Do Language Help Mould the Way We Think

Do language help mould the way we think? If we all spoke the same language, would we think in the same way? Discuss the issue using examples, details, and your personal experiences of English and your native language. Language is the tool for all of people around the world to communicate with each other; it is a product of human’s creativity which we can consider as the first evolution for the human kind. However, in different place, people use different languages which are differed in many ways: structure, pronunciation, meaning, and way of writing.Base on the Sapir-Whorf theory, language help mould the way we think; specially, the language habits of community. According to my way of thought, the way we think are affected by lots of different things; like education, family’s condition, environment, friends, traditions, †¦ . So, it do that language help to mould the way we think but we would hardly think in the same way even we spoke the same language. By evidence, in Vietnam, we all speak Vietnamese but there are still many different ideas which came out by different people when they are asked about the same topic.To be specific, they have been ask about the globalization, one said that it is all good for Vietnam on the way of development and it would be a big step for Vietnam to reach the high and stable economic which developed countries reached after globalization; others complained that it would make Vietnam losing many tradition and that the young people who are the future of our country would be affected and turned to support the tradition of foreign country; and others said that it would be fine to globalization with a good preparing and controlling by laws and media.Another evidence to prove that issue is that many young people in Vietnam studying English, some of them are really good and are to the levels that they can speak English fluently as American, but they still think in different way with the American. We can see it quite cl ear when we observe the cooperation between Vietnamese and American for example, they usually struggling with different thought about the way of working, the method that Vietnamese use to achieve the purpose usually softly and indirectly, on the other hand, American partners prefer strong and direct way of working.According to Chomsky (1983), language is considered as one aspect of cognition and its development as one aspect of the development of cognition; which means that language is important for people to mould the way of thinking but it’s just one of many aspects that we have to stable the way we think.Besides, a research of Somayyeh Sabah, a doctor from Islamic Azad University, said: â€Å"The relationship between language and thought is not generally posed in the hope that someone will come up with a definite answer†, it shows that even there are times that two or more people who use the same language have same answer or idea, they still indefinitely think in th e same way.For all of evidence that we have consider above, we can conclude that human are separated and each have their own way of thought, and that make the world’s diversity as well as help the world develop. In that process, language help us a lot to build the idea but it is not the only one; so, even we all spoke a same language, there still no chance that we have the same way of thought.

The Internet Brings About Some Disadvantages to Users and Society

It is obvious that in today’s modern world, people access to information technology for granted. Although it is necessary for our life to contact with each other easily, technology also causes some problems, which affected relationship people. In my point of view, there are two aspects both positive and negative impact from technological development. Since the internet was invented, which has made great changes lifestyle in society, almost activities are able to implement with technology. To start with, the online- communication tools such as: email, teleconference software, messenger†¦ it is helpful to connect people, who live far from their family or colleagues work in different regions. For example, everyone can perform various activities by e-commerce like booking accommodation, flights, purchasing stuff†¦. without leaving home. Therefore, the internet becomes prevalent device in modern life, which seems like a major technological breakthrough. Otherwise, overusing the internet and neglecting the real life can lead to social isolation. Researchers reveal that people who spend too much time at the computer tend to have difficulties when they communicate with somebody in real world. When internet access fills most people’s time, and even their leisure time, this is cause of disconnection with their family, friends or community. Furthermore, it also result in some health‘s problems such as obesity, myopia†¦ In conclusion, technology has both pros and cons. In my opinion, the advantages are stronger than disadvantages; the internet brings many benefits and will not disappear. Thus people should learn to use technology efficiently so that we can limit their bad effects.

Age discrimination Essay

Discrimination against older worker occurs so often that Congress made an act to protect older workers from discrimination; this helps prevent increased unemployment for those older than 40 years of age. In 1967, congress made the Age Discrimination in Employment Act for the purpose of promoting the employment of older workers based on their ability instead of their age. This act applies to employment by public and private employers and by the unions and employment agencies, as well as foreign companies that have more than 20 workers located here in the United States. In 1967 the act covered employees between the ages of 40 and 65, the upper limit was extended 70 in 1978 and then the limit was removed completely later on. Now there is no longer an upper age limit, a 79 year old may be just as qualified as a 30 year old and should have the opportunity to prove her or his qualifications and obtain employment base on them. Another issue with this act is mandatory retirement; for the most part this has become a thing of the past. It should also be mentioned that people are living longer lives today and this act will become more and more critical for the working employees in this country. Title VII and the Age Discrimination act are similar in several ways, and both are enforced by the EEOC. But these two acts are different in two important ways; The Age Discrimination In Employment Act is more lenient than Title VII regarding the latitude afforded employer’s reasons for adverse employment decisions (). The Age Discrimination In Employment act allows an employer to argue that a prima facie of age discrimination by identifying any factors other than age that has helped make the decision. The other difference is the Age Discrimination in Employment act only protects employees that are over 40 years of age from discrimination. So, a person under 40 cannot file a claim under this act based on the claim that he or she was too young. But there are some states that have laws that could be described as reverse discrimination in situations like this. In an Age discrimination case there are several different questions and points that must be answered. The following will help describe some of this key issues in a case like this.  · The employee feels that he or she has been discriminated against because of  the employee’s age. The employee may file an action against the employer under the ADEA and prove age discrimination. The employee must establish the following four elements to prove to the court that she or he has a claim for age discrimination.  · The employee must prove that he or she was demoted or fired because they were 40 years or older. They simply must prove that they are older than 40 years of age, therefore making themselves a member of a protected class.  · Adverse employment action taken against the employee, this is proof that the employer made an employment decision that adversely affected the employee in question. This could include a decision not to hire the applicant or even fire the employee.  · Another thing the employee must prove is that he or she is qualified for the position. The position requirements must be proven and not just devised for the purpose of terminating or refusing to hire older workers. The employee must show that he or she can perform their duties at a high level or they may face not being able to continue with their claim.  · Disclaimer Treatment, this requires an employer to explain there actions if they terminate of refuses to hire an older qualified employee, while at the same time hiring a younger person. This requirement has presented difficulty for the courts.  · Employers say in the matter, this is where the employer must prove that they did not hire or terminated an older employee because of other reasons. The burden of proof now shifts to the employer to present a legitimate and nondiscriminatory reason for their actions against the employee. They must prove that there are good reasons for their actions.  · The EEOC identifies what an employer must prove in an age discrimination case brought under the Age Discrimination in Employment act as; the age limit is reasonably necessary to the essence of the employer’s business. All or most all of the individuals over that age are unable to perform the job’s  requirement adequately or some of the people over that age posses a disqualifying trait that cannot be ascertained except by reference to the age of the employee. This element of proof allows an employer to exclude an older worker from a position that may be unsafe to some older workers. This information can be obtained by OSAH databases that have included worker age as being part of the reasoning for their actions.  · Disparate treatment and disparate impact. One court case that has helped define this act is the case of Steen v. Sun Oil Company. Paul Steen was discharged by Sun Oil Company after working for them for 19 years. Steen claimed that that he was fired because of his age, but Sun Oil rebuts by standing that Steen’s discharge was necessary action in the company’s overall reorganization process. Steen had statistics that proved that an average age of employees retained was 35 and the average of the employees that were let go was 48. Steen also had a letter from the company that stated a plan of the reorganization would be † a better age distribution of executive personnel†. This court case is similar to many that have used the Age and Discrimination in Employment act as grounds for suit in court cases. One recommendation that I would have for management to follow is not to have interest in the age of employees. If they can perform the job at a high level then they are good enough to remain a part of the company. I have seen in many cases in the job I have now of where many of the most valuable employees are often those over the age of 50. They are often the employees with the most experience and act as a teacher to the younger employees.

Improving Communication Between Healthcare Providers and Patients Research Paper

Improving Communication Between Healthcare Providers and Patients - Research Paper Example e what they need to treat patients, but they must share pertinent information to make sure they are treating patients safely while also keeping them adequately aware of the realities. Verbal reports of the patients are extremely important for the care providers to know the acute details of the problems encountered and to scrutinize them later. Many times, when a patient is under huge mental pressure owing to deplorable physical condition and his/her relatives are unavailable to talk to, many fine points go unnoticed and absolutely ignored. Motivational interviewing is an important tool for that purpose and worth mentioning here that is a relatively simple, transparent and supportive talk therapy based on the principles of cognitive–behavior therapy. (Bundy, 2004, p. 43). This technique is designed to talk patients into changing their conservative approached towards new therapies and convince them to cooperate in better terms for optimal prevention of a disease. For the correct application of handoff system, a standardized approach needs to be observed, as identified by Ellingson. She says that by creating a transfer communication form aided by trip-tickets, which are basically assessment charts that verify if the patient is ok with the treatment, communication can be readily improved. The toolkit of handoffs and transitions is basically focused on enhancing communication between caregivers and patients. Many strategies for improving communication through handoff system are daily envisaged but the one identified by Ellingson covers physical as well as psycho-social issues noted by staff as necessary to satisfactorily take care of patients. (Torner, 2008). According to the Interpersonal Communication (IPC) toolkit identified in Aidsmark.org (n.d), one of the main strategies formulated for interpersonal communication programmes is the deep analysis of the social, economical, cultural and geographic factors related to different patients. The P Process program

Business Analysis Essay Example | Topics and Well Written Essays - 1000 words

Business Analysis - Essay Example The cash flow for a particular period reflects the flow of cash in future for that period. But due to a loss in the time value of money, the present value of the cash flow is actually less than the actual value. To have a realistic view of the cash flows the actual values need to be converted into what are called as the Present Values. The factor by which the actual value is multiplied to calculate the present value is called the Discount Factor. Discount factor lies between 0 and 1. It is determined by the rate of return on capital during a given period and can be calculated using compounding (Johnson, Derek). Using the net present value approach, it can be found out that the net cash flows are positive in all quarters and the initial investment is also recovered within a quarter. The Net present value is hence positive and comes out as  £5,030,687. The NPV (Net Present value) calculations can be done using an excel spread sheet. An extract of the same is shown in Figure 2.1. Thus, it can be concluded from this that, the boutique must go with the development plan. There are several key factors that can affect the cash flows. One of them is the Build-up factor. If the build-up factor becomes negative i.e. there is a decrease in income in the following quarters due to some reason, the NPV decreases. The NPV turns negative at -57% build-up factor for each quarter as shown in Figure 3.1. This is where the decision gets reversed. This could happen in case of adverse external circumstances. The second factor which can affect cash flow is Cost of Sales. If due to an increase in raw material costs or due to some other factors, Cost of Sales rise as much as 89% of the sales, the NPV becomes negative and the decision has to be reversed. This is shown in Figure 3.2. Thirdly, the increase in rent can have an impact on net cash flows especially in wake of continuously rising real estate prices. If the rent increases to  £1427 per sq. m.,

Critical Thinking on Controversial Topic Research Paper

Critical Thinking on Controversial Topic - Research Paper Example 16). The situations given above show that communication is not easy. It can be found anywhere especially leaders deal with such situations that will test their experience and temperament in solving the issue. Clear communication is the key through discipline and proper advancing of agendas, promoting learning and strengthening relationships (Jarkins, 1999, p. 73). In real world situation, conflict is approached head on to solve it. If the conflict is not solved, it may just prolong the agony and the problem would still be there. Some people may give certain advice on how to make difficult conversations easier. Ten ways can be done: opening the lines of communication, acknowledging the other person’s willingness to talk, setting a time limit, paraphrasing each other’s comments, working out a compromise, making a list of questions to be answered, accepting being wrong, respecting expert opinion, understanding the emotional factors, and reviewing the things learned (Goldsm ith, 2011). The paper will not go into the details of the ten ways in dealing with difficult conversations but will focus on critical thinking skills on controversial topics. Critical thinking helps people to become wise even though they may not be practicing philosophers. What matters most is the concept of giving up two senses: â€Å"sense of obviousness and sense of absurdity,† (Sen, 2010, p. 1). Critical thinking contributes to intelligence analysis and a formal meaning may develop the ground towards the understanding of its importance according to the definition of Richard Paul and Lina Elder: that mode of thinking – about any subject, content, or problem -- in which the [solitary] thinker improves the quality of his or her thinking by skillfully taking charge of the structures inherent in thinking and imposing intellectual standards upon them (Moore, 2007, p. 8). The definition clearly shows what critical thinking is. Basically it is a way or process of thinking about certain matter wherein the person or thinker does his best effort to improve his ability in learning and understanding the reason. In simpler words, each person gives meaning to a certain thing through mental maps or representation of the reality. Such an activity aides the person in proceeding to â€Å"revising, expanding, improving [†¦] mental map† and the understanding of the reality. In critical thinking, memory plays a key role (Leicester, 2010, p. 2). Since critical thinking is already defined, the next term is controversial topics. Controversial topics are issues that people have very strong yet various feelings and opinions and are subject to heated debates. Various opinions may come from social, political or religious beliefs. Controversial topics make people either positive or negative depending upon the created strong arguments for and against the subjects. Controversial topics are used in research assignments especially on reviews and looking at the pro s and cons (Questia, n.d.). in other words, controversial are things that have more than two ways of viewing the right answer while topics which are usually controversial are issues that cause heated debate due to more than one â€Å"correct† answer (Versfeld, 2005, p. 7). In Harvard Law School being the center for training the would-be law professionals, difficult conversations happen and are allowed. In the past, the school management of

Health implications related to the personal health and wellbeing of Essay

Health implications related to the personal health and wellbeing of individual patients in hospital and domestic settings - Essay Example My immediate guess was that both chemotherapy and laser therapy had affected his body metabolism to a certain extent. He was a patient very concerned about his appearance. Being just 27 years of age and unmarried, he wanted to look smart all the time. He recalled the fact that he had a very stylish hair style prior to undergoing chemotherapy. He lamented stroking the few remaining strands of hair remaining in his otherwise bald head. The patient said he used to look in the mirror often and was very proud of his neatly combed hair earlier, but now he was devastated by the figure looking back at him when looking in the mirror. According to him his hair style enhanced his personality and every one used to comment on it. I knew that he was visibly shaken by his hair loss and this was affecting him psychologically. He asked me whether his hair would grow again. Due to his hair loss he told me that his confidence was shattered and did not know how to face society once he was discharged from hospital. Chemotherapy treatment often causes hair loss basically because the cells in the hair follicles grow fast (Baker, 1996). Hair loss would not be a permanent issue and the hair will grow back once the patient's treatment has ended. In fact chemotherapy damages fast growing cells, however all drugs will not cause hair loss and in some scenarios it just cause thinning and others cause dramatic hair loss including the body hair and eye brows (Bandura, 1998). Moreover, different people have different tolerances to the drugs and occasionally, some people lose their hair when it is not expected and sometimes in other cases no hair loss occurs when it is expected. The patient did not understand how certain drugs produced negative side effects in the long run, when I told him that certain chemical combinations coming from different drugs would have caused his hair roots to destabilize he thought that I was talking about some alien disease. When I explained this to him and said that his hair loss was temporarily he was much relieved and satisfied. Finally a smile appeared on his hitherto gloomy face. He thanked me a lot for enlightening him about his hair loss. I was much satisfied when a smile finally appeared on his face. Entry two This week I had an encounter with a patient who complained of a swelling in the neck and in the groin and the legs. But he was experiencing no pain. He also complained of an early feeling of fullness of the stomach and recurrent abdominal pain. He was sixteen years of age and had been an active member of the school soccer team and other sports sometime back. But now he was thin and frail and has been under medication for some time. He lamented that he was unable to go to school and take part in soccer practices which he loved so much. He had been a boy of robust build but of late has lost a lot of weight and said he was having a feeling of 'lack of energy'. This apart he experienced chills, fevers and night sweats on a regular basis. Being the only child in the family, he was the apple in the eye of his parents. He wanted to do all that he can to make his parents proud. Though not a very bright student in his studies, he was very keen on sports and said that his ambition was to

One page reflective Ecercise and 10 pages for case study questions Essay

One page reflective Ecercise and 10 pages for case study questions - Essay Example Adult years Had become a professional Mining Engineer. Had travelled and worked in Portugal, Greece, Finland, Morocco, Algeria and Mozambique. Had been fluent in 11 different languages. Had been a successful single parent of 2 Children, acting practically both as father and mother. 1988 Had migrated to WA with his kids filled with high hopes for a better life for his children. Had been out of worked and was forced to receive handouts of second hand clothes and food. Had suffered racism at work, while his kids were isolated in the school. His dream turned into a curse. Had felt miserably a failure. Had felt trapped. Had felt completely isolated and disillusioned. Had felt despair, unwelcome and betrayed. 1- Formulation Form Client: Julio Nunes Nesto UMRN: ....................................... Date: ........ / ........ / ........ Predisposing Factors: Possible Sources of Biological Vulnerability Neurological development or other neurological problem: Had polio at the age of two, had become partially paralysed and unable to speak and walk Maternal viral infection during pregnancy: N/A Family history: N/A Birth trauma: Born stigmatized to be an inferior race equivalent to a slave. Possible Sources of Physiological Vulnerability Physical abuse experienced or threatened: Grew up in an environment of oppression and inequality Witnessed family violence: N/A Emotional/psychological abuse: Work discrimination; unwelcomed; frightened; betrayed; disillusioned Sexual abuse: N/A Physical or emotional neglect: Single parent of two; without wife to care for him; without relatives to run to Other trauma: Culture shock in WA; living alone in a foreign cruel society Bullying in school/community: Isolation of children in the school; lack of social support in the community possible Sources of Social Vulnerability: Poverty/deprivation: Uncertain life in a foreign highly discriminating land Alcohol and other drug use (self/others prior teens): N/A Migration (international or intra- national): Migrated to Western Australia Cultural conflict/ alienation/stigma/ lack of supports: Experiences worse condition in WA Racism: Suffered racism in the workforce, in social settings and his 2 children suffered racism at school. Other forms of discrimination: No assistance to single father parent making it almost impossible for him to find work; his children are isolated because of their skin color. Precipitating Factors: (what stressors were happening prior to becoming unwell) Oppression and discrimination in his own land Stigmatized by his Portuguese name Single parent of two growing kids Perpetuating Factors: (what stressors are still operating or what helps keep the stress going). Racial discrimination of his family in a foreign land Joblessness and lack of opportunity for a decent living for a black single-father parent in WA Shattered dream for his two kids Humiliated and frustrated Trapped in a cruelly discriminating society Current Problem List as Identified by Clie nt: 1. Depression 2. Anxiety due to joblessness 3. Prejudice due to racial experienced discrimination 4. Frustration and anger because of failed high expectation Thoughts: This society is so cruel; it could treat children too unfairly. Racism is a large factor in mental health deterioration. I am trapped; we can no longer go back to Mozambique. Feelings: He felt completely isolated, unwelcome and betrayed. He felt despair, angry, helpless, depressed and disillusioned. He felt humiliated and a miserable failure. Behaviour:

Finance coursework Research Paper Example | Topics and Well Written Essays - 2500 words

Finance coursework - Research Paper Example According to Gustav Cassel, the purchasing power parity is the appropriate level at which the foreign exchange rate should be set. The rate is measured by calculating the relative departures or deviations of price levels from a chosen base period in which the balance of payments of the concerned countries had been in equilibrium. If countries X and Y were in reasonable adjustment in time period 0, then these countries should choose an exchange rate in time period 1 (R1) which reflects the changes in their prices between time period 0 and time period 1. So, the formula is: The inflation rate has risen by 5% in US from 1993 to 1995, while it has risen by 12% in Zeal during the same period. Taking these rates into account and calculating at the old exchange rates of GP20 for $1, we calculate the new rate of exchange at GP33.6 for $1. The peso is not likely to fall any further. It has overadjusted. The rate would finally be set near the above calculated level. 2. The peso float could have been forecast due to a number of reasons. First, the exchange rate that was set and maintained by the Zeal authorities was clearly overvalued. The purchasing parity theory of exchange rates predicted a rate of GP33.6 for $1, while it was being pegged at the rate of GP20 for $1. Second, the balance of payments was running in deficit for a number of years as can be seen in Table1. The current account deficit was constantly increasing over the years and it was being funded by capital flows from abroad, putting pressure on the currency to depreciate. Thirdly, Inflation was consistently rising and was at 12% in 1995. The money supply was rising at a greater rate than the price level, again placing peso under pressure. Fourth, Zeal central bank was continuously losing international reserves in an attempt to hold the exchange rate. Fifth, the country had to borrow capital to fill the gap in balance of payments. And lastly, a sustainability of a particular level of current account deficit depends on how the capital flows are used and if the country has the appropriate debt servicing capability. A large and persistent current account deficit in the balance of payments of Zeal shows the employment of unsustainable macroeconomic policies. The exchange rate would have finally fallen victim to those policies. So, from the above reasons we can say that the peso float could have been anticipated. (Beenhakker, 2000) 3. Many wealthy individuals of the country have shifted their money out of the country through the dollarization of their assets. This is indicated from the unilateral transfers shown in Table1. The table indicates that the trade balance deficit has been increasing since 1973 and currently it stands at a very high $400,000,000.00. The current account deficit has similarly been increasing constantly over the years to reach $387 million. The international reserves have also been depleting as the current account deficit is increasing. There are still positive figures in unilateral transfers. The transfers have increased from a very minuscule $1 million in 1973 to reach $13 million in 1995. From 1973 to 1993 there was any increase of $6 million in unilateral transfers overall. But in the two years from 1993 to 1995 the country has seen an increase in unilateral tra

Theory Synthesis Essay Example | Topics and Well Written Essays - 2500 words

Theory Synthesis - Essay Example For instance, in this paper, we focus on the postulation that there exists a gap in practice theories where nurses show partiality in the manner they treat outpatients as compared to the manner of treating the patients who are admitted. Introduction The study in the theoretical structures that govern nursing practices reveal that nurses care for patients holistically (patients as well as their family members) more when they are admitted than when they are on the outpatient setting. Therefore, there is the need to breech the gap in the holistic care of outpatients in order to restore effectiveness and efficiencies in the nursing profession. All patients, regardless of being admitted or treated under outpatient settings rely on the nursing services as advanced by the nursing practitioners. The nursing profession on the other hand has been shown to rely on the theoretical frameworks in order to actualize the effective delivery of caring services to patients. Therefore, nursing theories complement the nursing practice in servicing patients. From the previous literature review, a gap is established between the nursing practice and theory and this forms the basis of this paper. Synthesize the knowledge gained in the area you studied during this course The study of the interrelationship between theoretical and practical aspects in the nursing profession has revealed a lot of incites which form the basis of this paper. Among other features noted, nursing is purely a scientific discipline whose success wholly depends on the proper adoption and application of scientific theories (Swanson, 1991; Risjord, nd ). Scientific theories are frameworks that have been in application over decades in explaining scientific phenomena and are testable and universally accepted. Nursing as a profession is therefore based on scientific research and hence runs under the guidance of such defined theoretical frameworks. However, research studies have been used to reveal that there exists som e gap between the existing theories and the actual practice by the nursing professionals. In often times, the inpatients enjoy higher attention and improved care by the nurses as compared to the patients receiving care in the outpatient department. This gap shows that there is inadequacy in the existing theories to guide the nursing professionals in attending to needs of patients; both at the customized care set up within hospitals inpatient programs as well as at the outpatient departments. We therefore note that there is great need to breach the gap existing between practice and the nursing theories. Our particular attention will be on breaching this gap by proposing and evaluating the provisions of a theory that addresses a patient as an entity, the family and community from which the patient hails as well as the nurse as most critical component in the recovery process. Though there lacks particular theories to address the disparity between nursing practices towards inpatients as and outpatients, there are some theoretical formulations which holistically empowers nurses to play a critical role in recovery process of patients; both admitted and the outpatients. Propose a component of a theoretical framework that addresses a gap following the theory development procedure you learned It is worth noting that the formulation of theories

The Oregon Trail Essay Example for Free

The Oregon Trail Essay The West as an Ideal   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   During the 19th century, people migrated from Missouri to Oregon or to the Pacific Northwest of what is now known as the United States of America. Originally, the route covering Missouri all the way to Oregon was determined in order to provide a more convenient route for the fur trade, especially for establishing an overland supply route post right at the edge of the Columbia River.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The Oregon Trail, stretching at about 2,170 miles, essentially commenced through a rough system of rutted traces spanning the breadth of land from the Mississippi River that was utilized by roughly 400,000 individuals. In more recent times, the Oregon Trail has been known as symbolic of the differences which separate American Indians from the whites who settled in the land. Back in 1840, only three states were recognized to exist at the western side of the Mississippi River inasmuch as Canadas boundary with Maine remained undefined during those days.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The Nations boundary in the west was approximately situated in the Continental Divide, and within a decade Great Britain and the United States have created a boundary that spanned from the Pacific up to the Atlantic. After four decades, masses and masses of emigrants entirely diminished the concept of frontier which radically altered the lifestyle of the American Indians. It also threatened and ravaged numerous species of wild animals along the way, not to mention the buffalo herds. While barbed wires as well a plows dominated the prairies, long stretches of distances were eventually cut shorter by the transcontinental railroads.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   During 1837 and 1841, both businessmen and farmers have grown frustration over the economic depressions which affected and sunk their livelihood. As the fur trade became increasingly troubled after the trade collapsed back in 1839, thoughts of the British dominating the Northwest Territory heightened. During those times, the American Indians in Oregon were seen by eastern churches as potential candidates for the thoughts of European civilization. Heading for Oregon as missionaries in 1836, Henry and Eliza Spalding as well as Marcus Whitman and his new wife gave an increasing publicity for Oregon in terms of its advantages and promising opportunities through the letters which they wrote and sent home.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Eventually, more and more people became increasingly interested in Oregon for a wide variety of reasons. In 1841, the very first group of people began to leave the Missouri River banks and proceeded west with the serious intention of emigrating. Almost two years after, almost a thousand emigrants completed the travel which signaled the many others who followed in the years to come. Hardships Faced   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Like any other long distance journey, those who traversed the Oregon Trail would have to face challenges and hardships along the course of their path. Every part of the trail uniquely had its difficulties to be dealt with by the travelers. For the most part, the emigrants would have to face the challenge of loading and unloading their livestock so as to maintain the durability of their wagons. This they would have to do countless times until the trail is over. More importantly, the emigrants would have to spend some time fetching water and food for the animals they brought along with them. Otherwise, the animals would starve and probably die long before they reach the destination which will also affect the food supply determined by livestock and other animals.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Moreover, the emigrants would also have to adjust in terms of the way they deal with their fellow emigrants in order to maintain harmony throughout the journey and prevent disorder. They would have to determine and set rules that they have to abide along the journey as well as to arrange and break camp each morning and evening. They would have to take turns in terms of positioning in several columns so that lesser dust is raised and a minimal number of the travelers will choke from the air created.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Knowing that the most difficult part of the journey would be near the journeys end where crossing mountains prior to winter snows was a necessary imperative. Hence, the emigrants would have to set the journey and their pace in such a way that the time they travel will be during the time when grass was present almost everywhere along the trail so that the animals they brought would have sufficient food to feed on.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Health hazards to the emigrants were a large hindrance during the journey. Cholera was one of the feared ailments that the emigrants would have to face, caused perhaps by the contaminated water they might have used. Since the 19th century was the time when medical advancements were yet to be discovered, cholera remained one of the most dangerous health hazards the emigrants feared. Small pox also claimed a number of the lives of those who journeyed the Oregon Trail.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   In financial terms, the emigrants would have to be financially ready to shoulder the tolls situated at ferries as well as bridges, including the prices for food and other supplies bought along the trading posts or from other travelling emigrants. The payments required for repairing the wagons and other vital tools also shared a considerable fraction of the emigrants finances during the travel.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Moreover, the prices for the food and water relatively vary than in contrast to ordinary circumstances. Since the supply for water is scarce and the demand considerably high during the journey, emigrants would have no choice but to purchase water at costs they are able to pay for, whether low or high, just to survive the travel. Perhaps the only times when the emigrants are able to purchase water at lower prices are whenever they reach a small town and whenever they found a source of potable water along the way. Reasons for Leaving   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Thousands have already traveled across the trail and settled in Oregon by 1846. But why were these individuals willing to leave their homes and land, travel across thousands of miles with barely minimal food to eat and water to drink to a place where they have not been to yet? The answer to this question can be answered in three simple terms: these people were drawn towards the west because of the cheaper value of land where they can purchase and own more, the sense of patriotism, or perhaps the attractive promise of a more fulfilling life in Oregon.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Because Oregon was a region where very few people lived, the value of land was comparatively cheaper than in places were civilization is on the rise. People would take the journey just acquire more areas of land and start life anew. It was one of the risks they were willing to take all for the name of acquiring a better life and securing as well as sustaining the wealth of their families. As the civilization in Oregon sprawled and as transcontinental railroads were established, travelling became easier as the time covered for traveling was dramatically reduced. Access to Oregon became easier and the value of land eventually increased. The need to travel to Oregon because of cheaper land eventually diminished.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The relatively lower price of land back in the days essentially corresponded to a better life for the emigrants. Since Oregon was a newly formed state, acquiring land in the area was almost equivalent to acquiring a better life as compared to their former settlements. Given a larger land area to manipulate, emigrants who settled in Oregon and who were able to acquire land were given the opportunity to raise a higher number of livestock and other animals and cultivate a larger piece of land.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The promise of a more fulfilling life in Oregon manifested itself in terms of the higher chance to raise animals and cultivate the land with plants which resulted to an increase in ownership and income. Trade and commerce in Oregon reached heights and settlers found themselves amidst an area fertile for purposes of trade and commerce. Eventually, news of this spread and people became more and more interested in leaving their homes and transferring to Oregon. What Awaited the Emigrants?   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Although there was no assurance of whatever it is that awaited the emigrants at the end of the journey, it became increasingly known that flocks of individuals were heading towards the west. This fever created a deeper sense of awe and increased the longing of individuals to obtain a better life even at a distant land more than 2,000 miles away. As the number of emigrants grew larger, people began to think of things becoming better that awaited them at the end of the trail.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   In effect, Oregon grew in many different ways. The population count boomed in less than a couple of decades more than the normal annual rate. As settlers continuously increased and poured into Oregon, the small towns in the new state were nearing the verge of transforming into cities. Log cabins were slowly replaced by frame houses as the land became more and more civilized in the years that went by. The great migration, in the end, only heightened the urge of the people to travel far and wide towards Oregon.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   As Oregon grew at a rapid pace, news easily spread across neighboring areas giving the new state an increasing sense of popularity and presence in the minds of individuals. In the coming years, what awaited the emigrants has become less and less of what they expected. For the most part of the years to follow, new emigrants who settled in Oregon found themselves in the midst of a growing population where finding a place to settle in the heart of civilization in the new state was becoming scarce almost every year. The prospect of finding a place to stay at the center of commerce was diminishing.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Nevertheless, it has been rare for settlers in the new state to return to their original homes once they were able to find a suitable place to stay in Oregon. With a few exceptions such as the case of Ezra Meeker, the settlers have very little reason to retrace the Oregon Trail and return home. The harsh conditions they may have encountered along the journey and the things they have fulfilled in Oregon might have discouraged them to gamble on traveling back to where they originated.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   In essence, the Oregon Trail used to be one of the most treacherous yet mostly taken the path by people gathering near the mouth of the Mississippi River. The prospect of a better life mostly fueled this desire to leave home and travel thousands of miles amidst hardships and hazards to their health and property. The reasons for leaving mostly centered on the promise of acquiring cheaper land where they can begin their lives anew and attain prosperity. References Fanselow, J. (2001). Traveling the Oregon Trail (Second ed.). Guilford, Connecticut: Falcon. Faragher, J. M. (2001). The Oregon Trail: A review. The Journal of American History, 88(2), 15. Parkman, F. (2002). The Oregon Trail (Dover Value ed.). Toronto, Canada: Dover Publications. Roberts, J. M. (1954). A Review On the Oregon Trail: Robert Stuarts Journey of Discovery by Kenneth A. Spaulding. American Anthropologist: New Series, 56(6), 2. Willingham, W. F. (1994). Review: Interpreting the Oregon Trail: Three New Perspectives. The Public Historian, 16(1), 3.

Russian Financial Crisis in 1998 Essay Example for Free

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

Analysis Of Mlk Jrs Letter From Birmingham Jail Religion Essay

Analysis Of Mlk Jrs Letter From Birmingham Jail Religion Essay The Civil Rights Movement of the 1950s and 1960s was a time of great unrest. While the movement was felt across the south, Birmingham, Alabama was known for its unequal treatment of blacks and became the focus of the Civil Rights Movement. Under the leadership of Martin Luther King Jr., president of the Southern Christian Leadership Conference, African-Americans in Birmingham, began daily demonstrations and sit-ins to protest discrimination at lunch counters and in public facilities. These demonstrations were organized to draw attention to the injustices in the city. The demonstrations resulted in the arrest of protesters, including Martin Luther King. King was arrested in Birmingham after taking part in a peaceful march to draw attention to the way that African-Americans were being treated there, their lack of voter rights, and the extreme injustice they faced in Alabama. King immediately strives to justify the need for nonviolent direct action through his statement, Several months ago the affiliate here in Birmingham asked us to be on call to engage in a nonviolent direct action program if such were deemed necessary. What is direct action? Direct action is a form of political activism which may include sit-ins, strikes, and demonstrations. Kings explanation to the clergymen for protesting segregation began with an explanation of their actions, Nonviolent direct action seeks to create such a crisis and foster such a tension that a community which has constantly refused to negotiate is forced to confront the issue. In this case King was invoking the right of freedom of expression, not only freedom of speech but the freedom to assemble. The clergy and many of the citizens of Birmingham believed the demonstrations, sit-ins, and strikes, considered peaceful by King and his supporters, as a taunting and violation of the segregation laws in place in many of the southern states. Within the first paragraphs of his letter King rebukes the many injustices of his people in Birmingham. King responded with dismay at the clergys reference to him being an outsider. King stated that he had a reason for being in Birmingham and he was not an outsider as the clergymen claimed. He responded with a profound statement, Anyone who lives inside the United States can never be considered an outsider anywhere within its bounds. King explained that his purpose for being in Birmingham was due to the injustices within the city. He continued by comparing himself to the eighth century prophets in that he too was carrying a message the gospel of freedom. King explicitly compared himself to the apostle Paul whose travels were extensive in spreading the gospel of Christ. Just as Paul left Tarsus to spread the gospel of Jesus Christ, King left Atlanta for Birmingham. He claimed that his job as a Christian minister was to attack injustice wherever it appeared. Kings imprisonment could a lso be compared to the imprisonment of Paul. King answered the clergymens allegations that breaking the law was not the way to achieve the results Conversely, one has a moral responsibility to disobey unjust laws. I would agree with St. Augustine that, an unjust law is no law at all. King did not believe that they have broken the law. Kings response to the clergymen was that a law that is not morally sound is not a law. Kings statement supports the conservative theory of the Nature of Law in that law existed before man. The fundamental principles of law are to distinguish between that which is right and that which is wrong. Therefore, laws are made to protect the people not degrade and punish. King defined just and unjust law as follows: A just law is a man made code that squares with the moral law or the law of God. An unjust law is a code that is out of harmony with the moral law. To put it in the terms of St. Thomas Aquinas: An unjust law is a human law that is not rooted in eternal law and natural law. Any law that uplifts human personality is just. Any law that degrades human personality is unjust. King wrote that a law could be just on the surface and unjust in its application. The example given was how he had been arrested on the charge of parading without a permit. He explained that there is nothing wrong in having a law which requires a permit for a parade, but that it becomes unjust when it is used to maintain segregation and to deny citizens their First Amendment privilege. King connected the nonviolent civil disobedience or unjust laws to the revolutionary arguments of Thomas Jefferson. Kings writings include, law and order exist for the purpose of establishing justice, and when they fail in this purpose they become the dangerously structured dams that block the flow of social progress. In the Declaration of Independence, Jefferson argued that governments exist to protect basic human rights, deriving their just powers from the consent of the governed. King addressed civil disobedience, the active refusal to obey certain laws, demands and commands of a government or of an occupying power without resorting to physical violence, through his example of the refusal of Shadrach, Meshach, and Abednego to obey the laws of Nebuchadnezzar, on the ground that a higher moral law was at stake. Other examples of civil disobedience were incorporated into the letter. King wrote, civil disobedience was demonstrated by the early Christians who were willing to face lions and the chopping blocks rather than submit to certain unjust laws of the Roman Empire. King understood completely that his audience was not the clergymen alone. So, while appealing to the Christian and Biblical beliefs and principles of the clergy, he included non-Biblical examples of civil disobedience as well Socrates and the Boston Tea Party. King responded to the clergymens accusation that he was an extremist by countering with examples of extremists. King wrote, Was not Jesus an extremist for love: Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you. Amos was an extremist for justice, Let justice roll down like waters and righteousness like an ever-flowing stream.' He continued providing examples of other extremists including the apostle Paul, Martin Luther, Abraham Lincoln, John Bunyan, and Thomas Jefferson. King was concerned with the oppression of the African American. He continued by writing of the yearning for freedom of the African American. He wrote, à ¢Ã¢â€š ¬Ã‚ ¦the United States Negro is moving with a sense of great urgency toward the promised land of racial justice. Using the analogy of the promise land was not accidental. The promise land was the Israelites land of freedom from their enslavement at the hands of the Egyptians.   King quoted Abraham Lincoln, This nation cannot survive half slave and half free, and Thomas Jefferson, We hold these truths to be self evident, that all men are created equalà ¢Ã¢â€š ¬Ã‚ ¦ Christianity played a major role in Kings response to the clergymen. He shared his disappointment with the church as a whole. King believed that he would find support for the cause of justice within the community of the church. He wrote of the strength of the early Christians and of their rejoicing for being deemed worthy to suffer for what they believed. He also wrote of the weakness of the contemporary church and the concerns he had about Christianity losing its meaning. King was so distraught over the actions of the church that he found himself asking, What kind of people worship here? Who is their God? And, while disappointed, he responded with statements of love and hope. As King concluded his letter he shared his belief that the struggle for freedom would be won, not only in Birmingham but across the nation, because the black mans destiny was tied up with the destiny of America and the goal of America is freedom. Kings letter from the Birmingham jail inspired a national civil rights movement. The goal was to completely end the system of segregation in every aspect of public life (stores, separate bathrooms and drinking fountains, etc.) and in job discrimination. The enactment of the Civil Rights Act of 1964, that banned discrimination based on race, color, religion, or national origin in employment practices and public accommodations, and the Voting Rights Act of 1965 reinforced the guarantees of full citizenship provided under the thirteenth, fourteenth, and fifteenth amendments. The passage of these two acts marked the end of the Jim Crow system in the South. The desegregation of public facilities was swiftly implemented. With the enforcement powers of the federal government enhanced, the desegregation of public schools was also initiated.