...completely neglected. As a result the growth rate kept fluctuating during this period. 1966-80: During this period, India’s economic growth can be characterized by one word – “volatile”. The 1971 war with Pakistan, successive changes In Government in the late 1970’s and the huge drought in 1979 which affected nearly 200 million people in the agricultural sector, had a major impact on the national income. 1981-1991: In the 1980s, the businesses were able to drive efficiency and react to supply and demand incentives, the economy took off. The plan laid stress on improving the productivity level of industries by upgrading of technology. So, the national income always increased as depicted by the graph shown. Progress toward that goal was slow but steady. In the late 1980s, however, India relied on foreign borrowing to finance development plans to a greater extent than before. Trend since 1991: Economic liberalization of India began in 1991. The economic abolished license raj, reduced tariffs, removed entry-exit barriers and ended various trade barriers. The period from 1991 saw the Indian economy get integrated with global economy and the steady flow of foreign investment chipped in. The structural reforms and the stabilization measures undertaken since have had far reaching effects on the Indian economy. De-regulation, Liberalization and Globalization was able to attract international capital and modern technology. 2...
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...5 Abstract This paper investigates the impact of real interest rate on national saving in five Association of Southeast Asian Nations (ASEAN) of Indonesia, Malaysia, the Philippines, Singapore and Thailand. We analyze impact real interest rate to nation saving for ASEAN starting 1991-2013. Through an analysis from Excel, real interest rate is found to have significant impact on national saving during different stage of economic. Extensions using a graph reveal the impact of real interest rate in ASEAN-5 and thus mainly reflect heightened concerns to national savings amid the Asian financial crisis and the global financial crisis. Keywords: real interest rate, national saving, financial crisis 1.0 Introduction The world’s average saving rate has been declining since the first oil shock and through the early 1990s. However this trend conceals a large and increasing dispersion of saving rates, particularly among developing countries. The large heterogeneity in saving behavior is associated to country and time differences in levels of development, growth performance, and fiscal and financial policies. The level of real interest rates has once again become the focus of policy makers' concerned. To understanding the response of national saving to changes in interest rates is central to many issues in economic policy. For example, a reduction in the budget deficit would probably cause interest rates to decline. If personal saving declined as a result, the overall increase...
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...Industrial Policy – 1991 Introduction The Industrial Policy announced on July 24, 1991 by the Finance Minister Dr. Manmohan Singh heralded the economic reforms in India and sought to drastically alter the industrial scenario in our country. The Industrial Policy Statement of 1991 stated that “the Government will continue to pursue a sound policy framework encompassing encouragement of entrepreneurship, development of indigenous technology through investment in research and development, bringing in new technology, dismantling of the regulatory system, development of the capital markets and increased competitiveness for the benefit of common man". It further added that "the spread of industrialization to backward areas of the country will be actively promoted through appropriate incentives, institutions and infrastructure investments”. WHY THE POST-1990 REFORMS? It is well known that from 1951 to 1991, Indian policy-makers stuck to a path of centralized economic planning accompanied by extensive regulatory controls over the economy. The strategy was based on an ‘inward-looking import substitution’ model of development. This was evident from the design of the country’s Second Five-Year Plan (1956-61), which had been heavily influenced by the Soviet model of development. Several official and expert reviews undertaken by the government recommended incremental liberalization of the economy in different areas, but these did not address the fundamental issues facing the economy. ...
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...Macedonia: Economic History and Current Economic Environment The economy of Macedonia was almost none existent before its independence in 1991. During the period of the former Republic of Yugoslavia control “Macedonia only produced 5% of the total output of federal goods” (CIA, Macedonia Economy-overview), compared to all other former Yugoslav states. In Macedonia from 1991-1996 the economy was very unstable due to no government aid, which it formerly received from the Republic of Yugoslavia. Macedonia also had embargoes and trade sanctions from Greece and the United Nations respectively during this period. In 1996, the economy began steady growth until 2001. In 2001 internal conflict caused a decrease in GDP but rebounded quickly after. The economy took a hit in 2008 when the world economic problems caused a worldwide recession. With little effect on GDP from the recession, late in 2008 the Macedonian economy began recovering with a rise in exports and strengthening the infrastructure. During 1991-1996 the economic growth rate was minimal at best. From 1991 to 1994 the GDP declined because there was no foreign direct investment and the economy was drastically affected with a decline in growth. “The economy settled on a positive growth path from 1996 onwards but this was interrupted in 2001, the year of internal civil conflict.”(ILO, p.10) The change from a socialist economy to a market economy has had its ups and downs; the unemployment rate is very high at 29.1%(CIA)...
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...The Agrarian Crisis in India: The Root Causes The declining contribution of the agriculture sector towards India’s GDP is questioning the status of this sector as the backbone of the economy. With time agriculture is turning into an economically unviable activity with almost no profitability pushing the sector in a state of crisis. The following report analyses how the agrarian crisis can largely be attributed to the economic reforms in India since 1991. Lack of Easy Credit to Agriculture and Dependence on Money Lenders In 1969, 14 major commercial banks were nationalized with one of the objectives of developing banking sector in rural areas and providing easy institutionalized credit to the farmer. Soon these banks became the major source of affordable credit in the rural market particularly for the small and marginal farmers. However in the era of neo liberalization, since 1991, the nationalized banks started reducing their commitment below the prescribed 18 per cent, while the cooperative banks turned sick and failed to provide credit. With the implementation of the recommendations of the Narasimham Committee on Banking Reform post 1991, some of which included the decontrol of interest rates, large scale closure of rural branches for rationalized branch networks, the national effort towards developmental and social banking for farmers came to an end. This squeezed credit lines to farmers and led to a drastic fall in the credit flow to agriculture. In Andhra...
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...Economic Reforms in Asia: The Indian Case Study The Asian economy has seen a rapid rise over the past decade with countries such as China, India and South Korea making major headways. China, being the leader of the group, has been largely tipped by many economists to overtake the US as the world’s superpower by 2025. Asian GDP Performance (1997-2005) Source: http://www.treasury.gov.au The success of these nations came on the back of major economic reforms which transformed these sleeping giants into what it is today. China went through a major economic reform in 1979 and soon thereafter success followed. India, followed the same path, but much later than China, and it was not until the turn on the 1990s that India went on the path of economic liberalisation. This paper will focus on the economic reforms that took place in India and its impact on the country in terms of trade and macroeconomics growth and the birth of new economy. A section of this paper will also be comparing the growth of India in comparison to its Chinese counterparts as well as discuss reasoning behind critics who believe liberalisation was not the main contributor to the growth India is achieving today. Pre-Reform Period Post independence, India saw the need to move from an agrarian economy to an industrial one and as such building its competency in crucial sectors of the economy was important. The role of government therefore included economic management...
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...Globalization Tonya Waters Issues in Behavioral Science David Ouellette May 18, 2014 Globalization is the process of erasing national boundaries for economic purposes in order to create one global economy. This process is driven by free trade and the mobility of capital in order to trade goods, human labor, natural resources and investments. Globalization increases competition, creates jobs and increases economic growth. There is much debate however regarding the implications of globalization. While some welcome the integration as an opportunity to grow economically, others view globalization as the disintegration of their culture and values. India and Cambodia are examples of cultures affected both positively and negatively by globalization. Cambodia has been experiencing rapid economic growth, largely supported by increased tourism and the exportation of farm products. Globalization has brought improved healthcare, education, nutrition and raised the standard of living for the Cambodian people. Life expectancy has increased and infant mortality has declined substantially. However, Cambodia’s strong economic growth is not without cost. The jungles of Cambodia are being destroyed for the purposes of planting industrial size agriculture crops. "The government of Cambodia has full control over what companies are permitted access to various land and fishing concessions in Cambodia. Many of the concessions are given without regard to how they will impact people's...
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...Case: Capital Controls in Chile in the 1990s (A) Name Course Date Institution Why did Chile institute capital controls in 1991? Despite the impressive economic performance by Chile in the 1990’s, dramatic changes in the external environment call for a review of its capital controls. For instance, in 1991 the country instituted the “encaje” to control excessive speculative capital inflows. In addition, these controls would help the country efficiently manage her exchange rate regime and pursue an autonomous monetary policy. Due to the low prevailing global interest rates at the time, excess capital inflows exposed the Central Bank's capacity to manage the exchange rate within acceptable margins. Indeed, if the influx continued, Chile's inflation would drastically rise to unmanageable levels (Alfaro & Tella, 2007). Before the 1997 Asian financial crunch and the Russian debt crisis of 1998, the Chilean economy had thrived despite these controls. However, in the aftermath of these crises, the country suffered both trade and financial deficits. For instance, since Asia nations served as her important export destination, Chile’s current account deteriorated massively. Moreover, the declining price of cooper saw a plummeting of foreign exchange due to dwindling demand from traditional export markets. Certainly, these unpredictable changes in the dynamic economic environment force Chile to reassess its capital control strategies (Alfaro & Tella, 2007). Did...
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...Human being have travelled, traded and interacted across borders and great distances for thousands of years. Globalization is the term ascribed to the interaction of economics and societies all over the world. Globalization involves technological, economic, political and cultural exchanges made possible largely by advances in communication, transportation and infrastructure[1]. Globalization bring people are the world more choices and opportunities and can have a significant impact in developing countries such as India. India has made a substantial amount of progress in the last two decades in terms of its economic development. Development is a qualitative measure of progress in an economy and closely linked with globalization. It refers to development and adoption of new technologies, transition from agriculture-based to industry-based economy and general improvement in living standards[2]. Although in some cases, globalization has not held true to benefit in India’s development, it has undoubtedly improved overall economic growth and living standards since 1990. This paper will explore the following question: how has social and economic development in India been affected by the implementation of the structural adjustment program (SAP) and its policies over the past twenty years? It will examine the effects of the SAP; more specifically how its policies have benefited social and economic development. Through the exploration of foreign direct investment (FDI), I will examine how...
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...REASONS FOR INFLEXION POINT IN NATIONAL INCOME TREND SINCE 1990-1991 Analysis from 1990-91 Now, coming to identifying the inflexion points in analyzing the National Income from 1990-91, we are able to find multiple inflexion points. Although such is the case, we would like to choose the point where there is a dramatic inflexion. Based on this opinion we would like to choose the year 1991-92 as the inflexion point over the time period in discussion. Let us now have a look at the reasons for this dramatic change in National Income by identifying the reasons. Indian economy had experienced major policy changes in early 1990s. The new economic reform, popularly known as, Liberalization, Privatization and Globalization (LPG model) aimed at making the Indian economy as fastest growing economy and globally competitive. The series of reforms undertaken with respect to industrial sector, trade as well as financial sector aimed at making the economy more efficient. Slower economic growth and higher inflation in the fiscal years 1990 and 91 increased the population below poverty line to 38% reversing the previous trends until then. The balance of payments BoP crisis of 1990 and subsequent policy changes led to a temporary decline in the GDP growth rate which fell from 4.9% in FY 1990 to 1.1% in 1991. The crisis in 1991 was caused by currency over-valuation, the CAD and Investor confidence played a significant role in the sharp exchange rate depreciation. The gulf war was also one of...
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...Miller 3 Efficient Market Hypothesis 3 Bill Miller’s letter to shareholders 4 Changes in Chief Investment Officer (CIO) 4 Recommendation and Conclusion 4 Reference 6 Appendices 8 Appendix A: Data of LMVTX, S&P 500, and 30 years bond 8 Appendix B: Alpha and Beta between 1991 and 2013 9 Appendix C: Alpha and Beta between 1991 and 2005 9 Appendix D: Alpha and Beta between 2006 and 2013 9 Introduction Bill Miller is known as famous fund manager that hold the record of beating benchmark index for 15 years in a row. However, his poor performance after 2005 was the reason that the investors run away from his fund. Hence, arguments of whether Bill Miller’s previous performances involve luck or skills appear. Furthermore, this report will also discuss whether investors should invest in Bill Miller’s Value Trust. Past and current performance of Value Trust Figure [ 1 ]: LMVTX VS S&P500 (Morningstar Principia , 2013) Bill Miller had made an achievement of longest streak performance of beating the market. Refer to figure 1, it had showed that Bill Miller’s Value Trust had consistently beat the benchmark index of Standard & Poor’s 500 (S&P 500) between 1991 and 2005, 15 years in a row. In 1998, Value Trust had the best performance, which had total return of 48.04% and outperformed S&P 500 around 20%. Moreover, between the periods, the average total return of Value Trust was 18% while S&P 500 was 13%. Betas of 1.16 indicate that Value...
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...Operating a Goodwill in Ukraine Abstract The Ukraine is currently experiencing a crisis which started when former President Viktor Yanukovych disregarded a deal with The European Union for strong relations with Russia. Riots have been going on for over a year and gangs have formed. The number of deaths occurring are increasing, while The Happy Planet Index scored The Ukraine a 37.6 and is ranked number 100 out of 150 countries. There are many influences regarding business in The Ukraine including: cultural, economic, legal, political, and government. The Ukraine is involved in some international organizations including The United Nations. When trying to open and operate a Goodwill in The Ukraine there will be many importing, exporting, and marketing strategies. By opening and operating a Goodwill in Ukraine, there is an opportunity for the company to help the citizens who are effected by the crisis which may help bring The Happy Planet Index for the country up. Operating a Goodwill in Ukraine The Ukraine has a long historical background. From the beginning of The Ukraine’s creation to the year 1712, there has been four significant periods. “During the Miocene Period in Tertiary Age of Cenozoic Era, some 12 million years ago, most of Ukraine was covered by sea” (Hrushevs'ky, Skoryk, "History of Ukraine"). Between the years 879 and 1913, The Ukraine had been dominated by several groups. Originally, The Ukraine was divided between three Princes who were brothers. PriceVolodymyr...
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...their much debated article in July 2003 issue of Foreign Policy had observed: “Can India surpass China? This is no longer a silly question”. The July 23rd 2011 issue of The Economist observed; “Twenty years ago they said the yardstick against which India should be measured was its potential. On that measure, there is much to do.” As a fledgling democracy, India’s economic experiment of planned development was held out as an example to many aspiring low-income countries in the 1950s. While some countries raced ahead in the development process, India lagged behind. This is evident from the fact that it took 40 long years from 1950-51 for India’s real per capita GDP to double by 1990-91. But, 1991-92 was a defining moment in India’s modern economic history as a severe balance of payments (BoP) crisis prompted far reaching economic reforms, unlocking its growth potential. As a result, in only 15 years, India’s per capita income doubled again by 2006-07. If the current pace of growth is maintained, India’s per capita income could further double by 2017-18, in 10...
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...imperial integrity and Russia’s evolving ideology of Pan-Slavism and territorial expansion. These developing trends threatened the sustainability of the centuries-old ‘Balance of Power’ in Europe and caused extreme tension and stress in the Balkan region. War seemed inevitable and only a ‘spark’ was required to set off the fuse.1 The dreaded stimulus was soon provided through the assassination of the Austrian Archduke, Franz Ferdinand, and his wife Sophie at Sarajevo in June 1914. The casus belli that the assassination presented Austria was too good to be missed. The prospects of an all-out war also aligned with Germans desire for establishing their military supremacy in the region. Hence they became actively engaged in the ensuing July Crisis and staunchly supported Austria. The Kaiser offered a ‘blank cheque’ to its ally.2 Unbeknown to many, the stage was set for the catastrophic World War 1. Background The Ottoman Empire had progressively conquered the Balkans starting in the fourteenth century leading up to the height of its expansion in the seventeenth.3 They were opposed by various forces in Europe such as the Byzantine Empire, Hungary and Poland. Though...
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...The root-causes of the Greek sovereign debt crisis Basil Manessiotis paper presented at the 2nd Bank of Greece workshop on the economies of Eastern European and Mediterranean countries Athens, 6 May 2011 1 Introduction To better understand the current sovereign debt crisis in Greece, a longer view is warranted The 20 year period 1989-2009 is bounded by two major fiscal crises in Greece: the 1989-1993 crisis, and the ongoing crisis. In both crises deficits exceeded 15,0% of GDP. In between, Greece entered the Economic and Monetary Union and adopted the Euro To facilitate discussion the 20 year period will be divided into two parts: the 1989-1999 period, and the 2000-2009 period. 2 1989-1999: securing EMU membership The 1989-1993 sub-period: Macroeconomic developments Weak economic activity (1.2% average growth) Very high inflation (16.8% annual average) Very high real and nominal interest rates Low fixed investment (1.5% annual average) Fiscal developments Very high general government deficits (13.6% of GDP average) The 1990 deficit reached 15.9% of GDP Primary deficit averaged 4.3% of GDP Fast accumulation of debt Debt ratio increased from 69.0% of GDP in 1989 to 110.1% of GDP in 1993 Other reasons for debt accumulation Very high interest payments From 6.8% of GDP in 1989 to 11.4% of GDP in 1993 3 TABLE 1 Selected Macroeconomic Indicators (annual average rate) 1989-1993 Real GDP growth Fixed investment growth Inflation (CPI) General Government...
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