Euthanasia Persuasive Essay - 1577 Words

Sometimes Life Gets Tough Alexus Hughes 5/18/12 Honors Biology 3rd hour Throughout the history of the entire world, things have constantly been changing. Societies have been created and flourished, humans evolved, new technologies have been created, and new theories discovered. However, with so many advancements in the human world, there are some things that cannot be stopped from happening or change. Organisms can get an illness at any moment in their lives from many different causes. Some illnesses cannot be cured, can cause unbearable symptoms or pain, and can cause you to lose your life, such as cancer. If a person is terminally ill, their illness will be the cause of their death no matter how much treatment is received.†¦show more content†¦One of the only places on Earth to legalize physician-assisted suicide is the state of Oregon with a Death with Dignity Act. However, Oregon residents have a peace of mind knowing that if it came down to needing physician-assisted death, they would have it available (Dick and Lindsey). For docto rs, a main concern with euthanasia or physician-assisted suicide (PAS) is the Hippocratic Oath taken in medical school, which says to do no harm (Rogatz). However, disconnecting a ventilator is not seen as murder when the physician does it but prescribing medication that the patient chooses to request and then take is considered harm and murder. Also today, the Hippocratic Oath in its original form is only issued in one medical school in the country. It is argued that patients requesting help with hastening death come mostly from those who have not been treated or diagnosed properly (Asch). â€Å"There is a growing awareness that loss of dignity and of those attributes that we associate particularly with being human are the factors that most commonly reduce patients to a state of unrelieved misery and desperation,† (Rogatz). It would be to the doctor’s discretion and expertise to diagnose and treat the patient to the best of their ability, and the patient could seek as sistance from another doctor if looking for moreShow MoreRelatedEuthanasia Persuasive Essay1064 Words   |  5 PagesAn Avoidable Loss Death by choice or euthanasia is a very controversial subject that is typically one-sided. The very concept of death alone is somewhat a taboo, but controlling death itself is another monster. Death by choice or â€Å"euthanasia† should not be legalized because it promotes defeatism, may lead to the strict procedures to become more accessible to people with non-fatal illnesses, could legitimize murder, or pressure the elderly. When an unfortunate illness befalls, people have a tendencyRead MorePersuasive Essay Pro Euthanasia954 Words   |  4 PagesGrace (JiEun) Lee AP Language and composition Persuasive essay 6 October 2017 Euthanasia legalization The ultimate value of life depends upon awareness and the power of contemplation rather than upon mere survival. Aristotle Being one of the most fervid and controversial topic of all, euthanasia, also known as physician-assisted suicide, has initiated a very sensitive discussion on life and death under one’s ability to choose either side. Euthanasia is defined as a â€Å"the act or practice of killingRead MorePersuasive Essay on Euthanasia963 Words   |  4 PagesEuthanasia - The Right to Decide The definition of euthanasia from the Oxford Dictionary is: â€Å"The painless killing of a patient suffering from an incurable and painful disease or is in an incurable coma.† Consider the words â€Å"suffering,† â€Å"painful,† â€Å"irreversible† and â€Å"incurable.† These words describe a patients terrible conditions and prospects. Euthanasia is known as â€Å"mercy killing† for a reason, it is the most, humane, moral and logical form of treatment available to patients that have no hopeRead MorePersuasive Essay On Euthanasia811 Words   |  4 PagesEuthanasia In present society Euthanasia is a very controversial topic and must be addressed carefully and thoughtfully out of the respect of others. It is a topic that for those who are undecided on what side to pick really do not know which way to swing until it impacts their life. Euthanasia roughly translates into â€Å"a good death†, so for those who chose to end their life by their own decision, and without them having to deal with pain or the inevitable long incurable diseases, thenRead MorePersuasive Essay On Euthanasia973 Words   |  4 PagesEuthanasia, more commonly known as mercy killing, is the action of killing someone in order to end their suffering. This is a way for patients with terminal illnesses to die a peaceful death rather than a painful one; however, it is illegal throughout most of the United States. People have debated for many years whether or not Euthanasia in people should be legal. In the Bible, Exodus 20:13 states that â€Å"Thou shalt not kill.† This verse brings people to believe that mercy killing is an act of defianceRead MorePersuasive Essay Euthanasia1446 Words   |  6 PagesEuthanasia: A Legal Murder According the Merriam-Webster dictionary, Euthanasia is â€Å"the act or practice of killing or permitting the death of hopelessly sick or injured individuals (such as persons or domestic animals) in a relatively painless way for reasons of mercy. This procedure seems appealing to the many people around the world who suffer from terminal illnesses. In the minds of these people euthanasia or doctor-assisted suicide seems like the only escape. As stated in a journal, â€Å"My friendRead MorePersuasive Essay On Euthanasia1430 Words   |  6 Pageswould that answer change if you were suffering? Euthanasia, also known as â€Å"good death,† is the act of putting a living thing to death painlessly or allowing them to die by withholding extreme medical practices, such as withholding food. Then there is involuntary euthanasia: â€Å"a competent person’s life is brought to an end despite an explicit rejection of euthanasia† as stated by Robert Young, the author of Med ically Assisted Death. In the case of euthanasia, many people will argue that it is murder, butRead MorePersuasive Essay On Euthanasia737 Words   |  3 Pageswith no hope of ever leaving their hospital bed, death may seem like a blessing. Euthanasia is the practise of intentionally ending a life to relieve pain or suffering, a practise which is yet to be legalised in too many countries for being seen as illegal and immoral-which is ridiculous. A terminally ill patient or those suffering from deteriorating progressive conditions should always have the option of euthanasia. If possible, everyone would choose a quick and dignified death when the time comesRead MorePersuasive Essay On Euthanasia730 Words   |  3 Pages Euthanasia is sometimes referred to a â€Å"mercy killing.† This controversial topic has been debated for decades. Some argue that euthanasia causes more harm than good, and with modern medicine it is simply unnecessary. Others argue that it is an act of mercy sparing a suffering individual from days, weeks, or months of unnecessary pain and anguish. However, there are moral and ethical questions surrounding euthanasia. It could be argued that killing of any kind is murder. No matter the situation orRead MoreFor Euthanasia Persuasive Essay1663 Words   |  7 Pagespain and suffering. Euthanasia is a word that most people avoid because it is very controversial. But why? Euthanasia is a way of ending the prolonging of suffering, while leaving life in peace. Euthanasia is derived from the Greeks where Eu means good and Thanatos means death. When these phrases are combined the word euthanasia is created; meaning â€Å"good death† (6.) There are three types of euthana sia although only two are authentic forms. The first type is active euthanasia. It is described as

Strategic Planning Process Free Essays

Strategic Planning – Week 1 Keyla (Bolin, Niu) Keiser University MKT531 Marketing Management Dr. Jeff Ritter 03/09/13 Strategic Planning Process Strategic planning is refers to the development of the organization’s long- term goals and put forward into practice (Peter, 2013). Strategic planning system is the strategy, objectives, environmental factors, it is a process about the internal conditions and various elements integration and used to guide the rational allocation of limited resources enterprise for a certain period of time, in order to reach the goal of the management activities Some big enterprise have particular plan for next fifth years. We will write a custom essay sample on Strategic Planning Process or any similar topic only for you Order Now Strategic planning can be separate to three steps, the first step is to determine the objective goals, during the enterprise development, it should be meet all kinds of challenges that successful achieve the goal. The second step is to formulate the planning, after manger determine the goal, manager should consider what measures can be successfully to process the project, this is what I understannd about strategic planning. According to the requirements of the strategic planning, the characteristic about strategic planning can be summarizing by these points (Aldehayyat, Twaissi, 2011): 1. Strategic planning system set broke through the traditional thinking mode which is not planning at present project, but the goals are for enterprise future direction of planning and financial. It pays much more attention to how to adjust business environment and innovation. 2. The settings of strategic planning are often led by very few top management leader directly control. It doesn’t like short-term business plan by a wide range of many people to participate in. 3. The strategic planning system is focus on the changing the external environment and innovation about enterprise, it involved the possibility of market opportunity which is hard to control and requires the enterprise have random and rapid response. 4. The strategic planning plan can be set with external environment, business industry structure, customer and competitor’s information; however, the enterprise manager can understand the company’s internal standards through this process. 5. Strategic planning is a big change plan which is enough to change the enterprise future direction. It is combined with the strategic business goals and strategic key points that will make the enterprise get comprehensive change. The famous managerialist Drucker thinks that the enterprise of top managers’ first priority is to formulate and implement strategy. Through the company’s mission, he thought, to reflect on the basic task of the management, is to put forward such a question: our company is what kind of business? It should reach to what kind of business? To this end, enterprises should develop their strategic target, strategic and plan, make decisions for the future. Clearly, this is actually the strategic planning process. From western developed countries the large enterprise, the management strategy is the framework of the strategic plan system. Is not normative system, of course, also can produce excellent strategy? But, regardless of the manner, the formulation of strategic planning system is intertwined in the processes for management activities, and the strategic management plays an important guiding role. It makes enterprises at all levels of staff have been involved in the process. I. e. , the enterprise employees should participate in the formulation or implementation of the strategic planning system, it’s just them to participate in different degree of prevention is. Each employee in the enterprise bear the plan the worker roles at the same time, also has the characters such as organizer and commander. In this sense, the enterprise strategic planning system plays a sustained and coordinated the important role of strategic management and daily business activities, also prompted enterprise employees to form a strong cohesion and a sense of belonging (Robinson, Pearce, 1988). The effective decision system of corporate strategic planning must start with a strong organization. Enterprises in determining the strategic planning system, the corresponding processes must be designed so that the audit in the enterprise between various departments, as well as the correlation between their activities and planning, influence each other and mutual dependence. Generally speaking, due to the historical development of each enterprise, decision-making habits, thinking mode of different leaders, led to its approach in formulating strategic planning system is also ifferent. The strategic planning system of the scientific program should be determined based on the each company’s actual situation. Enterprise brand, family brand (brand) category and product brand constitute the brand level, different levels of brand both relate to each other, and influence each other (Kraus, Schwarz, 2006). For example General motors, the enterprise brand, Chevrolet is general motors’ family brand (brand) category, and sail (sail) is the product brand. Gm gives customers the brand association is a U. S. auto giant, a global fortune 500 companies, has a good reputation, and so on; The Chevrolet brand is one of the largest brands, gm’s global sales volume since introduced the first product in 1912, total sales has more than 100 million vehicles, market coverage to 70 countries, has a record of sales of a new car every 40 seconds. Chevrolet 2004 global sales of more than 3. million units, in the global sales of every 16 a new car is a Chevrolet, Chevrolet brand to the customer’s brand association is a reliable, pragmatic, intelligent and friendly, full of vitality; And sail (sail) brand, convey the differentiation characteristics of the product. The three levels of brand together, can put enough brand messages to customers, and make customer to sail (sail) this has just set up soon products produce good brand association and brand identity. References Robinson, R. B. ; Pearce, j. A. (1988). Planned Patterns of Strategic Behavior and Their Relationship to Busi- ness-Unit Performance. Strategic Management Journal, 9, 43-60. Peter, J. , ; Donnelly, J. (2013). Marketing Management Knowledge and Skills. New York, NY: McGraw-Hill. Aldehayyat, j. S. ; Twaissi, N. (2011). Strategic Planning and Corporate Performance Relationship in Small Business Firms: Evidence from a Middle East Country Context. International Journal of Business and Management, 6 (8), 255-263. Kraus, S. , Harms, R. , ; Schwarz, E. j. (2006). Strategic Planning in Smaller Enterprises: New Empirical Findings. Management Research News, 29 (6), 334-344. How to cite Strategic Planning Process, Essays

Financial and Managerial Accounting

Question: Discuss about the Financial and Managerial Accounting. Answer: Introduction: The essay will have comparison and contrast among cost-volume-profit (CVP) analysis, break-even (BEP) analysis and contribution margin (CM) analysis. The above three component are the three major areas in managerial or management accounting. Cost Volume Profit (CVP) Analysis is a simplified model in the managerial accounting. In CVP analysis, there is a critical part involved where, the total cost is equal to total revenue, and the total cost includes both fixed cost and variable cost. CVP analysis can define as the effect of output volume on the net profit, expense, and sales (Horngren et al., 2013). CVP analysis is useful for evaluating the targeted sales in units as well as in pounds. CVP analysis has a certain assumption, which is used in the evaluation of break-even analysis. The assumptions include firstly, the product mix ratio will be constant if the company sells more than one type of product. Secondly, the total cost will be categorized into fixed and variable cost. Fourthly, all the produced units should be sold. Fifthly, in a certain range of activity, the behavior of cost and revenue will be continuous. Sixthly, the factor affecting costs in the only reason for changes in the activity. Seventhly, under the CVP analysis sales price, variable price, and fixed price will be constant. Eighthly, under this inventory level at the beginning and the end is not important. Lastly, the productivity and efficiency regarding sales will not change. The cost drivers are the measures of output regarding resources and activities. It is very much necessary to have cost drivers in the organization. For evaluating cost behavior, the cost is based on the volume (Kaplan and Atkinson 2015). Cost driver of the variable cost does not change with the total cost. An example of variable cost is the cost of direct material, direct labor, software license and sales commission. Cost driver of the fixed cost changes with the total cost but within a specific range. Examples of fixed cost are real estate tax, computer equipment depreciation, rents, and space. The basic formula for CVP analysis is [PX = VX + FC+ Profit] Where, P = Price per unit; V = Variable cost per unit; X = Total number of unit produced or sold and FC = Fixed cost. Break-even (BEP) analysis is the point where at the level of sales, revenue will be equal to sales. Break-even Analysis is a useful tool in evaluating the level of production and in the target of the sales mix. BEP analysis will have a close look at the level of fixed cost which will be related to the profit earned by each and every department for sold and produced the unit. The company with low fixed cost will have low BEP. BEP is utilized for determining the relationship among profitability and product lines (Needles et al., 2013). In simple words, BEP is calculated for knowing the minimum level of the unit needs to be produced for covering the expense of the product. Under this fixed cost do not change with the change in level. Variable cost will change with the change in a level of production, or it is directly proportion to sales and production. Break-even is very useful in taking a decision like expansion, operations. Break-even point is measuring point for determining the marg in of safety by comparing the revenue with the units sold for covering fixed and variable cost regarding sales. BEP has certain assumptions which include firstly, the fixed cost will be constant, and do not change with the level of production. Secondly, the average variable cost will be constant, in the range of linearity. Thirdly, it further assumes that produced quantity will be equal to sold quantity. Finally, the sales mix is assumed to be constant where multi products are produced. On the basis of above assumption formula of BEP will be given as, either, BEP (units) = Fixed Cost / (Selling price p.u. Variable cost p.u.) or as, BEP (units) = Fixed cost / (Contribution Margin p.u.). Contribution Margin (CM) Analysis is the part of accounting principal which is helpful in evaluating the profitability of the company or the product. CM examines the margin of residual after subtracting variable expense from selling expense. CM will be excluding all variable expenses form revenue. The analysis will be evaluating offerings for the targeted acquisition which will be part of the diligence process (Warren et al., 2013). Contribution Margin per minute is also called throughout per minute. Contribution Margin will be considered as the fraction of sales that will be contributing the offsets of fixed cost. Contribution Margin is the each sale unit which is added to profit for giving the slope of the profit line. Contribution Margin is depicted regarding margin. Contribution Margin will be calculated in three forms: ratio, per unit and total. Formula of the Contribution margin is given as, Contribution Margin = Sales Variable cost. However, by contrasting all the BEP Analysis, Contribution Margin and CVP Analysis, it can be said that the cost volume profit (CVP) analysis is a simplified model in the managing accounting. On the other hand, the BEP Analysis is a part of managerial accounting and financial accounting and the contribution margin (CM) analysis is a part of the accounting principal. In case of the Cost Volume Profit Analysis, the entire sales price, variable price and the fixed price will be constant but for the BEP Analysis, the fixed cost is only constant. On the contrary, in case of contribution margin, there is no effect on the fixed cost. The product mix ratio will be constant for Cost Volume Profit analysis, the sales mix will be constant for BEP analysis and the contribution margin has no effect. In case of Cost Volume Profit (CVP) Analysis, the variable cost does not change with total cost but for BEP analysis the variable cost changes with total cost and with level of production. On the othe r hand, for the contribution margin the variable cost changes with total cost and with level of production. Fixed cost changes with total cost in case of CVP analysis and fixed cost remains constant with the level of production and with the total cost in case of BEP analysis. Nevertheless, in case of contribution margin, it has no effect on the fixed cost. CVP analysis can be defined as the effect of output volume on the net profit, expense and sales. BEP is calculated for knowing the minimum level of the unit needs to be produced for covering the expense of the product. However, the Contribution Margin is depicted regarding the margin. On the overall, it has been observed that BEP Analysis, CVP Analysis, and Contribution Margin are an essential part of maintaining the accounts as well as for measuring the performance of the product as well as the company. Reference list Horngren, C.T., Sundem, G.L., Schatzberg, J.O. and Burgstahler, D., 2013.Introduction to management accounting. Pearson Higher Ed. Kaplan, R.S. and Atkinson, A.A., 2015.Advanced management accounting. PHI Learning. Needles, B.E., Powers, M. and Crosson, S.V., 2013.Financial and managerial accounting. Nelson Education. Warren, C.S., Reeve, J.M. and Duchac, J., 2013.Financial managerial accounting. Cengage Learning.

Modern Slavery In The USA free essay sample

I became a student at the university back in 2010 and I was interested in nursing and psychology. Both these fields of studies required me to take two English classes and English W132 was one of them. I knew it was going to be similar to W131 but not as hard. When one hears about a writing class, they do not think that it can be very time consuming and involving a lot of research work and studying. Human trafficking has been a major social injustice and also considered to be a heinous crime. We as people have come in contact with a person who is a victim but we do not recognize that that person is being held captive and used as a slave laborer. Human trafficking is not allowed in the united states but just because it is the law does not mean that it does not exist. Topic and question at Issue This topic interests me because I watch a lot of television and see the anguish and torture people go through all around the word when they fall victim of human trafficking. We will write a custom essay sample on Modern Slavery In The USA or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It hurts a lot that I cannot help but just taking notice and deciding to write about it makes me learn more about the issue and I can be able to educate my peers about it. This is a human rights issue because it violates the rights of people to have freedom. We have a right to own our own property, live freely and enjoy life’s basic needs but the traffickers deny their victims this right. They hold them hostage and treat them like the scum of the earth. We are all equal and everyone deserves a chance to be in a fair and just world and when this is taken away, a person is like a slave in a place that is supposed to protect them. As I write my last argument for this class, my question at issue is â€Å"has the united states done enough to combat human trafficking or do they need to enact stricter laws and penalties to protect the victims? † this question has really evolved since I started research on my paper and the more research I did, the more the question became more important and I had to find answers to it. It surprised me to find out that in the united states, human trafficking has not always been in the fore front of issues. Yes, laws have been set forth to protect the victims but they have not been properly enforced and this is due to our government officials failing us. The people who are sworn y=to protect and serve the citizens, especially law enforcers have been marred by greed and have been taking bribes from the traffickers. This in turn has made the victims so scared to report the torture and abuse they go through and end up just suffering in the hands of their captors. Enthymeme and Argument After much research, I ended up with the following enthymeme â€Å"the United States may need to do more to combat human trafficking because the laws are frequently not being enforced properly, it is continuously increasing, and it is often due to weak penalties. † After reading all the instructors comments and doing more research on my topic, I realized that the above enthymeme is what I needed to focus on when I am writing my last argument. I added qualifiers to make my claim more believable. I need my audience to know that I present this claim with confident uncertainty because I am cautious and critical about the data and research I am presenting. The qualifiers I used are may, frequently and often and they show the reader that my claim does have limitations due to the research I have conducted. They also show my audience that my claim can be argued because the qualifiers are making them believe that my claim is valid. It is about time that the United States came up with better laws and stiffer penalties to combat human trafficking. There are some laws that have been put in place to stop this type of social injustice but not enforced effectively. At this time, the question at issue is not whether the United States has done enough to stop the trade of humans but simply â€Å"Should the United States do more to combat human trafficking? † I came up with this question after reading a lot of literature on human trafficking and finding out that it is still an ongoing issue which has never been abolished. We are in the 21st. century and have not yet found a solution to combat human trade which is a heinous crime against humanity. After researching a lot on this topic and doing some soul searching, I decided to take the following position; human trafficking should be illegal because it’s a grave social injustice against humanity. To back up this claim of policy, I took to the internet to make myself more familiar with the issue. There were a lot of  journal articles that were discussing the different ways that the government has tried to stop human trafficking but most of them were concluding that the laws were not tough enough and that some government officials were involved in the trade. Human trafficking is the worst crime that can be committed by anyone because it denies a person the right to freedom and equality making it a grave social injustice. Another reason is that I had to revisit the definition of human trafficking from all angles. I had to take into account child labor, forced labor, sex labor of men, women and children, and the factors that lead to trafficking. I chose to pick the UN Protocol to Prevent, Suppress, and Punish Trafficking in Persons in Palermo, Italy (2000) definition of human trafficking which states that it is â€Å"the recruitment, transportation, transfer, harboring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation† (Gozdziak, and Collett 6). This definition does not state that human trafficking only affects one gender or group of people but instead includes all human regardless of age, gender and sex. Some of my sources have listed different definitions of human trafficking and mostly concentrating on women and young girls. This paper is written to an audience with a background of social justice issues and that also includes my classmates and instructor. I believe that we all share the same assumption that human trafficking should be illegal because it is a heinous crime against humanity while denying them the rights and freedom that are supposed to enhance their well-being. The victims undergo cruel and unfair treatment which none of us can imagine going through and for this reason, I intend to persuade my audience that my paper is relevant and credible. It is going to have clear reasons to back up my claim from all the research work I have conducted. My audience will need to answer the question of whether the government has already done enough to stop human trafficking. I need to be careful when talking about the laws enacted because I will be addressing this issue happening in the United States even if I am only a permanent resident instead of being a citizen. Some of my audience members might feel like I am interfering with their governmental policies and I am not even originally from here. I also need to make my paper easy to read and straight to the point instead of trying to make them search for the hidden massages. The best evidence that I have found so far is a lot of literature written about this issue, especially peer reviewed articles written by renowned authors and researchers. Most of the literature articles are from published academic journals from people who have dedicated their research solely on human trafficking. Most of these articles support my claim that asks the question â€Å"which laws are set forth to stop human trafficking? † The research articles that I have gathered have a lot of evidence and explanations on the issue that United States has not enacted better laws to combat human trafficking. They do support my claim that not enough has been done to stop this ongoing problem and also show that the laws enacted are not being fully enacted by the government officials. Some counterarguments will arise while writing my final paper and the biggest one I have so far is that there is not enough research conducted in the past or present for me to come to my conclusions and fully support my claim. I will need to answer the question of â€Å"what if the united states has already done enough to stop human trafficking? † Another one will be that the United States has put forth enough resources to stop human trafficking but humans are the ones subjecting themselves to this kind of atrocities because they are trying to run from their home countries to better themselves in the United States hence making the crime a difficult one to prosecute. Most of my articles will be the evidence I use in the rebuttal to show that the government is the one that has failed to enact stricter measures to curb this illicit trade of humans. RESOURCES At the moment I have twenty sources that all discuss human trafficking and the laws that have been set forth. Most of my sources are from the internet via online peer reviewed journals, online magazines and publications, organizations that are against human trafficking, and online articles from accredited authors. I used the library databases from my school (IUPUI) and the one I found to be very helpful was Academic Search Premier. One of my sources is a book written specifically to address human trafficking in the United States. Most of the sources are less than ten years old and some have been updated lately making them current. My authors are also researchers who have done a lot of work about human trafficking and have great knowledge about the topic and this makes my sources credible. Most of them have written several articles about the issues that have been peer reviewed. It has been hard to find a wide range of articles that talks about the stiffer penalties needed or already in existence and that is one area I need to concentrate on more in the coming weeks. Also, most of my sources have the same laws enacted which I found very repetitive and I need to do more research on what other laws are there to protect the victims and end human trafficking and whether the government is currently trying to enact new laws. AUTHOR QUALIFICATIONS I am a senior and psychology major at Indiana University Purdue University Indiana. I believe that I am the right person to write this paper and present my argument because, as a future psychologist or psychiatrist, my main focus will be in the wellbeing of others. I plan to use all that I learn in school to help the victims of human trafficking live a better life while improving their mental health and behaviors. I am also an immigrant who moved to the United States almost sixteen years ago and I have seen a lot of human trafficking around the world especially in Africa where I come from and also in the United States. I am also one of the people who would have never believed that human trafficking was in the United States until I started this research. I live in a town (Indianapolis), where there are always raids set to bust human trafficking stings and I feel that my personal interest and intense research on this topic will help me support my claim. CONCLUSION My biggest concern as I prepare for the last segment of this course is whether my research is relevant with the question at issue and whether my evidence backs up my claim. I have tried very hard to follow instructions and try not to mix my ideas up with irrelevant research and my worry is that I might still fall short. I plan to spend more time doing research on my issue and also visit the writing center before it is too late. I need to find more credible sources and evidence which will shed light about the laws and penalties relating to human trafficking. I am so scared that I may not be able to pass this class and I have thought of dropping it and taking it in another school but I know if I do so, it will just push me back from graduating and also make me lose hope. One day at a time, that’s my motto and I also want to believe that I can be able to improve on my final portfolio. Agence France-Presse EU Nations Warned to Act As Human Trafficking Worsens. SIRS Issues Researcher. Apr 15 2013. Web. 24 Sep. 2013. This article has no named author. The article is an informative piece with the European Union member countries as the intended audience. The article was written to warn the EU-27 about a looming deadline in getting tougher sanctions against human traffickers or the countries would face sanctions. This article was written from Brussels and it claims that the number of forced labor in the EU has increased greatly and that because of cheap labor, it is going to worsen. It calls out the member states by saying that most of them have failed to enact tougher sanctions as agreed before and that human trafficking has increased 18% from 2008 to 2010. It calls for tougher laws like 5 years in prison but if the act has aggravated circumstances surrounding it, it calls for 10 years in prison. According to the author Men, women and children are being sold for sex, hard labor forced into marriages, domestic servitude, begging, or have their organs removed for trade. All these crimes against humanity have to be stopped and abolished and the article calls for the 27 countries to toughen their laws. This article will be good in my research because it talks about the tougher sanctions which are being put forward to end human trafficking and the consequences countries face if they do not comply. Bales, Kevin, and Ron Soodalter. The Slave Next Door: Human Trafficking and Slavery in America Today. Berkeley: University of California Press, 2009. Kevin Bales is the author of Ending Slavery and Disposable People, both from UC Press. He is also Co-Founder of Free the Slaves, Washington DC, and Professor of Contemporary Slavery at the Wilberforce Institute for the Study of Slavery and Emancipation at the University of Hull. He is the worlds leading expert on contemporary slavery. Ron Soodalter, historian, folklorist, and lecturer, is the author of Hanging Captain Gordon: The Life and Trial of an American Slave Trader, as well as articles on the historic and modern slave trade, the Civil War, and the American West. A respected Lincolnian scholar, he serves on the Board of the Abraham Lincoln Institute. The book was written to expose human trafficking in the United States. It details how the victims are everywhere we go from restaurants serving as cooks and dishwashers to the people working in our own houses. It talks about the way we need to come together to combat human trafficking and slavery. Davis, Michael Cory. HUMAN Trafficking. Hispanic 20. 8 (2007): 46-48. Academic Search Premier. Web. 25 Sept. 2013. Michael Cory Davis, founder of The Journey Film Group, is an actor/filmmaker/activist. He has been involved in the fight to end modern day slavery since 2003 when he became the Goodwill Ambassador for the organization Face to Face Bulgaria, which works to combat trafficking. Michael wrote, directed and produced the award-winning film Svetlana’s Journey, a true story about a Bulgarian girl forced into prostitution. In this article the author talks about trafficking in the U. S. A and how the captors lure their victims and get them to come with them with a lot of promises about their future. He also details the torture they endure and how they are held captive and exploited. He points out that it largely happens here and the reasons why it happens and the people involved especially the wealthy, educated and trusted people in society. Feingold, David. â€Å"Human Trafficking†. JSTOR; Foreign Policy, No. 150 (Sep. Oct. , 2005), pp. 26-30, 3230. Aug. 2005. Web. 28 Sept. 2013. Feingold is director of the Ophidian Research Institute and international coordinator for HIV/AIDS and Trafficking Projects for UNESCO Bangkok. The author is trying to warn people that if they continue to fight the war on human trafficking, they may end up losing. He is mostly against what all the other authors are saying about ending human trafficking. He strongly believes that trafficking is not about organized crime, prosecution, sanctions by the U. S. A or tightening borders. Gozdziak, M. Elzbieta. , and Elizabeth A. Collett. Research on Human Trafficking In North America: A Review of Literature. International Migration 43. 1/2 (2005): 99-128. Academic Search Premier. Web. 23 Sept. 2013. Dr. Elzbieta M. Gozdziak is the Director of Research at the Institute for the Study of International Migration (ISIM) and Editor of International Migration, a peer reviewed, scholarly journal devoted to research and policy analysis of contemporary issues affecting international migration (Georgetown Uni). Elizabeth Collett is European Policy Fellow at the Migration Policy Institute, and Senior Advisor to MPIs Transatlantic Council on Migration. She is based in Brussels and works on the International Program, with a particular focus on European policy (Flad). The authors wrote this article to map out research that currently exists and make note of research gaps that need to be filled in order to establish appropriate and effective policies and programs for trafficked victims (Gozdziak). Hodge, David R. Sexual Trafficking In The United States: A Domestic Problem With Transnational Dimensions. Social Work53. 2 (2008): 143-152. Academic Search Premier. Web. 24 Sept. 2013. The author is an associate professor in the School of Social Work at Arizona State University. He is also a senior nonresident fellow with both the Institute for Studies of Religion at Baylor University and the Program for Research on Religion and Urban Civil Society at the University of Pennsylvania. Dr. Hodge is an internationally recognized scholar in spirituality and religion. He has also written widely on social justice, cultural diversity, and social inclusion (asu. edu). This article seeks to increase readers awareness and knowledge of sexual trafficking in the United States (Hodges). The author is making the audience aware of the heinous crimes which are happening in our own backyard and how even the law enforcement is involved. He tries to make suggestions of how to curb trafficking and end it and he also talks about how the laws can be made stricter to end it. Kapstein, Ethan B. The New Global Slave Trade. Foreign Affairs 85. 6: 103-115. Academic Search Premier. Nov/Dec. 2009. Web. 1 Oct. 2013. The author is a Paul Dubrule Professor of Sustainable Development at INSEAD in Fontainebleau, France, and a Visiting Fellow at the Center for Global Development, in Washington, D.C. His most recent book is Economic Justice in an Unfair World: Toward a Level Playing Field. The author argues that the United States government offers too many incentives to human traffickers and states that support them in order to market humans and promises too little action against the trafficking. He states that most government officials cooperate with traffickers and are afforded a high pay due to the high profits of the trade. He writes this article in hopes of the general public gains knowledge about the slave trade here in the United States. Kara, Siddharth. Supply And Demand. Harvard International Review 33. 2 (2011): 66-71. Academic Search Premier. Web. 23 Sept. 2013. Siddharth Kara is an author, activist and one of the worlds foremost experts on modern day slavery and human trafficking. He is an Adjunct Lecturer in Public Policy and Director of the Program on Human Trafficking and Modern Slavery at the Kennedy School of Government at Harvard University and also a Visiting Scientist on Forced Labor at the Harvard School of Public Health. The author’s article explains how human trafficking is more in demand and profitable now than back in the day. It details how the victims end up being captured, transported and sold around the world and what they go through once in the hands of their owners. Kessler, J. â€Å"Human trafficking and sexual exploitation of children. † Catholic Woman, 33, 15. Proquest. Mar/Apr 2007. Web. 25 Sept. 2013. The author is a legislative commission chair For the National Council of Catholic Women. She writes this article to inform the people of all the steps that the government and non-governmental agencies with a particular focus on catholic groups, are taking to combat human trafficking and exploitation especially of children. Kiener, Robert. Human Trafficking and Slavery. CQ Global Researcher 16 Oct. 2012: 473-96. Web. 24 Sept. 2013. Robert Kiener is an award-winning writer whose work has appeared in the London Sunday Times, The Christian Science Monitor, The Washington Post, Readers Digest, Time Life Books, Asia Inc. and other publications. He holds an M. A. in Asian Studies from Hong Kong University and an M. Phil. in International Relations from Cambridge University (CQ). Kiener’s purpose is to inform the general audience about the ongoing battle to stop human trafficking and slavery. The author talks about the struggles people are facing with forced prostitution and forced labor in many countries around the world including western countries. He talks about how the laws put forward to protect the people are not strong enough and a lot of countries are not following the laws or trying to abolish the social crimes. He talks about the few laws which have been set forth but do not have stiffer penalties when broken. He also informs us about the 32 billion dollar industry and that â€Å"the biggest obstacle to halting the trade in human beings is the lack of political will† (CQ). This article is very important and basically the foundation of my research. It explains all about human trafficking and slavery and gives accounts of the problems facing abolishment of these social crimes. It also talks about the countries still involved and those which are not helping at all. Potocky, Miriam. The travesty of human trafficking: A decade of failed U. S. policy. Social Work 55(4), 373-5. Proquest. Oct. 2010. Web. 29 Sept. 2013. The author is a Professor in the Florida International University School of Social Work. Dr. Potocky is a specialist in refugee resettlement, human rights, international social work, and research methodology. She has authored over 50 publications, including Best Practices for Social Work with Refugees and Immigrants. The article focuses more on the failed policies and prevention of human trafficking in the united states. It talks about how politics plays a role in the enactment of better laws to combat human trafficking and how the government cannot even have statistics right. Tran, Jonathan. Sold into Slavery. He is working on a book about the Vietnam War, theology and memory. The author talks about the impact human trafficking/slavery has caused to the point where the Vatican has called it a worse crime than The Transatlantic Slave Trade. He talks about how a lot of people are surprise that modern day slavery exists and the factors that contribute to it. He talks about how the trafficking begins and how he believes that it is declining.

Academy Awards Trivia and Interesting Facts

Academy Awards Trivia and Interesting Facts Whether youre a classic movie buff or a blockbuster film fanatic, the yearly Academy Awards is likely to be a big deal for you and your friends. At your next Oscars party, test everyones knowledge with trivia questions on the award ceremonys history and fun, little-known facts. The Very First Oscar Winner The first person to receive an Academy Award did not even attend the first Academy Awards ceremony. Emil Jannings, the winner for Best Actor in the 1927-28 Academy Awards, had decided to go back to his home in Germany before the ceremony. But before he left for his trip, Jannings was handed the very first Academy Award. The Only Oscar to Win an Oscar Oscar Hammerstein II won the Oscar for his song, The Last Time I Saw Paris, in the movie Lady Be Good (1941). X-Rated Winner Midnight Cowboy (1969), the winner of the Academy Award for Best Picture, is the only X-rated movie to win an Oscar. Sibling Rivalry Ethel and Lionel Barrymore are the only brother and sister to ever win Academy Awards for acting. Lionel Barrymore won an Oscar for Best Actor in A Free Soul (1931). Ethel Barrymore won an Oscar for Best Actress in None But the Lonely Heart (1944). The First Color Movie to Win Best Picture Gone With the Wind (1939) was the first movie filmed in color to win the Best Picture award. Posthumous Nominations There have been a number of people nominated for Academy Awards after their death. However, the first person to be nominated posthumously and actually win was screenwriter Sidney Howard for Gone With the Wind (1939). James Dean, on the other hand, has been the only actor to be nominated twice after death; once for Best Actor in East of Eden (1955) and again the following year for Best Actor in Giant (1956). Winners Who Didnt Speak on Camera Three actors have won Academy Awards for playing characters that did not utter a single word throughout the entire film. Jane Wyman won the Best Actress award for her portrayal of Belinda, a deaf mute, in   Johnny Belinda (1948). Sir John Mills played the mute village idiot in Ryans Daughter (1970), for which he won the Best Supporting Actor award. Most recently, Holly Hunter won the Best Actress award for her portrayal of the mute Ada McGrath in The Piano (1993). The Most Frequent Hosts The list of hosts for the Academy Awards ceremony is dotted with prestigious names such as Will Rogers, Frank Capra, Jack Benny, Fred Astaire, Jack Lemmon and David Letterman. However, one man has dominated Academy Award history; Bob Hope hosted a whopping 18 Academy Award ceremonies. Billy Crystal, who has hosted the ceremonies 8 times, ranks second as the host with the most. Johnny Carson comes in third after hosting 5 Academy Award ceremonies. How the Oscar Name Came About The Oscar statuettes official name is the Academy Award of Merit. The name Oscar is actually a nickname that has been around for decades with unclear beginnings. Though there are several different stories that claim to tell the origin of the nickname Oscar, the most common attributes the nickname to a comment made by Margaret Herrick. Herrick, as the story goes, worked as a librarian at the Academy and upon first seeing the statuette, commented that the statuette looked like her Uncle Oscar. No matter how the nickname started, it became increasingly used to describe the statuette in the 1930s and was officially used by the Academy beginning in 1939. A Winner Who Was Never Nominated The only Academy Award winner who won but was never officially nominated was Hal Mohr for Best Cinematography for   A Midsummer Nights Dream (1935). Mohr was the first and only person to win via a write-in vote. When the Phrase And the winner is... Was Discontinued At the 61st Academy Awards, held in 1989, the Academy decided to replace the trademark phrase And the winner is... with the phrase And the Oscar goes to... Did you notice? The Streaker During the Academy Awards ceremony held on April 2, 1974, a man named Robert Opal ran across the stage naked, flashing the peace sign. David Niven had been on stage to introduce the Best Picture category when the streaker ran behind him. Thinking quickly on his feet, Niven remarked, The only laugh that man will ever get in his life is by stripping ... and showing his shortcomings.† A 20-Year Delay in Award Eligibility In a strange turn of events,  Charlie Chaplins movie Limelight, which was produced in 1952, won an Academy Award in 1972- 20 years after its first release. According to the Academys rules at the time, a movie could not be considered for an Academy Award until it had played in Los Angeles. When Limelight finally played at a theater in Los Angeles in 1972, it became eligible for an award. Winners Who Refused the Awards Honor The Academy Awards are one of the highest honors one can receive in the movie business. Yet, 3 people have refused the honor. The very first person to refuse an Oscar was Dudley Nichols. Nichols, who had won Best Screenplay for  The Informer  (1935), boycotted the Academy Awards ceremony because of ongoing conflicts between the Academy and the Writers Guild. For his dramatic portrayal of the World War II general in  Patton  (1970), George C. Scott won the Academy Award for Best Actor. Scott refused the honor, stating that the awards ceremony was a  two-hour meat parade. Marlon Brando also refused his award for Best Actor for  The Godfather  (1972). Brando, who said he refused the award because of the discrimination toward Native Americans by the U.S. and Hollywood, sent a woman supposedly named, Sacheen Littlefeather, to collect his award. It turned out later that the woman was really an actress named, Maria Cruz. The Oscar Statuette The Oscar statuette stands at 13 1/2 inches tall and weighs 8 1/2 pounds. It depicts a knight, holding a sword, standing on a reel of film which has five spokes, representing the 5 original branches of the Academyactors, directors, producers, technicians, and writers. In 1949, the Academy started to number the statuettes, starting with number 501. Award Ceremony Postponements Contrary to the old adage, the show must go on, the Academy Awards ceremonies have been postponed 3 times. In 1938, the ceremony was delayed a week because of flooding in Los Angeles. In 1968, the Academy Awards ceremony was pushed back 2 days because of  Martin Luther King Jr.s  funeral. The Academy Awards ceremony was pushed back a single day in 1981 because of the  assassination attempt  on President  Ronald Reagan. The First Televised Academy Awards On March 19, 1953, the Academy Awards ceremony was telecast for the first time across the United States and Canada. Then 13 years later on April 18, 1966, the Academy Awards were broadcast in color for the first time. Both of these ceremonies were hosted by Bob Hope. Plaster Oscars Rather than the usual metal Oscar statuettes, the Academy Awards handed out plaster Oscars during World War II in support of the war effort. After the war, the plaster Oscars could be traded in for traditional metal ones. 11 Nominations, 0 Wins In Oscar history, 2 films  tied  for the record of the most nominations without a single win. Both  The Turning Point  (1977) and  The Color Purple  (1985) received 11 Oscar  nominations but won not a single Academy Award. Sisterly Competition Twice in Academy Awards history, 2 sisters have been nominated for the same category during the same year. For the 1941 Academy Awards, sisters Joan Fontaine (Suspicion) and  Olivia de Havilland  (Hold Back the Dawn) were both nominated for the Best Actress award. Joan Fontaine won the Oscar. Jealousy between the two sisters continued to escalate after this and the 2 have been estranged for decades.   At the 1966 Academy Awards, a similar thing happened. Sisters Lynn Redgrave (Georgy Girl) and Vanessa Redgrave (Morgan: A Suitable Case for Treatment) were both nominated for the Best Actress award. However, this time, neither of the sisters won.

Cranberry Morpheme Definition and Examples

Cranberry Morpheme Definition and Examples In morphology, a cranberry morpheme is a  morpheme (that is, a word element, like the cran- of cranberry) that occurs in only one word. Also called a unique morph(eme), blocked morpheme, and leftover morpheme. Similarly, a cranberry word is a word that occurs in only one phrase, such as the word intents in the phrase all intents and purposes. The term cranberry morpheme was coined by American linguist Leonard Bloomfield in Language (1933). These are other closely related and sometimes confused terms with cranberry morpheme: Bound Morpheme and Free MorphemeComplex WordIdiomRoot Compound and Synthetic Compound Examples and Observations The bound morphemes in neo-classical compounds have an identifiable meaning, but there are also morphemes that have no clear meaning. In the word cranberry, the part berry is identifiable, and this makes us interpret the word cranberry as denoting a particular kind of berry. Yet, cran- has no particular meaning. . . . This phenomenon of cranberry morphemes is widespread, and is to be expected since complex words can lexicalize and thus survive, even though one of their constituent morphemes has disappeared from the lexicon. . . .Cranberry morphemes like English cran- . . . thus form a problem for an exclusively meaning-based definition of the notion morpheme.(Geert Booij, The Grammar of Words: An Introduction to Morphology, 2nd ed. Oxford University Press, 2007) Morphemes and Meaning Is it possible for a bound morpheme to be so limited in its distribution that it occurs in just one complex word? The answer is yes. This is almost true, for example, of the morpheme leg- read in legible . . .: at least in everyday vocabulary, it is found in only one other word, namely illegible, the negative counterpart of legible. And it is absolutely true of the morphemes cran-, huckle- and gorm- in cranberry, huckleberry and gormless. . . . A name commonly given to such bound morpheme is cranberry morpheme. Cranberry morphemes are more than just a curiosity, because they reinforce the difficulty of tying morphemes tightly to meaning. . . . (You may have noticed, too, that although blackberries are indeed blackish, strawberries have nothing obvious to do with straw; so, even if straw- in strawberry is not a cranberry morpheme, it does not by itself make any predictable semantic contribution in this word.)(Andrew Carstairs-McCarthy, An Introduction to English Morphology: Words and Their Structure. Edinburgh University Press, 2002) Is Cran- Truly a Cranberry Morpheme? [Peter] Hook reported that cran itself was not a cranberry morpheme: he had seen cranberry harvesting and could vouch for the abundance of cranes as spectator-participants in the process, hence the term cranberry.(Probal Dasgupta, Rephrasing the Question of Complex Predicates in Bangla: A Biaxial Approach. Annual Review of South Asian Languages and Linguistics: 2012, ed. by Rajendra Singh and Shishir Bhattacharja. Walter de Gruyter, 2012) The Once-Over An example [of a cranberry word], from many, is the word once-over. If you give someone or something the once-over you make a quick inspection, with a view to deciding on the merits of the person or whatever it may be. The word once-over clearly makes a semantic contribution to the expressions in which it occurs; its meaning, presumably, is quick inspection. To this extent, give someone/something the once-over is interpreted in accordance with the dictionary meaning of once-over. On the other hand, once-over is not freely available to occupy the N-slot of a noun phrase; the word is virtually restricted to occurring in the cited phrase. (Note, in this connection, the virtually obligatory use of the definite determiner.) The phrase, along with its conventional meaning, has to be learned as such.(John R. Taylor, The Mental Corpus: How Language is Represented in the Mind. Oxford University Press, 2012) More Examples of Cranberry Morphemes (or Bound Roots) The morphemes luke-, cran-, -ept, and -kempt . . . appear only in lukewarm, cranberry, inept, and unkempt. We dont use the term lukecold, nor do we use cran- anywhere other than attacked to berry, and we dont ever say He is an inept writer, but she is very ept, or Her hair looked kempt. So the rules that attach un- to -kempt or luke- to warm are not productive; they derive only these words. We will also define morphemes such as cran-, luke-, -ept, and -kempt as bound roots because they cannot stand alone as free morphemes and because they dont occur as affixes in other English words.(Kristin Denham and Anne Lobeck, Linguistics for Everyone. Wadsworth, 2010)

ASPECTS OF CONTRACT AND NEGLIGENCE FOR BUSINESS -2- Essay

ASPECTS OF CONTRACT AND NEGLIGENCE FOR BUSINESS -2- - Essay Example Similarly, if Paul refuses to pay against the same, he is also liable to be breaching the obligations of the agreement between the two. Furthermore, supplying sub-standard material and making unnecessary delays also comes under the description of breach of the contract. When a party repudiating its promise before time for performance arrives; for instance, Angelina announces to marry John the next year. However, she renounces the same before the beginning of the next year. It is breach of contract on the part of Angelina, and John can claim damages for the same. Hence, obligations of contract bind the parties to fulfil the responsibilities of their part, non-compliance of which creates liabilities on them. Section 37 of the Act discusses the liability of the parties in these words: â€Å"The parties to a contract must either perform or offer to perform their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or any other law.†3 Illustration: A offers B his services for fixing air-condition system at his office, and B accepts the offer against the consideration of worth  £ 5000. However, the system collapses after two days of its fixing causing a short circuit in the office and loss of  £ 20,000. Since A had not examined his system properly, he has committed liability negligence on his part. On the other hand, tort of negligence appears at the moment when individual rights of one or more persons are violated. â€Å"A tort is a civil wrong for which a remedy, usually compensation, is available to the wronged person in the civil courts.†4 Hence, tort actually serves as a civil wrong, which affects the private legal rights. â€Å"Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing

Freshmen Should Be Required to Live in the Dorms Essay

Freshmen Should Be Required to Live in the Dorms - Essay Example As well as Studies show, students who live on campus perform better academically than students living at home, said Michael Coakley, associate dean of student affairs and executive director of housing. Coakley added â€Å"National and institutional studies have continually shown that students who live in school housing for their first year of study have significantly higher retention rates, graduates according to the school calendar, and have greater involvement in campus life,† Campus housing not only provides academic and social benefit to the freshmen but also has advantages of free and available food, just like home even though it does not taste good like home food, but at least they know they have available ready-made food when needed. Also, there is a warm place to live, sleep, study and save, oppose to the student who stay outside campus, they will have to balance between studies and household chores like buying and cooking food, and paying bills i.e. electricity, water . One cannot serve two masters at a time (studies vs. household chores); therefore, freshmen students should live in campus in order to save resources like money and use it for something else like business, clothing, partying, or donations. Living outside campus especially as a freshman, students miss campus life experiences like dorms offer support and learning experiences, in such a way students who wants to study late in the libraries can do so, without worrying about taxi, train fares, or security like mugged, raped, or worse murdered on the way home. I believe living at school makes one socially prepared for life since they will be able to learn to be independent away from their parents, meet many people with a common interest as theirs, above all a friend a person make in college will often be friends for life. Living in campus will also allow them to join extra curriculum activities like clubs and sports, which allow students to step out from their comfort zone and experience new interest giving room for social connection and bonding. Though, many students complain about overcrowding in dorms, annoying roommates, noises and denial of freedom, freshmen are young adults, and they need to know that in every institution globally there are different individuals with different personalities, beliefs and cultures. Therefore, in order to survive, they need to deal with different people and situation. Nevertheless, rules are everywhere to be followed. Young people need rules, which remind them of their misleading acts, being shown where to live is not some kind of juvenile treatment and lack of freedom to choose, but on the brighter side, it works like a charm by reducing financial hardship to students who came from other states or under scholarships/ bursaries. Students should live in their dormitories during the first year because it allows them to network with other students easily. It has been proven through various social science studies that students with strong networking skills prove to be more successful in their careers as opposed to independent or isolated individuals. Networking also provides students with skills on problem solving and decision making in issues they face in life. Therefore, to obtain knowledge for lifelong success individuals need to live with career-oriented colleagues. The disadvantages of campus housing are some students may be

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. 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