The significance of the Copenhagen Conference Essay

The significance of the Copenhagen Conference - Essay Example However the new Obama administration seems open to the issue. In the past, the US has treated climate change as a non-issue, focusing on it only during political campaigns. Presently there are signs that the US government might reconsider its hard-line stance on global warming. It had already agreed to cut its emissions by 17% in 2005. By the year 2030, US plans to cut emissions by 42% and 83% by 2050 (Broder). China is also one of the world’s biggest air polluter and a lot of pressure has been put on that country’s government to come up with platform to regulate the emissions that come from industries in China. China has already agreed to cut CO2 emissions per GDP unit by 40 to 45% by the year 2020 (Zhi Lin). The whole world certainly agrees that global warming needs to be addressed as a matter of urgency. For instance the UK has already formally agreed to cut emissions by 20%. Countries in the European region also agreed to cut their emissions by the same margin (Bulow). As a result of global warming, the world is becoming hotter. The Polar Regions are melting and this in turn is causing the sea level to rise. It has been said that some islands might disappear if the situation is not addressed. Deserts are increasing and many people are going without water and food. This is not what the world wants, and the sooner this climate issue is resolved, the better it will be for everyone (Anup). The conference comes at a time when the world is hard pressed to address factors that have led to global warming and severe climate change in various parts of the world. If the world leaders come to a practical agreement, this could be a huge step towards saving the world from utter destruction. However the conference might end up like so many climate-based conferences before it, which did not produce any conclusive solution to the problem of

Analysis of the Economic Impact of the Major Social Problem of Poverty Assignment

Analysis of the Economic Impact of the Major Social Problem of Poverty - Assignment Example Indeed, the article vividly shows that the government of New York City must aid the residents in their desire to climb out of their current poverty debacle. Subject: Business Topic: Article Analysis Introduction In terms of discussing the model or economic theory that relates to the issue presented in the news article, the economic theory in focus is a supply and demand theory. As prices of goods and services increase, the demand for the products and services decrease. Likewise, as the prices of goods and services increase, the supply of the goods and services increase (Arnold, 2008). In terms of discussing what economic theory states and predicts about the issue presented in the news article, as the prices of goods and services increase, the poverty level people will reduce their demand for the higher priced products. On the other hand, as the prices of goods and services increase, the business entities are eager to supply more services and goods in order to generate more profits (B oyes, 2010). Analysis of the Economic Impact of the Major Social Problem of Poverty The April 12, 2012 issue of the New York Times article is reflection on poverty. The title of the article is New York City’s Poverty Rate Rises, Study Finds (Roberts, 2012). The paper shows strong evidence there has been an increasing number of New York residents joining the ranks of the poor over the last years. The number of New York City residents has literally increased by 100,000 individuals. With the increase, the poverty ratio soared by as much as 1.3 percent. The new poverty rate is 21 percent. The percent indicates that one out of every five New York residents qualifies as poor. The article further states that New York has one of the highest poverty levels in the U.S. Once New York has implemented a more detailed description which defines who can be classified as a poor individual, current New York City’s statistics of the poor has the largest annual rise in poverty ratio. As J an Windebank emphasized, â€Å"Throughout the advanced economies, the widespread consensus is that employment is the best route out of poverty. Not only are the approaches of both the Old Left and New Right grounded in such a belief, but so too is the employment-focused third way approach of New Labor. In this book, however, our intention is to begin to explain why an alternative third way discourse has started to emerge that rejects an employment-centered approach to poverty alleviation† (Windebank, 2003). The current recession, which started in 2008, is blamed as the major culprit for the ballooning of the poor individuals in New York City. The recession brought a lot of the United States companies into the unfavorable quagmire of bankruptcy. With bankruptcy enveloping some of the companies in the United States skies, those that cannot innovate are forced to close shops. With the closing of the shops, many employees are retrenched. With the loss of their jobs, the retrenche d employees could not afford to retain their previous lifestyle. The retrenched employees had to join the long line of New Yorkers waiting for their turn to grab a set of food coupons. With the slowing of the United States economic wheel into a snail’s pace, statistics showed that one out of every four New York residents, under the age of 18 years, joined the poor of New York, the city that never sleeps. New York City’s Center for Economic Opportunity reported the latest poverty report. Likewise, the 2008 U.S. Economic crisis is

Difference between functional and dysfunctional conflict Essay Example for Free

Difference between functional and dysfunctional conflict Essay Functional Conflict Susie Steel is a vice president in a real estate development firm called Hearts Development. She has spent enormous amounts of energy cultivating a relationship with a local town regarding an available plot of land. Susie would like to purchase the land to build townhomes for sale. She has developed an excellent relationship with the town politicians and community members. An issue has developed over the planned usage of the land, though. The town will sell the land to Susies company but feels that townhomes would be bad for the overall community. Theyre concerned with the additional cost and burden of kids that the townhomes would bring into the community. Susie understands the communitys concern and wants a win-win situation to occur. She feels that this issue will be a functional conflict due to the fact that the disagreement will bring a positive end result to both parties. Positive results of functional conflict include: Awareness of both sides of issues Improvement of working conditions due to accomplishing solutions together Solving issues together to improve overall morale Making innovations and improvements within an organization In Susies case, constructive criticism and discussion resulted in a compromise and a solution between the parties. Susie understood the towns concern but needed to find something to build that would bring revenue for the company. Through their joint meetings, the end solution was for Hearts Development to build a retirement community, which would only have citizens 55 and over living in the town. This would eliminate the issue of having more young people come into town and burden the school system.

The War Of Nerves History Essay

The War Of Nerves History Essay The Cold War was a war that began after WWII between the United States and USSR. It was called the Cold War because this was a war of nerves. fought without using any type of artillery. This whole war was fought completely with words. [No, it was also fought in little countries] It was way to dangerous for both The USSR which was Russia [Russia was one segment of the USSR] to fight with the United States so they fought they basically pulled strings and fought using other countries. The United States helped [What about Korea?] South Vietnam as well as Afghanistan while Russia helped supply North Vietnam. That in a sense is how it evolved from the countries talking to war. These things coming forth lead to the Truman Doctrine being born. This doctrine clearly stated that the US would lend aid to all countries and free people who were willing to take a stand against the Soviet Union. Truman recognized that the growing of communism would be very to not just the US but other countries such as Greece who were already involved in civil wars would easily fall into communism with the promise of financial and military backing. Following the decree the US sent 400 million and the Union of NATO would then be formed. It then became known as a form of containment because the US used it to stall the spread of communism. Not only did it stall the Communists it helped the US expand their security as well as their influence. This tatic would prove to be very helpful and slow down the expansion in Korea, China, and Vietnam. NATO is beginning to step in and take affect as well. NATO is the North Atlantic Treaty Organization. It provided military defenses and began to allow some trade which the Soviet Union did not want. Many people believe it was the best defensive plan for slowing down and eventually somewhat controlling communism. Countries aligned and the Us sent troops to help over sea being clear to not try to envoke the the already angry soviet union. Therefore NATO had a really big affect in the Cold War. Upon slowing down the Soviet Union the US established the Marshall Plan. It helped rebuild the economic foundation for the countries in Europe. Even though the US was involved in war with the USSR they offered them the same kind of help but they chose to decline it seeing it as a slap in the face or rather a taunt. George Marshall put the plan together and it was his idea to offer it to the USSR. It helped in the Industrial and Agricultural production in the countries. To many people it was believed to be a very important part of the recovery of those countries that needed it. The Marshall Plan also allowed some form of trade between the countries. It still remains a key reason to ending the war. The US basically ran a close hand over the Cold War. They over seen just about everything and pretty much won the war without having to take up arms. They won the war using strategy and carefully placed plans and power of the dollar. We became the most influential and powerful nation as far as political and militarily. We did it militarily even though we did not have to fight at all. The US basically did not want the Soviet Union to become window to foreign trade like they wanted to become. They basically controlled the war while the Soviet Union tried to find ways around the US continuously running into road blocks such as the Marshall Plan and the Truman doctrine. There were many events that took place in the Cold War. The Berlin blockade was a major event. Stalin did this so that the people in West berlin could not receive food, supplies and anything else they might need. This then brought about another major even the airlift in which the US, Britain, France, Canada, New Zealand, and Australia air lifted good to west Berlin. Another event was the cancellation of the radio in Europe. But the last of the major events was the Berlin crisis. It kept the immigrants from coming in and getting out. Many people refereed to it as a Brain Drain to the younger people and generation. This just brought on more drama such as with the missles that almost brought in nuclear warfare. The Cold War lasted a very long time. From (1947- to 1991). It all started fall apart in 1989. The soviet Union was beginning to lose its power. Many believe the loss in power truly started when the Moscow Pact began to fall thorugh and major leaders and authority figures began to abandon the Union. The final blow to the Soviet Union began when the Berlin Wall came down that showed they had no more power and the people were taking back their freedom and their lifeà ¢Ã¢â€š ¬Ã¢â€ž ¢s. In conclusion this whole war really could have been avoided if they would have just stopped trying to control the people of Eastern Europe. With Stalin in power in the USSR there was no way it could have been avoided. Unless you are William Faulkner, this essay should have been divided into paragraph. Where are your sources for this information?

Isolation and Nature in the Works of Robert Frost Essay -- Biography B

Isolation and Nature in the Works of Robert Frost During the height of Robert Frost’s popularity, he was a well-loved poet who’s natural- and simple-seeming verse drew people - academics, artists, ordinary people both male and female - together into lecture halls and at poetry readings across the country.1 An eloquent, witty, and, above all else, honest public speaker, Frost’s readings imbued his poetry with a charismatic resonance beyond that of the words on paper, and it is of little surprise that people gathered to listen. Yet it remains somewhat ironic that his poetry would possess this power to bring individuals together - poetry that, for the most part, contains a prevailing theme of alienation, of a sense of separation from society, of isolation and aloneness in an uncaring world. Running parallel with this is a second theme concerned with the interaction between the human and the non-human: occasionally the ‘non’ may serve as a comfort for the dispossessed - but more often, the inte raction between the two is destructive and disastrous. An analysis of a sample of his works - in this case his second book, North of Boston, as well as a few of his later poems - reveals these recurring themes, and the different interpretations Frost brings to them. It is this variety of interpretations that is fascinating: though his firmly held â€Å". . . belief that everybody was a separate individuality and that collective enterprises could do nothing but weaken the self†2 clearly led to this feeling of loneliness or separation that permeates his works, he does so without falling into a sense of needless pessimism, taking great care to bring out the themes’ multiple aspects under varied contexts. These contexts are: poe... ...l fireplace - are a little harder to place, though. 7 Another poem, this one outside of North of Boston, that deals with this identical theme is The Tuft of Flowers - except that one emphasis the separationn between the workers, and leaves it ambiguous wether this separation is a good or bad thing. 8 Although there are a few indications of regret/displeasure: his walk is a repentance, his walking is a profanation. And are ‘the cottages in a row’ indeed a sufficient substitution for a companion (‘No one at all with whom to talk...’)? 9 Frost, and specifically North of Boston, lends itself especially well to feminist criticism. With poems such as The Death of the Hired Man, Home Burial, A Servant to Servants, The Generations of Men, The Housekeeper, and The Fear, each of them dialogue pieces, there is an abundance of male/female interaction to be analyzed. Isolation and Nature in the Works of Robert Frost Essay -- Biography B Isolation and Nature in the Works of Robert Frost During the height of Robert Frost’s popularity, he was a well-loved poet who’s natural- and simple-seeming verse drew people - academics, artists, ordinary people both male and female - together into lecture halls and at poetry readings across the country.1 An eloquent, witty, and, above all else, honest public speaker, Frost’s readings imbued his poetry with a charismatic resonance beyond that of the words on paper, and it is of little surprise that people gathered to listen. Yet it remains somewhat ironic that his poetry would possess this power to bring individuals together - poetry that, for the most part, contains a prevailing theme of alienation, of a sense of separation from society, of isolation and aloneness in an uncaring world. Running parallel with this is a second theme concerned with the interaction between the human and the non-human: occasionally the ‘non’ may serve as a comfort for the dispossessed - but more often, the inte raction between the two is destructive and disastrous. An analysis of a sample of his works - in this case his second book, North of Boston, as well as a few of his later poems - reveals these recurring themes, and the different interpretations Frost brings to them. It is this variety of interpretations that is fascinating: though his firmly held â€Å". . . belief that everybody was a separate individuality and that collective enterprises could do nothing but weaken the self†2 clearly led to this feeling of loneliness or separation that permeates his works, he does so without falling into a sense of needless pessimism, taking great care to bring out the themes’ multiple aspects under varied contexts. These contexts are: poe... ...l fireplace - are a little harder to place, though. 7 Another poem, this one outside of North of Boston, that deals with this identical theme is The Tuft of Flowers - except that one emphasis the separationn between the workers, and leaves it ambiguous wether this separation is a good or bad thing. 8 Although there are a few indications of regret/displeasure: his walk is a repentance, his walking is a profanation. And are ‘the cottages in a row’ indeed a sufficient substitution for a companion (‘No one at all with whom to talk...’)? 9 Frost, and specifically North of Boston, lends itself especially well to feminist criticism. With poems such as The Death of the Hired Man, Home Burial, A Servant to Servants, The Generations of Men, The Housekeeper, and The Fear, each of them dialogue pieces, there is an abundance of male/female interaction to be analyzed.

Tylenol Crisis

Abstract Part 1: Crisis Scenario Development Develop a scenario describing a crisis situation. Possible topics for your scenario include school violence, workplace violence, terrorist attack, sexual assault, or natural disasters. Your scenario must include sufficient breadth and depth in terms of the details surrounding the incident you have chosen, to include: †¢Ã‚  Description of the crisis. †¢Ã‚  Description of the amount of damage. †¢Ã‚  Description of the victims (physical and psychological damage). †¢Ã‚  Information about the perpetrator(s).Project 1 Part 1 In October of 1982, Tylenol, the leading pain-killer medicine in the United States at the time, faced a tremendous crisis when seven people in Chicago were reported dead after taking extra-strength Tylenol capsules. It was reported that an unknown suspect put 65 milligrams of deadly cyanide into Tylenol capsules, 10,000 more than what is necessary to kill a human. The tampering occurred once the product r eached the shelves. They were removed from the shelves, infected with cyanide and returned to the shelves (Mitchell, 1989).In 1982, Tylenol controlled 37 percent of its market with revenue of about $1. 2 million. Immediately after the cyanide poisonings, its market share was reduced to seven percent (Mitchell 1989). Once the connection was made between the Tylenol capsules and the reported deaths, public announcements were made warning people about the consumption of the product. Johnson & Johnson was faced with the dilemma of the best way to deal with the problem without destroying the reputation of the company and its most profitable product.Following one of their guidelines of protecting people first and property second, McNeil Consumer Products, a subsidiary of Johnson & Johnson, conducted an immediate product recall from the entire country which amounted to about 31 million bottles and a loss of more than $100 million dollars. (Lazare, Chicago Sun-Times 2002) Additionally, they halted all advertisement for the product. Although Johnson & Johnson knew they were not responsible for the tampering of the product, they assumed responsibility by ensuring public safety first and recalled all of their capsules from the market.In fact, in February of 1986, when a woman was reported dead from cyanide poisoning in Tylenol capsules, Johnson & Johnson permanently removed all of the capsules from the market. The reason Tylenol reacted so quickly and in such a positive manner to the crisis stems from the company’s mission statement. (Lazare Chicago Sun-Times 2002). On the company’s credo written in the mid-1940’s by Robert Wood Johnson, he stated that the company‘s responsibilities were to the consumers and medical professionals using its products, employees, the communities where its people work and live, and its stockholders.Therefore, it was essential to maintain the safety of its publics to maintain the company alive. Johnson & Johnsonâ₠¬â„¢s responsibility to its publics first proved to be its most efficient public relations tool. It was the key to the brand’s survival. On September 29, 1982, 12-year-old Mary Kellerman of Elk Grove Village, Illinois, woke up at dawn and went into her parents’ bedroom. She did not feel well and complained of having a sore throat and a runny nose. To ease her discomfort, her parents gave her one Extra-Strength Tylenol capsule. At 7 a. m. they found Mary on the bathroom floor.She was immediately taken to the hospital where she was later pronounced dead. Doctors initially suspected that Mary died from a stroke, but evidence later pointed to a more sinister diagnosis. That same day, paramedics were called to the Arlington Heights home of 27-year-old postal worker Adam Janus. When they arrived, they found him lying on the floor. His breathing was labored, his blood pressure was dangerously low and his pupils were fixed and dilated. The paramedics rushed Adam Janus to the e mergency room at Northwest Community Hospital, where they attempted to resuscitate him, but it was too late.Adam died shortly after he was brought to the hospital. His death was believed to be the result of a massive heart attack. However, doctors would later learn that his death was anything but natural. On the eve of Adams death, his aggrieved family gathered at his house to mourn his sudden passing and discuss funeral arrangements. Adams 25-year old brother Stanley and his 19-year-old bride, Theresa, both suffered from headaches attributed to the stress of losing a family member. To his relief, Stanley found on Adams kitchen counter a bottle of Extra Strength Tylenol. He took a capsule from the bottle and then gave one to his wife.Shortly after taking the capsules, both Stanley and his wife collapsed onto the floor. The shocked family members immediately called an ambulance. Once again paramedics rushed to the home of Adam Janus and attempted to resuscitate the young couple. Howe ver, Stanley died that day, and his wife died two days later. Twenty-seven-year-old Mary Reiner of Winfield, Illinois, was recovering after the birth of her son when she unsuspectingly ingested the Tylenol laced with cyanide. She died a short time later. That same day, 35-year-old Paula Prince, a United Airlines stewardess, was found dead in her suburban Chicago apartment.Cyanide-filled Tylenol capsules were also found in her home. The seventh known victim of the Tylenol poisonings was 35-year-old Mary McFarland of Elmhurst, Illinois. While the blood samples were being tested for cyanide, two firefighters in another location of the Chicago suburbs discussed the four bizarre deaths that had recently taken place in the neighboring area. Arlington Heights firefighter Philip Cappitelli talked with his friend Richard Keyworth from the Elk Grove firehouse about Mary Kellerman and the fact that she had taken Tylenol before she died.Keyworth suggested that all the deaths could have been rel ated to the medicine. Following his friends suggestion, Cappitelli called the paramedics who worked on the Janus family and asked if they too had taken Tylenol. To both the men’s surprise, they discovered all three Janus family members had ingested the popular pain reliever. The police were immediately sent to the Kellerman and Janus homes to retrieve the suspicious bottles. Investigators soon discovered the Tylenol link. Urgent warnings were broadcast, and police drove through Chicago neighborhoods issuing warnings over loudspeakers.During the initial investigations, a man named James William Lewis sent a letter to Johnson & Johnson demanding $1 million to stop the cyanide-induced murders. Police were unable to link him with the crimes, as he and his wife were living in New York City at the time. He was convicted of extortion, served 13 years of a 20-year sentence, and was released in 1995 on parole. WCVB Channel 5 of Boston reported that court documents, released in early 2 009, â€Å"show Department of Justice investigators concluded Lewis was responsible for the poisonings, despite the fact that they did not have enough evidence to charge him. Lewis has denied responsibility for the poisonings for several years. A second man, Roger Arnold, was investigated and cleared of the killings. He had a nervous breakdown due to the media attention, which he blamed on Marty Sinclair, a bar owner. In the summer of 1983, Arnold shot and killed John Stanisha, whom he mistook for Sinclair. Stanisha was an innocent man who did not know Arnold. Arnold was convicted in January 1984 and served 15 years of a 30-year sentence for second-degree murder. He died in June 2008.Laurie Dann, who poisoned and shot people in a May 1988 rampage in and around Winnetka, Illinois, was briefly considered as a suspect, but no direct connection was found. On May 19, 2011, the FBI requested DNA samples from ‘Unabomber' Ted Kaczynski in connection to the Tylenol murders. Kaczynski denied having ever possessed potassium cyanide. The investigation is still under way. The first four Unabomber crimes happened in Chicago and its suburbs from 1978 to 1980, and Kaczynski's parents had a suburban Chicago home in Lombard, Illinois, in 1982, where he stayed occasionally.The media gave Johnson ; Johnson much positive coverage for its handling of the crisis; for example, an article in The Washington Post said, â€Å"Johnson & Johnson has effectively demonstrated how a major business ought to handle a disaster. † The article further stated that â€Å"this is no Three Mile Island accident in which the company's response did more damage than the original incident,† and applauded the company for being honest with the public. In addition to issuing the recall, the company established relations with the Chicago Police Department, the FBI, and the Food and Drug Administration.This way it could have a part in searching for the person who laced the capsules and they could help prevent further tampering. While at the time of the scare the company's market share collapsed from thirty-five percent to eight percent, it rebounded in less than a year, a move credited to the company's prompt and aggressive reaction. In November, it reintroduced capsules but in a new, triple-sealed package, coupled with heavy price promotions and within several years, Tylenol had become the most popular over-the-counter analgesic in the U. S. A number of copycat attacks involving Tylenol and other products ensued during the following years.One of these incidents occurred in the Chicago area; unlike Tylenol, it actually forced the end of the product affected by the hoax, Encaprin, from Procter ; Gamble. The incident inspired the pharmaceutical, food, and consumer product industries to develop tamper-resistant packaging, such as induction seals and improved quality control methods. Moreover, product tampering was made a federal crime. Additionally, the tragedy prompted the pharmaceutical industry to move away from capsules, which were easy to contaminate as a foreign substance could be placed inside without obvious signs of tampering.Within the year, the FDA introduced more stringent regulations to avoid product tampering. This led to the eventual replacement of the capsule with the solid â€Å"caplet†, a tablet made in the shape of a capsule, as a drug delivery form and with the addition of tamper-evident safety-seals to bottles of many sorts. References (n. d. ). Retrieved August 31, 2012, from http://www. trutv. com/library/crime/terrorists_spies/terrorists/tylenol_murders/index. html (n. d. ). Retrieved August 30, 2012, from http://iml. jou. ufl. edu/projects/fall02/susi/tylenol. htm (n. d. ). Retrieved August 29, 2012, from http://aboutpublicrelations. net/uczoulas1. htm

Is Foreign Debt a Problem for Bangladesh?

Is Foreign Debt a Problem for Bangladesh? Part-A Foreign debt in Bangladesh Introduction: External debt is one of the sources of financing capital formation in any economy. Developing countries like Bangladesh are characterized by inadequate internal capital formation due to the vicious circle of low productivity, low income, and low savings. Therefore, this situation calls for technical, managerial, and financial support from Western countries to bridge the resource gap. On the other hand, external debt acts as a major constraint to capital formation in developing nations.The burden and dynamics of external debt show that they do not contribute significantly to financing economic development in developing countries. In most cases, debt accumulates because of the servicing requirements and the principal itself. In view of the above, external debt becomes a self-perpetuating mechanism of poverty aggravation, work over-exploitation, and a constraint on development in developing economi es. Public borrowing can be seen by private investors as a warning signal of the government becoming bankrupt within the foreseeable future.They may also fear that government will impose higher taxes in future in order to facilitate the repayment and servicing of the loan. In that case private investors will become less enthusiastic to invest. However, policy makers have to know whether public borrowing is followed by any crowding- out effect on investment, through whatever channel, and to what extent and whether the detrimental effect of such actions outweighs the benefit coming from the use of borrowed money, as is argued by the classical. What is public debt?Public debt is the entry records of cumulative total of all government borrowings less repayments that are denominated in a country's home currency. Public debt should not be confused with external debt, which reflects the foreign currency liabilities of both the private and public sector and must be financed out of foreign e xchange earnings. Government debt is one method of financing government operations, but it is not the only method. Governments can also create money to monetize their debts, thereby removing the need to pay interest.But this practice simply reduces government interest costs rather than truly canceling government debt and can result in hyperinflation if used unsparingly. Governments usually borrow by issuing securities, government bonds and bills. Less creditworthy countries sometimes borrow directly from a supranational organization (e. g. the World Bank) or international financial institutions. Sources of public debt: A. Internal Sources. I. Borrowing from individual by issuing govt bond, notes, etc II. Borrowing from commercial bank III. Borrowing from central bankIV. Borrowing from nan-bank Financial institution B. External Sources I. Foreign Government II. Foreign private institution III. International financial institution like IMF, WB etc. Why Bangladesh economy is dependent o n Public debt? To utilize natural resources Economic development Financing deficit budget Strong social and economic structure Crucial economic contingencies Implement annual development Program Import financing Implementation of fiscal policy To strong national defense Modernization of agriculture Facilitate quick industrialization.Factors Which Influence How Much a Government Can Borrow †¢ Domestic Savings. If consumers have a high savings ratio, there will be a greater ability for the private sector to buy bonds. †¢ Relative Interest rates. If government bonds pay a relatively high interest rate compared to other investments, then ceteris paribus, it should be easier for the government to borrow. Sometimes, the government can borrow large amounts, even with low interest rates because government bonds are seen as more attractive than other investments. †¢ Lender of Last Resort.If a country has a Central Bank willing to buy bonds in case of a liquidity shortages, inv estors are less likely to fear a liquidity shortage. If there is no lender of last resort (e. g. in the Euro) then markets have a greater fear of liquidity shortages and so are more reluctant to buy bonds. †¢ Prospects for Economic Growth. If one country faces prospect of recession, then tax revenues will fall, the debt to GDP ratio will rise. Markets will be much more reluctant to buy bonds. If there is forecast for higher growth. This will make it much easier to reduce debt to GDP ratios.The irony is that cutting government spending to reduce deficits, can lead to lower economic growth and increase debt to GDP ratios. †¢ Confidence and Security. Usually, governments are seen as a safe investment. Many governments have never defaulted on debt payments so people are willing to buy bonds because at least they are safe. However, if investors feel a government is too stretched and could default, then it will be more difficult to borrow. †¢ Foreign Purchase. A country lik e the US attracts substantial foreign buyers for its debt (Japan, China, UK).This foreign demand makes it easier for government to borrow. However, if investors feared a country could experience inflation and a rapid devaluation, foreigners would not want to hold securities in that country. †¢ Inflation. Financing the debt by increasing the money supply is risky because of the inflationary effect. Inflation reduces the real value of the government debt, but, that means people will be less willing to hold government bonds. Inflation will require higher interest rates to attract people to keep bonds.In theory, the government can print money to reduce the real value of debt; but existing savers will lose out. If the government creates inflation, it will be more difficult to attract savings in the future. Is foreign debt a problem to Bangladesh? Excessive reliance on debt, whether domestic or external, carries macroeconomic risks that can hinder economic and social development. Cou ntries macro-economic is thus disturbed by this factor alone. Scarcity of resources has already compelled the government to borrow afresh and/or impose new taxes on the citizenry to meet debt service obligations.High domestic public debt pushes up interest rates and crowds out private investment, which is much needed to promote economic growth. When most government revenues are devoted to debt servicing, fiscal policy cannot be used to provide basic services, such as education, health, safe drinking water and housing. Unfortunately, the national budget — annual statement of the government’s income and expenditure — does not recognize the gravity of the situation characterized by its serious problem to finance the external debt servicing at the cost of basic human services.Every year Bangladesh pays, on an average $ 1070 million, to its foreign creditors. A 2003 study (SUPRO: 2003) exclusively revealed the fact that for every dollar in foreign grant aid received, the government spends over $1. 5 in debt service to foreign creditors annually. While there is no denying that Bangladesh is heavily dependent on foreign aid and loans to finance its annual budget, it is also true that aid agencies and multilateral lenders in the West have to carry a lion’s share of the blame for Bangladesh’s burden of debt. Between 1980 and 2012, Bangladesh’s total outstanding international debt quadrupled.The bulk of this surge in lending to the autocratic regimes came from the International Development Association, the soft-loan window of the World Bank. Can the World Bank and the IMF morally impose the burden of this debt on the Bangladeshi people, when in fact that money provided valuable succor to an autocratic regime that the people were struggling to topple at the time? How sustainable Bangladesh Debt is? Bangladesh is classified as a low-income country and is home to the third highest absolute number of poor people in the world, after China and India.Despite the huge amounts it spends servicing debt ($1551. 3 million in 2011), the World Bank describes it neither as ‘severely’ nor even ‘moderately’ indebted, but instead classifies Bangladesh as ‘less indebted’. Instead of rewarding Bangladesh for its track record of prompt debt servicing, the World Bank has interpreted this to mean that Bangladesh’s debt must be sustainable. Arbitrary thresholds on indicators like debt/exports made Bangladesh ineligible for the Heavily Indebted Poor Countries (HIPC) initiative or the Multilateral Debt Relief Initiative.Bangladesh will not receive through either of these initiatives the debt relief that it desperately needs to finance public expenditures on school and hospitals among other basic necessities. One of the Bangladeshi development experts remarked that- â€Å"Bangladesh has regularly paid its debts, expanded exports and are now being punished for its success† (Bhattac harya: 2006). The whole argument is that, since these countries are able to repay they must have â€Å"sustainable† levels of debt.The sustainability of debt is primarily measured on the economic matrix called Debt Sustainable Analysis (DSA) introduced by the World Bank and IMF, which lays too much emphasis on the country’s exports and does not fully reflect the true nature of the debt burden on government expenses. How can Bangladesh’s debt be sustainable especially when it pays back on an average $1070 million to its foreign creditors in general and $870 million to its so-called benevolent development partners (multi-lateral and bi-lateral donors) annually?For a poor country like Bangladesh, would it be realistic to calculate ‘debt sustainability’ without looking at how much money it spends on schools, hospitals and roads, on teachers, medicines, clean water and on everything else that is needed to combat the dire poverty blighting so many lives? If a country cannot afford to meet the basic needs of its own people, then how can one argue that giving money to the rich world is affordable or â€Å"sustainable†? How can its debt be sustainable when the cost of external debt servicing exceeds the public spending on health and education, for example?In what criteria, the Bangladesh external debt can be measured as sustainable when it clearly demonstrates that MDG progress is being seriously hampered due to the excesses of debt servicing? Presumably, the international community has left a single choice for Bangladesh: servicing external debt at the cost of basic services let alone the MDG progress! Why Bangladesh deserves full debt cancellation? Undeniably, Bangladesh cannot afford to pay on average $1060 million a year to foreign creditors.Even though the country is making some progress with regard to the implementation of the MDGs, it is still home to 70 million people living in poverty. It has the highest incidence of po verty in South-Asia. In fact, Bangladesh cannot afford to pay a single dollar in debt service. If debt sustainability is based on the financing needs for the MDGs, Bangladesh would receive full debt cancellation. Bangladesh needs US$ 7. 5 billion a year to finance the implementation of the MDGs. A growing number of NGOs, governments and analysts have come to the conclusion that debt cancellation should be expanded.As independent expert Bernards Mudho explained earlier this year (2007) in a report commissioned for the United Nations: â€Å"There†¦ is a need for further comprehensive solutions to the debt problems of poor countries, including further debt relief by other multilateral institutions and for permanent solutions to the problems of bilateral and commercial debts. Bangladesh Debt must be cancelled, because †¦ ? Debt costs too much to Bangladeshi people in general and poor and marginalized in particular. People need a healthy and prosperous life that requires incre ased government spending on basic services such as health, education, water-sanitation etc. ? Bangladesh needs to achieve the MDG targets in time. To finance the Millennium Development Goals, every year a staggering US7. 5 billion in external budget support is needed. This is about four times the amount of aid and concessional loans currently provided by foreign donors and creditors. ? At this juncture, Bangladesh can no longer afford to pay a single dollar for debt servicing. Because†¦.. Every dollar paid in debt service is a dollar lost for the MDGs†. Part-B Impact of Foreign debt on Bangladesh 1. Effects on Economic growth 2. Effects on NNP 3. Effects on Inflation 4. Effects on Investment 5. Effects on consumption 6. Effects on Production 7. Effects on Distribution 8. Effects on Risk, uncertainty, liquidity Part-C Statistical Analysis 1. Trend Analysis of Foreign Debt: Trend Analysis of External debt of last 10 years is given below Y=1714. 5+0. 8647x R? = 0. 9247 Appen dix Table 1 shows the summary of trend equation and r2 of External debt of Bangladesh.The trend equation of Foreign debt is, Y=1714. 5+0. 8647x and the square of correlation coefficient (r2) = . 9247. Interpretation: The trend equation indicates that during the period from 2003 to 2012 debt increase at the rate of . 8647 billion per year and 1714. 5 is the average external debt of Bangladesh. It is reflected from the table that trend equation of foreign debt are positive and goodness of fit of all the equations are very high. 2. Descriptive Analysis of Foreign Debt: Descriptive Statistical Analysis of External debt of last 10 years is given below: (All amounts are in billions) Descriptive Statistics | |N |Range |Minimum |Maximum |Mean |Std. Deviation |Variance |Skewness |Kurtosis | | |Statistic |Statistic |Statistic |Statistic |Statistic |Statistic |Statistic |Statistic |Std. Error |Statistic |Std. Error | |Foreign_Debt |11 |8. 7200 |16. 5000 |25. 2200 |2. 103273E1 |2. 9825127 |8. 8 95 |-. 169 |. 661 |-1. 108 |1. 279 | |Valid N (listwise) |11 | | | | | | | | | | | | Interpretation: This table provides statistical information about the data set, such as showing mean value of foreign debt individually and its deviation.For this information, for instance we found that minimum value of the variable is 16. 5bill, Maximum value is 25. 22billon, its mean 2. 103273e1 and Standard deviation is 2. 9825127. 3. Correlation Analysis: Table shows the correlation matrix for estimating interrelationships between chosen economic parameters of Bangladesh. Variables |GDP real Growth |Amount of Foreign Debt |Inflation rate |Investment Amount |Remittance Inflow |Import |Export Amount |Foreign Reserve | |GDP real Growth Rate |1 |. 635 |. 638 |. 748 |. 427 |. 457 |. 485 |. 352 | |Amount of Foreign Debt |. 35 |1 |. 819 |. 555 |. 919 |. 901 |. 920 |. 846 | |Inflation rate |. 638 |. 819 |1 |. 518 |. 686 |. 742 |. 763 |. 494 | |Investment Amount |. 748 |. 555 |. 518 |1 |. 406 |. 433 |. 4 68 |. 222 | |Remittance Inflow Amount |. 427 |. 919 |. 686 |. 406 |1 |. 915 |. 935 |. 920 | |Import Amount |. 457 |. 901 |. 742 |. 433 |. 915 |1 |. 994 |. 888 | |Export Amount |. 485 |. 920 |. 763 |. 468 |. 935 |. 994 |1 |. 885 | |Foreign Reserve Amount |. 352 |. 846 |. 494 |. 222 |. 920 |. 888 |. 885 |1 | | From the correlation matrix we have observed the followings; GDP real Growth has moderate correlation with foreign debt, inflation rate, investment and low degree of correlation with remittance, import, export and very low correlation with GDP per capita. †¢ Foreign debt has strong correlation with. †¢ Inflation rate have strong correlation with. †¢ Investment have strong correlation with. †¢ Remittance inflow has moderate correlation with †¢ Import has strong correlation with †¢ Export has low correlation with †¢ Foreign exchange Reserve has low correlation with Part-D Recommendation & Conclusion Recommendation: The international community inc luding the G-8 must take necessary steps immediately to ensure full Debt cancellation for Bangladesh; †¢ Debts must be cancelled as a matter of justice: creditors must accept their share of responsibility in creating the current debt crisis, and cancel debts on this basis; †¢ A â€Å"MDG-consistent† frame-work of Debt Sustainability should be applied and cancellation must be available to all that need it; †¢ The issue of Climate Change and its adverse effect must be taken into account and additional fund should be released to overcome the adversity linking it with MDG process; †¢ The governments of indebted countries must demonstrate to their citizens that they are spending money well and accountably.But this must not be used as an excuse to impose economic policy conditions or to limit those countries receiving debt cancellation by the donor community; †¢ Rich countries, institutions and commercial creditors must cancel all illegitimate and un-payabl e debts being claimed from all poor countries; †¢ Total Debt stocks must be cancelled, not just Service; debt service cancellation for a limited period is not enough. †¢ Debt cancellation of any kind must not be conditional and it must not be considered again as ODA Conclusion: The study has been conducted with a view to examining the presence of crowding- out effect of public borrowing on the private investment in the Bangladesh economy.To accomplish the task, a model for investment function has been specified and estimated considering public borrowing, GDP and interest rate as independent variables. A long -run relationship has been estimated and analyzed by performing unit root test, co – integration test and an error correction model. The main findings of the study confirm with statistical significance that there is no crowding- out effect in Bangladesh, rather, the crowding- in effect is evident. This result is indeed somewhat paradoxical in terms of convention al wisdom. The study has attempted to offer a rationale for this seemingly paradoxical finding from a macroeconomic point of view.In doing so, it has analyzed a couple of macroeconomic issues and ended up with the conclusion that the presence of crowding- in instead of crowding – out effect can be attributed to such factors as excess liquidity in the banking system, imperceptible government competition with the private sector, relatively sustainable public debt scenario, government expenditure for transfer payment program , significant development expenditure for producing those goods and services which has the potential to discharge positive externalities, government microcredit programs and ADP -black money linkages. The results of the study have important implications for the fiscal management.Existence of excess liquidity and possibility of crowding – in effect together put the fiscal authority in a position to foster private investment and hence economic growth th rough expanding borrowing backed public expenditure. However, the overall criteria that public expenditure authority ought to ensure is the transparency and efficiency in its programs. Moreover, government can avoid unnecessary inflation and external indebtedness by reducing reliance for funds on Bangladesh Bank and foreign sources as long as excess liquidity in the banking system prevails. In view of the perceived limitations inherent in this study, the following aspects may be taken up by future researchers: Decomposing private investment by category and taking each of them as separate dependent variable; †¢ Segregating borrowing by government itself and borrowing by other public sector corporations, and considering them as separate explanatory variables; †¢ Splitting public borrowing by sources (not only banks, NBDC or general public but also Bangladesh Bank and external sources) and taking all of them as explanatory variable s; †¢ Incorporating a dummy variable fo r capturing the issue of economic reform and structural variation between after and before 1990 periods; and †¢ Finally, if possible, carrying on the whole study on the basis of quarterly data to make the analytical framework parsimonious. [pic] ———————– 10