History 1 Essay Example | Topics and Well Written Essays - 750 words

History 1 - Essay Example He understood the weaknesses of Germany and came to the realization that conflicts within the European region were not possible anymore because all the superpowers would be engaged in a more large-scale conflict. Based on this assumption, Bismarck laid out the essential guiding principles of German policy. First, Bismarck argued that Germany should refrain from continuing its territorial expansion; rather, all the powerful nations excluding France should compete with one another for Germany’s alliance. Moreover, the conflict among these powerful nations would be massive enough to prevent them from collaborating against Germany. Second, Bismarck had a rational understanding of international relations and the importance of the balance of power. Third, he regarded it crucial to prevent the Russians from building an alliance with France which would consequently pressure and endanger the Reich on both sides. Initially, Bismarck focused on Germany’s alliance with Russia and A ustria. This alliance facilitated the realization of Bismarck’s foreign policy objectives: it effectively secluded France and gained the friendship of two European superpowers. He took advantage of alliances to control his allies. Bismarck believed that it was crucial for Germany to cut off a resentful France from European relations. Hence, he built an alliance with Austria-Hungary. Afterward, the Triple Alliance with Austria-Hungary, Germany, and Italy was formed. He also strived to sustain a diplomatic agreement with Russia so as to prevent an alliance between Russia and France that would pressure Germany to wage war against these two superpowers. Basically, the Triple Alliance was meant to keep France at bay. It declared that if France attacked Italy without any reasonable purpose, Austria-Hungary and Germany would help Italy. Accordingly, if France attacked Germany, Italy would help the latter. In summary, Bismarck’s major foreign policy goal was to strengthen and build up the Second Reich, and his foreign policy was therefore aimed against France. 2) However, in these chapters, as well as Chapter XVI, â€Å"Emperor William II†, he also revealed the difficulties he actually experienced in carrying out his policies, both within Germany at the highest levels, as well as in his diplomatic dealings with Russia. Which of the two did he imply posed the greater danger to the stability, safety, and survival of the Second Reich? The economic gains of subsequent years were able to conceal the major problems of the Second Reich, particularly after the rise of Wilhelm II to power. In his letters, Bismarck clearly revealed what he perceived are the real threats to the Second Reich: his diplomatic relations with Russia and his relationship with Germany’s monarchy. But he named the latter as a greater threat to the survival of the Second Reich. Wilhelm II did not have sufficient strategic and political skills. In foreign policy, Bismarck strug gled to help the young Reich develop in terms of diplomacy. Yet, his plan for the future of Germany was grander than sheer peace. His alliances with Russia and Austria not merely strengthened the Reich’s international influence, but also protected monarchies against the pressure of radical socialism. However, paradoxically, it was the growing influence of Germany’s social democracy that created the problems for the Second Reich.

Russian Financial Crisis in 1998 Essay Example for Free

Russian Financial Crisis in 1998 Essay These events led Russia’s international reserves to fall by $13. 5 billion and to the dissolution of the Kiriyenko government. One month later, Standard and Poor’s downgraded its rating of the Russian ruble to â€Å"CCC,† the lowest possible Standard and Poor’s rating, for its long-term outlook and â€Å"C† for short-term outlook. These events signaled the onset of the Russian financial crisis, which had its roots in the fundamental problems in the Russian economy but was triggered in part by the continuing financial crises in emerging markets in Asia and around the world. What were the causes of this crisis and near financial collapse? What are the so-called â€Å"experts† saying about the crisis and its spillover effects on other ENI countries? What are the possible courses of action that could minimize the adverse effects of the crisis and reduce the likelihood of future occurrences? The purpose of this paper is to summarize the divergent viewpoints expressed by leading scholars and practitioners in the field of international development and finance. By surveying the literature, it is apparent that the Russian crisis, and to some extent the Asian crisis that preceded it, was caused by a combination of internal structural problems in the domestic economy (especially in the banking and fiscal systems) and growing problems with the international financial system that permits excessively rapid outflows of capital. However, there is significant divergence of opinion among scholars and practitioners as to which set of factors, those related to the Russian economy or those related to the international financial system, are the cause of the crisis. In addition to the differences of opinion as to the causes of the crisis, disagreement exists as to the remedies to the crisis. As a result, each group has recommended its own set of policy prescriptions. The first section of this paper discusses the divergent opinions on the causes of the crisis. The second section highlights the economic, social, and political effects of the crisis. The third section provides a list of the proposed remedies offered by the divergent camps. The final section summarizes the main findings and includes a timeline of the Asian and Russian crises. Divergent Opinions: Causes of the Russian and Global Financial Crises The divergent views regarding the causes and cures of the Russian and Asian financial crises can be broken down into two camps: (1) those that believe that the crises derived primarily from problems in the international financial system and (2) those that place blame primarily on the structural problems within the countries themselves which left them vulnerable to capital flight and other problems arising from external financial instabilities. Members of the first group tend to be critical of the IMF and other international financial institutions, saying that these institutions played a role in creating and exacerbating the financial crises rather than helping to reduce the negative impact, although the â€Å"fix the system† critics do agree that each of the crisis countries did suffer from internal structural problems as well. The second group of analysts—the â€Å"fix the countries† group—believes that the international financial system and the approach of the IMF in assisting these countries are more or less working, and that the current crises derived from a lack of sufficient regulatory and fiscal reforms in Russia and Asia. â€Å"Fix the Global Financial System† Critics Jeffrey Sachs. According to Sachs, â€Å"the Treasury and the IMF have driven a large part of the developing world into recession†¦And the Brazil case makes absolutely clear that the first step is not to defend overvalued currencies. The punishing cost of this is overwhelmingly high. This is a lesson that the IMF and the Treasury have continued to ignore† (Uchitelle 1999). In his view, the IMF exacerbated the crisis by demanding tight fiscal and monetary policies. He claims that perceiving the crisis to be one of balance of payments, rather than a financial panic, the IMF chose an approach similar to the mistaken policies implemented by the United States in the early stages of the Great Depression of the 1930s (Radelet and Sachs 1999). Furthermore, Sachs insists that since high interest rates and austerity measures are bringing disaster to many emerging markets, interest rates should be kept down to encourage economic activity and allow exchange rates to find their own equilibrium level. He does not attribute the devaluation of exchange rates as a cause of the crisis in Russia, nor does he believe that a currency board arrangement would have saved the country. He states that â€Å"when pegged rates become overvalued, [this] forces countries to deplete their foreign exchange reserves, in a vain defense of the currency peg. † In his view, it was the combination of broken promises (i. e. , the ruble will not be devalued) and depleted reserves that left the country vulnerable to panic (Radelet and Sachs 1999). He believes that a growing economy is more likely to restore investor confidence than a recessionary one burdened by high interest rates (Uchitelle 1999). An additional contributing factor to the crisis, according to Sachs, was â€Å"moral hazard. Investors clearly had doubts about Russia’s medium-term stability, and talked openly about the risk of collapse and about the safety net that they expected the IMF and G-7 to provide to Russia. Knowing that these international lenders would rescue Russia and guarantee investments in the event of a financial meltdown in Russia, international investors tended to underestimate the r isks—and hence tended to over-invest in Russia. Russia was viewed as â€Å"too big to fail,† and this led to an inflow of capital that was larger than appropriate for the actual level of risk (Radelet and Sachs 1999). George Soros. As one of the world’s most successful international investors, an important philanthropist with millions of dollars invested in democracy projects throughout the ENI region, and a public intellectual who has proposed that sweeping changes be made to the international financial system, George Soros is a key figure in the Russian and Asian financial crises. His disparate roles often create a conflict, as Soros-the-intellectual appears to many an advocate of the regulation of international capital flows to prevent potential damages from speculations by people like himself (Frankel 1999). Soros was Russia’s biggest individual investor prior to the crisis in August 1998. He held a $1 billion stake in Svyazinvest, a telecommunications concern, and millions in stocks, bonds, and rubles. In mid-August 1998 Soros sprang into action to try to stop the crisis. He contacted the U. S. Treasury department, influential former members of Yeltsin’s administration, a nd published a letter in The Financial Times saying that the meltdown in Russian financial markets â€Å"had reached the terminal phase† (O’Brien 1998). In his letter, Soros called for immediate action—a devaluation of the ruble and institution of a currency board—that would have eliminated the Russian central bank’s discretion over monetary policy. Not realizing that a letter from Soros would be perceived as coming from Soros-the-investor instead of Soros-the-intellectual, his letter helped to prompt a panic in Russian markets, where investors believed Soros was shorting the ruble. Soros’ funds ultimately lost $2 billion in Russia as a result of the financial crisis there. According to his testimony to the Congressional Committee on Banking and Financial Services on 15 September 1998, Soros pointed out that â€Å"the Russia meltdown has revealed certain flaws in the international banking system which had previously been disregarded† (Soros 1998a). These flaws can be summarized as follows: (1) Banks engage in swaps, forward transactions, and derivative trades among each other— in addition to their exposure on their own balance sheets—but these additional transactions do not show up in the banks’ balance sheets. So when Russian banks defaulted on their obligations to western banks, the western banks continued to owe their own clients. As these transactions form a daisy chain with many intermediaries, and each intermediary has an obligation to his/her counterparty, no simple way could be found to offset the obligations of one bank against another. As a result, many hedge and speculative funds sustained large losses, and had to be liquidated. This systemic failure led most market participants to reduce their exposure to emerging markets all around, and this caused bank stocks to plummet and global credit market to enter a crunch phase. 2) As individual countries attempt to prevent the exodus of capital from their economy by raising interest rates and placing limits on foreign withdrawal of capital (as in Malaysia), this â€Å"beggar-thy-neighbor† policy tends to hurt the other countries that are trying to keep their capital markets open. (3) Another â€Å"major factor working for the d isintegration of the global capitalist system is the evident inability of the international monetary authorities to hold it together†¦ The response of the G7 governments to the Russian crisis was woefully inadequate, and the loss of control was kind of scary. Financial markets are rather peculiar in this respect: they resent any kind of government interference but they hold a belief deep down that if conditions get really rough the authorities will step in. This belief has now been shaken† (Soros 1998a). He also adds that â€Å"†¦financial markets are inherently unstable. The global capitalist system is based on the belief that financial markets, left to their own devices, tend toward equilibrium†¦This belief is false† (Soros 1998a). 3 His proposed cure is to reconsider the mission and methods of the IMF as well as replenish its capital base. Additionally, he’d like to see the establishment of an International Credit Insurance Corporation to help create sound banking systems, which would be subject to close supervision by the international credit agency, in developing countries (Soros 1998b). His last recommendation is to reconsider the functioning of debt-swap and derivative markets (Soros 1998b). Academia and Other Nongovernmental Organizations. Initially, Paul Krugman, an economist at MIT, argued that problems with the Asian economies, combined with corruption and moral hazard, led to wild over-investment and a boom-bust cycle. More recently, however, Krugman explains that such weaknesses cannot explain the depth and severity of the crisis, nor the fact that it occurred in so many countries simultaneously, and instead he places the blame on financial panic and overly liberalized international and domestic financial systems (Radelet and Sachs 1999). According to Krugman, â€Å"all short-term debt constitutes potential capital flight. † The need to fix structural problems in individual countries should not stand in the way of broader macroeconomic measures, in particular those designed to stimulate growth in hard times. He states that â€Å"it is hard to avoid concluding that sooner or later we will have to turn the clock at least part of the way back. To limit capital flows for countries that are unsuitable for either currency unions or free floating; to regulate financial markets to some extent; and to seek low, but not too low, inflation rather than price stability. We must heed the lessons of Depression economics, lest we be forced to relearn them the hard way† (Uchitelle 1999). In other words, the global financial system is largely to blame for the recent crises. Fix the Countries† Analysts IMF. According to the IMF, Russia’s financial crisis was brought on by a combination of (1) weak economic fundamentals, especially in the fiscal area; (2) unfavorable developments in the external environment, including contagion effects from the Asian financial crisis and falling prices for key export commodities such as oil; and (3) its â€Å"vulnerability to changes in market sentiment arising from the financing of balance of payments through short-term treasury bills and bonds placed on international markets† (IMF December 1998). The IMF had pointed out in May 1998 that Russia had made insufficient progress in improving budget procedures and tax systems, establishing competent agencies to collect taxes and control expenditures, clarifying intergovernmental fiscal relations, and ensuring transparency at all levels of government operations. By August 1998, investor confidence in the ability of Russian authorities to bring the fiscal system under control began to decline, immediately leading to the financial crisis, after the Duma failed to approve fiscal measures planned under the augmented Extended Fund Facility (EFF). These measures were aimed at reducing the fiscal deficit, implementing new structural reforms addressing the problem of arrears, promoting private sector development, and reducing the vulnerability of the government’s debt position, including a voluntary restructuring of treasury bills. 4 The extent to which the Russian crisis is attributable to contagion effects from the Asian crisis instead of to internal problems stemming from insufficient reforms in fiscal management is difficult to determine. According to the IMF’s May 1998 assessment of spillover effects from the Asian crisis, Russia’s stock market was seriously hit by the crisis and by early spring 1998, stock prices in Russia had indeed not yet fully recovered from the lows reached in fall 1997. The Russian ruble had also been hit hard and the central bank had to intervene heavily in the foreign exchange market just to keep the currency within the new exchange rate band. As international capital fled from the risky Asian economies in the fall and winter of 1997, investors who were similarly wary of risky investments in the transition economies began to reduce their exposure to Russian and other ENI markets. Nevertheless, emerging market investors quickly began to differentiate between high- and low-risk countries. By first quarter 1998 the Czech Republic and Poland had become relatively attractive to investors, receiving considerable short-term capital inflows and by January 1998 Standard and Poor’s credit rating for Hungary had greatly improved. Russia and Ukraine, on the other hand, continued to suffer from structurally weak financial sectors and an over-dependence on short-term borrowing. To attract investment back into Russia, the Russian government had to raise interest rates in order to offer yields well above pre-crisis levels to cover for the increased perception of risk. As a result, foreign investment had started to flow back into Russia by early 1998. According to the IMF, differences in the severity of interest rate and equity price movements among the transition countries illustrate the importance of appropriate domestic macroeconomic and structural policies to limit vulnerability to international financial crises. In Russia and Ukraine, financial sector weaknesses and a high dependence on government borrowing, in addition to chronic revenue problems, especially in Russia’s case, explain why these two countries were more affected by the Asian crisis than the Central and East European countries. In other words, the Asian crisis exposed Russia’s underlying structural problems and made the need to address them more apparent. The IMF continues to assert that the financial crisis in Russia was a crisis of the state. Nearly a year and a half ago, Michel Camdessus, Managing Director of the IMF, claimed that the Russian state â€Å"interferes in the economy where it shouldn’t; while where it should, it does nothing. Camdessus pointed out that the Russian state needs to make progress in promoting an efficient market economy through transparent and effective regulatory, legal, and tax systems. At present, the IMF still supports these recommendations (IMF November 1998). Existence of a Virtual Economy. Clifford Gaddy of the Brookings Institution and Barry Ickes of Penn State University argue that although the immediate causes of Russia’s financial crisis are the large budget deficit, resulting from nsufficient revenue collection, and an inability to service the debt, especially short-term dollar liabilities, there are more fundamental problems with Russia’s economy. These problems stem from â€Å"illusions† regarding prices, wages, taxes, and budgets that permeate the Russian economy to such a great extent that the economy has become â€Å"virtual† rather than actual. This virtual economy 5 is derived from a public pretense that the economy is bigger and output more valuable than they really are. According to Gaddy and Ickes, the virtual economy primarily originated from the unreformed industrial sector inherited from the Soviet era, in which enterprises produced output that was sold via barter at prices that were higher than they would be if sold for cash. In general, these enterprises operate without paying their bills, as wages that should be paid to employees (but are not paid) become wage arrears, and required payments for inputs (which are also not paid) emerge as interenterprise arrears and payments through barter. In fact, Gaddy and Ickes assert, people make an effort to avoid cash transactions because they would expose the pretense of the virtual economy. They go on to state that although the virtual economy acts as a safety net for Russian society, it has serious economic repercussions since it negatively affects enterprise restructuring, economic performance measuring, and public sector reform (Gaddy and Ickes 1998). At this point, they argue that the West has two choices on how to help Russia. First, the West can concentrate on keeping Russia stable in the short term by bailing out the virtual economy, which will lead to further consolidation of a backward, noncompetitive economy and will guarantee the need for future emergency bailouts. The second option would be to refuse the bailout. The consequences of this option would be drastic—the ruble will lose its value, foreign capital will flee—but on the positive side, the Russian economic policy that is so addicted to borrowing would have to kick the habit as it found its supply of international credit cut off. They state that â€Å"denying Russia a bailout is not without risks. But bailing out the virtual economy is sure to increase those risks for the future† (Gaddy and Ickes 1998). U. S. Government. The U. S. Treasury Department points out that despite the many important reforms that have been carried out in Russia—including extensive privatization, price liberalization, and reduction of government spending—reforms in a few critical sectors have lagged behind, leading to the financial crisis. According to David Lipton, the principal problems include the failure to control the budget deficit and extensive government borrowing. The budget problems are a manifestation of the political struggle over the country’s economic direction and as long as these disputes over the proper role of government remain unresolved, he believes that budget difficulties and unnecessary government borrowing will continue unabated. He also argues that Russia’s high fiscal deficits have led to the country’s high interest rates since â€Å"Russias macroeconomic problem is fundamentally fiscal; interest rates are more properly viewed as a symptom of that problem, not a cause† (Lipton 1998). Lastly, he argues that the failure to build a favorable investment climate and adhere to the rule of law also helped to sow the seeds of the financial crisis (Lipton 1998). The Treasury Department also points to external factors that led to the crisis. According to Deputy Secretary Lawrence Summers, the Russian crisis was not inevitable. He avers that if the Asian crisis had not reduced confidence among emerging markets investors, and had the prices of export commodities (e. g. , oil) not fallen so dramatically—the August 1998 crisis might not have taken place (Summers 1999). Nevertheless, the crisis did occur because the Russian government attempted to pursue an enormously risky course of simultaneously 6 devaluing the ruble, imposing a debt moratorium, and restructuring government bonds in response to the external pressures (Lipton 1998). To avoid future crises, Summers points out that Russia needs a tax system that supports the government and legitimizes enterprises, which probably involves a new allocation of spending and revenues between central and regional governments. Summers, however, is also quick to point out that it is much easier to talk about what tax reforms need to be implemented than to discuss how the reforms can be accepted politically. He adds that bank restructuring is another area where reform is needed and that it should be done in a fair nd transparent way within a legal framework that makes current owners take responsibility for their losses before scarce public funds are used (Summers 1999). Russian Government and Nongovernmental Analysts. Yegor Gaidar, former prime minister of Russia, attributes the crisis to the combined continuation of soft budget constraints from the socialist period along with the weakening of previous administrative controls and government corruption, which led to the ban kruptcy of state enterprises. The early years of transition in Russia were marred by inefficient macroeconomic policy, weak budgetary and monetary constraints, and inflation that eroded budget revenues. Although later macroeconomic policy was more efficient and succeeded in controlling inflation, efforts to improve revenue collection or cut expenditure obligations have failed, leading to unsustainable deficits. The lessons learned here are that budget deficits should be reduced as quickly as possible, as inflation is also controlled, and the vulnerability of exchange rate regimes to potential crises should be addressed immediately (IMF 1999; Gaidar 1999). In terms of the current regime, Gaidar describes Primakov and his government as a â€Å"communist government in post-communist Russia,† because Primakov and his cabinet come from the â€Å"traditional Soviet economics establishment† and his post-crisis approach relies on strengthening and centralizing government control. According to Gaidar, the Russian government faced two possible paths to solve the crisis: (1) return to the approach employed in 1992–94, with soft monetary and budget policies, or (2) maintain a tight monetary policy, stabilize the ruble, and carry out fundamental budget reforms to allow the government to balance revenues and expenditures. The first path would lead to the return of high inflation rates, as the government relaxed its control over the money supply in an attempt to pay its debts, but the banks would benefit from the return of â€Å"cheap money† issued by the Central Bank. The second path would involve speeding up structural reforms, which would be good news for profitable enterprises but would mean painful consequences for unproductive enterprises—mostly firms in the industrial and financial sectors—as they would be allowed to go bankrupt if they could not compete in world markets. Both paths would be painful, Gaidar explains, but the first path of high inflation would also be inequitable, as the poorest layer of society tends to suffer most from increasing prices. Not surprisingly, Primakov chose to pursue a modified version of the inflationary approach, a sort of populist economics policy that had been implemented in many Latin American countries. The reason Primakov opted for this path, as Gaidar states, is because â€Å"in part, the lack of internal and external sources for financing after the 7 dismissal of the Kiriyenko government pushed [the Primakov government] toward choosing the inflationary variant† (Institute for Economics in Transition 1999). Andrei Illarionov, Director of the Institute for Economic Analysis in Moscow, while noting the IMF’s successes with respect to Russia, criticized the IMF for being too willing to compromise on Russian conditionality. Not one of the IMF programs developed in Russia, Illarionov claims, has been executed in full, as a result of the softening and revision of conditions in original agreements. He states that â€Å"decisions to provide financing for Russia, motivated by political rather than economic considerations, have given rise to the problem of moral hazard. As a result, the Russian government became spoiled after being granted unearned financial assistance, and policy became even more irresponsible than before (Illarionov 1998). Finally, Illarionov also criticizes the IMF for offering inappropriate policy recommendations to Russian authorities in two other areas: exchange rate and fiscal policies. The IMF program (mid-1998, pre-crisis) stipulated that the exchange rate policy should remain unchanged for the remainder of 1998, in order to preserve the low inflation rates, and prescribed that the Russian government should concentrate mainly on raising revenue rather than reducing expenditures. Although many poor 9 O c t 9 8 J u l 9 8 A p r 9 8 egaw muminim laiciffo J a n 9 8 O c t 9 7 .9991/20 ,PECER :ecruoS J u l 9 7 A p r 9 7 J a n 9 7 Dissatisfaction over the continuing problem of wage arrears led to an increase in strikes throughout the country toward the latter part of 1998; 1873 strikes were registered in December 1998, nearly 3. 4 times the number during the previous December. aissuR ni ecnetsisbuS dna ,snoisneP ,segaW ecnetsisbus woleb era % 92 level ecnetsisbus laiciffo ecnetsisbus woleb era % 12 0 001 002 003 004 005 006 007 008 R u bl e s p e r m o n t h . eople have become poorer, the impoverishing effects of the crisis have also hit other groups within Russian society. Workers involved in the business of selling imported goods have found that demand for their products has nearly evaporated as not only consumer incomes have fallen, but also ruble depreciation means higher prices on imports. As a result, many of these trade businesses have shed labor or closed. One of the longer-term consequences of the economic crisis in Russia may be the strain on society, which is likely to weaken the Russian government’s ability to continue to push for reforms. In some ENI countries, the crisis has given reform skeptics an excuse to abandon or reverse some reforms already implemented. The social pressure against further economic reforms, now seen by many as the cause rather than the cure for the economic crises, may become strong enough to counter-balance the pro-reform force. It may lead some ENI countries to get stuck in what Adrian Karatnycky describes as a â€Å"state of stasis† rather than of transition. Stability Versus Democracy Politically, the financial collapse has weakened Russia vis-a-vis the west, but its relative power in the region has in many ways increased. Not only has the crisis given Moscow an excuse to consolidate power over the regions throughout Russia, but it has also allowed many hard-liners within Russia to gain some ground in their push to reassert Russia’s traditional sphere of influence. In addition, many neighboring regions have found themselves with large arrears on their payments to Russia for natural gas deliveries, and have had to strike deals with Russia to find ways to settle these debts through deliveries of food and other barter arrangements. Following the onset of the crisis in August, the Russian government proposed many changes intended to promote economic stability at the cost of democracy. In February 1999, Prime Minister Primakov argued that Russia’s governors should be appointed by the President, rather than elected by their constituents, so that Moscow can take back control over the regions and avoid a collapse of the country. President of Belarus Alyaksandr Lukashenko rejoiced in the crumbling of IMF-backed reforms in Russia, considering the crisis to be a indication of his position in favor of state planning and price controls. The old proposal regarding a possible political union of Belarus, Ukraine, and Russia has also resurfaced, as Russia and some neighboring countries have concluded that further integration will help solve their problems. In the words of Ivan Rybkin, President Yeltsin’s envoy to the CIS, â€Å"the recent crisis taught us all that we must stand together in order to surviveâ₠¬  (Rutland 1999). Effects on Neighboring Countries The drop in real wages in Russia—coupled with the devaluation of the ruble—has translated into dramatically reduced Russian imports. For the neighboring countries that depend on Russia as a market for their exports, the shrinking market in Russia has been disastrous for their local economies. As Russians are shifting consumption away from the relatively more expensive imported goods, the producers of these goods in neighboring countries are faced 10 with a dramatic fall in demand for their products. This has translated into falling output and increased unemployment for the countries that are most closely tied to Russia through trade, especially Moldova (more than 50 percent of Moldovan exports go to Russia); Belarus, Ukraine, and Kazakhstan, (;gt;33 percent of exports to Russia, as of early 1998); and Georgia (;gt;30 percent of exports to Russia) (EC 1999). The drop in remittances from nationals living in Russia has led to decreased incomes in neighboring countries with large numbers of gastarbeiter working in Russia. Armenia, Georgia, and Azerbaijan have been most severely hit by this decline in remittances. In some cases the pattern seems to have been reversed, with families in neighboring countries now supporting relatives living in Russia (EC 1999). Finally, food prices have also increased in the neighboring countries of the NIS, as the cost of imports from outside Russia has risen as a consequence of the significant devaluation of local currencies. Some of the specific effects and impacts on other NIS and neighboring countries are summarized briefly below. Armenia—Accumulation of public sector arrears is likely, as government is facing difficulties in financing of education, health care, and other expenditures. Remittances from Armenians in Russia have decreased, placing additional pressure on family support systems, and this could result in increased poverty. Azerbaijan—Trade-related consequences in the short term are less than for other NIS countries, as the political instability in the North Caucasus region has already limited trade ties with Russia prior to the crisis. Government spending was cut in 1998, and further cuts in 1999 will affect key social sectors. As in other Caucasus countries, decreased remittances from Azerbaijani nationals residing in Russia has reduced family incomes in Azerbaijan. Baltic Region—Estonia, Latvia, and Lithuania—The Russian crisis forced some Baltic banks to fail, and several others to reveal their under-reporting of exposure to Russia in their September 1998 quarterly reports. Better developed financial systems, a reorientation toward western markets, and general political stability have helped to limit the damage and contagion effects from the Russian crisis. Belarus—One of the most affected countries in the NIS, Belarus was highly dependent on trade with Russia prior to the crisis. Exports to Russia plunged from $400 million/month in the first half of 1998 to just $170 million/month by September 1998. Shortages of basic foods forced the government to introduce rationing. Georgia—The Russian market accounted for 30 percent of Georgia’s exports prior to the crisis, and Georgian nationals living in Russia provided a significant amount of income to Georgian families through remittances. The trade deficit with Russia widened to 50 percent in October 1998, forcing the Georgian authorities to float the lari (which led to a sharp depreciation). 11 Kazakhstan—In the first half of 1998, half of Kazakhstan’s exports went to Russia, and the impact of the crisis has been felt in Kazakhstan primarily through the reduction of exports to Russia. Kazakhstan introduced a temporary ban on the import of some Russian foodstuffs, in order to control the inflow of cheapened Russian goods following the depreciation of the ruble. Kyrgyzstan—Nearly 60 percent of Kyrgyzstan’s exports went to Russia, prior to the crisis, so this country was also one of the more vulnerable to negative shocks through the trade mechanism. In this most pro-reform of the Central Asian Republics, price liberalization of utilities and privatization may be threatened, as consumers are less able to pay the higher tariffs as a esult of fallen incomes. Moldova—Trade with Russia is important to Moldova, as 50 percent of Moldovan exports went to Russia prior to the crisis. Many farms and other agro-exporters have been unable to pay wages, as their export market has dried up in Russia. Here, too, the crisis has threatened the reform and liberalization process implemented by the government, as investors’ interest in the Moldovan economy has diminished and a heavy withdrawal from commercial banks have signaled a lack of confidence in this country. Tajikistan—Low commodity prices for cotton and gold had already damaged the Tajikistan economy before the Russian crisis, and the fragile peace held together in part with the support of the Russian military (serving as border guards) has certainly not gained strength from the crisis. Apparently, Tajikistan is not as dependent on trade with Russia as other NIS countries, and this has helped to insulate Tajikistan from the direct effects of the crisis. Turkmenistan—Exposure of Turkmen banks to Russian markets has been limited, as the Turkmenistan economy is tightly controlled by the state. The Russian crisis therefore is not expected to have a strong direct impact on Turkmenistan. Ukraine—Closely linked to Russia through trade and financial ties, Ukraine has suffered greatly as a result of the Russian crisis. The hryvnia lost half its value against the dollar following the crisis, and reserves have fallen (as of early 1999) to only one month of imports. Inflation surged to 12. 8 percent in October 1998 alone, following a long period of relatively stable inflation before the onset of the crisis (2 percent inflation in first half of 1998). Uzbekistan—As Uzbekistan has been gradually reorienting its international trade profile away from Russia over recent years, the country has apparently been less affected by the crisis than other NIS countries. Further, the underdeveloped banking system and financial markets in Uzbekistan may have helped to insulate that country from the shocks emanating from Russia in August 1998, as Uzbekistan had relatively little exposure to Russia’s financial markets. 2 Proposed Remedies As discussed throughout this paper, two camps have emerged in academic and policy circles that seek to explain the causes of and remedies for the Russian financial crisis. This section highlights some of the remedies proposed by each camp. According to the â€Å"fix the countries† critics, such as the IMF and the U. S. Treasury Department, the Russian government must continue pushing for reforms in the public finance and banking sectors. According to Gaddy and Ickes, only two options exist for western creditors and international financial institutions: keep Russia stable in the short-term by bailing out the virtual economy or refusing a bailout. Denying Russia a bailout would have negative effects in the short-term by leading to the demise of large commercial banks and oligarchs, foreign capital flight, and currency devaluation. In the long run, however, Gaddy and Ickes prefer this option because they believe it will force Russia to adjust to economic life without a steady supply of credit available and adapt sound economic policies. They dislike the first option simply because they believe it will lead to the further development of a nonmarket-oriented economy that would require bailouts in the future. The Treasury Department adds that bank restructuring and reforms in tax administration and collection are necessary as well. The â€Å"fix the global financial system† critics, such as Jeff Sachs and George Soros, urge that the international financial system be reformed so that short-term borrowing by banks and governments be limited so as to avoid potential investor panics. In addition, Sachs recommends that domestic banking regulations, in the form of enhanced capital adequacy standards and policies that encourage partial bank-sector ownership by foreign capital, be implemented in order to limit vulnerability of the domestic economy to foreign creditor panics, and that exchange rates be kept flexible instead of pegged. In addition to these proposed remedies, others have gone further to propose mechanisms for recovering losses (Sexton 1998). According to Sexton, foreign creditors have at their disposal four mechanisms to recover losses to Russian firms: 1. Convertible debt securities: debtors could issue convertible bonds to creditors although Sexton argues that this probably won’t work too well in Russia 2. Treasury or redeemed shares: company may exchange its own shares, that were bought back, or interests to extinguish outstanding indebtedness; there should be no tax consequences to debtor on repurchase of shares; on resale to foreign creditor, debtor should be taxed on any gain on shares or should be able to deduct any loss sustained 3. Alternative debt refinancing structure: swapping debt for convertible debt which creditor converts into equity; issue by debtor to creditor of convertible bonds as a means of refinancing outstanding debt; creditor should make sure conversion ratio covers value of outstanding debt over term of loan; disadvantage to this 13 strategy is that creditor is refinancing and likely to have twice the outstanding debt for some time 4. Securitizing the debt: convert debt into security which creditor then contributes to debtor’s charter capital to pay for the shares (key issue facing creditors thinking of taking equity in a Russian debtor company in exchange for indebtedness is how to value that equity) Summary This paper has addressed the opposing views as to the causes of and remedies for the Russian financial crisis. †¢ Two central camps have emerged. One camp argues that the Russian economy has severe structural problems that were the primary cause of the crisis: fiscal deficit, banking sector problems. The other group points to the IMF and the problems with the international financial system, claiming that moral hazard problems led investors to underestimate the risk of investing in emerging markets such as Russia, and that unregulated short-term investment flows out of emerging markets can result from the panic. Each of these groups proposes different remedies for the crisis, based on their assessment of the roots of the crisis. The IMF and Treasury Department insist that the Russian government continue to push for reforms in public finance and the banking sector, claiming that weaknesses in these areas ultimately led to the onset of the Russian crisis. Jeffrey Sachs, George Soros, and others who are critical of the international financial systems and the role of the IMF in the recent financial crises, recommend that the short-term borrowing by governments and banks in emerging markets be limited and regulated, and that exchange rates are flexible rather than pegged. †¢ Although the worst of the Russian crisis may have already passed, as the Russian and other ENI stock markets appear to have recovered and the dramatic fall in production has been reversed, the original causes of the crisis still need to be addressed. Continued progress in banking and fiscal reforms in Russia will be necessary to ensure that the country is less vulnerable to future external shocks and foreign creditor panics. Improvements in these sectors would help restore investor confidence in the Russian economy and reverse the current outflow of capital. 14 ANNEX: What Happened in Russia? A Brief Chronology of Events Asian Crisis: Precursor to the Russian Crisis †¢ †¢ July 1997, Thailand—devaluation of Thai baht December 1997, Korea—devaluation of Korean won †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ ate October 1997— Pressure on ruble intensifies, as result of Asian crisis December 1997—Foreign exchange pressure temporarily recedes in Russia 19 December 1997—Standard and Poor’s Sovereign Ratings of Russian ruble: longterm—â€Å"BB-â€Å"; outlook—negative; short-term—â€Å"B† January 1998—Reemerging p ressure on ruble forces Central Bank to raise interest rates, increase reserve requirements on foreign exchange deposits, and intervene on ruble and treasury bill market March 1998—Stock market prices in Russia have not yet recovered from lows reached in late fall 1997 May 1998—Russia places major commercial bank under Central Bank administration; miners strike over wage arrears; Russia continues to intervene on foreign exchange markets to support ruble, but investors increasingly see this strategy as unsustainable Late May 1998—Interest rates in Russia increased to 150 percent; Russian government announces revisions to 1998 budget, including 20 percent cut in expenditures and new initiatives to boost revenues Early June 1998—Recent policy announcements temporarily ease tensions, allow partial reversal of earlier interest rate hikes 9 June 1998—Standard and Poor’s Sovereign Ratings of Russian ruble: long-term— â€Å"B+â€Å"; outloo k—stable; short-term—â€Å"B† Late June 1998—Russian authorities unveil anti-crisis program, aimed at boosting tax revenues, cutting expenditures, and speeding up structural reforms . 9991 lirp A , eci vre S et aR egn ahc xE CIFI C AP : ecruo S 15 4 / 2 / 9 9 3 / 2 / 9 9 2 / 2 / 9 9 1 / 2 / 9 9 1 2 / 2 / 9 8 1 1 / 2 / 9 8 1 0 / 2 / 9 8 9 / 2 / 9 8 8 / 2 / 9 8 7 / 2 / 9 8 6 / 2 / 9 8 5 / 2 / 9 8 4 / 2 / 9 8 3 / 2 / 9 8 2 / 2 / 9 8 1 / 2 / 9 8 03 Russian Crisis Timeline 0 5 01 51 02 52 After the devaluation of the Thai baht in July 1997, one Asian country after another had to raise interest rates sharply to avoid currency devaluation. But the combination of high interest rates and currency depreciation, which inflated the burden of foreign debt, provoked a financial crisis (Krugman 1999). SU$/selbuR :etaR egnahcxE elbuR †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ 16 1 2 / 2 0 / 9 8 9 / 2 0 / 9 8 6 / 2 0 / 9 8 3 / 2 0 / 9 8 1 2 / 2 0 / 9 7 9 / 2 0 / 9 7 6 / 2 0 / 9 7 3 / 2 0 / 9 7 1 2 / 2 0 / 9 6 .9991 lirpA ,semiT wocsoM :ecruoS 9 / 2 0 / 9 6 6 / 2 0 / 9 6 3 / 2 0 / 9 6 1 2 / 2 0 / 9 5 9 / 2 0 / 9 5 6 / 2 0 / 9 5 3 / 2 0 / 9 5 1 2 / 2 0 / 9 4 9 / 2 0 / 9 4 6 / 2 0 / 9 4 0 †¢ 003 †¢ xednI semiT wocsoM :egnahcxE kcotS naissuR †¢ Mid-July 1998—Russian authorities introduce additional policy package, in the context of an IMF agreement on an augmented Extended Fund Facility (EFF) arrangement 20 July 1998—IMF releases first $4. 8 billion tranche of $22. billion extra credit pledge, as policy package is approved by IMF Late July 1998—Initial effects of this package are positive, with equity prices rebounding 30 percent, treasury bill rates falling from 100 to 50 percent, and a low ering of the Central Bank refinancing rate from 80 to 60 percent Early August 1998—The Duma fails to approve new reform program; President forced to veto several Duma measures and introduce others by decree 13 August 1998—Standard and Poor’s Sovereign Ratings of Russian ruble: longterm—â€Å"B-â€Å"; outlook—negative; short-term—â€Å"C† 14 August 1998—Average treasury bill rates are about 300 percent, international reserves down to only $15 billion, and Russian banks are unable to meet payment obligations Russia on the verge of full-scale banking and currency crisis 15 August 1998—Boris Yeltsin announces that there will be no devaluation of the ruble 17 August 1998—Russian government defaults on GKO Treasury Bonds, imposes 90day moratorium on foreign debt payments, abandons ruble exchange rate corridor 17 August 1998—Standard and Poor’s Sovereign Ratings of Russian ruble downgraded: long-term—â€Å"CCC†; outlook—negative; short-term—â€Å"C† 21 August 1998—Russia’s international reserves fall to $13. 5 billion, after renewed heavy intervention in an effort to support the weakened ruble 26 August 1998—Following heavy intervention, the Russian Central Bank announces that it will stop selling U. S. ollars, and suspends trading of ruble on main exchanges Late August 1998—Kiriyenko government is dissolved, financial crisis intensifies 1 September 1998—Russia is the IMF’s largest borrowe r, with a combined total of credits at this date equal to nearly $18. 8 billion 2 September 1998—Russian Central Bank abandons exchange rate band, lets the ruble float 16 September 1998—Standard and Poor’s Sovereign Ratings of Russian ruble: longterm—â€Å"CCC-† [lowest possible S and P rating]; outlook—negative; short-term—â€Å"C† January 1999—Moody’s assesses financial strength (â€Å"E†) and credit ratings (â€Å"Ca†) of the Russian banks at the lowest possible levels; most banks are insolvent (or nearly so) 005 054 004 053 052 002 051 001 05 †¢ †¢ †¢ 15 January 1999—The Central Bank of Russia re-launches trading on the domestic debt market. The new securities are to be used in the restructuring of frozen GKO and other debt instruments 27 January 1999—Standard and Poor’s Sovereign Ratings of Russian ruble: Longterm—â€Å"Selective Default†; outlook—â€Å"Not Meaningful†; short-term—â€Å"Selective Default† 5 February 1999—The 1999 budget was passed by the Duma in its fourth and final reading. The budget estimates a 2. 5 percent budget deficit, and assumes that the government will receive $7 billion in external loans to help finance foreign debt service 17 BIBLIOGRAPHY European Bank for Reconstruction and Development (EBRD). March 1999. â€Å"Overview on Developments in the Operating Environment,† mimeo. European Commission (EC). 20 January 1998. â€Å"The Russian Crisis and Its Impact on the New Independent States and Mongolia. † Communication of the European Commission to the Council and the European Parliament. [http://europa. eu. int/comm/dg1 a/nis/russian_crisis_impact/1. htm] Frankel, Jeffrey A. 1999. Soros’ Split Personality: Scanty Proposals from the Financial Wizard. † Foreign Affairs 78 (2): 124-130. Gaddy, Clifford G. , and Barry W. Ickes. 1998. â€Å"Russia’s Virtual Economy. † Foreign Affairs 77 (5): 53-67. Gaidar, Yegor. February 1999. â€Å"Lessons of the Russian Crisis for Transition Economies. † Institute for Economies in Transition on-line publication. Illarionov, Andrei. 1998. â€Å"Russia and the IMF,† testimony prepared for hearing of the General Oversight and Investigations Subcommittee of the Banking and Financial Services Committee of the U. S. House of Representatives, 10 September. International Monetary Fund (IMF). 1999. IMF Survey. Volume 28, Number 4. International Monetary Fund. May 1998 and December 1998. World Economic Outlook. International Research and Exchange Board (IREX). 1998. â€Å"Russia’s Economic Crisis and Its Effect on the New Independent States,† a discussion report summarizing conclusions of an IREX policy forum held on 18 November. â€Å"Kommunisticheskie pravitel’stvo v postkommunisticheskoi Rossii: pervye itogi i vozmozhnye perspektivy [Communist Government in Post-Communist Russia: Initial Results and Possible Perspectives]. † 1999. Working Paper Series. Moscow: Institut ekonomiki perekhodnogo perioda [Institute for Economies in Transition]. Krugman, Paul. 1999. â€Å"The Return of Depression Economics. Foreign Affairs 78 (1): 5674. Lipton, David. 1998. â€Å"Treasury Undersecretary David Lipton Testimony Before the House Banking General Oversight and Investigations Subcommittee on Russia,† RR-2673, 10 September. Odling-Smee, John. 1998. â€Å"The IMF Responds on Russia: A Letter to the Editor,† 30 November. 18 O’Brien, Timothy. 1998. â€Å"George Soros Has Seen the Enemy. It Looks Like Him. † The New York Times, 6 December: . Phillips, Michael M. 1999. â€Å"Apocalypse? No. Round the Globe, Signs Point to Final Days of Financial Crisis. † The Wall Street Journal, 14 April: . Radelet, Steven, and Jeffrey Sachs. 1999. â€Å"What Have We Learned, So Far, From the Asian Financial Crisis? Paper sponsored by USAID/G/EGAD under Consulting Assistance on Economic Reform (CAER) II Project. Robinson, Anthony. 1999. â€Å"Russia: Coming in from the Cold. † The Banker 149 (877): 4849. Russian European Centre for Economic Policy (RECEP). 1999. â€Å"Russian Economic Trends. † Monthly Update, 10 February. Russian Market Research Company (RMRC). 1998. â€Å"Business Barometer Survey: Moscow, October 2-3, 1998,† published on the American Chamber of Commerce in Russia website. Rutland, Peter. 1999. â€Å"Moscow Casts a Long Shadow. † Transitions 6 (3): 27-31. Sexton, Robert. 1999. â€Å"Turning Russian Debt into Equity. † Euromoney no. 357: 75-76. Smirnov, Mikhail. 1998. Rubl’ kaput ili kak bank Rossii opustil rubl’ [The Ruble is Kaput, or, How the Bank of Russia Lost the Ruble],† National’naia sluzhba novostei [National News Service]. Soros, George. 1998a. Testimony to the Congressional Committee on Banking and Financial Services of the U. S. House of Representatives, 15 September. Soros, George. 1998b. â€Å"The Crisis of Global Capitalism: Open Society Endangered,† remarks before the Council on Foreign Relations, New York, 10 December. Summers, Lawrence H. 1999. â€Å"Russian and the United States: The Economic Agenda,† remarks by Deputy Treasury Secretary Lawrence H. Summers at the U. S. -Russian Investment Symposium in Cambridge, MA, 14 January. Uchitelle, Louis. 1999. â€Å"Crash Course: Just What’s Driving the Crisis in Emerging Markets? † The New York Times, 29 January: . 19

My Childhood Memory Essay -- essays research papers

My Childhood Memory I remember it like yesterday. We were all waiting patiently for my father to come home from the race track. He promised me and my sister that if he won, he would take us all to Rye Playland. The minutes felt like hours. It was the longest hour of my life. Then finally we heard the car door shut. Me and my sister ran to the front door anxiously waiting for the news. He opened the door and walked in. We tried to read the expression on his face but of course he was looking down while taking his sneakers off. The suspense was killing us. Then he looked up. No words were spoken between us and our father. He just gave us a blank stare. I didn't know what to think. I was scared to ask because I was so worried of the response. It was that moment when he said to us, "Well kids, pick out what your going to wear to Rye playland this weekend." Excitement just jumped through out my whole body. We both ran over and gave him the biggest hug and ran upstairs to pick out what we were g oing to bring with us. I was so excited for the next two days, I probably only got about 4 hours sleep. Then the day finally came. It was Saturday. It was the only time in my life I was happy to hear the alarm clock go off. Of course I was already awake for two hours before it actually went off, but I waited anyway. I jumped out of... My Childhood Memory Essay -- essays research papers My Childhood Memory I remember it like yesterday. We were all waiting patiently for my father to come home from the race track. He promised me and my sister that if he won, he would take us all to Rye Playland. The minutes felt like hours. It was the longest hour of my life. Then finally we heard the car door shut. Me and my sister ran to the front door anxiously waiting for the news. He opened the door and walked in. We tried to read the expression on his face but of course he was looking down while taking his sneakers off. The suspense was killing us. Then he looked up. No words were spoken between us and our father. He just gave us a blank stare. I didn't know what to think. I was scared to ask because I was so worried of the response. It was that moment when he said to us, "Well kids, pick out what your going to wear to Rye playland this weekend." Excitement just jumped through out my whole body. We both ran over and gave him the biggest hug and ran upstairs to pick out what we were g oing to bring with us. I was so excited for the next two days, I probably only got about 4 hours sleep. Then the day finally came. It was Saturday. It was the only time in my life I was happy to hear the alarm clock go off. Of course I was already awake for two hours before it actually went off, but I waited anyway. I jumped out of...

Organizational performance Essay

Today’s society is diverse and rapidly changing and it is the organisation’s ability to adapt or be in fit with the external environment that will determine its overall performance. Ethical issues arise throughout all organisations daily activities but it is the continual debate about what is right or wrong that will shape ethical decision making now and for generations to come. This essay aims to investigate culture within the internal environment and how culture plays a role in an organisation’s ability to fit in with the environment. According to (Samson and Daft, 2003:80) the internal environment is â€Å"composed of present employees, management and business culture†. This essay will investigate how culture plays a role in the organisations overall success. In addressing the issue it will be shown how the external environment has changed in terms of how organisations are evaluated. How changing an organisation’s culture can help the organisation be in fit with the external environment and how the success of changing culture may depend on the level of employee moral development. It is argued that the organisation’s performance depends on a fit between the organisation and its external environment. Body Key point 1: How the external environment has changed in terms of how organisations are evaluated. The external environment has changed with respect to how organisations are evaluated today. According to ( Samson and Daft, 2003:79) the external environment is â€Å"all elements existing outside the organisation’s limitations that have the possibility to affect the organisation†. Companies around the world have started to realise that investors are not concerned exclusively with financial performance (Tschopp, 2003). The days of companies being  evaluated on their financial performance are gone and companies are now finding that they are being evaluated on a more overall perspective. Increasing the ethical obligations can help an organisation when adapting to the external environment. According to ( Samson and Daft, 2003:147) ethics is † the code of honourable principles and standards that governs the behaviours of an individual or group with respect to what is correct or incorrect.† If ethics is incorporated as part of the organisation this can lead to improvements in the workplace and towards society. The triple bottom line approach has been introduced as a way of achieving overall success both internally and externally throughout the organisation. Triple bottom line entails reporting on economic, social, and environmental issues. Corporate success should be considered not just by the traditional financial bottom line, but also by its social/ethical and environmental performance ( Samson and Daft, 2003). Triple bottom line has not only put the emphasis on managers to not only make a profit but to also consider the surrounding external environment that they could be affecting. Businesses now report annually on social and environmental performance as well as their financial performance because they know it provides a more complete measure of long-term value creation and strategic opportunity (Tuchman. J, 2004). Key Point 2: Organisations need to change to fit. They can do this by changing an organisation’s culture to fit in with the external environment. The external environment has altered and it’s the organisation’s ability to change to keep in touch with the external environment that determines its performance. One way an organisation can change to keep in contact with the environment is by altering it’s culture. According to (Samson and Daft. 2003: 94) culture is â€Å"the knowledge, beliefs, values, behaviours and ways of viewing shared among members of a society†. Organisational culture has been defined, in very simple but intuitive words, as â€Å"the way we do things around here† (Domenec, 2003). The notion that we can make others do what we want them to do by persuading them to want to do  it is one that has a long pedigree. This notion became formalised as an integrative view of organisation culture and became more ingrained after the publishing of the book In Search of Excellence in 1982 (Thomas J. Peters and Robert H. Waterman, Jr., 1982) Moving towards greater corporate responsibility may require culture change or at least cultural re-enforcement. The fundamental values that exemplify cultures at these and other organisations can be understood through the noticeable manifestations of symbols, stories, heroes, slogans and ceremonies. Any organisation’s culture can be interpreted by observing these factors (Samson and Daft, 2003:95). By incorporating symbols, stories, heroes, slogans and ceremonies into an organisation’s culture they will be able to adapt to the changing external environment. According to (Samson and Daft, 2003:97) slogan is † a phrase or sentence that succinctly expresses a key corporate value†. Hungry Jacks for example has the slogan † The burgers are better at Hungry Jacks†. They have incorporated this slogan as part of their culture to try and separate them from the other competitors. By incorporating the different types of culture into and organisation, may change the way managers and employees think to incorporate social and natural environmental responsibilities into the workforce. Key Point 3: The success of changing culture may depend on the level of employee ethical development. The success of changing culture can depend on numerous factors but the level of employee ethical development plays a role. The three levels of personal moral development could pose a problem for employee ethical development. The theory developed by Kohlberg goes through the different stages of employee development from pre-conventional to post conventional. Starting at the pre-conventional level which focuses on right vs. wrong and the behaviour is on one’s self to the conventional level which focuses on the  group rather then one’s self. Then lastly Kohlberg’s post-conventional level of individual development which focuses on abstract and self-chosen principles (Arnold and Lampe, 1999). Kohlberg’s theory brings attention to the fact that if employees are going in different directions it can hinder the success of an organisation. If there are employees who are focusing on what is right vs. wrong and other employees who are following self chosen principles even though they know people hold different views. In this sense, the greatest danger to modern organisations is the betrayal of â€Å"ambitious, selfish, untrustworthy people who care more for their own progression than the mission of the organisation† (Domenec, 2003). Since each person is unique, each one can focus on personal accomplishment in very different ways (Domenec, 2003). Conclusion This essay investigated culture within the internal environment and how culture plays a role in an organisation’s ability to fit in with the environment. In support of this argument there has been evidence supported to show how organisations incorporate culture to be in fit with the changes of external environment. Organisations are finding that they are being evaluated not only on their financial status but also their social and environmental performance. This has meant that organisations have had to change their culture to compensate in the change in evaluation. An organisation culture can be observed through such factors as slogans and symbols which now have to coincide with the external environment. The success of the changing culture can depend on the level of employee ethical development and at what stage everyone is at. If an organisation is united and following the same path or views they may find greater overall success. Views that link an organisation’s culture with its performance seek to shape managers and employees understandings in a common and coherent direction (Kolter and Keskett, 1992). Bibliography: 1. Samson, D., & Daft, R.L. (2003) Management: Pacific rim edition. Victoria: Thomson. 2. Thomas J. Peters and Robert H. Waterman, Jr., In Search of Excellence: Lessons from America’s Best-Run Companies (New York: Warner Books, 1982), 3. Tuchman, J. 2004, Big Owners Balance Triple Bottom Line [online], Available from URL: http://www.enr.com/news/bizlabor/archives/040809-1.asp 4.

Jim Crow Laws Main Problems for Black Americans in the 1920s and 1930s Essay

When the Civil War ended in 1865, Abraham Lincoln proclaimed all men in America – black or white – equal. However, throughout the rest of the nineteenth and much of the twentieth century African-Americans were widely discriminated especially in the Southern states of the country. They faced serious social, economic and political problems and were regarded by most people as the inferior race. Although America was referred to by its president Woodrow Wilson as the â€Å"great melting pot† in 1915 and although it was supposed to be a country where â€Å"all men are created equal† as stated in the Constitution; this certainly was not the case. American society was divided by strict racial hierarchy with the White Anglo-Saxon Protestants (WASP) on the very top, other European immigrants in the middle and with blacks descending mainly from slaves on the very bottom. Historians argue why this was and why the desires of some leaders to create a homologous nation really stayed only desires. Some argue that the ethnic minorities faced discrimination in everyday life because it had legal basis in the so called â€Å"Jim Crow† laws, which promoted the â€Å"separate but equal† decision of the Supreme Court from 1896. These laws were introduced in the South to support the separation of the races and basically made the discrimination of Blacks legal. However, others argue that the reason for discrimination lay deeper in the American history and that it rooted from the established racial hierarchy. There were many half-secret organisations that fought for the white supremacy and some historians, such as David M. Chalmers argue that it was the existences of such groups that caused the discrimination against blacks. Some historians also argue that the federal apathy was another important obstacle blacks had to face. This was because of the laissez-faire policy and also because of personal racist views held by the presidents of the era, who wanted (as the rest of American people) to keep power in the hands of the WASP establishment. Some other historians would argue that it was the impact of World War One that deepened the racial problems and others believe that blacks had to deal with discrimination because of the fear of the whites that their social and economic status were under threat. This essay will examine all those possible reasons why black people were treated with hostility in the interwar period and will prove that while the Jim Crow laws were important in justifying this approach; it was in fact the deep-rooted racism that caused all the other factors and led to the savage discrimination of African-Americans. Some historians, such as John A. Kerr argue that the Jim Crow laws were the main cause of the discrimination present in American states. The decision of the Supreme Court in 1896 led to proliferation of these laws throughout the South as Homer Plessy lost his case and the Court found that the laws were not breaking the US Constitution. The Court decided to support the popular â€Å"Separate but Equal† policy, which meant that as long as equal facilities were provided, the segregation of the races wasn? unconstitutional. Seven of the eight justices at the trial favoured this decision and stated that the 14th Amendment to the US constitution was not â€Å"intended to abolish distinctions based upon colour† and that separation of those does not â€Å"necessarily imply the inferiority of either race to the other. † This decision disappointed black people as they knew that it was very unlikely that the states would provide them with equal facilities. As a result of this case states could impose legal punishments on people consorting with members of another race. The most common examples of Jim Crow laws were forbidding intermarriage and ordering business owners and public institutions (schools, offices) to keep their black and white clientele separate. Basically, the discrimination of black Americans was now legal. The only justice that didn? t agree with the court? s decision, John Harlan, summarised it well stating â€Å"the present decision†¦ ill not only stimulate aggressions, more or less brutal and irritating, upon the admitted rights of coloured citizens, but will encourage the belief that it is possible, by means of state enactments, to defeat the beneficial purposes which the people of the United States had in view when they adopted the recent (13th and 14th) amendments of the Constitution. † In addition, even though black people possessed the right to vote, by the year 1902 there was only 3,000 black voters in Alabama as it was one of the states that created impossible qualification tests for black voters. In a state where African-American population was significant with around 900,000 individuals this isn? t surprising and only proves the extent of discrimination and racism present. These ridiculous tests, with questions such as â€Å"How many bubbles are in a bar of soap† denied blacks the opportunity to vote for their politicians and thus decreased the chances of a change of the situation. The Jim Crow laws were clearly a manifestation of the racism present within American culture, but they alone weren? t the reason for the hostility and discrimination towards the blacks. The factor that caused the laws to come into existence and be accepted and followed was the deep-rooted racism and the presumed dominance of the WASPs and this was the main problem African-Americans had to deal with. Many historians would thus argue that the main reason why ethnic minorities and blacks in particular, faced discrimination was the existence of racial hierarchy and deep-rooted racism inherent within the American WASP culture. After the 13th Amendment in 1865 that freed the former black slaves and the 14th and 15th Amendments that provided them with equal rights and suffrage, African-American hoped for a new better beginning. However, the former slave-owners and other WASPs living especially in the south were not willing to undergo such change. The problem wasn? t only with blacks, other ethnic groups different from the white â€Å"acceptable† Americans of northern European origin suffered from discrimination and perceived inferiority as well. Americans wanted to keep their standard of WASP Americanism and were unwilling to accept other cultures as equal. There were many pseudo-scientific findings that were meant to prove this inequality. Joseph Le Conte, an American anthropologist, for example claimed that â€Å"modern ethnologists have thoroughly established the fact that in all essential qualities the Negro race seems to be totally incapable of development†. Racial stereotypes of blacks as inferior beings were popular throughout American society and although the racial hierarchy was mostly unspoken, there were clear signs of it in every aspect of the culture. As the blacks were always regarded as inferior, low-class people, it was not easy for the white supremacy supporters to all of a sudden support their equality. Racism had a strong historical context in American society and it was this that caused the Jim Crow laws to be legalised and supremacist organisations, such as the Ku Klux Klan, to form. Therefore the deep-rooted racism must be seen as the key problem Blacks had to face as it caused all the other obstacles for them and resulted in discrimination in all levels of the society. However, some historians would argue that it was the existence of the supremacist organisations that posed the biggest trouble to the black Americans. Ku Klux Klan was formed immediately after the end of the Civil War but its main wave of actions happened during the 1920s and 30s. The founder of the second KKK, who awoke the old tradition in 1915, was William J. Simmons. His aim was to purge Southern culture of corrupting influences that were according to him trying to â€Å"destroy WASP America. † These were apparently not only blacks, but also other ethnic and religious groups, such as Catholics, Jews and even communists. The Klan used violent methods to intimidate and suppress these groups. Mob violence and lynching were a daily fact of life in the south during the 1920s. However, the organisation became gradually more national with members in the northern countries as well as in the southern ones. It restricted its membership to native-born white Protestants and it attracted many people due to blacks? migration and social fears resulting from it; many people across the country became committed to the â€Å"100% Americanism† and were afraid of losing the position on the top of the racial hierarchy. As historian Paul S. Boyer states, â€Å"The organisation consisted primarily of ordinary people, not criminals or fanatics. The Klan? s promise to restore the nation to an imagined purity – ethnical, moral and religious – appealed powerfully to ill-educated and deeply religious Americans. † By 1925 KKK had 5 million members and it dominated state legislatures. Assembly men, sheriffs, judges – all were members of the Klan and agreed with its policies, either secretly or publicly. The Klan used symbols, such as white robes and burning crosses to bring about and emphasise fear and as historian David M. Chalmers argues they were viewed as a â€Å"super-secret organisation; masked and mysterious, with a tradition of violence for which a generation of legend had achieved a high measure of social approval. † They were feared by the blacks and praised by the whites. Although the white supremacy organisations, such as the KKK played an important role in supporting racist actions and discrimination, they didn? t exist without a cause. This cause was the deep-rooted racism within American people as well as the social and economic fear after the â€Å"Great Migration† and the First World War. It is also surprising that such a violent organisation was free to carry out its actions and was not stopped by neither federal, nor state governments. This shows that the legal aspect of discrimination was to a great extent the major problem for the blacks. However, racism would have existed without the laws, but the laws would not have existed without the deep-rooted racism in American culture, which establishes it as the key reason for all the problems. In any other instance, organisations such as the KKK and racist laws such as the Jim Crow laws would not be accepted by any government. Thus, historians debate also the option that one of the biggest problems African Americans had to face during this time period was the federal government? s apathy. By the ruling of the Supreme Court in 1876 it has been decided that individual states could govern themselves as they saw fit. This led to proliferation of the Jim Crow laws in the South and increasing ignorance of the problem of discrimination in the North. What is more, it provided the federal government with an excuse to not intervene and carry out the ineffective laissez-faire policy. Woodrow Wilson, a Democrat president during and after the First World War, was even racist himself. He declared that the blacks were â€Å"an ignorant and inferior race† and strongly defended segregation stating in 1916 that it is â€Å"not humiliating and is a benefit to you Black gentlemen. † Even though he is known for his campaign for international brotherhood and peace and he denounced the tactics of the KKK, he openly sympathised with its efforts to restore the white supremacy. Clearly, the racism in America was deep-rooted in all levels of the society. In the 1920s Republicans held the presidential office in their hands and as part of their overall approach to ruling they applied the laissez-faire attitude towards social affairs. As Calvin Coolidge stated â€Å"the chief business of the American people is business†. They simply did not think it was their job to intervene in people? s everyday lives. Moreover, the various administrations seemed to close their eyes to racial discrimination. Anti-lynching law in 1921 was never passed as it was defeated by Southern Senators and that meant that the organisations such as the KKK could continue with their horrible actions. What is more, the Klan was allowed to organise 40,000 men march on Washington DC in 1925 showing its strength and being de facto supported by the federal government. Blacks were also further excluded from the Republican Party and had to submit to segregation in the White House and the federal civil service. The evidence shows that Blacks were discriminated in all levels of the society. Even the presidents themselves were racist and did nothing to tackle the inequalities, if not making them worse. The federal apathy clearly rooted from the racism present among the public and the government was simply responding to the will of the people. This created further complications for the African Americans to gain their civil rights as they had to face racism and discrimination not only at everyday levels but also at the proper political ones. Historians also debate the possibility that the aftermath of WW1 causing the â€Å"Great Migration† and wide spread social and economic fears was itself the reason for discrimination of black Americans. In the WW1, many African-Americans fought for the country, but even more of them were employed in munitions, other factories and agriculture to keep the country going. As a result, many blacks moved from the South to the North as they saw it as a chance for better life. Whites didn? t always welcome these migrants as they, too, had racism deep in their minds. Black migrants were also seen as an unwanted job competition – in 1917 in St. Louis 40 blacks and 9 whites were killed in race riot over employment. Although discrimination was nowhere near legal as it was in the South with the Jim Crow laws, whites in the North considered themselves superior as well and were ready to defend their position on the racial hierarchy. In Chicago, race riots began when a black boy accidentally swam to â€Å"white only† waters and the respectable white American citizens present on the beach stoned him to death. As Willoughby and Willoughby argue, â€Å"This incident clearly indicates the depth and extent of the hatred and prejudice. † And it indeed does. As shown above, the KKK had huge number of supporters and members in the North as well ever since its reformation and this meant that even the Northern WASPs were ready to discriminate. This leads back to the deep-rooted racism in the American culture and indicates it as the key problem. After the war ended, the closings of munitions factories hugely affected large proportion of the population. Blacks were then used as strike-breakers and were accused of lowering the wages as they were willing to work for less money. This, of course, created tensions and caused the â€Å"native† white Americans to feel their economic and social status being genuinely under threat. However, this attitude towards African-Americans was nothing new. On balance, there have been Klan members and other WASPs discriminating previous to the war, but the â€Å"Great Migration† caused by northern agents recruiting black workers in the South for munitions factories and other jobs, significantly increased the hostility towards blacks and heated the already existing racial tensions. It also gave further reasons to the â€Å"ordinary white workers† to support or join the Klan. Overall, there was no legal basis for discrimination in the north of the country, but the deep-rooted racism causing de facto segregation of the races provided strong enough reason for the racist Americans to discriminate. The black Americans faced serious problems of discrimination as they were regarded as members of the inferior race during the 19th and most of the 20th century. During the 1920s the tensions increased as the African Americans began to migrate within the US. Jim Crow laws made it legal to discriminate in the south as they sought segregation of the races and indirectly approved the white supremacy. This, alongside with federal government unwillingness to do anything about them, made it possible for racist organisations, such as the KKK, to exist and promote the WASP superiority through violence. However, the view that the KKK itself was the cause of racism is over simplistic misconception as it would not exist and be widely supported if the people would not agree with its goals. In addition, the impact of the First World War which meant increase in black migration to the North caused further deepening of racial problems there and was a factor in the increasing tensions. The problem black Americans faced was discrimination. This was possible to a great extent due to its de jure legalisation in the Jim Crow laws, but in actual fact the main problem blacks faced was the established racial hierarchy within the American society and the deep-rooted racism present in majority of the people. Simply, Blacks were denied to vote, federal government refused to do anything about their inadequate treatment and the Ku Klux Klan successfully managed to question their equality by themselves. However, all these actions taken by the WASPs to secure their position were but a manifestation of a wider racist attitude that was deep-rooted in the culture. In final conclusion, Jim Crow laws were a problem for the black Americans in the 1920s and 30s, but it was not the main one as they had to deal with the deep-rooted racism first to get rid of their discrimination completely.

Common Examples of Uncountable Sets

Common Examples of Uncountable Sets Not all infinite sets are the same. One way to distinguish between these sets is by asking if the set is countably infinite or not. In this way, we say that infinite sets are either countable or uncountable. We will consider several examples of infinite sets and determine which of these are uncountable.​ Countably Infinite We begin by ruling out several examples of infinite sets. Many of the infinite sets that we would immediately think of are found to be countably infinite. This means that they can be put into a one-to-one correspondence with the natural numbers. The natural numbers, integers, and rational numbers are all countably infinite. Any union or intersection of countably infinite sets is also countable. The Cartesian product of any number of countable sets is countable. Any subset of a countable set is also countable. Uncountable The most common way that uncountable sets are introduced is in considering the interval (0, 1) of real numbers. From this fact, and the one-to-one function f( x ) bx a. it is a straightforward corollary to show that any interval (a, b) of real numbers is uncountably infinite. The entire set of real numbers is also uncountable. One way to show this is to use the one-to-one tangent function f ( x ) tan x. The domain of this function is the interval (-π/2, π/2), an uncountable set, and the range is the set of all real numbers. Other Uncountable Sets The operations of basic set theory can be used to produce more examples of uncountably infinite sets: If A is a subset of B and A is uncountable, then so is B. This provides a more straightforward proof that the entire set of real numbers is uncountable.If A is uncountable and B is any set, then the union A U B is also uncountable.If A is uncountable and B is any set, then the Cartesian product A x B is also uncountable.If A is infinite (even countably infinite) then the power set of A is uncountable. Two other examples, which are related to one another are somewhat surprising. Not every subset of the real numbers is uncountably infinite (indeed, the rational numbers form a countable subset of the reals that is also dense). Certain subsets are uncountably infinite. One of these uncountably infinite subsets involves certain types of decimal expansions. If we choose two numerals and form every possible decimal expansion with only these two digits, then the resulting infinite set is uncountable. Another set is more complicated to construct and is also uncountable. Start with the closed interval [0,1]. Remove the middle third of this set, resulting in [0, 1/3] U [2/3, 1]. Now remove the middle third of each of the remaining pieces of the set. So (1/9, 2/9) and (7/9, 8/9) is removed. We continue in this fashion. The set of points that remain after all of these intervals are removed is not an interval, however, it is uncountably infinite. This set is called the Cantor Set. There are infinitely many uncountable sets, but the above examples are some of the most commonly encountered sets.

Result of the Black Plague on the West seen through Malthus essays

Result of the Black Plague on the West seen through Malthus essays Though the result of the Black Plague is initially deterioration, seen in Boccaccio's Decameron, the decline stimulates efforts at reform and renewal. In 1798 the English clergyman Thomas Malthus published the first edition of his influential Essay on the Principle of Population. In it, Malthus concludes that the plague does not end western culture. On the contrary, the plague allows it to flourish and ensures its survival. Boccaccio provides a wealth of information about the plague in his Decameron. The book is set in 1338, the year the plague struck Florence. Seven women and three men flee the plague in the city for the safety of a country villa. On their ten-day journey to the villa, each of the travelers entertains the others with a story. The result is a set of one hundred tales framed within the larger story of the travelers' journey. Boccaccio writes realistically and lyrically of the horror of the plague. He allows each of his characters a distinct voice to tell stories of charm, sadness, bawdiness, mystery, and drama. The plague and the death resulting from it are two major motifs in the Decameron. It can be argued that the Black Plague of 1338 and 1339 was the most devastating natural disaster to ever strike the European continent. The populations of some cities and villages as far removed from each other as in England and Italy fall by over seventy or eighty percent by the end of the plague. By 1420, Europe can only boast about a third of its population compared to what it could only one hundred years before. To truly understand the plague and its devastation, one must understand its origins. In the early 1340's, the plague moves westward along the silk route and penetrates the Mongol Khanate of the Golden Horde. Yet, it is still contained within the great Eurasian landmass. At this time, many Europeans begin to hear tales of a great plague from the Far East travelers. Most brush it off. Few take it ve...

Difference Between Physical and Chemical Properties

Difference Between Physical and Chemical Properties Measurable characteristics of matter may be categorized as either chemical or physical properties. What is the difference between a chemical property and a physical property? The answer has to do with  chemical and physical changes  of matter. A Physical Property A  physical property  is an aspect of matter that can be observed or measured without changing its chemical composition.  Examples of physical properties  include color, molecular weight, and volume. A Chemical Property A  chemical property  may only be observed  by changing the chemical  identity of a substance. In other words, the only way to observe a chemical property is by performing a chemical reaction. This property measures the potential for undergoing a  chemical change.  Examples of chemical properties  include reactivity, flammability and oxidation states. Telling Physical and Chemical Properties Apart Sometimes it can be tricky to know whether or not a chemical reaction has occurred. For example, when you melt ice into water, you can write the process in terms of a chemical reaction. However, the chemical formula on both sides of the reaction is the same. Since the chemical identity of the matter in question is unchanged, this process represents a physical change. Thus melting point is a physical property. On the other hand, flammability is a chemical property of matter because the only way to know how readily a substance ignites is to burn it. In the chemical reaction for combustion, the reactants and products are different. Look for Tell-Tale Signs of a Chemical Change Usually, you dont have the chemical reaction for a process. You can look for tell-tale signs of a chemical change. These include bubbling, color change, temperature change, and precipitation formation. If you see signs of a chemical reaction, the characteristic you are measuring is most likely a chemical property. If these signs are absent, the characteristic is probably a physical property.

Evocative Object - IPod (3rd Gen) Essay Example | Topics and Well Written Essays - 1000 words

Evocative Object - IPod (3rd Gen) - Essay Example It has been significant in improving the way of doing things, enhancing quick and efficient communication, promoting quick exchange of data, increasing human interactions, and generally improving human life. However, most common in the recent technological advancements is the information and communication technologies (ICT). Information and communication technologies cover a wide range of applications subject to the many gadgets that fall under technological advancements. Some of these applications are in computers, cell phones, software, and other innovative gadgets. Nevertheless, applications of given technological gadgets depend on specific properties in such tools. More so, these properties manifest clearly in the telephony world where different phones have variant features. Personally, I have had experiences with various cell phones both in school and at home. This paper will therefore detail my experience with the 3rd generation iPod. The introduction of the iPod in the market followed the iPhone, which is a smart phone. Indeed, the iPod is a development of an iPhone and is a product of apple just like iPhone and iPad. Nevertheless, the iPod has an improved processor and has more improved features than earlier software. Actually, the iPod touch (3rd generation) is a technological improvement of the iPod touch (2nd generation). As such, the iPod touch (3rd generation) was technologically better and at the time it was the best sleek phone in the market. Hence, when my father gave me the 3rd generation iPod upon my success in my exams, a sensual feeling coupled with a beautiful experience came to my life. The iPod touch (3rd generation) had a faster processor, sleek in shape and green in color (Apple Web). My father brought the iPod at night during the summer after the release of my exam results. Upon opening the box carrying the iPod, I could not contain the excitement from the beautiful gadget that met my eyes. The green color is my favorite color and alth ough the iPod comes in various colors, my father made the best choice. The gadget was small and sleek thus flexible and convenient to carry. I comfortably rested in my pocket and the feeling of having such a classy gadget in my pocket was awesome. In addition, there were Apple earphones with remote and microphone, USB 2.0 cable, and a dock adapter in the box carrying the iPod (Apple Web). Since, the iPod touch was already charged; I had to try the Apple earphones by playing the default music in the iPod. Upon a closer look, I realized that the ear bud headphones had an allowance for adjusting the volume, video playback, and control music. In addition, the sound and pitch coming through the Apple earphones was exciting. At the same time, I tried the USB 2.0 cable via my laptop and it worked marvelously. I realized that the cable was significant in connecting the iPod with a computer. The dock adapter was equally synonymous in charging the iPod. These applications made me value the ga dget so much. As such, the next day I checked to school with it and could not resist showing my friends who were so excited to see it. I came to learn that the iPod had a very fast processor. As such, I can download files from the internet and access information with record speed. Indeed, in between lessons, I research

Malignancy (Cellular Pathology) Case Study Example | Topics and Well Written Essays - 750 words

Malignancy (Cellular Pathology) - Case Study Example In addition, unlike the cancerous squamous cells which appear abnormal and distorted, normal squamous cells look smooth and regular. Deeper analysis focusing on the nucleus would have provided information that identifies and distinguishes normal from cancerous adipose tissue. The malignant adipose tissue have large nucleus with irregular shape and size. In addition, the nucleoli are prominent; the cytoplasm is scarce and deeply colored or, on the opposite, is pale. The nucleus of malignant adipose tissue plays, through its alterations, a big role in the evaluation of malignancy. Changes are associated with the surface, structure and homogeneity, the nucleus/cytoplasm ratio, volume, as well as shape and density. Ultra-structural features are associated with changes in chromatin (e.g. reduction in heterochromatin and increase of perichromatin and interchromatin granules, formation of inclusions, and increase of nuclear membrane pores), invaginations, and nucleus segmentation. The nucleus is characterized by its movement towards the membrane, hypertrophy, numerical increase, development of intranuclear and canalicular systems between the nucleolus and the nuclear membrane, and macro and micro-segregation. Mitoses are also a regular feature of malignant adipose tissue. Mitoses numerically increase, atypical mitosis forms with defects in the mitotic spindle develop, which produces dissymmetrical structures, triple or quadruple asters, and atypical forms of chromosomes. Nuclear changes justify genetic defects associated with these changes, and also explain the presence of different squamous cell clones. In malignant adipose tissue that are severely anaplastic, the presence of large nuclei and multinucleate squamous cells shows abnormal divisions (Hermans 2006, pg. 27). The morphological features discussed here symbolize the changes happening at metabolic level, with the augmentation of structures in regards to the

Finance 2 Essay Example | Topics and Well Written Essays - 1000 words

Finance 2 - Essay Example sales and purchase agreements or decisions in the ‘futures market to develop a known price level’ and mainly ‘to offset the risk exposure and to limit themselves from any price fluctuations’. (investopedia.com) Although the future and forward hedging through future and forward contracts respectively are almost similar in nature yet there is one main difference between the two. Forward Contracts are made for fairly large transactions whereas future contracts are reached for smaller amounts. The large organizations such as multinational or supranational companies, large financial or investor groups may involve themselves in forward contract hedge. Monet market Hedge is an internal hedging technique which refers to â€Å"borrowing and lending transactions to eradicate currency risk by locking the particular variables related to foreign exchange and cash equivalents.† (Kofi Bofah) Currency Option is another instrument utilized by investors or corporations to hedge against negative fluctuations, volatility or movements in foreign exchange rates. In simple words, I can say that Currency Option is an agreement through which the holder f currency has the ‘right to involve in buying or selling of currency at a specified time period.’ For instance, in our case, Hybat Corporation can hedge against foreign currency risk by purchasing a currency option put or call. If it believes that USD/HUF rate is going to fall from 250 to 200 meaning that it will become more expensive for US Hybat to convert its export revenues from HUF to Dollar and send it to its parent company so Hybat would want to buy a ‘put option’. Similarly, if the rate is going to increase from 181 to 200, then Hybat would want to buy a â€Å"call option on USD/HUF so that  it could  stand to gain from an increase in the exchange rate† (or the  USD rise). (Investopedia.com) You must independently justify the credit rating for each category given. That is, if you use these catagories, they

Summary Essay Example | Topics and Well Written Essays - 500 words - 152

Summary - Essay Example Additional to this are some famous and demanding worldwide organizations that are occupied in underlining all-purpose human rights problems as well as issues in Africa. The editorial highlights the contradictory interests plus diversified deeds. The issues have been brought forth on the rights matter since the formation of the Organization of Africa in 1963, at Addis Ababa, Ethiopia (Santosh 1). Africa went through some issues that discolored its image of the human rights. They comprise the rise along with the fall of evil dictators like Jean-Bedel of the Central African Republic, Fernando Nguema of Equatorial Guinea and Idi Amin of Uganda. In Africa there has been an unrelenting call for the conservation of civil and political right as per the article. Relations established particularly in the 1980’s and 90 are plea on strict enforcement on human rights. The piece of writing asserts that there is a special rule in which one requirement to give treatment to treat the other as they would love to be treated. The editorial stress on the works completed by groups that are anonymous as well as exposed ones as well as those that a evidently respected in the civilization in trying to avert governmental infringements of political and social rights. The writer states how nongovernmental organizations have disputed against rights breaches like favoritism, aggression against ch ildren, women as well as refugees and persecution (Santosh 1-5). NGOs have persisted to keep significant responsibility while they study human rights in diverse parts of African although they are weak. The drive, energy, vision, the obstinacy of global human rights movement at present lies fully with the NGOs. The NGOs dedicate a lot of funds in promoting and shielding the human rights. The NGOs are troubled with the clash for human rights troubles and are spearheaded by the Amnesty International.