French and Indian War Essay

The French and Indian War altered the political, economic, and ideological relations between Britain and American colonies. Ideologically, this War brought up resentment toward Britain this changed the political relationship between Britain and its colonists because the British were forced to unfairly tax them due to their debt. The French and Indian war transformed North America by only leaving the British and the colonists left in their region. Greedy as the British were they did not treat the colonists fair by taxing them lead to resentment that lead to the American Revolution. After the French and Indian War, North America completely changed. Before 1754 English, French, Spanish, and the Russians had a portion of North America that they had power over. After 1763 the French were completely left out and had no land at all. (Document A) This impacted Britain and American colonists politically because it lead to the Proclamation of 1763 where Native Americans believed that the white people were not allowed to settle in their land that they had inhabited for hundreds of years. (Document .B) Britain thought that with the proclamation everything would turn out great, but it did not it just angered the colonists. They were angry because they believed they had no freedom. After the French and Indian War, England had to pay off a huge debt that had been accumulating over the years. The only way they saw to pay this was to regulate trade meaning that they would have fully control and know who and what they are trading with, and to tax everything. Britain made these changes and angered the colonists even more because the colonists felt it was not fair that all of a sudden they started taxing everything. (Document F) Taxation had a huge impact on the economic relationship between the colonists and their mother country because many of these acts forced the Americans to ship their raw materials to Britain, only to later buy the finished products from them. Mercantilism was soon abandoned when the colonists rebelled. An act that really angered the colonists was the Stamp act. Colonists furious of these taxations used boycotting as their weapon, they practiced non-importation and non-consumption. Although hurting the colonists and the British, the British soon came to realize that they were not messing around.(Document G) Colonists coming together and boycotting these acts had a huge impact on the British ideological values. The colonists felt that taxation was another thing that they should be mad at the British for. It added more stuff to what was already going on. The colonists were already mad about the Proclomation and just taxing everything did not make colonists happier. The colonists soon came to understand that they had little to no freedom which lead to the idea of becoming independent. Thinking that they could stand on their own. They don’t need the British. (Document D) The French and Indian war brought up resentment toward the british this changed the political relationship between Britain and the colonists because of the taxation that the British put on everything. Colonists began to change their mindset from being one whole colony to believing that they could stand on their own and become independent thus leading to the Revolution.

Economics and Business Risk Information

Risk Information Rating is an interactive process relying primarily in gathering information from the issuer and supplementing it with strategic information obtained from outside independent sources. The entire process Is aimed at evaluating (a) Financial Risk and (b) Business Risk Information with regard to (a) Is generally provided by the company requesting for rating and, only when necessary, such Information Is corroborated or complemented by Information from other sources.However, comprehensive information with regard to (b) is not readily available from any identifiable source. PACRA has, therefore, proceeded to develop its own database consisting of economic data by industrial sub-sectors. Additionally, it continuously monitors macroeconomic developments and important government policy changes (like fiscal adjustments) for determining their likely impact on specific sectors and companies. PACRA does not assign unsolicited ratings.This policy is based on our sensitivity egardin g the motivation for such a practice: globally, unsolicited ratings have come under criticism as they seem to be a means of pressurizing recalcitrant entitles to subject themselves to rating. Again, the value of credit rating flows from the Interactive nature of the exercise. Thus, unless the rated entity has an opportunity to share the reasons for any delinquent performance In the past and Its view on prospects, the rating opinion may not be reliable. The rating process begins with a careful review of an entitys published information.From this review, analysts (normally two, the lead and support analyst, are assigned to each rating assignment) determine what additional data are needed and a detailed questionnaire is sent to the client. An initial rating assessment is made and discussed internally. A discussion agenda is then prepared for a meeting with the client company's senior management. The meeting Is wide-ranging, covering the company's flnanclal position, earning trends, ope rating practices, competitive standing, future prospects, the economic environment and many other Issues that an have a bearing on PACRA's assessment.In order to ensure full understanding of their position, companies entrust PACRA with confidential information, which is not disclosed in rating reports but which is certainly taken into account when assigning the ratings. In determining the initial ratings for an institution, a rating proposal is prepared based on the information gathered at the Management Meeting with the company, and is presented to the rating committee (comprising the Chairman, ManagingDirector, senior executives and the lead analyst). A draft rating report is then prepared and sent to the client for verification of the accuracy and confidentiality of the Information In the report. upon the client's approval, the one-page summary of the report Is made public and a press release of the assigned rating Is Issued. The detailed rating report Is sent to the client. plac ed on ‘RatingWatch'. The rating is then upgraded, downgraded or maintained after assessing the impact of any such change.

CJ 450 Counterterrorism Essay Example | Topics and Well Written Essays - 1500 words

CJ 450 Counterterrorism - Essay Example Arguably there are various reasons for terrorism attacks and hence each motive requires different approach to tackling terrorism. Some of the reasons include political conflict, religious clashes, gaining publicity and in some cases divine instruction to conduct terrorist attacks. (Victoroff, 2006). The terrorist believe that such motives justify their actions although many will agree that there is no justification to terrorism whichever way we look at it. For example the September 11 attack was fuelled by religious motives and political motives. When governments or those in authority understand the motives behind terrorist attacks then they can forge on in their efforts to reduce these tensions and dissatisfactions in an intelligent way hence counter terrorism. It seems that counter terrorism is a tactic of warfare. These efforts are usually retaliation with equal or greater force as applied y terrorist in order to disempower them. Often than not counterterrorism efforts will include the military and the police force that wage war against these organizations. Although the idea is to fight crime, innocent civilians may suffer in the process. The role of due process in counter terrorism is that both parties feel that they are entitled to use force in fighting for their ideologies (political or otherwise). The victims feel a need to avenge wrongs and in effect the problem doubles in the long run. In fact one of the implications of characterizing terrorists as the enemy rather than mere criminals is that it breeds ground for wa r. Question 2 Due to the sophistication of technology surveillance has changed from the traditional way to a new surveillance. The new system of surveillance includes monitoring inside activities of terrorist groups through satellites monitoring, or spying. Additionally, eavesdropping communication, tapping wire money transfers to trace terrorist funding etc. (Clarke & Newman, 2006). The ideal surveillance technique would be one where the counter terrorism units would gain clandestine sources within the terrorist groups or cells but this situation is almost impossible since these groups tend to be so close knit and bond by strong allegiances. (Clarke & Newman, 2006). It seems that the shift from traditional surveillance methods to the new type has had problematic effect in the civil liberties of the people of United States in that their communication is often been intercepted as the authorities try to trace terrorist linkages. In this light privacy has been infringed on. Additionally, surveillance has had negative connotation to discrimination especially for communities that are associated with terrorist groups. For instance in some place Muslims and Arabs are frown upon and are seen as potential threats due to association with al-Qaeda and Taliban groups. More to that the frequent travel advisories and terrorist alerts instill fear in the lives of people hence multiplying the power that terrorist groups have over the people in US. This denies such communities freedom of movements and enjoyment of life. The quality of life has been reduced to that of slavery like nature. It therefore seems that the counter terrorism efforts have to strike a balance between protecting the liberties of the people and preventing further terrorist attacks. (Meggle, 2005). Notably in order to achieve this all stakeholders have to echo what is important to them. Freedom or security. Nonetheless, even

ArticleAbstract Assignments 05 Essay Example | Topics and Well Written Essays - 250 words

ArticleAbstract Assignments 05 - Essay Example His research question is: How does football regulation by NACC constitute a cartel and hinder intercollegiate competition? The study used both empirical and theoretical methods. The author used data collected from published articles and books. He also used raw data from NACC Football Guide and other sport regulatory bodies. The article makes reference to several books and scholarly articles containing analyzed data. Researcher also made use of raw data collected from the field; especially score sheets on football progress from colleges. Literature on Cartel Enforcement and Competitive Balance are majorly theoretical. Empirical data were obtained from interviews and observations. For example, the author acknowledges valuable comments from seminar participants and referees from CU-Denver and WEA meetings. The article concludes in favor of the research hypothesis. Indeed NACC constitutes an economic cartel that bars fair competition in football. The researcher successfully uses data collected over a period of half a century to put across this point (Woodrow, 369). By elaborately analyzing the structure and functioning of NACC, the author effectively gives a hint to where concerned authorities should streamline to reinstate fairness in college football. However, the report gives too much weight on mathematical implications of its findings without lucid explanations. This implies that the report may not be of help to many who need to refer from it. Only those with technical knowhow on its exaggerated mathematical analysis make sense of the

Leadership Essay Example | Topics and Well Written Essays - 4500 words

Leadership - Essay Example In the financial year of 2012, the company recorded sales of $ 83.7 billion, the total equity of the company stands at $ 63.4 billion while the assets are to the tune of $ 132.2 billion. P&G Company changed the structure of their business in 2011 and formed two ‘Global Business Units’ that were further sub divided into ‘Business Segments’. From the new structuring, the company came up with the following segments; Baby care and Family Home Care, Snacks and Pet Care, Grooming, Fabric Care and Home Care, and Beauty Care (Baucus, 2011, p.18). This new structuring was proposed for easier channelling of the products to the market for marketing enhancement purposes, considering the management of P&G and the staff, the board of directors comprise of eleven members that manages the company with the CEO, chairperson and the President of the company being A.G Lafley. The company is one of the 500 fortune companies and was in 2008 considered top one hundred employers in Canada, the Company is also a member of the U.S. Global Leadership Coalition (Watt 1998, p.13), this company operates in most of the continents including manufacturing operations are based in Africa, China among others (Canedy 2012, p.17). Company’s Analysis As indicated in the introductory part, P&G also is an American multinational company spread in many countries including UK. As such, the company faces several challenges that it has to handle and this needs leadership management for efficient delivery of the required solution (Penford 2005, p.22). There are many challenges facing businesses all over the world and there has to be a strong leadership management at the helm, a leadership that is result oriented comes and can navigate the challenges fort the business keep track in the right direction of productivity. Considering this, analyses is done for P&G Company in the United Kingdom to understand the key challenges confronting the business, the model that has been used in this case is PEST analysis (Vinwood 2001, p.19). PEST model is a useful tool that is mostly engaged to understand the market growth or decline that may be experienced by a company, in this regard, the analysis that is accrued from PEST can be conveniently used to project on critical factors in an organization like potential, direction as well as the position. It is thus important to do a PEST analysis of a company occasionally to understand the critical factors that may be bedevilling its performance (Hardesty, 2008). Political Factors As it is known that P&G Company mainly deals on the personal cleaning and laundry products as their mainstream products, there are several political challenges that have been found to be affecting the company in UK. The indigenous companies in the country like Hospec Company are favoured by the tax legislations enacted in the country; this is away from the funding and grant given to the companies by the government. The taxation policies given to P &G are making their products very high not to favourably compete with the domestic products in the country in terms of costs (Crick 2012, p.21). In this regard, one of the challenges facing the company in UK is balancing the cost of their products so that they can be the same with the indigenous products; the Company has to balance this for adequate competition with other local companies in the UK. If the company

Paulo Coelho's The Alchemist Essay Example | Topics and Well Written Essays - 1500 words

Paulo Coelho's The Alchemist - Essay Example Despite its best-selling nature and general acclaim, then, Coelhos story a young boy and his "Personal Legend" (22) does not make a compelling argument. This is because, when faced with scrutiny in the form of looking at the larger universe outside his novel, Coelhos notion of a purposeful and benevolent universe does not work. The Alchemist starts with its protagonist, a young shepherd named Santiago living a simple life in the hills of Andalusia, in Spain. Santiago enjoys reading, and has had the same dream—one in which he is told of a great treasure—twice in a row. Most of the story is about his travels as he journeys to Egypt to find this treasure, and he eventually does find a chest of gold, although it turns out to have been where he was originally sleeping all along. In the epilogue, we see Santiago, now a rich man, happy not only from his new-found wealth, but from the way he has grown and the things he saw on his journey. This, we are meant to assume, is the real treasure, and it is one that ties in with the conclusion—calling it a moral might be a bit too strong—that Coelho builds up in his story from nearly the start. Throughout the novel, Santiago is met with resistance to his dream. The leader of the bandits who attacks him tells him he needs to "learn that a man shouldnt be so stupid" (Coelho 163). After he leaves Spain he has all his money stolen in Tangiers by a man who ironically tells him that the city "is a port, and every port has its thieves" (Coelho 37). Despite these set-backs, Coelho smoothly sets up as the main premise of the novel the idea that a positive attitude and a desire for success overcomes all obstacles. This is made most explicit in the role of Melchizedek, who tells the boy the book he is reading "describes peoples inability to choose their own Personal Legends" (Coelho 18) and argues that, in fact, â€Å"when you want something, all the universe

Organizational Change Vision Analysis (Of a Supplied Brief Case Study) Research Paper

Organizational Change Vision Analysis (Of a Supplied Brief Case Study) - Research Paper Example Vision is often confused with mission statement and values, which is precisely what happened at HP. Vision is a statement that describes the mid- to long-term goals. It is an expression of how the organization wants to be perceived. Mission statement on the other hand is a one sentence statement that defines the purpose of the organization. Visions statements should be inspirational, aspirational and measurable (Schraeder, 2002). Vision is also the ability of the organization to articulate the inner voice of the organization. The purpose of planning is to bring effective change. Organizational vision should be the focal point of all planning activities. The vision should be analyzed in the context of the external environment. Organizational vision ash three components – why the change is needed, the aim of change and how the change action will be initiated. The CEO at HP knew why the change was needed (to gain competitive advantage, to enhance sales coordination and increased market share) but the aim of change was not clear. There was no compelling vision and nor was this vision communicated effectively among the subordinates. Application analysis Vision is plan for the future and it should clarify the direction for the future (Kotter, 1975). The CEO of HP merely stated that culture could be changed by â€Å"going back to the roots of the place†. This statement has no inspirational message and neither is it measurable. It was too vague and Paler et al contend that visions fail when they are vague. Kotter clarifies that without a clear vision the transformation efforts can easily dissolve into confusing and incompatible projects that steer the organization in the wrong direction. To go back to the root, the CEO started restructuring the organization by reorganizing the company into â€Å"quadrants,† creating two â€Å"front-end† sections that consisted of sales and marketing and two â€Å"back-end† functions. This effort met w ith subtle employee resistance changes should be done in a systematic manner. The CEO’s vision had an affective component as it sought to achieve the intended outcome. It did not focus on motivating people and in increasing their commitment to change. Strained relations made the post-merger integration difficult. To achieve the objectives, new personnel were inducted which temporarily made the transition task easier but it increased resistance from the existing staff. The clear and compelling vision statement was not communicated effectively by the CEO which is evident from the fact that even after the merger many employees were not convinced of HP’s riskiest move. This can confuse or alienate the workers contends Kotter and this is what the employees at HP underwent. The CEO used â€Å"a range of methods† to communicate the vision including â€Å"management by walking around† style but Kotter believes that the compelling vision statement should be commun icated in five minutes or less. This implies that communication of the vision was not right and hence the company could not move in the right direction. The CEO gained popularity with the â€Å"new DNA† and the â€Å"transferees from Compaq† but not from the employees from the HP system. People were unable to relate to the description of change. Vision is a plan for the future and hence should drive change but HP could not handle the internal and external pressures as the vision lacked clarity.

Moral Dilemma Essay Example | Topics and Well Written Essays - 4000 words

Moral Dilemma - Essay Example (Moral Dilemmas: Stanford Encyclopedia of Philosophy) Therefore, it makes good sense to state that for a given agent, under a set of given circumstances, there are reasons to do either A or B, and this even when it is a fact that one set of reasons may be stronger than the other. (Foot, 2003) Does this mean, for a fact, that all moral dilemmas end up with a residue of guilt (Moral Dilemmas and Moral Ambiguity) This is a situation which in essence constitutes a real life moral dilemma: a woman, who is six months pregnant, discovers that she has bowel cancer. She must undergo treatment for the same, which is chemotherapy, but at the same time, she has been informed that the treatment would most probably end up deforming her unborn baby. Should the woman decide to go ahead with the chemotherapy, thus taking a chance with her unborn baby, or must she opt to wait for the baby to be born in order to start treatment, which may in fact endanger her own life What are the ethical issues involved in such a case, and what is the moral dilemma that the woman is facing at the present time The main issue or moral dilemma would be whether the woman must opt to have the chemotherapy or not. What then would be the alternatives for the unfortunate woman What are the different ethical issues that would be involved in the alternative courses of action for the woman Is it possible for the woman to be able to reason out, eventually, which horn of the moral dilemma would in fact be the best choice possible (Moral Dilemmas and Moral Ambiguity) What are the ethical issues involved in this case What, as a matter of fact, is referred to as 'ethics', and what is 'morality' How can an individual behave in a moral and in an ethical manner Today, especially, these issues and other similar ones seem to be overtaking the people, and most especially, younger people, who are faced with rapid changes and developments in all aspects of life. For example, one issue that has been in the forefront for some time is that of 'bioethics'. This is an extremely difficult field, because it is almost all the time concerned with some of the subjects that trouble man the most, life, death, the nature of both, what sort of life is actually worth living, what exactly constitutes murder, how exactly one must treat individuals who are in constant and relentless pain, what sort of responsibilities does one human being have towards another, and so on and so forth. (Issues in Bioethics, ethical dilemmas in biology and medicine) The other topic that seems to be the cause of several rancorous debates between groups of people is that of abortion of the fetus, pregnancy choices of a woman and other related issues. Medical treatments is also one issue that troubles many people, and the related topics here would be what is death, and what exactly constitutes the state of death Is there a bright line of sorts that would identify and state that this is what death is (Issues in Bioethics, ethical dilemmas in biology and medicine) As a matter of fact, doctors are faced all the time with moral dilemmas, and as far as Western medicine is concerned, the doctor-patient relationship gives rise to the 'principle of not doing any harm' or what is known as 'non-malfeasance'.

The duty to accommodate the injured and the disabled employees Essay

The duty to accommodate the injured and the disabled employees - Essay Example Three steps processes used to determine if the employer has made conscientious efforts on accommodation of the less fortunate employee: first is to know if the employee can perform his or her existing job. If the employee cannot, then establish if he or she can perform his or her current job if modified, if still he or she cannot, then determine if he or she can perform any other job existing re-bundled or modified job (David Morton Rayside, 2007). Disability is something that hinders an individual in undertaking life important functions. It may mean mental, psychological, physical, or even habitual. Of all the most complicated, as many employers claim, is mental incapacitation especially when the employee has to get into contact with clients, and habitual disabilities like drug dependency and alcoholism. They tend to be tricky even more than other health complications (David Morton Rayside, 2007). The importance of Human Rights Legislation, as it relates to disability is to protect those who are perceive or actually materially impaired through illness. The said disabilities include physical conditions, congenital deformities, asthma, epilepsy, hypertension, speech impediments, alcoholism and drug dependency, obesity and AIDS or AIDS related complex and any other medical, psychological or physical condition. However the duty to accommodate does not imply a guaranteed job for unemployed disabled person. If a person cannot reaso nably perform the essential duties and requirements after employment, there will be no findings for discrimination (David Morton Rayside, 2007). Accommodation is now a deeply entrenched feature in Canadian labor law. It has been enthusiastically practiced since the start of this decade, but it is already spawning or accelerating three outstanding trends in the arbitration system that are changing the very face of labor adjudication in

Sociology Asian Family Essay Example for Free

Sociology Asian Family Essay Myths about the Family Ever since the 1950s to this day, common discourse regarding the family, especially in the United States, has been based on Talcott Parsons’ (Parsons Bales, 1955) functionalism views. According to Parsons, the contemporary family form is the nuclear family composed of a breadwinner husband and a homemaker wife with their children. This particular family form emerged as a result of modernization and industrialization and displaced the extended family. This contemporary nuclear family is unctional in that the breadwinner provides for the instrumental needs of the family unit (food and shelter as well as other material needs) whereas the housewife provides for the expressive needs of the family unit (affective and emotional needs as well as socialization). As long as individuals perform their instrumental or expressive roles, the family is a functional unit that contributes to the stability of society as a whole. This gendered division of labor is therefore viewed as essential for the harmonious and orderly functioning of society. This view of the family is also called the male breadwinner model. This theoretical view became the dominant way of examining the family and family life and any deviation from the male breadwinner model is usually labeled a dysfunctional deviation. This is especially the case in the United States where Talcott Parsons’ brand of functionalism dominated social research until the 1960s. Social policies regarding the family are still designed with an eye to what is now considered the â€Å"traditional family,† such as policies encouraging single mothers to marry in order to get out of poverty through the re-creation of an intact nuclear family. Moreover, this model was not only generalized in the United States, it became the prism through which families around the world were seen as well. This view was especially promoted by William Goode (1963). In line with modernization theory, Goode postulated that as countries develop, extended families would be discarded to be replaced by the functional nuclear family, essential to modern society. The major problem with these functionalist views is that they are ideologies rather than derived from observable realities. The so-called traditional family, defined as the male breadwinner model, was an exceptional occurrence in the Western world after the Second World War, and it lasted only a few decades. In this sense, it is a socially invented tradition. Moreover, one of the main functions of ideologies is to maintain the status quo, thereby preserving privileges and maintaining oppressive social mechanisms. In this case, of course, the functional ideal is based on relegating women to the domestic sphere while proclaiming at the same time that expressive roles come more naturally to women and instrument roles more naturally to men. We have already examined how gender roles are socially constructed in our chapter on gender stratification. Also, the male breadwinner model of the family was only available to certain social classes (upper middle and above) as well as to the dominant racial group (whites). Finally, this ideological view of the family ignores cultural variations in family structures as well as the impact of changing socio-economic structures. This is what we turn to now. Family Systems Further evidence of the misleading and ideological nature of the functionalist the breadwinner model of the family is revealed by the variations in family structures across the globe. Using worldwide data, sociologist Goran Therborn (2004) identifies seven family systems, each with their specific regional social and cultural characteristics. According to Therborn, these different family systems do not have dynamics of their own but change based on external factors, such as modernization and globalization. Their inherent characteristics then make them more receptive or resistant to social change. * Sub-Saharan Africa Sub-Saharan Africa (map source) comprises all the countries south of the Sahara desert and that are not considered part of North Africa. As previously mentioned, European colonization had a strong impact of African family structures. Nevertheless, the African family was always strongly based on kinship ties. Depending on the regions, the family structure may patrilineal or matrilineal but in any cases, male relatives exercise authority. According to Therborn (2004), a specific African norm is that of substitutability: in the context of mass polygyny, if a wife does not bear heirs or simply becomes undesirable to the lineage, she can be easily replaced or substituted by the husband taking another wife. Similarly, if a husband dies, he can be replaced by his brother. Another norm that involves fluidity in kinship structure is the mass practice of fostering, lending and borrowing children among kin when necessity demands it. This practice also underlines the idea that individuals belong to a wide kinship network and not a narrow-based family structure. * East Asia The East Asian family system (map source) includes Mongolia, China and Japan. The Chinese society is still dominated by Confucian beliefs. Such beliefs involve a concern for social order and stability through the subordination of individual wishes to collective and familial interests. Central to the Confucian view is the notion of filial piety, that is, the respect for elders as pillars of childrearing. In other words, the typical Chinese family is a strongly patriarchal and hierarchical arrangement based on the three rules of obedience: a daughter obeys her father, a married woman her husband, and a widow her son (Chen and He, 2005). As part of the collective outlook based on Confucianism, there are still a considerable number of households comprising three generations based on patrilineality (parents of the husband, husband and wife, and usually, one child). There is a strong emphasis on family interdependence which maintains the divorce rate at a low level. These traditional patterns are mixed, and sometimes conflict, with the Communist regime’s law mandating equality between men and women as well as with the rapid urbanization and modernization of the Chinese society and the import of western influence on intimate relationships. South Asia The South Asian family pattern (map source) – geographically including countries such as India, Pakistan, Nepal, Bangladesh, Sri Lanka and Burma – involves high fertility as well as extended family networks as well as strong religious influence (Laungani, 2005). Although not all family members live under the same roof, the Indian family system is extended in the sense that most social relationships and decisions take place within the network of relatives in the context of mostly Hindu religious norms. For instance, in India, the sacred nature of marriage creates a low divorce rate based on the economic and financial dependence of women as well as the strong social stigma associated with divorce, especially for women. The Indian family system is therefore strongly patriarchal supported by strong social norms that may cover up dreadful domestic situations. The Indian family is strictly hierarchical along age and gender lines. The caste system is still pervasive so that endogamy is still the norm, especially in rural areas (over 70% of Indians still live in villages). In order to preserve such endogamy, arranged marriages are still practiced whereby marriages are negotiated between the parents of the potential husband and wife. As with other family systems, the impact of globalization and the massive urbanization has strongly impacted the traditional South Asian system. * West Asia / North Africa The West Asia – North Africa system (map source) covers countries such as Algeria, Morocco, Tunisia and Egypt in Africa, as well as the Middle East in Asia. This is the area commonly called the Muslim world because this is where Islam seems to exercise the most influence. In this system as well, collective family interests take precedence over personal preferences. Moreover, the concept of family honor is particularly strong. The behavior of each individual in a family reflects on the family honor and its standing in the community. It is in this family system that we find the practice of honor killing: the murder of female family members who are seen as having shamed the family and tarnished its honor, by being raped for instance or by not conforming to the dictates of family, tradition or religion. The fact that the victims of honor killings are women is another indicator of the extreme patriarchal nature of this family system which is centered on the strict control over the sexuality of women. This control can take the form of body cover, such as veiling, or of seclusion, whereby women are not allowed to interact with other men except under very restrictive conditions. This system also emphasizes high fertility with a strong preference for boys, especially in rural areas. The value of a woman is often based on her virginity prior to marriage and her fertility once married. Southeast Asia The Southeast Asian system (map source) – which includes countries such as the Philippines, Indonesia, Thailand, Cambodia, Vietnam, Laos, and Malaysia – enjoys religious diversity that comprises Muslim and Confucian populations whose marital and sexual norms have been relaxed under Buddhist influence and Malay customs (Therborn, 2004). For instance, in parts of Indonesia, Muslims do not follow the usual patriarchal family patterns. On the contrary, they observe matrilinearity. However, the great ethnic diversity of the Indonesian population generates some degree of extended family-enforced endogamy. Decisions on who can marry whom are made collectively (Sarwono, 2005). Similarly, Indonesia has a strong family planning program that emphasizes smaller families and the health of women through education and improvements in quality of life thanks to reproductive health clinics. In this sense, the status of Indonesian women is very advanced compared to other non-western family systems even though Indonesia is a largely Muslim country. * Creole America The Creole American system originated in the European colonization of the Americas and the Caribbean (which includes countries such as Antigua, Barbados, Jamaica, and Trinidad and Tobaggo) and the development of the plantation economy largely based on slavery. This estate system of stratification involved a white European dominant culture with a patriarchal family system alongside black African, mulatto, and mestizo family patterns. The Creole family pattern is present throughout the Americas, including African American ghettos in the United States. According to Jaipaul Roopnarine et al. (2005), the Creole system in the  Caribbean is characterized by a large number of nonmarital unions where fathers and husbands are largely absent and women assume the most responsibility in childrearing. Such marital patterns come from the colonial economic system whereby African Caribbean men were forced to leave their families to work in mines or plantations. A value system developed whereby African masculinity was based on successive but temporary sexual relationships and motherhood became the utmost form of femininity. When men and women live together, it is usually in cohabiting or common law relationships that reproduce the traditional patriarchal division of labor. This family system is also characterized by child-shifting, that is, the passing of children to other relatives or acquaintances if the parents find themselves unable to take care of them. As a result, multiple women are involved in childhood socialization. * European And New World Settlements The Western European system and its New World Settlements (such as the United States and Canada, as well as some parts of Central and South America) has always been the least patriarchal of all family systems. Apart from the European monarchies and nobility where marriage was strictly family-controlled with limited individual choice, this system has been based on marriage by consent, supported by the Catholic Church (family pressure was not absent, to be sure, but it was not enshrined into the law). Neolocal pattern has prevented the practice of child marriage: newlyweds were expected to create their own household, something that required financial means. As a result, people tended to marry later and to decide on their own fertility within monogamous arrangements. The Western system is also the one characterized by dramatic changes over the past centuries, changes that are still going on today and define the contemporary supposed marriage and family â€Å"crisis. † Before industrialization, as in other parts of the world, marriage and family formation patterns were patriarchal and fulfilled economic (production) and political (alliance making) functions. With industrialization, families were stripped of these functions taken over by the market and the state. What were left to the families were emotional and social functions. This became known as the love-based male breadwinner model that persisted until the late 1960s. Since then, cultural and economic factors, such as increased women’s independence and entry into the workforce have shattered that model to replace it with a more egalitarian one, with a progressive acceptance of different family forms.

Income Inequality and Economic Growth

Income Inequality and Economic Growth Chapter 1: Introduction Economic growth is the result of abstention from current consumption. An economy produces a variety of commodities, and then income is generated through sales of products. The very same income is used to buy other products which generate income for other producers. The very same income is used to buy a variety of commodities. The producers decide what to produce depending on their individual preferences and the distribution of income, initial endowments. In general, commodity production creates income, which creates the demand for those very same commodities. The cycle of production, consumption, saving, and investment that constantly regenerates itself is as old as human civilisation. In some cases, savers and investors are exactly the same individuals, using their own funds; in other cases, they are not. (51, Ray) The income inequality occurs because people in an economy differ from each other in many ways that are relevant to their incomes. These differences can be in forms of hum an capital (education and health), in where people live, in their ownership of physical capital, in the particular skills they have, and even in their luck. As explained above, economic growth and income inequality have a huge influence on each other. That is why there have been extensive studies in income distribution and its effect on other economic variables. Income distribution has always been considered to be an important topic because it tells us how incomes are distributed among the members of a population and allows the government to determine tax policies for redistribution to decrease inequality, or to implement social policies to reduce poverty. However, there are many debates about how reliable data is because they mainly are collected through surveys and the sources of errors are numerous. Furthermore, the income distribution measure, income gini-coefficient, does have its disadvantage because the best fit line method is used when representing the Lorenz curve which is used to calculate gini-coefficient. As outliers are ignored when a best-fit line is illustrated, the population in extreme poverty will not be accounted in income inequality measure. Thus, the measure of inequality may not be as accurate as it is believed to be. Because of these data features, it is important to complement classical statistical procedures with robust ones. (Maria-pia, Victoria-Feser, 2000) No concrete theory yet exists to explain the relationship between income inequality and economic growth. Most empirical research on income inequality and economic growth tends to focus on imperfect market, the politics of redistribution, the size of the market. Benabou (1996) and others argued that imperfect capital markets can slow the economic growth by increasing the level of inequality. The main input of economic growth is investment generated by savings or borrowing credits. A result of imperfect capital markets is that the poor credit applicants with high expected rate of return projects have limited access to credit compared with rich applicants with the lower profitable projects. Therefore, the imperfect capital markets create a higher level of inequality and limit both quantity and quality of investments, thereby lowering economic growth. As capital markets are more likely to be imperfect in developing countries, this theory implies that developing countries economic growth is affected greater by income inequality than developed countries. Deininger and Squire find that land inequality reduces growth more in low income countries. However, the effects of income inequality on growth do not differ across high and low income countries. Moreover, contrary to the theory, Perotti (1996) finds that income inequality affects school enrolment more in rich countries than in poor countries. 143-144 I am particularly interested in how East Asian countries managed to develop so rapidly while maintaining low income inequality during late industrialisation. This is because compared with many orthodox economic theories and research based on many European and North American states during their industrialisation, what East Asian countries achieved is unprecedented. Furthermore, I believe that there are much more complicated reasons behind this unique achievement unlike the suggestions by 1993 World Bank Report, East Asian Miracle. In this report, the neoclassical economi sts in the World Bank gave much credit to the new developing theories and state-intervened economies on the surface, but they managed to transform and relate the state-intervention and policies in East Asia to the orthodox economic theory, and concluded that the rapid economic growth in East Asia is the result of market friendly economies and well-operated macroeconomic policies. They are not completely wrong but I have found that the explanations are very vague and inaccurate. There is no consistency in their arguments because they are trying to explain state-oriented capitalism in terms of market-led capitalism. In addition, there is an obvious cultural factor. Johnson and few other economists and historians argue that cultural difference between in the East and in the West might play a crucial role in explaining the East Asian Miracle. They argue that Confucianism confers certain advantages over other traditions in the quest for economic development. Because Confucian beliefs pla ce a high value on hard work, loyalty, respect for authority, and punctuality, these characteristics are thought to have facilitated the national consensus around high-speed economic growth in East Asian countries since the 1950s and 1960s. (Johnson, 1983:6-10; and the chapters by Lucien Pye, Gordon Redding, and Siu-lun Wong in Berger and Hsiao, 1988) I believe that an argument stated above can be a more influential factor of East Asian Miracle than arguments based on the orthodox economic theory. Thus, in this paper, I aim to investigate not only orthodox economic theories behind the East Asian development but also focus more on political economic perspective during the late industrialisation periods in East Asian countries, especially in Republic of Korea (Korea hereafter) and Singapore. The political economic view of East Asian countries were taken rather lightly compared with theoretical economic analysis because there have been only few social-politic studies in East Asia and t he presence of military regimes in many East Asian countries made it difficult for researchers to gather accurate information. The reason that I have chosen Korea and Singapore is that they both are in OECD countries, which makes it easier to collect more accurate and more quantity of data. Most of all, Korea and Singapore maintain the lowest income inequality level during the late industrialisation, but the income inequality level in two countries took a complete different direction after the Asian financial crisis in 1997/8. Singapores income inequality did get worsened but it still stayed at reasonably low level, whereas Koreas income inequality level shoot up and still remains quite high at this point. This paper will contain five sections. They are; introduction; orthodox economic theory behind income inequality and economic growth; political economic section which will illustrate the policies employed in Korea and Singapore to develop rapidly while maintaining the income inequ ality level low with empirical evidences; the effect that Asian financial crisis had on Korea and Singapore, especially on two countries income inequality level; conclusion. Chapter 2: Orthodox Economic theory In this section, I shall discuss the orthodox economic growth theories and whether or not South Korea and Singapore followed neo-classical theory guidelines. To begin with, I will explain what causes income inequality and the consequence of it. I will especially focus on the spill-over effects of income inequality on economic growth. The level of income inequality is one of the main economic concerns for economists as it is directly related to poverty and also has significant effect on economic growth: Assuming that the average level of income per capita maintains constant in a country, a higher degree of income inequality will mean that poor people are worse off. According to this observation with implication of Kuznets curve -the level of inequality rises until income per capita has surpassed a critical point- then in theory; economic growth can be bad for the population placed at the low end of income spectrum. Specifically, growths effect of raising the average level of income may be counteracted by a widening of inequality as the poorest people fall farther below the average. (Weil, Economic Growth) The empirical study carried out by David Dollar and Aart Kraay shows how average GDP and the degree of inequality work together to determine the income of the poor. Mexico in 1989 and South Korea in 1988 had almo st the same level of GDP per capita ($8,883 and $8,948) but because South Koreas income distribution is so much more equal than Mexicos, the average income of the poorest quintile in South Korea was twice as high as that in Mexico ($3,812 and $ 1,923). A similar effect is observed when comparing Taiwan and Mexico. This study illustrates that a countrys average level of GDP is the most influential factor of the incomes of the poor population. Thus, the empirical evidence suggests that poor people in a wealthy but unequal country are better off than poor people in a poor and egalitarian country. Dollar and Kraay assessed whether specific policies had different effects on the income of the poor versus overall income. Their key finding was that policies that affect growth for good or ill generally do not significantly affect the distribution of income. For example, rule of law and openness to trade raise overall income in a country and have positive but very minor effects on the share o f income going to the lowest quintile. Similarly, a high rate of inflation and a high level of government consumption are bad for overall income and reduce the share of income going to the poor.372 The orthodox economic theory on income inequality and economic growth is that highly unequal distributions are necessary condition for generating rapid growth. In fact, in the 1960s and then again to a more limited extent in the 1980s and early 1990s with the dominance of free-market economic theory and policy, the explicit and implicit acceptance of this proposition by economists from both developed and underdeveloped countries tended to turn their collective and individual attentions away from problems of poverty and income distribution. If wide inequalities are a necessary condition of maximum growth and if, in the long run, maximum growth is a necessary condition of rising standards of living for all, through the natural passed-down processes of competition and mixed economic systems, it follows that direct concern with the alleviation of poverty would be self-defeating. Needless to say, such a viewpoint, correct or not, provided a psychological, if not conscious, rationalisation for the accumulation of wealth by powerful elite groups. The basic economic argument to justify large income inequalities was that high personal and corporate incomes were necessary conditions of saving, which made possible investment and economic growth through mechanism such as the Harrod-Domar model. If the rich save and invest significant proportions of their incomes, while poor spend all their income on consumption goods, and if GNP growth rates are directly related to the proportion of national income saved, then apparently an economy characterised by highly unequal distributions of income would save more and grow faster than one with a more equitable distribution of income. 182 Simon Kuznets hypothesis also states that in the early phase of economic growth, especially that are growing at an abnormal rate, growth is generally associated with high levels of inequality. First, to generate the high savings rate that is a prerequisite of rapid growth, income, it is assumed, must be concentrated in the hands of relatively rich, whose marginal propensity to save is relatively high. Second, Simon Kuznets has suggested that as the labour force shifts from low-productivity sectors to high-productivity sectors, aggregate inequality initially increases substantially, decreasing only later. Contrary to this conventional wisdom, in East Asia rapid economic growth has been associated with relatively low and declining levels of income inequality. Improved equity is not unique to East Asia. What is unique is the combination of rapid growth with modest (and, in a few high performers, dramatic) improvements in equity and reduction in absolute poverty. Analysis of the high performing Asian economies has focused on their rapid growth over the past decades. Isolated studies on the distributive qualities of growth in a few of these countries exist, but not of the growth-equity nexus for the group as a whole. (Adelman and Robinson, 1978) The indicators show that the Asian hig h performers have been unusually successful in distributing the benefits of growth widely. (The key to the Asian Miracle, Making Shared Growth Credible, Jose Edgardo Capos, Hilton L. Root, 1996) The orthodox economic theory suggests that tax policies which directly affect saving rates will determine the economic growth rate depending on changes in the ratio of capital to labour. According to this theory, peoples incentives to save their income or wealth are influenced by the rate of returns to savings which effectively determines the income distribution. This theory would also imply that richer people are more encouraged to save their income or wealth in an economy with a regressive income tax. As a result of this, faster economic growth is achieved due to higher saving rates and thus higher level of investment driven by richer people. The rate of savings affects the long-run level of per capita income and, in many cases, the rate of growth of the economy. Thus the relationship between inequality and savings creates an additional channel through which inequality interacts with income and growth in income. The political force of the arguments presented here are also not to be taken lightly. The view that moderate or high inequalities in income distribution concentrate money in hands of those who are willing to save, accumulate, and invest, thereby boosting growth rate, has been used more than once to justify a hands-off approach by government in matters pertaining to redistributive taxation. However, there are opposing views as well, arguing that a certain degree of redistribution can actually enhance savings and push up growth rates. The effect of a reduction in income inequality on the rate of savings, and therefore in the rate of growth, is likely to be complex. High economic inequality might retard economic growth by setting up political demands for redistribution. Now redistributing might take one of two broad forms. First, a policy might aim to redistribute existing wealth among the broader population. A good example of this is land reform. If land is held very unequally, the government may have the option to simply confiscate land from large landowners and redistribute the confiscated land among smaller peasants or landless labourers. Likewise, it is possible to have confiscatory taxes that transfer large quantities of nonland wealth to the government, which are then redistributed to the poor. It goes without saying that the creation and implementation of such policies require extraordinary political will, as well as the availability of data on which to base such policies. Elected government officials with large land holdings are not uncommon, and even if they were uncommon, large landowners often act as vote banks, which swing the votes of an entire village or even a group of villages. In such situations, the enactment of a comprehensive land reform that would alleviate inequality becomes a very difficult proposition indeed. Even if the political will did exist, there are the almost insuperable difficulties of implementation. To redistribute large quantities of wealth, for instance, it is necessary to know who has the wealth. There exist enormous quantities of wealth that are not even subject to taxes, simply because the information base required to implement such taxes is nonexistent. Even when wealth takes the form of land, which is arguably highly observable, it is difficult to implement ownership ceilings. As a large and powerful landowner, I could parcel out my holdings in the names of various members of my family, so that each parcel fell below the legally imposed ceiling. Faced with these difficulties, most governments resort to redistributive policies that take an entirely different route: they tax increments to the shock of wealth, rather than the existing wealth base. Thus marginal rates of tax on high income purchase of various products, and business profits are taxed as well. These taxes, imposed as they are on the margin, tend to bring down the rate of investment and therefore the rate of economic growth. Chapter 3: Political economic theory In this section, I shall concentrate on three policies which were probably the main driving force behind rapid economic growth while maintaining low level of income inequality. They are Land Reform and Agricultural policy, Public-Housing policy and Education. These three political acts shaped up the main foundation in the early stage of economic development and because of this solid foundation; Korea and Singapore were able to achieve their current economic status in the international arena. Many people, in general, believe that industry, not agriculture, can only facilitate the economic growth and agriculture constrains the economic growth to some extent. I will attempt to argue that agriculture and industry are equally able to constrain or facilitate economic development, but that agriculture is perhaps more important in the earlier stages of development, while industry is possibly more important in the latter. In doing so, I attempt to emphasise the importance of land reform in th e earlier phase of development and how South Korea and Singapore achieved it. Public-housing policy is rather more relevant to Singapores case than of South Korea. Today, over 85% of Singapore population resides in housing provided by the government since its public housing policy began in 1930s. The initial quality of housing was poor, but the continuous revolutionary programme since 1960s dramatically improved living conditions. The success of public housing policy, thus the positive spill-over effect of the programme on income inequality and economic growth will be discussed more in detail later on. High level of education, thus high quality of human capital in East Asia has always been on top of the list whenever the driving force of East Asian Miracle was discussed. Thus, I will further investigate why the education is considered to be so much more important in East Asia compared to other developing countries and the effect education on income inequality and economic growth. Ho wever, most of all, the authoritarian political background of Korea and Singapore government must be stressed before the three policies are discussed. This is because without the complete control that President Park, Jung-Hee had in Korea and Peoples Action Party had in Singapore, these policies would not have had its full effect. Government intervention can determine four general areas of distribution of income. They are as follows; Functional distribution – the returns to labour, land, and capital as determined by factor prices, utilisation levels, and the consequent shares of national income that accrue to the owners of each factor. Size distribution- the functional income distribution of an economy translated into a size distribution by knowledge of how ownership and control over productive assets and labour skills are concentrated and distributed throughout the population. The distribution of these asset holdings and skill endowments ultimately determines the distribution of personal income. Moderating (reducing) the size distribution at the upper levels through progressive taxation of personal income and wealth. Such taxation increases government revenues and converts a market-and asset- determined level of personal income into a fiscally corrected disposal personal income. An individual or familys disposable income is the actual amount available for expenditure on goods and services and for saving. Moderating (increasing) the size distribution at the lower levels through public expenditures of tax revenues to raise the incomes of the poor either directly (e.g. by outright money transfer) or indirectly, through public employment creation or the provision of free or subsidised primary education and health care for both men and women. Such public policies raise the real income levels of the poor above their market-determined personal income levels. 189 A contribution which agriculture makes to economic development is known as factor contribution which is related to functional distribution. This can be divided into a further two contributions labour contribution and capital contribution. Labour contribution is defined as the phenomenon when agricultural productivity improves and surplus labour form the agricultural sector is released in to the industrial sector. Yao (2006) noted that in pre-reform China this was not so as labour could not be immediately transferred from one sector to another. In Chinas case this resulted in depressed agricultural labour productivity and large underutilised human capital. In terms of capital contribution Thirlwall (2006) explains that capital contribution can be via voluntary investment in machinery or via involuntary contributions in the form of taxes. One way in which agriculture may constrain economic development is through the product contribution of forward linkage effect, wherein the agriculture sector is responsible for providing raw material, capital and labour for the rest of the economy (Todaro, 2006, 819). Economic development is characterised by a substantial increase in demand for agricultural products, and if the expansion in food supplies (Johnston, 1961, 567) cannot meet demand, then economic growth will be stunted: there will be a significant rise in food prices, leading to pressure on wage rates, which could adversely affect industrial profits, investment and hence economic growth; it could also cause political discontent (Johnston, 1961, 573). This pressure on wage rates can have extremely adverse effects in undeveloped countries where food has a dominant position as a wage good. Structuralists would argue this was at least in part due to a growing population putting pressure on food supplies, coupled with supply inelasticities (Thirwall, 2006, 452). A reliance on exports may also develop. Growth of demand for food is particularly significant as high rates of population growth (1.5%-3%) characterise most of the worlds developing countries, as the decline in death rates, due to increased medical knowledge and application, is frequently much sharper than the fall in birth rates (Johnston, 1980, 572). However, it is worth considering Engelss law at this point, which states that the income elasticity for primary commodities is in elastic; the implication being that as individuals, and a countrys income rise, they will spend proportionally less on these commodities (Thirwall, 2006, 550) and agriculture will become a less important component of economic development. Furthermore, the share of agriculture is GDP falls as per capita income increases; labour share also declines. Nevertheless, income elasticity for food tends to be considerably less elastic for developing countries in comparison with developed ones- 0.6 versus 0.2 or 0.2 Western Europe, the U.S and Canada (Johnston, 1961, 572), suggesting that at least in the short-run, or in the early stages of development, a lack of ability to provide product contribution could mean that agriculture is a main constraint to economic growth. Engels law also has implications for the foreign exchange contribution argument: which states that a country which primarily exports primary commodities will automatically suffer a balance of payments deterioration if there is a growth in world income, vis-Ã  -vis the balance of payments of a developed country largely exporting industrial goods (Thirwall, 2006, 550), as purported by the Singer-Prebisch thesis, whose import substitution industrialisation hypothesis advocates that developing countries replace imported industrial goods with their own domestically-produced versions. Furthermore, countries will have a heavy reliance on agricultural exports, particularly those which have a heavy reliance on one particular export, such as coffee, tea or fruits, are at the mercy of environmental factors within their own countries, as well as trade barriers and changes in taste, internationally. However, a long-run goal of diversifying from a reliance on one or two export crops can lessen th is vulnerability (Johnston, 1961, 575). In addition, primary commodities typically are the greatest source of foreign exchange and foreign exchange is needed to fund development projects (Todaro, 2006, 69). It is also worth noting that some countries have a marked comparative advantage in agriculture and that in these, a reliance on agricultural exports does not necessarily constraining at all. In some ways, agriculture is in fact an enabler of economic development as it can provide inter-sectoral transfers to faster growing industrial sectors, vis-Ã  -vis labour or capital transfers. As non-industrial sectors grow, they will need an increased quantity of labour, and whilst the assumption of the Lewis two-sector model that labour supply is perfectly elastic can never be entirely true (due to, lack of transferable skills, or cultural factors, such as an unwillingness on the part of women to move away from their families), it is likely that during the earlier stages of development at least, labour will be drawn from the agricultural sector, as there will be fewer other sources (Johnston, 1961, 576). This loss of labour might in turn provide incentives for agricultural sectors to become more productive, though investment from some source will obviously be necessarily to enable this. However, empirical evidence would appear to suggest that capital, rather than labour is the ma in limiting factor to industrial growth, at least in the case of Japan, where taxes levied on the agricultural sector constituted 80% of the tax burden and were used to subsidise the creation of a merchant and shipbuilding industry, as well as investments in railways and education. (Johnston, 1961, 578) This evidentially, presents an example of agriculture enabling, not constraining economic development. However, using agriculture in this way to provide capital for industrialisation inhibits the farming sector from aiding economic development in another way; namely through market contribution, otherwise known as the backward linkage effect, where the agricultural sector generates a demand for industrial products, such as fertilisers, insecticides, machinery, transportation and so on, positively impacting on the economy as a whole. In fact, in the early stages of development, the agricultural sector is likely to provide the largest market for industrial goods. Hence, if a countrys agricultural sector is very largely subsistence, as it is in many developing countries, with farmers able to afford very few of such capital inputs, then agriculture may indeed be the main constraint to economic development. (Thirwall, 2006) Thirwall in fact goes as far to say that, a precondition for rapid industrial growth is a rapidly expanding agricultural sector (2006) Some economists, such as Hirschman, have argued that there are in fact higher linkage effects in the industrial, rather than the agricultural sector and in particular, that in many less developed countries, linkages are to be found within manufacturing industries, but not between industry and agriculture. According to Hirschman idea of Unbalanced Growth, the key to economic development is investment in a leading sector, an industrial sector with high linkages, rather than in agriculture. A problem with this however, is the previously-mentioned inflation, due to lack of coordination between supply and demand. Propagating a single industry might indeed lead to the similar problems with lack of trade diversification that occur when primary commodities are the sole export. As a consequence of land reform, Korea has enjoyed a reputation among countries as one with a relatively equitable income distribution (World Bank, 1983). In1945, when Korea was liberated from Japan and soon afterwards partitioned into South and North, about 80 per cent of the labour force in South Korea was engaged in agricultural and less than 3 per cent in the mining, manufacturing and construction sector. Under these circumstances, two land reforms in 1947 and 1949 meant the collapse of a traditional social order based on land, especially a rice-cultivating society, and the start of a new social order. Furthermore, the Korean War (1950-1953) had a profound impact on South Korean society, destroying existing capital stocks and levelling out the distribution of non-agricultural assets, and leaving the majority of Koreans in destitution. (Pg9 Korea housing) In a rather elaborate simulation-planning exercise, Irma Adelman and Sherman Robinson have investigated the interactive effects of various rural development programmes on income distribution and poverty South Korea. Land reform is one component. (Adelman and Robinson, 1978) Their objective was to determine what types of programmes would yield the largest impact over the medium term. They constructed a basic model of the Korean economy, taking great pains to calibrate it so that its predictions came close to actual outcomes over a predetermined period. In essence, the basic model was made to mimic the development of the Korean economy over a nine-year period, 1964 to 1972. The result is significant. First, among the individual programmes, land reform has the most favourable impact on income distribution. Second, land reform and the public works and small-scale industry programmes are much more effective in reducing poverty than are the other programmes. Third, promoting rural development, that is, implementing all the simulated programmes, leads to greater reductions in the incidence of poverty and income di sparities than either of the two programmes taken individually or jointly. And fourth, without land reform, rural development programmes would be less successful at addressing both poverty and income inequality. (The key to the Asian Miracle, 55) Therefore, the inequality in landholdings is resulting in inequality in all spheres of economic activity, social and political life. The inequality in landownership is leading to inequality of other productive assets also. The inequality is further resulting in un-equal access to the much needed agricultural inputs like credit etc. (Krishna Rao, Growth and Inequality in Agriculture, 1991, 55) Nevertheless, Alice Amsden argues that the reputation of Korea as a country with low income inequality might be due to false information for three reasons: (1) The value of real estate and other assets, which lends to appreciate with inflation, rose more rapidly in the 1970s than wages. Because this value is excluded from income and these assets tend to be owned by higher income earners, the treatment of such assets is likely to result in the understatement of inequality. (2) The equivalent of the United States Internal Revenue Service in Korea sometimes includes and sometimes excludes from the calculation of personal income, capital gains, rent, and interest payments. Such income is also taxed differently from wage income. (3) It was possible until 1988 to open bank accounts in Korea under an assumed name. Nevertheless, land reform did respond to the ancient cry for ega

Lucille Ball :: Art

Lucille Ball Lucille Ball was the most loved television comedienne of her time. She was an American icon and is considered the first lady of television. With her strong work ethic and her determination, Lucille not only changed the face of television, she also paved the way for a lot of other female actresses. In 1940, Lucille Balled married her Cuban born husband Desi Arnaz. Together they developed the I Love Lucy show, which became one of the most popular sitcoms of all time. Although Lucille and Desi were set on doing the program, they had to overcome a few obstacles first. For instance, a woman had never had the starring role in a television sitcom and the networks were not sure that Lucille could carry the show. The major obstacle, however, was her marriage to a Cuban. This would be the first time on a network television that a couple would be inter-racial. The networks were positive that no one would believe that Lucy was married to a foreigner. Lucille and Desi had to go on tour the summer before the show started to prove that the American public would receive them. Contrary to the networks belief, the public did accept them and the show began in 1951. The I Love Lucy show also had a couple of other "firsts" in network programming. Lucy and Desi decided to film the series instead of doing it in front of a live audience. Because each episode was on film, they could reshow any episode at any time. They basically invented the term "rerun". When the series ended, they sold the show to independent stations and made millions. This set the pattern for all of television. Also, for the first time ever on small screen, the lead character became pregnant. This worried the network superiors a lot. They were again afraid of the reaction of the American public. They felt that people would not want to see a pregnant woman on television. After consulting with censors and several clergymen, the network decided to go ahead with the show. The only affect it had was to bring in an even larger audience. It was a national event, on January 19, 1953 when Lucy Ricardo gave birth to Little Ricky on television and Lucille Ball gave birth to her second son on the same night. The success of the show was unparallel.

Grendels Mothers Attack :: Essays Papers

Grendel's Mother's Attack Grendel's mother, unknown to the Danes or Geats, is plotting to avenge the death of her son. After the celebrations are over in Heorot and everybody is asleep, Grendel's mother appears out of her dwelling place, the swamp. She enters the hall where the warriors are sleeping. They wake in time to ward off the attack with their swords but the monster manages to escape with one victim in her claws (this is Aeschere). After she escapes, the warriors realize that she has managed to steal back Grendel's claw from where it has been hanging. The victim is one of Hrothgar's closest advisors, "the man he loved most of all men on earth." The king summons Beowulf and his men. There's a feeling of desperation in the air. We know Beowulf realizes that something is dreadfully wrong -- no doubt he can hear the uproar from the main hall- but he also knows that it's his job to convey confidence and self-control. At this moment, the young warrior seems wiser and more mature than the aging king. Beowulf is told by the King that Grendel's mother has "avenged the feud" (Abrams, 44). The king, once again, asks Beowulf to help him. Beowulf, upon seeing the king's condition, says: Sorrow not, wise warrior. It is better for a man to avenge his friend than much mourn. Each of us must await his end of the world's life. Let him who may get glory before death: that is best for the warrior after he has gone from life. Arise, guardian of the kingdom, let us go at once to look on the track of Grendel's kin. On their way to the swamp, they discover Aeschere's bloody head sitting on top of the cliff.

Farewell To Arms Paper :: essays research papers

Hemmingway has a unique style of writing. It works on multiple levels. A person could read Farewell to Arms and enjoy it as a tragic love story. Hemmingway’s concise writing style allows a literal interpretation. At the same time a reader could get involved with the various symbols that he has placed in the novel. In a way everything he has can be used as a symbol depending on a person’s biases. This is what makes Hemmingway’s writing even more unique. He can have what seems to be a straightforward sentence have multiple meanings. The transcendentalist and romantic writing styles leave ideas vague so the reader can reflect on his/her own thoughts. Hemmingway is pragmatic in the sense that his writing can be read literally, but also romantic if you read his work more in depth. One symbol that Hemmingway seems to use constantly is night and the fear of darkness. Fredrick is afraid of the dark. What this seems to mean is that Fredrick is afraid to be in the unknown. This is the idea that males want to know what is around them. Fredrick is afraid of what he does not understand. This symbol is also seen in â€Å"A Way You’ll Never Be† where Hemmingway’s character Nick will not sleep without a light. When a person sleeps they are resting and it seems that Fredrick does not want to rest without â€Å"knowing†. If Nick were to have the light he would be able to see what was going on. This would allow Nick to â€Å"know† what is happening. Thus it could be seen that the symbol of the unknown and how the male characters want to â€Å"know† what is happening. Another analysis of this could be that Fredrick is afraid of the malicious things around him. This is the superficiality of the male. Basically in this sense the male w ants to live in his perfect little world and not worry about the complexities of life. This is the opposite of the fear of the â€Å"unknown† because in this sense the males do not want to know. Fredrick would then be scared of the evil around him. War is part of the â€Å"evil† around him because with war comes with real sadness. Frederick’s fear of darkness is really fear of those evil elements and the sadness around him. Fredrick is afraid of the sad reality. He wants to live in the simple superficial world he is in.

Cognitive Psychology: a Meeting of the Mind and Education

Cognitive psychology: a meeting of the mind and education To John Bruer, cognitive psychology is the critical bridge between brain science and education. A true understanding of how the brain handles learning tasks will only be reached with the help of cognitive psychologists, says John Bruer, PhD, president of the James S. McDonnell Foundation. Over the last decade, Bruer has seen the rise of a â€Å"brain-based† education movement with the media, educational consultants and researchers trying to apply basic brain research to the education of the nation's children.In a much cited 1997 article, â€Å"Education and the brain: a bridge too far,† published in the Educational Researcher (Vol. 26, No. 8, p. 416), he criticized a trend to overinterpret the findings of this kind of research and apply it in schools. Holding more immediate promise for application in schools, he believes, are imaging technologies that examine the human brain's processing of math, reading and othe r specific learning tasks. But even imaging research, he says, must stem from quality cognitive science.Cognitive psychology, says Bruer, can serve as the â€Å"bridge† between this type of hard neuroscience and the schools. In a conversation with the Monitor, Bruer, whose background is in philosophy and physics and whose foundation funds mainly biomedical and behavioral sc iences research, called on psychologists to collaborate more closely with educators as they structure studies of the brain and attempt to apply their findings to education. Q. What have been some of the most dangerous myths that have been spread through brain-based education?A. One is the idea that there's a critical period for school-type learning, an optimal period during brain development that ends at around 11 or 12 years and after which learning becomes much more difficult. There's absolutely no basis in neuroscience for that claim. What a lot of brain-based consultants don't appreciate is that to tur n basic psychological research into effective learning practices you have to develop interventions based on cognitive science in math, reading and other subject areas and test them in classrooms. Q.Who do you think is in a position to do that kind of work? A. Cognitive psychologists. What a lot of people do not realize is that better understanding of brain function relies on improved understanding of learning and behavior. Our understanding of how mental tasks are executed by neural structures in the brain is crucially dependent on cognitive and behavioral research by psychologists. Q. Are imaging studies relying on this kind of behavioral research? A. Totally. To have an interpretable imaging study depends on very careful behavioral study of the experimental task.Our imaging technologies have limited temporal and spatial resolution, so we want to design studies that optimize our ability to look at the smallest parts of the brain that we possibly can. The way to do that is to analyz e mental arithmetic, for example, down to its subcomponents–retrieving a number fact, trying to decide which of two numbers is larger. You can begin to see where those subcomponents might be located in the brain, and from there you can begin to see the circuitry involved in doing these tasks. Q.Do you think that findings from brain research on learning disability–in math and reading, for example–might apply more generally to educating children? A. The attempt to understand learning and our mental capacities in terms of brain structures is such a new discipline that if they make advances over the next 50 years as they have over the last 15, who knows? It could be very exciting. But until 10 years ago, most cognitive psychologists did not take any interest in the brain. Brain imaging helped change that.But still, this hybrid discipline, cognitive neuroscience, that attempts to map cognitive mental functions onto brain areas and circuits, is in its infancy. We all have great expectations, but it's hard to make specific predictions about what the ultimate applications might be. Q. Do you think that, at this point, enough cognitive psychologists are involved in bridging brain research with education? A. Because of the interest in brain imaging and cognitive neuroscience, there are people doing it. But one of the problems is that there aren't enough experimental psychologists thinking about applications of psychology to education.Part of that is a funding problem. But it's been our experience at the foundation that if you make resources available for psychologists to work with educators to do that kind of work, you can elicit some very good proposals. Q. Are you looking more at funding that kind of work? A. Yes. I see an opportunity to work with some cognitive neuroscientists to ask, â€Å"What educational problems do you think you might be able to solve because of what you know? † I would like to see the foundation's interest moving more in that direction over the next five to 10 years. Q. Is t a problem that most cognitive psychologists don't have as much experience with education as with science? A. Yes. In most areas there's some friction between researchers and practitioners. It happens to be pretty evident in education. One way to address that is to encourage long-term collaborations between researchers and practitioners, where they're working together as peers rather than with the scientists going into schools and acting as master and educators as their servants. Two things have to happen. The researchers have to become a bit more aware of and sensitive to the problems teachers confront in the classroom.And teachers need to begin to think like researchers–to at least understand the importance of experimental controls, evidence, this kind of thing. Q. And how do you get that collaboration going? A. One thing we have found is if you send out a request for proposals that requires the teachers, the practit ioners and the researchers to come in together on a project, they do it. You want to structure funding programs for research and for improving instruction that incorporate the best research thinking and the best practical classroom knowledge.

Marketing Topical Research Paper

Global Marketing Topical Research Paper Chu Nguyen Binh – DBA Hanoi NorthCentral University (NCU), USA National University of Hanoi (Vietnam) August 2009 Research title: Where would be the market for foreign banks in Vietnam after joining WTO? ABBREVIATION BTABilateral Trade Agreement CARCapital Adequacy Ratio FBBForeign Bank Branch FIBForeign Invested Bank JSCBJoint Stock Commercial Bank JVBJoint Venture Bank MOFMinistry of Finance NPLNon-Performing Loan SBVState Bank of Vietnam SOCBState Owned Commercial Bank SOEState Owned Enterprise SMESmall and Medium-sized Enterprise SSCState Securities Commission WBWorld Bank WTOWorld Trade Organization TABLE OF CONTENTS ABBREVIATION ABSTRACT 1. INTRODUCTION1 2. VIETNAM BANKING SECTOR – A SUMMARY1 3. CHARACTERISTICS OF THE VIETNAMESE BANKING INDUSTRY3 3. 1. Very Low Market Penetration3 3. 2. Rate of Growth in Both Loans and Deposits Far Exceeding GDP Growth3 3. 3. A Highly Concentrated but Highly Fragmented Banking Market4 3. 4. Heavy Handed Regulation with Restrictions on Foreign Banks5 3. 5. Lack of Transparency Concerning Quality of Lending6 3. 6. Heavily Undercapitalized7 3. 7. Narrow Revenue Base and Few Product Offerings7 3. 8. Unknown Quantity of Non-performing Loans8 4. BUSINESS ENVIRONMENT FOR THE BANKING SECTOR9 4. 1. The Government’s Strategy9 4. 2. State Bank of Vietnam – Freeing the Tiger9 4. 3. Regulatory Environment – Meeting International Standards10 4. 4. Developing the Capital Markets11 5. PROSPECTS FOR BANKING SECTOR GOING FORWARD12 5. 1. Non-Performing Loan Ratios to Rise, But Risks of Bank Failures Looms12 5. 2. Further Development Inhibited by Low Capital and Technology12 6. CONCLUSION14 REFERENCES15 ABSTRACT Vietnam’s banking system is dominated by five state-owned banks, with around 70% of system assets at end-2008. Around 38 private banks comprise roughly another 25%, with the balance substantially accounted for by a host of foreign banks. In recent years, the private banks, being more commercially oriented, have grown rapidly at the expense of the state-owned banks’ market share. The foreign banks have also grown, as opportunities improved for them after Vietnam entered a bilateral trade agreement with the US in 2001 and acceded to the World Trade Organization (WTO) in 2006. The Research Paper will examine the Vietnam’s banking sector as a whole, including general characteristics of the Vietnamese banking market. It then analyzes the proportion in term of loan and deposit of state-owned, joint stock, joint venture and foreign banks. In the second part, the report lists opportunities for foreign banks to penetrate the Vietnam market under new legal requirement of the Vietnamese Government. They can establish 100% foreign bank entity, purchase stake in local banks or set up joint venture with Vietnamese partners. Finally, it will examine strengths and difficulties in terms of technology, expertise and experience, service quality, risk appetite, etc. f the foreign banks when operating in Vietnam market. 1. INTRODUCTION There are a lot of banks in Vietnam. Too many in fact. Currently there are five state-run commercial banks, 38 joint stock commercial banks, four joint-venture banks, 29 foreign bank branches, 45 foreign bank representative offices, five finance companies and nine finance leasing firms operating in Vietnam. Since 1992, Vietnam has moved to a diversified sys-tem in which state-owne d, joint-stock, joint-venture and foreign banks provide services to a broader customer base. However, the four main state-owned commercial banks – the Bank for Investment and Development of Vietnam (BIDV), the Bank for Foreign Trade of Vietnam (Vietcombank), the Industrial and Commercial Bank of Vietnam (Incombank) and the Bank for Agriculture and Rural Development (VBARD) account for around 70% of all lending activity. In a trade agreement with the United States signed five years ago, Vietnam fully committed to allow in foreign banks by 2010 at the latest, and to expose the banking sector to foreign competition. Under WTO entry rules the door may have to be opened even sooner than that. This has prompted foreign banking groups to closely scrutinize the Vietnamese banking sector as a business opportunity in itself. 2. VIETNAM BANKING SECTOR – A SUMMARY Vietnamese banking market is currently dominated by the five major State-Owned Commercial Banks (SOCBs), with 38 semi-private so-called joint stock commercial banks (JSCBs) gradually eating into their market share by better catering to the needs of small and medium-sized enterprises (SMEs) and retail clients. Years of lax monetary policy focused on supporting export-led GDP growth has flooded the banking system with money, pushing up redit growth to an annual average of 36. 4% over the past five years (2003-2007), hitting a peak of 54. 9% last year according to World Bank figures. High liquidity and a scramble for market share have resulted in a degree of aggressive lending, in particular to investments in the real estate and stock markets, which both experienced rapid downturns in 2007 and early 2008. State-Own ed Commercial Banks: The five SOCBs – Agribank, Bank for Investment and Development (BIDV), Vietcombank, Vietinbank and Vietnam Development Bank – hold roughly two thirds of banking assets according to IMF sources. The SOCBs are still encumbered by their previous role as instruments for implementing government policy. Indeed, the strong links between senior bank executives and the ruling Communist Party of Vietnam, and other state-owned enterprises (SOEs) have impeded much-needed corporate restructuring. Hence, SOEs still receive preferential treatment in loan allocation, resulting in the SOCBs running up high non-performing loan (NPL) ratios. The SOCBs are currently reporting NPL ratios of around 3%, but we are expecting this figure to rise to 5% before the end of 2008. However, we carry doubts about the reliability of official figures and suspect the real ratios could be significantly higher. Joint-Stock Commercial Banks: The 38 JSCBs presently control roughly 20-25% of banking assets in Vietnam, but are quickly eating into the market shares of the larger SOCBs by providing superior services to SMEs and retail savers. The JSCBs are generally better managed and more profitable than the SOCBs, but suffer from low capitalisation, which has made them vulnerable to Vietnam's domestic ‘credit crunch', prompted by the SBV's rapid tightening of its monetary policy. Foreign Banks: HSBC and Standard Chartered and a number of other foreign banks are already present in the Vietnamese market through joint ventures with JSCBs. HSBC increased its stake in Techcombank to 20% in August and Standard Chartered raised its stake in Asia Commercial Bank (ACB) to 15% in May 2008, but foreign banks have been prevented from increasing their stakes by restrictions on foreign ownership of domestic banks. Vietnam currently limits the shareholding a foreign bank can take in a domestic counterpart to 20%, with the total foreign ownership limited to 30%. 3. CHARACTERISTICS OF THE VIETNAMESE BANKING INDUSTRY . 1. Very Low Market Penetration There are only about six million bank accounts in Vietnam, five million of them for individuals which amounts to a penetration rate of about 6%. In reality, the effective potential market size is about 20 million or trebles the current penetration level. That is the size of the AB socioeconomic class in Vietnam. Even so, if we comp are this to the internet and mobile penetration rate of 14% and 12% the number is rather low. The reason is simple: the distribution and infrastructure of banking services is very poor relative to the telecommunications industry, which has virtual national coverage. By contrast, banks are almost unheard of in secondary cities and rural areas. With a low urban population of about 29%, banks simply don’t have easy access to over 70% of the population. There are other reasons, of course. Until recently the government had encouraged a cash economy by paying state employees in cash; there is a traditional distrust of banks; the banks themselves have done a poor job of providing services to the retailing public; and small businesses too are poorly served by banks unwilling to give them large loans unless they have the collateral to back it up. Of course the banking industry is growing rapidly with both deposits and loans expanding at high, double-digit growth rates per annum. And some banks such as Vietcombank, ACB, Sacombank, and Techcombank are making a determined effort to court the retail market. 3. 2. Rate of Growth in Both Loans and Deposits Far Exceeding GDP Growth Credit growth in Vietnam has been expanding at a breakneck speed these last few years. Not surprisingly given heady GDP growth. Nonetheless, the sustained rate of increase over several years has raised eyebrows at international bodies such as the IMF and World Bank. They like their credit growth at room temperature, rather than piping hot. Well piping hot is what they’ve got. In fact, the state-owned banks saw credit grow at an annual average rate of 24% over the past five years. Given the inability of some bankers to distinguish a good credit risk from a bad one (assuming they have a choice) this is not entirely a good thing. Hence the international sigh of disbelief that such stellar credit growth has been accompanied by a falling NPL ratio. According to some economists a 7% GDP growth rate can accommodate an annual credit growth rate of about 14-20%, roughly a factor of two without generating a lending bubble. However, credit growth rates above that level for any extended period of time are unhealthy for an economy. Admittedly credit growth rates have been falling for the last year down to about 15% as the central bank has tried to rein in credit departments. So far this year in fact lending has expanded at only about 16% nationwide. Going forward the speed of credit growth may well start expanding again as WTO becomes a reality. One bank has forecast that credit could grow at 35% per annum over the next five years given sufficient access to capital. While the better banks could probably cope with this, the temptation for others to take on too much risk is high. 3. 3. A Highly Concentrated but Highly Fragmented Banking Market Five state banks have carved up 70% of the loan market while forty-odd joint-stock banks and a host of foreign banks scrap for the remaining 30%. Compare this with the US where the ten biggest commercial banks control only 49% of the country’s banking assets, up from 29% a decade ago. Thus, at the top tier, the market acts like an oligopoly, while beneath the surface there is a holy war going on as mite-sized private sector banks scrap for the rest. Since the market itself is growing so fast this may not seem so bad. The state banks are also slowly bleeding market share. Even so things look very lopsided. Enter the State Bank of Vietnam (SBV), concerned about the fragmented nature of the private sector banks. They will introduce new regulations to force another round of consolidation in the near future. One way of doing this is to set high hurdles for any new established bank before it can get a license. All banks will need to have chartered capital of VND 1 trillion ($62. 8 million) which is exceeded by the existing capital of only the very biggest JSCB’s such as ACB and Sacombank. All other existing banks fall far short and will need to scramble for new capital or merge in order to meet the new requirements. And that is just the first round. From next year the SBV has circulated a draft proposal to raise the minimum capital level to about US$300 million. And there you have the consolidation trigger. 50% of the JSCB’s face merger or takeover. They will also have to demonstrate experience in banking governance. Banks will need to commit to Basel 2 standards from 2010. One of the key issues is the regulation of key stakeholders, such as a bar on lending to stakeholders or their affiliates. This is to prevent corporations from using their own banks as private piggy-banks. Currently a corporate of family can own up to 40% of a joint-stock commercial bank. 3. 4. Heavy Handed Regulation with Restrictions on Foreign Banks The government still exerts strong control on the banking sector in two ways. Directly, through various regulations and restrictions which govern how they conduct business and strictly licensing the type of businesses they can enter; and indirectly through the interference of a myriad of agencies and ministries, both local and national, who want to have a say on how scarce credit resources are allocated. The state-owned banking system is trying to shift from directed policy lending to a commercial system. But the transition is proving slow and painful. Given the legacy of state control at both national and local level it’s hardly surprising that the state-owned banks routinely complain about interference in their lending decisions and overall management. It seems that banking is too important to be left to bankers. The culture of social and political lending is still dominant amongst local officials and bureaucrats, as is the idea of consensus building and consultation before decisions are taken. To be fair, the problem has been recognized and things are getting better. With the proposed re-organization of the SBV for example, fewer local branches should reduce the amount of day-to-day noise coming in to credit departments. Local authorities will have less leverage in leaning on banks without the local central bank office to back them up. And the recently announced decree allowing for 100% foreign-owned bank branches will finally set the stage for a level playing field for foreign banks. However, without eliminating limits on branch openings and mobilization of Dong deposits (currently limited to 350% of total capital for foreign banks) some painful shackles will remain. . 5. Lack of Transparency Concerning Quality of Lending Lending decisions in Vietnam are still based more on relationships than cash flow. The assessment of loan customers is usually driven by the relationship with the bank and the size of the collateral being offered. Cash flow driven assessment and qualitative analysis is reserved for large private sector customers only. Amongst t he large banks only ACB bank uses DCF analysis across their entire customer base. The problem is partly due to outside interference in the decision making process and partly due to a lack of professional guidance. The absence of IT infrastructure to support professional credit analysis is another major factor. Another issue is exposure. Most banks lend a lot of money to a fairly narrow base of customers. The top 30 state-owned corporations probably account for over half of the state banks lending books. The private sector joint-stock commercial banks (JSCBs) are no different. 3. 6. Heavily Undercapitalized One of the legacies of state ownership is a severe shortage of capital at the state banks, a quality shared by private sector commercial banks as well. Government restrictions on equity holdings combined with a bond market that hardly functions has made raising chartered capital very difficult for banks. Average capital adequacy ratios (CAR) in amongst Vietnamese banks stood at 4. 5% at the end of 2007. This compares with an average CAR of 13. 1% in Asia Pacific and 12. 3% in South-East Asia. Admittedly with large scale raising of capital this year this number is improving. With most of the state banks well below the minimum 8% capital adequacy ratio for Tier 2 capital, lack of access to the international capital markets has constrained their growth. And this valuation is anyway based on a vary generous reading of their NPL’s. The JSCBs are in only a slightly better state with a handful able to cross the 8% hurdle rate. The rest are pitiful. And given that the domestic capital markets are still in the fledgling stages, raising new capital has been the biggest headache for all banks. The stronger JSCBs have responded partly by selling shares to foreign strategic partners. Further down the line, where profitability is lower and capital particularly skimpy the options are more limited. The SBV is chary of allowing smaller anks to raise capital from foreign investors. Going forward all of the banks have substantial appetites for raising further capital, to shore up their Tier 2 capital base to bring them over the 8% CAR hurdle by 2010. 3. 7. Narrow Revenue Base and Few Product Offerings Most Vietnamese banks make money from loans. And that’s basically it. Compare that to Western banks that make about a quarter of their income from fees – credit card fees, lending fees, arranging fees, etc. – and most have branched into wealth management. Well, not in Vietnam. To be fair this is tied into the lack of availability of credit history: banks don’t like lending to strangers they know nothing about. The state banks are generally geared to the large corporate and state-owned sector, providing syndicated loans for utilities, infrastructure projects, heavy industry and property developers. JSCBs are geared mainly towards lending to small and medium sized enterprises (SMEs) and the wealthier retail customers. However given their low penetration and limited branch network they only reach a fraction of their potential customer base. Car loans, mortgages and house improvement loans are retail staples. And small business loans using property as capital is the basic model for the SME market. In general, the Vietnamese banking model is best described as relationship-based rather than product-based as in international banks. 3. 8. Unknown Quantity of Non-performing Loans If you were to believe the State Bank of Vietnam (SBV) statistics the non-performing loans problem has been largely dealt with since 2000. Amongst the state-owned banks, non-performing loans (NPLs) have fallen steadily from 12. % in 2000 to 8. 5%, 8. 0% and 4. 47% in 2005, 2006 and 2007, respectively. Under a new stricter definition, the official number in 2008 has risen to about 7. 7%. Overall, about half of the NPL’s are on the watch list, which is the second of five lending categories in the new SBV scoring system. The other half fall into the three categories below watch list which are of greater concern. For private sector JSCBs, average NPLs were said to be around the 1% level at the end of 2007. Of course few believe the official numbers. International bodies carried out a similar exercise using Ernst & Young and found that NPL’s in the system using international accounting standard definitions came to about 15-20% of outstanding loans in the state-owned sector. This number is conservative due to limited data; a figure between 20-25% is probably a fairer estimate. In this respect the slow development of the banking industry is a blessing in disguise, things could be a whole lot worse. The worry is that the gap between the official version and the real picture is large and may indeed be growing. Most NPLs are generated by state-owned enterprises (SOEs) refusing to pay their obligations to state-owned banks. Pre-equalization is a favorite time to write off or simply clear out these loans. That way SOEs can start their new life in the private sector unencumbered by debts. So apart from asking the government to honor the SOEs’ commitment and trying to seize collateral there is precious little banks can do. There is not yet an effective secondary market for bad debt, although attempts to kick-start one are ongoing. There are very few NPLs sale and purchase transaction taking place. 4. BUSINESS ENVIRONMENT FOR THE BANKING SECTOR 4. 1. The Government’s Strategy After a long period of hesitation and hints of action the government has come up with a fast-track roadmap to liberalize the financial sector by 2010. Under the roadmap, the state will retain a controlling stake in the banks but its holdings will be quickly reduced to 51%. Foreign ownership will account for a maximum of 30% of total shares, while each strategic foreign institutional investor currently allowed to hold 10-20% at most. The 20% limit may be eventually erased but the 30% cap will stay for the time being. Basel 1 will be in effect until 2010, when the stricter Basel 2 standards for corporate governance will be introduced. The government will have to introduce further legislation before then to force banks’ compliance, particularly at the ownership level. This may create some buying opportunities amongst the JSCBs as families are forced to reduce their stake. 4. 2. State Bank of Vietnam – Freeing the Tiger In theory the central bank enjoys a wide remit. In practice it can’t do much without a legion of agencies and ministries throwing in their penny’s worth of advice. The central bank, the SBV, currently acts as the sole supervisory and regulatory body for the banking sector. It also owns the state-owned banks and sets interest rates. There is a clear need to separate the various roles of the SBV and give it increased autonomy in those areas such as monetary policy and regulation of the banking sector, which are clearly in its remit. The SBV also needs to be free of its role as custodian of the state’s shareholdings in the banking sector. The SBV sees several key roles for itself in the future: compiling and executing monetary policy, ensuring stability of the credit institutional system, act as a regulator to the banking system. In order to achieve this it needs legislative backing to clearly define its relationship with the National Assembly, government and all government agencies. In simple terms stop the incessant interference from other parties so that the SBV can get on with the job. After all, if the central bank is not allowed to set interest rate policy and regulate the banking sector without being leaned on, what hope is their for individual banks to lend money without getting the same treatment. Another issue is the lack of cooperation with the MOF on key issues such as bad debt and bank equitisation. MOF has often written off state-owned companies’ bad debt without consulting the banks. And the State Securities Commission (SSC), the stock market regulator often stalls on issuing licenses for banks to list. The two don’t play well together. 4. 3. Regulatory Environment – Meeting International Standards There are a myriad of regulations and decrees covering almost every aspect of the financial sector but we would like to look briefly at just three topics: progress removing restrictions from foreign banks, meeting international banking standards and the treatment of NPLs. With regard to meeting international banking standards, the government has appeared to follow WB recommendations to provide the necessary framework for an integrated financial system as required under WTO rules. And so in the last few years some of the necessary legislation has been pushed into place. On the NPL’s, the central bank issued Decision No. 93 to reclassify bad debts and risk reserves closer to international norms. So far, three state-owned banks (SOBs) claim to have successfully reduced their bad debt ratios to less than 5% in accordance with the new rules. Too successfully in fact, but more on this later. Overall the regulatory authorities are making an effort to converge with international stand ards in the financial sector, but with WTO membership and the 2010 deadline looming, time is not a friend. And foreign banks are still allowed to raise Dong deposits only to a ceiling of 350% of their chartered capital. In effect this locks them out of the domestic deposit market and is the most important impediment for their expansion plans. 4. 4. Developing the Capital Markets Banks need more tier 2 capital and bonds will provide the bulk of that. However with the bond market in its infancy there are still major constraints on the banks’ ability to raise sufficient capital quickly to reach the 8% capital adequacy ratio they crave. The infrastructure for developing the bond market is still not in place. HSBC is only now offering to provide a pilot rating scheme to enable potential investors to gauge the creditworthiness of various bond issuers. Fitch and Moody’s have also dipped their toes in the market, rating Sacombank and BIDV respectively. However rating services are horribly expensive and there needs to be a domestic agency to offer these services at prices most banks can afford. Another key hurdle lies with interest rate guidelines in place at all maturities along the yield curve. This prevents risk weightings and effectively bars smaller or weaker banks from coming to the market to issue capital whilst compensating for the higher risk by offering higher coupons. 5. PROSPECTS FOR BANKING SECTOR GOING FORWARD . 1. Non-Performing Loan Ratios to Rise, But Risks of Bank Failures Looms It is likely that there will be an increase in non-performing loan (NPL) ratios from the present 4-5% as an increasing number of companies and households default on their loans on the back of higher interest rates and slowing economic activity. A complicating factor in assessing the risk posed by deteriorating loan portfolios is that Vietnamese banks are currently applying a new system of internal credit rating schemes and debt classification systems in accordance with international standards. Implementation has so far been diverse between banks, making intra-sector comparisons a complicated business. Consultancy Ernst & Young has estimated that the application of the new standards is likely to lead to an increase in disclosed NPL ratios of 2-3 times, i. e. to the IMF estimates of 15-20%. While the new standards will make the NPL figures more internationally comparable, the resulting increase in the ratios is likely to create uncertainty about the proportion which can be attributed to the new standards and how much is down to an actual deterioration of loan portfolios. However, it can be believed that the effects on the overall economy from possible bank failures can be contained by larger JSCBs taking over smaller banks pushed to the brink by loan defaults and low capitalisation. Nonetheless, there might be possibility that the government or central bank will need to intervene to force mergers between banks and possibly also recapitalize those in worst health. 5. 2. Further Development Inhibited by Low Capital and Technology Consolidation should be a positive for the banking sector by decreasing excessive competition and increasing capitalization levels. Nonetheless, capital shortages, low technology and a shortage of skilled staff, especially at higher levels, will continue to inhibit the development of the banking sector. This will leave domestic banks exposed to the might of international banking giants such as HSBC and Standard Chartered, which are initially committing US$183 million and US$61 million respectively to their Vietnamese subsidiaries, placing them well in league with the larger JSCBs. Increased competition from foreign players will thus constitute a potent threat to domestic banks, which will be forced to improve services if they want to maintain their market share. Further expansion will need regulatory approval from the State Bank of Vietnam. The IMF has, in its annual review of the Vietnamese economy, set improvement of financial supervision as a prime task for the government in its reform agenda. The government raising the foreign ownership ratio to 25% for individual banks and 35% in total in 2009-2010 in order to maintain foreign banks' interest in holding stakes in domestic players, thus assisting in technology transfer. With the current system in place, there is a risk of a severe divide between better-capitalised, more technically advanced and better-managed foreign banks and a still relatively undeveloped domestic sector suffering from both a shortage of capital and low efficiency. Vietnamese banks are still primarily focused on taking deposits and lending and thus completely inexperienced in asset management and other financial services tipped to be the main growth areas in the Vietnamese banking market going forward. Domestic players, in particular the larger SOCBs, may have an advantage through their established branch network and client base, but this factor can be rapidly eroded as HSBC and Standard Chartered extend their operations. The threat from foreign banks will be particularly potent for the SOCBs, where reform has been slow in spite of the government's intention to place them foremost in the queue in the so-called ‘equitisation' process of transferring SOEs to private hands. It is unlikely that the government will find takers for its offers of 10-20% stakes in SOCBs for strategic foreign players if it does not radically review its privatisation procedures. With the state-owned banks constrained by politicised decision-making and the private banks suffering from a severe lack of capital, HSBC, Standard Chartered and other regional players will gain the upper hand over time as their extensive experience, superior technology, and readier access to capital work in their favor. It is unlikely that foreign players will dominate the Vietnamese banking sector in 10-15 years time, with the larger JSCBs being majority-owned by foreigners and the role of the once-impressive SOCBs reduced to supporting inefficient state-owned companies and agricultural households. 6. CONCLUSION In Vietnam, there is only less than 10% of Vietnamese currently use banks for financial services, instead largely relying on extended families and neighbourhood associations for lending and saving. However, a rising number of younger Vietnamese are now using banks for financial services, opening up great expansion opportunities in retail banking. The Vietnamese banking sector is a veritably good destination for early entrants as poorly-capitalised and inefficient domestic banks are ill-prepared for the opening of the banking market to foreign entrants as pledged in Vietnam's accession to the WTO in January 2007. With bank penetration at less than 10% and the Vietnamese economy forecast to grow by an average 7. 8% annually over the next ten years, the growth opportunities are great for foreign players. Top of Form REFERENCES Johny K. Johansson (2006). GLOBAL MARKETING Foreign Entry, Local Marketing, & Global Management. McGraw-Hill, Fourth Edition, International Edition. ISBN 007-124454-9. Vinacapital. Vietnam Equity Research. August 15, 2006 Fitch Ratings, Vietnam Special Report – Vietnamese Banks: Focus on Asset Quality – Three Stress Scenarios. February 25, 2009 at: www. fitchratings. com Vietnamese Banks: A Home-Made Liquidity Squeeze? May 2008 Jaccar Equity Research, Vietnam. Banks and Financial Services. The Bubbles did not Burst but Turned Grey. May 18, 2009 at www. jaccar. net Fulbright Research Project, The Banking System of Vietnam: Past, Present and Future. Nam Tran Thi Nguyen, 2001. at: www. iie. org/fulbrightweb/BankingPaper_Final. pdf retrieved on 27 Feb 2009.