Knowledges in Economics
Choose your interests from a vast range of topics
Managerial Economics
Managerial Economics (Mint)
Raparthy Rahul
Money laundering and Migration
The amount of money sent back home by migrants working abroad has grown rapidly in recent years -according to the World Bank it doubled in the five years from 2002, reaching at least $350bn. But the mechanisms used to transfer money can also be used for money laundering, and are of increasing concern to law enforcement agencies. Some estimates suggest that half of all money transfers from migrants living abroad are done outside the formal sector - that is, banks or money transfer firms. Of course, most migrant transfers are for legitimate reasons. But the vast volume of informal transfers has made it much easier to hide illicit transfers, whether they relate to criminal activity or terrorist finance. There are two reasons for the growth of the this informal sector. The first is the expense of transferring money abroad for poor individuals. The cost, especially for small amounts sent to nations with a less well-developed financial sector, can be as much as 20% of the sum, according to the World Bank. Secondly, there are a number of countries, for example in parts of Africa and the Middle East, where the banking system is not highly developed and so cash transactions are common. As directly sending cash, or its equivalent in gold or diamonds, is potentially risky, this has led to the widespread use, in Muslim countries, of the hawala system. Hawala is an informal system of money transfer based on trust, which uses a system of money brokers based throughout the Middle East, Africa and Asia, with links to others in major cities across Europe and North America. Under hawala, no money actually crosses international borders. Instead, a system of complex swaps is employed, using food, fuel, electronics or gold as a way of balancing the books between operators - hawaladas - in different countries. The OECD's Financial Action Task Force says these "alternative remittance systems" are widely used by terrorist finance, because of the "level of anonymity and rapidity" they offer, and for "cultural" reasons. They say that they have the additional attraction of "weaker and/or less opaque record-keeping" and in many places "less stringent regulatory oversight". This might particularly apply in failed states, such as Somalia, or large parts of Afghanistan. Finding terrorist funding in the huge volume of international money transfers may seem akin to looking for a needle in a haystack. The volume of normal transactions dwarfs the amount of money needed to carry out terrorist actions. The OECD estimates that the direct operational costs of major terrorist actions like the London and Madrid bombings were no more than $10,000 to $12,000 (£6,751 to £8,100). This level of funding - or even the Bali bombing, estimated to have cost $50,000 - could easily be incorporated into the hawala system. But the OECD says terrorist networks need other longer term funding to support their operations and logistics base - and so will also turn to money laundering, criminal activities, and the use of charities as conduits for money. Regulators, particularly in Europe, are beginning to tighten up the supervision of all types of financial institutions, formal and informal. An EU directive comes into force in 2009 that will compel financial companies above a certain size to become registered with the FSA and to put up bonds proportionate to their turnover or profit. At the same time, The World Bank has been pushing to lower the cost of formal money transfers. One possibility is to make more use of the postal system, which has the ability to create a global money transfer system. Another new development could be the use of mobile phone systems to credit small amounts to users. This would be particularly attractive in developing countries, where mobile phone use is growing and is much more dense than internet use. Meanwhile, private agencies such as Western Union and Moneygram have expanded rapidly across the globe, and the money transfer business has proved highly profitable, growing by 6% per year. There is no doubt that, overall, remittances make a positive contribution to economic growth in poor countries - although they might be better targeted. So finding ways of improving transfers, while avoiding the risks of hiding money, could be useful for economic development. And improving living conditions in these countries could be in itself an important antidote to the appeal of anti-Western militancy across the globe.
sagar sinha
LINEAR ALGEBRA
CoEP Year 2nd Dept Comp LA
Gaurav Mutyalwar
Recession
As the US Recession looms like a dark cloud over our business plans-. it would be well to pause and consider how to make it go away. Wherever I talk to Indian CEOs, I get the impression they are just crossing their fingers and hoping it goes away by itself. Which it won't. Even if it does this time, it will come and hover over us again, sooner or later. Of course, there is a silver lining even in this cloud - the recession will most likely reduce US consumption, close the current account deficit, and stabilize the dollar.. at a cost. Banks seem to be using the capital infusion for all sorts of things other than lending money. No joy there.. simply cutting interest rates isn't going to help, either. When financial institutions are afraid to lend and people are afraid to borrow, in what Paul Krugman calls a 'Crisis of Faith', fiddling with the Federal Funds rate will be about as effective as Nero's fiddling was. The engine oil has gotten contaminated this time (for that is what the financial markets really are), and only a complete cleaning out of the engine will help. ..which will take time! One common ploy, not even easy to adopt, really, is to shift focus to European markets rather than the US. Which would only put off the evil day just a bit, since it is quite certain that European economies are closely tied to the US economy anyway. So let us dismiss these easy answers and bend our minds to what an Indian company, acting on its own, can do. Always a good thing to do, any company can shed 10% of its cost without any real pain, anyway. This is as good an opportunity as any to remind IT's so-called 'knowledge workers' that 20% raise year after year, for doing the exact same work they did last year, is not the natural order of things. But not everyone has been so lucky, especially in the manufacturing and agricultural sectors, so belt tightening can only go so far. When our US client is nervous and unwilling to invest, and so puts his own expansion plans on hold, the one thing we can do is propose something different than the tried and tested 'time and materials' or even 'price for guaranteed volumes' proposition. It may not be enough to point out that outsourcing will save him money ' when he is contemplating 100% saving by not launching that expansion or change initiative at all! We must realize that the client is really not sure, either, whether the recession is for real, and, even if it is, whether it will affect his business, or not. Hedging his bets is what he is contemplating. How can we help him move forward? Can we offer him a business proposition where we share risk - share in the upside (and downside) rather than simply get a fixed revenue and manage costs (which is what almost all Indian companies do, even the best of them)? For instance, IT services company need to start offering customers a fee per user (customer's customer) or royalty models rather than '60 man-months to build this system'. If the client does well, we do well. Needless to say, it also means we have to · learn how to assess the client's prospects in his market · learn how to actually help him sell better in his markets Which means we will have to think like venture capitalists and investors rather than suppliers! Quite a change, but well within our capabilities. We just need to use them. Another solution is brand building. Brands are relatively recession proof due to their emotional hold. It is time to pay more than lip-service to the notion of being 'preferred partner'.. move it from the corporate ppt to reality!
Apurba Chakravorty
Shriya Kamath
Yashil Shah
ICSID
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Sanya Haswani
A short prelude to globalization
The concept of globalization should not be new to you. Globalization substantially means advancement in the integration and exchange of resources. Now, when there is globalization, there is industrialisation. Unprecedented increase in industrialisation has conventionally led to urbanisation. And don't you think that a rapid increase in urbanisation is largely affecting the primary sector, which is highly exploitative? Primary sector- This sector of economy includes use of natural resources such as agriculture, fishing, mining etc. Now to answer the former question, we need an example. There is a farmer who maintains his livelihood by selling vegetables and by producing grains. Grains such as wheat, rice, paddy and maize. Everything is flowing smoothly. On a sunny day wishing for rain, he gets a very strong feeling that things are going to be devastating. His production fails. All of his money that he had spent on irrigation and buying goods like crops and urea, lost. This was the second year, and his production failed, yet again. Without any further risking, he moves into a city. He searches for a few jobs, and fortunately he gets a new job in tertiary sectory which pays him good enough to maintain his life and livelihood. He starts saving for his children's education. He starts picturing a secure future. There are a few points he notices in both fields when he deeply looks at the status quos. a.) There were no savings when he was into farming, and he dissects the low rate of economic growth. b.) He couldn't see a secure future. c.) Even if this new job doesn't promise him a secure future, he has ideas. He has resources. He has his own savings. He is open to quit this job, and this experience level will help him find a new and a better job than the previous one. d.) Tertiary sector is full of jobs, and not parochial like primary sector. e.) Instability of output of agriculture sector. So, what do we conclude? We conclude that the soared increase in industrialisation, and hence resulting into urbanisation largely affects the primary sector which is very important for less developed countries. Okay, a quick question at the end of this short knowledge segment (brought to you by viden.io). Don't you think the day is not so far when secondary and tertiary sector will superpose the outweigh of primary sector? And oh, the farmer is thinking to relocate his family members to the new city.
Nikhil Bhardwaj
Harsh Vijaywargiya
Foreign Direct Investment (FDI)
Foreign Direct Investment (FDI)
Siddharth Chaudhary
UNEMPLOYMENT IN INDIA
UNEMPLOYMENT IN INDIA Even though India is seen as a fast growing, largest democracy and one of the most economically strong nations of South East Asia, there are reasons that have led to a sluggish growth in the employment rates of the country. Even though the govt has come up with numerous acts in the past that gave people of the rural area a chance to get employed and earn a living, neither were all the people covered under such acts, nor did the government provide any qualitative work. Our economy is largely dependent on agriculture, however it remains a seasonal job. Also, many agriculturalists that are still not exposed to the modern techniques on farming rely ion monsoon and often have their crops destroyed. Another huge problem arises when women are still not allowed to leave the doorsteps of their houses and go out to work in order to earn their bread. Many are not allowed secondary or higher education, others, belonging to the most affluent families are not allowed to wo0rk as it might hamper their family reputation in the society. Well, this also implies that women with higher professional qualification are at times sitting at home. Our population has always been a hindrance for us. Moving away from the rural area, and peeping into the urban culture of the metropolitan cities makes us realise that even students from the best B schools or medical colleges are not placed or are not employed because of the large number of students and the immense competition. Even though it is an asset but leads to people being unemployed at times ! I believe globalisation has opened numerous opportunities for our economy, atleast as far as the urban sector is concerned. With new companies entering our boundaries everyday, government undertaking new infrastructural projects, thousands of options are provided to the youth. Also, in the recent years govt has started providing funds for the start up initiatives as well for the budding entrepreneurs.
Bhawna Gulati
The Assam Issue of citizenship
The Assam Issue of citizenship The major issue that faces our country today is the security of its citizens. This is often hampered when illegal immigrants enter our boundaries and cause disruption, hampering our peace and harmony. One of the major problems that Assam is facing , since time immemorial is that of the Bangladeshi immigrants who occupy their territories, jobs and resources. The most recent occurrence in this aspect is the release of the National Register of Citizens(NRC) that has come with the list of all the inhabitants in the Assam region. All these citizens were required to provide documents to prove that they have been residing in the state from before 1971, as the citizens that came after this period were to be deported, as per the Assam Accord of 1985. After the proper checking it was found that around 40 lakh people were not supposed to be residing in Assam , and talks are that they will be deported, if they fail to satisfy the authorities by providing their documents to prove otherwise. The fate of such people is quite questionable .Given the current circumstances, will these people be allowed to vote in the upcoming elections? What if one or two citizens of a particular family are to be deported, what about the rest ? The answers to such questions are still unanswered and unclear.
Pranab Kumar