatures remain unchanged from 2005 to 2100, and if they warm at a rate predicted by the IPCC’s worst-case scenario.
Under the 2005 climate scenario, the study estimated that the expected loss in the region due to a severe hurricane — one with a 2% chance of occurring in 50 years — would be $7 billion. Under the warming oceans scenario, the intensity and size of the hurricane at the same risk level is likely to be much greater, the study found, and the expected loss figure climbs to $12 billion.
“Now what we have,” Mr. Rosowsky said, “are huge existing inventories of structures that weren’t designed for the kinds of wind speeds that might be projected by these hurricane hazard models that take climate change into account.”
Joel Scata, Chicago-based attorney with the water program at the Natural Resources Defense Council, said he “would agree overall with the conclusions that climate change will affect the intensity and severity of hurricanes, especially the damage caused by hurricanes.”
Mr. Scata said the combination of climate change and increasing coastal development will result in more hurricane damage in the coming years.
“The increase in sea surface temperature helps fuel higher-magnitude hurricanes,” Mr. Scata said, “but increases in sea surface temperature also result in sea level rise, which means that less destructive storms — smaller hurricanes — can have a bigger punch because storm surge can go further inland on a higher sea level.”
Mr. Scata said a 2016 report by the Congressional Budget Office concluded that that, over time, the costs associated with hurricane damage will increase more rapidly than the economy will grow.
Mr. Scata called for reducing greenhouse gas emissions and trying to adapt to the impact of climate change, such as making building infrastructure safer and smarter and designing it so that it’s capable of withstanding the larger storms that are predicted to occur.
The electric grid is one of modern society’s most critical infrastructure systems, but it is also one of the most vulnerable, Swiss Re Ltd. said in a report issued Tuesday.
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Energy | Renewable Energy Certificates
Renewable energy certificates that give you an opportunity to offset the carbon monoxide emissions produced from driving your car–a key cause of global warming and source of toxic air pollution. Your purchase of a certificate, appropriate to size of your car, reduces the environmental impact of your driving by funding clean energy projects that directly offset your car’s carbon emissions. Priced from $29.95 to $79.95 per year. Certificates are printed on recycled paper and come with a static cling decal for your car.
Renewable energy certificates utilizing a blend of energy from solar, wind, and biomass.
Renewable energy certificates using 100% wind energy.
A voluntary certification program for renewable electricity products. It sets consumer protection and environmental standards for electricity products, and verifies that Green-e certified products meet these standards. Certified products may display the Green-e logo. Click on “Your Electric Choices” to find out where to purchase green energy certificates in your state. This user-friendly site has lots of information on the health and environmental effects of non-renewable energy, and a great dictionary that defines all the confusing energy terms.
Renewable energy certificates using 100% wind.
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Kim Park a
This case talked about Kim Park tries to investigate the accounting principle of long lived nonmonetary assets. While we try to determine the difference in various situations, we also tries to focus on the reasoning and logic of accounting principle applied.
True Star Electronics Company
Now an entity can be either capitalized or expensed.
Capital expenditures (CAPEX or capex) are expenditures creating future benefits. A capital expenditure is incurred when a business spends money either to buy fixed assets or to add to the value of an existing fixed asset with a useful life …show more content…
A. Cost-based models:
(1) The historical cost model:
Pros: Captures all the cost related to recruiting, hiring, training, placing, and developing the employees. The employees are viewed as an asset rather than an expense, thereby reduce the total cost on the company's balance sheet.
Cons: As an intangible asset, there will be great disparities between companies’ books and the market value of the asset (employees) as this model relies on historical costs. In addition, this model only captures the cost of the employees, not the value they have for the organization.
(2)The replacement cost model:
Pros: Good for deciding whether to dismiss or replace the employees, as this model measure the cost of replacing employees. In addition, this model focuses on the services the asset will provide rather than the precise physical asset.
Cons: Cannot know what it costs to replace human capital, as there is no precise market value.
(3) The opportunity cost model:
Pros: Tries to reveal the market price of the employees.
Cons: Difficult to measure the value of human capital, also as the value will vary between different people. Also, it is easy to manipulate.
B. Economic value models:
(1)The firm value economic model
Pros: Focus on the earnings, and will reveal the earnings generated by the employees.
Cons: Difficult to measure. Importantly, difficult to measure the effects of the co-workers and team performance.
(2) The individual earnings
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Do you remember when your parents started talking to you about money? Whether it was because you got some cash on your birthday or you wanted an expensive new pair of shoes, you probably remember learning the basics of the dollar.
Talking to your kids about money is an important — and hopefully, ongoing — conversation that can help set them on the path to financial success. Children are perceptive and will quickly begin to pick up on how you handle money in your home. Having conversations with them early will help your kids understand healthy money management and form good habits, and there are some great ways to help them get started.
Why Money Matters to Kids
While you might be tempted to eschew conversations about finances with your little ones until they are older, starting early is best. The more understanding your children have of this universally important topic, the more comfortable they’ll be in the long run. Starting children off with a realistic, context-based, and accurate understanding of the value of money will help shape the basis of their financial knowledge, something that will be with them for life.
It’s probably pretty clear that kids will absorb any knowledge they can, especially when it pertains to things that they want. Most children are exposed to financial topics very early on in ways that might not be immediately obvious to you, and it’s easy for them to develop inaccurate understandings of how money works. Be transparent about your financial situation and experiences with your child, both the bad and the good. It’s better for them to know what’s really going on than to be in the dark, or worse, to misunderstand money.
Children are generally naturally impulsive. By teaching them to budget and delay gratification, you teach them life skills that extend beyond finances. These conversations are also tied to ones you should have about poverty and differences in income. Don’t shy away from these tough topics, as they’re also valuable to your child to understand and probably won’t be covered in school.
Start by setting good examples for your children. Your spending habits are subject to their scrutiny, even if you think you’re good at keeping them under wraps. In all financial conversations, context is key. Remember that children have a limited understanding of what cost means, so be sure to tie it all together so your child gets the big picture. Your kid might know that the shoes they want cost $50, but that doesn’t really mean anything unless they can relate that to the cost of dinner, a phone bill, or a car.
When to Start Talking to Your Child
The sooner you start having age-appropriate conversations with your kids about money, the better. Many experts say that it’s best to start talking to kids about cash by age 5. Once the topic is on your radar, it will become obvious how many opportunities you’ll find to talk to your child about finances. Grocery stores, the bank, and restaurants are all great places where your kids might tag along and where you can bring up the topic of money.
By the time your child is about 7, they’ll have learned math skills that will help them have a better understanding of spending. If you haven’t had conversations with your school-aged children about this topic, this is when it starts to become more urgent. Other kids will have had conversations with their parents by this age, so start laying the foundation of your child’s financial understanding ahead of time so they can hear it from you first. This puts more control of your kid’s perception of money matters into your hands.
Advising your kids about money doesn’t end when they’re out of the house either. Be prepared for many years of financial conversations, from when your kid gets their first job, to when they get their first credit card, and to when they have to start considering student loans. Be available to your child when they need financial advice, and help guide them in making good decisions.
Tools for Teaching Kids
You deal with finances on a daily basis. That means there are many opportunities for lessons on spending and saving with your kids. Try some of the following techniques to make sure your children get the most out of conversations about money. You can also check out our Household Finance Glossary, a great tool for learning more about common financial terms.
Coins — Coins are a great way to start teaching young kids about money. Sorting coins, explaining their equivalent values (ex.: two nickels equal one dime), and playing “store” are great activities that will help your child begin to understand money values. Piggy banks are a good way to help kids learn the very basics of saving. Consider using a clear one so your child can visualize the accumulation of money.
Allowances — Allowances help your child become comfortable with handling money and learn responsibility for keeping control of their own cash. Set expectations about how your child can earn and spend money. It’s worth considering whether or not your child’s allowance is tied to household chores: many financial advisors now recommend against tying an allowance to chores you expect your child to complete regularly, since things like keeping a clean room should be expected of anyone. On the flip side, it’s important for kids to understand that money is something to be earned. A good option may be using chores or tasks outside of daily household basics, such as chores you’d usually take on yourself, as ways for your child to earn money.
Bank Accounts — A bank account is an important first for kids. Typically, the best bet for kids is a savings account, since they won’t really need the features of a checking account. Some banks have account options just for kids. Bank accounts provide you with lots of teaching tools for your kids, and plenty of opportunities for conversations about deposits, debit and credit cards, interest, and saving money for the things they want. When your child is old enough, help them get established with their first credit card. This important piece of kid’s financial educations often gets skipped over. Low-limit or student cards are great for first-timers.
Helping your kids build a good foundation of financial understanding is an important part of parenting. With your guidance, your child will be able to navigate the road ahead of them as money becomes a bigger part of their life. Don’t shy away from having these conversations from an early age and preparing your child to confidently deal with money.
Image source: https://www.pexels.com/
Our Experts Recently Evaluated The Top 5 Credit Repair Companies Available.
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Since first taking office, Mayor Michael R. Bloomberg has made environmental protection and preservation something of a personal mission. Eco-advocates have applauded his ambitious PlaNYC initiative with its goal of cutting the city’s emissions and cleaning up its air and waterways, including making 90 percent of New York City’s waterways suitable for recreation.
Part of Mayor’s sweeping plan also involves installing sidewalks and parking areas paved with more porous concrete designed to capture excess rainwater and runoff. The proposed green surfaces would eliminate 40 percent of the existing runoff into the area's waterways and are projected to save taxpayers $2.4 billion dollars in clean-up costs over the next 20 years.
On top of all that—literally—the PlaNYC initiative is also encouraging both commercial and residential NYC buildings to ‘green’ their rooftops by incorporating plantings, solar arrays, rainwater collection points, and other eco-friendly elements into space that is usually left bare and unexploited.
“We have about 1.5 billion square feet of roof, and a lot of it right now is a tar desert,” says Laurie Kerr, senior policy advisor at the mayor’s Office of Long-Term Planning and Sustainability. “For people who want to use that rooftop space for urban agriculture, for green roofs, for “blue” roofs [to encourage water reclamation], passive or active recreation, even bird habitats, it’s important that we do what we can to make that feasible.”
The city currently does just that by providing an incentive for buildings that add green roofs, providing of course they get the proper permits beforehand and pass inspection once finished. “The Green Roof Abatement tax reduction program was signed into law in 2008,” says David Bragdon, head of Long-Term Planning and Sustainability in the mayor’s office. “The abatement is $4.50 per square-foot of green roof.”
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I am writing this in South Africa, where its currency, the rand, provides a useful illustration of the effects of monetary inflation described in Part 1.
When I was last here, three years ago, the going rate of exchange was around 16 rand to the British pound; now it is 21. That’s a 31 per cent devaluation (against sterling) over that period. Local prices adjust, of course, but that happens only over a period. Meanwhile, on the face of it, we are enjoying a “cheap” holiday.
But note that there is nothing objective about the statement that the rand has suffered a 31 per cent “devaluation”: that measure does not relate directly to its power to purchase actual consumer goods or services, still less a commodity like gold or silver. It is purely a comparison of exchange rates between two currencies at two dates, three years apart.
Seen thus, “cheap” is a relative term, and it disregards any devaluation that the comparator currency itself (sterling in this instance) might have suffered over that period, as measured objectively against, say, gold rather than just another volatile fiat currency. My statement therefore amounts to nothing more than that the rand suffered a greater loss of purchasing power than the pound sterling.
Background to the rand
Let’s broaden the picture: when the rand was established as the national currency in 1961, amid the euphoria of South Africa’s newly gained independence, it was not permitted to float and find its own level against other currencies; it was allotted an exchange rate of 2 rand to the British pound – the country’s former currency. As noted, today’s conversion rate is 21 rand to the pound – representing an apparent loss of relative purchasing power of more than 500 per cent since its inception.
But what of the pound itself, if objectively gauged? In 1961 £7 would have bought an ounce of gold, but now you would need close to £1,300 to pay for that ounce – an almost incalculable loss of purchasing power. So we see that the full debasement of the rand, as a currency, cannot be measured by reference to sterling alone – it needs a rock-solid comparator like gold.
Back to consumer prices. As the rand clearly has suffered a greater loss of purchasing power than the pound, it makes sense to say that, as British tourists in South Africa, we are enjoying a cheap holiday. One of the most obvious indications appears when eating out. Dinner for four in a good local North London restaurant would set me back between £120 and £130, including a bottle of decent wine and a 10% tip. Here, in Johannesburg, an equivalent evening out, including a bottle of delicious Pinotage, would cost around half of that, or 1,400 rand.
I’ll refrain from pressing the story much further than this, although clearly there is much to learn from it. It is, however, worth commenting on how that glorious country got into such a mess.
Currency destruction writ large
Looking back at the “apartheid” system under which I grew up, my generation didn’t see it then as we do now: as a scourge and national disgrace. But it is equally clear that the democratic transition to black majority rule did not have to incorporate measures since shown to be fully as destructive and counterproductive as those they replaced. In short, political infighting is hardly conducive to economic progress and in their frenzy to achieve racial equality the new governing class adopted practices such as land expropriation without compensation as legitimate policy platforms.
Employment opportunities are blighted by reverse discrimination in the form of statutes upholding “BEE” or “Black Economic Empowerment”. The powers have yet to learn the limits of what legislative reform can achieve. While the law can prescribe equality of opportunity, people themselves will never be “equal” – not even in the gulag. It is certainly beyond anything the law can achieve.
As you might expect the new wave of employment legislation facilitated the formation of some of the most powerful trade unions in Africa and, again, as you might expect, the youth unemployment rate of nigh 50 per cent is also among the highest in Africa. Do you think there might be a connection?
State capture and corruption
All the money creation that destroyed the South African currency simply filled the vacuum left by the billions stolen, literally, from its Treasury through systematic “state capture” by President Zuma and his criminal henchmen, including the Gupta family, now holed up out of reach in Dubai. They didn’t take it all themselves, of course, but they established, on a par with their Northern neighbour Mugabe in Zimbabwe, a culture of rampant and systemic theft of state assets now so entrenched that it represents the new norm for South African civil governance. Not merely corrupt, more a way of life.
State-owned enterprises, such South African Airways, energy generator Eskom, military technology conglomerate Denel or the transport monopoly Transnet, all depend on extensive supply chains from mines and imported raw materials through the production stages, whether they are in the business of light and heat or defence weaponry. At every point in the chain valuable resources are “skimmed” whereby cronies, having bribed their way into position, take their rake-off. The final cost finishes up as a huge multiple of the chain’s component elements.
As no consumers can afford prices that would cover thefts on this scale the entities involved incur massive losses, and virtually all of them are insolvent – as, indeed, is the nation itself. Eskom’s debt now stands at R454 billion and the only discussion centres on the best method of hiding the inevitability of its impending write-off.
On each day of the holiday our “luxury” hotel supplied us with that day’s “load-shedding” schedule – the hours during which elevators will be out of action, appliances and TV will have no electricity, the kitchen will not offer hot meals and there are no functioning traffic lights on the roads. These measures are not primarily designed to save energy – but arise from the many years in which sums earmarked for maintenance have been quietly misappropriated, leaving capital equipment on its last legs.
No correction in sight
An inescapable by-product of corruption on this scale is the legacy of nepotism and gross incompetence in its wake. Although everyone knows the story and talk about it is commonplace, we encountered no seething resentment, still less rebellion – only a marked increase in the number of beggars, including white BEE victims, that ply the pavements and look pleadingly at motorists waiting for the lights to change.
By its nature corruption starts at the top. And only from the top can a transformative remedy emerge.
The Goodnight Vienna Audio file
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This is an example of gentrification. Maybe not the classic example, but it is an example.
If home values have been stable, and families incomes have been stable, and the local government hasn't raised property tax rates, then people budget for a stable situation regarding their tax bills.
The rapid rise in property values due to this change will hurt property owners. We saw this in the early 2000`s when in some locations property values doubled in a few years. Long time homeowners said they would not be able to afford their current home if they were trying to move into the neighborhood.
Many times a local government will trigger a rapid rise in taxes without a rise in property values, when they implement a special taxing district to pay for a localized improvement. Those special taxes are harder on families becasue they have to pay more each year, under the hope that in the future they will see a rise in property values.
The local government has several options, these may take changes to the local tax code, but it may be possible becasue it is likely that zoning changes will be needed to build such a structure.
- They could create a special tax district that slows the increase to no more than the average for the city as a whole. They could defer additional value until the property is sold.
- They could put a several year delay until implementing the change, this would give homeowners time to adjust. They should still tell homeowners how much it would have been without the delay so they can be ready for the jump.
Loans generally wouldn't work, because the homeowner would still be paying for the tax increase. Home equity loans wouldn't be easy becasue the homeowner might not have enough equity. In some jurisdictions the value of the property for taxing purposes is unrelated to the property value on the resale market, so the mortgage owner would have to get a new appraisal. Families without a loan would have to apply for a loan.
Interest in those home equity loans wouldn't be tax deductible under the new tax law becasue the money would not be used to buying the home, or to improve the home.
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This week will be a turbulent one for the Eurozone. Greece will certainly default again on its debt, at least partially, after a first default in 2011. Here’s the cause of the problem in one picture:
For two (groups of) countries that consider adopting a single currency there are advantages and disadvantages compared to a situation with two currencies. Crucial advantages can be an increased ability to borrow on financial markets, lower inflation expectations, and lower currency exchange rate risks.
The biggest disadvantage is that a country no longer has full authority over its monetary policy. It cannot fire up the printing press and create money, which means that it cannot have government debt levels above a certain threshold and it cannot depreciate its exchange rates if it wants to boost exports relative to imports. The more this is a problem for a country, the bigger the disadvantage (or the costs) of a single currency. So when is this a problem?
That’s where the above graph comes in. If a country is sufficiently symmetric or flexible, or if we are OK with fiscal transfers, a single currency may very well be a good idea. So, let’s consider the Greek situation:
1 – Symmetry
If countries are symmetric, it means that their economies experience similar cycles and have similar strengths and vulnerabilities. For instance, if two countries’ entire economy consists of car manufacturing, they are symmetric. If one country’s economy is about car manufacturing and another country’s economy is about manufacturing steel for these cars, then they are symmetric as well.
If economic structures are very different, they are influenced by different dynamics. Every now and then, they will be hit by so-called asymmetric shocks: a development that hits once country more than others. For instance, if steel prices would spike 50% in one day, a car manufacturing country will be hit more than one that specialises in tourism. Asymmetric shocks are of tremendous importance. Traditionally, if a country is hit heavily by a certain shock, whatever it may be, it can use monetary policy to help deal with the shock. This could mean expanding expenditures (e.g. subsidies to the steel industry) to deal with the shock, and printing money to pay for it – but if you have a single currency, you cannot do that anymore.
Considering Greece and Germany (or the rest of the Eurozone), it is easy to see that their economic structures are completely different. Germany has big sectors of heavy industry, whereas the Greek economy depends more strongly on tourism. Germany’s governmental infrastructure is well-developed, with low levels of tax evasion. Greek government is haunted by a low tax base and corruption.
We thus know that it was a matter of time until significant asymmetric shocks would occur.
2 – Flexibility
A country is flexible if it can absorb and adapt to asymmetric shocks by internal institutional adaption. For instance, if the car industry is hit by higher prices for steel, they may be able to lower wages to protect their competitive position. Labour market flexibility is particularly important here. Being able to quickly decrease or increase (real) wages helps absorbing asymmetric shocks. Similarly, having the ability to move labour to more promising sectors (e.g. from the car industry to agriculture) helps to deflect the impact of such shocks.
Although the bankruptcy of the city of Detroit in the U.S. had severe implications for the city, many of its workers were free to leave the city and find employment elsewhere. They had the same freedom to do so when their car industry slumped, which relieves social misery but also creates room for new sectors to flourish. For Greece this is of course not an acceptable option – they won’t accept an exodus of its brightest minds as a natural reaction to an asymmetric shock. Greece also lacked the flexibility to internally deal with the asymmetric shocks that hit them. They are and were unable to lower their wages or to cut pensions.
Greece does not have the flexibility to deal with severe asymmetric shocks.
3 – Fiscal transfers
Government budgets are drafted at least a year in advance. Assume that a government planned to have government expenditures worth $100 billion, but an asymmetric shock depressed its economy during the budgetary year. Tax income is now expected to total $80 billion. It might decide to keep expenditures at a higher level, running a deficit. Investors will only lend money against high interest rates (aggravating the problem) because there is a risk of default as the country cannot print its way out of trouble.
If monetary policy cannot be used to absorb asymmetric shocks and if the country is unable to reorganise itself effectively to regain competitiveness, help must come from somewhere else. The only remaining way is to receive financial aid from other countries. Not loans, but ‘gifts’. Countries in a single currency zone will only accept this if there is enough (social) solidarity; that is, Germans would for example not mind paying for the Greeks. This social solidarity has never been sufficiently present in the Eurozone. The bailout Greece received in 2011 was not an act of solidarity – the alternative, which at the time seemed to be the collapse of the Euro altogether, was just worse.
We thus conclude that in the case of Greece and the Eurozone, we were bound for trouble, and we knew it from the start.
It is not only Greece
If Greece were to exit the Eurozone, the remaining group of countries is not all of a sudden a so-called optimum currency area. Spain’s economy is absolutely completely different from the Dutch and Finnish ones. So trouble is bound to keep coming if we retain the Eurozone in its current configuration (with or without Greece), without flexibility and fiscal transfers to compensate for a lack in symmetry.
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Our country’s energy landscape is rapidly changing. For the first time in decades we’re producing more barrels of oil in the United States than we import from other countries, thanks in part to shale oil production. Newly developed natural gas resources have enabled the U.S. to begin transitioning from a modest net importer of natural gas to a net exporter by 2017. Increased use of natural gas in the power sector has helped reduce carbon dioxide (CO2) emissions from electricity generation by more than 200 million metric tons since 2000. And when it comes to renewables, the reduced cost of photovoltaic solar is driving new projects—solar provided 32% of new domestic power generation capacity in 2014.
This is all good news for America’s energy security in a carbon-constrained future. But we still have work to do. We need to push the envelope to develop renewable energy sources, and the Department of Energy (DOE) is working hard at that task. At the same time, to advance our goals of environmental sustainability, energy security, and economic competitiveness, we will need all of our domestic energy sources. That’s why we need to continue refining technologies to reduce the carbon intensity of coal-fired power generation—which provides nearly 40% of our electricity—by capturing and storing the CO2 these plants would otherwise emit. So for the past decade, the DOE has been partnering with industry, academia, and state governments to demonstrate the readiness of carbon capture and sequestration (CCS) technologies.
CCS is not a technology that may work in some distant future—it’s working now. And there’s no better proof than this: In April, DOE-funded projects surpassed 10 million metric tons of CO2 stored. That’s the equivalent of taking more than 2 million passenger vehicles off the nation’s roads for one year.
While we’re safely and permanently storing large quantities of CO2 underground, we’re also working on beneficial CO2 utilization. Enhanced oil recovery (EOR)—storing CO2 in depleted oil fields to produce incremental barrels of oil—is one important pathway. We’re also exploring ways to convert CO2 into useful products. For instance, Skyonic’s “Skymine” project began operations last year to convert CO2 from a cement plant into commercial products like baking soda and hydrochloric acid.
Projects like these are providing valuable information needed to commercially deploy CCS, and not just for coal and industrial facilities; we’re also looking to leverage existing research and development (R&D) to apply CCS to natural gas–based systems.
Any transformational endeavor will face difficulties, and the drive to commercialize CCS is no exception. In February, the DOE withdrew federal support for the FutureGen 2.0 project in Illinois because it was unable to meet statutory schedule constraints.
Still, we’re making important strides. The 10 million metric tons of CO2 stored is just the start. In 2013, Air Products commenced operation of a DOE-sponsored CO2 capture project that will result in 1.6 to 3.1 million barrels of additional oil recovered through EOR. In 2014, NRG started construction on another DOE-sponsored project, the world’s largest post-combustion capture retrofit demonstration project, which will capture 1.6 million metric tons of CO2 per year and produce an additional 60 million barrels of oil through EOR. And though it has faced cost and schedule challenges, Southern Company’s Kemper integrated gasification combined cycle project is expected to begin operations in 2016.
Commitment to CCS
Going forward, the DOE’s commitment to CCS is clear. Of the $560 million that the president requested for DOE fossil energy R&D in FY 2016, $369 million is geared toward our CCS and Power Systems R&D. That’s on top of the $6 billion we’ve invested in CCS since 2009 and the $8 billion in the DOE’s loan guarantee program dedicated to fossil energy projects. Moreover, the president’s budget includes two new refundable tax credits totaling $2 billion for new and existing power plants that employ CCS.
What we’re doing in the U.S. is critical, but the nature of our energy and climate challenges requires a global response. The good news is there are 22 large-scale CCS projects in operation or under construction around the world. Still, the U.S. has more major CCS demonstration projects than any other country, and the DOE is taking a leadership role to achieve commercial deployment of these technologies globally.
To do that, we’re working with international partners to share the expertise and lessons learned that will help us overcome the technical, regulatory, and policy challenges to CCS commercialization. Most recently, we announced our intention to collaborate with Shell Canada to validate advanced monitoring technologies at Shell’s industrial CCS project in Saskatchewan, which will capture 1 million tons of CO2 annually. Additionally, we and China will lead an international consortium to establish a major new project in China that will monitor the storage of industrial CO2. We’ll also work with China to demonstrate a new pathway for CO2 utilization through a project that will capture and store CO2 while producing freshwater.
We’re also engaged in multinational efforts on CCS, including our leadership of the Carbon Sequestration Leadership Forum’s Policy Group and the International Energy Agency’s Working Party on Fossil Fuels. And through our work on the U.N. Economic Commission for Europe, we helped develop a recommendation for CCS parity that will be considered at the U.N. Climate Change Conference in Paris this year.
Storing 10 million metric tons of CO2 is an important achievement, but we still have work to do. And the DOE’s robust R&D and international outreach is laying the groundwork to ensure that CCS will help us meet our energy and climate challenges—and secure U.S. leadership in the global clean energy economy. ■
— Christopher A. Smith is the assistant secretary for fossil energy in the U.S. Department of Energy.
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We explain the reason behind such vague concept.
Two years ago, Cumberland County created the seven-member Common Level Ratio Task Force. According to The Sentinel Online, “The seven-member Common Level Ratio Task Force recommended to the commissioners in mid-November that they immediately reassess property values in the county because its common level ratio had dropped below 85 percent to 82 percent.The ratio is the measure of the difference between assessed property values and what the properties are worth on the market. Dropping below 85 can open a window for larger properties to appeal and win tax breaks, members of the task force said.”
Less information is found regarding the CLR. When computing for your real estate taxes, you need to know your area’s common level ratio factor or the CLR. It is the equalization ratio used to adjust the value of the assessed home in a specific area to its fair market value estimation. The CLR is typically calculated by your county’s tax board. To determine this, the concerned offices along with property assessors conduct a survey on property sales in a municipality. The sale value is then compared to the assessed value of the homes and the ratio is identified for the entire district. Therefore, when the area is reevaluated, the CLR also changes.
The main purpose of the CLR is to adjust fair market values in each county so that the values turn out to be more realistic (since a ratio between actual recent sales and assessed values are taken). Usually, the CLR is officially endorsed on the first day of the year while it takes effect on the following year thereafter. For example, certified CLAs in January 2008 will be used for the fiscal year 2009. Be aware that the dates vary in various states.
The two most common uses of the CLR are during tax computations and tax appeals. In tax computations, the assessed value is multiplied by the CLR to determine how much the property is worth. For example, in Allegheny County, PA, the CLR is equal to 1.16 until June 2009. An assessed value of $200,000 shows that the house is worth approximately $232,000.
When doing your tax appeals, the CLR is often used for clarification in your property assessment that is deemed unreasonable and unfair. To do this, the common level range is first identified. For example, if the range is from 70.05 percent to 98.05 percent, the CLR must fall within the scale or else there will be a reassessment. An assessed value of $100,000 divided by the real sale value of $95,000 gives a CLR of 1.053 or 105.26 percent. In this case, the assessment will be reduced because it is beyond 98.5 percent. However, if the CLR falls below 70.05 percent, the assessment will be increased by the tax board.
So this explains why Cumberland County is calling for reassessment. Back then when nothing was heard of the coming recession, some could actually take advantage of the situation and be free from paying their property taxes when no action regarding assessments.
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The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live by by Scott Shane
There are far more entrepreneurs than most people realize. But the failure rate of new businesses is disappointingly high, and the economic impact of most of them disappointingly low, suggesting that enthusiastic would-be entrepreneurs and their investors all too often operate under a false set of assumptions. This book shows that the reality of entrepreneurship is decidedly different from the myths that have come to surround it. Scott Shane, a leading expert in entrepreneurial activity in the United States and other countries, draws on the data from extensive research to provide accurate, useful information about who becomes an entrepreneur and why, how businesses are started, which factors lead to success, and which predict a likely failure. "The Illusions of Entrepreneurship" is an essential resource for everyone who has dreamed of starting a new business, for investors in start-ups, for policy makers attempting to facilitate the formation and survival of new businesses, and for researchers interested in the economic impact of entrepreneurial activity. Scott Shane offers research-based answers to these questions and many others: Why do people start businesses? What industries are popular for start-ups? How many jobs do new businesses create? How do entrepreneurs finance their start-ups? What makes some locations and some countries more entrepreneurial than others? What are the characteristics of the typical entrepreneur? How well does the typical start-up perform? What strategies contribute to the survival and profitability of new businesses over time?
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The distinction between headline and core inflation is commonly made in market and economic commentary. This primer briefly introduces these concepts, and why they are used.
DefinitionsAnalysts often refer to "core" measures of inflation in different countries; the exact definition can vary. This article will use the American definition.
- Headline Inflation is the inflation rate for all items in the price index basket (such as Consumer Price Index - CPI).
- Core Inflation is the inflation rate which results if we exclude food and energy from the price index calculation basket. (Some countries will exclude other items which have highly volatile prices.)
Why Use Core Inflation?From the perspective of the cost of living, it makes no sense to exclude food and energy prices from consideration. (One of the stranger theories floating around on the internet is that the CPI calculations always exclude food and energy.) Why do economists look at the core measure?
The justification for the modern use of core inflation is that it is less volatile, and captures the underlying trend in prices.
The chart above compares average hourly earnings in the United States versus core and headline measures of CPI inflation. If we look at the bottom panel (headline inflation) near the Financial Crisis, we see that wage growth was completely decoupled from the wild swings in headline CPI inflation (due to the oil price spike then collapse). Meanwhile, core inflation was more stable, resembling the trend in wages.
The chart above indicates that the two measures have not greatly diverged in the long run. I chopped down the period shown to be the low inflation period of 1994 to present. The secular rise in energy prices since the mid-1990s shows up with the All Items CPI rising by more than the core measure. That said, the total divergence is only 2.5% over the two decades (as shown in the bottom panel; the normalised ratio goes from 100 to 102.5). This is negligible when compared to the absolute change in the price level.
In other words, much of the hysterics about economists ignoring energy and food prices was misplaced.
Other Measures -- Trimmed Mean, Median
If all we are interested in is reducing the volatility of inflation, it is easy argue that arbitrarily eliminating food and energy from the CPI may not be the best way forward. Economists have studied this issue, and have proposed a statistical means of creating a low volatility inflation trend series -- trimmed mean CPI measures, or the median CPI. The chart above shows the median CPI from the Cleveland Federal Reserve bank. (Note: the series from FRED is a monthly series; I took the annual average to create the equivalent of the annual rate of change series. As long as the rate of inflation is low, the divergence between this approximation and the true annual rate of change is very small.)
(I summarise how these measures are calculated in a short appendix.)
Researchers have studied the properties of these inflation measures, and argued that they have better predictive properties for headline inflation than core inflation. This seems reasonable, but the core inflation measure is actually more useful for analysts making short-term inflation forecasts in practice. In particular, for those who are making forecasts of inflation-linked bond carry.
We can decompose inflation forecasting into two steps:
- forecast core CPI; and
- forecast food and energy CPI.
A trimmed mean CPI does not offer the ability to make such an analytical decomposition. As a result, I have deeply studied the literature discussing those measures.
Appendix: Summary of Trimmed Mean CPI CalculationThe calculations for a trimmed mean and median CPI are fairly straightforward, but the difficulty with them is that they are based on weighted averages. (All of the groupings in the CPI basket have different weights, based on consumption patterns.) Dealing with the weightings makes the calculations look more complicated than they really are.
Within a trimmed mean CPI, the monthly inflation rate for the index is calculated as follows.
- Arrange all of the monthly percent changes of the groupings within the CPI in order.
- Exclude a certain percentage (the Cleveland Fed calculates an index using 16%) of groups (based on the their CPI weighting) with the highest and lowest monthly changes. For example, if the two groupings with the highest monthly percent changes both have weights of 8% of the total CPI, they would be both excluded from the calculation. If the top 16 groups each have a weight of 1%, we would exclude all 16.
- We take the weighted average of all of the remaining groups.
For a median CPI, the calculation is simpler -- we just take the median monthly percentage change, taking into account the group weightings. That is, 50% of the weighted groups will have a percentage change greater (or equal to) the weighted median, and 50% of the weighting will have a percentage change less than (or equal to) the weighted median.
In both cases, we may need to "split" a grouping in order to do the calculation. For example, if we are calculating a 16% trimmed mean CPI, and the grouping with the least percentage change has a weighting of 20%, we would include that group within the mean calculation, but with a (non-normalised) weight of 4% -- that is, we lopped off 16% of the 20% of that group.
(c) Brian Romanchuk 2016
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Fuel-Cell Electric Buses: The Proven Solution for Canada’s Climate and Economy
May 28, 2020
Ballard Power Systems Blog | Nicolas Pocard
The COVID-19 pandemic has affected nearly all aspects of our day-to-day lives, and many industries are struggling to stay afloat amidst the economic crisis.
Public transit is an area that now needs urgent support from federal and provincial governments in order to sustain operations in the short term.
And in the longer term, our cities need public transportation—and it must be zero-emission in order for Canada to:
- become carbon neutral by 2050.
- reduce traffic, allowing us to continue to enjoy air quality we have seen during the past two months.
So what does this mean for transit authorities? What does it mean for Canada?
There are choices to make. We have the opportunity to invest in public transit while directly addressing climate change with a “Made-in-Canada” solution that offers:
- thousands of jobs for Canadians at a time when the economy needs them
- zero-emission buses that perform best in Canada’s harsh winters
- Canadian leadership in a zero-emission vehicle technology
5,000 Zero-Emission Buses Over the Next Five Years
The choices must be made soon: the federal government (working with the provinces and territories) should now commit to funding the zero-emissions bus initiative to support school boards and municipalities in purchasing 5,000 zero-emission buses over the next five years.
At Ballard, we believe that at least 20% of those 5,000 buses should have fuel cell electric powertrains. Here’s why.
Four Reasons Why Fuel Cell Electric Buses are Canada’s Best Choice
1. Canada receives more economic value from fuel cell electric buses
Fuel cell electric buses (FCEBs) are far more valuable to the Canadian economy than battery electric buses (BEBs). A significant percentage of every dollar spent on developing and operating FCEBs will support Canadian companies and Canadian jobs.
- Fuel cell technology and manufacturing is Canadian: fuel cells are made in Canada, by Ballard and other manufacturers.
- Electric buses are made in Canada: a key manufacturer of fuel cell electric buses is Winnipeg, Manitoba’s New Flyer.
- Electric drivetrain components are manufactured in Canada: Quebec is home to several manufacturers of electric drivetrain value chain.
- The hydrogen supply chain is here: Canada is home to a significant concentration of companies that provide equipment for hydrogen production, delivery, dispensing including refueling stations.
In contrast, far more of the value of a BEB is sent outside Canada. The large battery packs that are required for mass-transit electric buses account for approximately 26% of a BEB’s cost and most of the lithium ion cells are imported from Asia.
Finally, Canada now faces the challenge of rebuilding a post-COVID-19 economy. By choosing fuel cell technology for public transit, transit agencies and municipalities can support Canadian jobs in manufacturing and supply industries.
2. Fuel cell electric buses have superior performance in cold weather
When transit planners look at replacing their diesel fleets, bus range and recharging/refueling time are critical considerations. At their best, battery buses have less range and lower hill-climbing performance than fuel cell electric buses.
In Canada’s varied and harsh climates, performance degrades further. According to a Center for Transportation and the Environment study, the range of battery electric buses falls by 37.8% when temperature drops from the 10 to 15°C range to the zero to -5°C range. For fuel cell electric buses, the decrease is only 23.1%.
In colder climates, battery electric bus charging time is dramatically slower: at -20°C, it takes twenty times longer to recharge an electric bus than to recharge it at +20°C.
In contrast, a fuel-cell electric bus refuel time is unaffected by temperature.
3. Low carbon hydrogen is available in Canada
Green hydrogen can be created from water using electrolysis, either at a central regional facility, or onsite at a transit depot. Electrolysis requires a reliable source of electricity, which Canada is abundant in.
A high percentage of Canada’s electrical grid is generated by renewable and low-carbon sources, including:
- Hydro power (BC, Ontario, and Quebec)
- Wind (Maritimes)
- Natural gas (Prairies)
Low carbon hydrogen can also be generated from natural gas, which could be an opportunity for Canada’s struggling oil and gas sector. Jobs could be regained in the generation of blue hydrogen by using natural gas combined with carbon sequestration technologies.
4. Fuel cells are a sustainable solution for zero-emission vehicles
Ballard is a leader in reducing the total lifecycle emissions of fuel cell electric powertrains. Compared to battery electric powertrains:
- our manufacturing generates 75% fewer GHG emissions (from cradle to gate).
- our recycling and refurbishing processes are proven: every year we recycle and refurbish thousands of fuel cell stacks.
- our refurbished fuel cell stacks use recycled materials and are returned to service for a new life cycle.
At a vehicle level, fuel cell electric vehicles are also cleaner than battery electric vehicles and internal combustion engine vehicles from a lifetime emissions and environmental impact perspective. There’s even more room for improvement as low carbon hydrogen production and delivery matures.
Battery or fuel cell electric buses? Or both?
At Ballard, we feel that fuel cell electric buses and battery buses are allies, not competitors as both technologies are needed to achieve 100% zero-emissions bus fleets. Both are viable, depending on the need and the application. And Canada—and the world—must migrate to zero-emission buses, and quickly.
To make the transition, transit authorities will need to embrace both technologies. Therefore, when it comes to tenders, we encourage a “technology neutral” approach that is based on desired results and not a specific technology. Equally, funding agencies should prioritize results, and not one technology over the other.
Equal funding consideration should also apply to the infrastructure. Dollars invested in electric charging infrastructure should be matched by equal dollars invested in hydrogen infrastructure.
Too frequently, consideration focuses solely on vehicle purchase price. A more holistic view considers:
- total cost of ownership of each vehicle.
- charging or refueling requirements, and the implications to routes, schedules and system-wide infrastructure.
- depot modification requirements.
The time to consider the fuel cell option is now
The Canadian public is ready, even eager, for our economic recovery to be green with investments in clean energy and zero-emission transportation, in order to generate new jobs in our cleantech sector.
The transition to zero-emission vehicles for public transit is an opportunity to invest in a more sustainable future that features clean transit as part of the fabric of our cities. Now, with the strong support of the federal government, it’s time for zero-emission buses to be deployed at scale in Canada.
Local governments and transit agencies have the opportunity to make a win-win decision:
- Canadian fuel cell electric bus technology delivers affordable zero-emissions transit with uncompromised performance and route flexibility.
- Supporting Canada’s new green economy will create jobs and increase the country’s supply chain security
The choice is ours to make.
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Whatever children learn about money in their early years is usually carried with them throughout their adult life as well. This means that what you are teaching them now about finances will probably shape their decision-making, and therefore their lives for decades to come.
For instance, I was raised in a family of eleven where my mom stayed at home to take care of the kids and my dad was a teacher that never made more than $45,000 a year. We barely “got by” most months and we all knew it. I can remember that every penny was valued as something essential for our survival. Because of this, as an adult I continually save and don’t spend money unless I have to. I’m like Mr. Howell from the television show Gilligan’s Island: I like to have money, but I never like to let go of it.
To help educate your children about money, here are ten things you can begin to teach them early on.
How to Earn Money
Some parents may disagree, but for younger kids a weekly allowance can be a very good thing as long as it is not excessive. By having an allowance in place, you can teach your kids to be responsible for their spending. You will no longer have them running up to you at the store asking if you can buy them something. Their allowance is their money to do what they wish, but there are no handouts (or bailouts!) afterward. They will have to carefully decide if they want to spend their whole allowance at once or save it up for something down the road.
Make them earn it. Unless it is a birthday or holiday, never just hand your child money until they have earned it by doing some chore or job that you need completed. It will teach them to have a good work ethic early. If they can’t do the work, then they should not expect any sort of compensation.
Different Jobs Earn Different Pay
Just like in the real world, everyone’s job pays differently. All honest work is honorable and valuable, but a waiter simply does not earn the same salary as a doctor. Create a list of jobs your kids can do each week and then pay them once the job is completed successfully. For example, taking the garbage out every week might earn them fifty cents. For a couple dollars a week, they can walk the dog every morning. Once they sign up to do that job, they must complete it or their pay will be docked at the end of the week and given to whoever completes it.
The Benefits and Costs of Working a Job
Encourage your teenager to get a part-time job to open their eyes to how the real world operates. They will have a schedule and a boss (other than their parents) that will hold them responsible for their work. They will pay taxes which is a huge eye-opener for kids. This will influence their thinking about employment and money in a practical way. It may even encourage them toward a unique career path or entrepreneurship.
How to Create a Monthly Budget and Plan Ahead
It is amazing how many adults can’t create a monthly budget. Don’t let your child fall into this trap. For example, if they earn $50 a month through their allowance jobs, help them create a budget detailing how this money will be spent. It will show them exactly where their money is going every month and how they might be able to cut down on some expenses. Create with them a roadmap to financial stability and freedom. Dave Ramsey has some great material on this subject and more.
How to Save Money
If the current epidemic has taught us anything at all, it is that not enough people have built up any sort of savings to survive on. A few weeks of no paycheck has led millions to file for unemployment as they are unable to pay their rent or mortgage for the month. Don’t let this happen to your child. Teach them to put away at least ten percent of their pay every week.
How to Set Up a Bank Account
While they can have a piggy bank at home to drop their change into, it would be a good idea to bring them to the bank and show them how to start up their own savings account. In fact, maybe you can start them off with ten dollars (or the minimum the bank requires) and show them the interest they can eventually make on the money. As they get even older, you can introduce them to your financial advisor, and they can learn about mutual funds and stocks.
How to Be Generous
Kids are naturally selfish. Well, we are all naturally selfish. But that isn’t who we are called to be. Teach your children to be generous and give a portion of their earnings away. Whether to church, a charity, or a friend or neighbor in need, this valuable lesson will stick with them as they grow older. They will see money as a tool to bless others and not merely as a way to enrich themselves and serve their own desires. Model for them that money is important, but people are more important. This way they won’t hold tightly to it or strive hard after it and make it an idol.
Making Big Decisions With Money
Every parent has hopefully started a college savings account for their kid while they were still young. If not, start now! But you don’t want to just hand them this money at the age of 18. Let your child know during their freshman year in high school that you will have a set amount saved for them by the time they graduate high school. Instruct them to plan wisely as this will be the only money they will be receiving for college from you.
Point out how they could go to junior college for two years and save themselves tens of thousands of dollars in the process instead of going to a university or private college. Detail to them how they could work a part-time job to pay as they go, or try to earn a scholarship with their work in high school. They could then use their college fund to help them buy a house sooner rather than later in life. By getting them to think about these decisions early on, they can start setting goals immediately and develop a long-term approach to their financial future.
Warn Them About Credit Cards
The average American has a principal credit card debt of about $9,000. In reality, the debt is actually a lot more as interest is applied every month on top of it. This is the worst kind of debt to have as it is high interest and difficult to pay off. Teach your child that credit cards are only to be used in rare circumstances and that they should only carry one credit card. Most people have about four different credit cards in their wallet which can lead to irresponsible spending and excessive debt.
Build in Them an Entrepreneurial Spirit
As I said earlier, perhaps with your guidance your child will go on to become an entrepreneur. Start little businesses with them while they are young and show them the work it takes to earn a buck. For example, a lemonade stand during the summer or a dog walking service could lead to them running their own adult business someday. It isn’t easy being an entrepreneur, but it is rewarding. They may love the freedom that comes with “being their own boss,” even with the inherent risks of business ownership. These are great lessons to open up our children’s minds to what they can to do contribute to the world around them.
These are just 10 examples of things you should teach your kids about money. There are many, many more, but start small and build up their financial education as much as possible. This wisdom will be a huge blessing to them and their family long in to the future.
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COVID-19 is a smart coronavirus because it can spread quickly among humans. The speed of that spread has been helped by the interconnectedness of humanity through international air travel.
The speed and dramatic impact on the global supply chain and responses by financial markets, governments and central banks have also been due to the world’s increased interconnectedness, both physically and virtually.
That same interconnectedness also means that the whole world can learn of COVOD-19’s spread and score as they happen, provided there is a free and honest flow of information.
The supply chain effects have been complicated by China’s ascension as a major global player in manufacturing, a global dependence on single sources of ingredients and components and so-called efficient inventory management, i.e. ‘just in time’. The latter is proving to be a short-sighted cost saving that works very well in good times but fails in bad times. Poor risk management or greed, depending on your viewpoint.
China is now the world’s biggest manufacturer of steel, active pharmaceutical ingredients, medical supplies and motor vehicles, as well as industrial and consumer electronics. People can live comfortably if they delay the purchase of that new phone, car or TV for a few weeks but most pharmaceutical and medical supplies wholesalers and suppliers have only a limited supply of these essentials.
The hopes are that China’s manufacturing will resume soon and supply chains will move again. Now though, we are seeing forced isolations in other countries that could result in the same supply chain blockages that China is trying to clear up; forced isolations and supply chain blockages that will have drastic implications for the earnings and spending of the average business and household in countries that do not have the draconian ability to impose the same sort of control over and co-ordination of businesses and people as China.
For the rest of us, the threat remains for further restrictions on the supply to health professionals and individuals of vital items of medical and sanitary products – all because of someone’s poor risk management, or greed.
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Greenhouse gas emissions are at record levels and showing little sign of slowing. The global average temperature during the last decade was the highest on record compared to pre-industrial levels, as reported by three global agencies, and the trend is expected to continue.
World leaders and citizen groups are regularly gathering at climate change meetings and demonstrations around the world to voice their concerns about the deleterious effects of global warming and to emphasize the urgency of creating robust and realistic schemes to meet Paris reduction targets.
The ultimate goal is aspirational: net-zero by 2050. By net zero, carbon neutrality is implied, namely a post-carbon economy with a net zero carbon footprint, achieved by harmonizing carbon emissions with carbon removal.
Climate action groups and youth movements are beginning to experience some reasonable successes in focusing the attention of governments, financial stakeholders, and civil society to the existential challenges of climate change and the collective benefits of well-planned, speedy action. The zeitgeist seems right for achieving a net zero world.
Significantly, Mark Carney, economist and banker, former Governor of the Bank of Canada and Bank of England and now Special Envoy on Climate at the United Nations, considered as one of the world’s foremost leader’s championing climate change financing and policy, has recently stepped up to the plate with many world leaders to take action in dealing with the perceived crisis. He has been inspirational in formulating legislation and monetary policy for governments and businesses to accept and reconcile the effects of global warming and commit to the goal of a net-zero world by 2050.
His appointment to the United Nations, which starts around April 2020, and his commitment and determination to resolve climate change issues and plan climate finance solutions provides a great chance to influence and expedite ideas for a concerned global community.
It’s an ambitious mission as the economic growth of many countries is reliant on the continued production of fossil fuels to power industries, buildings and homes, and run transportation systems. As the key to success in this energy revolution has a strong economic component, it is crucial to de-risk the effects on the economy of implementing a gradual diversification of energy systems from ones based on non-renewable fossil fuels instead to those founded by renewable solar and wind energy over the next three decades.
This can be achieved by making financial policy a centerpiece for governments, businesses, and partnerships, in striving to achieve a net-zero economy. A challenge in realizing these goals is comprehensive transparency by all climate stakeholders on climate change, risk management, and investment to help companies deal with the financial stress on profits, investment, supply and demand, all associated with the perceived disruptive effects of the envisioned transition of the global energy infrastructure.
Any analysis of the risks involved to achieve net-zero emissions will involve stress testing of the financial sector to define whether the damage imposed by the change can be managed on a country-to-country basis without major economic disruption to the government, industry, and the private sector, while protecting the health and well-being of civil society and the environment.
Meanwhile, some of the world’s largest financial institutions (i.e., depository: banks, building societies, credit unions, trust, mortgage and loan companies; contractual: insurance companies and pension funds; investment: banks, underwriters and brokerage firms) are seeking to reduce their risk by divesting their investments in fossil fuel industries and aligning their loan portfolios in support of companies that are backing the transition to a net-zero industrial ecosystem.
The role of the financial institutions to provide finance for research and development of alternatives to fossil fuels is also key to achieving the targets set for a net-zero economy. Objectives of these institutions should be to develop alternatives that are competitive or even cheaper than fossil fuels. Then, users of fossils fuels will likely be encouraged to move away from fossil fuels instead of being compelled to move away from their use. An injection of significant institutional funding to achieve net zero will help the transition although targets for research and development spending set out in the Paris agreement are apparently insufficient. Financial institutions could be backing the research and development needed for a net-zero economy, particularly if they are divesting their investments in fossil fuel companies.
As illustrative of this trend, some of the world’s principal financial institutions with more than $2 trillion in assets have committed to develop eco-friendly investment portfolios by 2050. In addition, undertakings to reduce emissions have been made by major companies with aggregate market capitalization of more than $2.3 trillion. Also, around 33% of the global banking sector have committed to follow the Paris agreement with their investment portfolios.
A net-zero world is an incredibly ambitious vision, especially at a moment when oil prices are low and impacting the fossil fuel sector of the economy. This problem is exacerbated by some of the largest greenhouse gas emitters trying to maintain growth of their industries while reducing emissions, whereas others are weakening their climate commitments to boost economic growth. To avoid a climate catastrophe and meet Paris emission reduction targets, it will be necessary to leave a good proportion of the remaining supply of fossil carbon in the ground with a smart approach to protect investor’s economic returns.
It is clearly a balancing act of unprecedented proportions to reduce greenhouse gas emissions while not bringing non-renewable energy companies and their employees to poverty.
If not checked, an increase in greenhouse gas emissions may result in health and poverty issues related to the effects of global warming. So, the costs of financing this sector is also an issue that needs to be assessed. What will influence the health of people more: climate change or poverty?
Nevertheless, the climate finance debate is anticipated to motivate governments, business leaders, and civil society as well as energize climate youth movements to face the challenges of a significant readjustment of the financial market that will enable the gradual shift from fossil to non-fossil energy.
A recent report described what it would take technologically to create a net-zero-emissions energy infrastructure. It was proposed that known clean technologies, creatively integrated into essential energy systems and energy intensive industries, could enable a net-zero ecosystem, Figure 1.
The viability of this transition from non-renewable to renewable technologies, however, will be contingent on the reliable provision of vast amounts of low-cost renewable electricity; trustworthy grid balance of variable electricity generation, demand, and storage; electrification of energy intensive materials and manufacturing processes like steel, cement, chemicals, and petrochemicals; as well as transportation systems amenable to electrification. Large-scale, long-distance cargo ships, trucks, and passenger planes that cannot easily be electrified can be powered by carbon neutral fuels made by capturing and recycling carbon dioxide chemically or biologically.
One strategy aimed at decarbonisation of stubborn emissions is to centralize, unite, develop, and deploy candidate renewable energy technologies as depicted in Figure 1. This vision of integration of essential energy and industry operations could enhance the economics and efficiency of costly assets, facilitate cooperation of stakeholders, simplify the essential knowledge base required by policy makers, regulators, and legislators and minimize risk to investors to enable dependable and economically responsible provision of these net-zero services.
The economic and technological challenges of transitioning to a net-zero energy world are substantial. It remains to be demonstrated by continued research and development, scaling, and deployment of candidate clean technologies, which will prove to be most efficient, reliable, and cost-effective in future net-zero emission energy systems.
Written by Geoffery Ozin
Acknowledgements – Insightful feedback from Bob Davies and Erik Haites who appraised the content of this article is deeply appreciated.
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Quick summary: Students explore the concepts of wealth and compare a range of definitions. Students then investigate the concept of real wealth and consider how businesses and the ways that people work might have to change to support more people having more real wealth. Finally, students develop their own definition of real wealth.
This lesson supports students to inquire into the big idea of ‘real wealth’. Students develop an understanding of shared values, and build their sustainable and ethical financial knowledge, equipping them with the skills to make sound financial decisions based on social, environmental and economical merit.
- Students understand the concepts of wealth and real wealth.
- Students recognise that some of our current workplace and business practices would need to change in order to support more people having more real wealth.
- Students consider the costs and benefits of changing workplace and business practices in the pursuit of more real wealth.
General capabilities: Critical and creative thinking, Literacy.
Cross-curriculum priority: Sustainability OI.6., OI.8.
Australian Curriculum content description:
Year 7 Economics and Business
- Why individuals work, types of work and how people derive an income (ACHEK020)
- Present evidence-based conclusions using economics and business language and concepts in a range of appropriate formats, and reflect on the consequences of alternative actions (ACHES026)
Year 8 Economics and Business
- Influences on the ways people work and factors that might affect work in the future (ACHEK031)
- Present evidence-based conclusions using economics and business language and concepts in a range of appropriate formats, and reflect on the consequences of alternative actions (ACHES037)
Syllabus Outcomes: C4.2, C4.3, C4.4, C4.1, C4.8.
Unit of lessons: Real Wealth Year 7 & 8
Time required: 60 mins.
Level of teacher scaffolding: Medium – lead students in class-wide activities and discussion.
Resources required: Student Worksheet – one copy per student OR computers/tablets to access the online worksheet. Device capable of presenting a website to the class. Sticky notes (one for each student), pens, board for sticking notes on. Real Wealth Cheat Sheet, Glossary Secondary.
Digital technology opportunities: Digital sharing capabilities.
Homework and extension opportunities: Includes opportunities for extension.
Keywords: wealth, real wealth, definitions, work, business, community.
Cool Australia’s curriculum team continually reviews and refines our resources to be in line with changes to the Australian Curriculum.
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Achieving financial literacy should be a goal for every American. Adults with a firm understanding of personal finance, credit cards, and credit are more likely to avoid money troubles. And financial education is best started in childhood, before most kids have the power to make independent financial decisions.
Despite the importance of financial literacy, many adults lack an understanding of basic financial concepts, which can lead to bad credit. You can help your kids avoid poor credit by teaching them how to avoid mistakes.
Here are six common credit mistakes you should teach your kids to avoid.
Ignoring Their Credit
It’s easy to ignore your credit when you don’t understand how it works or why it’s important. But monitoring your credit can be viewed as part of being a healthy, productive adult, just like getting an annual physical exam. And if you ignore your credit, you could miss out on getting a credit card, owning a car, homeownership, and more.
Luckily, paying attention to your credit and credit score is fairly easy. You’re entitled to a free annual copy of your credit reports and there are many free credit scoremonitoring tools available.
Making Late Payments
If your kids understand one credit mistake to avoid, let it be making late payments. Payment history makes up 35% of your credit score, and one late payment can cause your score to plummet.
Most creditors won’t report a late payment until you’re at last 30 days past due, but it’s risky just to get to that point. Instill the importance of timely payments in your kids.
Applying for Too Many Credit Cards
Young adults may be tempted to apply to several credit cards as soon as they turn 18. This is a mistake for two reasons. First, a hard inquiry from a credit card application can ding your credit score a few points, so you don’t want multiple hard inquiries occurring at once (especially when you’re just starting out). Second, it can be difficult to juggle multiple credit cards at once when you’re just starting to establish financial independence.
Maxing Out Credit Cards
A higher minimum payment isn’t the only consequence of maxing out your credit cards. Experts recommend using no more than 30% of your available credit at one time. If you go above that threshold, you could be damaging your credit with a high credit utilization ratio. Your kids should keep their credit card balances low.
Defaulting on a Loan
Defaulting on a loan – whether it is an auto loan, mortgage, student loan, or other type – has many consequences that will vary based on the type of loan. Your credit will almost certainly take a big hit, debt collectors may go after you, and you could have your wages garnished as the result of a court judgment. You could even lose your home or have your car repossessed.
Many creditors are willing to work with borrowers before they get to that point. If your children are at risk of defaulting, they should try to work out an alternative solution with the creditor.
Living Beyond Their Means
Loans and credit cards aren’t free money. Frivolously taking out loans and opening credit cards you can’t afford can lead to crippling debt, poor credit, and a lifetime of financial woes. Teach your kids that loans and credit cards are useful tools that must be managed responsibly. You should never buy or borrow when you can’t afford it.
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The U.S. economic system advantages some and disadvantages many. In particular, African-Americans, Latinos, and women have faced historic, embedded discrimination —reinforced by institutional policies. This has created and sustained wealth inequality.
Misconceptions that racial wealth disparities result from individual choices are obstacles to systemic change. But research busts these damaging myths: attending college, raising children in a two-parent household, working full time, spending less—none of those personal behaviors can alone close the wealth gap. For women, the wealth gap has been largely overlooked in discussions of women’s economic security. These gaps, compounded by injustices in our tax system, impact the next generation. Funders who want to build assets for low and middle income families are finding ways to provide opportunity across race and gender.
The report, Clipped Wings: Closing the Wealth Gap for Millennial Women is the second in a series of publications that builds off AFN’s 2015 publication, Women & Wealth, exploring how the gender wealth gap impacts women. Read now to better understand the specific challenges facing millennial women and the strategies available to help grantmakers guide future investments.
AFN’s Tackling Debt focuses on the types of debt that trap families and are a pervasive impediment to wealth building—education, health, or justice. It also highlights a philanthropic strategy to address debt for households in the southern U.S.
Why It’s Important
AFN members explore and promote grantmaking strategies that can help build wealth for historically-disadvantaged individuals and families.
Fiscal stability brings greater capacity to manage emergencies
More prepared for children’s educational needs
Improved health outcomes
Increased economic activity and local prosperity
Systemic solutions disrupt assumptions and policies that reinforce gaps
Improved post-secondary educational outcomes
With white households’ median wealth 12.9 times greater than black households and 10.3 times greater than Latino households, grantmakers are focused on finding ways to address this devastating wealth gap and the damage it causes. Some serve as conveners to build awareness of systemic barriers. They build relationships between stakeholders—like banks and community groups—needed to catalyze change. Funders also catalyze change themselves through investments to dismantle inequities.
Strategies to reduce the racial wealth gap certainly include savings programs and credit building. Beyond those building blocks, some funders are zeroing in on another root cause: the lack of business and financial assets. People of color have historically been challenged to secure the resources—such as capital, education, and experience, as well as access to markets—needed to start and grow businesses. So, funders support micro- and small-business development by addressing the needs of African-American and Latino entrepreneurs.
Funders concerned about the gender wealth gap seed and grow programs to serve a continuum of women’s needs as well. Some programs provide affordable and available child care while others support affordable college completion. Some initiatives build paths to attainable home ownership while others build attainable vehicles to grow retirement assets.
Grantmakers are also tackling the need to change federal and state tax policies. Right now, household savings and investment incentives are not accessible to the least economically mobile. Funders have opportunities to participate in tax reform coalitions, weave tax policy reform into current funding arenas, and support research and communications campaigns to both educate and move people to action.
AFN members explore and promote grantmaking strategies like these that can help build wealth for historically-disadvantaged individuals and families—wealth that creates a reservoir in times of need.
““With nearly half of mothers positioned as the sole or primary breadwinner for their families, the advancement of our nation relies on women more than ever before.”
Dena L. Jackson | Texas Women’s Foundation
Accelerating Ideas Into Action
At the AFN May 2019 conference Accelerating Ideas into Action, we explored the ways where we live, work, and play, influences our ability to build assets, and shared how grantmakers are joining forces to invest in neighborhood development and individual wealth building to yield better individual asset and community outcomes.
Keynote speaker, Felecia Wong, PhD, president of the Roosevelt Institute, pulling from both her expertise and personal experiences, provided an “outside in” view of philanthropy’s role in racial equity and wealth equity work, helping our audience recognize aspects of the US economy that have systemically benefited some and excluded others, and showing us all some practical pathways for mitigating the harmful consequences of those systematic disparities.
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The FDIC has been in the news a lot in recent years, but during quieter times the agency and what it does are invisible to most Americans.
The closest we get to it is the sign in the bank window that says, “Member FDIC”.
The FDIC is sort of like a giant insurance company for the entire US banking industry (in fact it stands for the Federal Deposit Insurance Corporation). The fact that we usually don’t know what it does is an indication that it’s doing the job it was meant to do.
The History of the FDIC
The FDIC was created under the Glass-Steagall Act in 1933 in the depths of the Great Depression. Large numbers of banks were failing in the 1930’s and confidence in the entire banking system was going down as they did. The FDIC was created in an effort to restore that confidence.
For most of its existence the FDIC has served its purpose well; the confidence it has created in the banking system has limited the number of banking crises to just two in the past 80 years: the savings and loan crisis of the late 1980’s, and the recent financial crisis. And due largely to FDIC intervention, neither of those crises led to anything like the economic disaster that occurred during the Great Depression.
What the FDIC does
Like most government agencies, the FDIC has multiple functions, but the two that are most relevant to most people are deposit insurance and bank regulation.
This is what most of us know the FDIC for—the insurance they provide on our bank deposits.
The ceiling on that coverage, which started out as just $2,500 when the agency began, is now set at $250,000. That limit covers checking accounts of all types, savings accounts, bank money market accounts, certificates of deposits and certain outstanding negotiable instruments.
What FDIC insurance does not cover: any of the above in excess of $250,000 in a single bank, non-bank money market accounts, investment securities (stocks, bonds, mutual funds, ETF’s, etc) or the contents of safe deposit boxes.
The $250,000 limit is per bank, which is to say that you’d get full coverage on $500,000 in deposits if you split them evenly between two unrelated banks.
How effective is FDIC deposit insurance?
Since the FDIC started, no depositor in the US has lost any money on insured bank deposits due to the failure of a bank.
Prevention is the first line of defense against bank default (and the need to pay deposit insurance claims), and that’s why the FDIC has a powerful regulatory presence in the banking industry.
The FDIC monitors the health of banks based on largely on compliance with specified capital ratio requirements. If a bank falls below the required capital ratio requirement, the FDIC has a set of remedies ranging from issuing a warning to the bank, all the way up to declaring the bank to be insolvent which enables the agency to take it over.
Because the FDIC continuously monitors the health of the banks we deal with, we don’t need to do it ourselves. We can bank with confidence and know that our money and our transactions will be protected even if the bank is facing financial troubles.
The make up of the FDIC
The FDIC is set up as a government corporation. That means that while it’s owned by the US government, it operates as an independent agency and maintains its own revenue sources. The independent agency status is set up to minimize political interference.
The agency is governed by five board members, three of which are appointed by the president of the United States.
The FDIC provides deposit insurance out of reserves funded by premiums it collects from member banks. Should that reserve prove insufficient, there is at least an implied guarantee by the US government to cover the shortfall.
Why we need the FDIC
Banking is part of the nation’s financial infrastructure, which is to say that it’s part of the overall national infrastructure in much the same way the interstate highway system and the electric power grid are. The national economy—and our own individual personal economies—can’t exist without a sound banking system.
Something so important as the banking system has to be regulated and insured against failure, and that’s why we have (and need) the FDIC. It has undergone an enormous test since large scale bank failures began in 2007 and it has passed. The FDIC deposit insurance system worked so well that most people’s deposits were completely unaffected by the collapse of the banks that held them.
The FDIC works to keep bank failures from turning into bank runs and wholesale economic collapse. That’s worth the premiums we’re paying to the agency through the banks.
It guarantees us that though we may lose money elsewhere, it won’t be at the banks.
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Under subvention schemes, the home buyer, banker and the developer enter into a tripartite agreement where the buyer pays 5-20 per cent of the money upfront. The rest is paid by the bank in the form of a loan which is disbursed to the developer to continue the construction work.
Is subvention plan a good option?
When you buy an apartment under a subvention scheme, you pay the initial amount, and the bank pays the loan amount to the developer, according to the construction stage, while the interest portion on the loan disbursed is paid by the developer. … These (subvention schemes) are good options for developers to boost sales.
What is meant by subvention?
Definition: Subvention refers to a grant of money in aid or support, mostly by the government. … Subsidy is a transfer of money from the government to an entity.
What is the difference between subsidy and subvention?
Subsidy is the “English” word. Subvention is a word used in Latin languages such as French and Spanish, that has “crossed over” into (uncommon) English usage.
Is subvention scheme banned?
The National Housing Bank (NHB) in July asked housing finances companies to stop offering interest subvention schemes through developers. … “After the NHB ban, some builders are offering to reimburse the interest to the customers instead of the lender,” says a senior official of a large HFC.
What does interest subvention mean?
Subvention means grant of money by the government. In the context of the Budget, it is interest subvention, the government paying part of the interest on a loan. The government offers subvention mostly on home, crop and education loans.
How do you calculate interest subvention?
This interest subvention of 2% will be calculated on the loan amount from the date of its disbursement / drawal upto the date of actual repayment of the loan by the farmer or up to the due date of the loan fixed by the banks, whichever is earlier, subject to a maximum period of one year.
What does subvention cash mean?
Automakers offer incentives on leasing as well as big cash-back offers to those who buy. Such leasing incentives are called lease subvention. Subvention is when an automaker subsidizes a consumer in an effort to move slow-selling cars.
What is interest subvention scheme for farmers?
In order to provide short-term crop loans up to Rs 3 lakh to farmers at an interest rate of 7 per cent per annum, the government offers interest subvention of 2 per cent per annum to banks. An additional 3 per cent interest subvention is provided to farmers who pay their loans promptly.
What is a book subvention?
A book subvention is funding provided to the publisher to facilitate the publication of a book. Authors are not required to have a subvention in order to have their books published with a university press.
How do subvention payments work?
A subvention payment is an actual payment for the gross amount of the tax losses transferred, whereas a loss offset is a transfer of tax losses for no payment.
What is builder subvention scheme?
What is a subvention scheme? Subvention schemes are offered by the builders to their home buyers, through tie-ups with banks. … The scheme allowed the buyers to book the property by paying 5% to 20% of the amount, upfront. The buyers did not have to pay EMIs, until the possession of the apartments.
What is interest subvention period?
The amount of subvention was to be calculated on the amount of crop loan from the date of disbursement up to the actual date of repayment of the crop loan by the farmer or up to the due date of the loan fixed by the banks, whichever is earlier, subject to a maximum period of one year. …
How does pre EMI works?
What is Pre EMI scheme? Pre EMI means, you have to pay the interest amount only on the disbursed home loan amount. Once you receive the keys to your dream home, your full EMI begins for home loan. In case of under construction property, the banks and financial institutions disburse home loans in tranches.
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Definition of Intangible tax:
An annual tax assessed by state governments on the current market value of certain non-exempt assets including securities and real property. Bank accounts, bank CDs, tax-exempt bonds, U.S. Treasury bonds, and assets in qualified retirement plans are exempt. Although the value of intangible assets must be reported in annual tax filings a tax is not always assessed.
Meaning of Intangible tax & Intangible tax Definition
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By Jayla Johnson
In the age of e-finance and the ease of transferring money online, the issue of money management has become more important for students. In recent years, many of them have turned to apps to manage their spending.
Michael Thomas, a financial planning, housing and consumer economics professor at the University of Georgia, said that the best app he has seen for improving money management is You Need A Budget (YNAB).
YNAB is a paid personal finance app that offers a zero-based budgeting system, meaning all of your money is allocated to different categories. For example, if you make $1,000 a month, every dollar that you have will be allocated to a category in your budget. The app offers a one-year free trial to college students, but after that it costs about $12 a month.
“It’s intuitive, easy to use, great educational tools, and a lot of the app is designed by using science and psychology to not only track your money but present your money,” said Thomas. “It will promote certain financial behaviors or prevent certain financial behaviors.”
However, a student doesn’t need to necessarily pay for an app. Other popular free options exist, such as PocketGuard, Clarity Money, Goodbudget and EveryDollar.
Thomas said a good financial app has key components in order for users to get the most out of it. It must be easy to use because usability can be one of the biggest barriers for using the app, especially with many students liking things “readymade,” Thomas said.
“Thinking about short attention spans and the expectations as it relates to the use of apps, that’s a big piece. Beyond that, it’s what additional ongoing education does the app provide? You’re doing things with your money so does it give you helpful insights?”
Jalen Springfield is a senior computer science major at the University of Georgia and uses YNAB. He says he started using it as a way to “get on top” of his spending.
“This [app] fits well for me because I am very detail-oriented,” Springfield said. “Knowing exactly how much money goes where is pivotal in making changes to my spending and saving goals, but it’s accessible so that anyone can budget better. They provide articles and video tutorials that help navigate the process as well.”
Springfield said he looked at what he spent in a prior month to determine how to budget for the current month. He realized that the earlier he started budgeting for the future, the better.
“By repeating these steps, making mistakes and learning, I’m able to increase my age of money,” Springfield said. “That’s how long my cash stays solvent until I spend it. My goal is to reach 30 days so that I’m living on last month’s money and not paycheck to paycheck. Although there is a steep learning curve, the functionality is unmatched.”
Springfield said the app has taught him to manage his money differently compared to apps like Mint, which he said is good at “showing money I already spent in hindsight.”
Once he saves a certain amount of money using the app, he said he will make a plan for the future.
“YNAB ensures that I plan for the future with money I have today,” Springfield said. “YNAB is full of features to automatically track incoming and outgoing money and categorize it to their respective roles. Mistakes are bound to happen. Overspending will happen, but YNAB has features in place to shift money around.”
Jayla Johnson is studying journalism at the University of Georgia. She is a 2020 Cox-SABEW Fellow, a training program in partnership with UGA’s Cox Institute for Journalism Innovation, Management & Leadership.
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Corporate Financial Management
In order to calculate whether stock is under or outperformed the market, comparable approach can be used. Under this technique, the performance of the share can evaluated by market value of per share is divided by the earning per share (Da et. al. 2012). In this, it is found that the current market price of Nintendo is 47.66. At the same time, the company is providing the 30 Yen as the earning per share. Therefore, the value of the stoke will be
= 47.66 / 30
Hence, it can be said that Nintendo’s stock has under market.
Typically, in the business environment, the management of the organisation is responsible for the overall performance of the company. The management of the company is liable to make the profit by making the effective utilisation of the resources. If a company performs well then it indicates the management is making the effective utilisation of the resources. On the other hand, if company does not perform well it means that management is not effective in utilisation of the organisational resources (Dempsey, 2013).
The term cost of equity refers to the dividend paid in against of the capital invested by the shareholders. It can be calculated by the evaluated percentage dividend paid by the company. The financial statement of the company shows that it paid ¥ 51,654 million on the total shareholder equity ¥ 1,262,239 million.
Cost of equity = Dividend paid / shareholder equity * 100 (Edmans, 2011)
= 51,654 / 1,262,239 * 100
Therefore, it is found that the cost of equity is 4.09%.
NINTENDO uses the different kind of the source to raise the fund for its business operation. In this, it is found that the company uses both main source of financial such as debt finance and equity finance. Under the debt finance, company raise the fund from the account payable, short term finance, bank loan etc. On the other hand, as the equity finance company raises the fund from the preference share and equity share (Filis, et. al. 2011).
- Debt to Equity Ratio and Debt to Total Asset Ratio
|Debt to equity ratio||Total debt / Total equity||0.17||0.12||0.16||0.17||0.15|
|Debt to total asset ratio||Total debt / Total assets||0.15||0.10||0.14||0.14||0.13|
The above table shows the calculation of the debt to equity ratio and debt to total assets ratio for Nintendo last five years. In this, it is identified that debt to equity ratio is low for the company. In the financial year 2017, the debt to equity ratio is calculated 0.17 that increased from the previous year 2016 by 0.12. It means that company have more belief in the equity finance. At the same time, debt to total asset ratio is identified 0.15 in 2017 that is also increased by 0.10 from the last year 2016.
By the help of the calculation of the debt ratio, it is found that there is a low debt ratio. In capital structure of the company, there is a big part of the equity as compared to debt. The main advantage of firm using debt is that it has to provide the less dividend and tax. On the other hand, it also shows that most of the organisational assets are fully owned. It also minimises the risk of the company (Shepherd, 2015). At the same time, advantage of using the debt is that it helps to retain control on the flow of the capital. It also provides the tax advantage to the company because interest on debt is tax deductible. In additionally, debt finance is also supportive in the planning.
At the same time, the main loss of firm using the debt is that it decreases the profitability of the company because it has to pay interest on the operating profit. At the same time, in order raise the money by debt, a company has to need a good image in the term of the credit rating (Squire, 2013). At the same time, debt finance is risky form of the debt finance. However, it is used to raise fund quickly but is risky. It requires interest whether profit made or not.
From the above calculation, it is found that there the capital structure of Nintendo is not good because there unbalance between the debt and equity. In the capital structure of the company depicts that there is only 14.84% debt that is realty less. At the same time, it is also found that debt to equity ratio is calculated 0.17. On the other hand, industry ratio is found by 37.24% that is much appropriate compared to company. It indicates that other companies in the industry have balance between the debt and equity (Vanhove, 2012).
Qualitative trade-off tehory of the capitalt streucture is associated with the debt and equity that determine how much debt and equity should have in the capitla structure of the company. It helps the company to maintain the balance between the debt and equaity. According to this theory, company should have equal debt and equity in its capital structure. But, on the other hand, the capital strucure of Nintendo contains the 14.85% debt and 85.16% equity. On the basis of this, it can be determined that it has too little debt and unbalanced capital structure (Pilbeam, 2010).
Cash is a significant term of the business environment that is used during the making the payment or receiving the payment. The annual report of the company shows that it accumulates cash each year. In the last financial year 2017 company also accumulated some cash. The financial statement of the company shows that it received ¥ 662763 million in the financial year 2017 and ¥ 570,448 million in 2016. Therefore, the cash accumulation of the company was ¥ 92315 (662763 – 570448) million in the last financial year. At the same time, it is also found that in the financial year 2017, the company found generated 19101000 cash from the operating activities. At the same time, it generated 69,518,000 cash from the investing activities. But, Nintendo expended 14,435,000 in the financial activities (Nintendo, 2017).
Nintendo Company returned its owners cash in the form of dividend. The company pays its cash to the equity share holders in the year ended of March 31 is ¥ 51,654 millions. This dividend is occurring with the profits which are generated by the company during in that year. Thus, by distributing the part of the profits among the equity shareholders, company retain its goodwill in the market.
This strategy also encourages the employees to perform well in future and generate more profits for the company. Therefore, it can be stated that dividend plays a significant role to motivate the employees in regards to achieve company goals (Rezaee & Riley, 2011).
The firms’ dividend policy of Nintendo Company is quite different as compare to peer industry as company has a basic policy to provide funds internally for the future growth. At the same time, to maintaining the strong and liquid financial position in regards to this keeps update with the changes in the business environment. Moreover, company pays its dividend based on the profits levels in each fiscal period. Other than that, it is in Nintendo Company policy to distribute the surplus twice per year in the form of an interim dividend. As per the company standard, the interim dividend per share is calculated by dividing 33% of consolidated operating profit by the total number of outstanding shares, excluding treasury shares, as of the end of the six-month period rounded up to the 10 yen digit (Rubio, et. al. 2012).
Da, Z., Guo, R.J. and Jagannathan, R. (2012) CAPM for estimating the cost of equity capital: Interpreting the empirical evidence. Journal of Financial Economics, 103(1), pp.204-220.
Dempsey, M. (2013) The capital asset pricing model (CAPM): the history of a failed revolutionary idea in finance?. Abacus, 49(S1), pp.7-23.
Edmans, A. (2011) Does the stock market fully value intangibles? Employee satisfaction and equity prices. Journal of Financial Economics, 101(3), pp.621-640.
Filis, G., Degiannakis, S. and Floros, C. (2011) Dynamic correlation between stock market and oil prices: The case of oil-importing and oil-exporting countries. International Review of Financial Analysis, 20(3), pp.152-164.
Nintendo (2017) Annual Report [Online] Available: https://www.nintendo.co.jp/ir/pdf/2017/annual1703e.pdf
Pilbeam, K. (2010) Finance and Financial Markets. USA: Palgrave Macmillan.
Rezaee, Z. & Riley, R. (2011) Financial Statement Fraud Defined. USA: John Wiley & Sons.
Rubio, F., Mestre, X. and Palomar, D. P. (2012) Performance analysis and optimal selection of large minimum variance portfolios under estimation risk. Selected Topics in Signal Processing, IEEE Journal of, 6(4), pp. 337-350.
Shepherd, R. W. (2015) Theory of Cost and Production Functions. USA: Princeton University Press.
Squire, L. R. (2013) Fundamental accounts, Academic Press: California.
Vanhove, N. (2012) Economics of Tourism Destinations. UK: Routledge.
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This article is part of a series of Policy Issues articles on Soda Tax. You can also find articles on Should Soft Drinks be Taxed More Heavily?, Can Taxing Sugary Soda Influence Consumption and Avoid Unanticipated Consequences?, Sugar-Sweetened Beverage Taxation as Public Health Policy-Lesson from Tobacco, Soda Taxes and Substitution Effects: Will Obesity be Affected?, Better Milk than Cola: Soft Drink Taxes and Substitution Effects, and Evaluating Excise Taxes: The Need to Consider Brand Advertising as part of this theme.
Obesity has become so prevalent and its correlation with a broad set of chronic diseases so compelling that few would argue society should do nothing about it. The policy debate is not about whether to act but about what to do. This article contrasts the recommendation to tax one class of food—caloric-sweetened beverages—with a more comprehensive strategy.
The National Heart Lung and Blood Institute provides a summary of what the public health community sees as the recommended steps for preventing overweight and obesity: “A lack of energy balance most often causes overweight and obesity…. Overweight and obesity happen over time when you take in more calories than you use.”
The National Institutes of Health (NIH) also catalogues the many factors that contribute to overweight and obesity; they include: spending too much time sitting down watching screens; a physical environment that promotes vehicle use rather than walking; competition for the dining-out dollar that leads to larger portion size; lack of access to healthy foods or individualized portions; advertising messages promoting processed, calorie-dense foods; genetic factors; hormonal or other metabolic causes; use of medicines that contribute to weight gain; emotional needs that encourage overeating; quitting smoking; sleeping too little or too much; and aging.
Given this complex array of contributing factors across diet, lifestyle, personal makeup and surrounding environment, it is not surprising that NIH focuses its recommendations for preventing overweight and obesity on learning a number of healthy behaviors: make following healthy lifestyle a family goal, including following a healthy eating plan; focusing on portion size; remaining active; reducing screen time; and keeping track of weight, body mass index, and waist circumference.
This public health strategy essentially has three components: balancing calories in with calories out; choosing the right foods in the right portions, and taking responsibility for good health outcomes for one’s self and any dependents. Balance, choice and responsibility taken together represent a strategy that fits the complexity and scale of the overweight and obesity problem. The Mayo Clinic concurs: “Whether you’re at risk of becoming obese, currently overweight or at a healthy weight, you can take steps to prevent unhealthy weight gain and related health problems. Not surprisingly, the steps to prevent weight gain are the same as the steps to lose weight: daily exercise, a healthy diet, and a long-term commitment to watch what you eat and drink.”
Given the broadly-based nature of the causes of overweight and obesity, the public and private health strategies recommended by experts address the multiple causes of weight gain and place the onus for change on individuals. Is the idea of taxing sweetened soda beverage a useful element in a strategy for combating overweight and obesity?
On balance, it does not seem to be, for several reasons. First, it oversimplifies the problem by focusing on only one of many dietary inputs and ignoring the output side of the caloric equation. Second, it fails to address the many tax “loopholes” left behind—including substitution of other caloric-sweetened foods for the missed calories, consumption of other calorie-dense foods driving the weight-gain-train and rising tolerance over time for higher-priced sweetened soda. Third, it ignores its own collateral damage, including the regressive incidence of the tax on low-income people and the burden unnecessarily placed on responsible consumers of sweetened soda. Finally, it does not lead to better understanding of the problem and individual accountability.
Advocacy of a soda tax starts with a “link” between rising consumption of caloric-sweetened beverages and overweight and obesity. But the advocates of this approach gloss over the nature, tightness or relevance of that linkage to its taxing strategy. As to the nature of the linkage, unlike smoking, which is hazardous to one’s health under any circumstances, caloric-sweetened beverages are not intrinsically hazardous or even problematic. “Taken as directed,” they can be pleasurable, a quick source of energy, a nice meal complement or a break from the tedium of the day. It is when sweetened soda is consumed excessively that it begins to contribute to overweight and obesity. As with so many of life’s choices, it is the dosage that matters.
As to the tightness of the linkage, a recent longitudinal study of weight gain in both men and women published in the New England Journal of Medicine found:
“On the basis of increased daily servings of individual dietary components, 4-year weight change was most strongly associated with the intake of potato chips—1.69 lb., potatoes—1.28 lb., sugar-sweetened beverages—1.00 lb., unprocessed red meats—0.95 lb., and processed meats—0.93 lb. . . .” (Mozaffarian, et al., 2011).
While increased consumption of soda is a contributor to long-term weight gain, it was not the leading contributor. Ironically, it looks like increased consumption of meat and potatoes accounts for much more of the gain. One can always take too much of a good thing, including mom’s old prescription to “eat your meat and potatoes” for good health.
More importantly, it is only increases in consumption that had the measured effects. Portion control is also vital to maintaining a healthy weight. Finally, more alcohol—0.41 lb. per drink per day—more TV—0.31 lb. per hour per day—and less sleep—other prominent characteristics of modern lifestyles—also contribute to weight gain (Mozaffarian, et al., 2011). A healthy, stable weight comes from the many factors that make up a healthy behavior pattern.
As to the relevance of the linkage, the whole idea of taxing a food puts the emphasis in the wrong place. Behavior, not a bad food, should be the fulcrum of obesity prevention. Taxing soda is like taking away one sweet while ignoring other sweets and calorie-dense foods, oversized portions, inactive lifestyles and other contributing factors to obesity. In fact, if one were to use taxes to combat overweight and obesity, it would probably make more sense to tax the outcome rather than a single input.
While a soda tax may reduce consumption of sweetened beverages it may nevertheless fail to reduce overall caloric intake. People will likely substitute other sweetened foods. The gap also may be filled by increased consumption of other calorie-dense foods. Either substitution would frustrate the purpose of the soda tax.
Most studies of the effectiveness of soda taxes assume away this substitution effect. Still, they arrive at tax rates that have to be quite high in order to produce estimated modest dents in the incidence of obesity. Or, as a reviewer of sugar-sweetened soft drink (SSD) and obesity studies concluded, “Assertions that SSD are a disproportionate cause of excess body weight and/or that their avoidance would be effective in preventing weight gain are, in my opinion, not well substantiated by the science,” (Gibson, 2008).
Even harder to estimate is the degree to which people will build up indifference to the tax over time and what effect this tolerance for paying the tax would have on consumption. The history of other “sin” taxes, like those on cigarettes and alcoholic beverages, suggests that consumers adjust to the higher cost and resume or maintain their consumption. The real progress in reducing smoking came not from taxes but from health warnings on packages and from advertising, education campaigns and “clean indoor air acts”—i.e., policies that aim at changing behaviors, not price relationships.
Advocates of soda taxes are wont to minimize or dismiss the welfare effects of their proposal. The incidence of such a tax, however, is strongly regressive. It is not just that low-income families are likely to pay a significant share of the total of such revenue. Such a tax also will consume a larger share of poor peoples’ disposable incomes and leave them with even less to spend on healthier foods like fresh fruits and vegetables. Advocates of such a tax also tend to gloss over the difference between causation and correlation. Cigarette smoking causes cancer and other cardiovascular diseases. There is no good or safe dosage of smoking. There even is harm to others caused by second-hand smoke. This is an entirely different linkage than exists between soda consumption and obesity. Caloric-sweetened beverages are safe and enjoyable for many to consume. A tax on them unjustly burdens a portion of the population not deserving of being targeted. This is fundamentally different from taxing cigarettes, where all smokers are fairly taxed.
Finally, there is nothing about a soda tax per se that contributes to the growth in understanding that would lead most directly to the kind of behavior change needed to arrest and reverse obesity. As a backhanded recognition of this fact, advocates of a soda pop tax will sometimes argue that the revenues raised can be used to fund such educational initiatives.
Two problems arise from such an argument. The first is the practicality of earmarking such revenues for these purposes. The tobacco settlement payments are instructive. Most states have pulled them directly into general revenues or tapped them for budget-balancing shenanigans—as recently done in Minnesota. In a world where “no new taxes” clashes with deficit reduction necessities, neither passage of such a tax nor earmarking it for a broader public health initiative seems likely.
The second problem is even simpler: if such spending legerdemain could in fact be achieved, then why not fund it with a fairer tax? It is, after all, the personal accountability that better understanding and education seek to achieve that will make the real difference in curbing obesity.
All of which brings the discussion back to a more open-ended quest for good health policy with respect to the increase in obesity here and abroad. The foundation for such a policy should not be a soda tax, which only leads to the good food/bad food trap of treating symptoms, not causes. The causes of overweight and obesity are rooted in environmental, behavioral and cultural factors that make obesity easier to come by than to avoid. A narrowly targeted tax leaves most of these factors unaddressed. It is likely to end up misdirected, ineffective, inequitable and unfairly punitive for some.
Changing behavior works best when anchored in good science and broad-based education. The appropriate policy application to rising obesity requires balance, choice and responsibility. Balance calories in with calories out through diet and activity. Make good choices in the quality and quantity of foods consumed. And take responsibility for one’s lifestyle. This kind of approach is more likely to work.
It also is more likely to make an ally rather than an adversary of the beverage industry. When that happens, progress often comes more quickly and easily. For example, the Alliance for a Healthier Generation—an initiative of President Clinton’s foundation—is working with the beverage industry to change what is offered in school cafeterias. Among the 8,000 schools participating by 2009, it had achieved “a 65% decrease in full calorie soda shipments to schools…and 79% of school districts in compliance with alliance standards,” (Milling and Baking News, 2009). This also is the approach being taken by First Lady Michelle Obama, who is working with food retailers to give poor people better access to grocery stores selling more healthful foods.
A good example of the collaboration potential around an educational rather than a taxation approach is the recently announced 2010 Dietary Guidelines for Americans and its “MyPlate” symbol. “More than 2,000 organizations have joined the Nutrition Communicators Network, which launched June 2 coincident with the unveiling of the MyPlate icon…. Partners include public and private businesses as well as non-profit organizations that represent a diverse cross-section of stakeholders and partners,” (Food Business News, 2011).
Teaching all Americans to eat and live healthier lives rests on the principles of balance, choice and responsibility rather than taxes. That approach pushes a solution that better conforms to the problem. It also fits the idea that collaboration and common ground can work where confrontation and battle grounds often do not.
Bakers urged to take proactive steps in child obesity effort. (2009, April 21). Milling and Baking News, p. 7.
Gibson, S. (2008). Sugar-sweetened soft drinks and obesity: A systematic review of the evidence from observational studies and interventions. Nutrition Research Reviews, 21, 145.
More than 2,000 organizations in support of MyPlate. (2011, July 19). Food Business News, p. 22.
Mozaffarian, D., Hao, T., Rimm, E.B., Willett, W.C., and Hu, F.B. (2011). Changes in diet and lifestyle and long-term weight gain in women and men. The New England Journal of Medicine, 364(25), 2392-2404.
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Let Us Set The Table For Trading
In the world of business, trading is generally referred as commerce or transaction
. The system of mechanism which allows trade to happen at a particular place and time is known as market. In the olden days the original form of trade was known as barter that is the direct exchange of goods and services. Then slowly the one side of the barter system was introduced by the precious metals, ordinary metals and paper money.
The tradition of Modern traders is usually negotiated through a medium of exchange known as money. Therefore buying can be purely separated from the act of selling and in turn earning a profit out of it. The great invention of the mode of money usually simplified and did the art of promoting trade at the local level within a given region or within the state boundary level or within the nation or at the international level cutting across the boundary lines. In the present generation money has taken the form of credit, non-physical money and paper money.
Trade happening between two traders is known as bilateral trade. When trade between more than two traders happens then it is known as multilateral trade. In trade, the production of goods and services are done on a small scale and in the form of mass production to distribute to larger targeted potential customers.
International trade means the exchange of goods and services happening across national borders. It is more important for a country as it plays a significant part in the gross domestic product (GDP). In the recent scenario, every country is on the pace of industrialization, globalization, liberalization, privatization, allows entry of multinational corporation and outsourcing to increase the trade and commerce of the country.
When trade flourishes in a country it helps in the circulation of money and movement of goods and service in the market. Trade helps the people to get employed and contribute their mental and physical service and in turn earn a salary, wages or remuneration according to the nature of work done. Trade did help in the conversion of human resources into division of labor.
The trading activities in a country are governed by its law. Each country has its own rules and regulation regarding the conduct of trade within the country. Any violation of the rules and regulation plus carrying out illegal trade practice is punishable under the existing law of the country. Those involved in such act are debarred from carry on that particular trade and the existing business certificates are cancelled and license is taken away by the concerned authorities.
Trade should be carried out in a meaningful way which provide useful good and service to the society in general and for the potential customers. The satisfaction of the customers on those goods and services will survive in the market and earn goodwill for long stand in the local and international market. A good trade happens in the world in this form. A traders hard work and commitment in serving the general public with needy good and service with satisfaction is the prime motive for the success of the trade. The art of trading depends on the goods and services traded in the market. A lot of understanding and research is needed to rightly market the goods and service in the market too.
International Isotopes Inc. (inis) - Financial And Strategic Analysis Review -- Aarkstore Enterprise Means And Trading In Great Governance Pc Group, Inc. (pcgr) - Financial And Strategic Analysis Review --- Aarkstore Enterprise Berry Petroleum Company (bry) - Financial And Strategic Analysis Review --- Aarkstore Enterprise Goodrich Petroleum Corporation (gdp) - Financial And Strategic Analysis Review --- Aarkstore Callon Petroleum Company (cpe) - Financial And Strategic Analysis Review --- Aarkstore Enterprise Trading Advice- Define Capital Source Indoco Remedies Limited (532612) - Financial And Strategic Analysis Review Enerplus Resources Fund (erf.un) - Financial And Strategic Analysis Review --- Aarkstore Enterprise United Envirotech Ltd. (u19) - Financial And Strategic Analysis Review The End of Prop Trading: End of an Era High Probability Trading. Generate Income From Your Portfolio Today Getting Started in Options Trading
Let Us Set The Table For Trading Islamabad
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In Europe, the main region for the production and use of diesel vehicles, the downward trend began in 2012, but seriously accelerated in 2017. Explanations.
Changes to emissions standards for pollutants, particularly the introduction of the Euro 6 Standard at end 2014, which requires a substantial reduction in emissions of nitrogen oxide (NOx) by diesel engines, have made manufacturers all but eliminate them from small city cars. The cost of diesel engines was no longer compatible with the selling prices of these categories of vehicles. So, in France and Spain, where diesel was particularly prevalent1 and where mid- and low-range small vehicles are very popular, the decline of diesel began well before the scandal of the rigged tests at Volkswagen at end 2015. In Germany and the United Kingdom, where sales of top-of-the-range vehicles are almost twice as high2 as in France, the peak of diesel sales has been far more recent and the drop only became truly apparent during 2017.
In the European market, petrol vehicles are now the most widely sold. Direct fuel injection (GDI) technology is the big winner in this new trend: inspired by common rail – which made diesel successful – GDI considerably reduces emissions of CO2... but at the expense of higher emissions of particles. From this point of view, diesel engines fitted with a particle filter would be the best bet.
In view of the Climate-Energy transition plans of governments and the bigger European cities3, buyers seem to be changing their behaviour: many are moving away from diesel vehicles that they believe they might no longer be able to drive everywhere or sell second hand (but they are also buying more SUVs and crossovers!). This trend is encouraging manufacturers to further reduce their ranges. Toyota, and more recently Nissan, have thus announced their intention of no longer selling light diesel vehicles in Europe. The European manufacturers are revising their engine production forecasts downwards from 2025. Engine makers are not working on any new platforms and most of them are putting their engineers to work on petrol instead.
The hardest hit players are developing strategies to limit the decline in diesel. The Bosch Group has developed a system to drastically reduce NOx emissions, thanks to which it will easily be able to reach the emissions objectives of the future Euro 7 Standard. At the same time, the manufacturers are all busy working on mild hybrid projects, which could prolong the life expectancy of combustion engines. Lastly, the new regulations introduced in some big cities (e.g. Hamburg) ban polluting diesel engines predating the Euro 5 Standard, but allow “clean diesels”.
Whereas the decline of diesel is inevitable, it might not necessarily disappear altogether. Its future will depend, on the one hand, on the environmental, economic and driving performance of hybrid technologies and, on the other, on the speed of development of rechargeable electric solutions.
80% in France and 73% in Spain in 2016 according to figures published by the French Automobile Manufacturers Committee (CCFA).
37% in Germany, 35% in the United Kingdom, 27% in Spain, 20% in France according to figures published by the CCFA.
The city of Paris has set itself the goal of banning diesel engines in 2024 and petrol engines in 2030. On the national scale, the Hulot Plan announced in July 2017 calls for the end of combustion engines in 2040. However, these plans do not specify is this also concerns hybrid vehicles
TABLE OF CONTENTS
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In 1973 Black-Scholes wrote a paper on option valuation, centred on some tricky mathematics. In particular, this paper left many academics baffled over ‘stochastic processes’ and ‘random walks’.
Later, Cox, Ross and Rubenstein came up with their own explanation by creating ‘trees’ that visually represented this idea of random walks. Combined with he Black-Scholes idea of ‘risk-neutral valuation’, this led to an option valuation model far more applicable than Black-Scholes.
We will build up to the famous Black-Scholes equation using cashflows and greeks from earlier classes in this series. We will avoid using unnecessary mathematics unlike many academic text books. We will investigate the Black-Scholes pricing formula and correct misstatements people often make like ‘N(d1) is delta’ and ‘at-the-money options have a 50 delta’
An awareness of options pricing, preferably via a course like Option Pricing 1, part of this series or classes.
• Does option valuation require probabilities?
• Risk-neutral valuation and risk-neutral portfolios
• Replicating portfolios
Black-Scholes pricing formula
• Cashflows on a hedged option trade; costs and benefits
• Applying the formula
• The ‘0.4 rule – pricing options in our head
• Correcting myths about delta: N(d1) and 59 delta options
This class is offered in four separate half-day units that run concurrently. These can be taken separately but there are themes that run through the units.
WHO SHOULD TAKE THIS COURSE?
Aimed at staff and clients who want to understand the inner working of option valuation. It is not necessarily just for those who are actually involved in valuation in practice
These courses are included in this module
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Sarah McLaren, Professor of Life Cycle Management at New Zealand’s Massey University writes a valuable article on The Conversation website about how we account for greenhouse gas emissions and what are the implications. What are your views?
Climate explained: why countries don’t count emissions from goods they import
The latest Ministry for the Environment report, published last month, shows New Zealand contributes 0.17% of the world’s total greenhouse gas emissions.
New Zealand’s population represents just 0.06% of the world’s population (New Zealand 5 million, global 7.8 billion), which means it has a disproportionately high share of emissions for its population size. This is sometimes represented as per capita emissions – and in 2017, New Zealand ranked sixth highest among developed and transitioning countries, at 17.2 tonnes of carbon dioxide equivalent emissions per person. This is almost three times the average per capita share.
The reason for this can be partly explained by the way countries account for their greenhouse gas emissions.
Keeping track of emissions of traded goods
Countries generally use “production-based accounting” to quantify their greenhouse gas emissions. This approach counts emissions from all activities that happen within a country’s territory – which means goods manufactured elsewhere and then imported are not included.
It also means that if a country exports more goods and services than it imports, it will likely have disproportionately higher per capita emissions.
It can be argued that if a country can produce these goods more efficiently (with lower emissions) than other countries, this may be the preferred situation. This is the case for New Zealand’s agricultural production. Research shows New Zealand’s pasture-fed agricultural systems are efficient in producing meat and dairy products – per kilogram of meat or litre of milk, New Zealand emits less than many other countries.
Although most of these products are exported, the emissions from their production count towards New Zealand’s greenhouse gas inventory. In fact, almost half of New Zealand’s emissions in 2018 came from agriculture, and just under three-quarters of these agricultural emissions were methane from cows and sheep.
From a global perspective, climate policy needs to recognise the advantage of producing goods where they can be made with lower emissions. Otherwise there is a risk industries relocate to other (typically less developed) countries with less stringent climate change regulations, and global greenhouse gas emissions rise as a result. This is known as “carbon leakage”.
Patterns of consumption
But there is an important corollary to all of this: considering only the production-based emissions of countries is not enough to address the climate crisis. Even if New Zealand can produce agricultural goods more efficiently than other countries, should these be produced at the current volume – or at all?
Ultimately we need to consider patterns of consumption and assess whether they are in line with a sustainable future for the world.
In practical terms, this means that we should be accounting for both consumption and production-based emissions. An accounting system based on consumption would assess greenhouse gases emitted in the production of goods and services consumed by New Zealanders. This includes imported goods as well as everything that is produced and then consumed in New Zealand – and it excludes exported goods and services.
Two New Zealand studies (for 2011 and 2012) show the biggest contribution to consumption-based emissions comes from three sectors: construction, food and beverages, and education and health services. For food and beverages, animal protein and processed meat contributes 35% of the emissions associated with an average adult New Zealand diet.
But accounting for emissions from consumption comes with challenges. It requires tracing the point of origin of imported products, often in countries with less stringent emission inventories. There are two types of modelling we can use to support consumption-based analysis. Life cycle assessment starts with a product – say an apple or packet of milk powder – and tracks the entire supply chain back through the retail, distribution and agricultural production. Other models integrate environmental and economic data across multiple regions.
Such data and the insights we glean from both production and consumption accounting could guide future climate policies to enable New Zealand to reduce emissions both within the country and internationally.
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- How budgeting can improve your life?
- What are the three major objectives of budgeting?
- What are the five purposes of budgeting?
- What are the disadvantages of budgeting?
- What are the different types of budgeting methods?
- What is the importance of budgetary control?
- What are the 3 types of budgets?
- How can budgeting impact your overall wealth?
- What are the four benefits of budgeting?
- What are the advantages and disadvantages of budgeting?
- What are the benefits of planning a budget?
- Why is budgeting important for students?
- Why are budgets so important for organizations?
- What are the benefits of controlling?
- What are importance of budgeting?
- What are the advantages and disadvantages of zero based budgeting?
How budgeting can improve your life?
A budget helps your entire family focus on common goals.
A budget helps you prepare for emergencies or large or unanticipated expenses that might otherwise knock you for a loop financially.
A budget can improve your marriage.
A good budget is not just a spending plan; it’s a communication tool..
What are the three major objectives of budgeting?
They are:Provide structure. A budget is especially useful for giving a company guidance regarding the direction in which it is supposed to be going. … Predict cash flows. … Allocate resources. … Model scenarios. … Measure performance.
What are the five purposes of budgeting?
Five reasons why budgeting is so importantHave set goals and objectives you wish to achieve. A budget can help you determine your long-term goals and put you on the path of working towards them. … Ensuring you don’t spend money you don’t have. … Ensure you are happy in retirement. … It helps to be prepared for emergencies. … Budgeting will help address bad spending habits.
What are the disadvantages of budgeting?
The Disadvantages of BudgetingInaccuracy. A budget is based on a set of assumptions that are generally not too far distant from the operating conditions under which it was formulated. … Rigid decision making. … Time required. … Gaming the system. … Blame for outcomes. … Expense allocations. … Use it or lose it. … Only considers financial outcomes.
What are the different types of budgeting methods?
What are the different types of business budgeting methods?Incremental budgeting.Activity-based budgeting.Value proposition budgeting.Zero-based budgeting.Cash flow budgeting.Surplus budgeting.
What is the importance of budgetary control?
A budgetary control is a mechanism that helps senior managers ensure that spending limits are adequate. This control is important because spending excesses have an unfavorable impact on corporate profits.
What are the 3 types of budgets?
Depending on the feasibility of these estimates, Budgets are of three types — balanced budget, surplus budget and deficit budget.
How can budgeting impact your overall wealth?
Budgeting can reduce stress + improve overall physical and mental health, which leads to greater wealth. When you feel better, you’re going to make better financial decisions.
What are the four benefits of budgeting?
The advantages of budgetingPlanning orientation. The process of creating a budget takes management away from its short-term, day-to-day management of the business and forces it to think longer-term. … Profitability review. … Assumptions review. … Performance evaluations. … Funding planning. … Cash allocation. … Bottleneck analysis.
What are the advantages and disadvantages of budgeting?
ADVANTAGES & DISADVANTAGES OF BUDGETINGcoordinates activities across departments.Budgets translate strategic plans into action.Budgets provide an excellent record of organizational activities.Budgets improve communicationwith employees.Budgets improve resources allocation, because all requests are clarified and justified.More items…•
What are the benefits of planning a budget?
The Benefits of Budgeting: Provides You 100% Control Over Your Money. Let’s You Track Your Financial Goals. Budgeting Will Open Your Eyes. Will Help Organize Your Spending. Will Help Create a Cushion for Unexpected Expenses. Budgeting Makes Talking About Finances Much Easier.More items…•
Why is budgeting important for students?
Budgeting is important for your financial stability, ensuring you can pay common expenses like rent, tuition, student loans, credit card bills, and entertainment. … Budgeting ensures you’re not spending more than you’re making, allowing you to plan for short- and long-term expenses.
Why are budgets so important for organizations?
One of the most important tools an entrepreneur can develop for a business is a budget. Budgets allow a business owner to not only plan for expenses, but to analyze expenditures and make changes according to the needs of the enterprise.
What are the benefits of controlling?
Benefits. Organizational control has many varied benefits, including improved communication, financial stability, increased productivity and efficiency, help in meeting annual goals, improved morale, legal compliance, improved quality control, and fraud and error prevention.
What are importance of budgeting?
Budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. than they earn and slowly sink deeper into debt every year.
What are the advantages and disadvantages of zero based budgeting?
The major advantages are flexible budgets, focused operations, lower costs, and more disciplined execution. The disadvantages include the possibilities of resource intensiveness, being manipulated by savvy managers, and bias toward short-term planning.
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Do you want to know why do we need foreign direct investment? What is foreign direct Investment? Actually what is meant by FDI (Foreign Direct Investment) or foreign direct investment? And just what are the advantages for the sustainability of the economic system in the country? Look into the following full review.
What is Foreign Direct Investment?
What is foreign direct Investment? Foreign investment or foreign direct Investment (FDI) essentially comes from foreign or other nations through legal channels in our country. Normally, this is done by an investor from a nation who then has an interest in supplying capital to develop a business in another country.
This cross-border foreign investment generally is a long-term investment given by an investor from abroad to a company in the country. Thus, foreign direct investment involves two to many countries at once.
Foreign Direct Investment
FDI itself is a form of foreign investment that is directly invested or engaged in many fields. In this foreign direct investment flow, excluding investment from global portfolios in the form of shares through buying and selling on the stock exchange, bonds and other securities.
Compared to foreign debt, foreign direct investment is usually seen as more rewarding and safer to finance development. This, apart from due to risks from business failures held by foreign investors, is less. When compared with foreign debt, which the state has a binding responsibility to pay these debts as well as interest.
FDI is also often recognized as a tool or media in the world economic system with globalized dynamics.
Usually these foreign investments are performed in other countries which are extremely popular in the field of factory construction, buying land for investment, construction of new buildings and so on. Foreign direct investment extracted from this foreign country can have full or almost full ownership. There are numerous types of foreign investment, one example is a joint venture which includes a Permanent Establishment or PE. Joint Venture itself is a company whose ownership is shared between several countries. One thing that needs to be recognized if foreign direct investment is not contained in investments in the stock market.
Interesting Facts About Foreign Direct Investment
Usually, a country makes use of foreign direct investment to improve economic growth, especially in developing countries it is a much needed factor. The United Nations Conference on Trade and Development (UNCTAD) reports that, several developing countries have received foreign investment of around US $ 694 billion or around 60% of the total value of FDI globally.
In several developing countries in the Asian region, FDI accounted for an increase of around 10% for the year, with an investment of US $ 505 billion approximately. On the other hand, some developed countries such as the European Union and the United States also apparently need foreign investment. Companies in developed countries also make foreign investment for various reasons.
The majority of the foreign direct investments made by these countries are in different methods. For instance, by way of mergers to acquisitions between several old firms that have globalized, usually this is accomplished to restructure and to make the core business more refocused.
How to Promote a Foreign Direct Investment?
Foreign direct investment can be done in various approaches. One of these is by purchasing a organization that has been established in another region. Or you can also invest to create a new company in the country involved.
Foreign direct investment is also usually marked by the purchase of shares from companies in a country. The purchase must be made at least 10%, both by companies and individuals originating from other countries. If the purchase of shares is less than 10% then the IMF or the International Monetary Fund, says if the ownership of these shares is only as individual or corporate stock portfolios.
Another way to make for direct investment is usually also in the form of purchasing or construction activities for factory construction, or land acquisition by foreign investors. This form of land ownership or foreign direct investment buildings is generally partial or almost full.
If a organization has decided to invest abroad, there are a number of things to consider. For example, by thinking about the best way to make these investments successful. Here are some ways you can do investing abroad:
Joint Venture through FDI
One way to invest abroad is to be involved in a joint venture. This joint venture is a cooperation that is usually carried out by a local company with a multinational organization. This is usually carried out by a legal entity partnership by mixing various resources available in each company for a particular objective.
This joint venture has several advantages and advantages, including. These advantages for example:
Local companies that become partners generally understand and know the habits, customs and social institutions which exist in the local atmosphere.
Access to the capital markets in the host country can be strengthened through the relationships and reputations of local partners.
Local partners might have technology that is more desirable for the environment in the country.
Acquisition or merger
Acquisition takes place when a company has common stock in another company, or a company spends its capital on basis of long-term in another company. The following positive aspects are acquired by mergers and acquisitions.
Advantages of merger or acquisition
- The operation process is faster.
- No need to prepare a new management since there is already management of the company that has been acquired and only need to monitor its performance.
- The business risk is smaller.
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Whether in Silicon Valley, or basically anywhere else in the world, people talk about ‘disruptive innovation’ or simply ‘disruption’. Do they really know what it means? Or they are just trying to follow that new trend, and fit in the ‘innovation world’? Actually, knowing what disruption means makes you more sophisticated than just randomly using the word. This is why this article is a must-read.
What is disruption?
You should thank Clayton Christensen, of Harvard Business School for this “new” term. He used it in his book “The Innovator’s Dilemma”, to describe innovations that created new markets by discovering new categories of customers. I believe that these two words are losing their serious aspect, and are becoming more of “buzzwords”, that a lot of people use on social media. Indeed, the word was mentioned more than 2,000 times in articles last year. But a lot of people still get it wrong.
There are two types of “innovators”: those who simply work to improve existing products (this is what we call ‘sustainable innovation’). And those who invent new products, creating new markets. And these are called ‘disruptive innovators’.
Let’s go back in time, when people used to go from one place to another in horse carriages. Back then, “innovators” obviously tried to find ways to make the horses go from point A to point B faster. Until the first automobile was invented. New markets were created. Also, new needs and demands had to be served. So, in other words, new business models had to be put in place. As a matter of fact, disruption is a process, not just a product or a service offering, like a lot of people might believe.
This gives you a clearer picture of what a “disruption” or a “disruptive innovation” is. It is a new way of exploiting old or existing technology, to create something pioneering.
What is uberization
Uber, the multinational online taxi dispatch company, is the first example that comes to one’s mind when talking about ‘disruption’.
It is important to note that, by “uberization”, we do not only mean the Uber company, but also the new model that came along with the startup creation. It is very simple. Just like Uber transformed the taxi industry with its new technologies, you can do the same in your industry, whether you are in healthcare, agriculture, or finance. The recipe for the new model is easy: you take traditional jobs, you add new technologies including new elements such as measurement of supply and demand, worker’s performance, and customer satisfaction, and you mix all the ingredients! You get an ‘uberized’ model.
A lot of businesses are trying to implement this model to their structure, such as grocery shopping, or laundry, or even medicine. Basically, what they do it that they gather and combine buyer and seller information on one platform in real time. They work as an intermediary between the two parties.
This model was superbly accepted by the Society because it helped them lead a more flexible lifestyle. It also gave them the opportunity to have a better balance between full-time employment and having their own-business. It’s the perfect option that comes in between.
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- October 18, 2016
- Posted by: Catalyst
- Category: Business Energy News
The Stored Energy in the Sea (StEnSEA) project is a new pumped storage system aimed at large-scale marine storage of electrical energy.
There is currently a lack of storage within the UK grid system and but it is expected that storage levels will triple worldwide by 2030, while installed capacity is expected to multiply more than four times over.
Considering the fact that there were roughly 4.3GW of European offshore wind energy in 2012 and there is expected to be more than 150GW installed by 2030, renewable energy should surpass the EU’s target (20 percent) significantly.
What Is It?
The StEnSEA project helps with the development, testing and increase of offshore electrical energy storage. It consists of a 30 m diameter sphere, 2.70 m walls and a large pump turbine that will be submerged underwater. The operating principle is rather similar to that of the conventional pumped storage unit and includes many of it’s key aspects.
While the water pressure’s depth acts as somewhat of a hydraulic system for the kinetic energy, excess wind and solar energy will be used to pump the water out and charge the spheres. If for any reason the wind and solar power fail to do their job, it will enable water to enter back into the spheres and cause the turbine to discharge the spheres by generating additional electricity.
Through the thoroughly tested and developed storage concept, the sea will be used as somewhat of a storage compartment. Soon after the water is pumped out of the seabed’s hollow sphere, it flows back into the sphere in order to drive the turbine during the discharging phase.
While the eventual storage volume is expected to be 12,000 m and the capacity is expected to be 5-6 MW, the project will need a water depth of at least 700 m. Fortunately for the StEnSEA, their “underwater pumped hydro system” has been thoroughly and successfully tested.
Before the StEnSEA project officially began, a pre-study was done comprising a thorough and detailed analysis of the construction needed for it’s implementation. By analyzing these important details and running tests in inland lakes, an exact blueprint was formulated which lead to the StEnSEA project.
Countries such as Spain, France, Portugal and Italy have already installed wind parks equipped with deep water floating devices. The project has also received a tremendous amount of backing, reporting worldwide investments in their power plants, air compressors and batteries to be somewhere near $200 billion by the year 2030.
Considering the fact that the uptake is also less expensive than fossil fuel, this renewable energy storage system could be world changing.
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Let’s guess: you probably learned a slew of not-so-useful facts in school: the precise time of the Boston Tea Party, the symbol for gold in the periodic table, the square root of 64. That kind of stuff.
What you probably didn’t learn? How to, you know, manage the money you earn later in life. Financial skills like how to make a budget establish good credit, or even pay for college. In fact, in the U.S., only six states require students to take a standalone personal finance course in high school. Six!
So, this year, we’re celebrating Financial Literacy Month by highlighting some of the smartest money moves you can make. Why? We want all Chime members — all Americans, in fact — to feel confident when it comes to their finances.
To kick off this money party, here are five things that our members wished they’d been taught in school — and that you’ll be hearing a lot more about this April.
1. Understanding credit
If there’s one thing that got hammered home in our interviews, it’s this: Credit is a murky pit of mistakes waiting to happen. And our members want more information on how credit works, why it matters, and how to improve it.
“Your credit is just so important,” Atlanta says. “I feel like it’s definitely something we don’t learn enough about.”
Take Atlanta, a Chime member from Indiana. When she turned 18, she signed up for a Victoria’s Secret credit card and bought a couple pairs of sweatpants and leggings. “At the time it didn’t seem bad because it wasn’t technically my money,” she says. But the interest charges quickly added up, and made it difficult to pay her other bills.
“Your credit is just so important,” Atlanta says. “I feel like it’s definitely something we don’t learn enough about.” She’s right: Nearly 4 in 10 Americans say they “have no idea” how their credit scores are determined, and 30% don’t know how much credit card interest they pay.
Sound familiar? While we’re going to publish a lot of credit-related financial literacy content in the coming month, here are a few pieces to help you get started:
2. Developing good financial habits
Good habits are the foundation of a healthy relationship with money (not to mention a healthy life). Many Chime members want help developing good money habits – especially because those habits may look very different than the ones modeled during their childhoods.
One such member is Amy-Beth, a single mother to two teenage boys in Las Vegas. “My parents made lots of mistakes, and I learned how to make those mistakes as well,” she says. “I just carried on with the same bad patterns.” She’s missed bill payments, for example, and had utilities get turned off.
For Amy-Beth, managing her finances is like constantly “trying to get your head above water” — and she wants to show her children an alternative path.
That sentiment is shared by many Americans: In a recent survey by Charles Schwab, respondents rated money management as the most important skill for kids to learn, ranking it above the dangers of drugs and alcohol, healthy eating and exercise habits, and safe driving practices.
Want to get a head start on good habits? These articles will be right up your alley:
3. Avoiding fees
Financial fees are sneaky. They often seem so small: 7% APR, $10 monthly maintenance fees, $3 ATM fees. But after a while, they add up. Big time.
she didn’t think those $35 overdraft fees were a big deal. Then she received a bank statement revealing what they’d cost her over the course of the year: $900.
When Tierra, a Chime member in St. Louis, was in her early 20s, she didn’t think those $35 overdraft fees were a big deal. Then she received a bank statement revealing what they’d cost her over the course of the year: $900. Tierra was shocked. “At that time I was making like $20,000 or $25,000 a year,” she says. “That’s a lot of money.”
As Tierra puts it, she “just got in this really bad cycle.” She’s not alone: While only 9% of bank customers overdraft more than 10 times a year, they account for 79% of the estimated $34 billion in overdraft fees that banks charge annually.
Here at Chime, we’re not a fan of fees. At all. But we know that other financial institutions are, so it’s important to understand how to avoid them:
4. Budgeting on a limited income
Managing bills and debt, determining wants versus needs, tracking spending; these are tasks many people struggle with. But when you’re on a limited income — especially when you’re living paycheck to paycheck — it’s far more challenging. Our members often emphasized the fact that they never learned how to create (and stick to!) a budget.
“When I left home, I had no budget, no idea that I should just be writing this stuff down, no idea I should be reevaluating my bills and what I could and couldn’t afford,” Tierra says.
“I just kind of got what I wanted: ‘Oh a $200 table? Great.’ I wish I’d learned more about budgeting.”
While a budget would probably come in handy for most people, only 2 in 5 Americans say they have one. Of those who don’t budget, 24% of respondents said it was because they “never stick to one” and 11% of respondents said it was because they “don’t know how” to make one.
If you’re in either of those camps, we’ve got a lot of great guides to budgeting below — and more on the way!
5. Thinking in the long term
When you’ve got bills in the mailbox and kids’ birthdays on the calendar, it’s difficult to set aside money for the future. But the truth is that opening an emergency fund is one of the savviest financial moves you can make. Our members know that; what they don’t know is how they’re supposed to start when they have so many competing demands on their plate.
“I’m always afraid that something’s going to happen and I’ll have just $5 to fix whatever it is,” Amy-Beth says.
“I’m caught up on my bills, but now I want to be able to hold on to that — and not just spend it on whatever Facebook ad shows up next.”
Amy-Beth wants to build an emergency fund so that if she pops two tires (like she did less than a year ago) she’ll be able to get new ones without borrowing money. It’s a good goal, and one that many Americans have yet to achieve: In fact, if faced with a $1,000 emergency, only 41% would cover it with savings.
Though thinking in the long term is tough, it’s also crucial. Here are some articles that will help you on your emergency fund journey:
Money moves are on the way
What else do you wish you’d learned about in school? As noted earlier, we’re going to be sharing a series of money moves t in honor of Financial Literacy Month. So keep an eye out for those.
In the meantime, we’d love to learn about your biggest money challenges. Chime in with your money moves!
Real Members. Sponsored Content.
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What is reverse Logistics? Before we dive in the nuances of reverse logistics, otherwise known as return logistics, integration, let's briefly recap what reverse logistics is. Reverse logistics refers to all operations related to the reuse of products and materials. According to the Council of Logistics Management, it is “the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics.”
For example, the reverse logistics process includes the management and the sale of surplus as well as returned equipment and machines from the hardware leasing business. Normally, logistics deal with events that bring the product towards the customer. In the case of reverse logistics, the resource goes at least one step back in the supply chain. For instance, goods move from the customer to the distributor or to the manufacturer.
When a manufacturer’s product normally moves through the supply chain network, it is to reach the distributor or customer. Any process or management after the sale of the product involves reverse logistics. If the product is defective, the customer would return the product. The manufacturing firm would then have to organize shipping of the defective product, testing the product, dismantling, repairing, recycling or disposing the product. The product would travel in reverse through the supply chain network in order to retain any use from the defective product.
The supply chain of reverse logistics poses some serious challenges, especially with the recent explosion of ecommerce. Customers expect to return products in the same way they purchased them, so it is not always as simple as just returning to a store. With ecommerce sales expanding into more non-traditional, oversized items (like refrigerators and other appliances), shippers need to be prepared for the incoming boom of returns. Shippers are faced with a variety of challenges: finding the right carriers for the specialized reverse logistics movements, managing costs and inventory, and delivering the desired customer experience.
How to Optimize Your Return Logistics Through Integration
Managing return logistic can be challenging. Like traditional outbound logistics, return logistics requires the careful planning of pick-ups and deliveries of products, however, the involvement of end-consumers in the process creates additional complexities. Meanwhile, the rate of returns and hence the demand for reverse logistics is increasing.
As reported by Supply Chain Dive, the Reverse Logistics Association estimated “more than $550 billion worth of returns move through the economy per year, with half being sent back to suppliers and manufacturers. Many companies are making it easier for the customer to return and use it as a competitive advantage. The e-commerce side is increasing returns dramatically.” A recent article in Logistics Viewpoints noted that UPS estimated that post-holiday returns were up 23% in 2020. It is far too early to predict returns’ actual rates in 2021, but historical averages suggest this could be a historic year for returns.
In this new landscape, shippers need more effective return logistics management to understand how integrated processes are crucial to success: They need to be able to track customer returns and identify the root causes for those returns. Shippers need to seamlessly integrate with other parties, including carrier partners, to share real time data and make agile business decisions, for example, redesigning the product, changing how the product is marketed, and/or changing how the product is packaged and shipped.
In order to provide for a seamless and hassle-free customer experience, the TMS should have a web-based returns authorization process that is easy for the consumer to use and that captures all the info that the shipper needs in order to manage the return and track root cause data for future mitigation. Once the returns process has been initiated, the TMS must include an integrated solution that automatically pairs the specialized carriers that will pick up the item from the customer and the linehaul carrier that will return the product to the warehouse.
Moreover, shippers need to be able to determine the state of the returned product, whether it goes back into inventory, needs repackaging or refurbishing, is discounted, or is disposed of. Only when these criteria are met can a return logistics operation be considered truly “integrated.” The best way to tackle this massive undertaking is with a robust and fully integrated TMS.
Integration with Supply Chain Partners will Improve Your Return Logistics Strategy
High-cost products include electronics, medications, and specialty equipment. These items have a reasonable life-span, and their use may be necessary to literally save lives. Besides, failure of managing return logistics of such things may lead to an increased risk of exposing personal or company data.
For example, ISO standards mandate the proper disposal of electronics to prevent data theft. Failure to dispose of such items, mostly when returned for repair, replacement, or recycling, may lead to customers’ financial litigation. Instead of hoping disposal is appropriately addressed, integrated recycling supply chains keep everyone informed and hold outsourced service partners accountable.
Integration Can Decrease Your Return Logistics Costs
Integrated return logistics also eliminates the uncertainty behind returned products. When a customer returns an item, the costs of shipping, storage, diagnosis, repair, and replacement will fall to the retailer. In turn, those costs may then fall to the manufacturer. The cycle continues until the cause is addressed, and the item can then be resold, reclaimed, or otherwise repaired.
By integrating the process of managing return logistics with supply chain systems, particularly the transportation management system (TMS), managers can see reverse logistics KPIs and metrics in real-time. These values provide a measure of the whole reverse supply chain’s health for the business. As the KPIs change, organizational leadership can refine manufacturing, marketing, or other factors to reduce the risk of future returns.
Imagine this scenario. A customer returns an item based on a malfunction. It’s a simple weather radio. The manufacturer reviews the return data and sees a high trend of replaced or repaired radios based on the TMS trends. As a result, the manufacturer issues a recall to fix the broken items at risk of malfunction. Now, the retailer has an influx of returns.
Managing the products’ flow back to the manufacturer could become a nightmare. However, integrated return logistics processes within the TMS automatically route these returns directly to the manufacturer.
The process runs continuously behind the scenes to eliminate added inbound freight at the brick-and-mortar location. Of course, customers may opt to complete a return in-person. As a result, the TMS takes a more proactive role, showing retailers how to tender the shipment, when it is picked up, and bills the shipping cost to the receiving manufacturer. Again, it keeps costs under control.
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We just learned of a new proposal by the local utility company to implement a fixed fee on residential electricity bills. If passed, the proposal would also reduce rates for larger power consumers (i.e. businesses).
This isn’t the first time SDG&E has tried to slip in new hikes and fees.
Sometimes it’s successful. Just last year, the utility raised its rates across the board – charging some residential users 40% more for their electricity.
And more recently, SDG&E tried to completely overhaul San Diego’s net metering program. Fortunately, the pushback was strong enough from installers, residents, and green advocates that the measure was postponed for a few years.
However, the current proposal deals with changes to monthly service charges. Residential customers of SDG&E would pay a flat fee of $5 starting in 2015. That amount would go up to $10 by 2017. And thereafter, any future increases would be closely linked to inflation.
Why Should San Diego Solar Customers Be Worried?
Paying an extra $10 a month doesn’t sound like much. We’re only talking $120 extra a year.
But it represents the slow but consistent erosion of solar’s potential in San Diego.
SDG&E believes that solar customers throughout the County are getting a free ride by not paying their “fair share” of the utility grid’s upkeep. But isn’t that precisely why so many people embrace solar energy to begin with – to avoid supporting an outdated electricity network?
In other words, why should customers who receive the bulk of their energy from the sun have to pay more money to SDG&E? This is especially true when those same customers sell clean electricity to the utility company at competitive rates.
Because of solar’s rapid growth, SDG&E doesn’t have to burn as many fossil fuel inputs. The utility’s job is easier, cheaper, cleaner, and more predictable.
Solar customers should be rewarded for this – not punished.
How Much Will the Cost of Solar Energy Go Up If This Passes?
There’s no guarantee that the measure will pass. But if it does, the cost of going solar will indeed rise a little bit.
How much exactly?
That’s hard to say since we’re talking about price points that are more than 1 year away. You can only determine accurate costs, payback periods, and ROIs in the present moment. And rest assured that over the next 12 months:
- Solar panel installation costs will go down
- Incentives will evolve or expire
- Utility rates will change (i.e. go up)
- Fossil fuel costs will change (i.e. go up)
We don’t imagine that the true cost of solar power will change dramatically. But you’re almost certainly better off switching today than you will be tomorrow. For every month that you delay, you’re paying more money into an outdated electricity distribution system that is destroying the planet and wreaking havoc on your bank account.
If you’re ready to begin saving money and protecting the environment, contact us for a free quote today. It’ll be the best decision you ever made.
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Decentralised, unhackable and distributed
Picture a spreadsheet that is duplicated across a network of computers many thousands of times. Then imagine that this network is designed to regularly update this spreadsheet and check that all spreadsheets on all computers are the same.
Now imagine, if anyone tries to make changes to their copy of the spreadsheet, then the network of computers holding the other thousands of spreadsheet copies quickly detect this change and eject the changed spreadsheet from the network as invalid.
This is the way the blockchain ensures that no one person can "hack" or change the data. Information is only added to the spreadsheet if the network of computers all agree that the new information is valid and correct.
Consensus means everyone agrees that each transaction is valid. The blockchain system is a distributed network of computers, called “nodes”, which validate each others’ data, ensuring that no single node can corrupt or falsify the information.
The application of blockchain technology in agricultural supply chains is increasing. Using the AgriChain platform, every agreement to buy or sell some grain, every freight order, and every other type of agreement within the AgriChain system is validated by the entire network.
Provenance means everyone knows where each asset came from, who owned it and at what time. This is because the blockchain system holds a complete history of all transactions that can never be changed - right back to when transactions were first created.
In AgriChain, every asset transaction - be it for wheat, barley, wool or wine - is logged and stored within the blockchain system, from the time it was created to the time it was completed, ensuring absolute visibility of who did what and when.
Immutability means no one can tamper with the data - absolutely never! No transaction can be erased or changed once stored on the blockchain system.
In AgriChain, this means that every record, every transaction, every grain contract, every freight movement and supply chain is safe, secure and can never be falsified.
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The UK economy suffered the biggest contraction on record, in 2020, experiencing an unprecedented slump in economic and business activity after a series of lockdowns imposed to contain the coronavirus pandemic.
The country’s GDP shrank by 9.9 percent last year, according to new data revealed on Friday by its Office for National Statistics (ONS).
The annual decline was triggered by a historic recession at the beginning of the year, caused by the Covid-19 pandemic outbreak in February and March. The data shows that GDP began to rebound in the third quarter, but remained 7.8 percent smaller than it had been at the end of 2019.
In the final quarter of the year, the economy saw modest growth of around one percent, despite a further series of nationwide lockdowns aimed at tackling a resurgence of Covid-19 cases.
The near-flat performance at the end of the year came after 16 percent growth from July through September, as the British economy improved from its steepest crash in 300 years.
According to the ONS, GDP grew by 1.2 percent month on month in December, which was slightly better than had been forecasted.
Earlier this year, Britain became the first country to be blighted by one of the new and more transmissible variants of the virus. As of Friday, it has registered more than four million cases, along with 115,000 deaths, data compiled by Johns Hopkins University in the US shows.
The UK remains in a nationwide lockdown, which was imposed at the start of 2021. Earlier this week, Prime Minister Boris Johnson said some 13 million citizens had so far received the first dose of a vaccine against Covid-19
For more stories on economy & finance visit RT’s business section
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This chapter looks at the process of international financial and monetary reform in terms of the basic objectives which international financial architecture should meet. Those objectives are essentially five: (i) to regulate the financial and capital markets in all countries, as well as cross-border transactions, in order to avoid the excessive risk accumulation which has caused frequent and costly crises, both in developing as well as in developed countries; (ii) to offer emergency financing during crises, especially to ensure liquidity, complementing the functions of the central banks as lenders of last resort at a national level; (iii) to provide adequate mechanisms at an international level to manage problems of excessive indebtedness; (iv) to guarantee the consistency of national economic policies with the stability of the world economy system, and to avoid the macroeconomic policies of some countries having adverse effects on others; and (v) to guarantee an international monetary system which contributes to the stability of the international economy and is seen as fair by all parties. The Monterrey Consensus, approved by the United Nations International Conference on Financing for Development, which took place in 2002, might come closest to the definition of those goals although it does not include some of them explicitly (especially not the last one).
While some of those objectives refer to crisis prevention, others relate to the management of crises once they have been unleashed. Nevertheless, such a division is not a straightforward one since some good instruments for handling crises also have preventive effects as the history of the central banks throughout the world indicates. Nor is the distinction between micro and macroeconomic matters clear-cut since, as we shall see, financial regulation should include an important element of macro-prudential regulation.
This chapter is divided into four parts. Given the importance of the debate under way on financial regulation as a central mechanism to prevent crisis, the first section tackles this theme as well as corresponding institutional reform issues. The last section of that part analyses a question which is partially interrelated to the previous ones which has emerged strongly in recent debates: the role of an international tax on some financial transactions. The second part considers some of the main problems concerned with the prevention and management of crises in the developing world. That part concentrates, therefore, on the second and third objectives and the way in which developing countries have responded to the flaws in international financial architecture; this section will also look at a closely related question of the increasing demand by developing countries to participate in international financial organizations. The third part analyses the fourth and fifth objectives mentioned which, as we will see, are related. After briefly considering some of the problems associated with how to guarantee the consistency of national macroeconomic policies, we look more closely at reform of the international monetary system and propose a reform based on a significant expansion by the IMF (International Monetary Fund) of the use of Special Drawing Rights (SDRs). To conclude, the last part presents an overview of the reform of the international financial system since the Asian crisis; here we also study some of the characteristics of global economic governance.
It is worth highlighting that the chapter focuses on monetary and financial architecture and leaves aside, therefore, recent events on matters of financing for development, which also show a clearly complex panorama, but where some positive developments stand out: the clear recovery of the official development aid after the Monterrey Conference and the aggressive response of multilateral development banks to provide financing during the recent crisis. We discuss these topics in another chapter of this book.
2. DEFICIT AND GOVERNANCE OF FINANCIAL REGULATION
2.1 The regulatory deficit
The seriousness of the global financial crisis laid bare the magnitude of the regulatory deficit that the global financial system faced. This problem was particularly acute in developed countries, since many developing countries had responded to the series of financial crises they faced sincefrom the decade of the 1980s by strengthening their regulatory and supervisory frameworks. This regulatory deficit has two different dimensions. On the one hand, although the banking system was regulated, the regulation was insufficient in key areas and enforcement was not adequate due to deficiencies in the supervisory systems. On the other hand, there were significant areas of financial activity and financial agents (the so-called “shadow banking system”) that lacked any form of regulation.
The main effort made at an international level before the crisis was the negotiation of the Basel Agreement on banking regulation (Basel II). Although this agreement had various positive elements, it also contained a series of important flaws. One of its most worrying features, highlighted by a few commentators in the early 2000s (Griffith-Jones, Segoviano and Spratt 2002; Goodhart 2002), and clearly recognized after the global crisis was the fact that it reinforced the naturally pro-cyclical behavior of bank loans. In fact, the main failure of the financial markets is the tendency, both of lenders and borrowers, to assume excessive risks during boom periods. Those risks lead to significant losses later on in bank portfolios and other losses when growth slows down, which can set off financial crises. Basel II exacerbated this pro-cyclical behavior by giving increasing weight to the risk evaluation models of the banks themselves in the determination of suitable capital levels, which exacerbatesreproduces the inherent pro-cyclical pattern in the behavior of banks.
The need to introduce specific counter-cyclical mechanisms in banking regulation had been recognized by some analysts since the end of the 1990s, especially by the United Nations and the Bank for International Settlements (Ocampo, 2003; Griffith-Jones and Ocampo, 2009). In this field, one of the most important innovations was the Spanish system of counter-cyclical provisions for loan losses, initially introduced in 2000. However, neither those analyses nor the Spanish practice received adequate attention and were ignored by Basel II.
Another problem of Basel II was the tendency to overestimate the risk of bank loans made to developing countries, overlooking the benefits, in terms of risk reduction, of diversifying international portfolios. As a result of this flaw, its application can result in excessive capital requirements for loans to developing countries, reducing those loans and/or increasing their costs. This problem has not been corrected till now.
The areas which lacked regulation included, first of all, off-balance sheet bank transactions, which were in fact one of the most important sources by which the global crisis in the mortgage- and other asset -backed securities spread to the banks. In the same way, problem loans at some banks spread to other agents in the financial markets. The problems inherent in rating assets by rating agencies have also been the subject of a lot of attention in recent debates, particularly the tendency to poorly evaluate the risk of loans which are not going to be kept on a bank’s own books but which are to be sold off. Those loans heavily contributed to the crisis.
Another area with poor regulation before the crisis were the derivatives market and the alternative investment funds (generally called hedge funds, although their operations go beyond hedging operations), which are particularly active in derivatives markets. Given the multiple flaws which characterize those markets (which are very incomplete and are very imperfect, particularly during crises), it is crucial to improve regulation in this area.1 Lastly, the lack of regulation of the ratings agencies has also been the subject of a great deal of debate, as well as the possible conflicts of interest between their rating business and their business advising agents whose market products they rate.which are active in the market (Goodhart, 2010).
One of the most important breakthroughs in the international debate of the last two years was the recognition that the international financial crisis was clearly associated with inadequate, insufficient supervision of financial activities. This is precisely the sphere in which the G-20 has played a role, especially in reaching agreement on certain principles, the implementation of which, nevertheless, remains the subject of debate and on which slow progress is being made especially in Europe. In the United States, the Dodd-Frank bill on financial regulation implied significant progress, as we discuss below, but the fact it was finalized earlier than European reforms, shows that progress in different regions has not been sufficiently coordinated internationally, which will result in regulatory systems that have important divergences.
The Basel Committee on Banking Supervision (which we will refer to from now on as the Basel Committee) had already started to discuss among its members some practices as a complement to the regulations that Basel II introduced (Basel Committee 2009a and 2009b). Far more importantly, even though still insufficient, is the proposal approved in principle in September 2010 as Basel III (Basel Committee, 2010).
The proposals agreed in principle by the 27 countries in September 2010 have a number of positive elements. Firstly, it raises Tier 1 capital requirement (the core form of loss absorbing capital) from 2% to 4.5% of risk-weighted assets, as well as defining far more strictly the assets that make up this capital, to strengthen the solvency of financial institutions. The proposals also increase the capital for banks’ operations in the financial markets (the so called trading book) and require an additional capital conservation buffer of 2.5%. This implies banks should have 7% of common equity. It also implies introducing additional buffers of counter-cyclical capital, in a range of 0 to 2.5% of common equity, which would be implemented nationally, along lines we discuss below. Finally, the liquidity requirements are made explicit, which were practically non- existent in Basel II; it also , and introduces a maximum leverage ratio, calculated on total assets and not on risk-weighted assets, whose aim is to restrict the total of assets in relation to capital.
Nevertheless, Basel III has several serious problems (for a more detailed analysis see for example Griffith-Jones Silvers and Thiemann, 2010) First of all, many observers consider that the increases of capital requirements are not enough, especially for banks with very risky assets. A second important critique relates to the excessively long time period in which they will they be implemented, culminating in 2022. The main reason is that there have been strong pressures by the banks, both to avoid even higher capital increases and for delaying the reforms. This was combined, in the latter case, with the fear by regulators that an early increase in capital requirements would discourage even more the ability and willingness of banks to lend, which is considered key for the recovery.
A more radical critique is that maintaining risk-weighted assets capital requirements may be inadequate, and that it would be better to give a larger role to leverage. Furthermore it seems likely that the leverage indicator has been put at an excessively high level, as it can reach 33. Another set of questions relate to the design of the liquidity buffers, which may end up by discriminating against loans to SMEs, which play a key role in job creation. There is also an important concern whether stricter regulation of banks will not cause financial activity to move even more to the less or unregulated entities.
It should be emphasized, finally, that –as already mentioned— the possible discrimination in the regulations against developing countries has not been corrected in the new proposals. Therefore, it would be highly desirable if Basel III would incorporate a factor that takes account of the benefits of diversification towards that type of assets, as has already been done for loans to small and medium enterprises in the previous Accord (Griffith-Jones, Segoviano and Spratt, 2002). In fact, the recent crisis, and above all the following evolution, in which developing countries have in general had higher growth rates than developed ones, confirms the need to introduce the benefits of diversification in Basel III.
These national and international proposals have followed two basic principles that are worth analyzing in detail: those that guarantee a comprehensive, as well as a counter-cyclical, or more broadly macro-prudential regulation. But they have also tackled other matters, among them consumer protection and the need to downsize excessively large financial institutions.
The first principle mentioned is that regulation should be comprehensive, or that it should at least have a broad scope in terms of instruments, institutions and markets (D’Arista and Griffith-Jones, 2010), in order to avoid, as we have highlighted, serious evasionavoidance of regulation through non-banking intermediaries (or barely regulated banking intermediaries), which contributed to the crisis. Moreover, that should be accompanied by an increase in the capital base, that should also be better quality, consistent, transparent and cover all the risks which financial institutions face (including those associated with securitization, investment in shares, bonds and other securities which form part of the “trading book”, and the counterparty risk associated with derivative operations and the financing of operations in the capital market), as recognized in the Basel Committee proposals mentioned.
For many analysts, an essential element is the obligation for all markets to be open and transparent and, therefore, to limit over the counter trades. The new US legislation, which obliges all standard derivatives to pass through clearing- houses is a positive step to improve transparency and reduce counterparty risk and it should be applied to all derivative transactions. It is therefore unfortunate that the US legislation has maintained a series of exceptions, especially for derivatives used by non-financial companies. A positive aspect of the US legislation is that it imposes margin requirements on all the derivatives that go through clearing houses, which diminishes their risks, though again there are exceptions for those that do not go through clearing houses. We can expect European regulation to follow these US reforms on transparency in the derivatives markets, but it is to be feared that they will also allow important exceptions..
In the case of alternative investment funds, especially for hedge funds, it is the European Union that has taken initiatives to improve transparency by requiring their registration, as well as proposing some precautionary regulatory measures; those proposals have now been approved in spite of opposition from financial players and the reservations of some countries. As regards alternative investment funds, the US legislation not only took initiatives to improve their transparency, but also opened the possibility that the newly created Systemic Risk Council can declare these funds as systemically important, when they are large financial players, and thus impose limits on their leverage or other risk mitigating measures.
The creation of this Council, as well as its equivalent at European level –the European Systemic Risk Board—, whose objective is macro-prudential regulation, are institutional innovations that are potentially very positive. It is also very positive that a rather ambitious architecture has been created at European level of three sectoral pan-European regulators for key financial sectors (one for banks, another for insurance and pensions, and a third one for capital markets).
These steps imply that it has been recognized that financial intermediaries that are systemically important should be subject to particularly rigorous supervision, and even to stricter regulatory norms. This issue has received particular attention in the United States where the Treasury Department announced in 2009 that capital requirements of large financial intermediaries would be proportionally higher. In 2010, President Obama went further and announced limits on the size of banks. Since 1994, there are limits on the ratio of total deposits (10%) that can be held by one bank; the new rule would also apply to other liabilities.
Another important measure announced by President Obama proposed to ban the use of bank resources in their own trading (so-called “proprietary trading”). In fact, the US legislation approved has introduced the so called “Volcker rule”, which forbids the use of the banks’ own resources and that of its depositors for its own capital market business. However, this rule was diluted in the debates in Congress, when banks were allowed to maintain property of alternative investment funds (hedge funds and equity funds) up to 3% of their Tier 1 capital.
The Financial Stability Board has welcomed this initiative but has highlighted that this is just one of various options designed to tackle the issue of organizations being too large to fail, as well as to separate traditional banking business from its more speculative and risky activity. Those options include, for instance, capital, leverage and liquidity requirements being based on size and the complexity of the structures of financial conglomerates.
The question of regulating the bonuses of executives and traders at financial companies has similarly ignited heated national and international debate. The key problem has been not only that the salaries are excessive but also that they are structured in such a way that they generate incentives to undertake highly profitable short-term activities which are, nonetheless, excessively risky in the medium-term, which implies risks both for the individual financial institution as well as for the financial system as a whole. Those bonuses are also asymmetric since they are high when short-term profits are high but never negative (and even continue to be high) when there are large losses. The Financial Stability Board has stated its intention to raise the capital requirements of institutions that have bonus systems that increase future risk. Several countries have taken partial measures in this respect although they are insufficient.
The second principle which we have highlighted, and which represents an important step forward in recent discussions, has been the recognition that prudential norms should have a clear counter-cyclical, as well as a more broadly macro-prudential, focus. The creation of the already mentioned institutions in charge of avoiding accumulation of systemic risks is an element of this process. The crisis generated, also, a large consensus on the need to adopt counter-cyclical regulations both at the G-20 level (2009a and 2009b) as well as in diverse international reports on regulatory matters (the United Nations, 2009, and the Warwick Commission, 2009, for instance). As a result of this, the Basel Committee included some suggestions in this area in its December 2009 proposals, and even more clearly in its September 2010 proposed agreement.
The most important rules would be those to oblige financial institutions to accumulate more capital (or non-distributable reserves) and/or provisions forr debts that are unlikely to be collected, or provisions to be set aside in boom periods to increase the capacity of financial institutions to act during crises. One alternative, the one that had been introduced by the Spanish system, would be to make the provisions when the loans are made, based on the expected losses (“potential losses”), estimated on the basis of a full economic cycle. The advantage of this system is that it allows provisions to be accumulated against losses during the phases of rapid expansion of credit, giving a “rainy day provision” to absorb losses during crises. which This can also contribute to putting a curb on the credit boom – although that did not happen in the Spanish case (Saurina, 2009). Capital and provision requirements, should also take into account the nature of the financing which financial institutions use (short-term versus long-term, as the Warwick Commission, 2009, highlights).
Another equally important element to counter-cyclical regulation are rules to avoid the heavily pro-cyclical behavior of financial asset and real estate prices multiplying during the booms through an artificially high value being attached to the credit guarantees. The rules should therefore restrict the value of the guarantees accepted during the periods of asset inflation, make additional compulsory provisions for credits guaranteed with assets that have rapidly increased their value (maximum loan-to-value ratios), or increase the capital requirements in those cases. Any system of this type would have avoided or softened the highly costly crisis in low quality mortgages in the United States, and also in European countries like Spain, Great Britain and Ireland.
In the case of developing countries, the problems of currency mismatches are also very important, especially due to the tendency of exchange rates to appreciate during booms and to depreciate during crises. In the absence of appropriate counter-cyclical norms –or better still, of restrictions or bans on those exposures– the risks assumed during the booms tend to be reflected in large capital losses during crises, as developing countries learnt during various crises –and as various countries in Central and Eastern, as well as Southern Europe learnt during the most recent one.
Among the debates that co-exist in this field, an important one is related to the decision whether to opt for rules or to issue norms in a discretional way during boom periods. There seems to be a global preference for pre-established rules, which would reduce the risk of regulatory capture by financial interests or of the excessive enthusiasm which characterizes economic authorities during boom periods. Rules could be made stricter, but never looser during boom periods. Appropriate indicators (such as credit growth and/or asset prices) need to be chosen in order to ensure that the counter-cyclical capital set aside corresponds effectively to the cycle.
One matter which has received relatively less attention in the field of counter-cyclical regulations is that of liquidity requirements, an area in which the Basel Committee has already approved some norms.
Accounting rules have also been a subject of much debate. They should satisfy both the need for transparency as well as for financial stability. One interesting alternative which has been suggested is that two accounting balances be estimated: one in which current earnings and losses are reported, according to valuations at market prices, and another in which future provisions are deducted from current earnings or for a non-distributable “business cycle fund” to be established, which could only be used to cover future losses.
In order to avoid regulatory arbitrage, it is important for counter-cyclical regulation to be applied to all institutions, instruments and markets, and both nationally as well as internationally. However, since business cycles do not completely coincide, the regulations should be applied by the host countries, although in accordance with internationally agreed principles. This is what seems to be implicit in the decisions of September 2010 of the Basel Committee, but the norms there are still not fully developed. One fundamental reason for which coordination is essential has to do with contagion. A crisis in an important country (especially if it is an important creditor, debtor or trade partner) can seriously affect the financial stability or the economy of other countries even if those countries did not accumulate any systemic risk. Therefore, in a globalized economy all countries have a legitimate interest in avoiding pro-cyclical excess in other countries.
Two matters connected to the comprehensive and counter-cyclical nature of the regulations are related to the best moment to introduce the new norms and to the effect on credit availability. On the first issue, it is clear that it is important to agree regulation during crises when the political appetite for regulatory reforms is high and new rules also help to restore the confidence inof the financial system. In particular, increasing the scope of regulation should also be immediately applied. However, those rules involving more capital, provisions and liquidity should be gradually introduced and only fully implemented after the economy is on a clear recovery path. However, as pointed out, the slowness in implementing Basel III is debatable.
In terms of access to credit, it is worth highlighting that stronger regulations should result in higher spreads, as well as excluding those agents from credit that are considered particularly risky. That could generate less financing for small and medium-sized companies or for poorer households. Therefore, it might be necessary to introduce additional instruments to guarantee access to credit. Higher margins could also mean companies with direct access to international credit markets could have an incentive to seek loans abroad, increasing the probability of currency exposure in the portfolios of those agents. This is why it is particularly important to introduce rules aimed at handling currency mismatches, as mentioned previously.
Among the other issues worth highlighting in the process of strengthening regulation is the issue of consumer protection, which has been particularly important in the US debates. Due to the quality of toxic mortgages and high-risk investment vehicles, which were being offered in recent years to households that were not financially sophisticated, consumer protection needs to be strengthened, as well as the principle that financial instruments should be as simple as possible since complexity leads to information problems and difficulties for the markets in valuing the corresponding instruments. A positive step in the US regulatory reform was, therefore, the creation of an independent authority to protect consumers, with universal power over all the firms that provide financial services to them.
It is also probable that the crisis under way ends by generating a larger market share for some companies in the financial industry. That means restrictions on monopolies and even the possibility of dividing up the largest institutions should also figure in the new regulations. That includes differential treatment to the largest institutions, mentioned earlier. Lastly, and very importantly, it is essential for safeguards to be applied with rigor and for supervision to be carried out to the highest standards. Some of the most serious errors that led to the current crisis were the result of a lack of supervisions and strict application of the current norms.
2.2 The governance of international financial regulation.
Despite their growing importance, due to the integration of financial markets, global regulatory iInstitutions have been and continue to be perceived as undemocratic and of limited effectiveness. One central problem here is the representation of developing countries, as the Monterrey Consensus, has highlighted, various academics and non-governmental organizations across the world, and of course, the developing countries themselves have higlighted. Nevertheless, while the Bank for International Settlements had selectively increased its members,2 institutions like the Financial Stability Forum (FSF) and the Basel Committee continued to exclude developing countries. An exception to this rule was the International Organization of Securities Commissions (IOSCO), the organization of stock exchanges regulators, which had a wide representation from developing countries. However, its Technical Committee –which generates regulatory initiatives– only has OECD countries as members.
Given its importance and authority in establishing international banking standards, the Basel Committee hads been the target of most criticisms. The exclusion of developing countries from the Committee hads doubtlessly distorted and biased the policies designed, which proved ineffective in guaranteeing financial stability and were biased against the interests of the developing world (Griffith-Jones and Persaud, 2008). However, despite all this criticism, it was not until the global crisis and the subsequent declaration by the G-20 in November 2008 that some significant changes to the governance of the international regulatory institutions were made.
As is obvious, representation of different members in the governance of an institution is translated into decision-making. That has been extremely well-discussed in the case of the IMF in which voting rights on the Managing Board influence significantly the decisions of that institution (Rustomjee, 2004; Woods and Lombardi, 2006). A similar effect is observed in regulatory organizations whose support of global financial stability proved less effective due to their very biased governance structures.
If changes had been introduced to the country representations that make up the regulatory organizations, the very concentrated interests of the large private financial players could have been diluted. Many of the approaches, assumed and promoted by the large banks, such as use of sophisticated, but flawed, microeconomic risk models, reflected a confidence in the large banks being able to measure risk parameters themselves. Various developing countries were skeptical about the viability and effectiveness of those approaches, and they were worried about the pro-cyclical dimensions of the regulation developed. Developing countries had experienced a series of financial crises in the immediate past and, being more aware of their costs, gave greater priority to preventing crises. Their lack of participation in the Basel Committee could have, therefore, biased decisions in favor of the large international banks and against crisis prevention.
In the midst of the global financial crisis and driven, as we have seen, by the decision of the G-20 of November 2008, an important number of those institutions widened their membership, particularly to include so-called emerging economies. Table 1 summarizes the changes to the regulatory organizations. In early 2009, the Technical Committee of the International Organization of Securities Commissions, which apart from Mexico had not previously included any other developing country, included among its members Brazil, China and India. In March 2009, the Basel Committee included for the first time various developing countries (Brazil, China, the Republic of Korea, India and Mexico), as well as Australia and Russia. In June 2009, it widened its membership still further, including all the G-20 countries which were not already members (Argentina, Indonesia, Saudi Arabia, South Africa and Turkey) as well as Hong Kong and Singapore. As Figure 1 shows, that closed a large gap in the degree of representativeness of the Basel Committee, in relation to the countries that supervised the 50 largest banks in the world. However, countries with relatively small banks are not adequately represented which means banking regulation continues to excessively meet the interests of the large banks in the main industrialized countries. At the same time, the Committee on Payment and Settlement Systems (CPSS) invited the following members: Australia, Brazil, China, India, Mexico, Russia, Saudi Arabia, South Africa and the Republic of Korea. This is another organization based in Basel which serves as a forum to the Central Banks to monitor national payment systems as well as cross-border and multiple-currency agreements.
In the second quarter of 2009, the Financial Stability Forum increased its number of members to include all the members of the G-20, which includes most large developing countries as well as Spain and the European Commission. It was given the new name Financial Stability Board (FSB) to reflect its additional powers. This enlargement to the membership was also significant; as Figure 2 shows, if measured in terms of world foreign exchange reserve distribution, the FSB has a much better representation than its predecessor.
This increase in the participation of developing countries in the FSB is, of course, a positive step. However, it raisesthrows up two problems. The first has to do with the number of representatives of different countries. With enlargement, three different categories of countries were created: the BRIC (Brazil, China, India and Russia) joined the G-7 group of countries, with three representatives each, while Australia, Mexico, the Netherlands, Spain, the Republic of Korea and Switzerland were assigned two and the rest given one (Argentina, Hong Kong, Indonesia, Singapore, Saudi Arabia, South Africa and Turkey). Therefore, with the exception of the BRICs, the emerging economies represented in the FSB have one or two representatives while the G-7 have three, and even worse, the poorest economies and the small and medium-sized countries do not have any representation.
The second problem is to do with the fact that the FSB is now not only structured around a plenary session but also around a Committee for Initiatives and three additional committees. While this enlargement and specialization is welcome since it strengthens its role, all the heads of those five bodies come from developed countries. A greater diversity would be desirable in the future. One interesting example, which could be imitated, is that of the four working groups set up by the G-20 between November 2008 and April 2009. Each working group was headed by one developed country and another from a developing country.
These critiques are the basis for is is the root of some of the additional reforms that need to be introduced. We will underline three here. The first is the inclusion of representatives of small and medium-sized countries on the regulatory bodies. That would ensure that their concerns would be listened to –for instance, the preference for simpler regulation, as well as for small and medium-sized countries having greater regulatory powers to regulate the large international banks which are active in their countries (see the Warwick Commission, 2009, in this respect). That could also lead to regulation reflecting the interests and preferences of the largest international banks to a lesser degree and regulation becoming morewould be more appropriate for smaller, nationally focused banks. One alternative would be to establish regional representatives instead of individual nations on regulatory organizations (with perhaps just a few exceptions such as some important countries). Those representatives could be chosen by the countries of each region according to votes (as occurs in the IMF and the multilateral banks) and with some rules on rotation to guarantee that small and medium-sized countries are represented. A system of regional representation would also have the advantage that all the countries would have at least one indirect representative. This fact, as well as the representation of small and medium-sized countries, would also have the advantage of increasing the legitimacy and efficiency of those organizations. Introducing such changes soon is, moreover, urgent in order to avoid the new structures becoming fossilized.antiquated.
Secondly, it is important to include better systems of makingholding regulatory organizations to accountable, through national parliaments in the case of national regulators;, to which in the future international regulatory organizations and multilateral representative institutions should be also be more accountable.added (United Nations, 2009).
Finally, the benefits of including developing countries in key international regulatory organizations could be reinforced by the creation of a Technical Secretariat to support them in their interactions with those organizations. This Secretariat could prepare, or commissionbe in charge of studies, provide a forum for debate between developing countries and help –when appropriate– to define the positions of those countries, especially those which require international action and/or action bythat of developed countries. One example is the possible international regulation of the “carry trade” that has such which could have pro-cyclical effects, which is a subject of particular interest to developing countries. Such a body In this process the main group of developing countries could play a similar particular role in regulation to that played by for the G-24 in areas related to the Monetary Fund and the World Bank.
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Long term investments are acquired by companies to provide benefits for periods of time usually extending beyond one year. Examples of long term investments would include things like; long-term notes receivable and investments in land, debt and equity securities, life insurance, and special funds for specific purposes.
The notes Receivable account of a company includes receivables that are evidenced by promissory notes. Promissory notes are legally enforceable contracts/documents that state the face value of the receivables. These documents will formally outline the date when the face value is due, and the periodic interest payments to be made while the note is outstanding. The date when a receivable is due is called the maturity date. With long term investments the maturity date is often beyond one year, so the account should be listed in the long-term investment section of the balance sheet. However, if the maturity date of a note receivable is within one year, it should be disclosed as a current asset.
Notes receivable often arise because companies receive notes in exchange for the sale of an expensive items. For example, the Boeing Company, a major aircraft manufacturer, often receives notes in payment for sold aircraft. Alternatively, such notes can result from direct company loans to employees and others. It also happens that customers with large, overdue accounts are asked to sign promissory notes. Like accounts receivable, an estimate (often subjective) for uncollectibles must be provided for notes receivable.
In addition to notes receivable, the long-term investment section of the balance sheet can include a number of other investments. Investments in debt and equity securities that are not intended to be sold in the near future represent other examples that are not intended to be sold in the near future. Most major U.S. companies have made a significant investments in the equity securities of other smaller companies, with the intent to exert long-term influence over their management. An example of this would be, Scott Paper Company, who reportedly invested $53 million in a smaller company which owned a pulp mill, forestland, and a tree plantation in Chile. This would be listed in the long-term investment section of its balance sheet. Users should learn as much as possible about such investments, usually by reading the footnotes, because they signal areas where management has chosen to devote considerable attention.
The cash value of life insurance, the amount for which ordinary insurance policies held on the lives of company officers can be cashed in, and the assets of investment funds designed to finance future events, like plant expansions and debt payments, also appear in this section of the balance sheet. The dollar amounts in these accounts, which are relatively small for most major U.S. Companies, normally equal to the costs of acquiring them.
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- What are 3 types of assets?
- Are IT applications an asset or expense?
- Is a person an asset?
- Is capital an asset?
- Is a Camera an asset?
- What is asset example?
- Is unearned rent an asset?
- Is a computer an asset?
- Is a bank loan an asset?
- Is prepaid rent a debit or credit?
- Is Accounts Payable a debit or credit?
- Is a laptop an asset or expense?
- Is a cell phone an asset?
- What comes under fixed assets?
- Is a router a fixed asset?
- Is money an asset?
- Is software a non current asset?
- Is prepaid rent an asset?
What are 3 types of assets?
Types of assets: What are they and why are they important?Tangible vs intangible assets.Current vs fixed assets.Operating vs non-operating assets..
Are IT applications an asset or expense?
a. IT applications can be either an asset or an expense. An IT application is an asset if it allows the company to have a competitive advantage over others in the industry, for example. Another important thing to consider is how the application is appropriated within the organization.
Is a person an asset?
A human being or a person cannot be considered an asset like tangible fixed assets such as equipment, because people cannot be owned, controlled or measured for future economic benefits in money terms, unlike physical assets.
Is capital an asset?
Capital assets are significant pieces of property such as homes, cars, investment properties, stocks, bonds, and even collectibles or art. For businesses, a capital asset is an asset with a useful life longer than a year that is not intended for sale in the regular course of the business’s operation.
Is a Camera an asset?
Computers and Cameras are assets, but paper and ink are not. Normally when you purchase an asset, the IRS wants you to depreciate it, which means you record the expense over the period of time that you will be using the asset instead of recording the entire expense in the year you purchased it.
What is asset example?
Example of Assets Examples of assets that are likely to be listed on a company’s balance sheet include: cash, temporary investments, accounts receivable, inventory, prepaid expenses, long-term investments, land, buildings, machines, equipment, furniture, fixtures, vehicles, goodwill, and more.
Is unearned rent an asset?
Cash is the asset that is recorded upon receipt of funds, and since assets must equal liabilities plus equity, the other side of the journal entry must be a liability account. That being said, unearned rent does not remain a liability forever.
Is a computer an asset?
A personal computer is a fixed and noncurrent asset if it is to be used for more than a year to help produce goods that the company will sell. A vehicle is also a fixed and noncurrent asset if its use includes commuting or hauling company products.
Is a bank loan an asset?
Loans made by the bank usually account for the largest portion of a bank’s assets. … This legally binding contract is worth as much as the borrower commits to repay (assuming they will repay), and so can be considered an asset in accounting terms.
Is prepaid rent a debit or credit?
The initial journal entry for prepaid rent is a debit to prepaid rent and a credit to cash. These are both asset accounts and do not increase or decrease a company’s balance sheet. Recall that prepaid expenses are considered an asset because they provide future economic benefits to the company.
Is Accounts Payable a debit or credit?
Since liabilities are increased by credits, you will credit the accounts payable. And, you need to offset the entry by debiting another account. When you pay off the invoice, the amount of money you owe decreases (accounts payable). Since liabilities are decreased by debits, you will debit the accounts payable.
Is a laptop an asset or expense?
Anything large that’s integral to the functioning of your business, such as a laptop or camera that can have depreciating value, should be entered as an asset. Small things, such as accessories, should be entered as expenses. … However, both are still assets, because they retain value after a year.
Is a cell phone an asset?
There are several types of assets. That said, all assets are the same in that they have financial value to a business (or individual). Types of fixed assets common to small businesses include computer hardware, cell phones, equipment, tools and vehicles.
What comes under fixed assets?
Fixed assets can include buildings, computer equipment, software, furniture, land, machinery, and vehicles. For example, if a company sells produce, the delivery trucks it owns and uses are fixed assets. If a business creates a company parking lot, the parking lot is a fixed asset.
Is a router a fixed asset?
Can include a broad array of computer equipment, such as routers, servers, and backup power generators. It is useful to set the capitalization limit higher than the cost of desktop and laptop computers, so that these items are not tracked as assets. Construction in progress.
Is money an asset?
Personal assets are things of present or future value owned by an individual or household. Common examples of personal assets include: Cash and cash equivalents, certificates of deposit, checking, and savings accounts, money market accounts, physical cash, Treasury bills.
Is software a non current asset?
Software as Assets 3 Under most circumstances, computer software is classified as an intangible asset because of its nonphysical nature. However, accounting rules state that there are certain exceptions that permit the classification of computer software, such as PP&E (property, plant, and equipment).
Is prepaid rent an asset?
Rent Expense. Prepaid rent is a balance sheet account, and rent expense is an income statement account. … These are both asset accounts and do not increase or decrease a company’s balance sheet. Recall that prepaid expenses are considered an asset because they provide future economic benefits to the company.
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In Western households, canned food is kept for when you have little time to prepare a meal. In China it is regarded as a luxury food
A major production and export country
The canned food industry is one of China’s earliest food industries with a good foundation and fast development. The above photo was taken in 1957. As the opening text of this post already states, canned food used to be regarded as a luxury product. As a result, canned food was mainly positioned as export product. And indeed, those exports have made a great contribution in generating hard currency over the decades. China has been able to stay in the ranks as a processor and exporter of canned food such as tomatoes, asparagus, bamboo shoots, yellow peach, orange, etc. The world’s largest canned food producers are also located in China.
The following table shows that the Chinese canned food industry has seen a turbulent development since China opened up its economy in the late 1970s.
This table shows that the industry first grew through an increasing number of companies, followed by a period in which the worst performers had to leave the business, while the best performers grew in size.
Where are the canneries?
Canned food is produced all over China and food is usually canned near the place where the fruits and vegetables are grown and the animals are raised. E.g., Zhejiang province has been the largest export region for canned tangerines for decades. The top region is Fujian province and Zhangzhou in particular. In a previous post I already reported that Zhangzhou is often mentioned as the ‘Capital of Canned Food’ in China. A top product in this respect is canned mushrooms. 80% of the canned mushrooms exported from China leave the country via Zhangzhou. The above map shows the location of canneries in various regions of China in 2012.
In 2017, China produced 12,395,600 mt of canned food, up 3.75%. The industry generated a total turnover of RMB 175.387 bln; up 5.46%. In the same year, China exported 2,744,800 mt of canned food; down 3.32%. This generated an income of USD 4.66 bln; up 1.3%. Canned seafood was the largest export product with a volume of 336,400 mt. The USA and Japan were the main recipients of Chinese canned food with a rate of 14% each, followed by the EU with 11% and Russia with 5%. China has produced 2,959,586.1 mt of canned food in the first 5 months of 2020; Fujian was the largest region good for 44.68%.
Domestic consumption of canned food
The canned food market in China is not plain sailing. Especially in recent years, with the increasing concern for healthy food among Chinese consumers, the image of canned food has suffered due to the long shelf life, adding preservatives and other misunderstandings, but the industry as a whole has so far withstood the test. At present, China’s canned food consumption level is still very low with only 6 kg per capita while the consumption is at 92 kg in the United States, 56 kg for the EU, and 30 kg for Japan.
China’s canned food industry is coping with problems of overcapacity, disorderly competition, unfortunate product structure and lack of innovation, while there is a huge potential market to be stimulated. In recent years, the international market competitiveness has declined as the cost has been rising. Especially adjusting the product structure has become a priority. In fact, the changing lifestyle of the younger generation, with a busier pace of life, is posing a new market opportunity for the canned food industry in China. To cash in on that, innovation is imperative.
Nostalgia as marketing proposition
Linjia Puzi (Dalian, Liaoning) has launched canned fruit in a rather nostalgic packaging in 2020. The design resembles the style of that popular in the interbellum. The photo shows the peaches on syrup, with ‘imported arabinose’.
As is emerging from several posts in this blog, associations are a strong influencing factor in the Chinese food industry. This also applies to the China Canned Food Industry Association (CCFIA). Established in Aug. 28, 1995, the CCFIA is the only national wide legal organization entrusted by the Chinese Government. Its members include canned food producing enterprises, sale companies, research, inspecting, detecting units, equipment manufacturers, raw material providing companies and management departments and units. The CCFIA is the representative of the common interests of the members. Its aim is to promote the development in canned food industry in China and provide high quality services to all the members.
Eurasia Consult Consulting can help you embed your business in Chinese society.
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The effects of DFID’s cash transfer programmes on poverty and vulnerability
Good achievement on poverty reduction impact, value for money and learning, with scope for improvement on building national cash transfer systems
DFID’s support for cash transfers helps to alleviate poverty and vulnerability for the poorest households, in accordance with the “leave no one behind” commitment. Over the 2011-2015 period, DFID exceeded its target of reaching six million people with cash transfers. Independent evaluations show that the programmes have consistently delivered on their core objective of increasing incomes and consumption levels for the poorest households, with modest but positive effects on savings, asset accumulation and debt reduction. Evidence points to more variable results in relation to education, nutrition, health and the empowerment of women – areas where cash transfers may need to be combined with other interventions to improve results. DFID has made a significant contribution to promoting the use of cash transfers in national social protection systems in its partner countries. However, in the face of shortcomings in its approach to financial and technical assistance, it is not making enough progress in overcoming weaknesses in the national programmes it supports. We find that DFID’s cash transfer programme presents a strong value for money case, given its proven ability to deliver results for the poorest. DFID has made progress on building a focus on cost-efficiency into programme management, although its practice could be more consistent. It has made a strong contribution to the global evidence base on cash transfer programming, and has used evidence and learning well to strengthen its results. There is scope for DFID to increase its level of ambition for the cash transfer portfolio by improving results in individual programmes and helping to scale up promising national programmes.
Cash transfers play an increasingly important role in the fight against global poverty. In 2014, developing countries provided cash transfers to 718 million people. Their primary purpose is to alleviate extreme poverty by supplementing the income of the poorest households, enabling them to increase their consumption of food and other basic items. They can also promote other benefits, including increased use of education and health services and empowerment of women. Cash transfers are an important element of national social protection systems.
In this review, we explore the impact of DFID’s cash transfer programmes on poverty reduction over the period 2011 to 2015. There have been 28 such programmes, the majority of which support national cash transfer schemes and involve both direct funding for cash transfers and technical and financial support for system building. These programmes all aimed to mitigate extreme poverty and improve nutrition, as well as to achieve a range of other programme-specific objectives. Under its global results framework for 2011-15, DFID committed to reaching at least six million people with cash transfers. Over this period, DFID spent an average of £201 million per year – around 2% of its total expenditure – on cash transfers.
Box 1: What are cash transfers and what are they intended to do?
In this review, “cash transfers” include any regular payments made to individuals and households to reduce poverty and vulnerability. They can take the form of child-support grants, old-age pensions, payments to vulnerable groups such as widows or people with disabilities, or transfers to particularly poor households. Sometimes conditions are attached around other development objectives such as school enrolment, health clinic visits or work on community projects.
Most cash transfers are very small, at the level of a few pounds a month for each household. They are designed to supplement the incomes of the poorest, increasing their consumption of food and other basic items without creating a disincentive to work.
The target groups and objectives of DFID-funded cash transfer programmes vary. For example, one programme in Nigeria targets pregnant and lactating women, with a view to improving nutrition; in Pakistan, poor households receive quarterly transfers provided that their children attend school; while in
Uganda, a DFID-funded programme helps mitigate extreme poverty among the elderly.
Cash transfers are a form of development assistance that lends itself to rigorous impact assessment, and there is a substantial body of global and DFID-specific evidence available on its effectiveness. Their importance and the available body of evidence mean that this is an appropriate area for an impact review, to examine DFID’s reported results and their significance for the intended beneficiaries.
We conducted desk reviews of 18 of the 28 programmes, and detailed case studies of programming in two countries: Bangladesh and Rwanda. We addressed three broad areas:
i. The impact of DFID-supported cash transfers on poverty and vulnerability.
ii. DFID’s contribution to the development of sustainable, nationally owned cash transfer systems.
iii. The value for money of DFID’s cash transfer programming.
DFID’s cash transfers have succeeded in their core objective of raising income and consumption levels, but show more variable results against secondary objectives
In its 2015 Annual Report, DFID reported that between 2011 and 2015 it had reached a ‘peak’ of 9.3 million people with cash transfers, against a target of six million. We examined this claim thoroughly. We found some inclusion errors in the data that led to over-reporting of around 475,000 people – all from one programme. These errors were corrected when brought to DFID’s attention. For the rest of the programme portfolio, we were able to verify that DFID had exceeded its reach target.
DFID’s cash transfer programmes have succeeded in their primary purpose of alleviating extreme poverty. Independent evaluations have confirmed that DFID programmes have consistently helped to improve household incomes and boost consumption levels of food and other basic items, with no evidence of increases in unhealthy consumption choices (eg alcohol or gambling). The results data is robust and matches what would be expected from the literature.
DFID’s support for cash transfers has also brought a range of additional benefits to beneficiary households. The evidence suggests a modest but positive impact on savings, asset accumulation and debt reduction. This in turn helps to make poor households more resilient to external shocks (eg adverse weather or
unexpected health bills).
It is widely recognised that cash transfers are generally not sufficient on their own to lift the poorest households permanently out of poverty. DFID has been experimenting with a “poverty graduation” model that combines cash transfers with other interventions, such as asset grants, training and support for income generation. Its pilot programmes with a Bangladeshi NGO (BRAC) have delivered impressive results, although at a higher unit cost than a pure cash transfer programme. It is not yet known whether this model is replicable outside Bangladesh, or could be delivered by government, but DFID is experimenting with versions of the model in a number of other countries.
Most of DFID’s cash transfer programmes include secondary objectives in areas such as education, health and nutrition, and empowering women. In these areas, the evidence of impact is more mixed and, in a few cases, less than would be predicted from the global evidence base.
• Education: While many DFID-funded programmes include objectives around improving the education of children from poor households, the results have been uneven. Programmes in Pakistan and Zambia have made a positive contribution to school attendance, and one programme in Ethiopia has recorded an improvement in learning outcomes. A number of other programmes, however, showed no or very modest impact, and in Zimbabwe the programme had both positive and negative effects.
• Health and nutrition: The literature suggests a mixed but mostly positive relationship between cash transfers and improvements in health and nutrition outcomes. Independent evaluations of DFID funded programmes show a wider range of results, including some cases where no positive effect was observed. In several cases, DFID has recognised where programmes are underachieving in this area and is introducing corrective measures.
• Women’s empowerment: DFID programme design documents emphasise the objective of empowering women, and several programmes make payments directly to women. Unlike other areas, however, the focus on women’s empowerment has not been backed by rigorous measurement of results. There are encouraging signs of progress in some programmes, such as improved status for women within their households and communities and increased sexual autonomy, but the evidence is not strong enough to support a clear conclusion. We also found that DFID was not explicitly monitoring risks to women beneficiaries, such as increased domestic abuse.
Overall, we have awarded DFID’s portfolio a green-amber score for impact on poverty and vulnerability. DFID has achieved and exceeded its global reach targets. Across the portfolio, its core objective of alleviating income poverty and increasing consumption for the poorest and most vulnerable is being consistently achieved, with modest but positive impacts on building resilience to shocks. Impact on secondary objectives is more variable, with some positive results in areas such as school attendance (although not everywhere) and less positive results in health and nutrition. There is therefore scope for DFID to continue improving the impact from its cash transfer programming.
DFID has committed to strengthening national cash transfer systems but lacks a strategic approach
Beyond funding specific cash transfer programmes, DFID is also seeking to expand the coverage, quality and sustainability of national cash transfer systems. DFID has worked towards this objective by supporting pilot initiatives, as well as through funding, policy dialogue and capacity strengthening support. Over the review period, there has been clear progress in expanding national cash transfer programmes across DFID’s partner countries. In some cases, this is accompanied by increased domestic funding. While other factors are also at play, it is likely that DFID has made an important contribution to this result.
Wherever possible, DFID chooses to fund cash transfers through national programmes. This means tolerating weaknesses in the design and delivery of programmes over the short term in order to try to strengthen them over time. In most cases, DFID takes a long-term approach to systems development, sharing international and local evidence but generally choosing not to challenge partner countries on strongly held positions. While this approach is welcomed by national stakeholders, there are risks that it can lead to a lack of ambition and urgency in addressing core challenges. We observed ongoing challenges across the portfolio in the key areas of targeting, transfer size and timeliness. While recognising the positive achievements against core programme objectives, these challenges pose limits for effectiveness and sustainability. DFID is aware of these issues and, in some instances, has made good progress in addressing them, but overall progress is uneven.
DFID reports a range of practical results from its technical assistance programmes. However, its approach varies markedly across programmes, with no clearly stated rationale. We heard concerns from both DFID staff and implementers that technical assistance programmes can become drawn too far into short-term problem solving (“firefighting”) at the expense of a more strategic approach. We found that oversight and monitoring of technical assistance was not adequate, and that there have been no independent reviews or evaluations of results in this area.
There is also no clear strategy underlying the size or conditions of DFID’s financial contributions. With the exception of the Pakistan and Uganda programmes, DFID does not use performance triggers to drive reforms and it lacks a clear strategy for promoting financial sustainability.
We have therefore awarded DFID an amber-red for its system-building efforts. While DFID has good relations with its national counterparts and has helped to increase country ownership of cash transfer programmes, it lacks a systematic approach to both financial and technical assistance, and does not adequately monitor and assess the results of its system-building efforts.
DFID’s cash transfer programming offers a good value for money case, and there may be a value for money case for scaling up funding towards national coverage
We find that DFID’s support for cash transfers meets many of the criteria for value for money. It is consistently delivering on its core objective of alleviating extreme poverty and reducing vulnerability. It is an effective means of reaching the poorest and most vulnerable, in accordance with DFID’s commitment to “leaving no one behind”. There are short-term trade-offs involved in funding through national systems, and DFID should ensure that its technical assistance is sufficiently focused on improving financial sustainability. However, our analysis suggests that, where the core issues of targeting, timeliness and transfer size are being addressed, there may be a value for money case for scaling up funding towards national coverage.
Following a challenge from the Public Accounts Committee in 2012, DFID has made an effort to strengthen the focus on value for money in the management of its cash transfer portfolio. It has developed guidance and tools for undertaking value for money assessments at programme level. We saw some good use of value for money analysis in identifying the variables with the greatest impact on cost-efficiency and programme effectiveness (eg targeting, payment size and financial management). What was less clear was how these assessments were being used to inform broader, portfolio-level management decisions about funding for cash transfers.
DFID recognises evidence and learning as “cross-cutting enablers” of value for money. DFID has made an important contribution to building up evidence on what works in cash transfer programming. It has commissioned syntheses of existing literature to identify gaps and policy-relevant lessons. During the review period, it managed a centrally commissioned research portfolio of over £35 million that has been innovative in both themes and methodology.
DFID has also demonstrated a willingness to learn from international evidence and from its own programmes. It has an active community of practice that disseminates research findings and shares lessons. We saw good examples of real-time learning within and across programmes, and of the use of evaluative findings to inform new designs.
We have rated the portfolio as green-amber on value for money, owing to its demonstrated impact and strong learning orientation. There remains scope for DFID to continue strengthening the relationship between value for money assessments and management decision-making.
Conclusion and recommendations
Overall, DFID’s cash transfer portfolio merits a green-amber score. The portfolio has demonstrated its capacity to achieve impact in its core objective of alleviating extreme poverty. DFID has also made an important contribution to encouraging the spread of national protection systems. Notwithstanding the complexities of strengthening national systems and financial sustainability for social protection, there may be scope to achieve even greater value for money by taking successful programmes to scale.
The following recommendations are designed to help DFID to improve the impact and value for money of its cash transfers programming, in pursuit of its “leave no one behind” commitment.
DFID should consider options for scaling up contributions to cash transfer programmes where there is evidence of national government commitment to improving value for money, expanding coverage and ensuring future financial sustainability.
DFID should be clearer about the level and type of impact it is aiming for in each of its cash transfer programmes, and ensure that these are adequately reflected in programme designs and monitoring arrangements.
DFID should do more to follow through on its commitment to empowering women through cash transfers by strengthening its monitoring of both results and risks, and using this data to inform innovations in programming.
DFID should take a more strategic approach to technical assistance on national cash transfer systems, with more attention to prioritisation, sequencing, monitoring and oversight.
In 2014, cash transfers to poor households reached an estimated 718 million people across the developing world. Their primary purpose is to alleviate extreme poverty by supplementing the incomes of poor households and increasing their consumption of food and other basic items. Cash transfers can also help to empower women, improve school attendance and promote better nutrition and health. Many developing country governments are now using cash transfer programmes as part of national social protection systems (see Box 2). At the Addis Conference on Financing for Development in July 2015, the global development community pledged to provide “sustainable and nationally appropriate social protection systems and measures for all”. This commitment was repeated as target 1.3 of the Global Goals and is a key element of the “leave no one behind” pledge.
“Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.”
Target 1.3, Global Goals.
In this review, we explore what development impact DFID has achieved through its support for cash transfer programmes. DFID’s spending on cash transfers for poverty mitigation has increased as experience and evidence have grown, from £4 million in 2003 to an annual average of £201 million over the review period (2011-2015), reaching approximately 2% of DFID’s total expenditure. Most of this was direct financing for cash transfers, but there was also a significant element of technical and financial assistance for the development of national cash transfer systems. In this review, we are interested both in the direct impact of DFID’s funding for cash transfers and in its contribution to building sustainable national cash transfer systems.
This report reviews DFID’s use of cash transfers for mitigating poverty and vulnerability. We have not covered the use of cash transfers for humanitarian assistance, which raises different issues, but we hope to come back to this in a future review. Our scope is DFID’s cash transfer portfolio over the four-year period covered by DFID’s Results Framework 2011.
|Review criteria and questions|
|1. Impact on poverty and vulnerability: To what extent has DFID’s cash transfer portfolio contributed to reductions in poverty and vulnerability?|
|2. Building national cash transfer systems: How successfully is DFID supporting the development of sustainable, nationally owned cash transfer systems?|
|3. Value for money: To what extent has DFID ensured maximum value for money for its cash transfer programming?|
Box 2: Defining “cash transfers”
In line with DFID’s own definition, we define cash transfers as “all regular cash transfer payments made to individuals and households to reduce poverty and vulnerability”. They can take the form of child-support grants, old-age pensions, transfers to specific vulnerable groups such as widows or people with disabilities, or transfers to particularly poor households. Sometimes, conditions are attached around other development objectives, such as school enrolment, health clinic visits or work on community projects.
Cash transfer programmes can serve a range of development purposes. Increasingly, they form part of national social protection systems, as a type of “social assistance”.
This portfolio was chosen for an impact review because it is mature enough to have generated a substantial amount of results data. There is also a large body of evidence-based literature on the topic of cash transfers.
Box 3: What is an ICAI impact review?
ICAI impact reviews examine results claims made for UK aid to assess their credibility and their significance for the intended beneficiaries. We examine the quality of results data generated by aid programmes and whether the data is being used to improve results over time. We also assess value for money – that is, whether DFID or other spending departments are maximising the return on UK aid invested. ICAI impact reviews use the results data that is already available, triangulated with other sources. We do not carry out our own independent impact assessments.
Other types of ICAI reviews include performance reviews, which probe how efficiently and effectively UK aid is delivered, and learning reviews, which explore how knowledge is generated in novel areas and translated into credible programming.
There are four main methodological elements to our review.
i. Our literature review served two purposes. First, we reviewed the available evidence on the effects of cash transfers as a yardstick against which to measure the impact of DFID programmes. Second, we compared DFID’s research choices and contributions with the worldwide body of cash transfer literature to assess the extent to which DFID has contributed to filling relevant evidence gaps.
ii. We carried out key stakeholder interviews with 36 DFID staff about the portfolio as a whole and about specific programmes. We also interviewed 12 academics and peers from other organisations to gain stakeholders’ views on DFID’s cash transfer approaches and choices. We sought out known “critical voices”, to help us challenge DFID’s thinking.
iii. We selected a sample of 18 programmes (out of a total of 28 cash transfer programmes identified by DFID) for desk review. A list of the programmes is included in Annex 2 (Table A1). For each programme we reviewed the available programme documents, including business cases, logframes, baseline studies, diagnostic studies, annual reviews, project completion reports and independent evaluation reports.
iv. We carried out country case studies of DFID cash transfer programming in two countries: Bangladesh and Rwanda. Each involved a visit by the team. The countries were selected for having a sizeable portfolio with a history of programming over several years, covering both technical assistance and financial support.
The methodology is explained in more detail in Annex 3, and in full in our Approach Paper, which is available on the ICAI website. Both our methodology and this report were independently peer reviewed.
• We relied primarily on DFID’s own results data to assess the impact of individual programmes. We discounted any results data that we considered unreliable. If there is a correlation between the impact of programmes and the quality of their monitoring data, this could introduce a positive bias into our evidence. • Our sample of programmes was chosen purposively to reflect the full spectrum of programme objectives, modalities, support, types and sizes, but may nonetheless not be fully representative. Our findings may not always be applicable to the portfolio as a whole. • There is limited evidence on the impact of DFID’s technical assistance. DFID does not necessarily document the impacts of its support on thinking and practice in partner countries. In complex multi-stakeholder environments, it is challenging to attribute progress to DFID’s advocacy and influencing work.
• We relied primarily on DFID’s own results data to assess the impact of individual programmes. We discounted any results data that we considered unreliable. If there is a correlation between the impact of programmes and the quality of their monitoring data, this could introduce a positive bias into our evidence.
• Our sample of programmes was chosen purposively to reflect the full spectrum of programme objectives, modalities, support, types and sizes, but may nonetheless not be fully representative. Our findings may not always be applicable to the portfolio as a whole.
• There is limited evidence on the impact of DFID’s technical assistance. DFID does not necessarily document the impacts of its support on thinking and practice in partner countries. In complex multi-stakeholder environments, it is challenging to attribute progress to DFID’s advocacy and influencing work.
DFID is thought to be the largest funder of cash transfer programmes among bilateral donors, with annual expenditure ranging between £170 million and almost £300 million over the past five years (see Figure 1). Most of its cash transfer programmes fall within its social protection portfolio, contributing to the “poverty, vulnerability, nutrition and hunger” pillar of DFID’s results framework. These programmes provide supplementary income to the poorest and most vulnerable households in order to mitigate extreme poverty and ensure that beneficiaries are able to meet minimum consumption levels of food and other basic items. They thereby aim to have positive effects on nutrition and health. Individual programmes may also aim to provide additional benefits, such as improving school attendance or empowering women.
In its results framework, DFID committed to supporting at least six million people with cash transfers. To be “supported” means different things in different programmes. It may involve the household receiving a small monthly payment, often set by reference to the number of people in the household and the cost of buying basic foodstuffs (see Box 5 on payment sizes). It can also mean payment for regular or occasional labour on public works programmes. Section A5 in Annex 2 provides a more
detailed description of one particular programme, in Rwanda.
In most instances, DFID works with and through national governments in order to contribute to the development of national cash transfer systems. Most DFID programmes offer a combination of financial support for cash transfers and financial and technical assistance for system development.
Box 5: How large are cash transfer payments?
Cash transfer programmes supported by DFID provide small but regular payments to poor households, ranging from as little as £6 per household per month for Uganda’s cash transfer programme up to £19 per month for five-member households in Zimbabwe. In most cases there is an explicit rationale for the size of the payment. For example, in some programmes in Bangladesh and Zambia, the payment is equivalent to the cost of a daily bag of rice or maize, while in Nigeria it is based on a calculation of the amount needed to enable very poor households to pay for a nutritious diet. Transfer size is also determined by affordability and by political considerations. In two programmes in Bangladesh and one programme in Pakistan, we did not find an explicit rationale in programme documents for the size of the transfer.
Within the broad goals of extreme poverty mitigation and consumption protection, DFID’s cash transfer portfolio is diverse.
- Programme budgets range from £1 million to £300 million, and their duration from four to ten years, with repeat programming common.
- DFID may be the sole funder (as is currently the case for a World Bank administered programme in the Sahel), the main funder (Uganda, Zimbabwe) or one of many funders (Ethiopia).
- The programmes in Myanmar and Nigeria are delivered outside national governments, through NGO partners. Most other programmes are co-financed with government, with national contributions ranging from very little (Uganda, Zimbabwe) to most of the funding (Kenya, Pakistan, Rwanda).
- Seven programmes consist only of technical assistance. The other 21 provide a combination of technical assistance and direct funding for cash transfers (there are no cases of funding without technical assistance).
- Cash transfers are mainly unconditional. In Ethiopia, Myanmar, Nepal, Rwanda, Tanzania and Yemen, some or all of the cash transfers are provided in exchange for labour on public works. Programmes in Pakistan and Tanzania have education-related conditional components (for example the Pakistan programme provides a monthly payment of £1.80 for each child who attends school regularly).
- Some of these programmes are designed to reach the poorest in the community (though effective targeting is one of the challenges). Other programmes target a particular category of citizen, such as pregnant women in Nigeria or elderly people in Uganda.
Details of the programmes in our sample are included in Tables A1 and A2 in Annex 2.
DFID also has a substantial research portfolio on cash transfers. Since August 2009, it has centrally commissioned research contracts totalling over £35 million, many of which are ongoing. Its research partners include UK universities (Oxford, Manchester, Sussex), research institutes (the Overseas Development Institute, the Institute of Development Studies, 3ie, RAND Europe) and multilateral agencies (the World Bank, the Food and Agriculture Organization). Many of its country programmes also include research components.
Box 6: Findings from the literature on the impact of cash transfers
There is a comparatively large evidence base available in the development literature on the various impacts that can be achieved through cash transfer programming. While we would not expect to see all of these results in any single programme, the literature offers a benchmark against which to assess the performance of DFID’s portfolio as a whole.
The strongest evidence relates to reductions in income poverty. At household level, cash transfers have been consistently shown to increase total expenditure and expenditure on food, as well as to reduce various measures of monetary poverty.
There is evidence of linkages between cash transfers and school attendance, and limited evidence of a positive effect on cognitive development. However, there is no clear pattern of improved learning outcomes as measured by test scores.
There is evidence of positive effects of cash transfers on health and nutrition, measured through use of health services, dietary diversity and anthropometric measures (ie reduced stunting and wasting). However, the literature suggests that additional programme features (such as nutrition supplements and behavioural change training) are needed to produce consistent impact on child stunting.
There are positive links between cash transfers and savings, livestock ownership and investment in agricultural inputs, although these results are not universal and vary across types of livestock and inputs. Results on borrowing rates, investment in agricultural assets and business development are less clear and draw from a smaller evidence base.
The literature found contrary – but often positive – evidence in relation to domestic abuse. Cash transfers to women have been found to increase abuse in some instances and decrease it in others, depending on the type of abuse, the context and situation-specific design. There is relatively strong evidence that cash payments to women increase their decision-making power within the household. There is also evidence of positive impact on women’s choices as to fertility and engagement in sexual activity. However, cash transfers do not reduce risky sexual activity among men and boys.
Source: Cash transfers: what does the evidence say? ODI, July 2016, p. 28, link.
According to key stakeholders in DFID, the department’s interest in cash transfers emerged around 2005-06. The aftermath of the 2007-08 “Triple F” crisis, when the global financial crisis was combined with sharp rises in food and fuel prices, reinforced this interest, as DFID identified that cash transfer systems in a few South American countries had shielded the poorest households from the worst effects. A view emerged within DFID that low-income countries in Africa and Asia could also develop such systems, and that DFID could support them to do so. The 2009 White Paper, Eliminating World Poverty, announced an intention to extend social protection to 50 million people in 20 countries. This commitment was subsequently replaced with the target of reaching six million people.
In 2011, a DFID literature review noted that cash transfers were already “one of the more thoroughly researched forms of development intervention”. It concluded that “there is convincing evidence from a number of countries that cash transfers can reduce inequality and the depth or severity of poverty”, as well as “contribute directly or indirectly to a wider range of development outcomes”.
This enthusiasm was mirrored in a February 2012 Public Accounts Committee report on “transferring cash and assets to the poor”. The report confirmed that transfer programmes “are effective in targeting aid, and ensuring the money goes directly to the poorest and most vulnerable people. There is strong evidence of short-term benefits for recipients of transfers, for example better nutrition and greater access to health and education services.” The Committee expressed its surprise “that the use of transfer programmes has not increased more in light of the evidence of positive outcomes [and that] the Department only plans to support transfer programmes in 17 of its 28 priority countries”.
“The Global Goals for Sustainable Development offer a historic opportunity to eradicate extreme poverty and ensure no one is left behind. To realise this opportunity we will prioritise the interests of the world’s most vulnerable and disadvantaged people; the poorest of the poor and those people who are most excluded and at risk of violence and discrimination.”
Leaving no one behind: Our promise, DFID, November 2015.
DFID has nonetheless declined to set spending targets on cash transfers, arguing that the decision on whether to provide cash transfers, and in what amount, should be left to each country programme. It noted that: “[i]t is important the Department does not move ahead of local political and practical reality in seeking to support transfer programmes” and that “country offices are in the best place to judge which programmes offer the best value for money in achieving objectives”.
In this section, we look first at whether DFID has met the cash transfers target in its results framework. We then explore impact across our sample of 18 programmes. DFID-funded cash transfer programmes have a range of objectives (see Table A4 in Annex 2 for a DFID-funded cash transfer programmes have a range of objectives (see Table A4 in Annex 2 for a sample of logframe targets). All of the programmes are designed to alleviate extreme poverty and boost consumption, and some plan to improve household resilience to shocks. Most cash transfer programmes also include additional or secondary objectives in areas such as education, health and nutrition, and women’s empowerment (see Table 2). Not all programmes specify logframe targets in all these areas and some of the impact evaluations reveal results in areas that were not specified as logframe targets. To capture both planned and unplanned results, we looked at the evidence across five major areas:
i. Income poverty and consumption
ii. Savings, assets and resilience
iv. Health and nutrition
v. Women’s empowerment.
DFID provided us with an overview of 28 cash transfer and social protection programmes. Seven of them provided only technical assistance and 21 offered a combination of funding and technical support. The logframes and business cases of these 21 programmes covered a range of aims and objectives:
Table 2: DFID’s logframe targets and business case objectives
DFID’s reach target is a means to an end
Under its results framework, DFID set itself the target of supporting at least six million people with cash transfers between 2011 and 2015, measured as the total of the peak annual reach of each programme. This is known as a reach indicator: it shows the scale and coverage of DFID’s programming, but not the effects of cash transfers on beneficiaries. The indicator does not include the impact of DFID’s technical assistance on expanding national cash transfer systems.
While these are real limitations, the reach target remains relevant for three reasons. First, it builds on a large body of evidence showing a causal link between the provision of cash transfers and poverty mitigation. Second, DFID is a key advocate for the expansion of cash transfer coverage in Africa and Asia, and the reach target helps to signal this commitment. Finally, its inclusion in the results framework provided a clear signal to DFID country offices during the 2011 Bilateral Aid Review that cash transfers were a priority.
Cash transfers reached more people than DFID aimed for, but fewer than it reported
In its 2015 Annual Report, DFID reported that between 2011 and 2015 it had reached a ‘peak’ of 9.3 million people with cash transfers, including 4.9 million women and girls. According to DFID data, most individual programmes met or exceeded their targets, with the exception of programmes in Bangladesh (after the correction of a reporting error, covered below), Zimbabwe (with an underachievement in 2015 only) and the Sahel.
We reviewed this data (see Box 7). We found that, with the exception of DFID Bangladesh, all country offices had followed the approved methodology and had mechanisms in place to check data provided by their implementers. Where the data was incomplete, DFID used explicit assumptions to calculate its total.
Box 7: Verifying DFID’s overall results claim
We assessed DFID’s reported “reach” results by subjecting the programmes in our sample to five tests:
i. Have DFID’s implementing partners verifiably followed the guidance notes about what “reach” means? For example, are beneficiaries counted only once, and are they exclusively members of households in which at least one member has received “regular cash transfer payments” that were provided with an aim related to “tackling poverty and vulnerability”?
ii. Do the results look plausible and, if not, is DFID able to provide satisfactory explanations of unlikely numbers such as identical targets and results or identical results for women and men?
iii. Have the reported results been adjusted to reflect changes in the context? For example, has the claimed DFID proportion of a national programme changed when the national government increased its contribution or when a new funder joined?
iv. Have DFID country offices scrutinised the data and are they able to discuss it substantively?
v. Has there been periodic, independent verification of the reported results?
We did find a few inaccuracies. The only material one is that, in Bangladesh, various errors associated with one specific programme resulted in an over-claim of almost half a million people (corrected after we brought it to DFID’s attention). Notwithstanding this error, we conclude that there is reliable evidence that DFID has achieved and exceeded its target of six million people, even though the total is somewhat less than DFID reported.
There are two main reasons why the six million target was exceeded. First, the original target was lower than the sum total of the 2011 country targets, which added up to 7.2 million people. Second, while a few of the programmes planned at that time never materialised (including in Sudan and the Democratic Republic of Congo), two new, larger Pakistan programmes began during the review period, adding more than three million people to the total reached.
DFID’s cash transfers have succeeded in supplementing incomes and increasing consumption
The primary purpose of DFID’s cash transfers is to alleviate extreme poverty for the duration of the transfer (which may be short-term or open-ended) by increasing income and consumption levels. Independent evaluations have confirmed that DFID programmes have, in almost all cases, succeeded in achieving this objective. This finding is consistent, whichever definition of poverty is used.
The evaluations have consistently found that cash transfers increase consumption in beneficiary households. There is no evidence of an increase in unhealthy consumption choices (eg increased spending on alcohol or gambling) and in some cases there is evidence of a decrease. The most impressive finding is from Kenya, where beneficiary households spend significantly more of their overall income (not just the cash transfers) on food, health and clothing, and significantly less on alcohol and tobacco.
These are very positive findings, suggesting that cash transfers are proving to be an effective means of alleviating severe poverty.
Box 8: The intangible benefits of cash transfers
Not all of the benefits of cash transfer programmes can be measured quantitatively. During our country visits to Bangladesh and Rwanda, we met various beneficiary groups who stressed the importance of cash transfers in reducing the stigma of poverty and creating a more positive outlook on life, as illustrated in the following quotes.
Cash transfers have modestly increased longer-term income and resilience
In addition to improving consumption levels, increasing household income through cash transfers can bring a range of additional benefits. According to the literature, cash transfers may help to increase and diversify household income by enabling beneficiaries to acquire productive assets and take calculated risks in their business ventures (which is more likely if cash transfers are regular and predictable). In addition, cash transfers have been shown to boost savings, reduce debt and change the ways in which beneficiaries behave. All of this, as well as the assets built or maintained by public works programmes, potentially contribute to households becoming more resilient to shocks (see Boxes 9 and 10).
While potentially complex to measure, these effects have been confirmed in a number of DFID’s cash transfer programmes. A common result is a reduction of indebtedness and an increase in creditworthiness – two factors that affect households’ ability to deal with crises. Such effects were reported in DFID-funded programmes in Bangladesh, Ethiopia, Nepal, Rwanda, Uganda, Zambia and Zimbabwe.
Box 9: Cash transfers’ potential contribution to household resilience
Households living below or close to the poverty line are vulnerable to shocks, such as unexpected medical bills or adverse weather affecting their agricultural activities. One comprehensive review of the literature found that regular and predictable cash transfers can reduce poverty by making them less vulnerable to such shocks. Cash transfers can help to increase savings and the ability of beneficiary householders to access credit through formal and informal mechanisms. This in turn can reduce their reliance on detrimental risk-coping strategies, such as distress sales of productive assets or reducing consumption of food and other necessities below minimum levels.
In the longer term, cash transfers can also build resilience by enabling beneficiary households to make investments and change their livelihood strategies, such as by introducing sustainable land management practices.
We also found a number of other effects that were specific to individual programmes.
- In Zambia, recipient households were found to be more resilient to shocks and external fluctuations in income than they had been in the past, due to various factors including reduced debt, increased investment in assets, reduced reliance on casual labour and livelihood diversification (such as increased livestock, more production of agricultural output for markets and increased non-farm enterprise).
- In Zimbabwe, an independent impact evaluation concluded that, after only 12 months, the programme had led to increased agricultural assets and livestock, diversified income sources and reduced indebtedness. As a result, there was a reduction in vulnerability to shocks, particularly among smaller households.
- Reviews in Rwanda and Uganda tracked data on savings and productive assets. Both reported an increase in livestock, though probably not to the point that the gains would survive a single household shock. A study in Uganda found that transfers were helping recipients to purchase other types of productive assets.
- Conversely, a study in Pakistan reported that recipients expressed an increased desire to save, but that an actual increase in savings occurred in only a single province (Khyber Pakhtunkhwa).
While these findings illustrate the potential for cash transfers to go beyond boosting consumption, the reported impacts are relatively modest and, in many cases, amount to resilience against only a single shock. DFID’s annual reviews and evaluation reports confirm that cash transfer programmes do not have a lasting impact on income-earning opportunities and resilience, unless accompanied by other interventions. This is probably true everywhere, but especially in African countries, where the state of rural economies makes it particularly challenging to diversify income.
A more ambitious “poverty graduation” model in Bangladesh is achieving results by combining cash transfers with other forms of support
The biggest gains in both income and resilience are achieved by the DFID-funded programmes in Bangladesh. These programmes combine relatively small cash transfer components with other interventions, such as asset grants (eg livestock) and supporting products and services (eg animal vaccinations, food supplements, entrepreneurial and other training, and hygiene awareness raising).
DFID was a supporter of the Bangladeshi NGO BRAC when it first piloted this model in 2002. The approach has developed but not fundamentally changed since then, and there is strong evidence that it has enabled a large majority of beneficiaries to achieve substantial improvements in their socioeconomic status. The chances of these mixed interventions achieving results that continue after households have exited the programme are much stronger than for pure cash transfers. Furthermore, the results have shown an ability to survive climate shocks.
It is not yet known whether this model is replicable outside Bangladesh (only a few initial studies exist), whether it can be delivered by government (as opposed to an NGO) or how it performs in times of economic downturn. Moreover, these combined interventions are more costly than standard cash transfers. However, the results are impressive enough for DFID to be supporting a pilot adapted from this model in Rwanda, while other pilots in Pakistan and Kenya are under development.
Box 10: DFID-funded cash transfer programmes build resilience above household level
In Ethiopia and Bangladesh, public works programmes often support adaptation to climate change through, for example, reforestation projects or developing flood-resistant infrastructure.
Furthermore, in Ethiopia (but not in Rwanda, Myanmar or Nepal), some public works programmes schedule work to take place in the lean months of the year, when participants are most likely to be suffering from food insecurity. This counter-cyclical effect also contributes to resilience.
Despite significant success in Ethiopia and Pakistan, the effects on education have been generally modest
There is strong evidence that DFID’s cash transfer programmes have been successful in their core objectives of relieving income poverty, increasing consumption and, in some instances, providing a modest boost to resilience. However, most cash transfer programmes also include additional objectives in areas such as education, health, nutrition and empowering women. In these areas, the evidence of impact is more mixed and, in some cases, less than would be predicted from the literature.
Nine of the 18 programmes in our sample mentioned educational goals in their business cases. The programmes in Pakistan (see Box 11) and Ethiopia have achieved considerable success, but in the other programmes the impact has been modest, absent or, in one or two cases, negative. Overall, the impact of DFID’s programming on enrolment and attendance (although not necessarily learning) is below what the wider evidence suggests can be achieved through cash transfers. It is likely that weaknesses in programme design and implementation (see the sections on cash transfer targeting, timeliness and size) have held back results in these areas.
Box 11: School enrolment in Pakistan
The Benazir Income Support Programme (BISP) is the main social assistance programme in Pakistan. It targets and provides unconditional cash transfers to the poorest 25% of households. An independent evaluation found that unconditional cash transfers had no impact on school enrolment, but the addition of a conditional transfer did have an impact.
A sub-group of BISP recipients receive a quarterly amount of some £5.40 per child, conditional on school enrolment and an attendance rate of at least 70%. This conditional transfer is combined with behavioural change communication on the importance of schooling.
The marginal impact of this additional, conditional cash transfer (ie compared with children in households that received the unconditional cash transfers only) is an increase in the enrolment rate of nine percentage points for girls and boys alike. Source: Benazir Income Support Programme; Evaluation of the Waseela-e-Taleem Conditional Cash Transfer, OPM, July 2016, draft version.
In seeking to understand this mixed performance on education, we found no particular correlation between the presence of explicit education-related logframe targets and a programme’s education related outcomes. Schooling is not among the Ethiopia programme’s logframe targets, but transfers have helped children from poor families to attend schools and have improved educational attainment and progress. In one region – Tigray – children in recipient households outperformed the children of better-off, non-recipient households. Conversely, the Kenya programme does have education-related logframe targets, but the results have been limited to a minor enrolment increase among children living a long way from school. In Uganda, a hope that the transfer would support schooling has not materialised: the programme has not increased household expenditure on education and has had no impact on children’s attendance or attainment at either primary or secondary level.
We also came across an example of negative impact. In Zimbabwe, poor government coordination across programmes meant that cash transfer recipients were discouraged from participating in the Basic Education Assistance Module (BEAM), another government programme that provides targeted resources for children to attend school. An external evaluation found a 6% decline in BEAM participation among DFID-funded programme participants, which offset other positive effects on education (including a seven percentage point increase in the probability of school progression for children of primary school age in small households). An external assessment suggested that there may also have been a negative impact from a public works programme in Nepal. The researchers noted that, while the programme does not employ children below the age of 16, it may nonetheless have increased school absenteeism as a result of children taking on extra responsibilities of caring for younger siblings while their parents are participating in the programme.
Where programmes did increase school attendance, this did not necessarily result in improved learning outcomes. In Zambia, one of the two grant types resulted in large impacts on enrolment of both primary- and secondary-age children, but there was no impact on educational outcomes for primary school age girls. The wider evidence suggests that cash transfers on their own rarely secure a positive impact on learning, due in part to problems with the quality of national education systems. DFID has other programmes in most of its partner countries that aim to strengthen education systems.
Evidence of impact on health and nutrition is uneven across and within programmes
All of DFID’s cash transfer programmes (not just those in our sample) include objectives around health and nutrition, and 15 of them incorporate health and nutrition indicators in their logframes. This reflects empirical evidence from the literature that cash transfers can promote both greater use of health services and more dietary diversity, although impacts on child wasting and stunting are generally weaker.
Notwithstanding this strong focus on health and nutrition, evidence of impact in these areas is uneven in our sample programmes (see Table A3 in Annex 2). Where effects have been achieved, they are sometimes smaller than what the literature suggests is possible. In some cases, DFID recognises that its health and nutrition objectives are not being achieved; in Ethiopia and Bangladesh, DFID is supporting experiments combining cash transfers and other types of health and nutrition-related support in order to improve results.
The available evidence suggests that several of the programmes DFID is supporting are currently not optimised for maximum impact on nutrition and health, and that improvements in design and implementation – including timeliness and transfer size – could strengthen results in this area. These challenges and the manner in which DFID is supporting governments to overcome them are discussed in the section on DFID’s work to strengthen national cash transfer systems.
Women’s empowerment is central to programme design, but impacts are not fully clear
DFID’s programmes place a strong focus on women’s empowerment in their business cases. In some cases, women are the sole recipients of cash transfers (eg Nigeria, Bangladesh). Other programmes take care to ensure that eligible women have access to the cash transfers. For example, the Ethiopian public works programme uses client cards that feature the names and photographs of both husband and wife, and includes a range of measures to ensure women have access to the income. In contrast, the Myanmar public works programme allowed only one member of each household to participate, resulting in a preponderance of men.
The literature suggests that cash payments to women can strengthen their decision-making power within the household and their choices about fertility. However, there is mixed evidence about the impact of cash transfers on domestic abuse, with both positive and negative results recorded depending on context and programme design.
Despite the risk of causing harm under certain circumstances suggested by the literature, we found that none of the programmes in our sample were monitoring levels of domestic abuse. This is a surprising omission. While government counterparts may sometimes be reluctant to monitor domestic violence, owing to political sensitivities, DFID could invest in other monitoring or review mechanisms to ensure that programmes cause no harm in this respect.
DFID does monitor other empowerment indicators across its programmes. However, measuring empowerment is a challenging undertaking and we found DFID’s approach to be relatively weak. Only a few programmes were monitoring a basket of indicators capable of generating a robust picture of empowerment (see Box 12), despite the fact that DFID has been a pioneer of research on the impact of cash transfers on women’s empowerment. The lack of robust programme monitoring in this area is a notable gap, suggesting that DFID is not putting its own research into practice or doing enough to build up practical experience on what works in this critical area.
Box 12: Measuring women’s empowerment
Women’s empowerment is a complex phenomenon to measure. Good practice suggests that it should be assessed using multiple indicators looking at different aspects of empowerment. The ODI cash transfer review measures empowerment on the basis of six indicators: domestic abuse, women’s decision-making power, marriage, pregnancy, use of contraception and having multiple sexual partners. Other reports consider participation in public life, control over and ownership of assets, and/or access to information.
Few DFID-funded cash transfer programmes have systematically measured more than one or two of these indicators. As a result, their reported results are not particularly robust.
The exceptions are an assessment in Pakistan and a few assessments in Rwanda. In Pakistan, an external assessment looked at the proportion of women that are economically active (no statistically significant effects), at women’s control over cash and other resources (no effects), and at women’s mobility (a small positive effect on women’s ability to visit a friend’s home). In Rwanda, one assessment found improvements in intra-household decision-making, more equity in household relations and positive improvements in women’s participation at the community level as a result of the programme. Two other studies on the Rwanda programme were less positive, reporting similar findings but at a marginal level. Moreover, they found no effects on the gender division of labour within households, no marketable skills development and they noted that distance, times and lack of care facilities were obstacles for women’s access to public works programmes.
The limited evidence that is available points to mixed results from DFID’s programmes. In Zambia, which set a logframe target on women’s decision-making, there was no measurable progress. Programmes in Kenya and Zimbabwe impacted positively on adolescent girls’ sexual health (see Box 13), even though this was not an explicit target for either programme.
Box 13: Safe transitions into adulthood
In Zimbabwe, there is some evidence that the programme has supported the safe transition of adolescent girls into adulthood. Among the programme’s reported results were delayed sexual debut and marriage, decreased likelihood of early pregnancy in large households and a positive impact on safe sex practices among sexually active youth (ie condom use at first sex). These findings are encouraging but tentative, as the sample size was modest and the findings were only based on the initial 12 months of the programme.
DFID’s cash transfer portfolio is achieving its primary objectives, but with scope for improvement in other areas
Overall, we award DFID’s cash transfer portfolio a green-amber score for impact on poverty and vulnerability. The core objective of DFID’s cash transfer programmes is to alleviate income poverty and increase consumption for the poorest and most vulnerable, for the duration of the transfer. There is strong evidence that these results are being delivered consistently across the portfolio. Moreover, in some programmes the increases in income are in turn making beneficiary households more resilient to external fluctuations in their incomes, due mainly to increased creditworthiness and reduced debt. DFID has also achieved promising results from a more ambitious model of poverty graduation and is exploring how this could be replicated. These are strong results that, in our view, make a good case for DFID’s continuing investment in cash transfers.
There is no room for complacency, however. We found that DFID programmes are not always clear about what additional results to target, beyond the core objective of poverty alleviation, and therefore may not be optimised to deliver such results. Impact on school attendance has been below DFID’s targets, and we identified a few instances of zero or even negative impact. Evidence of impact on health and nutrition is uneven, both within and between programmes, with a pattern of results that DFID is sometimes unable to explain. Although women’s empowerment is a central concern in DFID’s business cases, its monitoring is not strong enough to generate robust results, and we are concerned that DFID has not done enough to monitor for unintended negative results such as increased domestic abuse. We are encouraged that DFID is beginning to explore how to combine cash transfers with other interventions, so as to maximise results in these areas.
DFID has successfully encouraged the introduction and expansion of national cash transfer systems in low income countries
When describing the cash transfer portfolio, DFID staff place more emphasis on the long-term aim of increasing the coverage, quality and sustainability of national cash transfer systems than on the immediate effects of DFID’s funding on today’s cash transfer recipients. The underlying objective is to extend coverage of cash transfers, particularly across sub-Saharan Africa, so that they become part of a standard toolkit in the fight against extreme poverty and vulnerability.
According to stakeholders in DFID, there are two dynamics that may, in the long run, support this goal. First, as national cash transfer systems become established, expand and demonstrate their effectiveness, public expectations and political commitment will grow and become mutually reinforcing. Second, the spread of national cash transfer systems across Africa would create a positive “neighbourhood effect” where national governments are under increasing pressure to emulate the actions of their neighbours.
Over the review period, government-operated cash transfer programmes in sub-Saharan Africa have indeed shown a rapid growth path, both in number and coverage. The number of countries with unconditional cash transfe programmes increased from 21 in 2010 to 40 in 2014 (out of 48), reaching some 50 million people. Within our sample, the programmes in Uganda, Rwanda and Zambia had expanded particularly fast.
In part, this expansion was underpinned by domestic political support that already existed at the start of the review period. Eight of DFID’s partner countries had signed the 2006 Livingstone Call for Action – an intergovernmental document calling for reliable long-term funding for social protection from both national budgets and donors. The African Union had also adopted a policy framework on social protection. In parallel, the World Bank has helped national governments to adopt or expand social safety nets.
Building on this initial support, DFID contributed to the expansion in cash transfers through evidence based policy advocacy, financial contributions and technical assistance on a range of issues (Table A4 in Annex 2 lists some of the diverse objectives of technical assistance). DFID also funded pilot programmes, either through government or non-government partners, in order to demonstrate the potential benefits of cash transfers, create a body of context-specific evidence and stimulate public demand.
It is obvious that DFID funding has directly enabled national governments to improve and extend their coverage. It is more difficult to isolate the impact of other forms of DFID support, but it is reasonable to conclude that DFID has made a valuable contribution to building the commitment of its partner countries to developing national cash transfer systems for the poorest and most vulnerable.
African governments have increased their financial contributions, although sustainability is still some way off
One of the indicators of this increased commitment is national financial contributions and commitments (see Figure 2). In the last few years, the capacity and willingness of African governments to fund national cash transfer systems has changed dramatically. In the words of one DFID advisor, “governments have changed from the assumption that ‘we cannot afford this’ to the question of how much they would be able to contribute”.
This change has been facilitated by a decade of economic growth in Africa, buoyant commodity prices and better macroeconomic management, creating more budgetary space. However, it was by no means certain that these additional resources would be invested in social protection. DFID has provided seed funding for national systems and has actively advocated for national contributions. We find it plausible that this has helped to secure government funding in a number of cases.
DFID’s partner countries are, nevertheless, still a considerable distance away from providing sustainable national funding for their cash transfer systems (the same can be said for other public services and development programmes). Financial contributions from national governments are often irregular; in Rwanda and Uganda, pressure on national budgets has resulted in disbursements for cash transfers being below what was budgeted. Furthermore, existing programmes still fall well short of nationwide coverage, there are programme design problems and the amounts transferred to individual households are not always high enough to make a meaningful difference.
It is not yet clear that the political consensus is strong enough to sustain budgetary allocations through economic downturns and in the face of competing priorities. Recent discussions in the Ethiopian parliament illustrate this. The country has a long-standing, large-scale public works programme, but there are still voices arguing for a reprioritisation towards fuel subsidies (which are shown not to be effective in reducing poverty). This underscores the challenges that the government of Ethiopia faces in delivering on its objective of full domestic financing of the programme within the next decade.
While financial sustainability may be a long-term goal, it is nonetheless notable that DFID has not yet begun to formulate an overall strategy for achieving it. There is no explicit rationale for the size and duration of its financial contributions, which vary considerably. Nor does DFID explicitly seek to incentivise increased national contributions via its own funding (though it does encourage increased national contributions through other means). As national programmes begin to be consolidated, financial sustainability will become an increasingly important consideration.
DFID’s choice to work through national government systems makes sense, but there are some short-term disadvantages
There are both advantages and costs to working through national systems. When working with NGO partners, DFID has the significant short-term advantage of direct influence over programme design and implementation. In its NGO-implemented programme in Nigeria, for example, DFID can be confident that the cash transfers offered to pregnant and lactating women are soundly targeted, with a meaningful transfer size (£14 per household per month) and a good record on timeliness. On the other hand, being donor-financed and NGO-implemented, the programme has limited geographic coverage, rates poorly for sustainability and does not contribute to the goal of strengthening national cash transfer systems.
As only national governments are in a position to develop sustainable cash transfer systems with nationwide coverage, DFID chooses to work with and through national systems whenever conditions allow. As a result, while it tries to influence the design and delivery of programmes through policy dialogue and technical assistance, it must ultimately accept the partner country’s right to decide. In the short term, this entails trade-offs in several important areas – particularly around the efficiency of targeting, transfer size and the reliability of transfer payments – all of which can hamper the size and depth of programme impacts. Given DFID’s ultimate goal of building sustainable national cash transfer systems, we regard this as a legitimate trade-off, provided that DFID is doing everything reasonably possible to strengthen these programmes over time.
DFID takes a gradual and evidence-based approach to policy dialogue
In most instances, DFID supports the development of national systems over an extended period – either through long-term programmes (eg ten years in Zambia and eight years in Pakistan) or a sequence of shorter ones. During these engagements, DFID contributes to the development of national policies and systems but does not insist on a single programme model. Generally it avoids directly confronting counterparts on strongly held positions. Instead it chooses to tolerate shortcomings in the national systems it funds while aiming for incremental improvements over time. As one DFID advisor put it, “we are supportive, show our value, and then see if we are able to open other doors”.
DFID’s engagement is often informed by political economy analysis, which helps advisors to negotiate complex political terrain. In appropriate cases, DFID makes good use of evidence in its policy dialogue. It synthesises evidence from cash transfer programming around the world and shares it with national counterparts. It also invests in domestic research and in documenting local success stories, where it believes this would be more persuasive. It should be noted, however, that evidence-based advice is not always taken, and we have found examples where governments are resistant to evidence that challenges their design choices or calls into question the effectiveness of their programmes.
During our visit to Rwanda, we found evidence that DFID’s policy advocacy had significantly influenced counterpart attitudes and beliefs. Our documentary analysis and feedback from a number of Rwandan senior civil servants, DFID staff and technical advisors led us to conclude that DFID has verifiably helped to advance the government’s thinking about social protection. There is a clear progression of the technical assistance programme, moving from basic advocacy work on core design issues to more detailed advice on technical delivery challenges. For example, it is now agreed that people living with disabilities are an important target group; the assistance now focuses on how best to identify and target them. DFID has also influenced adjustments to some of the key social protection principles. These include ring-fencing (ie protecting against budget cuts) unconditional transfers and introducing a system of budgeting across regions based on need rather than pre-determined percentages.
Across the sample, DFID has made useful contributions to the development of national policies and strategies. Elements of the National Social Security Strategy in Bangladesh can be traced back to DFID’s engagement, as can the government of Myanmar’s decision to start a 1,000-day maternity cash grants system. Similar examples can be found in Kenya, Pakistan, Rwanda, Uganda, Zambia and Zimbabwe.
DFID are keenly aware of the need to protect against opportunities for fraud and leakage within the cash transfer programmes they support. We also noted, however, that DFID may end up avoiding politically difficult but important areas of engagement relating to targeting errors in their policy and advocacy work with national governments. We did note that on occasion, political sensitivities can mean DFID avoiding tackling targeting issues directly. In Bangladesh, for example, DFID’s technical assistance programme started out with a relatively lengthy diagnostic exercise rather than engaging directly with problems of targeting – both inclusion and exclusion errors – that were already well known and evidenced (and which were a key reason for DFID providing technical rather than financial assistance to the programmes in the first place).
It also chose not to address the systemic but politically sensitive problem of the fragmentation of the government’s many social protection programmes. While the Bangladesh case shows that DFID’s patient approach to policy dialogue helps to maintain good working relations with counterparts, this should not be at the cost of a lack of ambition or urgency in tackling the most pressing problems head on.
DFID’s technical assistance is focused on improving programme delivery
Cash transfers are a new undertaking for most of DFID’s partner countries. They often begin with limited capacity to design, implement and maintain a national cash transfer system. In the few countries with a history of cash transfer programmes, such as Bangladesh, these are fragmented and spread over multiple ministries, giving rise to an additional problem of overcoming vested interests.
Wherever it provides financial aid, DFID also provides technical assistance to strengthen national delivery mechanisms. DFID’s annual reviews identify a range of examples where its technical assistance has helped to translate government preferences into practical policies, systems and processes, with accompanying monitoring systems to promote adherence. Examples include the following:
- In Kenya, flexible technical assistance helped the government with its targeting and recertification processes (ie determining whether beneficiaries remain eligible). Other contributions related to a management information system and an electronic payment system.
- In Uganda, DFID supported the government in the development of a social protection policy framework. It helped to design and implement a consultation process that improved the quality of the policy and also helped to build government understanding and support for social protection at both national and local government levels.
- In Nepal, DFID helped social protection programmes with no history of cross-fertilisation to learn from each other.
- In Zambia, technical assistance was instrumental in enabling the programme to scale up from 32,000 recipient households in 2010 to 240,000 in 2016.
- A conditional cash transfer programme in Pakistan was mainly designed by DFID technical advisors before being handed over to government.
Across the portfolio, we identified technical weaknesses in three areas – targeting systems, timeliness of payments and transfer size – that can have a significant impact on effectiveness and value for money. While DFID is aware of and engaged on all of these issues, it is often required to tolerate shortcomings in one area in order to focus its efforts on another. We look at each of these areas in turn.
Targeting errors remain common across the portfolio
Targeting systems are basic to the design of cash transfer programmes. An effective means of ensuring that cash transfers reach the poorest and most vulnerable households is key to maximising impact. We found that targeting errors exist across the portfolio. They fall into three main types:
- Targeting that is not focused on the poorest and most vulnerable households. In Rwanda, the selection of recipients is based on the government’s Ubedehe system – a home-grown community cohesion instrument that correlates only weakly with poverty levels. Even where targeting is explicitly focused on the poorest and most vulnerable households, different concepts and measures of poverty and vulnerability can lead to very different selection outcomes. The Sahel programme provides a good illustration. In this programme, different tests were used to identify the poorest households and those most vulnerable to shocks. These two groups should strongly overlap but, according to one key informant, the lists of eligible people had only a very minor overlap in some of the areas they surveyed.
- Inclusion errors. The inclusion of people who are not in fact eligible is all but inevitable in programmes that target on the basis of community selection or household income, as local power dynamics, misreporting and seasonal variations give rise to an unavoidable margin for error. Even programmes targeting specific groups may feature inclusion errors. A unique case was found in Nigeria where fake urine samples were reported to have initially led to the inclusion of women who were not actually pregnant. DFID successfully introduced random pregnancy testing to tackle the problem. The largest inclusion error we came across was in Pakistan, where the programme aims to reach the poorest 25% of the population but the World Bank found that a quarter of recipients fell well above that threshold. Rather than occurring from a failure to apply the targeting criteria properly, inclusion errors can also happen if the criteria themselves are inadequate. The child-focused programme in Zimbabwe used the criteria of labour constraints and food-poverty to identify households who may have been affected by the AIDS crisis and have children to care for. However, this resulted in 17% of the recipient households being included in spite of not having any children.
- Exclusion errors. In Pakistan, the women who receive the transfer must hold a valid Computerised National Identity Card. This led to temporary exclusions, as it takes time to acquire this card. In the early implementation stages in Myanmar, the most remote and labour constrained households were effectively excluded from public works programmes, as were a range of other particularly vulnerable groups (eg single women with young children and other labour-constrained households, disabled people, households without local registration cards).
Not all targeting problems are equally problematic, nor do all require an immediate solution. In some cases, the effort required to fix the targeting would be disproportionate to the benefits. Sometimes the finer points of targeting assume a lower priority in the face of more pressing issues such as expanding national coverage.
We nonetheless found several cases (in Rwanda, Nepal and Zimbabwe) where, in our assessment, DFID should have made greater use of its influence to improve targeting and to monitor the results more systematically. In Pakistan, DFID and other key international stakeholders have shown that it is possible to persuade a national government to change its targeting paradigm even in the face of strong vested interests (see Box 14).
Box 14: Changing the targeting paradigm in Pakistan
Before DFID’s involvement, the targeting system in Pakistan’s largest cash transfer programme was the major constraint on programme effectiveness. All national and provincial assembly members were given a budget for cash transfers and authorised to select the beneficiaries. After advocacy and technical support from DFID, the World Bank and USAID, the targeting mechanism was changed to a proxy means-based Poverty Score Card that enables effective targeting of the poorest 25% of households. It is not yet perfect (in 2013 the World Bank estimated that only 75% of the transfers reached the poorest 40% of the population) but it has been a step change in Pakistan’s cash transfer practice, making it considerably more effective in alleviating poverty.
DFID has invested in improving the timeliness of cash transfers, but delays remain common
Across the sample, delayed transfers of funds to beneficiary households are the most common operational weakness (see Table 3). Where the payments are not predictable, this reduces the likelihood of achieving the intended impact on consumption patterns. For this reason, many definitions of cash transfers incorporate the idea of regular and predictable payments.
DFID recognises the importance of timeliness and prioritises the issue in several countries. The country offices in Ethiopia, Nigeria, Rwanda and Zambia considered the issue important enough to include timeliness as a logframe target.
Nevertheless, the timeliness of payments is a recurrent problem in many of the national programmes. Gains are also sometimes temporary and can be reversed when new challenges appear. This is therefore an area requiring greater attention.
Table 3: Timeliness of payments across DFID-supported programmes
|Regular failures to deliver cash transfers on time||Ambiguous data||Most payments timely|
|• Ethiopia: average of 39 days’ delay between labour and payment to the last person in the group.|
• Kenya: only 50% of payments on time.
• Nepal: payments are not always timely, but DFID was unable to share data about the extent of the delays.
• Pakistan: in 2013, only 17% of recipients received all four payments when originally scheduled; transfers were not made on fixed dates, leading to multiple trips to the collection point.
• Rwanda: 86% of unconditional payments are typically more than a month late. There is now a strong focus on improving timeliness.
• Zambia: variable, with delays of up to four months.
|• Zimbabwe: 88% of recipients are “very satisfied” with timeliness, but a 2013 study on the cash transfer programme in Zimbabwe found that “the delays and uncertainty surrounding payments affect beneficiaries’ ability to plan and budget, and shopkeepers’ ability to restock and invest”.||• Bangladesh: very few delays due to intricate grass rootslevel networks and sophisticated planning by the NGOs involved.
• Nigeria: 91-98% of payments made within the 10-day target period.
• Uganda: after initial delays, 94% of payments were on time by the end of review period.
DFID does not have a clear view on the effects of transfer size on poverty outcomes
There is a wide variation in transfer sizes across the portfolio, and a range of rationales (see Table A2 in Annex 2). The size of the payment may be calculated based on the cost of certain food items, a percentage of the national poverty line or local labour costs in public works programmes. Affordability for national governments also plays a role and, given budgetary constraints, there is an obvious tradeoff between transfer size and coverage.
Transfers below a certain threshold are likely to be ineffective. Above that threshold, much depends on the country and context, but at household level and as long as the cash transfers do not provide a disincentive to work, more is likely to be better (see Box 15). Transfer size can also affect intrahousehold dynamics in unpredictable ways. Larger transfers may in some circumstances reduce abuse of women (due to a reduction in poverty-related stress and a better bargaining position for women), but in other circumstances increase their vulnerability to abuse (as a reassertion of male power). Balancing benefit and risk is not straightforward and requires careful context analysis and monitoring.
In the context of the “leave no one behind” commitment, it is particularly important to test and monitor the effects of transfer size on intra-household dynamics in certain sub-groups (eg for illiterate women or within marriages with a significant age difference) but DFID-funded programmes are not currently doing this.
Box 15: Evidence on the significance of transfer size
A review of 15 studies (each covering only one or a few of the potential effects of transfer size) suggests that higher transfer levels can lead to increases in household and food expenditure, and higher savings and investment in productive assets, with weaker evidence of improvements in certain health and nutrition outcomes. Based on only four studies, ODI concluded that there is “limited conclusive evidence that increases in transfer size lead to greater impacts on educational outcomes”. For empowerment of women, the evidence is limited, with one study reporting a positive correlation between transfer size and practising safe sex, and one study reporting a positive correlation between transfer size and the risk of abuse (and ODI concludes that, “[w]hile this is not an argument against providing sufficiently sized transfers, it does remind us that the provision of cash transfers invariably interacts with and affects intra-household dynamics and power relations”).
Source: Cash transfers: what does the evidence say?, ODI, July 2016, pp. 117 and 257
DFID does not have a clear view on the effects of transfer size on poverty outcomes
In our case study countries, we saw very different DFID responses to the issue of transfer size. In Rwanda, evidence showed that unconditional transfers had more impact than public works, as participants were working too few days for the income to make a material difference. DFID then advocated successfully for an assured minimum number of annual work days. This is an example of the value of good monitoring and follow-up. In the urban poverty reduction programme in Bangladesh, however, we saw examples of education stipends amounting to just 60p per month, which were unlikely to have any impact on the girls who were their intended beneficiaries. Similarly, in another programme in Bangladesh (called “Economic Empowerment of the Poorest”), we observed that temporary pensions of £1.50 per person per month were too modest to make a significant difference to the lives of elderly people living in poverty. We saw no evidence that DFID had identified the problem or raised it with its programme partners (though DFID does advocate on precisely this issue in respect of cash transfer programmes run by the government of Bangladesh).
While there is no golden rule for transfer size, it remains an important determinant of the value for money of programmes. Our evidence indicates that DFID invests too little in the case-by-case monitoring and evaluation of these effects, and does not always recognise and act upon cash transfers that have dropped below the threshold needed to make a meaningful difference. DFID lacks a strategic approach to its technical assistance and its funding of national programmes
There is significant variation in the types of technical assistance offered by DFID for national cash transfer systems. Across the portfolio, DFID’s technical assistance includes funding for the development of national cash transfer systems, staff secondment, short-, medium- and long-term technical advisors, funding for governments to engage their own consultants and funding for project implementation units and coordination bodies. DFID staff also play an important role in most countries, actively engaging with government and other stakeholders on strategy, policy and technical issues.
There is no central guidance on capacity building. While DFID staff in each country are able to provide a rationale for their choices, we could find no clear explanation for variations in approach, budgets and timelines across programmes. While we acknowledge the need to respond to each national context, a more explicit strategy might help to keep DFID’s programmes focused on long-term goals.
There is also no clear strategy underlying the size or conditions of financial support. With the exception of the Pakistan and Uganda programmes, we did not see examples of performance triggers, where payments are linked to agreed reforms (common in DFID programmes in other sectors), or conditions designed to encourage governments to increase their budgetary contributions over time. We were not provided with any evidence, at country level or centrally, suggesting that DFID had articulated a pathway for achieving sustainable national systems.
The lack of a rationale for the volume of funding is significant. The national cash transfer programmes that DFID supports remain well short of achieving national coverage. If DFID believes that the programmes are successful, then increasing its financial support to enable them to scale up could represent a good investment, provided technical weaknesses in programme design and delivery could be addressed. The introduction of performance-based financing might enable DFID to explore the viability of scaling up its assistance.
The balance between long-term capacity strengthening and short-term problem solving is not always clear or convincing
In the absence of a consistent approach, we found that DFID’s technical assistance was not always strategic in orientation. Because technical assistance is often provided in tandem with financial contributions, advisors can feel pressure to make sure that the flow of DFID funds through to the beneficiaries is not interrupted. While this is clearly legitimate, it can lead to advisors focusing on firefighting – that is, resolving immediate problems that threaten operations – even when the programme design suggests they should take a longer-term approach to building government capacity.
This concern was mentioned to us by technical advisors and DFID staff in a number of instances. While they acknowledged that a combination of short- and long-term focus is often required, they were not convinced that the balance was right. In Rwanda, we observed that DFID’s technical assistance has helped to resolve a range of short-term obstacles, but has struggled to achieve progress on some core issues such as establishing adequate baselines, building good administrative records and creating fiscal space for long-term funding.
Oversight and monitoring of technical assistance are not sufficient
Technical assistance is subject to a range of well-documented risks that can work against sustainable results, such as gap-filling and capacity substitution, generic rather than tailored programming and overreliance on technical solutions for problems that are not primarily technical. To mitigate these risks, technical assistance programmes should be carefully managed and monitored.
The evidence that we have seen suggests that this is not currently the case: programmes are often managed in a hands-off way by DFID staff, who do not always have the technical expertise to monitor the performance of technical advisors. Contact between technical advisors and the more specialised staff members in the DFID central team is infrequent.
A possible consequence of this is inconsistent advice to partners. DFID’s technical assistance is provided by implementing partners, which include both multilateral agencies and contractors. In a number of instances, DFID co-funds technical assistance with the World Bank. In Bangladesh, it cofunds with the World Bank, UNDP and the World Food Programme. According to key stakeholders, the social protection agendas of these agencies are not fully aligned with each other or with DFID. As a result, there are risks that DFID’s technical assistance is providing conflicting messages, or at least working without a clear consensus on the end goals and how to achieve them (for example one partner advocating for targeting on the basis of proxy means testing and another partner for community-based targeting).
We also found monitoring and evaluation of the results of technical assistance components to be inadequate. Across the portfolio, we found few explicit and coherent models of change and few meaningful baselines based on thorough capacity assessments. Not a single technical assistance contract has yet been independently evaluated. This makes it difficult to conclude that DFID is maximising the effectiveness of its technical assistance. This problem is likely to persist as the independent evaluations that are scheduled to take place in 2017 may not have the ingredients required to evaluate technical support: we have seen no evidence that DFID or the technical advisors are collecting the often fluid, time-bound data to make meaningful contribution analysis possible.
DFID’s system-building work has considerable scope for improvement
We have awarded DFID an amber-red score for its work on building sustainable national cash transfer systems.
We recognise that DFID has a long-term approach to building ownership of social protection that reflects a good understanding of national policy processes and political contexts. However, it lacks a strategic approach to technical assistance, does not have a consistent approach to improving the financial sustainability of national systems, and has not made consistent use of performance triggers to push forward reforms.
Evidence on the impact of DFID’s technical assistance for system building is fairly weak. We saw signs of progress in a number of countries in useful areas. However, DFID’s support has no coherent underlying model of change. The wide variations in approach seem to reflect the preferences of individual advisors rather than a clear strategy. Oversight is weak, monitoring systems are poorly developed and there have not yet been any independent evaluations. While capacity building is a challenging area, we conclude that there is substantial scope for DFID to strengthen its results.
In this section, we assess the overall value for money case for cash transfers, based on the totality of evidence that we have reviewed. We then look at how well DFID integrated value for money analysis into its programme and portfolio management. We also look at how well DFID uses evidence and learning to improve impact over time.
DFID’s cash transfers demonstrate good value for money, with scope to provide additional funds to help partner countries scale up their cash transfer programmes towards national coverage
Looking across the full range of impact data collected for this review, we find that DFID’s cash transfer programming offers a strong value for money case. There is solid evidence that it delivers consistently on its core objective of alleviating extreme poverty and reducing vulnerability. Building national social safety nets is an important complement to DFID’s increased emphasis on promoting economic development. It is also consistent with the commitment to “leaving no one behind”. In November 2015, DFID pledged that “people who are furthest behind, who have least opportunity and who are the most excluded will be prioritised”. Cash transfers are a proven method of helping the most vulnerable.
DFID has helped to promote the use of cash transfers in its partner countries and the expansion of national programmes. Recent evidence suggests that national contributions to cash transfer programmes are increasing across most of its partner countries. There is also some evidence that programmes become more cost-efficient over time, as coverage expands and programmes mature.
DFID’s choice to work through national government systems wherever possible necessarily entails a trade-off on value for money. While we found positive impact across the board, recurrent weaknesses in targeting, timeliness and transfer size show that there is scope to further improve value for money.
DFID must use its funding, policy dialogue and technical assistance as actively as possible to overcome these shortcomings in national programmes.
This analysis suggests that there may be a value for money case for providing additional funds to help partner countries scale up their cash transfer programmes towards national coverage – particularly where the additional funding could be used to help overcome programme weaknesses. For the time being, national programmes are still well short of national coverage, which means that there is room for DFID to increase its funding without displacing national expenditure. However, in due course, DFID will have to give greater attention to the question of how to achieve sustainable national financing.
A value for money focus is apparent in some aspects of programme management
In 2012, the Public Accounts Committee criticised DFID’s capacity to ensure value for money in cash transfer programming:
In response, DFID developed a toolkit for achieving value for money in social transfer programmes that follows the “3E” model of economy, efficiency and effectiveness. It aims to strengthen and promote consistency in value for money analysis, with a focus on cost drivers, cost-efficiency and cost-effectiveness. It also provides a set of benchmarks that can be used to compare the efficiency and effectiveness of programmes.
The influence of this toolkit is apparent in the value for money assessments that have been conducted across the portfolio (sometimes by the authors of the toolkit). The majority of the DFID advisors we interviewed reported that the toolkit had helped them to understand, adhere to and benefit from DFID’s value for money requirements. They identified two types of benefit.
First, they stated that value for money assessments focus their attention on the importance of minimising costs. In response to the Public Accounts Committee, DFID listed examples of measures that had been taken in particular programmes to reduce costs. We saw limited evidence that this was a major focus of effort, however.
The second benefit mentioned by DFID advisors is the use of value for money analysis to identify the variables with the greatest influence on the cost-effectiveness of their programmes, so as to address these in policy dialogue and technical assistance. We found a range of evidence that this is occurring. For example, in Rwanda this kind of analysis had led to technical assistance on targeting, financial management (to reduce payment delays), management information systems and accountability mechanisms.
Despite active support from central teams in DFID, the level of attention given to value for money issues still varies across country programmes. Some have conducted good quality value for money assessments and used them regularly to inform management choices (Kenya, Rwanda, Uganda and Zambia). Others have relatively weak assessments that are not regularly revisited (Bangladesh, Nepal and Pakistan).
Box 16: Cost-efficiency is only one dimension of value for money
One of the common measures of value for money is the proportion of programme budget spent on actual cash transfers. However, the figure needs to be interpreted in context. For example, two DFID-funded programmes in Bangladesh both spend unusually low proportions of their budgets on direct transfers. In the Chars Livelihoods Programme, the low proportion is partly the inevitable consequence of the programme’s intended beneficiaries, who live on Bangladesh’s riverine sand and silt landmasses (chars) and are costly to reach. In the context of the “leave no one behind” agenda, higher costs can be defended on grounds of equity, which is often included as a fourth “E” in value for money frameworks. However, in the Economic Empowerment for the Poorest Programme, the low percentage of the budget spent on transfers is partly indicative of programme inefficiencies, including a convoluted management structure, a large number of partners and an expensive innovation element (which is not matched with a functional system to capture and use the learning). While it is important to track efficiency indicators, they are only one element in value for money analysis.
DFID collects value for money data but does not use it consistently to inform portfolio management
Across the portfolio, DFID measures efficiency indicators and in some instances tracks movement over time. However, it is not clear how this data informs its management decisions, and whether it enables DFID to drive up efficiency. Moreover, every value for money assessment in our programme sample reached the conclusion that the programme in question represented good value for money. Given the risk of optimism bias in such assessments, this suggests that value for money analysis is being used to justify existing choices rather than to inform active management.
DFID does not currently use cross-programme comparison of value for money indicators to inform portfolio management. The assumptions and measurement methods used across programmes are often too dissimilar to support a meaningful ranking. However, the available data could be used to identify outliers and assess whether remedial action is required. We have not seen evidence of this occurring, and we found no examples of programmes being discontinued or put on improvement
plans because they demonstrated poor value for money.
DFID has made substantial investments in learning about what works
DFID’s Smart Guides on value for money recognise evidence and learning as important “cross-cutting enablers” of value for money. As described in Box 17, DFID has made an important contribution to building the evidence base on the effectiveness of cash transfers through a portfolio of innovative research. As well as large academic research projects, it has commissioned operational research to inform its programming. In particular, it has pioneered research into how the design parameters of cash transfer programmes affect results in different national contexts.
Box 17: DFID’s substantial contribution to the evidence base on cash transfers
When DFID first began to scale up its cash transfer portfolio, it faced a level of scepticism both within the department and among external partners. It therefore prioritised investment in research in order to build up a strong evidence base on the impact of cash transfers. As a result, DFID has emerged as a leading investor in cash transfer research. There is now strong evidence of what works in sub-Saharan Africa and increasingly in South Asia.
DFID conducted a review of the cash transfer literature in 2011 in order to synthesise the existing evidence and identify gaps. The conclusions pointed to the need for more research on the effects on growth, gender equality, climate change adaptation, social cohesion and state-building. This informed DFID’s subsequent research agenda. Its research priorities are also in line with gaps identified by the World Bank. DFID’s research agenda has included both large academic projects with rigorous methodologies and shorter, operational research to inform its approach to programming. Over the review period, its central research has focused on areas such as shock-responsive social protection, economic development and political economy. The research has been innovative in a number of areas, in terms of both focus and methodology. DFID has also invested in systematic and other reviews of the existing evidence, including on schooling, nutrition, local economies, gender effects and the role of design parameters in generating results.
Research on how programme design influences impact has received less funding than other topics, but the value of the work is nonetheless significant. In focusing on the drivers of effectiveness and by introducing cost factors into the equation, DFID has expanded the field in important ways. In its 2011 literature review it correctly identified that, while evidence on the overall effectiveness of cash transfers was strong, the factors that determined the level of effectiveness in different contexts were still largely unknown. DFID went on to produce significant contributions to the knowledge in areas such as targeting, value for money, social accountability and graduation, and has plans for more research on capacity development.
The DFID advisors we interviewed showed that they were familiar with this research, and were able to give examples of how it had shaped programme design. Despite this, we found that discussion of international research findings in business cases was limited.
We also saw good evidence of DFID programmes “learning by doing” and adapting in response to evidence (see Box 18). Real-time monitoring is sometimes hampered by data gaps in national cash transfer systems, but with a few exceptions DFID’s investments in independent evaluations have been of good quality, and the findings have been used to strengthen performance. The business cases of forthcoming programmes in Bangladesh, Ethiopia, Kenya and other countries are all based on evaluative evidence from their predecessor programmes.
Box 18: “Learning by doing” in DFID programmes
• In Ethiopia, a series of early targeting problems in the Highlands were resolved by 2010. In the Lowlands, problems persist, notwithstanding several years of trial and error.
• In Pakistan, the findings of third-party spot checks and beneficiary feedback informed a shift from mobile payments to debit cards and a biometric system.
• In Nigeria, the programme decided to slow down the rollout of cash payments to tackle the likelihood of fraud after ongoing monitoring had highlighted risks.
• In Uganda, DFID changed its advocacy approach – originally limited to direct political engagement – after civil society’s hitherto weak voice gained strength.
Cross-programme learning is facilitated by DFID’s small but active community of practice on cash transfers. Managed by the social protection team in policy division, the community of practice focuses on themes such as cash transfer financing, capacity building, accountability, value for money, gender, disability, shock-responsive social protection and nascent social protection systems in fragile contexts. It serves as a conduit for disseminating learning on these areas and for sharing lessons among country programmes, and we saw evidence of cross-programme learning shaping action. For example, experience from Kenya and Niger informed DFID’s Nigeria programme; Ugandan officials learned from experience in South Africa and Mozambique; and research in Zimbabwe was designed to complement similar research conducted in Kenya and South Africa.
Conclusions on value for money
Overall, we have given DFID’s cash transfer portfolio a green-amber score for value for money. It offers a good value for money case, based on consistent and well-demonstrated results in its core objectives and its good fit with DFID’s strategic objectives. DFID has done well at investing in evidence of what works, to inform its programming, and demonstrates good learning. It carries out value for money assessments across the cash transfer portfolio. However, it needs to get better at using value for money data to inform management decisions.
Overall, we have given DFID’s cash transfer portfolio a green-amber score. It is delivering consistently well against its core objective of alleviating extreme poverty and reducing vulnerability. In secondary results areas, such as education, health, nutrition and women’s empowerment, its results are inconsistent and in some cases below what might be expected. There is a need for greater clarity about which results are being addressed in each programme, and programme designs and monitoring arrangements should be optimised to achieve those results.
DFID’s support to national cash transfer systems has helped its partner countries to introduce and consolidate national social safety net programmes. DFID’s policy advocacy is well informed by evidence and analysis, but its approach to technical assistance is inconsistent and its results are poorly evidenced. Across the portfolio, there are recurrent weaknesses in targeting, timeliness and payment size, which need to be more consistently and firmly addressed. DFID is yet to develop a clear strategy for using its funding to promote the development of sustainable national systems.
We find that DFID’s cash transfer programming presents a good value for money case, given its proven ability to deliver results for the poorest, consistent with the “leave no one behind” commitment. Given that the programmes DFID is supporting are still well short of national coverage, there is also a value for
money case for increasing funding during their scale-up phase, provided the performance issues can be addressed.
We offer a number of recommendations for how DFID could improve the impact and value for money of its cash transfer portfolio.
Recommendation 1: DFID should consider options for scaling up contributions to cash transfer programmes where there is evidence of national government commitment to improving value for money, expanding coverage and ensuring future financial sustainability.
- The national cash transfer programmes that DFID supports are still well short of national coverage of the poorest and most vulnerable households.
- DFID at present lacks a clear rationale for the size of its financial contributions.
- Despite recurrent problems with targeting, timeliness and transfer size, DFID has not built performance triggers or similar mechanisms into its financial assistance.
- DFID lacks a strategy for promoting long-term financial sustainability.
Recommendation 2: DFID should be clearer about the level and type of impact it is aiming for in each of its cash transfer programmes, and ensure that these are adequately reflected in programme designs and monitoring arrangements.
- DFID is inconsistent in the way it sets the objectives and targets for its programmes, and there is weak correlation between the business case objectives, the logframe targets and the results actually achieved.
- DFID’s results in areas such as education, health and nutrition lag behind what the global evidence shows is achievable.
- DFID could do more to ensure that the design and delivery of individual programmes support the delivery of results. This may include a more prominent place for programmes that combine cash transfers with other interventions.
Recommendation 3: DFID should do more to follow through on its commitment to empowering women through cash transfers by strengthening its monitoring of both results and risks, and using this data to inform innovations in programming.
- DFID’s strong focus on empowerment of women in business cases is often carried through into programme design and implementation, but poor monitoring means that the results are unclear, that negative unintended consequences may not be identified and that risks are not mitigated.
- The lack of close monitoring of the risks of harm to particularly vulnerable women beneficiaries in the form of increased domestic abuse is a problem across the portfolio.
Recommendation 4: DFID should take a more strategic approach to technical assistance on national cash transfer systems, with more attention to prioritisation, sequencing, monitoring and oversight.
- DFID’s approach to technical assistance and capacity building varies substantially across countries and programmes, without a clear rationale.
- DFID’s technical assistance is not always based on holistic assessments of need and clear identification of priorities.
- There is a tendency for some technical assistance programmes to get drawn into addressing shortterm problems, at the expense of a sustainable focus on strategic challenges.
- DFID lacks a consistent focus on key determinants of programme effectiveness in areas such as targeting, timeliness and transfer size, where problems often remain unresolved for long periods.
- DFID’s oversight, monitoring and evaluation of its technical assistance programmes are inadequate.
Question 1: Impact on poverty and vulnerability – Green/Amber
DFID’s support for cash transfers is an important part of its fight against poverty and vulnerability. Over the 2011-2015 period, DFID exceeded its target of supporting six million people with cash transfers. The portfolio has delivered well against its central objective of alleviating extreme poverty and increasing consumption levels for the poorest households, and has made a positive but modest contribution to increasing their resilience. In Bangladesh, DFID has helped to develop a more ambitious model for helping extremely poor households graduate from poverty, by combining cash transfers with other interventions. In secondary results areas, including education, nutrition, health and the empowerment of women, performance has been mixed and on occasion falls short of what the evidence suggests is achievable. We found that DFID programmes are not clear enough about what kinds of impact they wish to achieve. As a result, programme design and monitoring arrangements are not sufficiently results-led. Nonetheless, solid achievement against its core objective means that the portfolio merits a green-amber score for impact on poverty and vulnerability
Question 2: Building national cash transfer systems – Amber/Red
DFID has made an important contribution to encouraging and supporting its partner countries to establish and expand national cash transfer systems. It takes a long-term approach to policy dialogue that is both evidence-based and politically informed, but is at times risk-averse in its advocacy. Its technical assistance has delivered a range of useful results, but its approach is inconsistent without a clear rationale. We found recurrent problems across the portfolio in the core areas of targeting, transfer size and timeliness of payments that are not being consistently addressed. DFID has not made sufficient use of performance triggers in its financial assistance to drive progress. Its technical assistance is sometimes drawn into short-term problem solving at the expense of long-term strategic objectives. Oversight and monitoring of technical assistance is weak and has not been subject to independent evaluation. While we recognise the scale of the challenge in building sustainable national systems, we conclude that there is substantial scope for improvement. We have therefore awarded DFID an amber-red score for its work on building national cash transfer systems.
Question 3: Value for money – Green/Amber
We find that DFID’s cash transfer programming offers a strong value for money case, owing to the consistent results on alleviating poverty and vulnerability and its fit with DFID’s “leaving no one behind” commitment. However, there are short-term trade-offs involved in delivering through national systems, and recurrent weaknesses in targeting, timeliness and transfer size show that there is scope to further improve value for money. Our analysis suggests that there may be a value for money case for scaling up cash transfer programmes towards national coverage, provided that there is commitment to addressing these issues, improving value for money and increasing national funding. DFID has increased its focus on value for money in the management of its cash transfer portfolio over time, but its practice could be more consistent. We saw evidence of value for money assessments being used to inform programme design and technical assistance, but less evidence that it was driving cost savings. DFID has made a strong contribution to the global evidence base on what works, and has used research and learning to strengthen programme design. Overall, we have awarded the portfolio a green-amber score for value for money.
This adds up to a green-amber score for the cash transfer portfolio as a whole. Cash transfers have emerged as an important part of DFID’s fight against extreme poverty and its commitment to “leaving no one behind”. There is strong evidence that they are effective in their core objectives and offer a good value for money case. However, there is also room for improvement. DFID’s cash transfer portfolio is not yet achieving the full range of results that the evidence suggests is possible.
Further data on our programme sample, transfer payment size, health and nutrition results across DFID programmes and examples of programme logframe outcome indicators is available in the PDF version of the report.
Four methodological elements jointly provided the data and insights required to answer our three review questions. The figure below shows these four elements and the way in which they allow for an assessment of three levels of analysis: i) a review of a sample of cash transfer programmes, ii) a review of the cash transfer
portfolio as a whole, and iii) an assessment of the way in which this portfolio is embedded in higher DFID agendas.
The literature reviews served two purposes. First, synthesis reports produced at the start and end of the review period provided overall findings in relation to the effects of cash transfers. We used these findings to compare the effects of DFID-funded programmes. Second, we compared DFID’s research choices and
contributions with the worldwide body of cash transfer literature, to assess the extent to which DFID has contributed to filling relevant evidence gaps (we present the summary conclusions under the first review question and the full report as an appendix to this report).
DFID interviews and document reviews. Interviews with 36 DFID staff focused on either strategic portfolio issues or on one or more of 18 out of 28 programmes that DFID presented to us (see Box 19 for the methodological implications of our sampling choices). The documents we reviewed were a combination of higher-level policies (such as DFID’s policy paper on its “Leave No One Behind” promise) and programme documents (with a focus on business cases, logframes, baseline studies, political economy analyses, annual reviews, project completion reports and independent evaluation reports).
External interviews with a dozen academics and peers from other organisations helped us to gain outsiders’ views on DFID’s cash transfer approaches and choices. By selecting known “critical voices” we reduced the risk of us, the reviewers, getting unwittingly pulled into DFID-type thinking (such as the conviction that it is inherently important to work through and with national governments).
Country case studies. The selection criteria were that the country portfolio must be sizeable, include both technical assistance and financial support, and have been operational for at least a few years. Of the five countries that fulfilled these criteria, we selected Bangladesh and Rwanda because the programmes are so
different that they jointly cover a very wide spectrum of DFID’s cash transfer work (see Figure 4).
The methodology is explained in full in our Approach Paper, which is on the ICAI website. Both our methodology and this report were independently peer reviewed.
Limitations of our methodology
Some research is very thorough. Some other research does not stand up to scrutiny. In the case of the latter, we generally just ignored it (for example the section on education does not mention the poorly executed education assessments in Bangladesh’s UPPR and EEP). If there is a correlation between the quality of programmes and the quality of their assessments, this could mean that our evidence has a positive bias.
We looked at only a sample of DFID’s cash transfer portfolio. We sampled purposively to reflect the full spectrum of programme objectives, modalities, support, types and sizes, but the sample may nonetheless not be fully representative. This has been particularly problematic in cases where we report on exceptions. For example, we found that DFID Bangladesh had over-reported the number of cash transfer recipients by almost half a million people and we simply do not know whether or not this is the only case of overreporting.
It has been hard to gain real insight into the usefulness of DFID’s technical assistance. In social protection’s complex multi-stakeholder environment, assessing the results of DFID’s advocacy and influencing work is challenging. Evidence of DFID’s role in reaching trigger, tipping and turning points in a
government’s thinking and practice – which could potentially be among DFID’s biggest achievements – has not been captured in real time, and has therefore been lost or become unverifiable.
A fuller discussion of the methodological limitations is included in the review’s Approach Paper, available on the ICAI website.
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If you’re in economic development or even government for any amount of time, you will probably come across the topic of economic impact. It can be a confusing concept and so it is no surprise we find ourselves regularly explaining the basics. I thought I’d take this opportunity to distill some of our economic impact know-what in this post.
Economic impacts occur anytime money changes hands; from consumer to business or even business to business. The biggest misconception is that there is a single value that represents the mystical concept of economic impact. Economic impact is typically measured using four metrics; (1) employment, (2) household earnings, (3) economic output, and (4) value added.
Employment (or jobs) is probably the easiest one. Typically, employment impact is reported as a headcount of jobs—not in terms of full-time equivalents. So, employment consists of a count of jobs that include both full-time and part-time workers. In this way, 10 full-time workers and 10 part-time workers would be reported as 20 jobs. Studies may vary in how this is reported, but most models take this headcount approach.
Household earnings (or workers’ earnings or labor income) is the total amount of income paid to all workers and owners, including wages and salaries, employer provided benefits, and business owner profits. Some studies might report salaries which, depending on how things were calculated, could be correct too.
Economic output (or gross output or output) is the total dollar amount of all sales made or the value of goods and services created in the activity under analysis. Economic output represents the money spent to purchase all of the inputs to a product as well as the money received when the product is sold. This measure is a duplicative total because the value of inputs are counted multiple times when those products are used in the production of other goods and services. Consider a wood furniture manufacturer who buys raw lumber for $50, cuts, sands and stains the wood to create a chair that sells for $200. Economic output in this example would be $250. If this sounds problematic, and you’d rather focus just on the value added at each step, you’re in luck.
Value added is the total dollar amount of only new sales made. Therefore, it is output minus the value of anything that was already sold in the market. In our wood furniture example, value added is $200.
These definitions are useful but often generate some additional questions. The first question is “So do I add all of these up to get the economic impact?” The answer is no, these are four distinct measurements of economic impact. Think about it this way, if I told you that I ran a marathon in 3 hours and 56 minutes, at an average pace of 9 minutes per mile; you wouldn’t add the total race time and average pace together. In that case, we’re using two numbers to describe the result of the race. The same is true for economic impact, we’re simply describing the impact in multiple ways.
Another common question is, “Which number do I tell the newspaper?” Not surprisingly, economic output, being the broadest measure of the goods produced, is a prime candidate and most often “the” economic impact that is reported. As most economic developers and newspaper readers know, $50.0 million is better than $49.0 million. But if we back up, how does someone interpret $50 million in economic output? What does $50 million look like? Speaking on behalf of Impact DataSource and our 23 years of experience, your guess is as good as mine. In essence it means that $50 million dollars changed hands in the economy but it doesn’t describe how it increased the size of the economy. The change in value added can be compared to the size of the economy and therefore provides a more meaningful, though less impressive economic impact to report.
For the typical economic development impact analysis for a new business locating or expanding in a community, employment and household earnings are the most meaningful measures. A new business will generate an impact on economic output and value added but the scale of that impact typically doesn’t warrant the use of economic output or value added. This is to say; these measures won’t provide any meaningful insight to the project. The easier-to-comprehend impacts of employment and household earnings are the most instructive measures to analyze and report.
Banner Photo Credit: FreeImages.com/Andrzej Pobiedzinski
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Targeted marketing is still one of the powerful tools for marketing. Marketers use this method more than ever, so it is important to realize how does it work and, how it will affect consumers life. According to The Naked Consumer, “In 1995 U.S. companies [spent] $331.2 billion in advertising”(Larson 5). And if advertisers ignore the targeted formula they can easily waste their advertisement funds. Manufactures have to advertise and compete in order to survive, which is why some much money is spent on advertising. As a result, they have to advertise more and more to become visible in clutter of ads. In this sense, it becomes an endless cycle. This money also should bring some revenue for them as well; otherwise spending without gaining revenue is pointless. A good example of wasting advertisement money could be some of the TV commercials. Some people around the world watch these commercials without really paying attention to them. Additionally, it is hard for the intended company to track the ad results. Advertising without measuring ads success is similar to wasting money or even not advertising at all. The question is, how manufactures should measure their success and how should do they advertise.
On the other hand consumer will be confronted with thousands of ads everyday. According to Louise Story, “A market research firm, estimates that a person living in a city 30 years ago saw up to 2,000 ad messages a day, compared with up to 5,000 today.” Most of these ads may not be related to a person at all. As a result, the person will not pay attention to those ads. That ad costs marketers money, and also bother a person without doing any good either to the person or for the marketer. Marketers should advertise in a way that they do not bother consumer and also reach the potential ones.
Since consumers are shifted from old type of shopping to the online world of shopping, targeted advertisement can be the best way to avoid most of these ad clutters. Targeted advertising means that targeting potential consumer base on their interests, social status, and purchase history. According to Levin, “By 2008 search advertising accounted for over $10.5 billion of the $23.4 billion in total online advertising, and pundits were forecasting continued growth at rates of 12 percent per year over the next five years”(603). The reason for this shift is because “the combination of targeting and measurement makes search advertising extremely effective”( 603). In the past that was not possible to implement targeted advertising completely. Thanks to technology today marketers can embrace this method with couple of clicks. According to Jonathan Levin and Paul Milgrom:
In the older media, every consumer that received a particular magazine, listened to a particular radio program, or watched a particular TV show would read, hear or see the same advertisement. An advertiser that wanted to reach an audience with particular characteristics could do so only within narrow limits. (603)
This means in the past there was no way to reach for all potential consumers. Also marketers had limited abilities to market the right consumers, but now all these things are possible. It is up to marketers to use these products correctly in order to leverage their marketing campaign and target the right consumers with the right interests.
As the Internet becomes the dominant media of choice for people, companies have changed their advertising strategies and opted for a targeted approach in reaching potential customers. As opposed to television where entertainment (the content) is periodically interrupted with commercials, targeted advertising (specially in the Internet) shows up simultaneously with the content.
When consumer receives email, searches in a search engine, looking for a place with his cell phone, sign up for club card, and many other activities like them marketers realize consumer’s interests. Marketers make a marketing profile for that person that shows her interests, social status, and her level of income. Based on that profile marketers show ads to her. For example, if a consumer searches in the Internet for the detergent she probably interested in detergent, and it is wise to show her ads for washing machine or detergent rather than ads for car oil change which she probably will be less interested.
With this type of advertising, customers can use many online and high-tech services free of charge because the costs for these services are already paid by advertisements. Consumer pays the costs of these services by watching the ads and if he is interested he will click on them. By clicking on ads consumer will goes to the store website and advertising medium will charge the store. As an example, picture above is taken from the Google search results. At the left Google shows the organic results of search and at the top and right it shows ads. Since these ads show up with the results simultaneously customer has an ability to click on them or ignore them. Additionally, since these ads are provoked by the customer search they are more likely to invite potential customers to go and purchase goods.
One common use of psychographics and targeted advertising could be found in “pay per click” ads. According to Mangàni, one type of targeted advertising is “pay per click” advertisement, which means when a person searches a keyword in a search engine, search engine will pull up relevant ads near the search results (liker the picture above), and a potential customer can easily make a decision to click on them or not. Thus, the company will only be charged if the customer clicks on its ad, which means no waste of advertising dollars. Company can also masseur it’s advertisement campaign success with measuring click through rate which is the number of clicks customers made relevant to the number of ad impressions. Also they can measure the bounce rate and customer behavior on their site and make sure that they have the optimized ads for the right consumers. In targeted advertising, the customer comes to the company instead of company looking for undecided customers.
Facebook has created a way for companies to market and sell their products and services in a new different way. Advertisements that appear on every page of Facebook have enabled companies to reach potential consumers in a way that is less time consuming and cost effective. Because of that, companies can target users that are the most likely to purchase their products by accessing the cookies from the Facebook users web browser. (155)
As a result, marketers can easily make a profile for any user without knowing the user’s identity.
One of the concerns about targeted advertising is customer privacy. At the beginning of this new type of advertising, no one thought about privacy. Instead everyone was only focused on how to sell more in this way. After a while it became obvious that a customer’s privacy can be easily jeopardized. In the early years of “click and buy,” advertisers suffered a lot of well deserved criticism, and even some law suits from consumers. In those years marketers were tried to sell more without thinking about other affects of their behavior. They did not care about people privacy. Their goal was only to sell more. For instance in 1992, Erick Larson mentioned these concerns, and based on the issue made some laws about data collections,
First of all, data must seek and merge with complementary data. Second, data always will be used for the purpose other than originally intended. Data collected about individuals will be used to cause harm […] to him or others. Finally, confidential information is confidential only until someone decides it’s not. (Larson 14)
Based on these laws although marketers seek data very nice, the will use data to destroy humans life. Data privacy is not have a meaning anymore. As a result people should avoid psychographic advertising at all costs. They should not give data to anyone. Also they should expect harm to themselves or their family members because they gave their private information to marketers.
The obvious example for neglecting privacy could be DoubleClick. According to Marilynn Larkin,
DoubleClick uses ‘cookies’ residing on a web user’s hard drive to gather information about how the user surfs the web—sites that are visited, online purchases made, etc. The data can be used by large websites—mainly portals, such as AltaVista or Yahoo—to customize content and advertising according to what they think would interest you. Cookies identify computers, not their users. But when DoubleClick purchased a company that tracked people’s offline buying habits, it began tying the online and offline data together, and could then pinpoint people’s identities when they were online. Pressure from the Center for Democracy and Technology (www.cdt.org), among others, and an investigation by the US FTC, forced DoubleClick to stop this practice. (1471)
These types of tracking is definitely illegal and by doing so every company can jeopardize its existence. Law allows marketers to track only customers behavior by using cookies, but marketers cannot go further and identify consumer’s identity. This is illegal and this is exactly what Double Click did.
As a result, many companies tried to change their rules. Instead of collecting personal information, they focused on the individual’s behavior. Today many companies focus on this type of marketing. Although companies are still collecting data from consumers, they do it with more cautions and they know if they cross the line they have to deal with consequences. As a result they try to focus on the consumers behavior more than identifying her identity interests the consumer. For example, one of the tools that companies are using for their targeted advertising is Google Analytics; the picture is part of this software. The Data that is represented here belongs to an ecommerce site. As shown, no confidential information about the consumer can be seen.
As of today this type of advertising is getting more popular than before. Many companies are selecting this type of advertisement instead of the old blind way. In compare to old fashion advertisement, targeted advertising is much cheaper, more efficient, and completely traceable.
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The average amount of economic output produced per job and per hour worked in Scotland
(showing types of area available in these data)
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Note: These may be large files.
Labour productivity measures the amount of economic output that is produced, on average, by each unit of labour input, and is an important indicator of economic performance. Labour productivity statistics for Scotland are produced by the Scottish Government and have been designated as Official Statistics.
Labour productivity is a derived statistic which means that it is not directly estimated, but is based on separate estimates for economic output and labour input. It is calculated by dividing a measure of output (gross value added, GVA) by a measure of input (number of jobs or total number of hours worked). An increase in GVA or a decrease in jobs/hours contributes toward an increase in labour productivity whilst a decrease in GVA or an increase in jobs/hours contributes toward a decrease.
Labour input is measured in terms of the number of jobs in the economy (giving a measure of output per job), and also the total number of hours worked (giving output per hour worked). Output per hour worked is usually viewed as the most comprehensive indicator of whole economy labour productivity and taken as the headline measure. Output statistics (gross value added, GVA) are sourced from Scottish Government quarterly national accounts statistics. Labour input measures (number of jobs filled and number of hours worked) are consistent with the quarterly NUTS1 results for countries and regions published by the Office for National Statistics (ONS).
The two measures of quarterly labour productivity growth in this dataset, detailed below, are calculated using a trend-based estimate of productivity which removes irregular volatility from the series, as well as recurring seasonal features. After removal of the irregular component from the quarterly series, the average of the four quarterly indices in a year does not equate to the annual index. For data relating to annual (calendar year) labour productivity, see the Labour Productivity: Annual dataset. Local Authority
• q-on-q year ago is the percentage change (growth rate) over the year, comparing the latest quarter to the same quarter of the previous year. This growth rate is usually taken as the headline measure of quarterly labour productivity growth.
• q-on-q is the percentage change (growth rate) for the latest quarter compared to the previous quarter. This can be used to identify underlying short term changes in a more timely way than the q-on-q year ago measure.
The productivity measures are in real terms (adjusted for inflation) and are suitable for analysis of changes in performance over time. The seasonally adjusted and trend based series are indexed to a reference year (2007=100) in order to focus on movements in labour productivity since the onset of recession in 2008. An index value of more than 100 means that productivity is higher than in the reference year, and a value of less than 100 means that output is lower than in the reference year.
The indices are rounded to 4 decimal places and the growth rate measures are rounded to 1 decimal place. It is not always possible to replicate the published growth rates using rounded data, but all results are also available unrounded in the downloadable spreadsheets from the latest publication.
Further information about these statistics and the methods used to produce them is available in the background notes of the latest statistical bulletin and in the accompanying methodology document.
The data on labour productivity does not contain any personal information.
Scotland's Labour Productivity Statistics are designated as Official Statistics. All Official Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics and undergo regular quality assurance reviews to ensure that they meet customer needs and are produced free from any political interference.
Labour productivity estimates are derived statistics produced using simple calculations on other source statistics. Their quality and accuracy is therefore dependent on the output and labour input data. While there are some known issues with the consistency between GVA and labour market statistics due to factors including the different survey sources, workforce residency and commuting effects, and differing definitions of business unit classifications, the data sources used to produce these estimates are all individually recognised to be of high quality and are designated as such.
Alternative statistics are available from the Office for National Statistics which are consistent with the NUTS1 Gross Value Added (Balanced approach) produced for all countries and regions of the UK. ONS estimates of GVA differ from Scottish Government estimates because of adjustments made by the Scottish Government during the production of Supply and Use Tables which balance estimates of GVA using Production and Expenditure data sources as well as Income.
Estimates of labour productivity are derived directly from GVA statistics, and are often analysed alongside GVA and GDP. It is therefore important that productivity statistics should be used in context with the GVA data they are consistent with. For users of Scottish Government GDP and Quarterly National Accounts Scotland statistics, the recommended productivity statistics are those published by the Scottish Government. Users of ONS Regional GVA statistics are recommended to continue using the ONS Regional Productivity statistics as a consistent product. Likewise, users who focus primarily on productivity statistics should ensure that any comparison to GVA or GDP makes reference to the consistent product.
For other tables, commentary and more methodology please visit the Labour Productivity statistics webpages on gov.scot.
Labour productivity is an important indicator of economic performance.
Labour productivity estimates are published quarterly.
Labour productivity estimates are derived using simple calculations on other source statistics and any revisions to these sources of data have a consequent impact on the productivity estimates.
This slice of multidimensional data is not a Linked Data resource in the database: it's a virtual resource (i.e. you can't query it by SPARQL). But does have a permanent unique URL which can be bookmarked.
A linked data-orientated view of dimensions and values
Output per hour
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|(not locked to a value)|
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The government of India launched an initiative in the month of January 2016 known as, Startup India. The government of India wanted to give a push to the ecosystem that supported innovation and start-ups in the country and so the initiative known as Startup India was born. The government of India wanted to uplift the economic development and increase the employment opportunities in India with the help of this scheme. In order to meet the requirements of this initiative the government also launched an action plan very recently.
A startup as the name suggests is a small business venture that is started with the sole objective to solve a problem in a particular field or niche. A startup generally has a single founder or several founders who operate it. Startups are started with an objective to provide services in a particular field which its founders believe are not available in the market or services that they feel have a great future. Not only are startups great for those who have small investments to start a business but are also a great way to generate income or provide job opportunities to people.
Startups and DIPP
The Department of Industrial Policy and Promotion or DIPP was set up in the year 1995 and today it governs all that concerns the industrial sector. DIPP operates underthe Ministry of Commerce and Industry, Government of India. The development and policies of the industrial sector are taken care of by the DIPP.
Startups are registered under DIPP and there is proper process for that. First of all a business has to be incorporated which is in the form of either a Limited Liability Partnership or a firm or maybe a Private Limited Company. Next is the process of registering a startup with the department. It is a very easy process that involves filling up and uploading an online form on the Startup India website. The whole process in itself is quite simple and easy and is made such way by the government of India.
What are the documents required to be uploaded online in order to get a startup registered?
Well, as stated earlier, the process of registering a startup is very simple and there is hardly any fuss about it. However, there are certain formalities such as filling up and uploading a form online and uploading a few documents. The documents that are required for registration and have to be uploaded online are:
- Letter of funding which shall
not be lesser than 20% in equity by incubation fund or angel fund.
- Incubators established in PG colleges in India.
- Supporting letter from one of the startups funded through the state of central government or an incubator recognised by the government of India.
- Patent if any filed and published in the patent journals.
- A description of your business involving the description of innovation of the product or services that you wish to offer.
- Certificate of incorporation of business.
the documents before uploading them for recognition is very important. If you have self-certified all the documents make sure that you have checked that your company is qualifying for being recognised as a startup. It should be fulfilling all the required conditions such as it should not have been incorporated for more than 7 years and can only be registered within 7 years plus the turnover must not exceed 25 crores and the product offered should not be copied and should be innovative.
Getting a recognition number
Once all the formalities have been completed a company can be registered under the startupindia initiative. Upon applying, a certificate of registration is given with a unique registration number. It has to be made sure that all documents are uploaded while taking due care because one mistake in filing or filing fake documents can cause a lot of problems and may result in fine.
The government of India is providing a lot of benefits to those who wish to launch a startup of their own. These benefits include tax benefits, no compliance with regard to environmental laws etc. for the first three years and many more. This initiative is for the betterment of the economy and for generating more and more job opportunities. This is why a lot of people are registering their startups and availing the maximum benefits that they can. It is a one of kind scheme that delivers a lot. If you wish to get your company registered under this initiative then you must ensure that you fulfill all the requirements otherwise you may end up losing rather than gaining from the initiative. A lot of care has to be taken while getting registered and once the startup is registered, there is no limit to the benefits that come along. Register a startup carefully and avail the maximum benefits today.
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- March 20, 2017
- Posted by: Will Feibel
- Categories: Advanced Trading Strategies, Trading Article
Line break charts were developed in Japan and popularized here by Steve Nisson in his book Beyond Candlesticks. The purpose of line break charts is to filter out market noise and give a clear indication of the current trend and trend reversals.
As you may know, sometimes determining the current trend can be difficult due to market price movement that consolidates, and a trend reversal can be just as difficult.
The 3 line break chart, as you will soon see, can make this process much easier.
This is a three line break chart of the daily Dow Industrials futures contract (YM). You can see it could almost be mistaken for a candlestick chart or a renko chart but you will see that line break charts and candlestick charts are vastly different.
The white and red bars are called lines. Notice that whenever we have consecutive white lines, each line has a higher close than the previous one; when we have consecutive red lines each line has a lower close than the previous line.
How Are 3 Line Break Charts Constructed?
Line break charts are defined by two values: the line break number and the underlying time interval. These values are used in the construction of the line break chart.
The chart above is a 3 line break chart of the daily YM and in this case the construction rules are as follows, assuming the last line on the chart was a white line:
- If the close of the daily bar is higher than the high of the previous white line, draw a new white line with the open equal to the previous line’s high, and the close equal to the close of the current daily bar.
- If the close of the daily bar is lower than the low of the last three lines, draw a new red line with the open equal to the previous line’s low and the close equal to the close of the current daily bar.
- If neither of the above two conditions are met, no new line is produced.
Why is it called a 3 line break chart?
As you can see from the construction rules, white lines are only drawn if the daily bar closes above the previous line, or if the daily bar closes below the lowest low of the last three lines.
The rules for red bars are the inverse of what they are for the white lines.
This charts shows the relationship between the 3 line break chart on top and the daily candlestick chart on the bottom. The numbers on the bars indicate how single bars or groups of bars on the daily chart relate to the white or red lines on the 3 line break chart.
It’s important to note that the construction of the line break charts is based on closing prices in the underlying time frame chart, in our example the daily chart. Daily highs and lows are not shown on the line break charts, just closing prices.
This needs to be borne in mind when back testing a line break chart trading strategy because we have no way of knowing how far price actually moved above or below the lines.
Trading Strategy And Line Break Charts
A trading system based on line break charts must must have all entries and exits based on the close or open of a line. As mentioned earlier, the two key values of a line break chart are the line break number and the underlying time interval.
We can construct line break charts based on daily, weekly, 5 minute, hourly, any time frame, they can even be based on an underlying tick count, for example a 150 tick interval. This allows us to adapt them for day trading or swing trading systems.
The line break number itself can also be changed.
Although the 3 line break is the most popular chart, it’s also possible to build 2 line break, 4 line break, etc. charts, the difference being that a reversing line needs to break the lowest low (or highest high) of the previous 2 or 4 lines respectively. This allows us to tailor the strength of the reversal needed to declare a change in trend direction, or change in line color.
Trading With The Line Break Chart
The simplest application of line break charts is to use the change in line color as a trade setup:
- when the first white line forms, go long
- when the next red line forms reverse to short
- repeat for each change in direction.
Look back at the line break charts from earlier, we see that this can be quite an effective strategy in strongly trending markets, however during market consolidations it can lead to significant losses.
Alternating line colors are a clear sign of consolidation in the market and can help mitigate that risk somewhat by telling us when to stay out of the market.
Can Chart Patterns Be Used With 3 Line Break Charts?
Another approach that works well with line break charts is to use them for identifying simple candlestick chart patterns.
This graphic shows how well the chart highlights a double top and double bottom formation that defined a short term trading channel. A line closing below or above this channel gives us a clear setup for going long or short, and we can use the height of the channel in projecting the target for the move.
We could also use simple trend lines to indicate reversals or to help us trail a stop in an existing trend.
Line Break Trading Strategy With Indicators
It’s also possible to use line break charts in conjunction with standard technical analysis indicators in the creation of a system. Here we have a simple system based on a 3 line break chart with an exponential moving average and the CCI (commodity channel index) oscillator.
In this system long trades are entered when the CCI crosses above -100 and a white line closes above the exponential moving average; the trade is exited either when the CCI crosses below +100 or a red line is formed.
Rules for shorts are the inverse.
The green arrows show long or short entries and the red arrows show the exits.
The entry or exit rules of course can be refined through the use of different or additional indicators and/or lower time frame charts.
Trend Direction Even Using Multiple Time Frame Charts
Finally, line break charts can serve as a directional filter for setups on different time frame charts. Only go long if the last line was white; go short if it was a red line.
Line break charts can be a valuable addition to your trader’s tool chest. They can be used on their own or in combination with other charts. Just be careful when back testing these charts, remember that only closing prices are plotted, not highs and lows, so test results may look much better than real trading results would have been. You can also consider trading renko bars as an alternative to time based charts.
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Part of the answer may lie in education. As the call for reassurance and information about sustainability – from consumers, investors and regulators alike – continues to grow, many oil and gas sector industry insiders are asking themselves: “Do stakeholders actually understand the data and the implications for our sector?” Unfortunately, it would seem that all too often the answer is no. After all, it is only possible to have a sensible conversation about where improvements can be made on the basis of a good understanding of the nature of the problem.
A key challenge is the fact that the collection, analysis and dissemination of information relating to environmental impacts increases as supply chains become more complex. As the industry diversifies into other forms of energy production, the wider implications around, for example, deforestation, biodiversity and water scarcity, mean that companies will be expected to collect and share meaningful high-resolution data on an ongoing basis. One potential strategy could see companies acquire data remotely from orbiting satellites and harness this input by using web-based technologies. This makes it possible to acquire, store and analyse near-real time data in high resolution or over vast geographical areas, taking advantage of ubiquitous web browsers and cloud-based processing and storage.
Companies will increasingly be expected to make better informed procurement decisions and transform such insight into a valuable communication tool that builds trust with investors, shareholders and customers. In parallel, a greater focus must be placed on explaining why environmental impact data varies between companies, geographies and production assets, and the fact that some companies that report higher emissions are not necessarily less efficient or less well managed.
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The Price of Education and Inequality
Economics Letters, Vol. 105, No. 2, pp. 183-185, November 2009
Posted: 6 May 2011 Last revised: 14 Nov 2012
Date Written: September 7, 2008
Constructing a simple model that includes the price of education, this paper shows that the educational expenditure of rich households could prevent poor households from escaping poverty. The paper offers an explanation for persistent inequality.
Keywords: Education, Inequality, Trickle-down
JEL Classification: D31, I21, I22, I28, L31
Suggested Citation: Suggested Citation
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- How do I check my bank balance?
- How do I calculate my account balance?
- Is bank balance an asset?
- What happens if I spend more than my available balance?
- What is current balance and available balance?
- Why is my available balance negative but current balance positive?
- What is a statement Balance vs minimum payment?
- Why is my available balance 0?
- Does my current balance include my overdraft?
- What happens if you don’t pay full statement balance?
- Can current balance be withdrawn?
- How can I check my ATM balance online?
- What is the difference between available credit and current balance?
- How can I check my bank account balance online?
- Is having a statement balance bad?
- Why is my total balance and available balance different?
- Can I use my available balance?
- What does account balance mean?
- Should I pay current balance or statement balance?
How do I check my bank balance?
Ways to check your balance.Giving a Missed Call.
Give a missed call on a toll- free number 1800 180 2223 or A missed call to the tolled number 0120-2303090 to get back an SMS with your current balance.
On Internet Banking.
By Sending An SMS..
How do I calculate my account balance?
Because these accounts have credit balances, to calculate the current balance, start with the beginning credit amount. Add any credit posting made to the account and subtract any debit postings. After completing this, you have calculated the current balance of an account.
Is bank balance an asset?
From the Bank’s perspective, a deposit account (savings/recurring/fixed deposit) is a liability account. Treated like the customer has lent money to the bank. A loan account held by a banking customer is an Asset for the bank, where the customer now owes money to the bank. … The banks own balances are assets!
What happens if I spend more than my available balance?
“ Only you know all the transactions that will affect the balance you have available for making that next payment or purchase. ” What happens when you spend more than you have in your checking account? … Your next ATM or debit card transaction may be declined when you are attempting to withdraw money or make a purchase.
What is current balance and available balance?
The current balance is the total amount of funds in your account. The available balance is your current balance less any outstanding holds or debits that have not yet posted to your account.
Why is my available balance negative but current balance positive?
Your available balance is the amount of money in your account to which you have immediate access. Your available balance will be different from your current balance if we have placed a hold on your deposit or if an authorized credit or debit card transaction has not yet cleared.
What is a statement Balance vs minimum payment?
Minimum payments are calculated differently bank by bank, but most commonly a “floor” is set, usually $25 or $35, which is the lowest minimum payment you’ll be charged. However, if your statement balance is less than the floor, your minimum payment will be the total balance.
Why is my available balance 0?
That means you may soon overdraw your checking account. If you swipe your card for more than what is in your account, the available balance will be $0 (which actually means less than 0).
Does my current balance include my overdraft?
The idea behind the new rules is to make it clearer to customers that an overdraft, even if agreed, is a debt. So in a nutshell, your available balance will only show how much money you actually have in your account, and won’t include any overdraft facility you’ve agreed.
What happens if you don’t pay full statement balance?
First of all, don’t pay late. If you can’t afford to pay the full statement balance, make at least the minimum payment by the due date. On top of any fees your bank may charge for late payments, a late payment on your credit reports can stay there for seven years.
Can current balance be withdrawn?
|||You can only withdraw the “available balance.” The current balance is the money you have in your account, however, all that money may not be verified yet. … Depending on your bank and account, you won’t be able to immediately withdraw the entire amount or even a portion of it.
How can I check my ATM balance online?
1. Just open application for checking your balance, select your bank or you can directly call customer care toll free numbers given here. 2. ATM Balance Check All Bank AC Balance app enables you to view your bank account balance and customer care number with just a single tap.
What is the difference between available credit and current balance?
The current balance on a credit card is the amount you owe on your account, minus any pending purchases or payments. … Available credit refers to your total credit limit minus your current and pending balances. Essentially, available credit is how much of your credit you can still spend before making a payment.
How can I check my bank account balance online?
1. Log In Online. You can check your account balance online anytime—and much more. To get started, navigate to your bank’s website and access your account information.
Is having a statement balance bad?
Deciding which balance to pay each month on your credit card depends on your goals. … Unless you have a 0% APR, we typically recommend paying your statement balance in full to avoid interest, and to take advantage of your credit card grace period as long as possible.
Why is my total balance and available balance different?
Total Balance is the amount currently in your account. Available Balance is the Total Balance minus any holds. Holds can include ATM transactions that have been authorized but haven’t cleared the account yet, checks that are pending, and certain deposited items. Pending transactions clear based upon the total balance.
Can I use my available balance?
Using the Available Balance Customers can use the available balance in any way they choose, as long as they don’t exceed the limit. They should also take into consideration any pending transactions that haven’t been added or deducted from the balance.
What does account balance mean?
An account balance is the amount of money present in a financial repository, such as a savings or checking account, at any given moment. The account balance is always the net amount after factoring in all debits and credits.
Should I pay current balance or statement balance?
While paying your statement balance by the due date is typically enough to avoid interest charges, you should consider paying your current balance in full, which could improve your credit utilization ratio.
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Last Updated on 13 April, 2021 by Samuelsson
Average True Range (ATR): Calculation, Definition and Use
Average True Range (ATR) is a technical tool that is used to measure volatility. Volatility is important because it is a reliable proxy for risk in the market. Since all investors aim to maximize risk-adjusted-returns, it makes sense to have a measure of risk as part of one’s decision matrix. An investor that knows how to read ATR will be able to use it with different strategies. The two most common strategies for ATR are judging the speed of movement and adjusting the stop loss mechanism to changing volatility.
What is ATR?
Average True Range (ATR) belongs to a group of technical tools that are used to measure volatility. This in-turn, allows the investor to integrate risk into their decision making. ATR is used in different types of markets. Though ATR is a strong measure on its own, it can also be used in conjunction with other measures. All measures for price can be judged on their ability to measure the direction or strength of price movements. ATR cannot be used to measure the direction of the price movement. Therefore, it is often prudent to use it along with a trend indicator.
Now there are some important points that every investor must know about ATR before they can use it to maximize their risk-adjusted-returns. First, ATR can measure volatility over any time period. There is a convention to use 14 days. However, the optimum time for ATR depends on the market that is being studied and the strategies being used by the investor. Second, ATR can be used for any time frame be it day, months or weeks. This again depends on the dynamics of the market. At this point one must realize that a tool is only as good as the market domain knowledge of the investor. Before one knows how to use ATR, it is important to understand how ATR is calculated and the importance of volatility for investors. Let’s start with the importance of volatility for investors.
Where Is Volatility Important?
Volatility is relevant to the investor because of the concept of risk. Every investor has to choose between different investment options. All of these options promise returns. At first look, it makes natural sense to choose the investment with the highest returns. However, prudent investors realize that these returns are not guaranteed. For two promising investments, one investment might fulfill its promise while the other one might even give negative returns. Though these investments are not guaranteed, some investments are more sure bets than others. These sure bets are said to carry a lower risk as compared to their more uncertain counterparts. Therefore, it’s no surprise that good investors also consider the risks along with the returns and always perform their comparative analysis on the basis of risk-adjusted-returns.
In order to calculate the risk adjusted returns, the investor needs to take a proxy (something that represents risk) for risk. Volatility is a good proxy for risk. Volatility measures help investors with the comparing risky investments (with high returns) to low risk investments (with comparatively lower returns). ATR is one of those measures of volatility. In order to fully grasp the use of ATR, one must understand the formulae used to calculate ATR.
How do you calculate ATR?
ATR is essentially a moving average of the true range. True range is calculated for every time period. The first true range is simply the high minus low. For the following true range values, the formulas are as following:
True range = MAX (BarHigh, PreviousBarClose) – MIN (BarLow, PreviousBarClose)
Alternatively, it can also express as following
True range = Whichever-is-higher(BarHigh, PreviousBarClose) – Whichever-is-lower(BarLow, PreviousBarClose).
The above statement contains three different formulas depending on if there was a price gap or not. A price gap occurs when the price ticker between two consecutive time periods has a gap. The red circles in the following image show an example of such price gap.
The price gap can be of two types. First, the current opening can be lower than last close, which is what is happening for the above price chart. Otherwise, the previous close can be lower than the current opening. This is what happens in the image below.
For each of these situations, the calculation for true range is given as follows
- No gap: current-high – current-low
- Positive gap: absolute value of |Current-high – previous-close|
- Negative gap: absolute value of |Current-low – previous-close|
Once one has the TR values for all the days, then ATR can be calculated via a moving average.
If the investor is finding the ATR for n time-periods then the ATR for the first day is the Average of True range for the last (n-1) days. While the ATR for the n+1th day is given by the following formulae
This formula is used to get a series of ATR values. Of course in real life investors prefer ATR graph as compared to tables of ATR values.
How To Use ATR?
An investor cannot use ATR unless they know how to read graph for ATR. The following image shows the graph that the investor uses while trading with ATR.
The circled red line above shows the value of the ATR. As the ATR increases so do the volatility. These changes in ATR can be used by the investor to adapt to the changing volatility within markets. Below are some of the strategies used by investor to maximize their risk adjusted returns
Using Average True Range (ATR) In Trading
Finding the pressure of the move
If there is a reversal in the direction, that reversal can be steep or slow. An investor needs to know the speed of this reversal in order to calculate their expected-annualized-gains from investment. Usually, the rule of thumb is that the higher the change in ATR, the more explosive the move. This definition of explosiveness varies depending on the market. What is considered explosive for S&P 500 might be just another day for Penny Stocks. Remember it is the change in the value of ATR that betrays the pressure rather than the absolute value for ATR. By looking for changes in the value of ATR, one can get a fair idea of the strength of the current market move.
Use ATR to adjust top loss
All investors need to trail their investments with a stop loss order. Stop loss orders automatically sell assets if they move above or below a certain threshold. These stop-loss measures can be placed on a percentage or absolute basis. in percentage basis the stock is automatically sold after it changes in value by a certain percentage whereas in absolute terms the sale happens as soon as the stock crosses a certain threshold.
Creating a stop-loss can become a problem if the stop-loss sells an asset too soon. In the following image we can see that if the investor had placed his stop loss at the red line, they would have lost on the rally afterwards. Under fixed market volatility, these mistakes can be corrected on the basis of experience. However, with changing volatility the investor risks repeating the same mistake over and over again. ATR can help the investor in adapting to the changing volatility. If the investor keeps their stop-loss order as a multiple of ATR, they would avoid selling the security too soon. The exact multiple would again depend on the market and intuition of the investor.
What are the upsides and downsides of using ATR?
Like all measures ATR has its advantages and disadvantages. Good investors will play to the strengths of ATR while making up for its weaknesses. The defining advantage of ATR is that it is able to measure volatility even when there are price gaps. The aim of using ATR is that investor should be warned about sudden increase or decrease in volatility. Any measure that cannot measure volatility over price gaps is will fail badly at warning the investor of such changes in the volatility. Furthermore, ATR can also be used for any length of time period (1-1000) or time frame (hours, days, weeks, years). This allows investors with different types of strategies to use ATR.
On the flipside, ATR cannot measure changes in direction. This ability is not something one looks for in a volatility measure, but it is always useful. However, one must realize that no tool is meant to be used alone. Prudent investors will always use ATR with some other measure such Bollinger bands.
ATR is a good technical indicator that can be used to measure the volatility in a market. The measure is essentially the moving average of the true range value for the given time period. Investors can use ATR to find the pressure of the rally or run. Furthermore, ATR can also be used to adapt the stop-loss mechanism to changing volatility within the market. As long as one uses ATR along with a direction-assessing technical measure, this tool can come in very handy when it comes to maximizing risk adjusted returns.
The value and direction of these thresholds are determined by whether the investor is going for a short or long position.
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It is often possible to expedite the completion of certain activities by increasing the budget. This problem often comes up when the duration of parts of a project needs to be reduced to compensate for unexpected delays or when it is necessary to complete a project before a predetermined due date.
One important extension to the basic network analysis technique relates to project cost project time tradeoff.
The project manager can trade between constraints. INTRODUCTIONT HE TIME-COST tradeoff problem TCTP is one of the most important in project management. A simple example of time cost trade-offs in project management.
They gave a solution based on linear programming on AOE network. Network analysis – costtime tradeoff. By assigning more workers to a particular activity will normally result in a shorter duration.
In 1996 Babu and Suresh proposed a new method to study the tradeoff among time cost and quality using three inter-related linear programming models. Journal of Applied Sciences 2008. Timecost trade-offs arise when organizations seek the fastest product development PD process subject to a predefined budget or the lowest-cost PD process within a given project deadline.
These two factors are linked together. One is time duration of the activities and second is cost of each activity. In 1961 Fulkerson and Kelly gave another solution based on maximal flow algorithm.
In this way one can step through the critical path activities and create a graph of the total project cost versus the project time. For a project manager the decision regarding changes in times and costs is very difficult. In this extension to the basic method we assume that for each activity the completion time can be reduced within limits by spending more money on the activity.
Thus the decision to reduce the project duration must be based on an analysis of the trade-off between time and cost. Their approach is based on the linear relationship among the project cost the quality measure and the project completion time. Negative duration and loops are solved even in project management softwares.
In this case there are two tradeoffs to deliver the project according to the scope. 3 Full PDFs related to this paper. The time-cost tradeoff problem TCTP is an important issue in the scheduling of industrial projects.
Time cost trade off problem is one of the highly important issues in project accomplishment and has been ever taken into consideration by project managers. Time-cost trade-off in fact is. Time Cost Trade off Explanation.
Is the relationship between activity time and cost. Time in project management or Time-Cost Trade-Off. A short summary of this paper.
Finally in some cases you have to play with all 3 constraints and thats the last resort. In any project you start making tradeoffs from the least important constraint and you start playing with the most important constraint only when your project is in a desperate situation. In a project two factors are very crucial.
Time and cost as two critical objectives of construction project management are not independent but intricately related. However a savvy project manager understands the dynamic between scope time and costand you know that trade-offs are inevitable. The project management triangle called also the triple constraint iron triangle and project triangle is a model of the constraints of project managementWhile its origins are unclear it has been used since at least the 1950s.
Download Full PDF Package. So there must be a trade-off between time and cost. The quality of work is constrained by the projects budget deadlines and scope features.
Slope Crash cost – Normal cost Normal time – Crash time The activities having the lowest cost per unit of time reduction should be shortened first. Greater speed may result in higher costs and lower quality however. Trade-off between project duration and total cost are extensively discussed in the project scheduling literature because of its practical relevance.
Naturally the client would prefer to change the scope without the time or cost of the project changing this is a whole issue in and of itselfsee our post on managing scope creep. The slope of each cost versus time trade-off can be determined for each activity as follows. The time-cost trade-off problem was presented at first in 1959 in work of Kelley and Walker.
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What Is PCI DSS?
Let us get into the basics and first know what PCI is. The Payment-Card-Industry Data Security Standard or PCI DSS is the set of those security standards that are designed for ensuring all companies accepting, processing, storing, or transmitting credit card info to maintain a properly secured environment. The requirements for PCI DSS include a set of stringent security protocols, which business houses need to implement for protecting their credit card data and also for complying with this Standard. These requirements were initially put forth as well as maintained by the PCI Security Standards Council.
What Is the Need for PCI?
Now that we have understood what PCI lets us know, what is the need for PCI? The PCI DSS is needed for all businesses, which are, in any way, transacting with the help of credit cards. Many healthcare firms, as well as hospitals, also need PCI compliance along with HIPAA compliance as two essential parts of their enterprise security portfolio.
What Is the Importance of PCI DSS?
Patient Data security is prime, and thus the need for PCI cannot be averted for those medical entities that are processing, accepting, storing, or transmitting credit card info. Even though PCI DSS is implemented by almost all objects that are processing, storing, or transmitting cardholders’ data, formal validation for this PCI DSS compliance is not a mandatory thing for all those entities. Presently, both Visa and MasterCard, need merchants, as well as service providers, are validated as per PCI DSS.
Why Is PCI Compliance Needed inspite of HIPAA Compliance?
Some healthcare firms need both HIPAA compliance and also PCI DSS compliance, including covered entities as well as business associates, which are accepting credit cards, debit cards, or other such payment generation cards. Many people have this belief that if they are compliant with any one of these two, then it would cover the other. This thought is so not correct. PCI and HIPAA are two separate and distinctive sets of security requirements. And each one of these is specially designed for different information types. On the one hand, HIPAA is designed by Government bodies that are trying to protect crucial citizen data. On the other hand, PCI is created by the private industry for reducing fraud-related costs as per the loss of payment card info.
How Can a CASB Help Enterprises with PCI Compliance?
Cloud has immersed into the systems so much so that today’s work systems are cloud-run. With sensitive medical information, data storage over cloud data centers is highly risky. In light of the benefits offered through these cloud-based work practices, this fact cannot be negated that even medical centers cannot do without cloud working systems, and they are a kind of indispensable now. But again, this creates many security gaps and lapses into the systems, making the sensitive patient medical records and other personal data, including their card info prone to leakages, thus inviting crimes.
CASB solutions can, therefore, really help enterprises with PCI compliance. These solutions are customized to meet specific requirements of respective medical offices and are deployed as per the need that is generated in that particular medical center. With the superlative presence of cloud run operations, only a CASB can provide that extra security layer protecting the medical organizations from any damaging data thefts. Using a CASB solution encompasses many security protocols made through restrictions and policies imposed on users, thus ensuring enterprise security from the grass-root level.
CloudCodes CASB solution for finance segment
At CloudCodes, enterprise data security is of great significance. IP restriction, a feature nested under Access Control solution helps in Whitelisting networks and connected devices, which have been accessible from a shared dashboard. CloudCodes for G Suite allowed the company to add that extra cloud security layer by protecting the firm from any of the unauthorized user access attempts from outside the organization and that also without having to compromise with G Suite benefits. G Suite hand-in-hand with CloudCodes CASB solution enabled the enterprise to get much secured cloud access.
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*** The 3 Things Series aims to simplify – sometimes even oversimplify – technology concepts so that you learn 3 things about a topic ***. Opinions are my own.
Organizations embark in Big Data projects typically with 3 goals in mind: cost reductions, improved decision making and the ability to create new products and services.
1- Cost Reduction
As the quantities and complexity of data in organizations increase, so does the cost of storing and processing this data. Decisions about how much data to keep available for analysis, and how much “historic” data to move to tape or other less expensive resources, are then made. The problem with this strategy is that by limiting the data that can be analyzed, the insight that can be derived from this data is also limited.
In recent years, technology developments especially in Open Source, have made cost reduction a reality through the use of inexpensive technology such as Hadoop clusters (Hadoop is a unified storage and processing environment that allows for data and data processing to be distributed across multiple computers). Hadoop clusters give organizations the ability to keep more data available for analysis at a lower cost, and to easily add complex data types (images, sound, etc) to the pool of data to be analyzed
2- Improved Decision Making
Data analysis can be significantly improved by adding new data sources and new data types to traditional data. For example a data-driven retailer may see significant benefits in their inventory planning processes, if a new data source like weather data is added to the model to better predict sales and inventory requirements. An enriched model may be able to predict shortages of winter clothing by incorporating temperature into the existing models. Additional benefits can also be achieved, if more complex data is analyzed. For example, this same retailer may better target their ads in social media, if they evaluate not only their clients purchasing history, but also the actions they take in social media to interact with their brands and those of their competitors.
3- Development of New Products and Services
The most strategic and innovative business benefits will probably be achieved by the ability to use new data or new sources of data to create new products and services. Let’s think for a minute about the data our cars generate (yes, we don’t necessarily see it, but more and more cars are equipped with sensors that collect a lot of data about our driving history). Using this data, insurance companies can offer policies that are dynamically priced based on an individual’s driving history (which is good news to you only if you are a safe driver of course). Integrating weather data can also bring tremendous savings to an insurance company. Some insurance companies have been able to achieve significant savings per claim by letting their clients know that a storm is coming and recommending they don’t leave their cars exposed to the elements. (Again, assuming that as a client you listen to your insurance company recommendations).
In summary, when thinking of the business value of Big Data, think of three areas of value:
- Cost reductions
- Improved decision making
- Ability to create new products and services
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Tags: Examples Of Essay OutlinesPlant Nursery Business PlanImage Consulting Business PlanWorst College EssaysHelpful Tips For College EssaysOutcasts Of Poker Flat Essay QuestionsI Need Help With My EssayThesis Cambridge OnlineNyu Stern Emba Essays
But many economies have been legislating to reduce these inequalities.
Using Contextual Interaction Theory (CIT), the researchers explain why it is possible for previous authors to come to such a different conclusion.
In this study, the team conducted a systematic literature review (SLR) to assess the state and quality of knowledge about women’s energy entrepreneurship and links to Sustainability Development Goals (SDGs) of energy access, gender equality, and poverty alleviation.
C., March 17, 2010-Only 20 of 128 economies have equal legal rights for men and women in several important areas for entrepreneurs and workers, according to a new World Bank Group report, Women, Business and the Law 2010.
Inequality occurs across all regions and income levels.
Equitable business regulations are one piece of the puzzle."Women, Business and the Law2010analyzes differences in formal laws and institutions affecting women's prospects as entrepreneurs and employees across six topics-accessing institutions, using property, getting a job, dealing with taxes, building credit, and going to court.
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- Bitcoin (bitcoin) is a digital currency.
Bitcoin (bitcoin), the abbreviation BTC, is one of the digital currencies. There are many brands in the world, but one that is louder than anyone because he was the big brother in the industry before battling traditional financial systems before his birth in 2009.
Currently it is 10 years old and is called “King of the crypto industry”
Still, bitcoins are not certified as legal money by the Central Bank of Thailand (BOT), but there are other countries like Japan where bitcoin can be used to pay for goods and services. Legally
- Bitcoin is the origin of blockchain technology.
Bitcoin is the birthplace of blockchain technology. Which transactions The bitcoins will be included in the box, known as the Block, once the transaction has been verified. The boxes will be connected from the previous block into a chain, and so on. Respectively, called Blockchain.
Following the birth of bitcoin, many more varieties of digital assets emerged. Which are based on blockchain technology Examples include Ethereum, Litecoin, Monero, Zcash, and Zcoin.
- Her birth is an anonymous person named “Satoshi Nakamoto”
Satoshi released a white paper on Oct. 31, 2008 (2008), before going live in 2009 until today, and now no one knows who Satoshi is, a man or woman. A group of people … !!?
Who knows to bother telling the lady With a phone number Will ask for a special interview appointment> <
4.Approximately 4 million bitcoins are left to mine.
Bitcoin is limited to 21 million BTC in the world, as of January 2019 there is a certain amount of bitcoins. Around 17 million BTC are circulated in the system, with Satoshi making it harder and harder to mine. From the first year, easy to dig That’s why 50 bitcoins are released every 10 minutes or 300 bitcoins per hour, which is 7,200 bitcoins per day or 2.6 million bitcoins per year.
Bitcoin is designed to be released in half every four years, so it will reach $ 21 million in 2140 or 2683, or about 4 million BTC remaining.
- Bitcoin’s highest record is 650,000 baht / BTC.
Bitcoin price went up to All Time High in December 2017, almost $ 20,000 per bitcoin, or about 650,000 baht (the exchange rate at that time of 32.54 baht / dollar), before going head-to-head all year. 2018 continued to the beginning of 2019, at the time of writing this article at 3,400 US dollars or about 100,000 baht only. (Which the price fluctuates and changes very quickly in 24 hours)
You can see that the Bitcoin price fluctuates more and more, the force – the pressure. No silling – no floor Like the stock market, it is limited to 30% of the previous day’s closing price. Which reduces volatility to a certain extent
6.Bitcoin market cap More than half of the total market
As of January 2019, bitcoin has a market cap of approximately $ 60 billion, or 53% of the market cap, including the crypto market at $ 120 billion. Followed by Bitcoin XRP and Ethereum, which have market caps of $ 11.9 billion and $ 11.0 billion respectively.
Hence, Bitcoin’s sharp fluctuation or fluctuation has a significant effect on the value of the crypto market. Plus, it also affects the trading atmosphere of other digital coins. (Altcoins) to be bad, too.
- Bitcoin is the “most high-risk” asset.
Just this stock is very risky, but bitcoins are heavier because they can’t estimate the proper value at all.Unlike stocks that have many valuation methods, be it P / E, DCA or SOTP, etc., Bitcoin has no value. P / E and no fundamentals to evaluate You can only view charts of technical signals to find points of purchase and selling points
Bitcoin in Thailand does not yet have any agency to support it. And trading prices in the market are very volatile like a roller coaster Many people used to get rich with bitcoins like “King”, they turned into “poor” just over the years. Plus usage as a digital currency It depends on the acceptance between the buyer and the seller of the product.
But on these risks …
Some investors see it as The most exciting “alternative assets” of the 21st century, as people view it It is still not used to buy rice and curry.
And many others believe that bitcoins are dying …
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Computers (desktops, laptops, tablets) currently account for 3 percent of home electric bills and 7 percent of commercial power costs in the state of California. While that may not seem like much, the numbers are expected to rise as computer use—and technology in general—will, of course, rise steadily over the next few years and beyond. And to stay ahead of that trend, regulators in California have proposed the first mandatory US energy efficiency standards for computers and monitors.
The most recent draft standard issued by the California Energy Commission—this marks the second revision of the rules which were first proposed in March of 2015—suggests that the regulation would save consumers an estimated $373 million, collectively, per year, once it is fully implemented.
Of course, monetary savings is attractive to consumers, but according to the Natural Resources Defense Council—an environmental group focused on establishing these standards—commented they have a plan to cut greenhouse gas emission from all fossil fuel combustion power generation by upwards of 700,000 tons a year.
However, the NRDC has is now urging the CEC to avoid loopholes that would allow for special exemptions or credits for premium computer features that, while maybe not quite so common now, will become more mainstream by the time these standards go into action.
The NRDC goes on to explain that computers and monitors draw roughly 5,610 gigawatt-hours of electricity (the equivalent of the 3:7 ratio mentioned above). Unfortunately, most of that power is consumed while the devices sit idle (and not turned off). If there were a complete turnover in existing devices—either in practice or in the adoption of new devices—the total amount of power consumed (wasted) could be reduced by as much as one third.
The plan would be for the first phase of the new rules to be set forth in January of 2018 for workstations and small-scale servers and then in January 2019 for all desktop and notebook-style computers. Finally, regulations for computer monitors—17 inches or larger—would take effect in July of 2019.
The NRDC says that desktop standards—which devour more energy than notebooks—should add only about $14 to the total retail cost of computers. However, the new standard will save consumers more than $40 in electric bills over a five year period.
California often leads the country in green initiatives and if this one were adopted nationwide, it could save consumers in the US roughly $2.2 billion per year in electric bills and reduce energy generation by the equivalent output of approximately seven coal-based power plants
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Edited by Jonathan Klick
Chapter 3: Lessons in fiscal federalism from American Indian nations
Since Native Americans were relegated to reservations in the nineteenth century, their governance structures have been dictated largely from Washington, leaving little room for an optimal mix of tribal, federal, and state control to evolve. This chapter explores the optimal mix with respect to law enforcement and natural resource management. The key advantages of decentralized tribal control lie with its conformity to local norms of legitimacy, and with its better incentives for maximizing returns from local resources. The key advantage of the larger nodes of government lies with scale economies in resource management and in the provision of a uniform rule of law. Based on these tradeoffs, we argue that some responsibilities are ill-suited for non-local control (e.g., jurisdiction over reservation crime) whereas others are well-suited (e.g., jurisdiction over commercial contracts involving non-Indians). We explain why local jurisdiction over contracts, and top-down control of natural resources by the federal government, can stunt economic development on reservations. We evaluate these arguments by reviewing empirical studies, and by analyzing a novel reservation-level panel data set spanning 1915–2010. The evidence from both sources suggests the current mix of governance authority – which has largely been imposed on tribes rather than chosen by them – has slowed income growth. We conclude that tribes should be free to choose a different system of federalism and we identify some potential barriers to a freer choice.
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Earlier in August, the Bureau of Labor Statistics released their monthly Consumer Price Index (CPI) report. The report, used to measure change in prices for a basket of goods over time, is highly watched by economists and researchers alike to gauge the current state of the economy. The higher the CPI reading, the more that goods and services will cost the consumer to purchase. The report showed that the CPI has increased 2.9% over the prior 12 months (before adjusting for seasonality). The same index less food and energy increased 2.4%. Over the past twenty years inflation has been relatively modest, typically anywhere between zero and four percent annually. Although zero inflation sounds great, it typically implies that people aren’t earning more over time and that the economy is stagnant. On the flip side, a higher inflation number typically signals that the economy is firing on all cylinders, that unemployment is low, and wages are increasing at a fast pace. Although there is no perfect inflation number, current policymakers have targeted an inflation amount of around 2% annually.
If no inflation is bad, then high inflation is worse. Nothing can derail an economy faster than high inflation. A high inflation rate means that your dollar won’t go as far as it used to as the prices you pay for goods and services increases. The mere thought of higher inflation can send asset valuations lower. This is because if there’s higher inflation, the Federal Reserve will most likely raise borrowing rates in a hurry, sending bond prices sharply lower and causing people to pull money out of equities. This is what happened in early February of 2018. The worry of inflation sent the stock markets into a sharp selloff, causing a 10% decline in equity markets.
A key determinant of inflation is the labor market. A lower unemployment rate typically means more people are working and receiving a steady paycheck, which should allow them to spend more money. With a current unemployment rate of 3.9%, the United States labor market is in the best shape that it’s been in over the last 20 years. The unemployment rate has been steadily trending downward ever since late 2009 when it peaked at 10% and it doesn’t seem to be slowing. This alone should be a concern for policymakers as there is an increased amount of money being moved around in the economy. The counter argument to current concerns over inflation is that wages haven’t been increasing fast enough to spur inflation. But looking at just the wage growth in the country to determine the future of inflation would be a mistake. Just as the government and central banks have different levers they can pull to stimulate or slow the economy (think interest rates, bond purchases, budget deficits, and tax rates), so too does the consumer.
If history has taught us anything it’s that Americans don’t like to save money. They especially don’t like to save money towards the end of bull markets. Why? Because consumer sentiment is high. People don’t see any risks within the economy and they’re living in the moment. According to the U.S. Bureau of Economic Analysis, the personal savings rate in the United States in December 2002, just before the Dot-com Bust, was a paltry 4.2%. And prior to the Great Recession in November 2007, the savings rate was a trivial 3.1%. In June of 2018 this rate stood at 6.8%, much higher than rates prior to past recessions. Take a look at the chart below to see how savings rates typically go lower prior to a recession.
Although the current savings rate looks great for the individual American (and it is), it also means that Americans have the ability to decrease their savings rate in an effort to generate cash flow. This will, in turn, allow them to increase spending on goods and services. According to Trading Economics, Americans have roughly 15.5 trillion dollars of disposable income per year. Using the current savings rate of 6.8% we can conclude that Americans save about one trillion USD per year. Should the savings rate drop to even just 5.0% over the next year, the drop would inject an additional $280 billion into the economy, causing inflation to surge.
What other levers can consumers pull to generate additional spending money? Just as governments can sell assets in times of want, so too can consumers. With equity markets at record levels there is a tremendous amount of wealth tied up in equities. Should the masses decide to sell some of these financial securities they could quickly raise billions in cash for purchases, again causing inflation to soar. One last tactic is through borrowing. Household and non-household debt has risen for 16 consecutive quarters. According to the Federal Reserve Bank of New York, the most recent number as of June 30th, is that Americans owe $13.29 trillion, which is over $600 billion more than prior to the Great Recession. As Americans are willing to take on an increasing amount of debt, the nominal prices of goods and services should continue to rise.
One other possible catalyst to inflation is the recent reduction of effective tax rates. At the beginning of the year something miraculous happened to me. I started receiving roughly $40 more per paycheck. I wasn’t sure what was going on. Did the payroll department make a mistake? Did I receive an early raise and my manager forgot to tell me? No to both, I’m not that lucky. After a little research on Financial Fixation I found out that the tax cuts had gone through and new withholding amounts were calculated by my company’s payroll department. This recalculation allowed me to receive additional money in my bi-weekly paycheck. I wasn’t the only one that received these tax cuts, however. Most middle-class wage earners received similar cuts and should see a slight benefit in every paycheck moving forward. This new money won’t show up in traditional wage growth numbers. That’s because the top-line wages didn’t increase. I did receive less of a tax bite though, and due to this I’ve been receiving more money on a bi-weekly basis. I now had an extra $80 a month burning a hole in my pocket. What was I to do? How about pass these savings onto the producer, via purchasing more goods and services. As the tax cuts have only been in effect for about half of the year, consumers haven’t fully allocated this newfound capital back to the retailers. Give it a few months and you’ll really start to notice the impacts.
All in all, decreased unemployment rates that generate even modest wage growth, coupled with a decreased personal savings rate and increased consumer debt will result in an accelerating inflation rate. Although we have yet to see a decrease in savings rates, should historical trends resume, we may see inflation creep up at a quicker pace. Throw in decreased effective tax rates for individuals, increased trade tariffs, and a somewhat accommodative Federal Reserve and you have the cherry on top of an all-too-expensive inflation sundae.
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February 10, 2017
The foreign exchange market, also called forex or FX for short, is the biggest financial market in the world, with a daily turnover of around $5 trillion — that is $5,000 billion in a single day! It dwarfs all other markets by size and is one of the most exciting markets for investors. The main participants in the forex market are large banks and other institutional investors, but with technological innovation in the last 20 years, the market became accessible for smaller retail investors as well.
Today, all you need to participate in this exciting market brimming with money making opportunities is a computer with internet access, a broker account which you open online, and this forex tutorial, which will cover all the basics to start trading.
Major World Currency Pairs
As you probably already assumed from the name, the foreign exchange market is where traders go to trade the world’s currencies. There are many currencies around, but just a few are considered the major currencies. Namely, there are eight most traded currencies in the forex market. These are:
- U.S. dollar (USD)
- British pound (GBP)
- Euro (EUR)
- Japanese yen (JPY)
- Swiss franc (CHF)
- Australian dollar (AUD)
- New Zealand dollar (NZD)
- Canadian dollar (CAD)
As you can notice, all the listed currencies are from developed economies, as they make up the highest share of the world trade, which makes their currencies the most traded in the world.
Simply said, like in all other markets, the traders in the forex market try to buy a currency cheap and sell it later at a higher price. But, what’s unique about the forex market, (and the reason why so many traders decide to invest in it) is it’s also possible to make a profit when the price goes down – we will explain this later. For now, let’s focus on the process of the actual buying of currencies in the forex market.
You have probably already noticed that all currencies are quoted in currency pairs. That is, the quote represents the price of one currency in the second currency. These are called the base currency, and the counter currency. For example, a quote of EUR/USD of 1.10 means that 1 euro buys 1.10 U.S. dollars. Here, the euro (EUR) is the base currency, and the U.S. dollar represents the counter currency. A rise of the quote of EUR/USD to 1.20, means that now 1 euro buys 1.20 U.S. dollars. In this situation, the euro became stronger and the dollar weaker. The goal of a forex trader is to anticipate the rise (or fall) of a currency’s value, in order to buy or sell that currency. In the mentioned example, a forex trader would like to buy the euro for $1.10, and then sell it for $1.20.
Usually, currency pairs don’t fluctuate that much. Most pairs move less than 1% daily, making forex one of the least volatile financial markets. On the other side, liquidity is extremely deep. If you decide to buy or sell currency, it will take you milliseconds to do so. That’s why relatively high leverage is available on forex, which increases the value of potential gains from small movements but also increases the risk of higher losses.
No Centralized Trading Locations
Forex is an over-the-counter market, with no centralized location for trading currencies. Instead, currencies are traded in financial centers around the world, like New York, London, Frankfurt, Tokyo, and Sydney. This means, the market is open 24-hours a day, and you can trade around the clock. This is perfect for those looking to trade after your day-job, or before going to sleep! A market will always be open somewhere – in North America, Europe, Asia or Australia.
Test Your Knowledge: What is the Forex Market
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What is the Forex Market
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Which of the following is NOT one of the eight most traded currencies in the forex market?Correct
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The Forex Market it open 24-hours a day.Correct
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Money is an incredibly important part of our life. When you consider all the parts of modern-day life that you take for granted, money is one of the few things that hasn’t changed for many years. If you think about how you communicate, it has changed dramatically over a short number of years. While how you pay for things has largely remained the same. However, appearances are deceiving. In reality money, and the way we use it is always changing. It has been decided that the $20 bill will no longer show the face of Andrew Jackson, instead, it will show the face of Harriet Tubman a hero in the fight against slavery. The changing of the $20 bill has met a lot of criticism from people who want money to respect the traditions of times gone. However, this makes no sense as money is always changing.
While cash is the main form of currency in many countries that is changing. The phrase cash is king is no longer true and digital forms of payment continue to grow in popularity. In countries like Spain and Italy over 85% of transactions are still carried out using cash, in the UK and China that number is around 40% with the US at 37%. In Japan, the figure is only 14% while in New Zealand it is even lower. It is estimated that over 90% of transactions in New Zealand are carried out without cash today.
The most common form of payment in these countries is of course card. Yet that may change too. Payments using mobile phones are growing in most countries and many technology experts expect cards to be obsolete within the next decade. At the same time currencies are also changing. In the last number of years, we have seen the rise of digital currencies like bitcoin. Although none of them have taken hold yet it is again expected that currencies will shift to more digital methods in the future.
These changes are modern but there have been many changes since money was invented. When the penny first came into production in the US it did not have the powerful words ‘E Pluribus Unum’ or ‘Out of many, One’ written on them. Instead, pennies simply stated ‘Mind Your Business’. It was a design by Benjamin Franklin.
Today pennies are in threat of extinction. They cost the US treasury more to make than they are actually worth with each cent coasting 1.7 cents to make. In many countries, small counts have been taken out of circulation and all prices are rounded to the nearest 5 or 10 cent amount. The same may soon happen in the US.
Even paper money is not actually made from paper in the US. The green note is 75% cotton and 25% linen, this is what gives it that beautiful texture. The average note will take 4,000 bends before it breaks. However, we all know that a note becomes useless far earlier than when it breaks. A note will start to be refused by vending machines quickly after it is in use, although it has been shown that popping it in the microwave for 20 seconds will restore its crisp.
The average note will be taken out of circulation quickly too. A $10 note is used so frequently that it will only last around four and a half years. The $100 note lasts the longest at fifteen years.
Clearly, money is always changing. The face of Harriet Tubman replacing a slave-owning former president who was impeached and also hated the idea of paper money makes a lot of sense. Instead of being afraid of change, we should all embrace it, especially when it is so clearly a good decision.
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Hello, in this lecture, we’re going to talk about the closing process step one of the step four process. Last time, we talked about the objectives of the closing process, which in essence was to close out the temporary accounts, all the accounts from the draws, and the revenue and expenses on down to zero. Putting that balance into the capital account, we talked about how we were going to do that, we’re going to do a four step process, including closeout, the income to the income summary, and then close out the expenses to the income summary. And then we’re going to close out the entire income summary to the capital account. And finally closeout draws to the capital account. We’re going to start off with step one of those four step processes. In order to do this. We are adding this new account you’ve probably been wondering, income summary account, what is that? Where did it come from? Why is it there? The income summary can be called a clearing account, meaning it’s going to start at zero and it’s going to end at zero right when we’re done with this four step process which we’re going to do basically at the same point. Time.
Why then do we have it if it’s just going to start at zero and then end at zero, its purpose is going to be to allow us to close out the entire income statement meaning the revenue and expenses to the income summary. The result then will be that the income summary will have net income in it, which is revenue minus expenses, then we can check to see that the revenue and expense accounts are totally closed out that it’s zero, that the income summary will have net income in it, then we can allocate the income summary to the capital account. This can be a helpful process, especially when we go to like partnerships or some more complex equity sections, because then we can know that we’re allocating the proper amount to the partners. In the case of a sole proprietor, then we’re allocating to the sole proprietor of the sole capital account in this format. Remember, our goal is to have all these accounts be zero starting with revenue, there’s only one revenue account in this case, and most of the time, there’s only gonna be a few revenue accounts because we only do a few things as opposed to expenses where we have a lot of different things that we spend the money on. We concentrate specialize in one or two things, usually from a revenue side. Therefore, we just need to make that revenue account zero journal journal entry wise, in order to do that we see of credit balance represented by the brackets, we need to do the opposite thing to it then to make it go down, which is going to be a debit for everything in there for 330 to 250. If we post that, then we’ll post the debit that will take it to zero. That’s the goal, we want it to be zero, then we need to credit something, what are we going to credit. Ultimately, we wanted in the capital account, that’s what we’re ultimately aiming for. But we’re first going to put it into that income summary. That’s what we’re going to do first to put it into that clearing account. And there we have it in the clearing account, and the clearing account goes up in the credit direction to the 330 to 250. In essence, all we’ve done then is move the revenue here up to the income summary account. That’s the first step of our four step process. This is where we’re at at this point in time. This is where we need to be. Remember, we’re going to keep moving on to the next steps next time so we have now closed out the income. Next time we’re gonna close out the expenses to the income summary. Then we’re going to take the income summary which will then have net income in it, close it out to the capital account, which is where we ultimately want that, then we’re going to close out draws to the capital account.
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House prices rose 60 percent between 2000 and 2007 before the housing bubble burst. The question is whether the housing boom made people better or worse prepared for retirement. If they extracted the equity from their home through some form of housing-related debt and consumed all their borrowings, they will be left with additional debt and no additional assets and probably will be worse off in retirement. If they did not borrow and consume their equity, they will have more housing wealth to tap in retirement and will be better off.
This brief explores how the rise in house prices affected individual households. The first section discusses the impact of an increase in house prices on the homeowner’s balance sheet and describes the evidence to date suggesting that the housing boom led to an increase in debt and to increased consumption. The second section uses the 2004 Survey of Consumer Finances (SCF) to explore the actual response of individual households. The third section discusses events since the 2004 SCF – the continued inflating of the housing bubble and its ultimate bursting in 2007. The final section concludes that a substantial proportion – perhaps a third – of older households will be less secure in retirement because of the housing bubble.
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Specifically, the energy demand of global transport, which includes deliveries of goods and services, should increase by about 25% by 2040, according to ExxonMobil’s Outlook for Energy. And the connection between a larger middle class and the growth in transportation isn’t just about more people commuting to work or finding the time to take a leisurely weekend drive.
Economic opportunity means that more people around the world – especially in developing countries – are able to buy personal vehicles, travel, shop for products delivered from faraway countries and expand their businesses.
As that demand grows, so too do the new technologies that improve energy efficiency.
Vehicles hitting the road can drive more miles on less fuel as auto manufacturers produce cars and light trucks with better fuel economy. Those new vehicles use lighter plastic parts and better lubricants to enable them to travel longer on less.
It’s all part of the complex landscape that makes up the daily buzz of transportation fuel consumption. Learn more about the factors driving these future energy demands.
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A periodic inventory system is a mechanism for measuring the level of inventory and the cost of goods sold (COGS) by using an occasional physical count. Periodic systems use regular and random inventory audits to update inventory-tracking information. Typically, the physically counted inventory on hand is compared to sales and receipt data to identify any discrepancies.
Periodic inventory systems were more widely used before computers made real-time inventory management more efficient. Conducting periodic counts requiring that each item in stock be tallied by hand can be time-consuming and tedious. Companies using this method often have to shut some or all their business down while the count is under way.
How periodic inventory systems work
In periodic inventory systems, merchandise purchases are recorded in a purchases account, a ledger listing all inventory purchases and their costs. The inventory and COGS accounts are updated at the end of a set period, which could be once a month, once a quarter or once a year. COGS is a key accounting metric, which when subtracted from revenue, shows a company's gross margin. Under the periodic inventory system, COGS is calculated as follows:
Beginning Balance of Inventory + Cost of Inventory Purchases - Cost of Ending Inventory
Periodic vs. perpetual inventory systems
Periodic systems do not track inventory daily, unlike perpetual inventory systems, which record store balances of inventory after every transaction through point-of-sale (PoS) inventory systems and do not rely solely on quarterly or annual data to calculate COGS. Generally accepted accounting principles permit companies to use either periodic or perpetual systems to monitor inventory.
Managers at companies that are small or resource-constrained may have to weigh the costs and benefits of using perpetual versus periodic inventory systems. To cover all bases, some experts recommend regularly performing physical audits under both perpetual and periodic inventory systems.
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Last year, using projections from the Energy Information Agency’s Annual Energy Outlook report, we showed that coal production in Central Appalachia was heading for a steep decline, with or without new environmental regulations. This year’s report tells the same story. Under the EIA’s baseline model, Central Appalachian coal production is projected to decline from 186.4 million short tons in 2010 to 87.2 million short tons in 2040. Under the “no green house gas concern” model, which assumes that no greenhouse gas reduction policies are implemented and the market never anticipates any, there are hardly any changes from the baseline model, showing that the decline in Central Appalachian coal production isn’t driven solely by environmental regulations.
However, there are other scenarios modeled by the EIA that do have an effect on Central Appalachian Coal production. For instance, under the low coal cost scenarios, which assume higher productivity and lower labor costs, Central Appalachian annual average jumps from 115.0 to 118.8 million short tons per year, an increase of 3.2%.
On the other hand, under the high coal cost scenario, with lower productivity and higher labor costs, Central Appalachia’s annual average production falls to 110.6 million short tons per year, a decline of 3.9 percent from the baseline production.
But changes to coal production don’t happen in a vacuum, and what’s good for coal isn’t necessarily good for natural gas. As the projections show, one side effect of cheaper coal is less production of natural gas. Northeast natural gas production, which includes the Marcellus Shale, is projected to increase from 1.3 trillion cubic feet in 2010 to 6.6 trillion cubic feet in 2040, for an annual average of 4.5 trillion cubic feet. But under the low cost coal scenario, natural gas production declines to an annual average of 4.4 trillion cubic feet, a decline of 1.3 percent.
But if the cost of coal is higher than expected, then natural gas would reap the benefits. Under the high cost coal scenario, average annual northeast gas production jumps to 4.6 trillion cubic feet per year, an increase of three percent over the reference case.
Right now, discussions around West Virginia’s economy are often dominated by these two industries. But the ugly truth is that they are often in opposition to each other, and efforts to help one can come at the expense of the other. Moving forward, maybe we would be all better off if instead of asking what’s best for a particular industry, we asked what’s best for the people of West Virginia first.
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In the wake of September 11th and following an overemphasis on passenger air travel security, the air cargo system has become a potential target for terrorists. European countries have undertaken various regulatory approaches that involve technology and operational measures aimed at addressing the perceived security threats in the air cargo industry.
The air cargo transportation system is designed to provide fast and efficient shipment of goods, two features that make it highly vulnerable to potential security threats. Similar to other components of the aviation system, the proper functioning of air cargo transport affects the economic vitality not only of the aviation industry, but also of the national and international high-value, “just-in-time” supply chain that serves many globally operating other industries. In the new fast-cycle logistic era, air cargo enables businesses, regardless of their location, to connect distant markets and global supply chains in an efficient, expeditious, and reliable manner.
Transportation of goods by air has become an essential component of contemporary world economy. Due to increased market demands, the volume of cargo transported by air was multiplied by 5 between 1990 and 2010. Despite the recent economic slowdown and the shift to other transportation modes, air cargo traffic is still expected to grow at a compound annual growth rate (CAGR) of 3.2% in the next 5 years. In this context, vulnerabilities in air cargo security place at risk the entire air transportation system if exploited by terrorists and could prove extremely harmful to the European (and global) economy.
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Budgeting fiscally sustainable increases in healthcare spending is an important first step, but only if actual spending matches those targets will publicly funded healthcare stay in line with Canadians’ long-term capacity to pay for it. The Canadian Institute of Health Information’s National Health Expenditure Database, which gets its initial projections of spending on healthcare from government budgets, and its later numbers from actual results, reveals that governments have typically overshot their budget plans.
This edition of Graphic Intelligence looks at the difference in preliminary and later figures on healthcare spending by use of funds in each province and territory over the 2014-18 period. Colour indicates the severity of discrepancies between preliminary estimates and actual spending, with overshoots in blue and undershoots in gold. The relative sizes of the squares represent the amounts spent in each jurisdiction, by use of funds.
On average, provincial and territorial governments tend to overshoot budget spending targets by 0.9 percent annually. Spending on drugs, miscellaneous services and capital, in particular, were likely to overshoot. However, this tendency is not consistent across the country; New Brunswick and Manitoba undershot over the entire period, and Newfoundland and Labrador also stood out as a province that budgeted for, and achieved, modest growth in healthcare spending. So overshoots are not inevitable. Provinces and territories can learn from each other’s experience as they work to keep publicly funded healthcare fiscally sustainable.
For more information see There is No Try: Sustainable Healthcare Requires Reining in Spending Overshoots
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Studies effects of spillovers, external economies or agglomeration economies on FDI location choice goes back to Alfred Marshall (1920). Agglomerations economic benefits that accrue to firms that locate in geographically concentrated areas or “clusters” (Smarzynska 2005) such asSilicon Valley. Several types of benefits can occur when firms collocate. First, geographically concentrated group of activities in a particular sector creates specialized skilled labor, which may lead to lower search firm and training costs.
Secondly, due to mobility of labor and social networks, companies can potentially get some knowledge of the patented technologies and processes of their competitors. At the same time, of course, companies also risk losing some of their own knowledge in this context. Third, specialized vendors are often located next to clusters, again, (Porter 1998) reducing costs of companies and firms to provide choices to make or buy decisions.
Fourthly, when clusters exist, firms and countries often make substantial investments in infrastructure such as roads, modernization of airports and the improvement of local universities. These features of industrial clusters create an environment in which firms can benefit, potentially greater than their direct costs.
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- IGU calls on G20 Governments to prioritise reductions in marine emission levels
- One large container ship produces same amount of sulphur oxide emissions as 50 million diesel cars
Berlin/Barcelona, 23 March 2017 – The International Gas Union (IGU) has released a new report on the crucial role of liquified natural gas (LNG) in enabling cleaner marine transport – currently a major cause of human health and environmental costs.
Unveiled at today’s G20 Energy Sustainability Working Group, the latest report highlights the detrimental impact of marine transport on air quality levels, emphasisng the positive role LNG can play in combatting these impacts as an alternative and cleaner fuel for shipping.
Urban air pollution has become a top priority for local, national, and international governments in both developed and developing countries. Marine transportation is an often overlooked contributor to negative air quality levels – with one large container ship, powered by 3% sulphur bunker fuel, emitting the same amount of sulphur oxide gases, as 50 million diesel-burning cars.
In Hong Kong, ship traffic is responsible for half of the city’s total toxic pollutants – more so than those produced by the power generation and transportation sectors. In the world’s top 100 ports, roughly 230 million people are exposed directly to the harmful emissions produced by shipping.
These emissions also create significant economic costs, with emissions of PM2.5, SO₂ and NOx produced by shipping in the world’s 50 largest ports costing authorities €12 Billion annually. In Spain alone the country’s 13 key ports cost an estimated €206million. In Bergen, Norway, the emissions of ships at berth in the port are estimated to cost the city between €10 – 22 million.
The use of LNG in marine transport can deliver significant environmental, economic and social benefits. These include reductions in emissions of harmful pollutants, including up to 90% reductions in sulfur oxide (SOx) emissions, 29% reductions in carbon dioxide (CO₂) emissions, and 85% reductions in PM levels. In addition, a switch to LNG fuel can generate substantial monetary savings for operators through fuel costs, as well as benefiting local infrastructure through investments and jobs.
Strong policy responses are needed to make this switch a reality. Armed with the latest supporting data, and various global case studies, the report outlines a number of recommendations for G20 Governments:
- Increasing regulation of emissions from marine transport
- Identifying and eliminating gaps in existing regulatory frameworks
- Facilitating better access to financing for the switch to LNG
- Funding LNG technology development and first-mover deployments
The recommendations above go a long way to tackling existing barriers to the more rapid deployment of LNG-fulled ships, which the report identifies primarily as: a confusing regulatory landscape; gaps in emissions controls; regional inconsistencies; lack of clarity in future policy direction; as well as commercial barriers, such as access to capital and cost uncertainties.
“The case for using LNG fuel for shipping is clear. It will provide significant improvement to our quality of life by dramatically reducing air pollution. It will also support climate change goals by reducing greenhouse gases. We need effective policy change to encourage a switch to LNG,” said David Carroll, President of the IGU. “This report, and our recent reports on urban air quality, demonstrates the key role natural gas plays in tackling the issue of air pollution and improving the quality of people’s lives.”
To download the full report, please click here.
For further information please contact:
Menelaos (Mel) Ydreos
Director, External Affairs
International Gas Union (IGU)
About The International Gas Union (IGU):
The International Gas Union (IGU) was founded in 1931 and is a worldwide non-profit organisation aimed at promoting the political, technical and economic progress of the gas industry. The Union has more than 150 members worldwide on all continents, representing approximately 97% of the world gas market. The members of the IGU are national associations and corporations within the gas industry worldwide. The IGU organises the World Gas Conference (WGC) every three years, with the forthcoming WGC taking place in Washington, D.C., United States, in June 2018. The IGU’s working organisation covers all aspects of the gas industry from exploration and production, storage, LNG, distribution and natural gas utilisation in all market segments. www.igu.org
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Part 4: What’s the problem, anyway?
All scientists, researchers and engineers should skip this article
Today, most of the world’s leaders (not You Know Who) acknowledge climate change’s threat and have committed billions of dollars to research new sustainable energy technologies or scale existing sustainable solutions (e.g., wind and solar). Unfortunately, much – if not most – of this investment will be under-utilized because there is no mechanism that can efficiently get new technology solutions out of research labs into the market on a global basis. This has created a global innovation gap between technology and the markets that desperately need its benefits today.
The Innovation Gap
There is no coordinated, efficient, comprehensive way of bridging this gap today – it’s all ad hoc with loosely connected efforts. Incubators, or other innovation centers, are most often regionally focused with sporadic connections to other parts of the world. Existing “networks” are usually only skin deep and concentrate on periodic convening events.
Don’t look to the national labs or the research universities to bridge this gap, because they have a “Not my job!” attitude when it comes to commercialization. Researchers are not incentivized to focus on the application of their invention and frankly most of them don’t have the skills to build businesses quickly. Despite what happens behind their lab doors, most universities aren’t flexible, fast-paced, and creative enough.
Why isn’t it the role of the private sector – specifically the venture capital and start up communities on the Left and Right Coasts — to bridge this gap? Well yes and no. Capital – especially venture capital – flows to the use with the best return in the quickest amount of time, which is not impact technology. We bend metal, build products, do chemistry. The average impact technology exit for a VC fund is 10+ years vs. 7+ years in the App and Mobile worlds. Hence, most VC money – and their well-developed support systems – has moved downstream on the impact technology market. As a result, the “flow” of risk investment capital to early stage clean technology entrepreneurs is best described as a trickle.
But the lack of money isn’t the only thing that’s causing in the innovation gap. Where are the entrepreneur assistance programs that cover the full range of cleantech start up issues needed to grow a clean technology company? There are some stand-out examples – Greentown Labs in Boston, the Austin Technology Incubator come to mind – but not many and certainly not around the world.
The kind of “ecosystems” that are needed are very different from those that support for the digital and media technologies. Condensed programs aimed at getting an investment in a couple of months’ time just don’t work for chemistry or hardware based technology companies. We need longer incubation, we need pilot programs with large customers or government agencies, we need help in scaling up manufacturing, expertise in developing a distribution network, a supply chain, etc., etc. The number of organizations that attempt this kind of assistance can be measured on two hands.
An ecosystem of ecosystems
We need to connect scientists with entrepreneurs with investors, with customers, with policy makers in 40+ countries. (yes, you read that right – 40. More on that later). At its core, our envisioned network is a collaboration of entrepreneurs and other innovators driven by a common mission to slow climate change and build economic wealth at the same time. Globally. In real time. At scale.
We are already working on this and have made significant progress in the last 24 months with supporters in the U.S., Canada, Mexico, Germany, Italy, Finland, India, China, and Japan. This is just a start – significant for sure – but we know the road before us will be challenge.
We’re looking for the few who have the guts to tackle the earth’s biggest problems by building the world’s greatest impact technology companies. And, we don’t care about your age, gender, sexual preference, religion, or race or whatever else might make you special.
If you want to help build this network, then I want to talk to you. Anytime. [email protected]
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Many people keep wondering how much money they should save each month. The simple answer is: as much as you can.
We all make a different amount each month. We also have various financial obligations. As such, it is vital to note that one dollar amount will not work for everyone.
In this article, we have put for you some guidelines to follow when determining how much to save every month.
Always Remember the 10 Percent Rule
The standard rule recommended is 10 percent of your income. This is a good beginning point. This makes saving easy since you will have set a specific amount aside to save every given month.
Whereas it’s quite easy to save this amount, you might have to consider increasing the amount with time. Eventually, you can work with 30 or even 40 percent to grow your savings and also implement your plans.
Increase the Amount You Save
It is not reasonable to begin at 20 percent and continue with that all the way. At some point in your saving life, you should increase the amount to 30 or 40 percent. If you are making more than you need to survive for a given month, consider saving a lot of money.
To make things easier, always save more as you get a pay raise. This way, you might not feel the pinch. Set challenges for yourself every month, track your expenses, and also always remember to give.
Re-Check Your Lifestyle
If you want to know you are saving enough, consider whether you are feeling the pinch. If you feel like your lifestyle has changed a little bit, then you are on the right track. This will put you in a place where you have to watch your spending habits. This does not mean that you will never have fun or enjoy your money; it means that you are saving enough so that you are not overspending every day.
Always Have a Purpose
Once you begin saving, you should have a purpose as to why you are saving. For instance, you set aside two to five months in an emergency fund. Set another percentage aside for retirement. Personal finance experts recommend 15 percent should be saved each month for retirement.
Save another percentage for a new home or vacation. In other words, if you know what you are saving for, it will be easy for you to make the sacrifices you need to achieve your goal.
Your Savings Should Work for You
As you begin the journey of saving, you will be amazed at how much power your money has. If you are disciplined enough to save every month, your money will also grow diligently. Set strategies to help you save every month, and it will be easier for you as you grow up.
It is always advisable to build healthy financial habits at an earlier stage in life. You can also set automatic money deductions so that whenever your pay-check comes in, a certain percentage is automatically transferred to your savings account.
Saving will save you a lot of financial issues in the future. It might look like you are depriving yourself of some things while saving, but this will be a blessing in disguise. It is all about building a saving habit, and the earlier you start, the better.
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In the previous few a long time there has been a revolution in computing and communications, and all indications are that technological progress and use of data technology will keep on at a speedy speed. Accompanying and supporting the remarkable will increase in the power and use of new details systems has been the declining expense of communications as a result of both technological improvements and increased competitiveness. According to Moore’s legislation the processing energy of microchips is doubling every 18 months. These developments present many substantial possibilities but also pose major problems. Today, improvements in info technologies are getting broad-ranging outcomes throughout quite a few domains of culture, and policy makers are performing on issues involving financial productivity, mental home legal rights, privateness safety, and affordability of and accessibility to information. Options made now will have lengthy long lasting repercussions, and attention must be paid out to their social and economic impacts.
A single of the most significant results of the development of details technology is probably digital commerce in excess of the Internet, a new way of conducting business. Though only a handful of years previous, it may radically change economic routines and the social environment. Presently, it impacts such big sectors as communications, finance and retail trade and may possibly broaden to areas this kind of as schooling and overall health services. It implies the seamless application of info and communication technologies along the whole benefit chain of a organization that is executed electronically.
The impacts of info engineering and electronic commerce on organization models, commerce, market place structure, place of work, labour marketplace, schooling, private daily life and culture as a entire.
1. Company Models, Commerce and Marketplace Composition
One particular critical way in which details technologies is affecting work is by decreasing the importance of distance. In many industries, the geographic distribution of operate is altering considerably. For instance, some computer software corporations have discovered that they can conquer the restricted local market for application engineers by sending projects to India or other nations in which the wages are significantly reduce. Furthermore, this kind of arrangements can consider benefit of the time variations so that essential initiatives can be worked on nearly around the clock. Companies can outsource their producing to other nations and count on telecommunications to maintain marketing, R&D, and distribution teams in shut contact with the producing teams. Thus the engineering can allow a finer division of labour amongst nations, which in change impacts the relative need for various skills in every single country. The technology enables a variety of varieties of perform and employment to be decoupled from a single another. Corporations have higher liberty to identify their financial pursuits, creating higher competition between regions in infrastructure, labour, cash, and other useful resource markets. It also opens the doorway for regulatory arbitrage: corporations can more and more choose which tax authority and other restrictions apply.
Pcs and interaction systems also advertise a lot more market-like varieties of generation and distribution. An infrastructure of computing and interaction technological innovation, delivering 24-hour accessibility at low price to nearly any kind of cost and merchandise info sought after by purchasers, will minimize the informational barriers to efficient market place procedure. This infrastructure might also give the implies for effecting actual-time transactions and make intermediaries this kind of as revenue clerks, inventory brokers and journey agents, whose function is to supply an vital data link in between buyers and sellers, redundant. Removal of intermediaries would decrease the expenses in the production and distribution value chain. The info technologies have facilitated the evolution of enhanced mail order retailing, in which products can be requested quickly by making use of telephones or laptop networks and then dispatched by suppliers by means of integrated transportation firms that count extensively on computers and interaction systems to management their functions. Nonphysical merchandise, such as software program, can be delivered electronically, reducing the whole transportation channel. Payments can be accomplished in new methods. The result is disintermediation through the distribution channel, with cost reduction, decrease conclude-client charges, and larger earnings margins.
The impact of details technological innovation on the firms’ value structure can be greatest illustrated on the electronic commerce illustration. The essential locations of cost reduction when carrying out a sale via digital commerce relatively than in a standard retailer require physical establishment, purchase placement and execution, consumer support, strong, stock carrying, and distribution. Although setting up and preserving an e-commerce world wide web website may well be expensive, it is surely much less pricey to keep this sort of a storefront than a physical one particular since it is always open, can be accessed by millions close to the world, and has couple of variable expenses, so that it can scale up to meet the demand from customers. By preserving 1 ‘store’ rather of several, duplicate inventory fees are removed. In addition, e-commerce is really efficient at decreasing the fees of attracting new consumers, since marketing is usually more affordable than for other media and much more focused. In addition, the digital interface enables e-commerce merchants to check that an order is internally consistent and that the order, receipt, and bill match. By way of e-commerce, firms are capable to transfer a lot of their customer assistance on line so that buyers can accessibility databases or manuals directly. This considerably cuts costs whilst normally enhancing the top quality of service. E-commerce outlets demand much much less, but large-experienced, employees. E-commerce also permits financial savings in stock carrying fees. The more rapidly the enter can be ordered and sent, the much less the require for a large stock. The effect on costs associated with lowered inventories is most pronounced in industries exactly where the merchandise has a restricted shelf life (e.g. bananas), is subject to quickly technological obsolescence or cost declines (e.g. pcs), or the place there is a quick flow of new goods (e.g. books, tunes). Although shipping and delivery charges can boost the price of numerous items bought by means of digital commerce and incorporate significantly to the ultimate price, distribution charges are significantly diminished for electronic merchandise these kinds of as economic services, application, and journey, which are important e-commerce segments.
Even though digital commerce causes the disintermediation of some intermediaries, it creates higher dependency on others and also some entirely new middleman capabilities. Between Cyber Security that could include fees to e-commerce transactions are promoting, safe on-line payment, and shipping. The relative relieve of turning into an e-commerce merchant and placing up shops benefits in such a enormous variety of choices that customers can very easily be confused. This boosts the relevance of using advertising and marketing to build a manufacturer name and as a result make client familiarity and trust. For new e-commerce start-ups, this approach can be pricey and represents a considerable transaction expense. The openness, world-wide attain, and absence of physical clues that are inherent attributes of e-commerce also make it vulnerable to fraud and hence improve specified costs for e-commerce merchants as in contrast to conventional merchants. New tactics are currently being designed to defend the use of credit rating playing cards in e-commerce transactions, but the want for greater protection and user verification qualified prospects to elevated expenses. A essential attribute of e-commerce is the convenience of getting buys sent straight. In the circumstance of tangibles, these kinds of as books, this incurs shipping and delivery costs, which cause charges to rise in most cases, therefore negating many of the cost savings connected with e-commerce and substantially introducing to transaction fees.
With the World wide web, e-commerce is rapidly expanding into a fast-shifting, open global industry with an at any time-escalating number of contributors. The open and global mother nature of e-commerce is most likely to improve industry dimensions and alter industry construction, the two in phrases of the number and dimension of players and the way in which gamers compete on intercontinental markets. Digitized goods can cross the border in real time, buyers can shop 24 several hours a working day, seven days a week, and firms are progressively faced with worldwide on-line competitiveness. The Net is assisting to enlarge present markets by slicing through several of the distribution and marketing and advertising limitations that can avert companies from gaining accessibility to international marketplaces. E-commerce lowers details and transaction expenses for functioning on overseas marketplaces and supplies a low cost and successful way to reinforce client-supplier relations. It also encourages firms to build revolutionary ways of promoting, providing and supporting their product and services. Whilst e-commerce on the Net offers the likely for international marketplaces, particular aspects, this sort of as language, transportation charges, local status, as properly as variations in the expense and relieve of access to networks, attenuate this potential to a increased or lesser extent.
two. Place of work and Labour Industry
Computer systems and conversation systems permit men and women to connect with 1 yet another in methods complementary to traditional face-to-face, telephonic, and composed modes. They enable collaborative function involving dispersed communities of actors who rarely, if ever, satisfy bodily. These technologies use conversation infrastructures that are the two international and often up, hence enabling 24-hour activity and asynchronous as properly as synchronous interactions between folks, groups, and businesses. Social conversation in companies will be influenced by use of personal computers and conversation technologies. Peer-to-peer relations across division lines will be improved by means of sharing of info and coordination of actions. Conversation in between superiors and subordinates will turn out to be more tense simply because of social handle issues lifted by the use of computerized monitoring programs, but on the other hand, the use of e-mail will reduced the boundaries to communications throughout various standing amounts, ensuing in far more uninhibited communications among supervisor and subordinates.
That the significance of distance will be reduced by computers and conversation engineering also favours telecommuting, and therefore, has implications for the home patterns of the citizens. As employees locate that they can do most of their perform at property rather than in a centralized place of work, the demand for residences in climatically and physically attractive locations would improve. The consequences of these kinds of a shift in employment from the suburbs to much more remote places would be profound. Residence values would increase in the favoured locations and tumble in the suburbs. Rural, historic, or charming elements of daily life and the environment in the newly appealing places would be threatened. Considering that most telecommuters would be between the far better educated and higher compensated, the demand in these locations for large-earnings and high-status providers like connoisseur restaurants and clothing boutiques would improve. Also would there be an growth of services of all varieties, creating and growing task chances for the neighborhood inhabitants.
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With the end of the financial year looming, many business owners will reviewing their systems and procedures in preparation for the coming year. Some may be considering a financial management system to help them better manage income and expenses.
However, financial management systems come in all shapes and sizes and it’s important to fully understand the purpose of them and which systems will work best in your business.
What is a financial management system?
A financial management system is the methodology and software that an organisation uses to oversee and govern its income, expenses, and assets with the objectives of maximising profits and ensuring sustainability.
An effective financial management system:
- Improves short- and long-term business performance by streamlining invoicing and bill collection
- Eliminates accounting errors
- Minimises record-keeping redundancy
- Ensures compliance with tax and accounting regulations
- Helps personnel to quantify budget planning
- Offers flexibility and expandability to accommodate change and growth.
What are the different financial management systems?
There are three main types of financial management systems. These are:
- Financial accounting
- Managerial accounting
- Corporate finance
Financial accounting is a part of financial information systems that provide income statements, balance sheets, and statement of cash flows to creditors, investors, and taxing authorities. These reports are monthly outputs that create the ability for decision makers to determine financial trends relating to the business.
Managerial accounting is a system that provides information internally to individuals and businesses. These are generally not released to the public and are only for internal use only. Decision makers can simply request data they wish to see and ask for a specific format, if necessary.
Corporate finance is a part of financial management systems that resides outside of the normal accounting information systems. These include budgeting, financial analysis, forecasting, and performance metrics, among others. The activities in this system take accounting information to create necessary reports. The main purpose of corporate finance, is to provide a road map or plans for a company’s future activities.
Not all financial management systems include the same activities. A small business will not have the same needs as a much larger organisation in terms of financial management. Creating a specific system tailored for the company’s needs is what sets these systems apart from others.
If you have further questions or would like to develop an effective financial management system in your business, talk to your local First Class Accounts consultant today on 1800 082 066 or by visiting www.firstclassaccounts.com
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Startup capital is money used to start a business and get it functioning. There are a number of sources for such capital, including bank loans, investors, and personal loans from family and friends. It can take the form of debt or equity capital, depending on how a startup is organized and what kinds of options are available. These funds are also known as seed money or seed capital, and they are an important part of developing the concept for a business into a working reality.
In the case of debt capital, the startup capital is a debt that must be repaid. Businesses seeking funding through debt capital need to demonstrate with their business plans that they have the capability to repay the funds on a reasonable schedule, and they will also pay interest and other fees associated with the loans. Banks provide loans and people may also get loans from friends, families, and government lending programs designed to create business incentives.
Equity capital is money given to a business venture in exchange for a share in the venture. Investors and venture capitalists often provide funding in the case of equity capital. The size of the share in the business is negotiated in the process of discussing the amount of funds being contributed. Equity capital has the advantage of not requiring repayment over time, but it may also result in having less control over a business. While negotiating this type of startup capital, people also need to think in the long term when considering how to divide shares in the business.
People preparing to start new businesses generally must estimate how much money they need to get the business started, considering immediate expenses like setting up premises, along with short-term funding needs to keep the business going until money starts coming in. Consultants may be used to develop a reasonable and accurate estimate. This estimate is taken to potential sources of startup capital to negotiate loans or investments and is accompanied with business projects to give people an idea of the kind of returns they can expect.
Businesses may require multiple funding rounds to be successful. It is not uncommon for two or three rounds of funding to be solicited before a business gets off its feet, especially if the business concept is ambitious or complicated. Investors and lenders try to expect the unexpected when it comes to startup capital needs so they are not surprised if the costs of starting the business run over the original estimate.
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Peru’s cocoa production has tripled since 2008, with exports reaching $200 million in 2016—the most dramatic increase among the world’s top cocoa producers. What accounts for this transformation? Having witnessed it first-hand, I believe that the recent success of Peru’s cocoa sector is the result of two factors: a shared commitment among key actors to improve the well-being of farmers, as well as a clear strategy to engage the entire cocoa value chain, from farm to market.
The rise of Peru’s cocoa sector has to be understood as part of the country’s alternative development strategy for areas that had previously produced coca, the leading ingredient in cocaine. This three-pronged approach focused on the substitution of illicit crops, improved government services, and investments in infrastructure. Its objective was to show farmers that they could improve their well-being by giving up their coca plants.
Investments made by the Peruvian government and partner governments, such as the United States and the European Union, have made it possible to establish a vibrant, licit, and agriculture-led economy in these areas, with the cocoa, oil palm, and coffee value chains spearheading the change. But the impact of projects aimed at replacing illicit crops would have been limited without the alignment of the project objectives and activities with those of national and local public institutions providing services and infrastructure in the area.
Unlike many traditional agricultural projects, efforts to boost Peru’s cocoa sector have focused not only on farms, but in the development of strong linkages between producers and their markets. To achieve this, investments by government and donors have concentrated on improving planting and productivity at the farm level, aggregating production through cooperatives or commercial blocks, and promoting Peruvian cocoa in local and international markets.
On the agricultural front, simple techniques to improve productivity, such as TAPS (the Spanish acronym for Synchronized Fertilization and Pruning) have helped to increase average productivity in alternative development areas to close to 1,000 kg per hectare of dry beans. Cooperatives are exporting directly to customers overseas, and smaller co-ops are forming commercial blocks in order to increase volumes and reach better customers. Finally, improvements in post-harvest infrastructure and fermentation techniques have helped access markets demanding higher quality.
On the marketing level, Peruvian cocoa has benefited from the development of a solid, growing artisan chocolate sector and promotion events in Peru that attract numerous foreign artisan chocolate manufacturers and buyers. This, coupled with participation at international venues, and recognition won by Peruvian-made chocolates, has increased buyers’ interest in Peru’s cocoa.
One example of this “whole value chain approach” is the Economic Development Alliance project in the region of San Martin, funded by USAID and others—including the World Cocoa Foundation—and implemented by TechnoServe. In collaboration with local, regional, and national government institutions, the project worked with over 20,000 cocoa producers between 2011 and 2017. Farmers in the program increased their productivity and household incomes by 30 percent, and participant producer associations achieved annual export sales of $12 million. The project promoted over 50 artisan chocolate ventures led by women in the region and worked to consolidate a support platform made up of the various private and public stakeholders to promote Peruvian cocoa at the local and international level.
As a result of this and other similar projects, over 60,000 ha of cocoa have been planted, mostly in alternative development areas of Peru. Exports will continue to grow as new areas come into production over the next five years. Through continued cooperation and carefully designed support, Peru’s cocoa sector can continue to flourish.
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So much these days is written about entrepreneurship, but perhaps too little is written about the entrepreneur. What is an entrepreneur exactly?
In fact the word itself has seen dramatically increasing popularity in recent years, probably due, in large part, to colleges adopting entrepreneurship programs of study. But how do we define entrepreneur in dictionary terms?
The commonly accepted definition is: a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so. That sounds so simple and easy to understand, doesn’t it? I submit that starting a business involves much more than this conventional definition.
After dealing with business startups for many years I have found that it is definitely not for the faint of heart, especially in this fast paced, hyper-competitive environment that characterizes today’s business climate.
Entrepreneurs have hundreds of things to consider, but let’s start at the beginning. First, there are character traits to consider. The traits that most often are noticeable in business startup founders are ambition and commitment. Ambition manifests itself in a strong desire to achieve or be successful and commitment is most often seen in unwavering determination to be successful. Needless to say, there are other qualities that are frequently exhibited by the founder of a successful startup such as drive, persistence, flexibility, and passion.
Okay, you say, everyone recognizes those necessary qualities but a lot of people have them. Exactly, that is the reason that this business-startup business is not for the faint of heart, because there are dozens if not hundreds of other considerations standing in the path to success.
Let’s start with product or service. Creating a unique offering often depends on a unique idea. And many people have an interesting idea almost every day, but is it something that can be created and sold? This is where the hard work comes in and is often overlooked. Customer discovery is finding out if you have a solution to a problem or an excellent opportunity that people will actually pay for. The only way that really works well is to go out and ask people — lots of people.
Now that you’ve found a product or service that people need the fun has just begun, considerations that must be brought to bear at this point are voluminous. Start with market research — how will you get the product to market and who exactly is your market? Now, how about a prototype to actually test market? And how are you going to finance this startup, where will the money come from? And how will you organize? — as a sole proprietor, an LLC, or will you incorporate? And where will you find your skilled employees to help you get the business off the ground? And how about pricing, engineering, distribution, legal, accounting, insurance, regulations, production, warehousing, shipping, receiving and more?
The point here is simple: over half of new business startups fail in the first five years and for good reason. Many of the above referenced considerations are overlooked, under considered, and inadequately planned for. Some of the best advice for a new business founder is to find a really good mentor that can regularly act as a sounding board and keep the entrepreneur on the right path.
Although startups are not for everyone, they can be tremendously rewarding — both personally and financially. Choosing the right team and seeking the advice that is readily available in the entrepreneurial ecosystem is so important to success.
article originally published in the BJNN
By Paul Brooks, a business advisor at the Small Business Development Center (SBDC) at Onondaga Community College. Contact him at [email protected]
We are currently offering clients the option to have appointments virtually, by phone, or in person BY APPOINTMENT ONLY (following CDC Guidelines).
Read articles and advice written by our very own Onondaga SBDC Business Advisors!
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The business improvement district model first emerged in 1969 in Toronto,
Canada, and arrived to the United States in 1974 (Morcol, 2008). Its
development was preceded by years of private-sector efforts to revitalize
urban commercial districts. These organizing efforts first began as voluntary
membership associations among business and property owners to address the
challenges pressed on urban commercial centers by growing suburbanization.
In the 1950s, families, businesses and commercial activity began migrating
out of urban centers to nearby suburban communities, compelled by mass
construction of new single-family homes following the World War 2 baby
boom, highway expansion, and decreases in the cost of car ownership. In
these suburban communities, new forms and environments of suburban
retail emerged, including the strip mall, while businesses relocated their
downtown operations to office parks surrounded by acres of parking spaces.
Suburbanization and out-migration left urban centers neglected, and
declining tax bases made it difficult to deal with growing crime and poverty
that quickly reshaped public perception of cities as dirty and unsafe. Urban
renewal projects and investments in social services attempted to stem these
effects, but they were unsuccessful in fully restoring urban communities.
During this period, voluntary membership organizations—business owners
associations and downtown councils—used marketing and promotional
activities, such as fairs, window displays, parades, and coupon books, in an
attempt to restore declining commercial activity and maintain property values
in their districts. As these associations matured, organizers recognized that
many property owners within their districts reaped benefits from the collective
effort, but did not contribute to the activities or financing that kindled growth
in retail sales and commercial property values.
In the 1960s in Toronto, Canada, business owners coalesced around a formal
membership organization to eliminate the free rider problem (Morcol, 2008).
Given existing financial contributions made by local businesses to pay for
new services and programming, organizers explored a legal framework to levy
an additional assessment on business owners within the district. In 1969, the
enabling legislation was passed in Toronto. In five years time, the businessbased
assessment district model arrived to the United States in 1974.
The Emergence of BIDs in California and San Francisco
Business based special assessment districts focused on commercial district
revitalization, first emerged in California with the Parking and Business
Improvement District Law of 1989, which allowed cities to establish
parking and business improvement areas as a way to levy assessments on
business owners. These assessments could then be used to finance a limited
range of improvement activities. To counteract the shortfalls of the 1989
law, the Downtown Economic Improvement Coalition lobbied successfully
for a supplemental statue allowing for both property and business-based
assessments, and an expanded list of authorized expenditures necessary to
address the multidimensional challenge of improving urban centers (Olson,
R., J., & Keys, L, 2008). Following the passage of the California Property
and Business Improvement District Law of 1994 (California Streets and
Highways Code 36600 et seq.), property-based special assessment districts
focused on commercial district improvements emerged in California.
In 2004 The City and County of San Francisco, acting under its authority
as a Charter City, augmented the CA Property and Business Improvement
District Law of 1994 with the passage of Article 15 of the San Francisco
Business and Tax Regulations Code. Article 15 lengthened the initial term
that a district could be in place from 5 to 15 years and lowered the weighted
petition threshold required to initiate the legislative approval process and the
special ballot election from 50% to 30%. This legislation, combined with a new
technical assistance program initiated by then Mayor Gavin Newsom through
the Office of Economic and Workforce Development, was instrumental in
easing the process for the formation of new PBID districts in San Francisco.
Prior to 2004, San Francisco had only one PBID district in the Union
Square neighborhood, but in 2005 alone, 5 new districts were established.
Rapid growth of PBIDs in San Francisco, locally referred to as Business
Improvement Districts (BIDs) or Community Benefit Districts (CBDs),
continued through 2008, when a total of 10 districts were in operation. As
of the issuance of this report in 2012, 12 CBD/BID districts have formed in
San Francisco, representing the diversity of the City’s vibrant neighborhood
CBDs/BIDs established in San Francisco under The CA PBID Law of 1994,
as augmented by Article 15 are subject to the following requirements:
- Districts may provide services that include safety, maintenance,
marketing, capital improvements, economic development, and special
events. Authorized services may be funded by property and or business
- A portion of the annual services budget may also be required to come
from non-assessment revenues based on an analysis of the separation
and proportionality of general benefits from the special benefits
conferred onto the parcels and businesses assessed. The formation of
a district requires petition support from property and business owners
responsible for contributing at least 30% of the total assessment budget.
- Following the petition process, a special ballot election occurs for
45 days. More than 50% of the returned weighted ballots must be
in support of the district for the Board of Supervisors to vote on its
- Noticing to all merchants within the proposed district must be provided
in multiple languages during the ballot phase.
- Once the district has formed, the Management Corporation Board,
a body responsible for overseeing the district, must maintain district
merchant representation—those who do not own property—that is
equal to 20% of the total board.
- District meetings and hearing are pursuant to the California Ralph M.
Brown Act (Government Code sec. 54950 et seq.), as well as public
records to the California Public Records Act (Government Code sec.
6250 et seq.).
- The term of a district may last up to 15 years, however, per a 2012
amendment to Article 15, those which levy bonds may have a term of
up to 40 years.
The information above was taken directly from
Impact Analysis of San Francisco’s
Property & Business Improvement
Fall 2012 by Stanley Ellicott and Lisa Pagan
Morcol, G. (2008). Business improvement districts research, theories, and
controversies. Boca Raton, FL: Auerbach.
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Photo (above) by JACK DELANO. Arecibo, Puerto Rico (vicinity). Sugar cane workers on a plantation (1941)
- Alternative Economies
- Bond markets
- Colonial capitalism
- Enslavement and Slavery
- Extractive economies
- Hedge or Vulture Funds
- Pension debt
Unit 1. Understanding Debt
The opening unit provides an introduction to consider the concept and history of debt, the general state of debt in the Caribbean, and the implications of this present state of affairs for the region’s future.
- What are the politics of debt?
- How and when did debt first appear as a form of politics in the Caribbean?
- How has debt complicated the history of the Caribbean and what might be its effects on the region’s future?
David Graeber, Debt: The First 5,000 Years (Brooklyn: Melville House, 2014).
Keith Hart, “The Anthropology of Debt,” Journal of the Royal Anthropological Institute, 2016, 22: 415-421.
Miranda Joseph, Debt to Society: Accounting for Life under Capitalism (University of Minnesota Press, 2014).
Odette Lienau, Rethinking Sovereign Debt: Politics, Reputation, and Legitimacy in Modern Finance (Harvard University Press, 2014).
Susana Narotzky and Niko Besnier, “Crisis, Value, and Hope: Rethinking the Economy,” Current Anthropology 55 (supplement 9): S4-S16, Aug 2014.
Horacio Ortiz, “The Limits of Financial Imagination: Free Investors, Efficient Markets, and Crisis,” American Anthropologist, 2014, 116(1): 38-50.
Bartholomew Paudyn, Credit Ratings and Sovereign Debt: The Political Economy of Creditworthiness through Risk and Uncertainty (Palgrave, 2014).
Gustav Peebles, “The Anthropology of Credit and Debt,” Annual Review of Anthropology, 2010, 39: 225-240.
Stuart Hall, Familiar Stranger: A Life Between Two Islands (Durham: Duke University Press, 2017).
Michel-Rolph Trouillot, Global Transformations: Anthropology and the Modern World (Palgrave Macmillan, 2003).
Carl Wennerlind, Casualties of Credit: The English Financial Revolution (Harvard University Press, 2011).
Promises, Promises, A History of Debt, 10-part radio program produced by BBC (2017).
Unit 2. Debt and Theft in the Contact Period (1492-1700)
Colonial economies were designed to take goods and profits out of the Caribbean, and coloniality was based on consuming Caribbean nature, bodies, labor, land, and culture. This unit examines the relationship between colonization, genocide, European wealth creation, and debt.
- How did colonialism and colonial economics play a part in debt creation?
- How did genocide of indigenous groups create wealth?
- How and by whom were these policies and frameworks justified?
Francis Barker, Peter Hulme, and Margaret Iversen (eds), Cannibalism and the Colonial World (Cambridge University Press, 1998).
Eduardo Galeano, Open Veins of Latin America: Five Centuries of the Pillage of a Continent. (Monthly Review Press, 1973).
Peter Hulme, Colonial Encounters: Europe and the Native Caribbean, 1492-1797 (Routledge, 1992).*
Melanie Newton, “The Race Leapt At Sauteurs: Genocide, Narrative and Indigenous Exile from the Caribbean,” Caribbean Quarterly (Special issue on the Garifuna People), 60(2): 5-28, June 2014.
Lizabeth Paravisni-Gebert, “Extinctions: Chronicles of Vanishing Fauna in the Colonial and Post-Colonial Caribbean.” In The Oxford Handbook of Ecocriticism, 340-357. Edited by Greg Garrard (Oxford University Press, 2014).
Irving Rouse, The Tainos: Rise and Decline of the People who Greeted Columbus (New Haven, 1992).
Francisco Scarano, “Imperial Decline, Colonial Adaptation: The Spanish islands During the Long 17th Century.” in The Caribbean: A History of the Region and Its People, Stephan Palmié and Francisco Scarano, ed (University of Chicago Press, 2013).
Mimi Sheller, Consuming the Caribbean: from Arawaks to Zombies (Routledge, 2003).
Jalil Sued Badillo, “From Tainos to Africans in the Caribbean: Labor, Migration and Resistance” in The Caribbean: A History of the Region and Its People, Stephan Palmié and Francisco Scarano, ed. (University of Chicago Press, 2013).
Leif Svalesen. The Slave Ship Fredensborg (Indiana University Press, 2000).
Paul Thomas, “The Caribs of St. Vincent: A Study in Imperial Maladministration,” in Caribbean Slave Society and Economy, Hilary Beckles and Verene Shepard, ed. (New Press, 1993).
Samuel M. Wilson, Hispaniola: Caribbean Chiefdoms in the Age of Columbus (University of Alabama Press, 1990).
“The Taste for Human Commodities: Experiencing the Atlantic System,” in Stephan Palmié, ed., Slave Cultures and the Cultures of Slavery, pp. 40-54 (Knoxville: University of Tennesee Press, 1995).
Fray Agustín Iñigo Abad y Lasierra, Chapter XXX: “Carácter y diferentes castas de los habitantes de la isla de San Juan de Puerto-Rico” Historia geográfica, civil y natural de la isla de San Juan Bautista de Puerto Rico (1788 / 1979) Río Piedras: Editorial de la Universidad de Puerto Rico.
Bartolomé de Las Casas, A Brief Account of the Destruction of the Indies (Project Gutenberg EBook: 2007)
Stafford C.M. Poole, ed. In Defense of the Indians The Defense of the Most Reverend Lord, Don Fray Bartolome de Las Casas, of the Order of Preachers, Late Bishop of Chiapa, Against the Persecutors and Slanderers of the Peoples of the New World Discovered Across the Seas (Northern Illinois University Press, 1974).
Unit 3: From Bitter Sugar to Troubling Freedom: Slavery and Emancipation
The profits of slavery are directly traceable to specific families, companies and banks. When slavery was finally abolished, slave owners were paid “compensation” for their lost “capital investment,” but emancipated people were given nothing in return for their lost lives, labor, and suffering.
- Who profited from slavery?
- Why is the transition from enslavement to freedom “troubled”?
- What are the colonial legacies of slave ownership and huge payouts after abolition to slave owners and others?
Hilary Beckles and Verene Shepherd, eds., Caribbean Slave Society and Economy: A Student Reader (Jamaica and London, 1991).
Hilary Beckles, Natural Rebels: A Social History of Enslaved Black Women in Barbados (Rutgers University Press, 1989).
Hilary Beckles and Andrew Downes, “The Economics of Transition to the Black Labor System in Barbados,” Journal of Interdisciplinary History, 1987, 18(2): 225-247.
Thomas Bender, ed., The Antislavery Debate: Capitalism and Abolitionism as a Problem in Historical Interpretation (University of California Press, 1992).
William Darrity, Jr., “British industry and the West Indies plantations,” Social Science History, 1990, 14(1):117-149.
Howard Dodson, “How Slavery Helped Build a World Economy,” National Geographic, February 2003.
Richard S. Dunn, Sugar and Slaves: The Rise of the Planter Class in the English West Indies, 1624-1713 (University of North Carolina Press, 1966).
Ada Ferrer, Freedom’s Mirror: Cuba and Haiti in the Age of Revolution (Cambridge University Press, 2014).
Catherine Hall, Nicholas Draper, Keith McClelland, Katie Donnington and Rachel Lang, Legacies of British Slave-ownership: Colonial Slavery and the Formation of Victorian Britain (Cambridge University Press, 2014)
Saidiya V. Hartman, Scenes of Subjection: Terror, Slavery, and Self-Making in Nineteenth-Century America (New York: Oxford University Press, 1997).
Thomas C. Holt, The Problem of Freedom: Race, Labor, and Politics in Jamaica and Britain, 1832-1938 (Johns Hopkins University Press, 1992).
Aaron Kamugisha, “The Black Experience of New World Coloniality” Small Axe, 49 (March 2016).
Natasha Lightfoot, Troubling Freedom: Antigua and the Aftermath of British Emancipation (Durham, NC: Duke University Press, 2015).
Bernard Moitt, Women and Slavery in the French Antilles, 1635-1848 (Indiana University Press, 2001).
Lizabeth Paravisini-Gebert, “Bitter Sugar: Teaching the Caribbean Plantation through the Arts.” In Re-imagining the Caribbean: Teaching Creole, French and Spanish Caribbean Literatures. Edited by Sandra Cypess and Valérie K. Orlando. (Lanham, MD: Lexington Books, 2014).
Francisco A. Scarano, Sugar and Slavery in Puerto Rico: The Plantation Economy of Ponce, 1800- 1850 (University of Wisconsin Press, 1984).
Christopher Schmidt-Nowara, “A Second Slavery?: The 19th Century Sugar Revolutions in Cuba and Puerto Rico.” Francisco Scarano, “Imperial Decline, Colonial Adaptation: The Spanish islands During the Long 17th Century.” The Caribbean: A History of the Region and Its People Eds. Stephan Palmié and Francisco Scarano (University of Chicago Press, 2013).
Stephanie E. Smallwood, Saltwater Slavery: A Middle Passage from Africa to American Diaspora (Cambridge: Harvard University Press, 2008)
Richard Sheridan, Sugar and Slavery: An Economic History of the British West Indies, 1623-1775 (University of the West Indies Press, 1973).
Rebecca J. Scott, “Explaining Abolition: Contradiction, Adaptation, and Challenge in Cuban Slave Society, 1860-86,” in Caribbean Slave Society and Economy, Hilary Beckles and Verene Shepard, ed. (New Press, 1993).
David Olusoga “The History of British Slave Ownership has been buried: Now its scale can be revealed.” The Guardian. 11 July 2015
Manning Sanchez. “Britain’s colonial shame: Slave-owners given huge payouts after abolition.” The Independent, 23 February 2013.
James Williams, A Narrative of the Events since the First of August, 1834 by James Williams, an Apprenticed Labourer in Jamaica. (1837). Ed. Diana Paton. (Duke University Press, 2001)
Ashton Warner, Negro Slavery Described by a Negro, Being the Narrative of Ashton Warner, a Native of St. Vincent. Ed. Susanna Strickland. (Samuel Maunder, 1831).
“How Many Britons are descended from slave owners?” BBC News, 27 Feb 2013.
UCL Centre for the Studies of the Legacies of British Slave Ownership
UNIT 4: INTIMATE BONDS AND BONDED LABOR: INDENTURE AND DEBT PEONAGE IN THE CARIBBEAN
Andrea Chung, “’Im Hole ‘Im Cahner,’” 2008, photo cut out, 24 x 17 inches
In response to the lacuna in the European colonial archive of indenture, this unit considers how Caribbean diasporic intellectuals and artists have represented the lived experience of the institution. Indenture forms part of the long history of unfree labor that began with seventeenth-century debt peonage from Europe and re-emerged in a new form after abolition when hundreds of thousands of Asians, from British India and China, were imported to perform agricultural labor across the hemisphere. An experience colored by abuse, fugitivity, and suicide, the entanglement of debt, race and labor, also includes smaller waves of indentured African and Javanese migrants who were conscripted into unfree plantation economies after emancipation.
- How do the descendants of indenture mourn and mediate the lived experience of the institution and represent its afterlife?
- In the mosaic of unfree labors that shaped the hemisphere, how do race and language play a role in approaches to analyzing indenture in relation to enslavement and blackbirding?
- In what present forms does debt bondage continue in the Caribbean?
Bahadur, Gaiutra. Coolie Woman: The Odyssey of Indenture. University of Chicago Press, 2014.
Goffe, Tao Leigh. “Albums of Inclusion: The Photographic Poetics of Caribbean Chinese Visual Kinship.” Small Axe July 2018; 22 (2 (56)): 35–56.
Hu-DeHart, Evelyn. “Indispensible Enemy of Convenient Scapegoat? A Critical Examination of Sinophobia in Latin America and the Caribbean, 1870s to 1930s.” in “Ed. Look Lai Walton and Tan, Chee-Beng, The Chinese in Latin American and the Caribbean, Brill, 2010.
Jung, Moon-Ho. “Coolie.” In Keywords in American Cultural Studies, edited by Bruce Burgett and Glenn Hendler, 64-65. New York: New York University Press, 2007.
Kempadoo, Kamala. “’Bound Coolies’ and Other Indentured Workers in the Caribbean: Implications for Debates about Human Trafficking” Anti-Trafficking Review, (9) 2017.
Look Lai, Walton. Indentured Labor, Caribbean Sugar: Chinese and Indian migrants to the British West Indies, 1838-1918, Baltimore: Johns Hopkins University Press, 1993.
Lowe, Lisa. “The Intimacies of Four Continents.” In Haunted By Empire, edited by Ann
Stoler. Durham, NC: Duke University Press, 2006.
Shepherd, Verene. Transients to Settlers: The Experience of Indians in Jamaica 1845–1950: East Indians in Jamaica in the Late 19th and Early 20th Century, Peepal Tree Press, 1994.
Ed. Torabully, Khal and Carter, Marina. Coolitude: An Anthology of the Indian Labour Diaspora, Anthem Press, 2002.
Yun, Lisa. The Coolie Speaks: Chinese Indentured Laborers and African Slaves in Cuba. Philadelphia: Temple University Press, 2008.
PRIMARY SOURCES/ MULTIMEDIA
Ed. Dabydeen, David Kaladeen, Maria del Pilar & Ramnarine, Tina K. We Mark Your Memory: Writings from the Descendants of Indenture, 2018.
Ed. Denise Helly, Cuba Commission Report, 1876.
Jenkins, Edward. The Coolie: His Rights and Wrongs, 1871.
Fung, Richard. My Mother’s Place. DVD, 1990.
García, Cristina. Monkey Hunting, 2003.
Powell, Patricia. The Pagoda. New York: Alfred A. Knopf, 1998.
ADDITIONAL SOURCES (for end bibliography)
Wong, Edlie L. ”Storytelling and the Comparative Study of Atlantic Slavery and Freedom.” Social Text December 2015; 33 (4 (125)): 109–130.
Siu, Lok. Memories of a Future Home: Diasporic Citizenship of Chinese in Panama. Stanford University Press, 2007.
Tjon Sie Fat, Paul. “Old Migrants, New Immigration and Anti-Chinese Discourse in Suriname.” in “Ed. Look Lai, Walton and Tan, Chee-Beng, The Chinese in Latin American and the Caribbean, Brill, 2010.
Schuler, M. “Alas, alas, Kongo”: a Social History of Indentured African Immigration into Jamaica, 1841-1865. Johns Hopkins University Press, 1980.
Murphy, Angela (2016). ‘This foul slavery-reviving system’: Irish opposition to the Jamaica Emigration Scheme. Slavery & Abolition, 37(3), 578-598.
Mohabir, Nalini. “Picturing an Afterlife of Indenture.” Small Axe, July 2017; 21 (2 (53)): 81–93.
Robert Wesson, ed., Communism in Central America and the Caribbean (Stanford: Hoover Institution Press, 1982).
Eric Williams, Capitalism and Slavery (University of North Carolina Press, 1944).
Kevin Yelvington, Producing power: Ethnicity, gender, and class in a Caribbean workplace (Temple University Press, 2010).
Unit 5: Nation-building, sovereignty and inequality
Beginning in the late eighteenth century, new political actors across the Caribbean emerged to contest European colonial rule. From the the Haitian Revolution (1791-1804) and the founding of the Republic of Haiti to the Cuban wars of independence culminating in the Spanish-Cuban-American War (1898), new and old colonial powers deployed debt as a form of power to limit Caribbean sovereignty and access to resources.
- What role did debt play in the struggles for independence and Caribbean nation-building processes?
- How did economic inequality affect the economic and political development of Caribbean nations?
- What was the impact of colonial institutions in the state building process and how did these help or hinder these processes?
Kristy A. Belton, Statelessness in the Caribbean: The Paradox of Belonging in a Postnational World (University of Pennsylvania Press, 2017).
Nigel Bolland, The Politics of Labour in the British Caribbean: The Social Origins of Authoritarianism and Democracy in the Labour Movement, 1934-54 (Ian Randle Publishers, 2001).
Yarimar Bonilla, Non-Sovereign Futures: French Caribbean Politics in the Wake of Disenchantment (University of Chicago Press, 2015).
Pedro Cabán, Constructing a Colonial People: The United States and Puerto Rico, 1898-1932 (Westview Press, 1999).
CENTRO: Journal of the Center for Puerto Rican Studies, Spring 2013, XXV, 1, Special Section on: Puerto Rico, the United States and the Making of a Bounded Citizenship, Pedro Cabán, Ed.
Norman Girvan, Foreign Capital and Economic Underdevelopment in Jamaica (Institute of Social and Economic Research, University of the West Indies, 1971).
Peter James Hudson, Banker and Empire: How Wall Street Colonized the Caribbean (University of Chicago Press, 2018).
Franklin W. Knight, The Caribbean: The Genesis of a Fragmented Nationalism, 2nd. ed. (Oxford University Press, 1991).
Anne Macpherson, “Toward Decolonization: Impulses, Processes and Consequences since the 1930s,” in The Caribbean: A History of the Region and Its People, Stephan Palmié and Francisco Scarano, ed (University of Chicago Press, 2013).
Frances Negrón-Muntaner, “The Look of Sovereignty: Style and Politics in the Young Lords,” in Sovereign Acts: Contesting Colonialism Across Indigenous Nations and Latinx America, Frances Negrón-Muntaner, ed. (University of Arizona Press, 2017).
Francisco Scarano, “Imperial Decline, Colonial Adaptation: The Spanish islands During the Long 17th Century” in The Caribbean: A History of the Region and Its People, Stephan Palmié and Francisco Scarano, ed. (University of Chicago Press, 2013).
Deborah A. Thomas. Modern Blackness: Nationalism, Globalization, and the Politics of Culture in Jamaica. (Duke University Press, 2004).
Marion Werner, Global Displacements: The Making of Uneven Development in the Caribbean, (Wiley-Blackwell, 2015).
Juan R. Torruella, “Ruling America’s Colonies: The Insular Cases,” Yale Law & Policy Review, 2013, Article 3, 32(1).
Cyrus Veeser, A World Safe for Capitalism: Dollar Diplomacy and America’s Rise to Global Power (New York: Columbia University Press, 2002)
Jean Michel-Basquiat, 50 cent, 1983.
Yarimar Bonilla, “Visualizing Sovereignty,” 2016, https://vimeo.com/169690419
Stephanie Black, Life and Debt, 2001.
Rosario Ferré, Sweet Diamond Dust, (Penguin, 1996).
Isaac Julien, Black Skin, White Masks (1995), https://www.youtube.com/watch?v=7HYPWiEr7-I
Tato Laviera, Mainstream Ethics, (Arte Publico Press, 1988).
V.S. Naipaul, V.S. Mimic Men, (New Fiction Society, 1967).
Platt Amendment, 1903
“The Insular Cases: Constitutional experts assess the status of territories acquired in the Spanish– American War”, Reconsidering Insular Cases Conference at Harvard Law School, Mar 2014 (video)
Unit 6: In focus: The Haitian Crucible
One of the most complex case studies to explore the ways that debt compromised nation-building processes in the Caribbean involves the Republic of Haiti. A result of the first successful slave revolution in history, France imposed one of the most odious debt regimes on the new “Black Republic”: it forced a state founded by formerly enslaved people to compensate French slave owners for their loss of property during the Revolution — calculated not only in terms of land but also the monetary value of enslaved human beings.
- What is the relationship between debt and political power in Haiti?
- In what ways did France’s debt policy provide a precedent for future post-emancipation debt regimes?
- How have European and U.S. colonial policies produced wealth at Haiti’s expense?
Greg Beckett, “The Ontology of Freedom: The Unthinkable Miracle of Haiti,” Journal of Haitian Studies 19(2): 54-74, 2013.
Susan Buck-Morss, Hegel and Haiti (University of Pittsburgh Press, 2009).
Joseph Chatelain, La Banque Nationale (de la Republique d’Haïti): Son Histoire, Ses Problèmes (Imprimerie Held, 1954).
Dady Chery, We Have Dared to Be Free: Haiti’s Struggle Against Occupation (News Junkie Post Press, 2015).
Laurent Dubois, Haiti: The Aftershocks of History (Henry Holt, 2012).
Alex Dupuy, Haiti in the World Economy: Class, Race, and Underdevelopment since 1700 (Routledge, 1989).
Julia Gaffield, Haitian Connections in the Atlantic World: Recognition After Revolution (University of North Carolina Press, 2015).
Simon Henochsberg, “Public Debt and Slavery : The Case of Haiti (1760-1915)” (Paris School of Economics, 2016).
Mats Lundahl, Peasants and Poverty: A Study of Haiti, (Routledge, 2016).
Marc Marval, La politique financière extérieur de la république d’Haïti depuis 1910. La Banque nationale de la république d’Haïti ou nos emprunts extérieurs. (Paris, Imprimerie Baron, 1932).
Richard Millett and G. Dale Gaddy, “Administering the Protectorates: the U.S. Occupation of Haiti and the Dominican Republic,” Revista/Review Interamericana, October 1976, 6(3):383-402.
David Nicholls, From Dessalines to Duvalier: Race, Colour, and National Independence in Haiti (Cambridge University Press, 1979).
Anthony Phillips and Brian Concannon, Jr., “Economic Justice in Haiti Requires Debt Restitution,” (Thesis, International Relations Center Americas Program, September 7, 2006).
Anthony Phillips, “Haiti, France, and the Independence Debt of 1825” (Institute for Justice and Democracy in Haiti, 2008).
Brenda Gayle Plummer. Haiti and the Great Powers, 1902-1915 (Louisiana State University Press, 1988).
Robert L. Stein, “From Saint Domingue to Haiti, 1804-1825,” The Journal of Caribbean History, 1984, 19(2): 189-226.
Erin B. Taylor, “Counting on change: What money can tell us about inequality in Haiti?” (OAC Press Working Papers Series #22: 2016).
Michel-Rolph Trouillot, Haiti: State against Nation: The Origins and Legacy of Duvalierism (Monthly Review Press, 1990).
Michel-Rolph Trouillot, Silencing the Past: Power and the Production of History (Beacon Press, 1995).
James Weldon Johnson, “The Truth about Haiti. An NAACP Investigation,” History Matters, Crisis 5, September 1920: 217–224.
Lenelle Moïse, “Quaking Conversation” (2014)
Banque de la République d’Haïti, Administrative and Information Documents [Documents administratifs et d’information], gallica.bnf.fr / Bibliothèque nationale de France, 1911.
Haiti. Bureau du Conseiller Financier-Receveur Général (1930). A review of the finances of the republic of Haiti. 1924-1930: Submitted to the American High Commissioner. [Port-au-Prince].
Proclamation of the Military Occupation of Santo Domingo by the United States. The American Journal of International Law, Vol. 11, No. 2, Supplement: Official Documents (Apr., 1917): 94-96 (Published by: Cambridge University Press).
“Treaty with Haiti. Treaty between the United States and Haiti. Finances, economic development and tranquility of Haiti.” (Signed at Port-au-Prince, September 16, 1915
Ratification advised by the Senate, February 16, 1916. Ratified by the President, March 20, 1916. Ratified by Haiti, September 17, 1915. Ratifications exchanged at Washington, May 3, 1916. Proclaimed, May 3, 1916).
Inquiry into occupation and administration of Haiti and Santo Domingo: Hearing[s] before a Select Committee on Haiti and Santo Domingo, United States Senate, Sixty-seventh Congress, first and second sessions, pursuant to S. Res. 112 authorizing a special committee to inquire into the occupation and administration of the territories of the Republic of Haiti and the Dominican Republic. Washington: Govt. Print. Off., 1922.
United States Department of State / Papers Relating to the Foreign Relations of the
United States with the Address of the President to Congress, December 8, Haiti, pp. 334-386.
Unit 7: Gender, Reproduction and the Debt to Women’s Labor
Ingrid Pollard, The Valentine Days #1 “Negro Girls, J.V.13994”, 1891/2017. Courtesy of Ingrid Pollard/The Caribbean Photo Archive/Autograph ABP
From the moment of conquest, through slavery and the modern period women have experienced debt regimes and extraction regimes differently than men. This process has often created both particular forms of embodied and economic coercion, and strategies to resist colonial, racial, and gendered power structures.
- Are there gendered forms of debt?
- How did a gendered globalization contribute to the marginalization of women in the Caribbean?
- What forms of state repressions did women face in the past, as well as in the present?
Eva E. Abraham-Van der Mark, “The Impact of Industrialization on Women: A Caribbean Case” in Women, Men and the International Division of Labor, June Nash and Maria Fernandez-Kelly, eds. (SUNY Press, 1983).
Jacqui M. Alexanderi, “Not Just (Any) Body Can Be a Citizen: The Politics of Law, Sexuality and Postcoloniality in Trinidad and Tobago and the Bahamas,” Feminist Review 48 (Autumn 1994): 5- 23.
Eudine Barriteau, The Political Economy of Gender in the Twentieth-Century Caribbean (Palgrave, 2001).
Christine Barrow, Caribbean Portraits: Essays on Gender Ideologies and Identities (Ian Randle Publishers, 1998).
Hilary Beckles, Centering Woman: Gender Discourses in Caribbean Slave Society (Kingston: Ian Randle Publishers, 1998).
Lynn A. Bolles, “Kitchens hit by priorities: Employed working-class Jamaican women confront the IMF,” Women, Men, and the International Division of Labor 13, 1983: 8-160.
Barbara Bush, “White ‘ladies’, coloured ‘favourites’ and black ‘wenches’: some considerations on sex, race and class factors in social relations in white Creole Society in the British Caribbean,” Slavery and Abolition 2(3) 1981.
Edith Clarke, My Mother Who Fathered Me: A Study of the Family in Three Selected Communities in Jamaica (G. Allen & Unwin, 1957).
Debra Curtis, Pleasures and Perils: Girls’ Sexuality in a Caribbean Consumer Culture (Rutgers University Press, 2009).
Cynthia Enloe, Bananas, Beaches and Bases: Making Feminist Sense of International Politics (University of California Press, 1989).
Carla Freeman, High Tech and High Heels in the Global Economy: Women, Work, and Pink-Collar Identities in the Caribbean (Durham: Duke, 2000).
Gaiutra Bahadur, Coolie Woman: The Odyssey of Indenture (University of Chicago Press, 2013).
Kemala Kempadoo, Sexing the Caribbean: Gender, Race and Sexual Labor (Routledge, 2004).
Rhoda Reddock, “Women’s Organizations and Movements in the Commonwealth Caribbean: The Response to Global Economic Crisis in the 1980s.” Feminist Review 1998, 59(1): 57-73.
Pamela Scully and Diana Paton, eds., Gender and Slave Emancipation in the Atlantic World (Duke University Press, 2004).
Mimi Sheller, Citizenship from Below: Erotic Agency and Caribbean Freedom (Duke University Press, 2012).
Eileen Suarez-Findlay, Imposing Decency: The Politics of Sexuality and Race in Puerto Rico, 1870-1920 (Duke University Press, 1999).
Marina Vishmidt, “Permanent Reproductive Crisis: An Interview with Silvia Federici” Mute, 7 March 2013, http://www.metamute.org/editorial/articles/permanent-reproductive-crisis-interview-silvia-federici
The History of Mary Prince, A West Indian Slave, Related by Herself (1831)
Ana María García, La operación (1983)
Mark Mark and René Bergen. Poto-Mitan: Haitian Women as Pillar of the Global Economy. (2009)
Unit 8: The Role of Law in the Production of Debt
Law has been instrumental to the colonial and neoliberal development projects that have historically fueled the growth of debt in the Caribbean. This unit addresses some of the ways that the international and US law that have been deployed in the region in the interest of capital have also allowed for the endemically indebted condition of the region.
- How does law facilitate the growth of debt?
- What sorts of legal arrangements work to create indebtedness?
- What has been the relationship between colonial power structures and contemporary legal structures that have allowed for the growth of debt in the region?
Natasha Lycia Ora Bannan, “Puerto Rico’s Odious Debt: The Economic Crisis of Colonialism.” The City University of New York Law Review, 2016,19 (2): 287-311.
Benjamin Allen Coates, Legalist Empire: International Law and American Foreign Relations in the Early 20th Century (New York: Oxford University Press, 2016).
Diane Lourdes Dick, “U.S Tax Imperialism.” American University Law Review, 2015, 65:1-86.
Peter James Hudson, Bankers and Empire: How Wall Street Colonized the Caribbean (Chicago: University of Chicago Press, 2017).
Pedro A. Malavet, “The Inconvenience of a ‘Constitution [that] follows the flag … but doesn’t quite catch up with it’: From Downes v. Bidwell to Boumediene v. Bush.” Mississippi Law Journal, 2010, 80: 181-257.
Liliana Obregón, “Empire, Racial Capitalism and International Law: The Case of Manumitted Haiti and the Recognition Debt.” Leiden Journal of International Law, 2018, 31:597-615.
Cyrus Vesser, A World Safe for Capitalism: Dollar Diplomacy and America’s Rise to Global Power (New York: Columbia University Press, 2002).
Zenia Kish and Justin Leroy, “Bonded Life: Technologies of racial finance from slave insurance to philanthrocapital”
José L. Fusté, “Repeating Islands of Debt: Historicizing the Transcolonial Relationality of Puerto Rico’s Economic Crisis”
Unit 9: Caribbean Projects: Development, Modernization, and Socialism
The challenges to Caribbean nation-building led to a range of investments in modernizing projects. At the same time, Caribbean radical economists argued that 20th-Century models of “modernization” and “development” actually led to massive debt and impoverishment of many Caribbean countries. Some called this “extractive imperialism” or “the development of underdevelopment.”
- What were the ways in which extractive imperialism made Caribbean countries worse off and what were the policy dynamics and development implications?
- How did modern development lead to socialist movements and how did colonial powers respond?
- What were the aftereffects of these socialist movements and what mark have they left in the Caribbean today?
Keith Bolender,“Cuban Perspectives on Cuban Socialism,” Socialism and Democracy 24(1) (2010).
Selwyn Cudjoe, Caribbean Visionary: A.R.F. Webber and the Making of the Guyanese Nation (Jackson: University Press of Mississippi, 2009).
Mary Dejevsky, “The Era of the Socialist Experiment is Over – But the Nostalgia Surrounding it is Growing,” The Independent (2016).
James Dietz, “Socialism and Imperialism in the Caribbean,” Latin American Perspectives 6(1) 1979: 4-12.
Tavis D. Jules, “Ideological Pluralism and Revisionism in Small (and Micro) States: The Erection of the Caribbean Education Policy Space.” Globalisation, Societies and Education, 2013, 11(2): 258-275.
Tavid D. Jules, “Going Trilingual: Post-revolutionary Socialist Education Reform in Grenada,” The Round Table 2013, 102(5): 459-470.
Stephen Kinzer, “Caribbean Communism v. Capitalism,” The Guardian, 2010.
Kathy McAfee, Storm Signals: Structural Adjustment and Development Alternatives in the Caribbean. (Boston: South End, 1991).
Cedric Robinson, Black Marxism: the Making of the Black Radical Tradition, 2nd edition, (Durham, NC: University of North Carolina Press, 2000).
Euclid A. Rose, Dependency and Socialism in the Modern Caribbean: Superpower Intervention in Guyana, Jamaica, and Grenada, 1970-1985 (Lanham, MD: Lexington Books, 2002).
Barrington Salmon, “30 Years Later: Remembering Grenada’s Socialist Experiment,” New American Media (2013).
David Scott, Omens of Adversity (Durham, NC: Duke University Press, 2014)
Celia Topping,. “Cuban wheels: Cycling through the communist Caribbean.” The Independent. 12 March 2012.
J.A. Zumoff, “The African Blood Brotherhood: From Caribbean Nationalism to Communism,” The Journal of Caribbean History 2007, 41(1-2): 200-206.
Miguel Coyula, Memories of Overdevelopment (2010)
Sara Gomez, One Way or Another (De cierta manera) (1974)
Tomás Gutiérrez Alea, Memories of Underdevelopment (1968)
Jamaica Kincaid, A Small Place (2000)
Bruce Paddington, “Forward Ever: The Killing of a Revolution” (2013), https://www.youtube.com/watch?v=uqvirVqrlMg
Pedro Rivera and Susan Zeig, Operation Bootstrap (1983)
Unit 10: Unnatural: Ecological Debts in the Caribbean
The extraction of natural resources and raw materials by colonial powers has resulted in what has been called “ecological debt” or the use of space and services without payment or recognition of people’s entitlement to compensation, and the degradation of local environments over long periods of time. Equally important, ecological unequal exchanges result in economic imbalances and inequities, such as that the world’s most industrialized nations produce the emissions that contribute to climate change and rising sea levels and yet the world’s most vulnerable societies are often located in the global South and increasingly pay the consequences.
- Why are human lives in the global north more valuable than human lives in the Caribbean?
- Why haven’t Caribbean governments politicized the environment to argue for debt cancellation and reparations?
- Why should Caribbean national communities continue to sacrifice both their people and environment’s health to sustain tourism economies while remaining mired in external debt to the global North?
Julian Agyeman, Robert D. Bullard and Bob Evans, ed., Just Sustainabilities: Development in an Unequal World (Cambridge, MA: MIT Press, 2003).
Dana Alston and Nicole Brown, “Global Threats to People of Color,” in Confronting Environmental Racism: Voices from the Grassroots, Robert Bullard, ed. (Boston, MA: South End Press, 1993).
Sherrie L. Baver and Barbara Deutsch Lynch, ed., Beyond Sun and Sand: Caribbean Environmentalisms (New Brunswick, NJ: Rutgers University Press, 2006).
Deborah Berman-Santana, Kicking off the Bootstrap: Environment, Development, and Community Power in Puerto Rico (Tucson: University of Arizona Press, 2000).
Aaron Golub, Maren Mahoney, and John Harlow, “Sustainability and Intergenerational Justice: Do Past Injustices Matter?” Sustainability Science 2013, 8(2): 269-277.
Bret Gustafson. “The New Energy Imperialism in the Caribbean.” NACLA 2017, 49(4): 421-428.
Giorgos Kallis, Joan Martinez-Alier, and Richard B. Noorgard, “Paper Assets, Real Debts: An Ecological-economic Exploration of the Global Crisis,” Critical Perspectives on International Business 2009, 5(1-2): 14-25.
Hilda Lloréns, “In Puerto Rico, Environmental Injustice and Racism Inflame Protests Over Coal Ash,” The Conversation (2016).
Lirio Márquez and Jorge Fernández Porto. “Vieques: Environmental and Ecological Damage.” 2000. Diálogo.
Katherine McCaffrey. “Fish, Wildlife, and Bombs: The Struggle to Clean up Vieques.” 1 September 2009. NACLA.
David McDermott Hughes. Energy without Conscience: Oil, Climate Change, and Complicity. 2017. (Durham, NC: Duke University Press).
Joan Martinez-Alier, The Environmentalism of the Poor: A Study of Ecological Conflicts and Valuation (Northampton, MA: Edward Edgar Publishing, Inc, 2002).
Andreas Mayer and Alpen-Andria, “Cumulative Material Flows Provide Indicators to Quantify Ecological Debt,” Journal of Political Ecology 23 (2016): 350-363.
Catalina M. de Onís, “Energy Colonialism Powers the Ongoing Unnatural Disaster in Puerto Rico,” Frontiers in Communication (2018).
Lizabeth Paravisini-Gébert,“‘All Misfortune Comes from the Cut Trees:’ Marie Chauvet’s Environmental Imagination,” Yale French Studies No. 128 (2015): 74-91.
Lizabeth Paravisini-Gebert, “The Caribbean’s Agonizing Seashores: Tourism Resorts, Art, and the Future of the Region’s Coastlines,” in Routledge Companion to the Environmental Humanities, Ursula Heisse et al, ed. (New York: Routledge, 2017).
Polly Pattullo, Last Resorts: The Cost of Tourism in the Caribbean (London, Cassell / Latin American Bureau, 1996).
Laura T. Raynolds, “The Organic Agro-Export Boom in the Dominican Republic: Maintaining Tradition or Fostering Transformation?,” Latin American Research Review; Pittsburgh Vol. 43, Iss. 1 (2008): 161-184, 272.
Bonham C. Richardson. Caribbean Migrants: Environment and Human Survival in St. Kitts and Nevis. 1983. (Knoxville, TN: The University of Tennessee Press).
Timmons Roberts and Bradley C. Parks, “Ecologically Unequal Exchange, Ecological Debt, and Climate Justice: The History of Three Related Ideas for a New Social Movement,” International Journal of Comparative Sociology 50(3-4) (2009): 385-409.
Andrew Simms, Ecological Debt: The Health of the Planet and the Wealth of Nations (London: Pluto Press, 2005).
Maritza Stanchich. “Ten Years After Ousting US Navy, Vieques Confronts Contamination.” 14 May 2013. Huffington Post.
Unit 11: Sold Out: Neoliberalism and Exploitative Economies
As in other parts of the world, over the last three decades, neoliberal regimes in the Caribbean have successfully shifted policies to reduce state investment in fundamental public goods such as education, health, and environment. These shifts have benefited specific sectors of capital, including real estate and finance capital.
- How has banking and finance capital exerted power in the Caribbean?
- How have the development and expansion of financial institutions of colonial powers increased debt in the Caribbean and made its citizens worse off?
- How does financial capitalism manifest in economic development of the Caribbean today?
- How does debt function as a tool of “accumulation by dispossession” in the Caribbean during the era of neoliberalism?
Eitienne Balibar, “Politics of the Debt,” Postmodern Culture 23.3, 2013, http://muse.jhu.edu.ezproxy.cul.columbia.edu/article/554614
Tom Barry, et al. The Other Side of Paradise: Foreign Control in the Caribbean (New York: Grove Press, 1984).
“From Commoning to Debt: Financialization, Microcredit, and the Changing Architecture of Capital Accumulation.” South Atlantic Quarterly (2014) 113 (2): 231-244.
Norman Girvan, et al, The Debt Problem of Small Peripheral Economies: Case Studies of the Caribbean and Central America (Kingston, Jamaica: Association of Caribbean Economists in collaboration with Friedrich Ebert Stiftung, 1990). (Also published in Caribbean Studies 24[1-2] .)
George Holmes, “Neo-liberalism, Power and the Contradictory Relationship Between Conservation NGOs and the State in the Dominican Republic,” Papers from the Annual Meeting of the Association of American Geographers, March 2009.
Peter James Hudson, “Imperial designs: the Royal Bank of Canada in the Caribbean,” Race & Class 52(1) (2010): 33-48.*
Kiran Jayaram, “Capital Changes: Haitian Migrants in Contemporary Dominican Republic,” Caribbean Quarterly; Mona Vol. 56, Iss. 3 (Sep 2010): 31-54.
Maurizio Lazzarato, The Making of the Indebted Man: An Essay on the Neoliberal Condition (Cambridge: MIT Press, 2012).
Sharlene Mollett, “The Power to Plunder: Rethinking Land Grabbing in Latin America.” Antipode 48(2) (2016): 412-432.
Marion Werner, Global Displacements: The Making of Uneven Development in the Caribbean (New York: John Wiley, 2016).
Esther Figueroa, Jamaica for Sale (2006).
Joseph Stiglitz in Puerto Rico: The Perils of Austerity (2017), https://www.youtube.com/watch?v=1V0PqntLDNM
Unit 12: Caribbean Education Debt
The neoliberal debt apparatus has drastic impacts on K-12 and Higher Education in the Caribbean. It produces mis-educative experiences for students, and accelerates education privatization efforts. New debt critical pedagogies within education and social movements are playing a vital role in cultivating oppositional debt consciousness and debt resistance.
- How does debt impact education experiences (formal/informal) in the Caribbean?
- How are debt activists developing alternative pedagogies which cultivate oppositional debt consciousness and contribute to efforts to free universities and libraries from debt regimes?
- What is the education debt owed to the descendants of slaves of the Caribbean?
Robert F. Arnove, Stephen Franz, and Carlos Alberto Torres. “Education in Latin America: From Dependency and Neoliberalism to Alternative Paths to Development,” in Comparative Education : The Dialectic of the Global and the Local, edited by Robert F. Arnove, et al., Rowman & Littlefield Publishers, 2012, pp. 292-314.
Jason Thomas Wozniak. “Debt, Education, and Decolonization,” in Educational Philosophy and Theory, edited by Michael Peters, Springer, Singapore. 2016.
Rima Brusi-Gil de Lamadrid. “The University of Puerto Rico: A Testing Ground for the Neoliberal State.” NACLA Report on the Americas, 44:2, 2011. pp.7-10.
Melissa Rosario. “Public pedagogy in the creative strike: Destabilizing boundaries and re-imagining resistance in the University of Puerto Rico.” Curriculum Inquiry, 45:1, 2015. pp. 52-68.
Alicia Pousada. “Days of reckoning for the University of Puerto Rico: the struggle to maintain the Cultural Autonomy of a Caribbean public university.” International Journal of the Sociology of Language, Volume 2012, Issue 213, 2012. pp.111–118.
Rachel M. Cohen. “Betsy DeVos is Helping Puerto Rico Re-imagine its Public School System. That has People Worried. The Intercept, 2.22.2018. https://theintercept.com/2018/02/22/puerto-rico-schools-betsy-devos/
Kristina Hinds. “Decision-Making by Surprise: The Introduction of Tuition Fees for University Education in Barbados,” in Tavis D. Jules (ed.) The Global Educational Policy Environment in the Fourth Industrial Revolution (Public Policy and Governance, Volume 26) Emerald Group Publishing Limited, 2016, pp.173 – 194
Nadini Persaud and Indeira Persaud. “An Exploratory Study Examining Barbadian Students’ Knowledge and Awareness of Costs of University of the West Indies Education.” International Journal of Higher Education Vol. 5, No. 2, 2016. pp.1-11.
Anthony J. Payne. (1989) “University students and politics in Jamaica.” The Round Table, 78:310, 1989, pp. 207-222.
Gloria Ladson-Billings. “From the Achievement Gap to the Education Debt: Understanding Achievement in U.S. Schools.” Educational Researcher, vol. 35, no. 7, 2006, pp. 3–12.
In 2013, two-dozen Philadelphia schools were shuttered by city authorities in an effort to close a budget deficit. In response to these closings, Temple Contemporary commissioned artist Pepón Osorio to create a new installation specifically addressing the loss of the Fairhill Elementary School in North Philadelphia, not far from Temple University.
Papel Machete: https://papelmachete.wordpress.com/
Unit 13: Visa for a Dream: Migration and Remittances
The Caribbean is not only one of the most indebted regions in the world, it is also one of the most affected by mass migration. Migration affects debt regimes in various and sometimes contradictory ways as migrants remittances may distress sending communities while simultaneously keeping them and the state politically afloat. Migration itself may also entail massive debt, turning migrants into a new form of indentured labor.
- What is the relationship between migration and debt?
- How has migration contributed to the alleviation or aggravation of sovereign debt in the Caribbean?
- What is the role that migrant labor plays in Caribbean politics today?
Kristy Belton, Statelessness in the Caribbean (Philadelphia: University of Pennsylvania, 2017).
Crus Caridad Bueno, “Grassroots Development: The Case of Low-Income Black Women Workers in Santo Domingo, Dominican Republic” Review of Black Political Economy; Baton Rouge Vol. 42, Iss. 1-2, (Jun 2015): 35-55.
Rosemary Brana-Shute and Rosemarijn Hoefte, “A bibliography of Caribbean migration and Caribbean immigrant communities” (Gainesville, FL: Reference and Bibliographic Dept., University of Florida Libraries in cooperation with the Center for Latin American Studies, University of Florida, 1983).
J.A. Brown-Rose, Critical Nostalgia and Caribbean Migration (New York: Peter Lang, 2009).
Mary Chamberlain, ed., Caribbean Migration: Globalised Identities (New York: Routledge, 1998).
Jorge Duany, Blurred Borders: Transnational Migration between the Hispanic Caribbean and the United States (Chapel Hill: The University of North Carolina Press, 2011)
Lauren Derby, and Marion Werner, “The Devil Wears Dockers: Devil Pacts, Trade Zones, and Rural-Urban Ties in the Dominican Republic” Nieuwe West – Indische Gids; Leiden Vol. 87, Iss. 3/4, (2013): 294-321.
Christine Du Bois, “Caribbean Migrations and Diasporas” in The Caribbean: A History of the Region and Its Peoples, Stephan Palmié and Francisco Scarano, ed., pgs. 583- 596 (Chicago: University of Chicago Press, 2011).
James Ferguson, Migration in the Caribbean: Haiti, the Dominican Republic and Beyond (London: Minority Rights Group International, 2003).
Ramón Grosfoguel, Colonial Subjects: Puerto Ricans in a Global Perspective (University of California Press, 2003).
Ramona Hernández, The mobility of workers under advanced capitalism : Dominican migration to the United States (New York: Columbia University Press, 2002).
Beverley Mullings and D. Alissa Trotz, “Engaging the Diasporas: An Alternative Paradigm from the Caribbean,” in New Rules for Global Justice: Structural Redistribution in the Global Economy, Jan Aart Scholte, Lorenzo Fioramonti and Alfred G. Nhema, ed. Pp. 43-56 (New York: Rowman and Littlefield, 2016).
Hiska Reyes, “Migration in the Caribbean: A Path to Development?” (Washington, DC: World Bank, 2004).
Alissa Trotz and Beverley Mullings, “Transnational Migration, the State and Development: Reflecting on ‘The Diaspora Option,’” Small Axe: A Caribbean Journal of Criticism 17(2) (2013): 154-171.
“Migration and the Caribbean diaspora.” (St. Michael, Barbados: AICA Southern Caribbean, 2001).
Juan Luis Guerra, “Visa para un sueño” (1989).
Rita Indiana, “La Hora de Volvé’” (2010).
Calle 13, “Latinoamérica” (2010).
Gabby Rivera, Juliet Takes a Breath (2016)
Junot Diaz, Drown (1996) and The Brief Wondrous Life of Oscar Wao (2007)
Unit 14: The Past is not Past: The Case for Reparations
The call for reparations as a way to address the major gaps in wealth and opportunity between former colonies and colonizers has been growing across the Caribbean. In the Anglophone and Francophone Caribbean, the emphasis is on reparations for enslavement under European powers; in Puerto Rico, it refers to reparations for US colonization since 1898.
- What are the arguments for reparations?
- Why have these emerged in the late twentieth century?
- How would reparations for slavery and debt in the Caribbean affect the region and the world?
Westenley Alcenat, “The Case for Haitian Reparations,” Jacobin Magazine, 14 January 2017.
Henry Balford, “£7.5 trillion for slavery,” Jamaica Observer, 22 Sept 2014.
Hilary Beckles, Britain’s Black Debt: Reparations for Caribbean Slavery and Native Genocide (Mona, Jamaica: University of the West Indies Press, 2013).
Alfred Brophy, “The Case for Reparations for Slavery in the Caribbean,” Slavery & Abolition, 35(1) (2014): 165-169.
Steven Castle, “Caribbean Nations to Seek Reparations, Putting Price on Damage of Slavery.” The New York Times, October 2013.
Peter Clegg, “The Caribbean Reparations Claim: What Chance of Success?” The Round Table 103(4): 435.
Thomas Craemer, “Estimating Slavery Reparations: Present Value Comparisons of Historical Multigenerational Reparations Policies,” Social Science Quarterly, 2015 96(2): 639-655.
Alex Dupuy, “Commentary Beyond the Earthquake: A Wake-Up Call for Haiti,” Latin American Perspectives 37(3) (2010): 195-204.
Charles Forsdick, “Compensating for the past: Debating Reparations for Slavery in Contemporary France”, Contemporary French and Francophone Studies, 2015, 19(4): 420-429.
Ralph Gonsalves, The Case for Caribbean Reparatory Justice (Kingstown, Saint Vincent: Strategy Forum, Inc., 2014).
Jonathan Holloway, “Caribbean Payback,” Foreign Affairs.
Robert Mackey, “France Asked to Return Money ‘Extorted’ From Haiti” New York Times, 16 August 2010.
Luke de Noronha, “Britain must honor its debt to the Caribbean Islands,” The Guardian, 19 September 2017.
Luke de Noronha, “David Cameron’s Jamaican Prison: A Show of Ignorance, Cruelty and Historical Amnesia,” Ceasefire, 1 October 2015,
Mark Weisbrot and Luis Sandoval “Debt Cancellation for Haiti: No Reason for Further Delays.” Center for Economic and Policy Research, December 2008.
EIan Steadman, “Site Traces Huge Payouts slave owners received after abolition” Wired, 27 February 2013.
“Reparations for Native Genocide And Slavery.” CARICOM. 13 October 2015.
Unit 15: Help or Hinder? Foreign, Disaster and Opportunistic Aid
Colonizing powers, international organizations, and local national elites often grant, seek and/or are provided with aid to address structural challenges but rarely achieve this goal. Instead, aid tends to deepen unequal relations in the global economy and locally.
- What is “aid” and what is its history in the Caribbean?
- How does international aid for disaster recovery hinder recovery and post-disaster change?
- What is the relationship between natural disasters and climate change and how has this contributed to the Caribbean debt?
- How has the existing debt affected the response of Caribbean islands to natural disasters?
- When did climate justice movements start growing and what has been the key achievements of these movement?
Sebastian Acevedo, “Debt, growth and natural disasters: a Caribbean trilogy” IMF Working Papers, 2014.
Mard D. Anderson, Disaster Writing: The Cultural Politics of Catastrophe in Latin America (Charlottesville: University of Virginia Press, 2011).
Greg Becket, “A Dog’s Life: Suffering Humanitarianism in Port-au-Prince, Haiti,” American Anthropologist 119(1): 35-45, 2017.
Dady Chery, “Haiti’s Gold Rush: An Ecological Crime in the Making,” News Junkie Post. Global News and In-Depth Analyses, 29 November 2012.
Junot Diaz, “Apocalypse,” Boston Review, 1 May 2011. http://bostonreview.net/junot-diaz-apocalypse-haiti-earthquake
Alex Dupuy, “Foreign aid keeps the country from shaping its own future,” The Washington Post, 9 January 2011.
Levi Gahman and Gabrielle Thongs, “In the Caribbean, colonialism and inequality mean hurricanes hit harder,” The Conversation, 20 September 2017.
Jonathan M. Katz, The Big Truck That Went By: ow the World Came to Save Haiti and Left Behind a Disaster (New York: St. Martin’s Griffin, 2014)
Sara Michaela Pavey, “Good Intentions and False Representations: How U.S. Humanitarian Aid Cultivates Dependency in Haiti,” (Texas State University, 2017).
Mark Schuller, Humanitarian Aftershocks in Haiti (New Brunswick, NJ and London: Rutgers University Press, 2016).
Mark Schuller, Killing with Kindness: Haiti, International Aid, and NGO’s (New Brunswick, NJ and London: Rutgers University Press, 2012).
Stuart B. Schwartz, Sea of Storms: A History of Hurricanes in the Greater Caribbean from Columbus to Katrina (Princeton: Princeton University Press, 2015).
“Wesleyan Professor Alex Dupuy: Haiti Transformed into the “Republic of the NGOs” Democracy Now, 12 January 2011.
Haitian Led Reconstruction & Development: A Compilation of Recommendation Documents from Several Haitian Civil Society and Diaspora Organizations and Coalitions, 29 March 2010.
Unit 16. Getting Away with Debt: Debt Havens in the Caribbean
While most of the Caribbean suffers from debt, some islands are fueling their economies by becoming “tax havens” for the globe’s wealthy. Tax avoidance and secrecy in Caribbean jurisdictions allow the profits of global capitalism to be hidden from public taxation, sucking billions of dollars out of the global economy.
- How did the idea of the Caribbean as a tax haven develop?
- Who is benefiting?
- How does offshoring contribute to the current debt in the Caribbean?
Godfrey Baldacchino, Island Enclaves: Offshoring Strategies, Creative Governance, and Subnational Island Jurisdictions (Montreal: McGill-Queen’s University, 2010).
Nellie Bowles, “Making a Crypto Utopia in Puerto Rico,” The New York Times, February 8, 2018.
Ezra Fieser, “Indebted Caribbean Tax Havens Look to Tax Foreign Investors,” The Christian Science Monitor.
Peter James Hudson, Bankers and Empire: How Wall Street Colonized the Caribbean (Chicago: University of Chicago Press, 2017).*
Peter James Hudson, “On the History and Historiography of Banking in the Caribbean,” Small Axe 18(1) (2014): 22-37.*
Bill Maurer, Recharting the Caribbean (Ann Arbor: University of Michigan Press, 2000).
Tami Navarro, “’Offshore’ Banking within the Nation: Economic Development in the United States Virgin Islands” The Global South 4(2) (2010): 9-28.
Ronen Palan, The Offshore World (Ithaca: Cornell University Press, 2003).
Nicholas Shaxson, Treasure Islands: Tax Havens and the Men Who Stole the World (London: Bodley Head, 2011).
John Urry, Offshoring (London: Polity Press, 2014).
Jordan Weissmann, “Should I Put My Money in Caribbean Tax Havens Like Mitt Romney Does?” The Atlantic.
Unit 17. Unpayable Debt: The Puerto Rico Case (2006-present)
Since 2015, debt crisis in the Caribbean has become equated with the travails of Puerto Rico, underscoring that the use of debt to establish new forms of colonial power in the region remains viable and efficient for capital.
- How and why did Puerto Rico became one of the most indebted places in the world?
- What does Puerto Rico’s debt tell us about the rise of global finance capital?
- How is debt facilitating new colonial forms of domination and galvanining decolonial politics?
Kate Aronoff, “Puerto Rico is On Track for Historic Debt Forgiveness – Unless Wall Street Gets its Way” The Intercept, 4 October 2017.
Yarimar Bonilla, “Why Would Anyone in Puerto Rico Want a Hurricane? People think someone will get rich,” The Washington Post, 22 September 2017.
Nellie Bowles, “Making a Crypto Utopia in Puerto Rico,” The New York Times, 2 February 2018.
Nicholas Confessore and Jonathan Mahler, “Inside the Billion-Dollar Battle for Puerto Rico’s Future,” New York Times, 19 December 2015.
Nelson Denis, “The Jones Act: The Law Strangling Puerto Rico,” The New York Times, 25 September 2017.
Ismael García-Colón and Harry Franqui-Rivera, “Puerto Rico Is NOT Greece: The Role of Debt in Colonialism,” FocalBlog, 26 August 2015.
John Gendall, “A Puerto Rican Architect Explains How Rebuilding the Country Will Take More Than Brick and Mortar,” Architectural Digest, 3 October 2017.
Martín Guzman, “Puerto Rico’s debt crisis is a wake-up call. It could be crushed like Greece,” The Guardian, 8 May 2017.
Lisa Jahn and Sarah Molinari, “New Developments in Puerto Rican Economic Readjustment?” panel commentary, 2015.
Hilda Lloréns, Ruth Santiago, Carlos G. García-Quijano, Catalina M. de Onís. Hurricane María: Puerto Rico’s Unnatural Disaster. Social Justice, 22 January 2018.
Ed Morales, “The Roots of Puerto Rico’s Debt Crisis—and Why Austerity Will Not Solve It,” The Nation, 8 July 2015.
Frances Negrón-Muntaner, “The Crisis in Puerto Rico is a Racial Issue. Here’s Why,” The Root, 12 October 2017.
Frances Negrón-Muntaner, “Blackout: What Darkness Illuminated in Puerto Rico,” Politics/Letters, 2 March 2018.
Natasha Lycia Ora Bannan. “Puerto Rico’s Odious Debt: The Economic Crisis of Colonialism,” The City University Law Review, Vol. 19, Issue 2 (Summer 2016).
Melissa Rosario, “Healing the Break”: A DiaspoRican Project of Return,” Savage Minds, 9 May 2016.
Mary Williams Walsh, “After Puerto Rico’s Debt Crisis, Worries Shift to Virgin Islands, The New York Times, 25 June 2017.
ADAL, “Puerto Ricans Under Water.”
Kate Arnoff, Puerto Rico is on Track for Historic Debt Forgiveness – Unless Wall Street Gets Its Way, The Intercept, 4 October, 2017.
Omar Banuchi and Ed Morales, “A Cartoon History of Colonialism in Puerto Rico,” Village Voice March 19, 2018. https://www.villagevoice.com/2018/03/19/a-cartoon-history-of-colonialism-in-puerto-rico/
Giannina Braschi, United States of Banana (Las Vegas, NV: Amazon Crossing, 2011).
“Debt,” Radio Ambulante, 20 December 2016.
Julio González “The Crisis of Puerto Rico explained in 5 graphs” Global Politics and Law 22 April 2017.
“Juan González on How Puerto Rico’s Economic ‘Death Spiral’ is Tied to Legacy of Colonialism,” Democracy Now, 26 November 2015.
Naomi Klein, “The Battle for Paradise,” The Intercept, 7 April 2018.
Puerto Rico Oversight Board Website
Puerto Rico Under Water: Five Artist Perspectives on Debt, http://www.cser.columbia.edu/puerto-rico-under-water
PROMESA Bill, H.R.4900, 114th Congress (2016).
Puerto Rico’s debt crisis and its impact on the bond markets [electronic resource] : hearing before the Subcommittee on Oversight and Investigations of the Committee on Financial Services, U.S. House of Representatives, One Hundred Fourteenth Congress, second session, February 25, 2016. Washington : U.S. Government Publishing Office, 2017.
Unit 18. Imagining Things: Debtless Futures
As growing debt propels even greater migrations and inequality, communities, artists, and activists are imagining other ways of living good lives and creating more horizontal political communities.
- What are the responses to debt regimes in the era of financial capitalism?
- What kinds of (non-monetary) currencies do Caribbean peoples use to exchange material goods, services, and to add value to their lives?
- What is the role or art, new forms of political organization, and ways of thinking about resources in building more just societies in the Caribbean?
Anna Kasafi Perkins, Justice as Equality: Michael Manley’s Caribbean Vision of Justice (New York: Peter Lang, 2010)
Tatiana Flores and Michelle Stephens, Eds. Relational Undercurrents: Contemporary Art of the Caribbean Archipelago. (Long Beach, CA: Museum of Latin American Art, 2017).
Carlos G. García-Quijano and Hilda Lloréns. “What Rural, Coastal Puerto Ricans Can Teach Us About Thriving in Times of Crisis.” The Conversation, May 30 2017.
Naomi Klein, Elizabeth Yeampierre, “Imagine a Puerto Rico Recovery Designed by Puerto Ricans”, The Intercept, 20 October 2017.
Hilda Lloréns. “The Making of a Community Activist.” Sapiens, Reflection 5 May 2017.
Samuel Martinez, “A Postcolonial Indemnity? New Premises for International Solidarity with Haitian-Dominican Rights”, Iberoamericana. Nordic Journal of Latin American and Caribbean Studies, Vol. XLIV: 1-2 (2014): 173-93.
Ramesh Ramsaran, “Caribbean Survival and the Global Challenge” (Kingston, Jamaica: Ian Randle Publishers, 2002).
Robert Rennhack. “Global Financial Regulatory Reform: Implications for Latin America and the Caribbean.” Washington: International Monetary Fund, July 2009.
Saskia Sassen, ‘Too big to save: the end of financial capitalism’, Open Democracy News Analysis, 1 April 2009.
Sylvia Wynter, “Unsettling the Coloniality of Being/Power/Truth/Freedom: towards the Human, after Man, Its Overrepresentation – An Argument”. In: CR: The New Centennial Review,Vol. 3, No. 3 (2003): 257–337.
Kehinde Andrews,. “The West’s Wealth is based on slavery: Reparations Should Be Paid.” The Guardian.
Robert Carlyle Batie, Why Sugar? Economic Cycles and the Changing of Staples on the English and French (University of the West Indies, 1976).
Hilary Beckles, “Irma-Maria: A reparations requiem for Caribbean poverty.” Jamaica Observer. 9 October 2017.
Hilary Beckles, “Reparation Issue Will Cause Greatest Political Movement If British PM Fails To Resolve, Beckles Warns,” The Gleaner, 27 September 2017.
Ericka Beckman, Capital Fictions: The Literature of Latin America’s export age (University of Minnesota Press, 2013).
Laird W. Bergad, Cuban Rural Society in the Nineteenth Century: the Social and Economic History of Sugar Monoculture in Matanzas (Princeton University Press, 1990).
Lynn A. Bolles, “Paying the Piper Twice: Gender and the Process of Globalization.” Caribbean Studies 29(1) (1996): 106–119.
Victor Bulmer-Thomas, The Economic History of Latin America since Independence (Cambridge University Press, 1993).
Victor Bulmer-Thomas, The Economic History of the Caribbean Since the Napoleonic
Wars (Cambridge University Press, 2012).
Barbara Bush, Slave Women in Caribbean Society, 1650-1832 (Indiana University Press, 1990).
Eli Cook, The Pricing of Progress: Economic Indicators and the Capitalization of American Life (Harvard University Press, 2017).
Nick Dearden,. “Jamaica’s decades of debt are damaging its future,” The Guardian, April 2013.
Isaac Dookhan, A History of the Virgin Islands of the United States (Canoe Press, 1974)
Laurent Dubois, “Confronting the Legacies of Slavery,” New York Times, October 2013.
Katie Engelhart, “The Caribbean Is Finally Going to Sue Over Slavery,” VICE, March 2014.
Carlos G. García-Quijano, John J. Poggie, Ana Pitchon, Miguel H. Del Pozo. “Coastal Resource Foraging, Life Satisfaction, and Well-being in Southeastern Puerto Rico.” Journal of Anthropological Research, Vol. 71, 2 (2015): 145-167.
Norman Girvan, “Extractive imperialism in historical perspective,” Extractive Imperialism in the Americas, Henry Veltmeyer, ed., pp. 49-61 (Leiden: Brill, 2014).
Frank Graziano, Undocumented Dominican Migration (Austin: University of Texas Press, 2014).
Steven Gregory, The Devil behind the Mirror : Globalization and Politics in the Dominican Republic (Berkeley: University of California Press, 2014).
David Griffith, Carlos G. García-Quijano, Manuel Valdés Pizzini. “A Fresh Defense: A Cultural Biography of Quality in Puerto Rican Fishing.” American Anthropologist, Vol. 115, 1 (2013): 17-28.
David Griffith and Manuel Valdés Pizzini, Fishers at Work, Workers at Sea: A Puerto Rican Journey Through Labor and Refuge (Philadelphia: Temple University Press, 2002).
Catherine Hall. “Britain’s massive debt to slavery”, The Guardian, 27 Feb 2013.
Barry W. Higman, “African and creole slave family patterns in Trinidad” Journal of Family History 3:3 (1978): 163-180.
Robert Himmerich y Valencia, The Encomenderos of New Spain, 1521-1555 (University of Texas Press, 1991)
C.L.R. James, Black Jacobins: Toussaint L’Ouverture and the San Domingo Revolution (New York: Vintage, 1989).
Peter James Hudson, “On the History and Historiography of Banking in the Caribbean,” Small Axe 18(1) (2014): 22-37.*
Peter Hulme and Neil L. Whitehead, ed., Wild Majesty. Encounters with Caribs from Columbus to the Present Day (Oxford: Oxford University Press, 1992).
Eugène Itazienne, “La normalisation des relations franco-haïtiennes (1825-1838),” Outre-mers, 2003, 90(340-341): 139-154.
Sam Jones, “Follow the money: investigators trace forgotten story of slave trade,” The Guardian, 27 Aug 2013.
Kemala Kempadoo, ed., Sun, Sex and Gold: Tourism and Sex Work in the Caribbean (Rowman and Littlefield, 1999).
Lester D. Langley, The Banana Wars: An Inner History of American Empire, 1900-1934, (The University Press of Kentucky, 1983).
Maurizio Lazzarato, Governing by Debt (Cambridge: MIT Press, 2015)
Leadbetter, Russell, “ Secret Shame: The Scots who made a fortune from abolition of slavery” The Herald, 27 February 2013.
Katherine McCaffrey. Military Power and Popular Protests. The U.S.Navy in Vieques, Puerto Rico. 2002 (New Brunswick: Rutgers University Press).
Stephen McLaren, “The Slave Trade made Scotland rich. Now we must pay our blood-soaked debts.” The Guardian.
Sidney W. Mintz, Sweetness and Power: The Place of Sugar in Modern History (Penguin, 1985).
Manuel Moreno Fraginals, The Sugarmill: The Socioeconomic Complex of Sugar in Cuba, 1760-1860, Cedric Belfrage, trans. (Monthly Review Press, 1976).
Nigel Morris. “Justice for Britain’s former slave colonies? Caribbean leaders to ask the UK for apologies, repatriation and debt cancellation,” The Independent, March 2014.
Ivan Musicant, The Banana Wars: A History of United States Military Intervention in Latin America from the Spanish-American War to the Invasion of Panama (Macmillan, 1991).
Mark Padilla, Caribbean Pleasure Industry: Tourism, Sexuality and AIDS in the Dominican Republic (Chicago: University of Chicago Press, 2007).
Angus Cameron, and Ronen Palan, The Imagined Economies of Globalization (Sage, 2004).*
Iris Perez, Minnesotans rally to wipe Puerto Rico’s debt, Fox News October 4 2017
Nancy Priscilla, ed., Blacks, coloureds and national identity in nineteenth-century Latin America (University of London Press, 2003).
Ramesh Ramsaran, “Financial constraints and economic development in the Commonwealth Caribbean : the recent experience.” St. Augustine, Republic of Trinidad & Tobago (Institute of International Relations, 1983).
Ramesh Ramsaran,. “Savings and investment in the Caribbean : emerging imperatives.” St. Augustine, Trinidad: Caribbean Center for Monetary Studies (The University of the West Indies, 1995).
Walter Rodney, How Europe Underdeveloped Africa (Tanzanian Publishing House, 1973).
Lomarsh Roopnarine, “Britain’s Black Death: Reparations for Caribbean Slavery and Genocide.” Journal of Third World Studies 32(1) (2015): 351-352.
Hymie Rubenstein, “Economic History and Population Movements in an Eastern Caribbean Valley,” Ethnohistory 24(1) (1977): 19–45.
Helen I. Safa, The Myth of the Male Breadwinner: Women and Industrialization in the Caribbean (Routledge, 2018).
David Scott, Omens of Adversity: Tragedy, Time, Memory, Justice (Durham: Duke University Press, 2014).
Stephanie Seguino, “The great equalizer?: Globalization effects on gender equality in Latin America and the Caribbean” in Globalization and the Myths of Free Trade: History, Theory, and Empirical Evidence, Anwar Shaikh, ed. (Routledge, 2006).
Verene Shepherd, “Our Caribbean past matters too.” Barbados Today. 20 November 2017.
Verene Shepherd,. “Britain remembers its past but urges others to forget theirs, ” Jamaica Observer. 26 Nov 2017.
Lesley Byrd Simpson, The Encomienda in New Spain, (University of California Press, 1950).
Barbara L. Solow and Stanley L. Engerman, eds., British Capitalism and Caribbean Slavery: The Legacy of Eric Williams (Cambridge University Press, 1987).*
Dan Sperling, “In 1825, Haiti Paid France $21 Billion To Preserve Its Independence – Time For France To Pay It Back,” Forbes, 6 December 2017, https://www.forbes.com/sites/realspin/2017/12/06/in-1825-haiti-gained-i…france-for-21-billion-its-time-for-france-to-pay-it-back/#397142a1312b
Antonio Stevens-Arroyo, “The Natural World of the Tainos,” and “The Religious Cosmos of the Tainos,” in Cave of the Jagua: the Mythological World of the Tainos (Albuquerque, 1988), 37-69.
Lanny Thompson, Imperial Archipelago: Representation and Rule in the Insular Territories under U.S. Dominion after 1898 (University of Hawai’i Press, 2010).
Richard Lee Turits, Foundations of Despotism: Peasants, the Trujillo regime, and Modernity in Dominican History (Palo Alto: Stanford University Press, 2004).
Fitzhugh Turner, Communism in the Caribbean (New York: New York Tribune, Inc., 1950).
Valdés Pizzini, M. González Cruz, and J. Martínez Reyes, ed., La transformación del paisaje puertorriqueño y la disciplina del Cuerpo Civil de Conservación, 1933-1942 (San Juan, P.R.: Centro de Investigaciones Sociales, Universidad de Puerto Rico, 2011).
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Most of us have the understanding that Economics, as a subject taught in school, is ultimately theoretical, and we live with that (for the sake of exams).
As a tutor teaching Economics, I can live with having to explain the theoretical underpinnings of empirical observations, and pointing out their limitations. If anything, it helps students form good arguments especially in evaluative essays.
Occasionally though, I get flummoxed by questions posed by my students.
‘Chur I don’t understand.
What some students must have realised by now, is that the different JCs across Singapore often teach the same concepts differently. I can accept this to some extent by way that Economics, taught at the “entry-level” as a humanities subject, is not quite as deterministic as Math/Science subjects.
Unfortunately the side effect to this is confusion from students, especially when they do not understand their school’s materials, and resort to referencing other schools’ materials in the hope of getting alternative explanations.
I have to comment that reading some schools’ notes as a student is akin to using eyes only to read a barcode – you believe there is information behind it, but you can’t seem to see it.
Anyhow, I was motivated to write this post because of a particularly problematic concept that students often struggle to understand fully for such reasons.
And yes – it’s in the title.
Productive Efficiency is…
A situation where goods and/or services are produced with the least-cost factor combinations.
Which can also be re-stated as one where:
- Producing an additional unit of a good or service cannot be achieved without reducing the production of another one; or
- The maximum amount of goods and services is produced for the given quantity of resources.
This small list of possible permutations in the definition taught by schools is not exhaustive.
Cue potential confusion ahead. Fortunately, if you are a student, you can be assured that just sticking to whichever is taught to you in school works.
Illustrating Productive Efficiency.
In Economics at “A” levels, there is some obsession with using graphs everywhere. This case is no different. But ironically, that’s also where problems begin for this case.
When I was a student many years ago, I was taught that productive efficiency occurs at the minimum point of the LRAC (Long-Run Average Curve) curve. For the uninitiated, you may read more about what it is here.
The rationale for that is obvious – what can be more legit-ly minimal in cost than the minimum cost itself? And convinced I therefore was as a student.
Years later, as a tutor, I discovered that it is now mostly taught to students that any point on the LRAC curve is productively efficient.
What changed in the reasoning?
In the latest teachings, it is reasoned that since the LRAC is a cost curve enveloping all possible SRACs (each of which represents cost associated with 1 combination of fixed factor), all cost combinations on the LRAC itself must be efficient since they represent the respective lowest cost for all fixed factor combinations.
Ok, no arguments to that. But that means I was taught the “wrong” stuff years ago? There is already some confusion to that.
But then, one student tipped me off that her school taught the following:
- From the firm’s perspective, as long as it is producing on any point of the LRAC, it is productively efficient; but
- It may not be productively efficient from society’s perspective since it is not maximising long-term use of resources.
Of course given that the complexity in deciding something that should really be straightforward just got doubled suddenly, most of our first take would be: Wait wait don’t understand, let’s read again.
A superficial analysis might very well see this segregation of analysis to be a brilliant solution to reconciling what appeared to be 2 seemingly unproblematic perspectives (when viewed separately).
Unfortunately a closer look revealed at least 2 logical fallacies that mildly speaking, left me suspicious of what my students were being taught in their schools.
Who produces the wares?
In the simple model of society utilised at “A” level Economics, the 2-sector free market comprises only consumers and producers (firms) as economic agents, who consume and produce in their respective transactions.
It stands to reason that any yardstick utilised to measure the productive efficiency of producers in aggregate, must be the same as used for society. This is because producers are assumed to produce by definition (consumers do not contribute to production), and therefore wholly account for societal production.
Obviously this isn’t the case with the school’s approach, and the contradiction can be easily revealed.
Since the firms are productively efficient as long as they produce on their respective LRAC, the productively-efficient industry will too be producing on any point of the industry-aggregated LRAC.
Since society produces on the basis of producers’ efforts only (by definition), what applies to the industry must obviously apply to the society too. Except this didn’t happen in the school’s analysis.
Mixing key concepts up?
Productive efficiency at societal level refers to the maximisation of resource use in the production of all goods and services at the aggregate level.
It is therefore fundamentally different from productive efficiency at the industry level, since it considers the competing use of resources in the production of other goods and services.
All schools agree that, using a simple Production Possibility Curve (PPC) to illustrate, by definition, all points on the PPC represent productively efficient output combinations for society.
Unfortunately this contradicts the definition of societal productive efficiency taught by that particular school since it asserts that this only occurs at the lowest point of the industry LRAC (i.e. only 1 output level).
Quite frankly, unless I had seriously misunderstood something, I am not terribly convinced that the part about how firms are productively inefficient unless they produce at their respective LRACs will fly in the “A” levels.
In the spirit of leaving no stones unturned though (in case I am indeed wrong), but also to contribute my views, I plan to write to the school in question about what I had discussed here.
Before I do that though, I would like to see if my readers have comments to add, or even disagree with me. So please comment below if you like. You can also share this post of mine to others if you feel that they are in better position to advise.
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The Key to Recycling is Markets
If you amassed all the waste dumps, kindly called “landfills,” in the U.S.A. and totaled the acreage, they would cover an area larger than Rhode Island. Most are full or filling up rapidly; new land fills are very difficult to get passed environmental requirements and community opposition.
So the Big Word for the Nineties will be “Recycling.” Already more states are passing recycling laws to be applied to household and retail waste. In the District of Columbia, the first stage of mandatory recycling begins in October with paper separation. Next year, it covers cans and bottles. This is the same District which the bottling industry persuaded at the expenditure of millions of campaign dollars, to reject a bottle bill two years ago. So the pressure is on business and household consumers to separate their garbage and not on the creation of markets for recycled materials.
But markets are crucial for the potential of recycling to be realized. For energy to be saved and trees to be left standing and raw minerals, to be conserved, there has to be a marketplace where waste separators (often municipalities but also non-profit recycling groups) can be paid for their separated trash by businesses who then can transform trash into usable products.
Japan’s automobile industry used so much domestic and imported scrap from the U.S. that back in 1980 the quip was “This year’s Toyota is last year’s Buick.”
We are far behind Japan and many other nations in recycling our waste into new materials. By way of example, we recycle 10% of our newsprint; Japan turns around 90%.
Achieving stable markets means expanding demand to meet the burgeoning supply of recycled garbage. The dilemma is that when a community becomes successful in preparing waste for recycling, supply outstrips demand and the bottom falls out of the market.
For instance, many localities which were profiting from recycling programs just two or three months ago — receiving as much as $25 a ton for their newspapers, are now having to pay the same firms just to haul it away. Presently, in Groton, Connecticut, the town has to pay $15 a ton to have old newspapers taken away. Maryland’s comparatively advanced state recycling program has been on hold for the same reason.
In a few months, the Environmental Protection Agency’s recycling guidelines for each federal agency and department are slated to go into effect. But they won’t be implemented if red ink is spilled in the process. Again markets are needed.
Congressman Sam Gejdenson (D-CT) has a proposal. He has introduced H.R. 1691 which deals with 40% of the nation’s waste stream — paper and paper products. He would have the federal government impose an escalating tax on paper manufacturers, starting at three percent of the selling price, for any paper products that do not meet the recycled fibers content standards developed by the Environmental Protection Agency. This “non-compliance tax” will increase by one percent per year until it reaches twelve percent.
Congressman Gejdenson believes H.R. 1691 will “help create stronger and more stable markets for recycled paper.” But one other change is necessary. A moratorium on any new incinerators will stop the undermining of the recycling effort by stopping the burning of recyclable products and pouring air pollutants into out air and toxic ash into landfills. Incinerators devour the supply of waste products; they are incompatible with both a health community environment and a recycling, resource conserving society.
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Retail accounting differs from standard accounting in a number of ways, with the primary complication being inventory accounting. Please note that federal, state, and local laws related to accounting change regularly and vary based on location. The information below and the For Dummies series are essentially primers and you should consult with an accounting professional if you have any questions or concerns. Below is a sample of the differences in retail accounting versus standard accounting.
Sales Tax Reporting
A tax is levied on retail sales in most states. According to the law, monies collected should be immediately passed on to the government. Thus, according to HarborTouch, “all taxes on sales have to be recorded as payable. Retail accountants can, therefore, know the total of taxes to be paid at any given time from ‘tax payable.’ In other industries, it is recorded as revenues to be reversed at tax times.”
While that is straightforward enough, there are complications which can stem from determining your location. The Balance Small Business says, “If you have a tax presence … in different states, you may have to collect different taxes on different items.” Online retailers need “to figure out if you have to collect sales tax from customers.” In addition, not all items are taxable, and the list isn’t standard across states.
Any business which includes staff beyond the owner must consider payroll processing. A complication in retail accounting comes from the fact that many small retail businesses hire temporary or seasonal staff (as opposed to permanent staff) during the busy season.
Because of the different types of employees, “Salaries payable will therefore not be standardized, and changes will be inherent every month,” says HarborTouch. In addition, each year “business and individual tax[es] for both permanent and temporary employees have to be calculated and returns filed.”
While Fundera says retail accounting is a bit of a misnomer as it is not a special kind of accounting, “but rather an inventory valuation technique often used by retailers. It differs from ‘cost accounting’ for inventory in that it values inventory based on the selling price rather than the acquisition price.”
A company’s inventory, which is typically its biggest expense, is considered an asset since the retailer technically owns it and, thus, needs to be managed or tracked for costs. “This can become especially complicated when items have different prices and initial costs, so there are several methods for calculating the cost of your inventory,” says business.com.
Below are a few ways a retailer can track the value of the inventory. FIFO First In, First Out (FIFO) means those first items added to your inventory will be recorded as the first to be sold. This method is favored when the inventory is perishable with clear expiration dates. The cost of older inventory is assigned to cost of goods sold while the cost of newer inventory is assigned to ending inventory.
Fundera says, “FIFO inventory costing assumes any inventory left on hand at the end of the accounting period should be valued at the most recent purchase price. Anything purchased at an older price would have been discarded due to spoilage and lapsing expiration dates.”
FIFO tends to be a more accurate depiction of inventory value. Fit Small Business says ,“The inventory that remains on the shelf at the end of the month or year is valued at a cost that is closer to what the current price is for those items.” On the downside, your business may “reflect a higher profit under the FIFO [as compared to LIFO] which … could result in a higher tax bill.”
LIFO or Last In, First Out is the opposite of FIFO in that the newest additions to the inventory are the first to be sold. Also, opposite of FIFO, the small businesses who use this method are dealing with non-perishable items and the inventory is valued based on earlier prices depending upon sales.
Inc. suggests companies that have stable or increasing inventory costs use LIFO. Haden adds, “Companies that use LIFO inventory valuations are typically those with relatively large inventories and increasing costs because LIFO typically results in lower profit levels, lower taxes, and as a result higher cash flow.”
The weighted average method considers the cost of each item of inventory in stock. This method is more likely to be used with inventory that is interchangeable and not perishable.
Because the same items could be in stock for differing amounts of time, purchasing costs could vary. Therefore, Fundera says the “retailer will take a weighted average and spread the average cost over all the existing inventory.” This method is more time consuming.
The retail method provides an approximate value of the inventory. Investopedia says of this method that it, “provides the ending inventory balance for a store by measuring the cost of inventory relative to the price of the merchandise… the retail inventory method uses the cost-to-retail ratio.” They also suggest doing a periodic physical inventory for accuracy purposes.
Providing an approximate value of inventory, some see the retail method as simpler. There is no need to count items or match the ‘cost to items still on hand.’ According to Fundera, “The retail method works only if the retailer’s markup on the inventory is consistent across their entire inventory. If items are marked up at different percentages, the retail method will not give you an accurate value of your inventory.”
Retail accounting is different from standard accounting and retailers need to carefully consider their accounting system to ensure they are in compliance with generally accepted accounting practices.
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The History of Natural Gas Deregulation in Ohio
Natural gas deregulation in Ohio lets you shop around to find the best price on natural gas supply in your area. Ohio's Natural Gas Customer Choice program gives consumers the choice between purchasing their natural gas supply from their local gas utility or from a Competitive Retail Natural Gas Supplier. Now, you can choose to buy gas at competitive market rates from a licensed retail supplier or continue to buy it at the state-regulated rate from your local utility. Either way, your local utility will continue delivering natural gas through its local distribution pipeline at the standard transmission price set by the Public Utilities Commission of Ohio (PUCO) for both utility and retail supply customers.
The Federal Energy Regulatory Commission (FERC) Order No. 636 of April 1992 was designed to foster competition in the national natural gas market and to avoid shortages that closed schools and factories throughout Ohio in the mid 1970's. Before the FERC Order, pipelines bought gas from suppliers, and sold the gas bundled with pipeline transport costs to local gas utilities (known in the business as "local distribution companies" or LDCs). Now, pipeline companies are required to transport gas in a non-discriminatory fashion, leaving natural gas suppliers to compete for gas purchasers throughout the country.
In June, 1996, Ohio General Assembly passed the Natural Gas Alternative Regulation law which established customer choice as a State policy goal. In 1997, the Public Utilities Commission of Ohio (PUCO) adopted rules that encouraged retail unbundling by the major natural gas utilities in Ohio. While Ohio currently has 24 natural gas Local Distribution Companies (LDC's), customer choice programs exist in areas served by four LDC's. However, these are by far the largest utilities in the state: Duke Energy, Columbia Gas of Ohio, Dominion East Ohio, and Vectren Energy Delivery of Ohio.
Instead of the local gas utilities dictating to you the kind of Ohio natural gas service your family will receive, you now have the option to choose your natural gas supplier, what kind of plan you want to have, how long it will last, and also shop around for the best deal.
Getting It Right — Changes and Fine Tuning
It's true that Ohio's natural gas choice program wasn't completely perfect at the outset. Over the years, several rule changes and fine tuning were required to work out problems and make the program fair to both consumers and businesses. Many regulatory reforms are ongoing and in time will bring about fundamental changes to Ohio's natural gas market.
In March 2001, the amended substituted House Bill 9 was signed into law. It allowed local governments to aggregate for competitive retail gas service and consolidated consumer protection authority over certain retail natural gas transactions. Most importantly, it requires retail gas suppliers to be certified by PUCO instead of leaving it to utilities. This part of the law was later amended in April 2002 to include technical, managerial, and financial requirements that competitive retail natural gas suppliers and natural gas aggregators must meet to be certified to provide service in Ohio.
Between 2005 and 2008, Ohio voters across the state approved local aggregation programs for their towns and municipalities and gave local officials the authority to purchase natural gas on behalf of residents, but left room for local residents to choose not to participate. Local communities are now allowed to join their citizens together to buy natural gas as a group and on the group's behalf, negotiate the terms, conditions, and price of the natural gas supply. Most governmental aggregation programs are "opt-out" programs which automatically enroll all local residents, unless they individually and actively opt-out of the program (choose not to be included).
Beginning in 2006, LDC's began changing over their rate setting methods from Gas Cost Recovery (GSR) to what has become a Standard Choice Offer (SCO). Broadly speaking, The SCO rate is for customers who do not participate in the gas choice program from their local utility. The rate is based on the NYMEX month-end settlement price for natural gas, plus a retail price adjustment determined in annual wholesale auctions. Auctions must be approved by PUCO. Suppliers compete in these auctions to provide gas to the local utility. The retail price adjustment reflects the winning bidders' price to deliver natural gas from the production area to the utility's service area. Since the rate follows the month-end NYMEX price, the rate will fluctuate every month.
Meanwhile, Choice customers who are enrolled with a retail supplier are not affected by the SCO price nor do they affect natural gas distribution rates.
The Differences Between the LDC's
Auctions and service offers differ among utilities. All four LDC's have slightly differing rate arrangements with PUCO:
- Columbia Gas of Ohio sets a yearly Standard Choice Offer (SCO) for customers who do not participate in the gas choice program.
- Dominion East Ohio sets both a yearly Standard Choice Offer (SCO) rate for choice-eligible customers and a Standard Service Offer (SSO) rate for Percentage of Income Payment Plan (PIPP) customers and other customers who are not eligible to participate in Energy Choice.
- Duke Energy continues to use a Gas Cost Recovery (GCR) rate to provide a dollar-for-dollar recovery of costs to purchase natural gas. Its natural gas prices are set on a monthly basis to reflect the current cost of gas. Duke Energy is prohibited by law from making a profit on the Gas Cost Recovery (GCR) Charge.
- Vectren Energy Delivery of Ohio sets a yearly Standard Choice Offer (SCO) and a direct sales service (DSS) rate. Again, the SCO rate applies to customers who do not participate in the gas choice program. The DSS rate applies to Percentage of Income Payment Plan Plus (PIPP Plus) customers and other choice-ineligible customers.
Currently, Direct Energy provides natural gas service in all four LDC areas.
In 2008, PUCO allowed rate increases for Columbia Gas of Ohio, Dominion East Ohio, and Duke Energy Ohio and approved a new levelized residential distribution rate structure. Under the levelized rate, customers pay a flat monthly charge that does not change with gas usage. The remainder of the distribution rate consists of a lower usage-based gas delivery charge. The State consumer advocate opposed the change, pointing out that energy-conserving customers wind up paying extra for using less energy.
Those participating in a customer choice program with an alternative natural gas supplier will see the alternative gas supplier's charge on their bill.
In January 2013, PUCO approved an agreement to allow Columbia Gas and Dominion East Ohio to end SCO pricing for non-shopping, non-residential customers. All non-residential customers who have not selected a natural gas supplier will ultimately be served by a competitive supplier under a Monthly Variable Rate (MVR). PUCO provides complete information on how to understand the different parts of your Ohio Natural Gas Bill.
Winter Reconnect Order
In the northern US, wintertime cold can be dangerous. PUCO issues a Winter Reconnect Order on an annual basis during each heating season, which runs from mid-October through mid-April. This order allows residential customers who are disconnected or being threatened with disconnection the opportunity to pay a designated amount to have their service restored or maintained. Residential customers are required to pay no more than $175 to maintain service under the reconnection order, plus a reconnection fee of no more than $36.00.
Find your local Natural Gas Distribution Company
Because LDC's do not have exclusive territories in any one county or region, it can be confusing to determine which one you have for your Ohio home. You can find yours here at the PUCO Apples to Apples website or get an idea from PUCO's service area map.
Ohio Natural Gas Choice Is Working
Ohio's deregulated gas market is providing its customers with lower prices, better reliability, and above all - energy choice. Local gas utility companies deliver natural gas to all customers whether they have switched to a competitive retail supplier or are keeping their old local utility. All the same, competition is growing and prices are declining, and Ohioans are paying less than ever before.
Not only is Energy Choice catching on, it's taking off. As of September 2014, Ohio had a total of 1,696,925 Choice customers. Of these, 1,535,895 of which were residential. In the Dominion East Ohio's (Dominion) service area, participation was about 94% of the total gas customers.
While still receiving the same reliable service from their local utility, Ohio's natural gas customers are getting more by choosing their own supplier. They're no longer trapped with the one-size-fits-all approach of the old regulated utilities. Now Ohioans can shop for and choose a supplier that meets their lifestyle needs.
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Service accounting code or SAC is a system of classification framed by the Central Board of Indirect Taxes and Customs (CBIC). These codes are used to identify services and GST Rates to compute tax liability.
SAC (Services and Accounting Code) codes depend on the Harmonized System of Nomenclature which is a globally perceived framework for arranging and classifying all the services. This framework empowers the consistence of GST dependent on universal principles. It will give a typical structure to the government for the collection of data or analyzing the equivalent.
Understanding SAC code under GST
Separating the 6 digit SAC in GST
For instance, the SAC for catering services provided in flights,trains etc.., is 996335.
(i) The initial two digits in SAC is the same for all services, i.e., 99.
(ii) The two digits in between states the significant idea of services(63), for this situation, catering services.
(iii) The last two digits state the nature of services (65), for this situation, catering services provided in flights, trains, and so forth.
How SAC codes are important for the business?
Here is the reason why SAC codes are important for the business:
(i) SAC codes help the business and client to distinguish the GST rates relevant to the particular services.
(ii) SAC code is required to be mentioned at the time of GST registration.
(iii) These codes help to recognize and distinguish the services from the huge number of services available.
Difference between HSN Code and SAC Code
The basic difference between the HSN and SAC code is that HSN is used to identify the Goods and SAC codes are used to identify the services. Another contrast between the two is the number of digits present in the code, for instance, HSN code has 8 Digit codes through SAC has 6 digit codes.
GST rates and SAC code of various services
The SAC codes and GST rates against the various services give the sellers and business individuals the GST rate applicable to the services they offer or the services they render. So, it is essential to know the SAC codes.
To know the GST rates and SAC Code of various services you may visit this page.
Who can utilize SAC Codes?
SAC codes must be used by the service providers at the time of filing GST Returns and issuing invoices.
Here are the criteria for utilizing the SAC code in the GSTR filling.
(i) SAC code isn’t compulsory if the organization’s turnover is under 1.5 Crores INR.
(ii) SAC code is compulsory for the business whose turnover is above 1.5 Crore INR.
Which chapter of HSN Modules states the SAC Code?
Chapter 99 of the HSN module is the chapter that is related to services and helps in identifying the different services under SAC code.
Is it compulsory to specify the SAC code in the invoice?
SAC codes are utilized to identify various services rendered by business organizations. In case if the turnover of the service provider is more than 1.5 Crores INR, at that point he/she should specify the SAC code in the invoice. What’s more, during GSTR fillings he/she should specify the SAC code for GSTR filling. This does not only saves time for the organization but also helps in keeping a check on the finances.
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Global Debt: Australia vs The World
Global debt levels are at all time highs. Governments, corporations and individuals are dealing with mounting debt problems in different ways on both domestic and international comparisons. How do they compare? Have they been or will they be successful? What does this mean for the Australian economy?
Current Snapshot of Government Debt Levels
The world’s most highly indebted developed nations are represented below. It is worth noting Australia’s relatively strong position when compared to its Organisation for Economic and Cooperative Development (OECD) counterparts. Australian government debt is 26% of GDP. That is not to say that Australia doesn’t have a significant debt issue to deal with, this will be discussed later in the article.
Cleary Japan is the stand out, and they are also on their own in terms of policy approaches. Whilst the rest of the world is focusing on spending cuts and increasing taxes to cut debt, a method referred to as “austerity measures”. Japanese PM Shinzo Abe, using what has been termed as “Abenomics”, is attempting to spend Japan’s way out of trouble by recently announcing a USD$100 billion Bank Of Japan (BOJ) stimulus package. The aim is to create 600,000 jobs and add 2% to GDP, however the only certainty is it will increase Japan’s extremely high debt levels even further.
The EU’s government debt now sits at 94.9% of GDP. In this region “austerity” is the common theme, enforced by the European Central Bank and the International Monetary Fund in exchange for rescue packages. It should be noted that for all the press
coverage given to these bailouts, primary countries on the receiving end (Greece, Ireland, Portugal and Cyprus) account for only 6.5% of Eurozone GDP, whilst Germany, France and Italy (which account for 65% of GDP) continue to benefits from a low Euro, boosting international competitiveness for their exports.
Spain remains the tipping point in the region. Whilst accounting for a large 12% of Eurozone GDP, its public debt relative to GDP was only 60% in 2010 (less than Germany and France at the time). Debt was largely avoided by ballooning tax revenue from a housing bubble, which helped accommodate a decade of increased government spending without debt accumulation. When thebubble burst, Spain spent large amounts of money on bank bailouts, including 19 billion euros to Bankia in May 2012 on top of a previous 4.5 billion euros bailout. During September 2012, regulators indicated that Spanish banks required 59 billion in additional capital to offset losses from real estate investments, and governments deficits continue to accrue at ever increasing levels. Spain became a prime concern to the Euro-zone when interest on its 10-year bonds recently reached the 7% level and it faced difficulties in accessing bond markets. This led to a Eurogroup financial support package of 100 billion euro. Government debt is now expected to peak at 110% of GDP in 2014.
There are some clear parallels from this experience which should ring alarm bells for Australian context…
The adoption of austerity measures has been a politically fraught path for many administrations in the region. Greece was initially the most high profile case where PM George Papandreou resigned his priministership in the face of large public protests and civil unrest. Spain and Portugal have also struggled to have austerity measures approved by their parliaments. Most recently French President Francois Hollande raised tax rates on the wealthy to as high as 75% of income, prompting high profile French citizens such as actor Gerard Depardieu and Frances richest man Bernard Arnault (of LVMH fame) to renounce their citizenship.
In the USA there is bipartisan political support for the reduction of the government debt. There is however political acrimony between Republicans & Democrats over how to get there. This is hampering the legislative reforms needed to reduce debt over the long term. The political paralysis is also causing disruption to global markets as the US congress lets the country float dangerously close to the fiscal cliff. A criticism of Barack Obama’s and John Boehner’s handling of the negotiations has been that they are merely “kicking the can down the road” and deferring the hard decisions until a later day of fiscal reckoning.
Global Household Debt
The world’s most highly indebted developed nations are represented in the graph below. Previously we saw that Japan’s government debt as a percentage of GDP is the highest in the world, however Japanese households are in a relatively better position. Britain & France are shown to have high household debt levels in conjunction with high government debt levels. This makes them susceptible to economic shocks, and more recently the target of international hedge funds with shorting strategies.
It is also worth noting the countries with the highest levels of economic growth i.e Brazil, India, Russia, China (BRICS) have the lowest household debt levels.
Below there are three time series graphs that show trends in government, household, and corporate debt levels of the USA, Japan and the United Kingdom since 1975.
The long term trend borne out of all three graphs is the explosion in overall debt levels since the 1970’s and 1980’s.
The long term story in the USA is a doubling of overall indebtedness since 1975. The increase has been across all sectors and each sector has remained proportionally similar over the time period. A recent pullback from the peak levels of 2009 is evident, however debt levels remain at all time highs. Warren Buffet in a recent interview told Bloomberg: “The banks will not get this country in trouble, I guarantee it…. our banking system is in the best shape in recent memory.” Such a respected view is difficult to disagree with, but there seems to be common agreement that the 30 year debt fuelled growth binge is going to take a generation to get back under control, is assuming all parties are willing to start now.
In Japan debt has doubled since the 1980’s. What really stands out in this graph is the fact that government debt has expanded the most, quadrupling since the 1980’s. Corporate debt has grown only marginally and in fact shrunk as a proportion of overall debt since the 1990’s. Short term Japans overall debt levels look set to continue their rise as the BOJ begins to stimulate the economy to the tune of USD$100 billion. The Japanese situation clearly rests at the Government level, but is proving difficult to arrest as its population ages and lives longer (increasing health care and pension costs), and its workforce shrinks (reducing the tax base and national GDP). These are structural long term issues which require fundamental shifts in Japanese government policy.
British debt levels are now approximately 250% of what they were in 1987. This increase is largely due to the enormous increase in the debt of banking and financial institutions. A more leveraged financial sector means a financial sector more susceptible to economic shocks such as the global financial crisis. Over the long term the proportion of financial debt to total debt has markedly increased from 25% of total debt to 45%. Short term we can see a slight pullback in overall debt from the levels of 2010 as austerity measures begin to have an impact.
The Australian Case
Despite Australia being in a strong position fiscally relative to its OECD counterparts we are not in fact in a strong position by our own standards historically. The graph below reveals that current Australian debt levels are similar to that of the years of 1985 and 1986 when Paul Keating made his famous “banana republic” comment to John Laws. Back then the same level of government debt was viewed by the markets and media as a huge problem, why is it not now? Our view is that it should be. The levels of debt we are seeing now preceded “the recession we had to have” and high interest rates seen in Australia in the early 1990’s.
Components of Australian Debt Over Time
The graph below shows the trend of Australian household, corporate, and government debt over time.
The Australian governments debt position is, as Wayne Swan continually reminds us “the envy on the developed world”. However what he fails to mention is that our level of household debt is certainly not to be envied. Looking at the graph above clearly reveals a nearly 600% increase in household debt in the Australian economy since 1990. Short term we can see a reduction in corporate debt since 2008 but an increase in government debt over that period as well.
The two graphs below elaborate further on Australia’s household debt problem. Firstly debt affordability compared to household disposable income has seriously deteriorated since 1990, largely driven by growth in debt fast outpacing growth in income. The second graph is of even greater concern, showing that over the same period household debt growth has rapidly exceeded growth in household assets. The domestic debt binge has been directed by households towards consumption rather than investment. This may be very positive for current sales of flat screen TV’s, however it does nothing to aid repayment of the debt, and has really only been a brining forward of future consumption. Australian households remain highly geared and stretched in their ability to repay, resulting in a large drag on future consumption as households are forced to deal with tackling accumulated debts.
This new era of debt consolidation is not only of concern for the retail sector in terms of reduced sales, but is of particular importance to those in the mortgage industry as financially distressed households will inevitably lead to an increase in mortgage arrears and defaults. The Australian banking sector is highly exposed to Australian households, both via direct loans and loans to businesses which are reliant on household consumption. The strength of the Australian banking sector is therefore directly linked to the strength of the Australian household. As outlined above, this is not a good sign for Australian banks.
The world’s developed economies have to find the right policy mix to simultaneously stimulate economic growth and bring down high government debt levels. The European Union is adopting austerity measures, whereas the BOJ is attempting to spend its way to economic recovery. In the USA, it is Barack Obama’s intention to raise taxes and reduce spending but an acrimonious political situation there is stymieing major reforms. The bottom line however is that all of these regions are continuing to run government budget deficits and so none are reducing debt yet.
Global household debt levels tell a slightly different story. The USA, Eurozone Japan and England may all have higher government debt levels than Australia, but they also all have lower household debt levels than Australia. This comparative strength in Australian government debt levels is also no reason for comfort, as in absolute terms, the Australian position is weak by our own historical standards and must be dealt with by the government. The key risk in the Australian economy is a still inflated property market, buoyed by very high levels of household debt (compared to assets) and household gearing (compared to disposable income to service the debt).
This makes the Australian economy extremely vulnerable to any external shocks that may cause a rise in unemployment, lower incomes, or higher interest rates. Any falter in the property market would have serious flow on effects to the Australian banking sector, and whilst the Australian government continues to accrue higher debt levels, it reduces its ability to assist in any required bail outs. This scenario is uncannily similar to the Spanish case, however Australia has no ability to rely on a backup like the Eurozone bail out scenarios. The island economy is clearly in a fragile state, and we suggest a false sense of security. Immediate measures must be adopted to reduce household and government debt levels, and investors should tread with caution until that occurs.
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Preview the first lesson for free!
DISCLAIMER: These courses are based on the Western Australian Curriculum but many of the course concepts and topics should apply to ATAR courses in other States and Territories.
Course Outline for Economics Unit 3:
This Economics Unit 3 course is designed to cover all the core concepts and syllabus points for the Economics Unit 3 syllabus ‘Australia and the Global Economy’, and what might be presented in an Economics examination. For each of the main focus areas, a PDF of the guided presentation is provided, with each presentation containing all of the most up-to-date syllabus points, recent economic data as of 2020, tips and examples of past exam questions and their respective marking keys.
In addition to the guided presentations covering course content, a presentation on ‘how to write an extended answer in Economics’ has also been included, which provides lots of helpful tips and examiner insights that will help you improve your exam preparation.
Access this course to give yourself the best chance of extending your knowledge and applying that knowledge to improve your Economics Exam performance.
The videos in this course will follow the textbook: Investigating Macroeconomics (5th Edition) by Greg Parry and Steven Kemp and will cover the following topics:
Chapter 1: Global Interdependence
Chapter 2: Free Trade and Protection
Chapter 3: Australia’s Pattern of Trade
Chapter 4: The Balance of Payments
Chapter 5: Terms of Trade
Chapter 6: Exchange Rates
Chapter 7: Foreign Investment.
- Lectures 26
- Quizzes 0
- Skill level Year 12
- Language English
- Students 41
- Assessments Yes
Economics Year 12 - Unit 3 1
Global Interdependence 3
Free Trade and Protection 8
Pattern of Trade 1
The Balance of Payments 2
Terms of Trade 2
Exchange Rates 4
Foreign Investment 4
Extended Answer Writing 1
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Long Run Supply Decisions
The long-run supply curve in a perfectly competitive market has three parts; a downward sloping curve, a flat portion, and an upwards sloping curve.
Describe the long-run market supply curve of a perfectly competitive market
- The long-run supply curves of a market is the sum of a series of that market’s short-run supply curves.
- Most supply curves are composed of three periods of production: a period of increasing returns to scale, constant returns to scale, and decreasing returns to scale.
- A long-run supply curve connects the points of constant returns to scales of a markets’ short-run supply curves.
- constant returns to scale: Changes in output resulting from a proportional change in all inputs (where all inputs increase by a constant factor). If output increases by that same proportional change then there are constant returns to scale (CRS).
- decreasing returns to scale: Changes in output resulting from a proportional change in all inputs (where all inputs increase by a constant factor). If output increases by less than the proportional change then there are decreasing returns to scale.
- increasing returns to scale: The characteristic of production in which output increases by more than the proportional increase in inputs.
The long-run supply curve of a market is the sum of a series of short-run supply curves in the market (). Prior to determining how the long-run supply curve looks, its important to understand short-run supply curves.
Short-Run Supply Curves
While most people focus on the second half of a supply curve, which has a positive slope, that is not how the supply and pricing decision works in practice. As you can see from the chart, the first items that are produced start out with a very high price. This is because it is very expensive for a producer to manufacture one item. The producer has to incur fixed costs, such as learning the necessary skills to produce the item and purchasing new tools. These initial fixed costs make the cost of producing one good very expensive.
However, as more goods are produced, those initial fixed costs are spread out over more items. This decreases the price of per unit of each good produced for a period of time. As a result, in the early stages of production the supply curve is sloping downward as you can see in the chart. This period of supply is known as “increasing returns to scale,” because a proportional increase in resources yields a greater proportional increase in output.
At some point, the per unit share of fixed costs becomes less than the variable costs of producing one more item. Variable expenses include purchasing more raw materials to manufacture another item. When this occurs, the supply curve slopes upward. Thus, in the short-run, a market’s supply curve looks like an oddly shaped “u.” This period of supply is known as “decreasing returns to scale,” because a proportional increase in resources yields a smaller proportional increase in its amount in output. Between these two periods is the “constant returns to scale,” where a proportion increase in resources yields an equal proportional increase in the amount of output.
Long-Run Supply Curves
A market’s long-run supply curve is the sum of the market’s short-run supply curves taken at different points of time. As a result, a long-run supply curve for a market will look very similar to short-run supply curves for a market, but more stretched out; the long-term market curve will a wider “u.” A long-run supply curve connects the points of constant returns to scales of a markets’ short-run supply curves.; the bottom of each short-term supply curve’s “u.” Consider the attached chart.
The first short-run supply curve reflects what happens when a firm enters into a new market for the first time. When it does, it should make an economic profit. In a perfectly competitive market, firms can freely enter and exit an industry. When other business notice that the first firm is making it profit, they will enter the market to capture some of that profit and because there is nothing preventing them from doing so. In the early stages of the market, where only one or a few firms are producing goods, the market experiences increasing returns to scale, similar to what an individual firm would experience.
As more firms enter the market and time passes, production yields less and less returns in comparison to the production. Eventually the market reaches a state of constant returns to scale. How long this period of constant returns is varies by industry. Agriculture has a longer period of constant returns while technology has shorter.
Eventually, production of goods in a market yields less of a return than the amount of goods that go into product, which causes the market to enter into a period of decreasing returns to scale and the market’s supply curve slopes upward.
Long Run Market Equilibrium
The long-run equilibrium of a perfectly competitive market occurs when marginal revenue equals marginal costs, which is also equal to average total costs.
Describe the long-run market equilibrium
- In a perfectly competitive market, demand is perfectly elastic. This means the demand curve is a horizontal line.
- Once equilibrium has been achieved, firms in a perfectly competitive market can’t achieve economic profit; it can only break even.
- A perfectly competitive market in equilibrium is productively and allocatively efficient.
- long-run: The conceptual time period in which there are no fixed factors of production.
The long-run is the period of time where there are no fixed variables of production. As with any other economic equilibrium, it is defined by demand and supply.
In a perfect market, demand is perfectly elastic. The demand curve also represents marginal revenue, which is important to remember later when we calculate quantity supplied. That means regardless of how much is produced by the suppliers, the price will remain constant.
In a perfectly competitive market, it is assumed that all of the firms participating in production are trying to maximize their profits. So a firm will produce goods until the marginal costs of production equal the marginal revenues from sales. In a perfectly competitive market in the long-term, this is taken one step further. In a perfectly competitive market, long-run equilibrium will occur when the marginal costs of production equal the average costs of production which also equals marginal revenue from selling the goods. So the equilibrium will be set, graphically, at a three-way intersection between the demand, marginal cost and average total cost curves.
Repercussions of Equilibrium
A perfectly competitive market in equilibrium has several important characteristics.
- Firms can’t make economic profit; the best they can do is break even so that their revenues equals their costs.
- The market is productively and allocatively efficient. This means that not only is the market using all of its resources efficiently, it is using its resources in a way that maximizes the social welfare.
- Economic surplus is maximized, which means there is no deadweight loss. Attempting to improve the conditions of one group would harm the interests of the other.
Productive efficiency occurs when production of a good is achieved at the lowest resource cost possible, given the level of production of other goods.
Describe the efficiency of production in perfectly competitive markets
- An equilibrium may be productively efficient without being allocatively efficient.
- Another way to define productive efficiency is that it occurs when the highest possible output of one good is produced, given the production level of the other good(s).
- Productive efficiency requires that all firms operate using best-practice technological and managerial processes.
- Productive efficiency requires that all firms operate using best-practice technological and managerial processes.
- Productive Efficiency: An economic status that occurs when when the highest possible output of one good is produced, given the production level of the other good(s).
Productive efficiency occurs when the economy is getting maximum output from its resources. The concept is illustrated on a production possibility frontier (PPF) where all points on the curve are points of maximum productive efficiency (i.e., no more output can be achieved from the given inputs). An equilibrium may be productively efficient without being allocatively efficient. In other words, just because a market maximizes the output it generates, that doesn’t mean that social welfare is maximized.
Production efficiency occurs when production of one good is achieved at the lowest resource (input) cost possible, given the level of production of the other good(s). Another way to define productive efficiency is that it occurs when the highest possible output of one good is produced, given the production level of the other good(s). In long-run equilibrium for perfectly competitive markets, productive efficiency occurs at the base of the average total cost curve, or where marginal cost equals average total cost. Productive efficiency requires that all firms operate using best-practice technological and managerial processes. By improving these processes, an economy or business can extend its production possibility frontier outward, so that efficient production yields more output.
Monopolistic companies may not be productively efficient because companies operating in a monopoly have less of an incentive to maximize output due to lack of competition. However, due to economies of scale, it may be possible for the profit-maximizing level of output of monopolistic companies to occur with a lower price to the consumer than perfectly competitive companies. So, consumers may pay less with a monopoly, but a monopolistic market would not achieve productive efficiency.
Free markets iterate towards higher levels of allocative efficiency, aligning the marginal cost of production with the marginal benefit for consumers.
Explain resource allocation in terms of consumer and producer surplus and market equilibrium
- Allocative efficiency occurs where a good or service’s marginal benefit is equal to its marginal cost. At this point the social surplus is maximized with no deadweight loss.
- Free markets that are perfectly competitive are generally allocatively efficient.
- Allocative efficiency is the main means to measure the degree markets and public policy improve or harm society or other specific subgroups.
- Under these basic premises, the goal of maximizing allocative efficiency can be defined according to some neutral principle where some allocations are objectively better than others.
- Allocative efficiency: A state of the economy in which production represents consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing.
Allocative efficiency is the degree to which the marginal benefits consumers receive from goods are as close as possible to the marginal costs of producing them. At the optimal level of allocative efficiency in a given market, the last unit’s marginal cost would be perfectly equal to the marginal benefit it provides consumers, resulting in no deadweight loss.
The amount of value generated in a market that efficient equals the social value of the produced output minus the value of resources used in production. Optimal efficiency is higher in free markets, though reality always has some limitations and imperfections to detract from completely perfect allocative efficiency. Markets are not efficient if it is subject to:
- public goods which construe market failure, or
- price controls which construe government failure in addition to taxation.
Allocative efficiency is the main means to measure the degree markets and public policy improve or harm society or other specific subgroups.
Although there are different standards of evaluation for the concept of allocative efficiency, the basic principle asserts that in any economic system, choices in resource allocation produce both “winners” and “losers” relative to the choice being evaluated. The principles of rational choice, individual maximization, utilitarianism, and market theory further suppose that the outcomes for winners and losers can be identified, compared, and measured.
Under these basic premises, the goal of maximizing allocative efficiency can be defined according to some neutral principle where some allocations are objectively better than others. For example, an economist might say that a change in policy increases allocative efficiency as long as those who benefit from the change (winners) gain more than the losers lose.
Entry and Exit of Firms
The absence of barriers of entry and exit is a necessary condition for a market to be perfectly competitive.
Explain the entry and exit of firms in perfectly competitive markets.
- Barriers to entry are obstacles that make it difficult to enter a given market. The term can refer to hindrances a firm faces in trying to enter a market or industry. Barriers can be obstacles an individual faces in trying to enter into a profession, such as education or licensing requirements.
- Because firms are able to freely enter and exit in response to potential profit, this means that in the long-run firms cannot make economic profit; they can only break even.
- Barriers to exit are obstacles in the path of a firm which wants to leave a given market or industrial sector.
- Barriers to entry: Obstacles that make it difficult to enter a given market. The term can refer to hindrances a firm faces in trying to enter a market or industry, such as government regulation, or a large, established firm taking advantage of economies of scale.
- barriers to exit: Obstacles in the path of a firm that want to leave a market or industrial sector.
Barriers to entry and exit are an important characteristics to consider when analyzing a market. In perfectly competitive markets, there are no barriers to entry or exit. This is a critical characteristic of perfectly competitive markets because firms are able to freely enter and exit in response to potential profit. Therefore, in the long-run firms cannot make economic profit but can only break even.
However, in most other types of markets barriers do exist. These types of barriers, defined below, prevent free entry to or exit from markets.
Barriers to Entry
Barriers to entry are obstacles that make it difficult to enter a given market. The term can refer to hindrances a firm faces in trying to enter a market or industry. Barriers can also be obstacles an individual faces in trying to gain entrance to a profession, such as education or licensing requirements.
Because barriers to entry protect incumbent firms and restrict competition in a market, they can distort prices. Monopolies are often aided by barriers to entry. Examples of barriers to entry include:
- Capital: need the capital to start up such as equipment, building, and raw materials.
- Customer loyalty: Large incumbent firms may have existing customers loyal to established products. The presence of established strong brands within a market can be a barrier to entry in this case.
- Economy of scale: The increase in efficiency of production as the number of goods being produced increases. Cost advantages can sometimes be quickly reversed by advances in technology.
- Intellectual property: Potential entrant requires access to equally efficient production technology as the combatant monopolist in order to freely enter a market. Patents give a firm the legal right to stop other firms producing a product for a given period of time, and so restrict entry into a market. Patents are intended to encourage invention and technological progress by guaranteeing proceeds as an incentive. Similarly, trademarks and service marks may represent a kind of entry barrier for a particular product or service if the market is dominated by one or a few well-known names.
Barriers to Exit
Barriers to exit are obstacles in the path of a firm which wants to leave a given market or industrial sector. These obstacles often cost the firm financially to leave the market and may prohibit it doing so. If the barriers of exit are significant; a firm may be forced to continue competing in a market, as the costs of leaving may be higher than those incurred if they continue competing in the market. The factors that may form a barrier to exit include:
- High investment in non-transferable fixed assets: This is particularly common for manufacturing companies that invest heavily in capital equipment which is specific to one task.
- High redundancy costs: If a company has a large number of employees, employees with high salaries, or contracts with employees which stipulate high redundancy payments, then the firm may face significant cost if it wishes to leave the market.
- Other closure costs: Contract contingencies with suppliers or buyers and any penalty costs incurred from cutting short tenancy agreements.
- Potential upturn:Firms may be influenced by the potential of an upturn in their market that may reverse their current financial situation.
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If you’re interested in training to become an HGV (Heavy Goods Vehicle) driver, it’s important to be aware of all the different types of government funding for HGV training. Between grants, loans and other types of financial aid, some students pay very little to none of their education costs out of their own pockets.
Grants, if you qualify for them, are a wonderful type of government funding for HGV training. They do not have to be paid back. Loans are typically given based on very strict criteria. Your school should have all the necessary paperwork and information.
Many students miss out on government grants because they feel that they would not qualify. Regardless of your financial situation, experts recommend applying for as many grants as possible. The money is literally yours for the asking, providing that you meet criteria. It makes good financial sense to apply.
Available directly through many schools, loans are amounts of money which must be paid back. Student loans, however, often have very easy terms. This means, in many cases, that you will be loaned a certain amount of money but will not be required to begin paying it off until a certain point after your graduation, which gives you plenty of time to find work and begin earning a paycheck. Typically you will have six months after graduation, although this can vary. Check with your school and lender to be absolutely sure of how much time you have.
While every loan comes with an interest rate, these loans typically have low rates compared to bank loans. This makes them easier to pay off in a reasonable amount of time. Some are even interest free, meaning that you only pay back the amount you borrowed. Be certain, before you sign anything, to find out exactly how much interest you’ll be accumulating. In some cases, interest rates can be high enough to make it nearly impossible to pay the loan off. There is usually a much better alternative out there, so if an interest rates sounds too high for you, don’t hesitate to look elsewhere.
How to Find Funding
A great way to begin searching for financial assistance is with the help of your advisor, counselor or any other school official. Many schools have a specific office or person just for handling students’ financial aid and assistance, and they typically have information on the best ways to get the biggest loans and grants. They will also be able to assist you in finding a low- or no-interest loan, as opposed to one with a high interest rate.
If your school doesn’t have the resources necessary, or you just want to begin your search early, try looking online for government funding for HGV training. There are grants and loans available for certain types of careers, different individuals and many other criteria. Search and see what you come up with – you’ll likely be surprised at all the financing that’s out there. The sooner you begin your search, the sooner you’ll be on your way to a new career.
Check out one of our other articles that offers further advise on methods to get free training.
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Principles of Political Economy
Collected Works of John Stuart Mill, Volume 2, Books I-II
Автор(и) : John Stuart Mill
Издател : Liberty Fund
Място на издаване : Indianapolis, USA
Година на издаване : 2006
ISBN : 978-0-86597-651-1
Брой страници : 451
Език : английски
Резервираната от вас книга ще бъде пазена до 2 работни дни след избраната дата, след което ще бъде освободена за по-нататъшно резервиране. Съгласувайте с работното време на Библиотеката!
First published in 1848, Principles of Political Economy established Mill as a leading economic thinker of his time, and this work endured as the principal economics textbook for the balance of the nineteenth century. As a comprehensive treatment of economic thought, the book touches on the full range of micro- and macroeconomic topics, including taxation, national debt, and theories of money, production, and prices.Volumes 2 and 3 are based on the seventh and final edition of this work published by Mill in 1871. Professor Robson and his editorial team allow the reader to seamlessly track the changes made through all seven editions of Principles of Political Economy, providing insight into the development of Mill’s economic ideas.
Of the Law of the Increase of Capital
§ 1. [Means and motives to saving, on what dependent] The requisites of production being labour, capital, and land, it has been seen from the preceding chapter that the impediments to the increase of production do not arise from the first of these elements. On the side of labour there is no obstacle to an increase of production, indefinite in extent and of unslackening rapidity. Population has the power of increasing in an uniform and rapid geometrical ratio. If the only essential condition of production were labour, the produce might, and naturally would, increase in the same ratio; and there would be no limit, until the numbers of mankind were brought to a stand from actual want of space.
But production has other requisites, and of these, the one which we shall next consider is Capital. There cannot be more people in any country, or in the world, than can be supported from the produce of past labour until that of present labour comes in. There will be no greater number of productive labourers in any country, or in the world, than can be supported from that portion of the produce of past labour, which is spared from the enjoyments of its possessor for purposes of reproduction, and is termed Capital. We have next, therefore, to inquire into the conditions of the increase of capital: the causes by which the rapidity of its increase is determined, and the necessary limitations of that increase.
Since all capital is the product of saving, that is, of abstinence from present consumption for the sake of a future good, the increase of capital must depend upon two things—the amount of the fund from which saving can be made, and the strength of the dispositions which prompt to it.
John Stuart Mill
John Stuart Mill (1806-1873), British philosopher, economist, moral and political theorist, and administrator, was the most influential English-speaking philosopher of the nineteenth century. His views are of continuing significance, and are generally recognized to be among the deepest and certainly the most effective defenses of empiricism and of a liberal political view of society and culture. The overall aim of his philosophy is to develop a positive view of the universe and the place of humans in it, one which contributes to the progress of human knowledge, individual freedom and human well-being. His views are not entirely original, having their roots in the British empiricism of John Locke, George Berkeley and David Hume, and in the utilitarianism of Jeremy Bentham. But he gave them a new depth, and his formulations were sufficiently articulate to gain for them a continuing influence among a broad public.
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• Global economies are more responsive due to the triple headwinds of aging demographics, low interest rates and deleveraging.
• Greater responsiveness to fiscal and monetary policy has made the economy more like a golf cart and less like a car.
• Policymakers need to adapt to this shifting economic environment by continuing steady stimulus.
Anyone who has ever driven a golf cart immediately realizes it is different than driving a car. Golf carts don’t glide, they slow the minute you lift your foot from the accelerator. Golf carts also tend to have ‘hair-trigger’ brakes, where the lightest pressure can send its passengers through the windshield. Because they are so different than cars, they can take a little getting used to.
The difference between golf carts and cars is a little like the difference between the economies of today and the economies of yesteryear. Today’s economies don’t glide like they used to, in fact they seem to slow the minute monetary or fiscal stimulus is removed. Their brakes also seem to be more responsive than ever. There are multiple causes for the greater responsiveness of global economies; however, there are three drivers that we believe may be the greatest contributors.
The Shift In Three Tailwinds May Explain Why The Economy Is More Responsive:
Over the last fifty years the world has benefited from three important tailwinds: Demographics, declining interest rates, and increased household leverage. These three tailwinds have provided a steady source of organic growth that has been relatively independent of the overall economic cycle. These tailwinds also provided a more self-sustaining economic trajectory, in our view, allowing economies to ‘glide’ once they were stimulated. Likewise, we believe with the three powerful tailwinds, governments and central bankers did not have to be so precise when they wanted to slow the economy because the brakes were more forgiving. Unfortunately, the three tailwinds have recently become headwinds, that we think may impact the investment climate for many years to come.
Fading Demographic Tailwind:
Every year from 1967 to 2014, a greater percentage of the global population entered the work force (ages 15 to 64) than exited. A growing work force is an important component of economic growth, because ‘workers’ earn and spend more than those that are not working. However, in 2014, that all changed when workers around the world began ‘aging out’ of the 15 to 64-year-old population, turning demographics into a headwind. The aging of the workforce has been most acute in the developed world outside the US.
Declining Interest Rate Tailwinds Have Moderated:
Declining interest rates for the past 40 years provided a natural tailwind for growth throughout much of the developed world. In the left chart we show US interest rates, but this phenomenon has also occurred overseas.
Interest rates in much of the developed world are currently close to their lowest levels since World War II. Central Bank balance sheets have also already expanded to levels not seen since the Great Depression. With low or negative interest rates throughout the developed world and exceptionally low rates in most emerging markets, the opportunity for further declines in rates is limited.
Fading Household Leverage Tailwind:
Since 1983, low interest rates have allowed households in the US to take on more debt, thereby increasing leverage. When households take on debt, purchases of goods and services are amplified because consumers are spending more than they make. This provided an additional boost to consumption and ultimately economic growth. However, household debt as a percentage of disposable personal income peaked in 2007 in the US and has actually declined from roughly over 120% to levels back below 100% (Right Chart). This trend has also been mirrored in large European economies such as the UK and Germany. Declining household debt is an admirable long-term goal from a personal finance perspective, but it is a clear detractor from global economic growth.
Implications Of A More Responsive Economy:
We believe controlling today's global economies is more like driving a golf cart than a car. They may accelerate similarly, but due to the headwinds of aging demographics, declining interest rates, and deleveraging; the economy no longer 'glides' like it used to and can be especially sensitive to braking. More responsive economies mean that investors need to pay more attention to monetary and fiscal policy. It also means that policymakers (legislators and central bankers) need to recognize that the vehicles they are driving may be different than the vehicles they have trained on.
Economies where these headwinds are the strongest, like those in Japan and Europe, appear to now require steady stimulus to keep any economic momentum going. Even slight changes in monetary stimulus like ceasing quantitative easing (QE) in Europe or slowing asset purchases in Japan can have far larger impacts than in the past. Over the long-term, we feel confident that ‘necessity’ will be the ‘mother of invention’ and policymakers will begin to understand the new dynamics they face and re-calibrate their driving style by altering the pace and magnitude of new policies and their implementations.
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With Congressional approval of the $1.9 trillion COVID-19 relief package, US President Joe Biden is poised to sign his first major piece of legislation this week. Julie Norman explains what’s in the bill, and what both the policies and the process tell us about how Biden and Congressional Democrats are likely to govern.
What’s in the bill?
The $1.9 trillion coronavirus relief bill, dubbed the American Rescue Plan, includes a number of measures designed to provide pandemic-related relief and stimulate the economy. Direct payments are a key element, with the government sending additional stimulus checks of $1,400 per person to individuals earning less than $75,000 and couples earning less than $150,000, reaching about 90 percent of American households. The bill will also extend additional weekly unemployment benefits of $300, which were set to expire next week, until September. It also includes funding for COVID-19 tests and vaccinations, grants for small businesses, money for state and local governments, school reopening funds, additional child tax credits, health insurance subsidies, and housing and nutrition assistance.
Why is the bill so big?
Democrats maintain that the size of the bill is necessary to confront the ongoing crises of the pandemic and the economic recession. Most Democrats, including Biden, have stated that the danger of going too small on the stimulus bill posed a greater risk than going too big, citing lessons learned from the Obama-era stimulus which was criticised for not being ambitious enough. Republicans however argue that the bill includes levels of spending that go beyond urgent pandemic needs, such as the $350 billion allocated to local governments. Some critics have questioned if the ambitious spending is still as crucial as it appeared two months ago, and even some Democrats have voiced concern that the bill may be too big, and could lead to inflation.
Is there bipartisan support?
Most Senate bills effectively require 60 votes to pass, but Democrats pushed the bill through the evenly divided Senate via reconciliation, a budget-related process that only requires a simple majority. The bill passed 50-49 along strict partisan lines, with no Republican votes, as was the case in the House. Democrats, wary of long delays, maintained that the gulf between the two parties was too wide to engage in drawn out negotiations with little chance of increased support. Instead, Democrats essentially bet that a big policy win would matter more to voters than bipartisanship, and point to the bill’s popularity across party lines in national polls as evidence of its bipartisan appeal. But Democrats’ bypassing any attempt at bipartisanship in their negotiation efforts may weaken the legitimacy of the bill, and frustrate future efforts for compromise on upcoming proposals on infrastructure, voting rights, and immigration.
What can we expect from Democrats moving forward?
The compromises that were made on the bill – such as removing the provision to increase the federal minimum wage to $15 per hour – were due mostly to disagreements between centrist and progressive Democrats, illustrating the leverage that moderates like Senator Joe Manchin (D-WV) currently have in the party. With the Democrats’ razor-thin majority, it is likely that future legislative efforts will similarly depend more on intra-party negotiations than reaching across the aisle.
- Featured image credit: Senate Majority Leader Chuck Schumer (D-NY), Senator Jon Ossoff (D-GA) and Senator Reverend Raphael Warnock (D-GA) by Senate Democrats is licensed under CC BY 2.0
Note: This article gives the views of the author, and not the position of USAPP– American Politics and Policy, nor of the London School of Economics.
Shortened URL for this post: https://bit.ly/38kYJxu
About the author
Julie Norman – UCL
Dr Julie Norman (@DrJulieNorman2) is a Lecturer in the Department of Political Science at University College London (UCL), and Deputy Director of the UCL Centre on US Politics (@CUSP_ucl).
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A lot of social landlords are already using renewable technologies such as solar PV, solar thermal, biomass and ground and air source heat pumps because they are proven to be able to help combat fuel poverty, especially in off-gas areas.
Part of this drive was undoubtedly a result of the previous Code for Sustainable Homes, which forced social housing landlords to look at the green credentials of new developments. At the time of the Code’s demise, HA’s were expected to achieve Code Level 4, which made the use of gas boilers in new-build almost completely unviable and lead to a significant rise in the number of air source heat pumps installations.
With the Code now consigned to history and no clear replacement at this stage, many landlords are still adhering to Code Level 4 as a benchmark for new-build.
However, this leaves thousands of older properties still requiring an upgrade before they can fully benefit from renewable heating.
For the housing association, they can not only earn the regular income from the property, they can rest assured that they are helping tackle fuel poverty in a way that can also benefit their housing stock
Renewable Heat Incentive
What we do have from Government though, is the Renewable Heat Incentive (RHI), which means HA’s can receive a quarterly income from every kilowatt of renewable heating each property produces using approved, renewable technologies.
Forward-thinking HAs have been therefore able to justify the initial capital expenditure on upgrading windows, insulation and installing heat pumps, by building the RHI payments into their forward budget planning.
The latest Government tinkering with the RHI earlier this year saw a 33% rise in the rates for air source heat pumps and places this technology firmly in the vanguard of the renewable revolution.
Gas boilers are still the dominant force in the domestic heating market with around 1.5 million units sold each year. However, the Government has forecast that by 2030, the use of air source heat pumps to provide heating for UK homes will rise to over one million units per year.
At the same time, the way we as a country produce electricity is becoming greener, which increases the benefits of air source heat pumps further as a renewable technology and brings the demise of gas boilers as the default heating, even closer.
At the end of April, the UK generated a whole day of electricity produced without burning a single lump of coal – a landmark moment and the first working day this has happened since 1882.
So heat pumps are on the up, backed by the Committee on Climate Change and with the electricity needed to run them coming from more and more renewable sources.
Still need convincing
But if you or your tenants are still unsure, is there anywhere you can go for help and advice?
The market leader in air source heat pumps by far is Mitsubishi Electric, with its Ecodan range which can be fitted to almost any property and can also be used in a hybrid situation with the existing heating system. The company has produced a special brochure for homeowners and tenants focusing on the benefits of air source heat pumps.
“In addition to helping with newer homes, this can offer landlords a quick renewable fix for older properties on the gas-grid, with funding from the RHI helping to significantly reduce the payback period,” explains Sharon Oliver, marketing manager for the Ecodan brand.
In a hybrid system, the heat pump is added to an existing heating system, with the advanced controls in the heat pump able to decide when it is most efficient and effective to use the heat pump over the existing heating system.
“This provides reassurance to the tenant whilst bringing them the benefits of fully controllable heating throughout the home, all year round,” adds Oliver.
For the housing association, they can not only earn the regular income from the property, they can rest assured that they are helping tackle fuel poverty in a way that can also benefit their housing stock by reducing property damage from damp and mould. Heat pumps can also reduce annual maintenance costs as there is no need for a gas safety certificate.
Reliable, renewable heating
Air source heat pumps have now been fitted into thousands of properties of all sizes, shapes and ages.
With tens of thousands of installs, nationwide, tenants and HA's are starting to see the added benefits of heat pumps
Frequently Asked Questions
Mitsubishi Electric has also produced a website for tenants and homeowners, explaining how a heat pump works and answering all of the frequently asked questions that tenants are likely to ask.
The website includes short videos which not only focus on noise levels and controls, it explains how a heat pump works; how much heat you will get for the home; how hot the radiators should be; and how the technology works when its cold outside (this particular video was filmed whilst snow was on the ground!).
The company’s technical experts have also visited hundreds of tenant groups around the country to show people the technology and answer questions face to face.
Even more benefits
As we have previously reported in Housing Association, the benefits do not stop there as the ‘Touching the Void’ report from Sustainable Homes clearly shows. The report can be downloaded at http://www.sustainablehomes.co.uk/research-project/rent-arrears/
The research examined data from over 500,000 homes, looking at benefits of energy efficient homes for social landlords’ income. The study found that:
- as homes become more energy efficient they are void for a shorter length of time – on average, 31% shorter for band B properties compared to those in bands E and F
- landlords with more energy efficient stock spend less on refurbishing void homes, less on repairs and less on staff time to manage voids
- rent arrears are on average half a month higher in Band F properties than in other bands
- other cost savings identified include time spent seeking overdue rent payment, legal costs and court costs which decline by around 35% for more energy efficient homes
So, if you are already using air source heat pumps for your new-build properties, is it now time to consider the technology for on-gas properties too?
And if you haven’t yet looked at heat pumps, isn’t it time you asked your peers in the industry what their experience has been? Alternatively, get in touch with the manufacturers and talk to them yourself.
Click here for more information on the Ecodan range of air source heat pumps.
Joe Bradbury is Assistant Editor of Housing Association Magazine.
We upload new articles every week so remember to check back regularly.
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- What are 2 characteristics of a command economy?
- What are the main characteristics of a command economy?
- What are five weaknesses of a command economy?
- What are seven disadvantages of a command economy?
- What are the advantages and disadvantages of a command economy quizlet?
- Why a command economy is bad?
- What are 2 advantages of traditional economy?
- What are characteristics of a planned economy?
- What’s a main disadvantage of a traditional economy?
- Is North Korea a poor country?
- Is North Korea a command economy?
- What is the main disadvantage of a market economy?
- Is North Korea a 3rd world country?
- Is North Korea a developed country?
- What are the five characteristics of a command economy?
What are 2 characteristics of a command economy?
A command economy has a small number of typical elements: A central economic plan, government ownership of the means of production, and (supposed) social equality are essential features of a command economy..
What are the main characteristics of a command economy?
A command economy is a system where the government, rather than the free market, determines what goods should be produced, how much should be produced, and the price at which the goods are offered for sale. It also determines investments and incomes. The command economy is a key feature of any communist society.
What are five weaknesses of a command economy?
What are the five major weaknesses of the command economy?… not designed to meet the wnats of consumers. no insentive to work hard. requires large decidion- making bureaucracy. no flexablity with problems. new ideas find it difficult to get ahead.
What are seven disadvantages of a command economy?
List of Disadvantages of a Command EconomySocietal needs might be ignored. … Freedom is restricted. … Innovative developments might be hindered. … No competition is offered. … Black markets would explode. … There might emerge some export problems. … Unbalanced amounts of goods would be experienced.More items…•
What are the advantages and disadvantages of a command economy quizlet?
What are the advantages and disadvantages of a command economy? Advantages: Can quickly and dramatically change if needed by shifting resources. Disadvantages: It does not meet the demands of consumers, it does not give people a reason to work hard, and it requires a large decision-making government agency.
Why a command economy is bad?
There are benefits and drawbacks to command economy structures. Command economy advantages include low levels of inequality and unemployment, and the common good replacing profit as the primary incentive of production. Command economy disadvantages include lack of competition and lack of efficiency.
What are 2 advantages of traditional economy?
Advantages of a Traditional Economy Traditional economies produce no industrial pollution, and keep their living environment clean. Traditional economies only produce and take what they need, so there is no waste or inefficiencies involved in producing the goods required to survive as a community.
What are characteristics of a planned economy?
All resources are owned and managed by the government. There is no Consumer or producer sovereignty. The market forces are not allowed to set the price of the goods and services. Profit in not the main objective, instead the government aims to provide goods and services to everybody.
What’s a main disadvantage of a traditional economy?
What are the disadvantages of a Traditional Economy? A Change of economy is discouraged and perhaps punished, and one in which the methods of production are inefficient.
Is North Korea a poor country?
Poverty in North Korea has been widely repeated by Western media sources with the majority referring to the famine that affected the country in the mid-1990s. … It is estimated that 60% of the total population of North Korea live below the poverty line in 2020.
Is North Korea a command economy?
The economy of North Korea is a centrally planned economy, where the role of market allocation schemes is limited, although increasing. As of 2020, North Korea continues its basic adherence to a centralized command economy.
What is the main disadvantage of a market economy?
The disadvantages of a market economy are as follows: Competitive disadvantages. A market economy is defined by cutthroat competition, and there is no mechanism to help those who are inherently disadvantaged, such as the elderly or people with disabilities.
Is North Korea a 3rd world country?
The term Third World includes as well capitalist (e.g., Venezuela) and communist (e.g., North Korea) countries, and very rich (e.g., Saudi Arabia) and very poor (e.g., Mali) countries.
Is North Korea a developed country?
North Korea is one of the poorest and least developed countries in the world. Because of its penchant for secrecy and isolation, exact metrics on the country’s economy are difficult to obtain. … North Korea is run by a totalitarian regime that permits no economic freedom.
What are the five characteristics of a command economy?
Five Characteristics of a Command EconomyThe government creates a central economic plan. … The government allocates all resources according to the central plan. … The central plan sets the priorities for the production of all goods and services. … The government owns monopoly businesses.More items…
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Tuesday 02 Jul 2019
The Largest Free Trade Deal in Nearly a Quarter-Century Seeks to Make Africa a Single Market
The U.S. ditched the Trans-Pacific Partnership, while across the Atlantic, the U.K. is trying to extract itself from the European Union and its single market.
But while free trade is under threat in much of the world, African countries are heading in the other direction: the continent is on track to create the largest free trade agreement by population that the world has seen since the 1995 creation of the World Trade Organization. That organization has 164 member countries.
On May 30, the African Continental Free Trade Area (AfCFTA) will become a reality. All but three of Africa’s 55 countries have signed up, creating a free trade area that covers more than a billion people and a collective GDP of over $2 trillion, and includes most of Africa’s largest economies, including South Africa and Egypt. If hold-outs Benin, Eritrea and Nigeria—Africa’s largest economy—join in, that’s a total of 1.2 billion people and $2.3 trillion in GDP.
By way of comparison, NAFTA and the EU-Japan free trade agreement each cover a collective GDP of around $22 trillion. But even when added together, they don’t cover as many people as the AfCFTA will if every African nation joins.
Here’s what you need to know about the deal that could transform Africa’s business landscape.
What’s the goal?
Trade within Africa is in a dire state. A mere 17% of African countries’ exports go to other African countries—compare that with intra-regional trade levels of 59% in Asia and 69% in Europe. That means Africa doesn’t feature much in the way of cross-border value chains.
Why? There’s currently a mess of fragmented tariffs and trade regulations. As Africa’s richest man, the Nigerian billionaire Aliko Dangote, recently complained, a Dangote Industries cement factory that’s a mere 25 miles from the border with Benin finds it difficult to sell its wares into that country, because of Benin’s decision to import Chinese cement instead.
Once the AfCFTA comes into effect, the signatories will need to drop 90% of their tariffs for imports from other African states. According to the United Nations, this could boost intra-African trade by 52.3%. And once countries drop their remaining tariffs, which they will be allowed to maintain for a decade in order to protect key industries, the U.N. says intra-African trade will double.
“When you look at the African economies right now, their basic problem is fragmentation. They’re very small economies in relation to the rest of the world. Investors find it very difficult to come up with large-scale investments in those small markets,” said Albert Muchanga, the African Union’s trade commissioner. “We’re moving away from fragmentation, to attract long-term and large-scale investment.”
Another good reason to boost intra-African trade is that it should create more jobs in more diverse industries, from services to manufacturing. Trade with outside countries tends to rely on sending commodities such as metals and timber to overseas factories—meaning fewer jobs at home, plus over-exposure to commodity prices.
The African Continental Free Trade Area has been a flagship project of the African Union’s “Agenda 2063” development drive for five years now, but it got a major push forward under the AU chairmanship of Rwandan President Paul Kagame last year. Kagame got almost every African country to sign the deal in March 2018. Just over a year later, the 22nd of those countries—Gambia—ratified the deal, meaning the agreement can now enter into force.
Setting up a free trade area does not magically make trade happen. Indeed, there are many obstacles to overcome before that dream becomes reality in Africa.
Problem number one: infrastructure. The physical remnants of Africa’s colonial past continues to hold back trade.
“[Colonial infrastructure] was organized to take the commodities from inland and channel them to the ports, or on to the colonial country for processing. You have very little infrastructure that is meant to do the interconnection across countries and regions,” said Abdoul Salam Bello, a World Bank advisor and Atlantic Council visiting fellow.
According to the African Development Bank, the continent needs $130 billion to $170 billion in infrastructure financing per year, and there’s a shortfall of $68 billion to $108 billion. “This is a challenge, but also an opportunity,” said Bello, who said the creation of a common market could improve the availability of long-term financing in Africa.
Countries will need to fix their corporate laws so businesses can operate across borders with minimal fuss. Then there’s the skills issue, which will come to the fore as companies try to build international value chains and countries industrialize to make this possible. In Ethiopia, for example, the government is pushing to boost manufacturing’s share of the economy from 5% to 20% by 2025, and this has meant working with industry to train the necessary workforce.
“Some other countries don’t have this strategic shift of the economy toward industrialization,” said Bello. “It speaks to research and development. You need scientists; you need engineers.”
What about Nigeria?
Nigeria remains the biggest absence in the new trade area—and a large one, too, as Nigeria accounts for a sixth of Africa’s GDP. It originally pulled out of talks because, per President Muhammadu Buhari, the agreement could “undermine local manufacturers and entrepreneurs, or… lead to Nigeria becoming a dumping ground for finished goods.”
The fear here was that cheap overseas goods could flow into Nigeria via other African countries. Nigerian manufacturers backed Buhari’s protectionist stance.
However, South Africa—Africa’s second-biggest economy—then signed up to the free trade deal, and Buhari changed tack. He told reporters in December that he would sign it soon, and would have already done so if it weren’t for the fact that he is “a slow reader.”
Buhari still hasn’t signed, though. According to Bello, the Nigerian private sector is still concerned about protecting local manufacturing. Muchanga said the Nigerian Chamber of Commerce was “on board,” but he didn’t know when the country would sign the agreement.
The main point of the AfCFTA is to benefit Africa and Africans, but that doesn’t mean it doesn’t create opportunities for outsiders.
“Some companies hardly go to Africa because they find the market too small for them,” said Bello. With the new free trade area, that could change—a big U.S. firm could for example set up shop in a major country such as South Africa or Ethiopia, knowing it could use that as a base to expand into other African countries as well.
Over time, if all goes to plan, the AfCFTA will also lead to new trade agreements with countries outside Africa—but this time with Africa maintaining a united front, much as the European Union does today.
That would mean setting up a full-blown customs union—something Muchanga said will happen “when the member states have agreed” it should—and perhaps even a common currency; an idea that is already gathering steam at a regional level in West Africa and East Africa.
“The purpose is not to create a copy-and-paste of the European common market,” said Bello. “It has to take on board African issues and context. But that doesn’t mean we have to reinvent the wheel.”
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About Personal Account
A personal account is an account used by an individual for its own needs. The term “personal account” may be used basically for financial accounts at banks. These accounts are used for non-business purposes. Most likely, the service at banks for personal accounts is termed as Savings account. This is a type of account held at a bank where a customer can accumulate extra cash, earn interest on it and access it when required. It is the most common type of banking means used by a customer and one of the safest mode to ensure that they can have secured access to hard earned money when in need. A customer can deposit funds into the savings account either by cash or cheques or can transfer money from other accounts using IMPS/NEFT/RTGS/UPI methods. The earned interest using such deposits are credited into the customer’s account on a quarterly basis.
Interest rates offered on these accounts varies from bank to bank and usually ranges from 3.5% to 7%. Withdrawals from these accounts can be done either by visiting the bank branch and cashing a cheque/withdrawal form drawn on the account or at an ATM by using a debit card linked to the account. Customers are also required to maintain an average minimum balance for the quarter or month according to the rules and regulations of the bank. Nonetheless, banks also offer zero balance accounts where the customers do not have to maintain a minimum balance.
Features and Benefits of Personal Account
Features of savings account vary according to the type of account chosen. Some of the common features for understanding the benefits of savings account are listed below:
- The interest rates range from 3.5% to 7% per annum
- Fund transfers easy through IMPS/NEFT/RTGS/UPI facilities
- The bank branches and ATMs are easily accessible to the customers
- Personalised cheques books are issued for enhanced security
- Several offers and discounts on debit
- For quick check of balance and bill payments internet banking and phone banking facilities are available
- There is no limit on the amount deposited
Types of Personal Account
Personal account also known as savings account are classified into different types based on the work domains and age groups of the customers. According to the eligibility and the specific requirements, customers can open any of the savings account mentioned below. The benefits and features of every account differ from bank to bank. However, based on the personal requirements customers have to choose the appropriate option. The common types of account available are:
Zero Balance Savings Account:
In this type of account, the banks offer their customers to operate their account without the strings of maintaining any minimum balance. Applicants can open this type of account online using the Aadhaar based eKYC and utilise the benefits related to the account.
Regular/Basic Savings Account:
These accounts offers the minimum facilities and basic interest rates for its services. Customers have to ensure that they maintain the minimum balance issued according to the bank rules so that they do not incur extra charges.
These accounts can only be opened by the salaried individuals where their monthly salary is directly deposited by the companies. These are a zero-balance savings account where the customers do not need to maintain a minimum balance. If the monthly salary is not credited into this account for 2 to 3 months, it is automatically converted to regular savings account with minimum balance requirements.
Eligibility Criteria of Personal Account
There is minimal eligibility requirement for openings a savings account. These criteria might vary from bank to bank. Applying for a savings account also does not require applicants to fulfill any income or employment criteria. Some of the common requirements are listed below:
- Applicants can be an Indian citizen, Non-Resident Indian and also foreign nationals
- They should be over 18 years of age. However, accounts for minors are also available which are opened by their parents/guardians
Documents Required to Open Personal Account
Nowadays, online savings account opening is an easy way to create an account without any difficulty. An applicant need to submit the following documents at the bank for opening a savings account or for eKYC:
Aadhaar card: It has now become mandatory to submit the aadhaar card number for opening an account
PAN card: These are also mandatory to submit as this can be a utilised as a proof of signature
ID and residence proof: Other ID proof that can be submitted in the bank are Passport, pan card, driving licence, voter ID card, etc.
Address proof: For address proofs bank statement, rent agreement, voter ID card, ration card, passport, driving licence, telephone/electricity/water bills can be used
Photographs: A color passport sized photograph of the applicant is also required
Personal Account Frequently Asked Questions (FAQs)
Your age and your income are the primary criteria for the bank to decide your credit eligibility. For instance, a bank would be more willing to a younger person, earning a stable monthly salary. Such profiles have lower risk exposure.
© 2021 CreditTour.in
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Internet Exchange Point and its Necessity
What is an Internet Exchange?
An internet exchange point (IXP) is a physical network access point through which primary network providers connect their networks and exchange traffic. Sometimes it is hard to believe that the Internet can be stored in some physical segment. Although it is true, that the internet is stored. While using the Internet, we connect to two networks at a time to acquire data and is known as Peering.
What is Peering?
Peering is a process by which two Internet networks connect and exchange traffic to distribute traffic to each other’s customers without having to pay a third party to carry that traffic across the Internet for them. The routing protocol that allows peering between ISPs is Border Gateway Protocol (BGP), which is free and benefits all ISPs.
What are the different types of Peering?
- Public Peering: Public peering is performed over a Shared network called Internet Exchange Points through which connecting to many peers becomes easy with lesser costs. Useful for a small volume of traffic.
- Private Peering: Private peering is performed by establishing a direct physical connection (usually consisting of one or more 10GE fibers) between two internet networks. Useful for Large volume of traffic.
Why does a country need an IXP?
Let’s presume, that you as an end user browsing something which is hosted outside India through your service provider, the query will go all the way through the international gateway to Singapore and then come back to you. The time taken to achieve this becomes much. In order to get this query to be routed locally, IXP’s come in to picture which provides a platform to those providers to host their infrastructure locally and serve the users with lowest possible latency.
What are the benefits of Internet Exchange Points (IXP)?
- Substantial cost saving with local networks & hosting global CDNs.
- More improved bandwidth.
- Reduced latency with a better quality of experience.
- High-speed data transfer.
- Enhanced Routing efficiency.
Should businesses be close to IX Points?
Being close to internet exchanges can be thoroughly favorable for your business/company if you want to recover information from collocation facilities, like data centers, often. This is mostly due to the cost of sustaining the network but is also applicable to the time it takes to recover information from the centre. However, if you want to recover something from an internet exchange that is not situated physically close to your office, you would require more than just the fiber cable and other equipment which can turn out to be costly to maintain.
Internet exchanges make the internet a swift and easy tool for business use. It helps you retrieve and forward data over the internet and execute tasks. Being close to an IXP can bring the company great advantages and help it to achieve more as costs will be lower, response time will be lower and your data will be safer.
Mumbai Convergence Hub was India's first private Internet Exchange which is now DE-CIX India. DE-CIX India is one of the Largest Internet Exchange in India currently interconnects 200+ Networks all across India & the World. DE-CIX India runs Internet Exchange Point in Indian Metro cities in Mumbai, Delhi, Kolkata & in Chennai. DE-CIX India is a carrier & datacenter neutral, Internet Exchange for the Indian & South Asian markets DE-CIX India is backed by DE-CIX Global which is the world’s largest Internet Exchange with 8 terabits of per second. DE-CIX also runs 16+ Internet exchanges across the world.
DE-CIX India is always happy to help its community, if you wish to connect or have any query, please drop us a mail at [email protected]
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