The effect of the financial crash on Kazakhstans economy - Free Essay Example

Sample details Pages: 23 Words: 6899 Downloads: 2 Date added: 2017/06/26 Category Economics Essay Type Narrative essay Did you like this example? Financial Crises. Analysis of House prises in London and Almaty and how world financial crises affected Kazakhstans economy. TABLE OF CONTENTS Abstract 2 Don’t waste time! Our writers will create an original "The effect of the financial crash on Kazakhstans economy" essay for you Create order 1.0 Introduction 3 2.0 Background 5 3.0 Methodology 9 3.1 Research Philosophy and Approach 10 3.2 Research Strategy 10 3.3 Information Search 10 3.4 Research Questions 12 4.0 Literature Review 13 4.1 Kazakhstan 17 4.2 London 27 4.3 Subprime Crisis 37 4.4 Global Financial Sector 39 5.0 Evidence 41 6.0 Conclusion 48 7.0 Recommendations 50 Bibliography 57 Abstract The subprime market crisis that hit the financial markets in the summer of 2007 caused a series of negative market reactions on a global scale. The tightly entwined nature of world financial markets represents a global loop whereby occurrences in one market have implications in and for others. This factor has been and will continue to be one that triggers international financial incidents, and in some cases they result in what are termed as a crisis. A crisis is defined as an unstable or crucial time or state of affairs in which a decisive change is impending; especially :one with the distinct possibility of a highly undesirable outcome[1]. This describes the financial situation that forms the basis for this study, the subprime mortgage meltdown in the United States that hit the global stage in the Summer of 2007. In equating the ramifications of the preceding, two locales will serve as the focal point of the foregoing. London and Almaty are two examples that offer a distinct contrast in terms of where they sit in the global economic arena. London is located in the financial stable European Union, and is a city that has gone through differing economic turmoil in its long history. Almaty, is located in Kazakhstan, a new country that was borne out of the ashes of the break-up of the Soviet Union, and is seeking its economic identity through creating an infrastructure that is being crafted from the state run Soviet system that left few positives in its passing. The financial services sector is often a little understood arena owing to the complexities of how it operates within the context of international economic activity and the variables of the market economy. The intricate nature of the ties between differing regions, and how they interact upon one another represents a complex set of macro and micro economic aspects within which this crisis developed and impacted every corner of the globe. This study shall look into the manner in which this financial crisis affected the real estate markets in Almaty, Kazakhstan as well as London, England looking to uncover the why of this impact, along with the ramifications. 1.0 Introduction The tightly interlinked nature of the global economy has brought every corner of the globe closer together as a result of the advances in technology. This fact is also of course true for the financial services sector. In the later part of 2006 a financial issues began brewing in the United States as a result of lending activities in the home real estate sector. The underlying problems created from the lending of favourable interest rate loans that were put into motion by the Federal Reserve System in the United States to spur economic growth translated into a later meltdown as a result of defaults. The Secretary of the Treasury, Henry Paulson, Jr., stated that the situation came about because of some bad lending practices[2]. Timing, circumstances, and other factors in the complex web of national economics that are tied to global economics can generate an unpredictable set of occurrences that can mushroom in almost any direction. Such is the situation that befell the subprime mortgage arena as it reeled from a cascading series of events than impacted global markets. So great were the ramifications that the situation still threatens the U.S. economy. Fears of a recession have been forecast as a possible outcome of the downturn this situation contributed to. The discussion of what transpired in the United States is integral to understanding the wave of events that represent the focus of this study. There are those who believe that the foundation for the crisis was laid in good economic principles, and it was the greed of some operators in the U.S. financial sector that abused the directive with what is termed as predatory lending practices[3]. There are others who fault funds and banking systems for helping to fuel the underpinnings that lead to the crisis, and still others who think that such market shake outs are the way in which the international financial sector finds ways to deal with loose bolts within th e system[4]. Alexander et al (2002) tell us that[5]: Finding that some loans are more risky than others does not, by itself, imply a market inefficiency. Inefficiency exists only if loans with different risk receive similar interest rates. We document such an inefficiency. The ramifications of the tightly wound international financial system is that while it provides opportunities to make money, it also magnifies the downsides and loses money. Gains always have their negatives, thus financial mishaps have and will continue to happen. In understanding the subprime financial crisis, a broad number of topic areas will be covered herein to draw a picture of the matter in which financial markets work in this instance. One key aspect of the foregoing is liquidity. McGee[6] tells us The essence of a liquidity crisis is a flight from riskier assets to cash. In understanding the many contributing factors, one has to be mindful that this situation originated in the United States, thus there are other considerations that also factor into the equation. Financial crises situations are nothing new; they are market occurrences that appear on an all too frequent basis. Chi and Gai[7] provide a perspective on this: The spate of financial crises in emerging market economies as diverse as Brazil, Korea, Mexico, Russia, and Turkey, during the 1990s has focused attention on the importance of improving the policy framework for the management and prevention of crises. A distinctive feature of these modern crises has been the role of imbalances in the national balance sheet. Maturity, currency, and capital structure mismatches meant that the capital account took centre-stage, with large external financing gaps emerging as a result of unparalleled reversals of capital flows. Foreign investors wanted, and attempted, to withdraw from these countries at the same time, much like a run by depositors on a bank. Once sentiment soured sufficiently so that a critical mass of investors rushed to withdraw their claims, the crises became self-fulfilling as others found it rational to join the herd. The preceding situation represents a different financial crisis, however it does provide us with some valuable insights that will guide us through the varied aspects that will be discussed herein. The important part of their statement is the fact that risk represents an underpinning in financial transactions, thus risk is a situation to be minimised. A sense of the complexity of this examination is provided by Langley[8] who states: Any attempt to apprehend contemporary world finance encounters not only significant structural changes that cannot easily be captured, but also the predominance of neo-liberal political economy in framing our knowledge of world finance. Alternatives to the neo-liberal mode of knowledge of world finance are a necessary first step towards forestalling the worst eventualities of the current structural transformation. Neo-Liberalism represents a facet of this examination in that[9]: The most powerful coalitions between state agents and economic actors are found in liberal political economies. The Soviet Union offered an alternative to capitalism that theoretically emphasized economic justice and material welfare, one that intertwined economic and political power even more closely together than elites are thought to be in liberal capitalist states. Even so, the power of the economic agents of the Soviet state was more structurally constrained than the power of capitalist states and their agents. In a global economy, the underpinning foundation is capital, and the movement of that capital to effect borrowing and lending, along with the financial instruments that accompany such action[10]. Capital movements have cycles that are marked by up turns and down turns based upon the activities within markets and the decision of the cogs (individuals) that run the machinery. The foundation, influence, reasons and reasoning behind those decisions represent paths that lead in differing directions which impact other course of actions that create cycles. This study shall follow these paths as they related to the subprime crisis. 2.0 Background As indicated, the financial crisis under examination originated in the United States, starting as far back as 2002. The ramifications of that event shall be covered in the Literature Review of this examination. In setting up the path of understanding for the journey through the twists and turns of the crisis, a foundational pillar of understanding is necessary in order to see the varied ramifications. Carrada-Bravo[11] advises the process of creating value starts with the identification of a market need. Todays international financial system is an outgrowth of[12]: The collapse of the Bretton Woods system of fixed exchange rates in the early 1970s marked the last major turning point in the evolution of global finance, ushering in the generalised non-system of exchange rate arrangements that survives today. However, at least as important in the development of international financial relations since then has been the enormous growth in the volume of international capital flows. In large part, this growth is attributable to the dismantling of the panoply of exchange controls introduced during the Bretton Woods era to facilitate exchange rate management by central banks under the auspices of the International Monetary Fund. In understanding the dynamics of the circumstances that comprise the comparison of events in London and Almaty, Makin[13] provides us with an important capsulisation of the underpinnings that will be brought out herein: The domestic financial markets of many economies have therefore been increasingly internationalised in the wake of liberalising policy initiatives implemented by governments around the world. Financial market liberalisation in many advanced economies was virtually complete by the late 1980s. With the removal of previously stringent regulations over domestic and international financial transactions, institutional barriers impeding the movement of financial capital between many regions of the world have now largely disappeared. Accompanying the domestic deregulatory changes were tighter prudential arrangements in advanced economies aimed at strengthening the capitalisation of banks and hence the stability of domestic financial systems. Such accompanying arrangements have been lacking in many emerging economies however and this has been a fundamental reason for recurrent financial crises in these economies The highly integrated nature of international financial markets as a result of globalisation has integrated national economies to the point that the world is virtually a seamless flow of capital. The foregoing, combined with the international liberalisation of world financial markets that arose out of Bretton Woods facilitated a dramatic increase in financial movements across borders that has been aided by advances in technology that have reduced transaction time, and lowering costs[14]. The increased efficiency of the preceding has helped to increase the pool of funds available for lending activities to all nations. Capital mobility is the underpinning for the preceding as fund availabilities can be quickly correlated. These advances have brought with them inherent problems, one of which is an important facet of the manner in which the subprime crisis impacted Almaty more than it did London. The following provides insight into an area that is an important point of understanding to b e remembered[15].: International money market activity of this order and the lightning speed at which funds can now quit countries has also prompted many commentators to question its worth and, in light of heightened vulnerability to foreign investor sentiment, to emphasise its perceived dangers. In particular, strong objections to the ever-increasing trend of financial globalisation have been raised on the grounds that the governments of the economies most affected have ceded their economic sovereignty to international investors. Thus, the actions of individuals within a market can start a feeding frenzy based upon the promise of available opportunities that seem to be available in the future to entice bankers into lending policies that incur the preceding. This is exactly what occurred in Almaty, as shall be explained in the Analysis. Given the aforementioned complexities involved in a discussion of this crisis. This background is being utilised to inject core issues that will be useful in understanding the circumstances and other areas to be explored. In finance, risk equates into a higher rate of return as fewer opportunities for borrowing are present. This has been a fundamental principle of lending since antiquity. High current account deficits along with rising foreign debt, means more risk, thus interest premiums must be charged. This makes the cost of money higher inside a country and acts as an inhibitor to borrowing. The preceding translates into the creditability of the borrower and the circumstances involved. Desai and Said[16] help us in understanding the relationships involved in international finance in term of how they apply to the countries in which London and Almaty are located in, which impacts the events that occurred: Financial crises, from the perspective of territorial order, arise because of a loss of control by sovereign states over financial markets and financial flows. The problem is invariably seen as one of inadequate regulation, the failure of governments either individually, or in concert with others, to exert sufficient control over the international economy. Economic agents have created patterns of activity which have escaped the control of governments. The response to these problems is to find ways of restoring the control of each sovereign state over these activities by increasing regulation. This may involve enforcing existing powers, or creating new institutions, either intergovernmental or national in their scope. In times of crisis, increased financial regulation is imposed either internally by the sovereign state, or externally by lending controls that make the cost of money more expressive, and thereby limits its use. This represents what Desai and Said[17] tell us is cosmopolitan order in global finance that: emphasises not state sovereignty but either market sovereignty or the sovereignty of capital accumulation. There are many different variants of the cosmopolitan conception of world order including neo-liberal, Marxist and Austrian strands but what all of them share is the assumption that the state and politics are subordinate to the way in which the economy is organised, whether this is the spontaneous market order of Hayek or the system of production relations of Marx. These structures determine how the society as a whole evolves and they supply its ordering principles. This means that states have to operate within fairly tight constraints, imposed by the way in which markets and accumulation work. They do not have much discretion in determining their responses. The growth of a global system of production and exchange, from the very first, tended to run ahead of states and national jurisdictions. It ended up undermining and circumscribing them. It has not destroyed them, but it has created powers, resources, networks and institutions which go far beyond them and which it is impossible for states to control without destroying the conditions for economic growth and prosperity and with them the fiscal basis for their own existence. World order is cosmopolitan rather than national in this sense. It is based not on states and intergovernmental co-operation, but on the logic of markets and capital accumulation. The preceding is another important central aspect that is a part of this study, in that it applies to Almaty, and how the subprime meltdown ripple effect was handled to bring about a correction in Kazakhstan. 3.0 Methodology The approach to this study utilised a number of techniques to approach the examination of how the United States subprime mortgage crisis impacted Almaty and London. The complexity of the situation entailed looking at economic, statistical, historical, pre and post market factors, and other elements to equate the forces acting upon various markets in order to glean a picture of the what transpired. The following will set forth the various techniques used. 3.1 Research Philosophy and Approach Qualitative and quantitative research was used in this study as the combination of these two approaches led to a more comprehensive understanding of the forces acting upon the situation. The foregoing aided in equating key aspects of the study as represented by occurrences that transpired in the market, along with historical components. Secondary research that entailed books, journals, magazines and the Internet were used as the study entailed gathering past data and contemporary information in order to compile a picture of the situation and aspects associated with this investigation. As the range of the examination took in a broad array of financial, market components, it must be understood that in researching data it might have been possible that some information was either overlooked and or not available. The volumes of data on the study also rendered the possibility that some more important sources of information where not found that could have potential altered the findings, ana lysis, conclusions and or recommendations reached. In order to guard against such possibilities a number of differing sources were reviewed in order to form a more balanced assessment of the information. 3.2 Research Strategy One of the research methods utilised in this study represented what is termed as a cross-sectional study. The foregoing represents a method entailing observation of a number of items during the same point of time[18]. The preceding was utilised as opposed to a longitudinal study as the later represents observations occurring over a long period of time[19]. In conducting this study utilising the cross-section method, the foregoing entailed explorative, as well as descriptive and explanatory facets as it delved into the nuances of the industry, seeking to describe the contextual factors, along with the explanation of strategies, and tactics. The vast views of approach, and thought contained in understanding this study takes in a broad range of secondary research as this method provides exposure to a balanced view that is not skewed by what can occur in primary research. Secondary research allows us to be in touch with many different points of view, however, it can not always be relied upon as the researcher may have sourced the wrong materials in making the analysis, and or missed certain key points that were either not available, or unknown at the time the study was conducted. Secondary research represents the gathering of information from books, journals, articles, other research sources, and case examples. Secondary research represents a means to collect information regarding techniques and procedures, as well as strategies, rationales and the reasons behind courses of action, and or circumstances. Within this study, the literature search represented the main sources of information. It, the literature search, consisted of an examination of existing material, searching for information pertinent to the project. The means via which to approach the study of a project can take on many forms. Inductive and deductive research represent two techniques that can be brought together to understand the views of differing approaches to the area under examination[20]. The combining of research methodologies has been advised as a means to improve the quality of an examination, and it is possible to bring these different approaches to bear on one study, whereby there are advantages in so doing. Table 1 Comparison of Inductive and Deductive Research[21] Deductive Research Emphasis Inductive Research Emphasis Utilises scientific principles Gains an understanding of the meanings people attach to events Moves from theory to data Obtains a close understanding of the research context Collects quantitative data Collects qualitative data Utilises the application of controls to ensure the validity of data Represents a more flexible structure that permits changes of the research emphasis as the research progresses Is a highly structured approach Makes the understanding that the researcher is a part of the research process The researcher is independent of what is being researched Has less concern with respect to the need to generalise Has a necessity to select samples that represent sufficient size in order to generalise conclusions Saunders (2006, p. 121) advises that the path of deductive research often is faster in terms of completion, as the data collection is usually based on what he terms as one take. Inductive research however, states Saunders (2006, p. 121) can be much more protracted in that frequently the ideas are based on a much longer period of data collection and analysis all of which has to emerge gradually. 3.4 Research Questions In order to equate the answer or answers to the query entailing how the financial crisis impacted the real estate sectors in London and Almaty, the research questions entailed looking into an understanding of how economies work on a national as well as international level, along with financial market operation on a national and international level. 4.0 Literature Review Allen[22] in his book Financial Crisis and Recession in the Global Economy tells us of the fact that the rapid expansion and globalisation of financial markets shadows most other recent developments in international economics. The foregoing is a critical component in the understanding of the recent U.S. sub prime mortgage crisis and its impact on global markets. Allen[23] advises that during the past twenty years, the international financial sector has changed and advanced in dramatic fashion, earmarked by the introduction and success of an entirely new currency, and change in the underpinnings of financial cohesiveness that impacts the countries of the European Union as well as the rest of the world. The Euro is the singular most noteworthy development in the rapid expansion of international finance that is marked by a host of important occurrences. He explains that new financial instrument such as derivatives, offshore banking, offshore financial markets, along with numerous other developments are at work in a global financial system that binds itself closer and closer by degrees each day Allen[24]. In his book, Allen[25] explains that the advances in information technology has directly impacted the growth and interlinkages in international finance as he states: A financial transaction can loosely be defined as any business arrangement where money changes hands but the only other thing that changes hands is documentation. Both money and documentation are moved by information technologies; therefore financial market activity is enhanced by advances in those technologies. Expanding use and performance of electronic and regular mail service, telephones, computers, fax machines, image processing devices, communication satellites, fibre optics, the World Wide Web and so on creates better opportunities in finance In illustrating the foregoing, Allen[26] explains that in the early 1980s financial transactions were communicated across telephone lines, via facsimile machines, and satellite transmissions that were collectively owned and operated by national governments through Intelsat in proportion to national use. In his book, Allen[27] advises that developments in the speed of transmission of the facsimile machine during the 1980s corresponded to increases in international financial transactions. In the early 1980s a single page transmission took six minutes, by the end of the 1980s that time frame was down to three seconds. Increased speed in transmission times helped to facilitate international financial transactions, thus bringing global financial instructions closer together in terms of their ability to conduct business in a more timely manner. In todays world, international financial transactions take place over T1 networks employing packet-switching networks that can communicate with any bank, anywhere almost in real time, as volumes of data and documents can be transmitted in seconds[28]. The significance of the advance of technology is further explained by Allen, as he stated[29]: Changes in communications have always affected the structure of finance, but these developments of the last few decades are responsible for the truly global nature of todays financial markets. As participants use these new technologies and networks, linkages are formed between various national and international sub-economy financial markets. New international opportunities have occurred for centuries, but only recently has interdependence become so pervasive to merit the word global The rapid developments of information technology and its impact on global monetary movements brought capitalist economies closer together and rendered the opposing state planned economy as a dinosaur, thus, along with a long list of other important development, helped to lead to the collapse of communism as an alternative economic system[30]. The developments in information sharing systems, transmission, interbank transactions, international currency and stock trading underpins what is termed as the global economy that transcends the centurys old manifestation of borders. DeMartino[31] helps us to better understand the preceding by explaining: emerging today is not just the latest experiment in economic organization, it is, indeed, the highest possible form of economy. Global neoliberalism, the extension of market-based economic integration across all local, regional and national borders, will provide humankind with the optimal means to achieve prosperity from now until eternity. With the perfection of the global capitalist market economyand the consequent eradication of communism socialism and all forms of state planningeconomic history as the contest among alternative forms of economic systems come(s) to an end. DeMartinos[32] statement concerning neoliberalism represents an important concept within the context of this examination, thus it shall be explored briefly, to add illumination as to its meaning. Martinez and Garcia[33] help us to understand the foregoing by stating: Neo-liberalism is a set of economic policies that have become widespread during the last 25 years or so. Although the word is rarely heard in the United States, you can clearly see the effects of neo-liberalism here as the rich grow richer and the poor grow poorer. Around the world, neo-liberalism has been imposed by powerful financial institutions like the International Monetary Fund (IMF), the World Bank and the Inter- American Development Bank.the capitalist crisis over the last 25 years, with its shrinking profit rates, inspired the corporate elite to revive economic liberalism. Thats what makes it neo or new. The concept of neoliberalism comes into play in terms of the ramifications of the recent U.S. subprime crisis. The following, represent market undercurrents that help to explain the underlying as well as overt facets involved that were linked factors that impacted the economy of Kazakhstan, along with the banking and financial market fallout from the subprime crisis. Per Martinez and Garcia[34] neoliberalims key points represent: Rule of the Market: This aspect of neoliberalism represents the freeing of private enterprise from bonds that are imposed by the state, irrespective of the impact such causes in terms of social change. The preceding entails developing internal mechanisms and policies that foster an increased openness to international investment as well as trade. In addition, price controls are removed, along with freedom of capital movement, services and goods. Deregulation: This aspect calls for the reduction of state regulation of all areas that would have an impact on reducing profits. Privatisation State owned enterprises are divested, representing banking institutions, utilities, hospitals, important industries, education system and allied areas. Unfortunately, in most instances privatisation has had the effect of putting a concentration of wealth in a few hands when systems are dismantled, as has been the case in Kazakhstan as well as other former Soviet bloc states, resulting in higher prices for goods and services. Elimination of the Concept of the Public Good or Community This represents replacement of the foregoing with what is termed as individual responsibility. This is exampled by pressuring the poorer segments of society to find their own solutions for lack of health care, employment and education, and then finding fault when they do not solve these and or similar problems Martinez and Garcia[35] further explain neoliberalim, by advising that it represents a policy reform that has been imposed by the World Bank and other global financial institutions. Neoliberalism in the United States is dismantling the welfare system, watering down labour rights, and causing cuts in social programs[36]. The explanation of neoliberalim is importantly in understanding what happened to the Russian economy and its new states after the break-up of the Soviet Union. The transition policy crafted for Russia after its economic collapse was crafted by what are termed as radical neoliberal reformers[37]. 4.1 Kazakhstan Kazakhstan is the largest economy as well as nation in Central Asia, possessing extremely rich oil reserves along with minerals[38]. Agriculture also represents a strong sector and a good industrial base for the extraction and processing of some of these natural resources[39]. That foundation has provided stability for the countrys economy, which rests strongly on the export of oil, grain, and metals that have produced a GDP per capita that ranks 100 in the world, the United Kingdom stands at 19th[40]: Chart 1 GDP per Capita[41] Rank Country GDP per capita 1 Luxembourg $ 55,100 2 United States $ 37,800 3 Norway $ 37,700 7 Switzerland $ 32,800 8 Denmark $ 31,200 9 Iceland $ 30,900 10 Austria $ 30,000 11 Ireland $ 29,800 12 Canada $ 29,700 13 Belgium $ 29,000 14 Australia $ 28,900 15 Hong Kong $ 28,700 16 Netherlands $ 28,600 18 Japan $ 28,000 19 United Kingdom $ 27,700 20 Germany $ 27,600 21 France $ 27,500 86 Russia $ 8,900 91 World $ 8,200 95 Brazil $ 7,600 99 Iran $ 7,000 100 Kazakhstan $ 7,000 101 Romania $ 6,900 The economy of Kazakhstan is basically almost totally dependent upon the production of basic commodities (such as) agricultural products like wheat and livestock, minerals like copper, alumina, lead, zinc, iron ore, and steel, and mineral fuels like oil, gas, and coal [42]. Prior to the U.S. subprime mortgage crisis the Kazakhstan economy had been enjoying a steady growth rate, primarily as a result of oil exports, with real GDP growth ranging around 10.4% for the period between 2000 and 2004 that marked a major improvement from the sluggish growth rates of the 1990s as the country adjusted from its neoliberial start[43]. During that period the economy recorded modest inflation, with a governmental budget surplus[44]. On the negative side, and a facet that is important in understanding the later review of the real estate sector, is that the business environment is known for widespread corruption that impedes the conduct of business[45]. As real estate is a valued commodity, this a spect needs to be considered in the evaluation of factors involved in the subprime mortgage credit crunch. The financial sector of the country is reported as being relatively well developed, marked by low interest rate spreads[46]. A report by Nathan Associates[47] commented that the rapid growth of credit needed to be accompanied by improved regulation of the financial market as well as supervision, a critical factor when a crisis situation surfaces. The following illustrates key economic areas: Table 2 Kazakhstan Analysis / Notable Strengths and Weaknesses[48] The basically strong economic underpinnings are weakened by the moderately structured state of the financial sector, and the countrys corruption index. The countrys overall monetary and fiscal policies were rated as sound in the Nathan Associates[49] report, which emphasised the reliance on oil exports as a key driver of the economy as productivity of the workforce is rated low. As mentioned, corruption is a problem in the business sector where under the Index of Economic Freedom the country ranks 76th in the world which puts it in the category of mostly free[50]: Table Index of Economic Freedom 2008[51] Category United Kingdom Kazakhstan United States Rank 10 76 5 Overall Score 79.55 60.54 80.56 Business Freedom 90.79 56.53 91.69 Trade Freedom 86.0 86.2 86.8 Fiscal Freedom 61.2 80.1 68.3 Government Size 40.06 84.68 59.81 Monetary Freedom 80.75 71.87 83.67 Investment Freedom 90 30 80 Financial Freedom 90 60 80 Property Rights 90 30 90 Freedom from Corruption 86 26 73 Labour Freedom 80.7 80 92.3 * The ranking system represents 80-100 Free / 70 79.9 Mostly Free / 60-69.9 Moderately Free / 50-59.9 Mostly Free / 0-49.9 Repressed Atmaty is Kazakhstans largest city, having a population that exceeds 1,226,000, and is the major commerce centre of the country[52]. Considered as relatively stabile, the real estate in Atmaty has been noted as a destination for foreign investment form many individuals with capital, termed as well to do[53]. Condo sales in Atmaty moved briskly prior to the financial crisis. In a report generated by the American Chamber of Commerce in January of 2006[54], before the financial crisis, Land development, construction and marketing of commercial and residential properties (had) become a vital part of the national economy. Figure Map of Kazakhstan[55] Figure Map of Almaty, Kazakhstan[56] The increase in real estate investment prior through 2006 had been a result of the introducing of policies and reforms to spur investment and growth in that sector, which impacted Almaty, Astana and Atyrau[57]. Real estate market investment and growth have proceeded well in Almaty since the late 1990s, however the moving of the capital to Astana saw a moderate transition of residents that included many governmental personnel[58]. The real estate sectors growth rate during that period showed an overheating of domestic real estate prices as well as prices for assets, along with building pressures in terms of the appreciation of the real exchange rate[59]. In a report generated by the Harvard Business School Institute for Strategy and Competitiveness[60], the overall prospects for the economy were rated as declining due to the preceding factors, which also included the dominance of oil in the nations economy as creating overall imbalances. The competitive challenges for the country as indicated in the preceding report mentioned that this was also a declining factor in that the geographical location is remote, the structural weakness in the business environment, the lack of human intellectual capital as well as institutional capacity to tackle the broad range of economic and competitive issues to be addressed, the lack of clear policy priorities that sets forth a sequenced methodology for achieving goals and objectives to develop a balanced economy, and a vision of where the country sees itself heading over the long term, with the road map to reach that destination[61]. The Harvard Business School report pointed out other structural weaknesses as represented by the following[62]: The prosperity the country has been able to achieve has been derived from the selling of natural resources and real estate, without the benefit of an industrial base and other forms of trade. The prosperity of the country is constrained as a result of it being dependent upon the use of natural resources, thus rendering growth beyond that realm as limited. The countrys government is heavily engaged in the economy, along with it being the owner as well as distributor of wealth as defined by natural resources. Interest groups seek increasing portions of the countrys wealth thus ignoring investments in production facilities and the development of a manufacturing and or industrial base. The countrys resource revenue dependency and unproductive economic policies permit wasteful methods. Resources are utilised to support subsidies that contribute to wasteful practices The preceding broad based review of the economic sector has been undertaken to reveal the structural components of the economy of Kazakhstan, and its small manufacturing underpinnings that indicate an economic weakness. The foregoing represents a potential financial bubble that could suffer dramatic reversal in economic downturns and or financial crisis situations. The preceding analysis of the Kazakhstan economy is supported by a report conducted by the International Monetary Fund in 2005[63] that pointed to the same economic sector structural weaknesses: Inflationary pressures are being created by increases in governmental salaries thus creating a demographic market inconsistent with the country as a whole. The monetary challenges in the country were indicated as continuing as a result of the dependency on oil revenues. It also stated that the appreciation of the value of the currency is contributing to heightened pressures on inflation. The International Monetary Fund placed particular emphasis on the area of bank credit that has seen a dramatic rise, mentioning the real estate sector in particular. It stated that the increase in banking credit was being financed through external borrowing that creates significant risks As shown throughout this Literature Review, the heightening of credit lending, and real estate under an inflationary currency, underpinned by an economy highly dependent upon oil and raw material exports, does not represent a strong foundation for hard asset appreciation (Real estate) over the long term[64]. In a report generated by the International Monetary Fund[65] specific risks associated with the real estate sector were mentioned as a result of the rapid rise in lending. The increased risk as a result of the heightened rise in mortgage and consumer borrowing tripled during 2004, with indications pointing to continued increases in these areas[66]. Consumer borrowing for reasons related to property, meaning including straight mortgage loans, represented 37% of bank portfolios exposed to real estate, which is extraordinarily high[67]. The IMF report went on to state that as a result of lending limits on banks for real estate have been established, such limits were basically meanin gless as this was circumvented by disguising real estate loans as consumer lending to hide their categories[68]. Another weakness in this area was revealed by the fact that there were no income disclosure requirements for commercial property loans as well as construction loans[69]. Other underlying problems in the banking sector was also identified, as the Kazakhstan banking sector had dramatically increased its international borrowing to underwrite the domestic extension of credit[70] The International Monetary Fund revealed concern over long-term bonds that were being issued by the banking sector as a result of the concern over contract options permitting the lenders to exercise early repayment options which would impact upon the maturity rates[71]. Supervisory increases concerning regulatory aspects in the banking sector were also raised as the rapid growth in the sector, the heightened consumer borrowing profile and increase in real estate, commercial property and construction loans indicated a heavily banking portfolio skew in one economic sector thus indicating portfolio imbalance[72]. The promotion of Almaty as the countrys financial sector after the moving of the capital had helped to stabilise the real estate sector after some resident relocations and moving, however concern was indicated regarding the building in the commercial sector in anticipation of such growth, which was also accompanied by real estate purchase for speculative as well as income potentials[73]. All of the preceding points to a relative strength in economic growth, but weaknesses in the structure of the underlying economy as a result of dependence on oil revenues. The extension of a disproportionate percentage of loans into the real estate sector for commercial, construction and real estate also was indicated as a structural weakness. Inflation represents an important term in this examination. It, inflation, according to the 1983 definition as contained in Websters New Universal Unabridged Dictionary, represents[74]: An increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices: it may be caused by an increase in the volume of paper money issued or of gold mined, or a relative increase in expenditures as when the supply of goods fails to meet the demand. In 2000, Websters Dictionary revised its definition of inflation to read[75]: A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services. The new definition indicated that inflation was the consequence of rising prices as opposed to being its cause, a significant change in face of the preceding review of Kazakhstans economy and its direction prior to the financial crisis. The definition view of Websters revised version is supported by a number of sources. InvestorWords.com[76] define inflation as The overall general upward price movement of goods and services in an economy, usually as measured by the Consumer Price Index and the Producer Price Index. Over time as the cost of goods and services increase, the value of a dollar is going to fall because a person wont be able to purchase as much with that dollar as he/she previously could.[77] The economic growth in Kazakhstan prior to the financial crisis was underpinned my mild inflation that was somewhat keep in check by oil revenues and external banking sector borrowing that supplied currency for consumer lending and real estate. Thus when the crisis hit, these sectors underlying weaknesses magnified. 4.2 London As the capital of England, London has always held a pivotal place in the economy of the country. It is home to the second most important financial capital in the world after New York[78], with the prices for real estate in London among the worlds highest, competing with New York and Tokyo for that distinction[79]. In equating London with Almaty, there are a large number of fundamental differences that shall be covered herein in order to provide understandings as to the impact of the financial crisis on each locale. In brief, London is a global financial capital as well as location for retailing, corporate headquarters for global companies, is a pivotal location as a gateway between the United States and Europe, is a shipping destination as well as being linked with the strong economic underpinnings of the European Union. The foregoing are highlighted differences between it and landlocked, oil dependant Almaty that has a limited economic base, however, there are a host of factors that go deeper. London has a strong and skilled workforce that is highly diverse, along with an economic base that is spread into differing sectors thus offering balance in the case of economic downturns. In a survey of the most costly cities, London ranked as third after Tokyo and Osaka Japan[80]: Table 3 Worlds Most Costliest Cities[81] Rank Location Last years rank 1 Tokyo, Japan 1 2 Osaka, Japan 4 3 London, Britain 2 4 Moscow, Russia 3 5 Seoul, South Korea 7 6

Exploration Narrative Essay - 713 Words

The testimonies written in both early exploration narratives and seventeenth century Puritan texts described how a particular explorer viewed the new land of America. Each of these writings had their own deception about the significance of America, both as a physical place and also as an ideal. Christopher Columbus wrote several exploration narratives during his journeys to and from the new land. He offered his own personal definitions and arguments about what he saw and thought about his new discoveries. In the text Letter to Luis de Santangel, Columbus writes about his crowning achievement, the discovery of new world. I believe that this text helps convey a specific definition of America. Columbus portrayed America as being†¦show more content†¦Another passage in this text which shows the idea of America as paradise is In it there are many harbors on the coast of the sea, beyond comparison with others which I know in Christendom, and many rivers, good and large, whic h is marvelous. This excerpt from Columbus about the shore of the new world describes how the inlets of the coast make for great harbors. This was an extremely important detail for explorers during that time in history. Sea ports and inlets allowed explorers and the people of the land trade and travel with ease. Columbus knew that harbors were a very significant aspect of land as a territory and as a central reason why an area should be described as marvelous. Another quote from Columbus letter that is significant is All are most beautiful, of a thousand shapes, and they are accessible and filled with trees of a thousand kinds and tall, and they seem to touch the sky. This quote describes the mountain ranges which Columbus discovered. He wrote that the curves of the range are beautiful and that they are filled with life. The next line from Columbus tells of the significance of the mountains being overwhelmed with trees. And I am told that they never lose their foliage, as I can understand, for I saw them as green and as lovely as they are in Spain in May, and some of them were flowering, some bearing fruit, and some in another stage, according to their nature. This passage compares theShow MoreRelatedTravel Writing Of The 21st Century : An Exploration Of Relevance Through William Dalrymple1643 Words   |  7 PagesTravel Writing in the 21st Century: An exploration of Relevance through William Dalrymple. The creation of Google Earth has made the foreign ever more familiar by making the foreign accessible to anyone with access to a computer or internet cafe. The growing popularity of the internet has contributed to a â€Å"sense of information omnipotence [which] has proved horribly illusory† (Dalrymple 4). Travel writing provides global context and depth that is difficult to access through the internet, lendingRead Morenarrative essay1321 Words   |  6 PagesNarrative Essay A Brief Guide to Writing Narrative Essays Narrative writing tells a story. In essays the narrative writing could also be considered reflection or an exploration of the author s values told as a story. The author may remember his or her past, or a memorable person or event from that past, or even observe the present. When you re writing a narrative essay, loosen up. After all, you re basically just telling a story to someone, something you probably do every day in casual conversationRead MoreGames Design As Narrative Architecture By Henry Jenkins1602 Words   |  7 PagesNarrative research Introduction Games and story, which on opposite sides of the interactivity. After reading a paper named â€Å"Games Design as Narrative Architecture† by Henry Jenkins, I think controlling the balance of gameplay and storytelling is important to game designers if they want to design a game with narrative. For this essay I will be analysing two completely different examples, focusing on their narrative and gameplay in order to explain this issue. In addition to this, I will also provideRead MoreNarrative Essay1497 Words   |  6 PagesThe Narrative Essay *What is a Narrative Essay? †¢ Narrative writing tells a story. In essays, the narrative writing could also be considered reflection or an exploration of the authors values told as a story. The author may remember his or her past, or a memorable person or event from that past, or even observe the present. †¢ The author may write about: -An experience or event from his or her past. -A recent or ongoing experience or event. Read MoreThe Importance of Human Connections Explored in The Curious Incident of the Dog in the Night-time by Mark Haddon805 Words   |  3 Pagesenabling an exploration of the difficulties inherent in raising an autistic child and thus alters the perceptions of the reader concerning the complex connection between disability and dependence. Narration has a formative influence on the way in which the reader responds to the text. Within his novel, Haddon conveys the perceptions of the logic and order-based reliance of aspergus sufferers through the emotionless mind of the protagonist, Christopher Boone. As a consequence of this narrative style,Read MoreRichard Wright and William Faulkner both examine the psychologies of excluded members of society.1500 Words   |  6 PagesLay Dying. For both, a central question becomes the function of their characters’ minds in relation to one another, and to reality. Through different approaches, both Wright and Faulkner conduct modernist explorations of the social outcast’s interiority. To accomplish this, each author’s narrative voice traverses the gradient from realism to experimental fragmentation, Wright constructing a vertical consciousness, articulate and omniscient regarding Bigger’s psychological world, and Faulkner accessingRead MoreSue Monk-Kidd I n The Secret Life Of Bees, And Bernhard Schlink1158 Words   |  5 Pagesnovel The Secret Life of Bees, and Bernhard Schlink in The Reader, explore how it is absolutely essential to confront the truth about the past. Temporal setting in both texts is important to understand the ubiquitous desire to address the past. Narrative voice provides important comprehension of the longing to consolidate their history. The climaxes are important in displaying the repercussions of disregarding truths elapsed. Structure of the texts highlights the correlation between the past andRead MoreAnalysis Of Jonathan Swift s Gulliver s Travels 887 Words   |  4 Pagesstory is written in a satiristic style that makes fun of the bad things in society. Swift uses Gulliver to show how corrupt and cruel the 18th century English society was. Swift constructs Gulliver’s character through his first person narrative style. His narratives reveal that he is a rather unemotional character. This is shown when he describes and recounts dangerous situations in a matter-of-fact and passive style. A clear example of this is when his ship was destroyed in a storm and all of hisRead More Toni Morrisons Beloved - Identity Essay1171 Words   |  5 Pagesslave narrative, explores how the text itself expresses issues of identity and describes Morrisons choices of authorship and their contribution to identity. Her exploration of the theme of identity calls upon the treatment of self-image, particularly in the context of slavery; and outward image as expressed by naming and other white descriptions of the black characters. Her organization of information is historically sequential, ordering elements as they occurred rather than in the narrative orderRead MoreCase Study : Mr. Rocky Mountain 916 Words   |  4 Pagesextent of his s ickness. This paper will prove that illness narrative provide adequate subjective assessment and telling story of their illness allows the narrator to disclose what is important to their lives, what matter to them most. To provide effective care to the patient, understanding the patient interpretation of illness must occur. Stories narrative by patient is an articulation of their knowledge. The act of understanding one’s narrative story becomes a biggest part of formulating the plan of

E-Marketing Strategy Free Essays

E-marketing is an effective tool to establish and strength the corporate brand image. The brand relation can be strengthened by online presence (through website and services) with an aim to retain the customers and eliminate the price factor. More and more people are using net which is creating great potential for online business. We will write a custom essay sample on E-Marketing Strategy or any similar topic only for you Order Now A brand expressed the hopes and expectations of customers. The online presence of an established brand also requires such criterions where customers expect some thing different than every day website. For an well known brand, it is not just dumping information online, but establishing communication, telling the visitors clearly; what is company about and what it stand for? Pepsi is successful in conveying that image. Its website www. pepsi. com is filled with many innovative features to capture the attention of visitors. The E-marketing strategy is based on the similar principals as traditional marketing 4P’s (Product, Price, Promotion and Position); however online marketing needs some additional P’s (People, Process, and Proof). E-marketing is the extended form of traditional marketing requiring the synthesis of the following factors; Personalization, Privacy and Security, Customer Service, Site, Sales Promotion. These functions allow managers to further their businesses online. (a) Personalization The basic concept behind the personalization is to understand a certain customer and establish relation. Thus the vital issue is to gather information about customer and then develop personalized products and services. For example Amazon asks the customers to make an account; where customer provides information about themselves. Based on this customer information, every time a customer logs in, products related to customer interests automatically pops up. This strategy works two ways; it allows the marketers to target individuals on personal level; and on the other hand it allows individual customers to go no further, but find product right in front of their eyes. (b) Privacy and Security Privacy is related to personalization. When businesses gathers information and store this customer information; the crucial issue is to make it safe. A major task of e-marketing strategy is to develop policy or guide lines for gathering information and keep this information private and confidential. Another crucial issue is security. Any transaction performed on the websites becomes the responsibly of the business and to ensure that no outsider is able to access the information. Thus a wise marketer will convey clear and convincing the customers that their provided data is safe hands. (c) Customer Service Like any traditional business, customer service is an essential part of e-business. Good customer service is a key to gain loyalty form the customers. Compared to traditional service online shoppers can come from anywhere in the world with different time zones; providing 24/7 customer service in crucial. One example is precisionreservation. com which provides online (hotel) booking to travelers. The booking is done automatically, while the copy of booking is sent via email. In case of any question, live support is available 24/7 through online customer service. Such excellent strategy allows the customers service to reach customers in real-time. d) Site E-marketing interaction takes place online on digital location which is called site. This location /site have to be available 24/7 and should have the infrastructure to support the number of visitors it receives each day. For any online business, the name should be very clear and should not be confused with any other name. The site should not have any resemblance to any other brand or any other business which makes t he customers confused. Any such resemblance is considered unethical practice and has severe consequences. Another issue is scalability; Amazon receives million of visitors with hundreds of orders each day. Amazon is able to meet the growing number of customers orders as its website has the vital infrastructure for its growing number of customers. (e) Promotions In any effective marketing campaigns, sales promotions are crucial. While developing an e-marketing strategy it is essential to develop online sales promotions targeted at shoppers. The target of any promotion is not long term sales, but achieving immediate goals (in term of volumes). Other than traditional methods; such as discount marketing manger needs to understand the latest technology well enough to exploit it. For example; doing promotions through RSS, which instead of news letter provides almost live data on day- to- day basis. It is very easy for online shoppers to compare the price before they make purchase; which makes it inevitable to check the competitors prices and promotions before starting any campaign. Conclusion For companies who already have established brands need to reach to the online consumers through consistent advertising to enhance their corporate image. One easy way is use the search engines; such as Yahoo and Google who offer relevant add with the queries surfers are seeking. This strategy helps in reaching old and new customers more effectively rather than waiting for customers. E-marketing needs new dimension to be considered compared with traditional marketing, even though e-marketing is evolved from traditional marketing. However such concepts revolve around the principal where customer and business can reach each other in a meaningful way. How to cite E-Marketing Strategy, Papers

Preventing Childhood Obesity

Question: Discuss about the Preventing Childhood Obesity. Answer: Background health promotion For every four children in NSW, one of them starts school being overweight or obese. Health reports from studies conducted since 2010 show that the rates of the prevalence of obesity affecting the school going age of 5-17 years are stabilizing (Neter, Schokker, Jong, Renders, Seidell and Visscher, 2011). However, the level at which these rates are stabilizing is alarming. It is a grave concern since overweight children, as well as teenagers, are likely to reach adulthood as obese, or worse still develop certain orthopedic problems or gastrointestinal endocrine. According to Vander Wal, and Mitchell (2011) children with obesity face the risk of having a cardiovascular disease which can be long-term as long as they are obese. When a child is overweight, their self-esteem is bound to be affected since they face discrimination and bullying from their age mates who are not obese. In a worst case scenario, the victim can develop depression (Kraak, Liverman and Koplan, 2005). To come up with ways to reduce and prevent obesity in children, it is prudent to examine the cause. Unhealthy lifestyles are the main cause of overweight and obesity in children. Unhealthy lifestyle includes unhealthy eating patterns where the childs consumption of Junk food is unregulated. Lack of physical activity worsens the situation since it leads to an accumulation of body fats. Another cause of obesity is genetic predisposal of a child. According to Neter, Schokker, Jong, Renders, Seidell and Visscher, 2011 in 2010 a great percentage of over 90% of K, 2 and 4 children and above 20% of those in high school were trying to live healthily by observing the guideline on vegetable consumption. Strategies put in place to prevent and manage obesity Due to this alarming trend, Public Health Wales postulates that children must be healthier at the age of five. To achieve their goal they have set some strategies to sensitize the environment around a child in eating and exercising habits at home and in school (Pearson, Webb and Mckeen, 2006). These strategies include educating children on the importance of healthy eating in schools. The schools in New South Wales are provided with a curriculum that understands that the challenge of obesity requires a broad approach. The schools, therefore, have strategies in place to enhance the acquisition of knowledge and development of skills as well as attitudes that influence the childrens eating habits in line with NSW. Linking up with agencies that facilitate educating children on healthy eating helps in sensitizing children on healthy eating. For instance, the Food Standards Agency (FSA) in Wales works with schools to facilitate workshops to educate children on healthy eating programs. NSWs eating programs have enhanced healthy eating. By Zask, Adams, Brooks, and Hughes (2012) Tooty Fruity Vegie has increased consumption of fruits and vegetables in Pre-schools. They also ensure that children engage in required physical activity. In addition to physical activities schools have come up with policies as stipulated by the Social, Personal, and Health Education (PDHPE) to ensure healthy eating. Other programs include the principles of Food Dudes Program that have increased the consumption of vegetables and fruits among children. On a normal school week, half of the students eat from the canteen not less than once a week. Having a healthy eating option at canteens is a way of NSW to achieve their main aim of reducing obesity in children by a margin of 5% by 2025. The NSW strategy contains and framework made by the government that aims at reducing the effect of chronic diseases that are lifestyle related. In 2007, NSW schools banned the sale of sugar-sweetened items in support of a healthy eating pattern. NSW has come up with various programs to promote physical activities in government schools. The Munch and Move is an NSW program that facilitates the training of trainers who handle children in physical activities. This program has policies that are in support of childrens well-being. Another program of NSW is the live life well @ school. Through this program, teachers acquire skills, confidence, and knowledge in line with the PDHPE syllabus. The PDHPE syllabus stipulates that a student should spend at least 120 minutes per week (Pearson, Webb and Mckeen, 2006). The input of parents in physical activities has a high impact. Therefore, parents are encouraged to support their children to participate in physical activities. In the early stages of five and below years, parents are advised to allow a child to have more playing time and less time on the screen. NSW also educates parents as well as family members on the importance of physical activities (Lindsay, Sussner, Kim and Gortmaker, 2006). This way, parents improve their perception of physical activities and support it. The Scholtz is an NSW website that provides the parent with more information about school physical activities (Lindsay, Sussner, Kim and Gortmaker, 2006). A teachers role in managing childhood obesity is very crucial. With all the policies and rules set by the NSW government, a teacher plays a great role in implementation and evaluation. To ensure that the teacher is skilled enough, NSW has put in place to enable a teac her acquire necessary skills. References Kraak, V. A., Liverman, C. T., Koplan, J. P. (Eds.). (2005).Preventing childhood obesity: health in the balance. National Academies Press. Lindsay, A. C., Sussner, K. M., Kim, J., Gortmaker, S. (2006). The role of parents in preventing childhood obesity.The Future of children, 169-186. Neter, J. E., Schokker, D. F., de Jong, E., Renders, C. M., Seidell, J. C., Visscher, T. L. (2011). The prevalence of overweight and obesity and its determinants in children with and without disabilities.The Journal of pediatrics,158(5), 735-739. Pearson, P. J., Webb, P. I., Mckeen, K. (2006). Linking teaching games for understanding and quality teaching in NSW secondary schools Vander Wal, J. S., Mitchell, E. R. (2011). Psychological complications of pediatric obesity.Pediatric Clinics of North America,58(6), 1393-1401. Zask, A., Adams, J. K., Brooks, L. O., Hughes, D. F. (2012). Tooty Fruity Vegie: an obesity prevention intervention evaluation in Australian preschools.Health Promotion Journal of Australia,23(1), 10-15.