Category: Economic Development

The emphasis on the life cycle impacts of projects is also a process efficiency drive to ensure that construction strategies take a long-term view of costs, explaining why sustainable buildings typically have lower running and maintenance costs. These are achieved through sustainable design strategies and innovative use of sustainable materials and equipment. Even where upfront costs of sustainable projects are high, it takes a relatively short time to recover such additional costs in addition to the indirect benefits to clients, end users, and society. In particular, projects designed or refurbished to the attributes of economic sustainability can significantly extend or prolong both the physical and economic lives of a built asset. The economic life of a building is exhausted the moment the cost of maintenance exceeds the revenue flow from the asset. The benefits of designing sustainable attributes also extend to low maintenance and running costs, enhancing returns on investments, affordability, and clients’ or end-user retention.

Various design and construction management strategies exist that can be used to drive economic sustainability in projects’ delivery, but for effective outcomes, sustainability has to be designed into the project right at the very beginning. Conscious of post-construction running costs in terms of energy costs, efforts are deployed to see the potential for alternative energy sources such as solar energy, requiring site optimization and re-orientation in the direction where solar energy can easily be captured. Using stark effects and a passive ventilation system will avoid mechanical processes and hence, eliminate the use of energy. Also, increasing ceiling heights and using plants can be used to enhance cooling, as heat is known to rise, and also to allow daylight. Similarly, plants and innovative designs are also used to cool the building to reduce the amount of energy in use to keep running costs to a bare minimum. Secondly, executing sustainability site analysis will allow what materials can be reused and recycled, resulting in large savings on building costs. This is particularly the case in the refurbishments of built assets. The economic sustainability pillar and the environmental pillar can be seen to be inextricably linked and complementary, as economic sustainability measures also enhance environmental sustainability and vice versa; thus, synergies can be found between actions under the two pillars. Other strategies which include the use of Life Cycle Cost Analysis (LCCA), and Building Information Modelling (BIM) are used to achieve economic sustainability, these will further be elaborated upon when we come to discuss the tools for achieving economic sustainability.

Another dimension of economic sustainability is the opportunities projects provide for local employment and income generation, boosting local employment in the process. However, for this to be done, a sustainable site analysis is necessary to indicate materials that could be sourced locally for the project, as well as a local skills audit to indicate the possible skills available that could be employed. For maximum local impact, projects should be designed to use local materials and skills available without compromising the structural, functional, and aesthetic quality of the project. The Crossrail project in London is a case in point where it was deliberately decided to enhance the local economy, and the following were the economic contributions to the local economy:

At least £42 billion is estimated to be generated

• 55,000 jobs supported
• 96% of work awarded to businesses in the UK
• 62% of suppliers based outside London
• 62% of Tier 1 suppliers are small and medium-sized enterprises
• 72% of Tier 2 suppliers are small and medium-sized enterprises
• 1.5 million additional people to access central London within 45 minutes when the railway fully opens
• 3 million square feet of high-quality office, retail, and residential space at 12 sites
• More than 1 million square feet of improved public space across 40 sites
• Delivery of 57,000 homes was supported by the project

What has been demonstrated is that the building construction sector is well positioned to drive economic sustainability given the capacity to drive down costs through design and management efficiency and innovations, and above all, leverage employment and income-earning opportunities for the local economy. However, to effectively do this, sustainability policies and practices must be mainstreamed into projects at the conceptualization stage of the project and not appended at a later stage of the project life cycle.

Colonialism is the act of a “powerful country directly controlling less powerful countries” (Collins,[no date] ) the historical act of colonialism was performed by the European colonial empires which involved countries such as Great Britain, Spain, Germany, Portugal, France, Belgium, and many more European countries. Before the end of the 19th-century, colonialism wasn’t ‘popular’ or important due to the historical context of the Napoleonic wars, industrialization, and “struggle of nationalism and democracy” (Age of imperialism, [no date], p.145.) European nations were not in the place to expand their empire. However, towards the end of the 19th century, there was an age of new imperialism as “Great Britain and France began to be economic rivals” (Age of imperialism, [no date],p.145. The desire to become great powers was growing this gave European nations the confidence to expand their empires. There are many reasons for the European colonial expansion and in this essay, I will be outlining the main motives which include political (within this I will be discussing military and strategic motives), economic, religious, and racial reasons.

One of the causes or motivations for colonial expansion in the 19th century was due to economic reasons. European countries such as Britain in the 1800s had just been through vast urbanization through the Industrial Revolution this meant they were scouting for new markets due to the pressures of financiers who were seeking new areas to invest. J.A. Hobson argued that European capitalist economies had expanded due to there being not enough profitability in investments in their home nations this meant they had to discover new areas to invest in to gain more profit so this caused European countries such as Britain to colonize areas around the world. As well as pressures from financiers there were also pressures from traders to seek new and raw materials (e.g. cocoa beans, rubber, copper, diamonds) and cheap labor, as imperialist power wherein rising competition for the best material goods and resources meant imperialist governments sorted for countries that possessed these materials this is seen in the example of when many European countries colonized countries in Africa to get its natural resources of cocoa beans, copper, diamonds, iron, etc. “Imperial merchants often established trading posts and warehouses, created transportation infrastructure, and sought control over strategic chokepoints, such as the Suez Canal in Egypt; which allows boats to cut thousands of miles of travel time between Asia and Europe” which made trading easier (Modern World History, [no date]).

Political motivations were also part of the reason for colonial expansion, during the 19th century there was a rise in nationalism this can be seen in the events of the Enlightenment and the French Revolution where nation-states were developing, and national identity was established among many. With this came the need for imperialist powers to want to become the best, thus creating more competition between countries they wanted to be the most powerful and prestigious so for them to have those qualities they needed to expand. For example, in Germany, Kaiser Wilhelm’s policy of Weltpolitik stated that colonial expansion was a way of raising Germany’s status, due to the late development of its industry expansion compared to other European powers Germany lacked the same advancement and they wanted to match their imperialist components. Leon Gambetta reiterates this when he stated, “To remain or to become a great state you must colonize” (James Joll, London Penguin,1990, p.81) this shows how territorial dominance was politically significant. A great example of political territorial power as a motive for colonial expansion was the colonization of Africa named ‘The scramble for Africa’ where European superpowers came together at the Berlin conference and negotiated who was going to occupy which countries and how the continent was going to be divided. France and Britain were the two European superpowers who conquered the most land which provided their status and power through this they were great powers. Aside from territorial power leading European nations felt that to be a great power they needed a strong navy military force this meant naval vessels needed military bases around the world to take on coal supplies (The Age of Imperialism, no date, p.146.)

Furthermore, aside from economic and political motivations for imperial expansion, there was also a sense of humanitarian and religious duty European countries felt they needed to fulfill, by spreading Christianity to Asia and Africa. For example, Christian missionaries from Europe established churches in conquered territories, they used this as a tool to encourage imperialism through educating the natives on Western culture and Christian values as they felt what they believed was “wrong” or “evil” and Christianity was the superior faith this is illustrated in a quote from the papal bull Inter Caetera on May 3, 1493 “The Catholic faith and the Christian religion be exalted and everywhere increased and spread, that the health of souls is cared for and that barbarous nations be overthrown and brought to the faith itself.” (Motives for imperialism, no date).

The idea of Western religion being superior leads me to the next motivation for the colonial expansion at the end 19th century; Ethnocentric motives. European imperial nations believed that their cultural beliefs were superior and more civilized than other groups, this was due to the prevailing concept of social Darwinism that was evident at the time. Social Darwinism is the belief that only the strong will survive in society, this is derived from Charles Darwin’s natural selection theory but was applied to societal concepts by Herbert Spencer in 1820-1902. For example, social Darwinism states that only the rich will survive because they’re naturally superior and fit to survive whereas the poor are naturally unfit to survive. After all, they’re the weaker group in society. During imperialism this same notion existed but in terms of race. The European colonizers were superior to the African and Asian colonized where inferior this is because European nations regarded their race, norms, values, and culture as superior to the Africans and Asians so they believed through colonization they were able to transmit their culture to the inferior people and help ‘civilize’ them. European humanitarians argued that colonialism was their humanitarian duty and that they were “aiding” the “barbaric” This is illustrated in a speech made by the French prime minister Jules Ferry in 1883 stated “I repeat, that the superior races have a right because they have a duty. They must civilize the inferior races…In the history of earlier centuries these duties, gentlemen, have often been misunderstood…But, in our time, I maintain that European nations acquit themselves with generosity, with grandeur, and with sincerity of this superior civilizing duty”. Furthermore, Europeans adopted social Darwinism as a motive for their imperialistic expansion by reasoning that some people were more advanced than others and as the white race they were inherently dominant therefore it was only natural for them to conquer the “inferior” as it’s a way of bettering mankind thus, the conquest of inferior people and the destruction of the weaker races was just nature’s natural law. ( The Age of Imperialism, [no date],p.146) 

The enactment of the Affordable Care Act is important in improving universal healthcare because it provides people of low income the opportunity to access quality healthcare services just like the working class. However, in attempting to achieve this, the GDP growth rate is likely to reduce leading to high inflation rates. This is why the government must take adequate measures as spending in healthcare is increased to help deal with these negative outcomes that are likely to jeopardize the country’s economy. The United States of America has experienced increased healthcare costs for several years which has forced the government to pump a lot of money into the healthcare sector. This has indeed forced the government to increase taxes and also tighten laws to maximize revenue collection. However, persistent increases in healthcare spending are harmful to the country’s economy and if not addressed adequately will lead to neglect of other basic needs like security. This paper will discuss in detail the case at hand, the major players involved in it, and the outcome of the case.

Reaching the year 2014, 18% of US GDP had been spent on healthcare services. During this time the cost of healthcare services went high making it unaffordable to low-income individuals. The number of people who cannot afford the rising cost of healthcare is projected to increase in case remedial actions are not taken (Haeder). However, the enactment of the Affordable Care Act is seen as the main remedy for this problem. The US economists argue that lowering the cost of healthcare is, however, unsustainable for the country and if not implemented properly would lead to over-borrowing to raise funds for healthcare services. The increasing spending on healthcare is only sustainable if it results in an absolute decrease in per capita GDP.

The rising cost of healthcare has impacted the US economy in several ways. Healthcare expenditures have been higher than GDP growth over the years in the United States of America. This has indeed raised several concerns among the country’s economists who think it will adversely affect the country’s economy if not addressed in good time. The biggest concern is that overspending on healthcare is likely to adversely affect the country’s economic indicators such as employment, inflation, and per capita GDP (Haeder). For example, if the government is forced to increase taxes being charged on various businesses to raise money for the provision of health insurance and improve health services across the country, this is likely to force some businesses to close down thus leading to unemployment. Moreover, the increased spending on healthcare will force the government to increase borrowing to raise money for such services thus leading to the rapid rate of inflation.

To solve these problems, Congress has passed the Affordable Healthcare Act aiming at ensuring that the cost of healthcare becomes affordable for the lower income individuals. The private sector has been the most affected in terms of growing expenditures in healthcare. This is so because employer-sponsored healthcare is the majority in the US (Andersen). This sector attracts several employers because income and payroll taxes do not apply in this case. Therefore, an increase in healthcare spending will erode profits gained by these private individuals in the provision of healthcare services. Also, employers who are faced with increased healthcare premiums are likely to lay off some workers to maintain profits. However, rising healthcare spending might not adversely affect employers if their employees bear incidences of such rising costs (Haeder). In case, the employers are the ones that bear incidences of high healthcare costs then their profits will reduce thus forcing them to cut employment. In addition, an increase in health insurance premiums will result in a reduction of employees while at the same time leading to an increase in working hours. For example, the increase in health insurance premiums during the 1980s led to a 3% increase in working hours (Ory). This increase in working hours is because health insurance premiums are fixed cost thus compelling employers to increase working hours to compensate for the cost.

The rising cost of healthcare will also lead to high prices of basic commodities such as foodstuffs, clothing, housing, etc. As stated earlier, the government usually increases taxes on businesses and companies to raise money for the provision of healthcare services. This is harmful to the country’s economy because it leads to an increase in manufacturing costs which ultimately makes those firms increase the prices of basic products.

The major political parties involved are the Democratic and the Republican parties. An unexpected move by the Trump organization to strike down the Affordable Care Act pushed the divided fight over human services into the center of the 2020 battle on Tuesday, giving Democrats a potential political blessing on an issue that harmed Republicans seriously a year ago in midterm races (Andersen). In another court recording, the Justice Department contended that the ACA, otherwise called Obama care, ought to be tossed out completely, including arrangements securing a great many Americans with previous well-being conditions and enabling youthful grown-ups to remain on their folks’ social insurance plans. President Trump commended the move amid a lunch with Senate Republicans and proposed the GOP should grasp another congressional fight over medicinal services arrangement in front of the 2020 decisions.

Republican legislators offered varying reactions to the organization’s new court recording, however, none offered help for tossing out all of Obama care without a prepared substitution for its most well-known components. Some Republican congresspersons made light of the possibility that the 2010 human services law was quickly in danger and said they would work to ensure those with prior conditions would be secured regardless (Healthcare.gov). The destiny of Obamacare depended on the Supreme Court, which has introduced two moderate judges since it cast a ballot to maintain the milestone medicinal services law in 2012.

The elements of ACA have been generally judged as positive by Americans and these elements need to be retained. Particularly, replacement or reform legislation-whichever phrase is favored-need to continue with:

• Prohibition of insurance firms from charging higher premiums or denying coverage due to pre-existing circumstances.
• Prohibition of lifetime restraints or limits for healthcare costs.
• Prohibition of “rescission “coverage for reporting on the application of immaterial inaccuracies.
• Allowing parents to include their respective children on their respective policies till age twenty-six, requires simplified and standardized enrollment as well as paperwork for health insurance.

Nonetheless, the policymakers have to comprehend the prerequisites of such gains/benefits. Specifically, pure voluntary health insurance enrollment in the absence of discriminating against pre-existing circumstances/conditions might encourage the healthy ones to refute the contribution to a risk pool till they fall sick. This shall culminate in an insurance “death spiral” whereby the cost of premiums will increase since the healthy stop paying premiums (Healthcare.gov). They will then inspire additional healthy people to refute the enrollment and increase the premium even further. Consequently, the following recommendations or suggestions for ACA changes are selected to spread the benefits and costs in a market-focused, sustainable manner.

Kate M. Bundorf, an associate professor of health research and policy at the Stanford School of Medicine, has researched healthy policy and healthcare systems’ economics. She claims that the Affordable Care Act increased health insurance coverage dramatically and this worked. About 13 million fewer uninsured individuals in the year 2015 as compared to the 2013 statistics. Obama Care further surged health insurance government expenditure since most novel enrollees got subsidized coverage, via Medicaid or exchanges. She highlights the controversy existing about whether Obama Care did or would slow healthcare expenditure’s growth rate. Her take was that whereas a slowdown in per capita spending growth was observed around the ACA’s implementation period, it is never precise that a dramatic increase in health insurance coverage was propelled by ACA provision. Indeed the Affordable Care Act has significantly assisted with the decrease in the number of uninsured Americans without neatly 20 million more Americans receiving health coverage since the ACA passage back in the year 2010.

The Affordable Care Act was put in place to ensure that all Americans receive the same quality care and plans without any type of bias criteria. Also, it is helping people who could not afford plans by having the healthcare market placed which is fair and equal. Even though the plan may have its benefits and drawbacks it is still going in the right direction to help millions of people who need the insurance coverage without any block or limitations. 

Japan is a highly developed first world country and is currently (2019-2020) ranked the third largest economy in the world after China. Japan has gone through major economic success and challenges through the years but its ability to learn, adapt and combine the skills and knowledge acquired has enabled it to always hold and avoid. The paper below looks at the various changes that the Japanese economy underwent from the early 1600s to date. It also looks at the role the political system played in shaping Japan’s economy and how it also changed to adapt to the world order.

In the early 1600s to the mid-1800s Japan’s economy was characterized by gradual economic growth. This was the period during which there was growing urbanization, spread of popular education and rise of the merchant class. However, a huge gap existed between Japan and western powers due to its isolation from the rest of the world. In 1853 Commodore Matthew Perry and a naval unit of the U.S. Navy went to Japan and demanded that Japan open commerce with the West. This resulted in unequal treaties forcing Japan to concede its economic and legal powers to the westerners. However, there were some middle-ranking samurai who were not willing to let this be the fate of the Japan so taking matters into their own hands they overthrew the ruling Shoguns government that could not defend its people from the westerners and in 1868 and set Japan on a new path of change. These new leaders studied and adopted the economic, political ways of the westerners that best suited them which propelled the industrial growth in Japan. The constitution was officiated in 1889 which saw the centralization of power as the accountability parliamentary government was left to the emperor as opposed to the people. During this period a national military was established and a mandatory education system enforced to teach the citizen skills and to foster patriotism to the country.

The period from 1890 to 1930 saw Japan industries grow that is the light export industries like textiles, which were necessary to pay for the raw materials needed from abroad, and also in heavy industries like steel and ship building. More people moved into the factories and offices which resulted in the growth of the cities. The leaders in Japan continued to pursue modernization and equal treaty rights and in 1894 it succeeded in revising the equal rights treaty and regained its parity with the western powers. Japan gained its first colony –Taiwan in 1895 and in 1902 signed a treaty with Great Britain which meant growth in its international status. In 1904-1905, Japan won a war against Russia and this expanded it empire. Japan continuously grew and even allied with the westerners in the World War I, but gain no political or territorial gains which felt like an insult to them. This insult was further perpetuated when Japanese were barred from immigration. 1929 Japan was hit hard by the Great Depression as it was mostly dependent on foreign trade. The impressive economic growth the country had gained started to deteriorate. Social problems were now on a rise and this was mostly felt in the country side as most silk farmers who had planted the crop in hope of exporting it didn’t have a market for it as a result of crash in the silk and stock markets.

In 1931 Japan was confronted with an accomplishment they could not ignore when the field commanders in Manchuria used a local provocation as an excuse to put all the Japanese territory in Manchuria under control of the military. The military-industrial machine went into high gear, pulling Japan out of its depression as it continued to expand Japanese hegemony across the Far East. As Holland, France, and Germany were enveloped in turmoil in Europe, Japan looked to replace them in Asia. Japanese troops invaded China in 1937 and French Indochina in 1940, setting up puppet governments to administer areas too vast to be controlled by the Japanese armies. The United States was alarmed by the increase in power of the Japanese and gave them an ultimatum of leaving China or steel and oil supplies would be cut off from Japan. But Japan was not having it and it organized a surprise attack on Pearl Harbor in December 1941, where most of the United States troops were and this took the United States a year to recover from which bought Japan time. On recovering the United States started gaining back most of the islands that Japan had colonized. In 1945 United States dropped two atomic bombs on Japan one Hiroshima and the other in Nagasaki which left the country devastated and in shambles resulting in its unconditional surrender. Before the Second World War Japan had spent most of its strength trying to gain power through war but in the Second World War Japan was defeated, and everything, they had built, destroyed in the world war. Even though the Japanese had been left in abject poverty and the factories and industries left in waste ruins the country was able to start over.

The United States came to its rescue and led the Allies in the occupation and rehabilitation of the Japanese state. Led by General Douglas A. MacArthur they set forth a series of reforms that helped the country get back on its feet and also make it democratic so that the people would never be led into aggression war again. In 1947 a new constitution which transferred the power from the emperor to its people was established and democracy became popularized. The Korean War that happened 25 June 1950 – 27 July 1953 was a major contributor to the economic development of Japan, as Japan re-established most of its wartime industries with the help of the United States to help the US forces in this war. The war saw the turn of Japan from the economic depression that had crippled the country. In 1952 the occupation ended, and by 1955 Japan had become stable politically and had regained its prowess in production. Through the 1960 to the mid-1980s Japan maintained a stable political system and also an economic growth averaging around 10% every year. Japan now grew to be the third most politically and economically strong country in the world falling behind the United State and the Soviet Union. Its industries such as steel, chemical, and technological continued to boom and face enormous growth. The Japanese enjoyed prosperity and the benefits of a mid-class thriving society.

In 1989, the emperor who had held the country together for the longest era died. 1991 marked the end of the cold war which meant the end of a global geopolitical system that had provided Japan with the shelter it had needed within the American premium. This was followed by lengthy recession two years later. Japan’s was failing, the markets were collapsing, the businesses were plagued by debts and there was hardly any investment into the country. The unemployment rates were high the gross domestic product was declining, industries had minimal output. This condition has plagued Japan over the last two decades and it has never quite fully recovered. In 2015 it had another recession and in 2020 the same happened again due to the effects of coronavirus but has still maintained its position as the third largest economy in the world.

In conclusion, Japan has gone through so many challenges as a country from being the most technologically advance country in the world to becoming a country crippled with debt and high unemployment rates.

Zafar Iqbal and Ghulam Mustafa Zahid from the ‘Pakistan Development Review’ worked on the ‘Macroeconomic Determinants of Pakistan’s Economic Growth’ in 1998. The study explores the effect on Pakistan’s economic growth of some of the most significant microeconomic variables, such as education, physical growth and the budget deficit. A multiple regression method was used to analyze the period between 1959-60 and 1996-1997.

According to quantitative evidence, primary education and economic openness are essential factors for accelerating growth. However, the budget deficit, on the other hand, negatively linked to production and inflation. The study also shows that our best shot is to focus on domestic capital for finance, as external debt is also negatively linked to growth. In order to maintain economic development, the study focuses on coming up with long-term economic growth policies.

The findings indicate that real GDP growth and per capita income have a positive relationship with the labor-force ratio for primary school enrollment. It is concluded that primary education is the foundation stone for Pakistan’s growth. It is cretinously that the government should make every effort to provide everyone of age who wants it with primary education and then it can go off to the road of economic development. It has also been shown that physical capital is also a significant part of growth in any form, such as infrastructure.

The tests also conclude that economic openness has a positive relationship with growth, meaning openness to imports and exports of products. On the other hand, the study also indicates that the most dangerous factor affecting economic growth is the budget deficit, along with external debt, which suggests that lowering the deficit by cutting non-development spending and using only domestic capital to boost finances is our best shot for economic growth.

The 2004 research ‘Entrepreneurship Selection and Performance: A Meta-analysis of the Influence of Education in Less Developed Countries’ by Van Der Sluis, Mirjam Van Praag and Wim Vijverber offers an empirical view of the impact of education on entrepreneurship selection and the impact on less developed countries. It also indicates that a marginal year of education increases the company’s profits by 5.5%. Such returns differ by residence in urban rural areas, gender and the amount of agriculture in the economy.

More trained workers often end up in wage jobs and tend to do non-farm business instead of farming as well. Instead of self-employment, skilled women are more inclined towards wage employment.

The rate of female literacy in Pakistan remains poor compared to male literacy. Women have a poor proportion of social activity. The status of women in Pakistan is poor, especially in rural areas, because of social and cultural barriers. One of Pakistan’s strangest aspects is that the family is against educating girls in some places, particularly in northern tribal areas. The situation is most serious in NWFP and Baluchistan. The literacy rate for women is 3-8%. In the areas that provide education, several organizations have opened such schools. Unfortunately, in these regions, the government has not taken any steps or measures to encourage literacy for the education of girls. For women in developing countries and those living in urban areas, the benefits of additional years of schooling are greater. The results also show that uneducated women are mainly working in low-income sectors such as food or textiles. This implies that education allows women to work in a higher income setting.

The dissertation of Mamoon Dawood from the Institute of Social Studies was also of particular significance in 2004. The study raises a very significant argument regarding Pakistan’s education policy. It studies the impact of increased government spending on Pakistan’s higher education sector on the development of Pakistan’s economy, while ignoring the primary education sector.

Like every other developed country, our education strategy is to spend more and more on higher education at the cost of primary education. Compared to investing in the primary education market, higher education creates skilled labor that reaps higher rewards. Via foreign trade, which is very important for every developing world, these incentives are achieved. What this does is establish a wider divide between skilled and unskilled labor, leaving the economy in a very unbalanced situation like the one India is currently facing.

The study concludes that in order to solve the problem of inequality the government should have a very balanced approach towards spending in both the primary and the higher education in Pakistan. Like every other developed country, our education strategy is to spend more and more on higher education at the cost of primary education. Compared to investing in the primary education market, higher education creates skilled labor that reaps higher rewards. Via foreign trade, which is very important for every developing world, these incentives are achieved. What this does is establish a wider divide between skilled and unskilled labor, leaving the economy in a very unbalanced situation like the one India is currently facing.

In 2005, Mohsin S. Khan researched the subject of ‘Human Capital and Economic Growth in Pakistan’. The paper examines the factors explaining the relative growth of Pakistan. The economy of Pakistan has developed faster than other low- or middle-income countries, but some others have done much better in South Asia, the paper emphasizes what Pakistan has done to achieve the rapid growth and what it has ignored that has left it behind other more excellent countries. This paper focuses on the role of differences in the quality of human resources and its effects on the economic growth factor, in addition to the other obvious factors. Four variables with respect to human resources, the accumulation of physical capital, the efficiency of institutions, health care and education have been given special importance here. Here, human capital is the dependent variable, while the independent variables become these four variables. Then the dependent variable becomes economic development, and the independent variable becomes human resources.

These four factors have a profound impact on human capital development, and human capital development contributes to economic growth. These variables have a positive relationship with the development of human capital, and the development of human capital has a positive relationship with economic growth, which means that improving each of these four variables contributes to improving the economic growth of the country. The obvious reality remains that developing institutions and growing investment are critical keys to achieving economic growth, but that economic growth is greater for countries that invest more in human resources.

The research ‘The Information Economy and Education and Training in South Asia’ was conducted in 2007 by Michelle Riboud, Yevgeniya Savchenko and Hong Tan. This study assesses how education and training in human resources countries can have far-reaching consequences for developing countries in terms of job creation, sustainability of growth, productivity and poverty reduction. The study takes into account the growth of skills in South Asian countries and how the effects of the labor market are affected. Here, ability acquisition requires both educating and preparing individuals.

The main objective of the analysis is to record and compare developments in training and education in the area of South Asia and to observe the shifts in earnings and jobs purchased by them. The research uses surveys of families, business levels and labor force from the 1090s to recent years. The study focuses primarily on Pakistan, Sri Lanka, India and Bangladesh, compared with East Asian countries and other areas.

In some cases, it can be seen that the difference between East Asia and South Asia in terms of education can expand rather than close. It also concludes that countries’ development has been unequal and skewed in this regard. There has always been unequal improvement in education in terms of gender equality in this part of the world, but this disparity has decreased dramatically only in primary education, and a great deal of work needs to be done to address this gap in the secondary or higher education sectors. Highly skilled labor is in demand and policymakers should pay careful attention to the availability of education and training.

Later in the same year, Asma Hyder of the Pakistan Institute of Development Economics conducted a study of ‘Wage Differentials, Rate of Return to Education, and Occupational Wage Share in the Pakistan Labor Market’. This labor force survey is a nationwide survey containing data on demographics and job information from all over Pakistan. It assesses the inter-sectoral earnings of the three major sectors of the private, state-owned and public economy. The rate of return from various stages of schooling is analyzed in order to observe the pay difference in human resources.

Education is one of the most important variables that influence the wage gap and the wage gap and poverty gap can be substantially reduced by reducing the educational gap of the people of Pakistan.

Arshad Hasan and Safdar Butt worked on ‘The Role of Trade, External Debt, Labor Force and Education in Pakistan’s Empirical Evidence of Economic Growth Using the ARDL Approach’ in 2008. This paper studies Pakistan’s economic growth factors over the period 1975-2005, using the co-integration method of the Autoregressive Regressive Distributed Lag (ARDL). The ties between economic growth and external debt, trade, labor and education, along with their short-term and long-term consequences, have been addressed. Education, total trade, external debt and human capital are some of the determinants which affect Pakistan’s economic development.

Many research on economic growth have been performed before and there are many theoretical growth models, including Lucas (1988), Becker, Murphy, Nelson and Phelps (1966) and Rebelo (1992), Tamura (1990) and Sala-i-Martin and Mulligan (1992).

It is the growth of human capital in order to achieve economic growth. And education is the most critical aspect of building human capital. Therefore, education plays a major role in a country’s economic development and is directly connected to one another. In the past, research has assumed that education increases the capital stock of human beings, which enhances their productivity and ultimately contributes to growth. However, Bils and Klenow (2000) take the problem differently and find that different levels of education are associated positively with different growth rates.

However, the findings of the study suggest that a very positive relationship exists between a country’s labor force, trade and economic development. External debt has been shown to be related to economic development. This also showed that economic development in our country has not been used correctly and that this may also be one of the reasons for the country’s slow economic growth. The combination of sufficient debt flow, trade and a highly efficient labor force will contribute to growth and speed up the process of growth.

Later, in 2010, Babar Aziz, Tasneem Khan and Shumaila Aziz carried out a report on the effect of higher education on Pakistan’s economic development. The study estimates and uses the Cobb-Douglas output function to assess the effect of higher education on Pakistan’s economic growth from 1972 to 2008. In order to assess whether their enrollment affects the efficiency of the labor force, which in turn affects economic development, the enrollment of students in higher education has been studied. The results of the International Labor Office are taken into account in this report, which establishes that education is one of the most significant measures in the labor market.

The influence of higher education on changes in GDP is also seen as a very significant driver of economic development. So, GDP is taken as the dependent variable to see the returns of higher education on Pakistan’s economic development. The analysis also discusses higher education, registration and GDP as variables that are both dependent and independent.

The study concludes that higher education is having a positive influence on the development of Pakistan’s economy. Student participation in higher education implies more skilled labor, leading to a positive effect on GDP in turn. But education expenditure has to increase in order to get students to enroll in higher education, which allows us to conclude that these three variables, education expenditure, higher education enrollment, and the availability of a skilled labor force and GDP are all positively linked and are a very important determinant of Pakistan’s economy’s growth.

All studies show that education and economic growth have a clear positive relationship, and every state should invest time and money on the education sector in order to gain economic strength. Although there have been many studies in this regard, the reality remains that the availability of data is not up to Pakistan’s expectations and it poses many difficulties in carrying out a study and coming to a conclusion. In order to be able to make more accurate and precise decisions, a lot of work needs to be done in this regard. But we can be sure, even with the data available, that a great deal of work needs to be done in Pakistan’s education sector in order to achieve sustainable economic growth and prosperity.

North America and Latin America have always been two nations, which possessed fairly different characteristics. North America, the third-largest continent in the world, consisting of twenty-three countries, occupies the majority of the northwest hemisphere. Latin America, based in the southern part of the western hemisphere, consists of a group of countries and dependencies. Latin America consists of the entire continent of South America as well as Central America, Mexico and the Caribbean islands, where citizens in the area speak languages such as Spanish, Portuguese and French. From the early years of colonization to the present day, the two nations have differed in various ways, specifically in their economic performance. North America, in present-day, is considered to be one of the largest most successful economies in the world as it generates gross domestic product (GDP) values which range within trillions (US$) per year and experiences positive gross domestic product growth percentages annually. Latin America, on the other hand, has a less successful economy. However, this was not always the case, in the previous century, initially, Latin America seemed to be the prosperous nation between two and exhibited immense potential for growth and development. Latin America was a nation with an abundance of natural resources, such as sugar, rubber and metals this lead many to believe Latin America would be one of the greatest economies in the modern world. However, this view has changed drastically and Latin America currently has very low economic growth prospects. Several researchers have studied the case of North America and Latin America, to deduce why the economic disparity exists between the two nations. Some have argued, “North Americas priority in development was predetermined by nature” (Landes, 1998). While others believed that culture and institutions were the driving force that led to North America’s economic performance outweighing that of, Latin America. It is evident that, in terms of economic performance, these two nations lie on opposite ends of the spectrum. This paper aims to analyze and assess the various factors, which have led to the difference in economic performance between North America and Latin America.

Institutions

The economic performance of a nation is determined by a combination of factors, one of which is the presence of institutions. Institutions occur quite frequently in discussions about development, as they account for the differences that occur in the economic performances of different countries. Institutions such as rule of law, regulation, transparency, accountable government and low levels of corruption are all necessary for economic growth. The presence of institutions within a nation could be the differentiating factor between a thriving and prosperous economy, compared to an economy without economic institutions, which often lacks markets and is less prosperous. Institutions play a great role in determining a country’s long-term economic growth and performance. Institutions are defined as, “systematic patterns of shared expectations and accepted norms” (Chang and Evans, 2005) and can be further broken down into two categories, political and economic institutions. Economic institutions can be inclusive or extractive economic institutions. Acemoglu and Robinson (2012) describe inclusive institutions as institutions that “create inclusive markets” which allow individuals to participate in economic activities. Inclusive institutions are institutions that help propel growth and improve economic performance. These institutions encourage people to participate in economic activities. Inclusive institutions are considered to be institutions that contain public services, which provide people in the economy with equal opportunities to exchange and they allow for entry into new businesses. Understanding the definition of inclusive institutions and the impact they have on economic performance, helps one identify why a nation such as North America, performs better than Latin America, economically. Colonial Latin America, unlike North America, exhibits patterns of extractive economic institutions. Extractive economic institutions are institutions that mainly generate growth in the short-term but in the long run, ultimately result in poverty within the nation. These institutions are designed to “extract income and wealth from one subset of society to benefit a different subset” (Acemoglu and Robinson, 2012).

The economic institutions in the Americas, as presented by Acemoglu and Robinson (2012), highlight the main reason that North America and Latin America, differ in terms of economic performance. The economic institutions in North America fostered economic activity as well as economic prosperity. This was achieved through the secure private property rights, which consequently encouraged individuals to invest and increase production throughout their economic activities. Secure property rights, rule of law, public services and freedom to contract and exchange were characteristics that North America possessed as a result of their inclusive economic institutions. Colonial Latin America on the other hand lacked property rights for the indigenous individuals, only the Spaniards had access to private property, this ultimately resulted in very little investment from the indigenous population, as it became evident that in the presence of extractive economic institutions, resources would be saved for the elite (Acemoglu and Robinson, 2012). Acemoglu and Robinson (2012) highlights the role of institutions play in helping an economy grow. For North America, the presence of inclusive economic institutions created incentives and opportunities, which aided the nation to prosper through technology and education. The absence of such institutions is the main reason Latin America’s economic performance is below that of North America. Once institutions have been formed within a nation it is fairly difficult for poor nations to adopt good institutions. Sokoloff and Engerman (2000) states “once on a particular path economies find it very hard to fundamentally change direction because of the built-in characteristics of institutions”. This reinforces the reason why a disparity occurs in the economic performance between North America and Latin America. Latin America is unable to improve their economic performance, because of the persistent extractive institutions within the nation. This also accounts for the inequality Latin America experiences in the long run compared to North America.

States

States are necessary for economic growth and play a vital role in the economic performance of a nation. The state actively ensures that the country can meet the needs of the citizens through the effective use of resources and economic development. The state also focuses on ensuring that equilibrium is met between developing the society and the economic growth of the country. States come in several different forms. Large states, which have very little capacity and have large autonomy amongst the state and the society, are considered to be predatory states. Evans (1989) defines predatory states as states, which, “extract investible surplus and provide so little in the way of collective goods in return”. Predatory states often hamper economic transformation in a nation. Alternative states, which encourage economic transformation and development, are called developmental states. Developmental states are those that “foster long-term entrepreneurial perspectives among private elites”, these states “increase incentives to engage in transformative investments” in doing so, they lower the risks which may be associated with the investment. Developmental states possess high levels of autonomy and embeddedness. Evans (1989) highlights that the most effective states are those which have “autonomy and join well-developed, bureaucratic internal organization with dense public-private ties”. It is clear that the type of state that a nation follows will have an impact on whether economic transformation will occur or not.

Latin America is said to have followed a predatory state approach and as a result, struggled to catch-up to North America’s rapidly growing economy. After World War II, Latin America attempted to implement the developmental state as a means to tackle underdevelopment. However, when Latin America faced a serve debt crisis, which resulted in a financial crisis and hyperinflation, the developmental state ceased to exist. Instead, Latin America, followed the approach taken by North America, and became a Neo-liberal state. The neo-liberal state focuses on the reduction of government spending, increase of free trade as a means to increase the role of private sector in the economy.

Markets

Markets play a fundamental role in a nation’s economic performance. The right markets offer opportunities for investors to specialize in certain markets or services; nations are also able to diversify economic risks using markets. Markets were considered to be the most efficient way to make decisions about the allocation of resources. Although markets effectively allocate resources-markets, without institutions, often fail. When markets fail it is more often than not caused by failures in the institutional arrangements that support the market. There are four main economic systems that countries can subscribe to, these include, the free market system, mixed market system, command economic system, and the traditional economic system. While all four have particular benefits, Smith and Cannan (2003) advocate for the use of free-market systems. Free markets are known as markets; which have the ability to regulate themselves, through the supply and demand of goods and services. Smith suggests the laissez-fair approach towards markets. Smith believed that free markets could regulate themselves and needed very little involvement or regulation by governments.

North America, adopted the mixed economic system. The mixed system merges free markets with market systems, which encourage economic prosperity. In contrast, Latin America used a traditional economic system approach. This system relies on customs and history to make decisions about resources, production and the economy. This system seemed to be the ideal system at first, as it was a system that worked well for economies that dealt with agriculture. The traditional approach, however, does not foster economic growth and development. Many believe that the adoption of the traditional economic system played a role in Latin America’s lack of development and poor economic performance.

Social Conflicts

Economic growth and the economic performance of a nation requires political order and very little social conflict. A difference, which largely created and affected the inequality in economic performance within North America and Latin America, can be linked back to the colonizers of each of the nations. Although both nations were colonized, the British colonized one of the nations while the Spanish and the Portuguese colonized the other. The British colonized North America. Landes (1998) states that the British based their behavior mostly on trade rather than domination, this equipped the individuals with the necessary skills to become trade-minded and this ultimately assisted North America to achieve better economic performance. Latin America was conquered and colonized by the Spanish and Portuguese. The Spanish and Portuguese lacked governance and wealth-creation skills. The Spanish and the Portuguese focused on domination rather than trade and their main goals focused on increasing their empire, rather than growing the nations they colonized. Thus, the people of Latin America lacked the skills needed to truly develop the nations and achieve economic prosperity. This became evident in Latin America when war broke out throughout the nation, years after the nation gained independence from the Spanish and the Portuguese. The lack of governance skills, as a result of “autonomous institutions of self-government which only existed local level, and possessed heavily circumscribed authorities” (North, Summerhill, Weingast, 2000), meant that the people within the nation had no institutions of their own and had to create them without any framework to refer to for decision making, this often ended in conflict. This social conflict within the nation ultimately impacted the economic performance of the nation. “The instability imposed several types of costs. It diverted resources from economic activity and channeled them into caudillo armies and a variety of praetorian effort” (North, Summerhill, Weingast, 2000). North America on the other hand, experienced a different fate, the nation possessed a set of political arrangements, which ultimately provided the nation with stability after they gained independence and they were able to protect their markets from predation.

Conclusion

In summary, the economic performance of a nation can be a result of a various factors. The comparison of North America and Latin America finds that North America exhibits greater economic performance than Latin America. This is largely due to the presence of inclusive economic institutions in North America and the extractive economic intuitions in Latin America. The type of markets, social conflicts all resulted in the disparity between economic performance in Latin America and North America. Thus, North America in contrast to Latin America is a nation that exhibits: efficient markets, national institutions as well as political stability.

References

1. Hofman, A. A. (2000). The Economic Development of Latin America in the Twentieth Century. ECLAC.
2. Evans, P. B. (1989, December). Predatory, Developmental, and Other Apparatuses: A Comparative Political Economy Perspective on the Third World State. In Sociological forum (Vol. 4, No. 4, pp. 561-587). Kluwer Academic Publishers-Plenum Publishers.
3. Landes, D. S. (1998). The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor. New York: W.W. Norton.
4. North, D. C., Summerhill, W., & Weingast, B. (2000). Order, Disorder and Economic Change: Latin America Vs North America. Governing for prosperity, 19.
5. Robinson, J., & Acemoglu, R. (2012). Why Nations Fail. Crown Publishing Group.
6. Smith, Adam, and Edwin Cannan. (2003). The Wealth of Nations. New York, N.Y.: Bantam Classic
7. Sokoloff, K. L., & Engerman, S. L. (2000). Institutions, Factor Endowments, and Paths of Development in the New World. Journal of Economic perspectives, 14(3), 217-232.

The case for free trade in Georgia has been a prolonged process ever since the fall of the Soviet Union. It geographically resides in the Caucasus region and has seen an increase in free-market economics in a bid to increase foreign investment and economic prosperity (Erikson, 2018). It has utilized this liberalization of economics after the disintegration of the Soviet Union; after that, the state has struggled with economic and governmental reforms. Nevertheless, 20 years after the fall of the Soviet Union, the restoration of Georgia’s independence with the application of the minimum shock/maximum therapy technique has brought about some detrimental changes. However, the first-generation post-communist reforms of shock therapy were less fortunate but were corrected for a minimum shock/maximum therapy approach (Papava, 2011). Georgia has been following in the steps of Poland and the ‘Balcerowicz Plan’. The transition to a market economy, according to Papava (2002), has been a significant social and economic development in the last decade, and several theoretical works were dedicated to this notion. Be that as it may, and notwithstanding the multiplicity of research and investigative examinations, numerous issues still must be discussed, and some perplexing issues–regardless of whether hypothetical or viable–still need solutions. By and large, these issues are common ones, which turns the building up of some universal approaches for their answer into an issue of particular significance. At the same time, it should be stressed that the practice of using uniform approaches to form economic policies (with total or almost complete disregard for the peculiarities of individual countries) is still quite widespread. By the way, this is one of the reasons (not the only one) because of which theoretically faultless schemes often fail to implement successful reform programs (Papava, 2002).

The former President of the United States, Harry Truman, once said he was searching for a ‘one-armed’ economist because, often, when he asked them for advice on economic matters, they would reply with “On the one hand…, On the other hand…” (Mankiw, 1998, p.27). However, a true economist cannot be ‘one-armed’ as, according to Papava (1998), “while applying universally proved approaches to the process of post-Communist transformation, one has to attach due importance to specific national context as well’ (Papava, 2002). The issue with a transition to a market economy has been an underlying factor of several interesting studies. Professor Leszek Balcerowicz stood as a ‘two-armed’ economist and was not only a renowned researcher but also an equally distinguished politician and statesmen (Papava, 2002). So far, as the issue of post-communist transformation is concerned, Balcerowicz follows the economic teachings of Ludwig von Mises, Leader of the Austrian Economic School, and Fredrich A. Hayek and Milton Friedman, Nobel Prize winners in economics. It is therefore not surprising that the phrase, ‘democracy requires capitalism’, appears as the crucial element of almost all Balcerowicz ‘s works (Papava, 2002). It is a common understanding that democracy primarily implies freedom of choice. A choice is a prerequisite for competition, while competition is an impetus for development.

Other countries in the region had already commenced the transition, and Poland embarked on a so-called ‘shock therapy’ model of transition to market economy under the leadership of Balcerowicz in the late 1980s (Balcerowicz, 1994, 1995; Blanchard, Dornbush, Krugman, Layard, Summers, 1994; Johnson, Kowalska, 1994; Lipton, Sachs, 1990; Sachs, 1993; Schaffer, 1992). However, ‘shock therapy’ as a term is not exclusive to any case and has had alternating names, such as, ‘bitter pill’ (Adams, Brock, 1993, p. XIII) or ‘big bang’ (Kowalik, 1994, p. 116). Generally, it means maximization in the shortest time possible; radical transformations are aimed at liquidating (or at least mitigating) state budget deficits and furthering strict monetary policy under nominal money supply or fixed exchange rate conditions. The ‘shock therapy’ concept derives from the ‘orthodox scenario of macroeconomic stabilization’ (Papava, 2002). However, Kiselva (1996, p. 113) suggests that the objectives of liquidating (or minimizing) the state budget deficit and working to ensure a strict monetary policy under the conditions of nominal money supply or fixed exchange rates should be accomplished very rapidly within a minimal amount of time. Simultaneously, success depends primarily on political stability (Jochem, 1999). It should also be noted that the concept of ‘shock therapy’ is the same as the so-called ‘Washington Consensus’, the basis on which the IMF’s transformative approach is built (Papava, 2002).

The ‘shock therapy’ method was first applied in West Germany shortly after the end of World War II. However, according to Papava, (2002) “Post-Communist Poland breathed ‘new life’ into the ‘shock therapy’ method and was then implemented by some post-Soviet republics with different variations and different levels of success” (Stroev, Bliakhman & Krotov, 1999). For instance, if the ‘Balcerowicz Plan’ was developed in Poland, the ‘Marcovic Plan’ was developed in Yugoslavia, the ‘Klaus Plan’ in Hungary, and the ‘Kupa Plan’ in Czechoslovakia. It should be noted that each such plan was virtually the same as the other, except for some insignificant details in which they differed (Papava, 2002). In January 1992, Russia decided to join the countries that had previously implemented the ‘shock therapy’ method and Egor Gaidar, vice-president of the Russian government, took the lead. What was different from other countries in Russia, however, was the fact that no one officially used the term ‘Gaidar Plan’ in regard to the actual transformations. After a month, the ‘Balcerowicz Plan’ of ‘shock therapy’ was also put on the agenda in Georgia in its Russian variant.

As in Russia, the Deputy Prime Minister of the Government of Georgia, Roman Gotsiridze, accepted responsibility for this plan. Although, like Russia, the Georgians did not call it the ‘Gotsiridze Plan’. The rational question it raises in this respect is: Was Georgia prepared to implement this renowned reform method at the time? To understand this question, an important difference between countries with and without statehood on their limit to affect regulations must be looked at. States without statehood include countries of Eastern and Central Europe such as Bulgaria, Poland, and Hungary; on the other hand, the new sovereign states were conceived as a result of the disintegration of the former USSR, such as Czechoslovakia and Yugoslavia. It is necessary to distinguish those who succeeded their disintegrated predecessors since they preserved almost all state attributes (e.g., independent monetary systems, embassies, customs). Russia retained all the attributes of its precursor after the breakdown of the former Soviet Union, which is why Russia could be identified with the first group of post-Communist countries. As for the others, they had to start rebuilding their government institutions from ground zero. Georgia could be identified as one of those. Indeed, it had to tackle two problems that are nearly equal in complexity: establishing its government institutions and commencing on a transition to the market economy (Schmitter, 1994; Balcerowicz, 1995; Papava, 1996; Milanovic, 1998). The consistent utilization of a government’s budgetary and monetary institutions is required for the ‘shock therapy’ model. Therefore, it is not worth considering that the ‘shock therapy’ model would succeed in the absence of such institutions (Papava, 2002). This assumption can be verified by the case of Georgia, comparing the initial ‘Balcerowicz Plan’ (considered to be the classical model of ‘shock therapy’ and the most recent) to the plan implemented by Georgia, which was seen through the Russian lens.

To execute the ‘Balcerowicz Plan’, Poland was required to implement the ensuing concurrent measures (Papava, 2002):

1. Multiple increases in all types of prices and the deliberate encouragement of inflation with the aim of balancing the market.
2. Imposing stringent restrictions on individuals’ incomes.
3. Increasing interest rates dramatically and decreasing the amount of money circulating; increasing interest rates on savings and deposits in order to encourage people to save money.
4. Reducing expenditure on the state budget by limiting central government investments and stopping the subsidization of loss-making companies.
5. Distributing government bonds to liquidate the government’s budget deficit.
6. Establishing a taxation system in order to achieve uniform taxes.
7. Setting a uniform exchange rate of the zloty to the dollar and ensuring the convertibility of zloty in the domestic market.
8. Implementing new customs tariffs in order to limit imports and promote exports.
9. Within the limitations of the government’s actual capabilities, social benefits are provided to the groups that needed them.
10. Finally, the elimination of monopolistic structures and abandonment of bureaucratic interference into enterprises by the government.

Now we will compare the initial ‘Balcerowicz Plan’ with the Georgian implementation of ‘shock therapy’, to see to what extent it was implemented (Papava, 2002):

1. The price formation reform began in Georgia in the spring of 1991, when free prices were first enacted for certain types of goods. Since February 1992, many radical changes have been made to Georgia’s pricing system: government-controlled prices for a certain group of goods and services have been dramatically increased. This was all done in order to balance the market. If the consumer price index was 1,82 in 1991, it grew to 25 in 1992. We can, therefore, state that the first item of the ‘Balcerowicz Plan’ in Georgia has been adequately fulfilled.
2. In 1992, the Georgian government indexed the minimum wage and social benefits significantly. If indexing took place only once in 1991, in 1992, in the course of comprehensive price liberalization, income indexation was carried out six times. In 1991, the minimum and average wages were increased by 1.85 and 1.26 times, and by 13.14 and 17.94 times in 1992 compared to 1991, respectively. The government of Georgia has never taken preventive measures to control wage increases, such as Poland, where the wage increase of up to 2 percent of payroll would require the company under discussion to pay a penalty of 200 percent of the increase in wages, and increases over 2 percent would lead to penalties ranging from 300 to 500 percent. The wage growth rate and social benefits were lagging behind that of prices; it could, therefore, be recognized that item two of the ‘Balcerowicz Plan’ has also been implemented to some extent.
3. In 1992, compared with 1991, annual interest rates increased from 2% to 5%, and from 9% to 80% on demand deposits and up to 10-year deposits. However, even that rate of interest rate growth did not match inflation. However, it must be acknowledged that no interest rate increases could help to control the amount of money in circulation since the country did not have its own monetary system at the time. Georgia, at the time, was using the ruble of the former Soviet Union and the, only just established, Russian ruble. In the summer of 1992, the administration decided to ‘double deposits on an ahead-of-time basis’ (Papava, 2002, p. 9), especially on July 25, when the government declared that due to the devaluation of deposits, they would double by August 1, 1992. The people directly responded by rushing to banks to make more deposits. However, the government decided on August 1 to lengthen the doubled deposit period till August 10, 1992. A surplus obtained as a consequence of doubling may only be withdrawn after the expiry of a one-year period. However, it could be used without any restrictions for privatization purposes. Moreover, the privatization process was actually at a deadlock at the time. During the second half of 1992, it became significantly more challenging to get the necessary amount of Russian ruble bills from Russia in a convenient fashion. Besides, only Russia, of course, can issue Russian currency. The deposit accounts mentioned above were paid as salaries and pensions. Such conditions practically prevented the reformist government from regulating the amount of money in circulation. We can, therefore, conclude that item three of the ‘Balcerowicz Plan’ has not been fulfilled in Georgia.
4. The share of central government investments in accumulative state budgetary expenditure did not decrease in 1992 and fluctuated anywhere between 20% and 25% by 1992. Moreover, compared with 1991, the total sum of subsidies increased almost 5.1 times in 1992. However, the share of government subsidies in state budgetary expenditures in 1992 fell to 30.1% from 47% in 1991. This proposition is not sufficient to persuade us that the fourth requirement of the ‘Balcerowicz Plan’ has been met due to many increases in the actual number of subsidies.
5. In 1992, domestic government bonds were issued; they were only offered for sale in the fall of 1993. Besides, this was mainly done in order to replace the old bonds of the former Soviet Union with new Georgian bonds. As regards the use of state bonds to fill the government budget deficit, at that time, such a tool had not been used at all. Clearly, item 5 of the ‘Balcerowicz Plan’ had also not been implemented.
6. The reform of the tax system, following the demands of the market economy, began in the summer of 1991. Accordingly, item six of the ‘Balcerowicz Plan’ should generally be deemed gratified; nevertheless, it should be acknowledged that, as in many countries around the world, the optimization of the tax system in Georgia is a somewhat gradual process.
7. In 1992, Georgia did not have a national currency, so it was virtually impossible to attain item seven of the ‘Balcerowicz Plan’.
8. Uniform customs tariffs were established in 1992. Imports and exports were taxed by 2% and 8%, respectively. Of course, with this policy in action, neither exports could be encouraged nor imports controlled. That mere fact proves that Georgia did not enact item eight, either.
9. As stated previously, the government carried out income indexation in 1992, as it did in 1991. During that period, there was no particular social program for the benefit of low-income families. That is to say; the national social security model lacked a mechanism to separate social benefits by income levels. Under such circumstances, if wages doubled, for instance, the difference between low-income and high-income household earnings would also double. Indeed, the status of low-income families perished even further at the outset of general indexation. As a direct effect of this indexation in 1992, the real minimum wage amounted to only 86% of the wages in 1991. Since the 1992 income indexation program in no way helped achieve the objective of allocating focused assistance to the poor, we must acknowledge that Georgia has also failed to comply with prerequisite nine of the ‘Balcerowicz Plan’.
10. In 1992, the legislative and executive authorities of Georgia took the first decision to constrain monopolistic practices and promote competition. From the beginning, however, these decisions could not function adequately. Even though the Soviet centralized resource system had already collapsed in 1991, the practice of bureaucratic interference by the government with companies managed to survive. This suggests that item ten of the ‘Balcerowicz Plan’ has not been enacted adequately in Georgia.

The Georgian government, in its attempt to implement ‘shock therapy’, ended up with only three of the ten requirements being actually implemented. However, there was a major drawback since Georgia lacked a monetary system of its own at the time (Papava, 2002). The extensive anti-reform steps taken by the government ran for a year-and-a-half and defined the periods from 1993 to the first half of 1994 (Gurgenidze, Lobzhanidze, Onoprishvili, 1994). However, after 1994, Georgia reignited cooperation with the World Bank and the IMF. Although a significant factor in the resumption of the economic reform was aimed at filling the gaps left behind by the badly executed ‘Balcerowicz Plan’, which by that time seemed an achievable goal since Georgia had established suitable governmental institutions and more significant offices in the state were undertaken by professional economists (Wang, 1998).

All in all, the case for a free market in Georgia is a strong one because it is a post-communist state that is lacking statehood and significant governmental institutions. However, the ‘shock therapy’ method would not succeed in a state that is witnessing fruition, as Papava (2002) argues that the method worked in Georgia because the people of the state were experiencing an impoverished economic environment, which then, in turn, allowed them to accept such extreme governmental reforms. Georgia, today, has seen a large amount of foreign investment from countries and individuals from all around the world, trade deals with the EU, and a bite out of the Chinese belt and road initiative, proving that it is capable and accepting of the free market and globalization.

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Poverty has no root cause. Success is the one that has. Heat is analogically a result of active processes; it has sources. But cold is not a result of such processes; it is just the absence of heat. Simply put, the great cold of economic stagnation is just the absence of economic development. Economic development transforms basic, low-income, national economies into modern industrialized economies by a dynamic interaction within local and foreign systems. The question now is not whether to integrate, but rather how does one effectively and efficiently integrate?

The word ‘development’ does not mean ‘catching up with the highly industrialized countries’. Most of every individual misinterprets economic development as a race. Development isn’t just externally motivated to some extent it is also internally driven. Japan went through a lot of peaks and valleys yet manages to stay on top after a long time. Although, Japan from the past has different manifestation from its present economy, both old and new elements coincide flexibly. Given their multi-layered identity, depending on the present or existing circumstances, different characteristics of the Japanese people and their economy can surface.

In the 19th century, Japan was classified as one of the weak countries in various aspects. Japan had a difficulty in industrializing its economy, yet according to Dr. Tadao Umesao, a Japanese anthropologist, somehow Japan succeeded albeit those struggles. He stated that the traditional view of Japan succeeded as a backward country, a country that does not have modern industries and machines, is incorrect as it is also later on proved after the post-war era until the present days.

During the Edo period, the foundation for the future industrialization and modernization were formed. From political unity and stability, applying the class society ruled by samurais, farmers, craftsmen, and merchants respectively. And a centralized system of the government having daimyos pledged loyalty to shogun and disobedience is not tolerated with ritual suicide and family termination are done as a punishment. Furthermore, Han’s promotion of local industries, development of agriculture and handicraft, transportation, finance, commerce, and education are also upgraded resulting in to increase in power and also cultural development, all under the government of the Tokugawa Shogun.

Moreover, in the Meiji period, a total switch to foreign systems occur which happens to be the way in modernizing Japan’s economy. From Tokugawa (Edo period) to the Meiji period, Japan transitioned to being the first Asian industrialized nation. With a strong government under an emperor and Fukoku Kyohei – a slogan meaning ‘rich country and strong army’, Japan adopted the open-door policy, rapid Westernization and industrialization supported by the government. Japan hires foreign advisors from hundreds in any year to decrease in officially contracted foreigners and an increase in private hired ones to teach English in universities.

Despite the succeeding modernization and pre-war era, it is predicted that there would be a huge bonanza to the Japanese economy. Given the severe shortages of high-quality machines and industrial materials, Japan succeeds as the global demand shifts. This is because their products, despite its quality, could be a substitute for the European products which became unavailable during the post-war era. Japan studied its strengths and weaknesses well enough which led to recognizing their opportunities and preventing threats to their growing economy. Because of the sharp rise in demand, Japan manages to get out of the pre-WWI balance-of-payment crisis.

Nowadays, industrialization is more dynamic and transferable with great leadership and ideas, there are various efficient ways in developing an economy that is fitted in a certain country. Japan did a great job of accepting their flaws and used it to improve upon themselves. Starting internally to externally being influenced and be an influence on the other developing countries. Nevertheless, Japan may be a model or a guide to an accurate economic development, but one should always remember that in a different country there are also different ways and different possibilities to consider. Can a developing country attain a legitimate economic development if graft and corruption are existing? If the government isn’t aware of some major problems? Or even in a simple event of prioritizing? A country could if the government would and its citizens won’t be misunderstood.

Texas being the second largest state of the United States of America in terms of area and population was once considered as a mediocre, agricultural state after it was granted freedom from Mexico. Fortunes changed for Texas in the 20th century, and a massive increase was recorded in the economy of the state. Firstly, there was a massive increase in the oil industry then and afterward by its broadening into petrochemicals, aerospace, computers, and many other industries. Thus, making it a major destination for business and forcing people to migrate for a good living. We cannot deny the sincerity of the government which made sure the state gets not only economically strong but also socially. One of the significant achievements of the Texas government this century has been to keep the tax rate low. At the same time, we cannot deny the fact that low tax rate can cause difficulties to face the future challenges. Keeping the next generation in mind the government needs to create a favorable business plan that does not hurt the economy. The unbalanced policies of the government can boost the economy but hinder the health, welfare, environment and education rate of the state. Thus, keeping the economy, taxes and services in mind, in this essay I will discuss the role of government that can help in keeping the state socially and economically balanced.

Role of Government

The government of Texas has played a vital part in boosting the country’s economy. It has the ninth largest economy in the world. The favorable business plans introduced by the government are acceptable for small business or short-term future plans. The low tax rate and weak labor can create a non-flexible economy. Government has been quite lenient when it comes to tax rate. The tax rate is extremely low which results in less revenue collection. The policy makers need to increase the tax rate specifically on products like oil and cigarettes. New taxes should be introduced on unhealthy food or drinks and even on objects that cause rapid climate change. This would not only increase the revenues but also improve the lifestyle of the nation.

The policies introduced by the government can be healthy for the economy but when it comes to state services Texas has always been on the lower side of the chart. Public policy is termed as ‘unequal’ because the government spends a low amount of money on health, education, welfare, environment and the arts. This has a major effect on the poor citizens who can barely afford bread and butter. Due to ‘unequal’ policy the poverty rate has remained consistent throughout the period. One of the reasons why the government has not spent much on education, health and other services is due to less revenue collection. If we compare Texas with other states in terms of state services Texas has been on the lower side, that will also be discussed later in detail. But we cannot deny the fact that the quality of life in Texas is way much better than other states, thanks to their great policies and decisions. This can be seen through the rise of population since the start of the 20th century.

Texas Rank Among States in Expenditure and Taxation

Texas has ranked among the lowest in terms of state services. Due to poor policies while developing strategies to improve the economy the state has suffered in other departments. Because of low tax rates less revenue is collected from the nation, thus the amount spent by the government is quiet low as compared to other states earning the fourth lowest spot in ‘state government per-capita spending’. Education sector has not seen wonders since a long time. Teachers have earned of low income as compared to other sectors like oil, pharmaceuticals, information technology etc. The education rate in Texas is quiet low, thanks to less support from the government. Same goes for the health department. The rich can afford medical expenses while the poor has no choice but to suffer. The society has to take care of itself while no support from the government. Infants, children, women have to work themselves to earn their living that creates serious issues in the society. As the children have no support from the government, they are forced to do child labor. The infants require vaccines for protection from various diseases, unfortunately no such facility is provided by the government which ultimately leads to nutritional issues. Not a single penny is spent by the government to improve the nutritional problems hence Texas earns the lowest (50th) rank in the country. The government has given zero importance on climate issues which is resulting in serious weather changes. The burning of carbon from vehicles, industry pollutes the environment that results in serious medical issues. Below average tax policies introduced by the government has left no choice but to rank worst among other states in terms of services.

Texas Rank in Measures of Quality of Life

We cannot deny the fact that the quality of life in Texas is far better than other states. The average income per person is much higher as compared to other states. With large number of industries functioning there are numerous job opportunities for individuals that reduces the overall crime rate and murder rates in the state. No doubt there is low-cost living due to low tax rate but at the same time the state experiences pollution in terms of water and air (burning of fossil fuels). Many liberals believe that these problems are caused due to poor expenditure and taxation policies. The standard of living is highly satisfying. The land is cheaper as compared to other states in the US but quality of living sheds a bad impression on the state. With on-going burning of fossil fuels, the rate of hurricanes is getting disastrous each year, floods are increasing and the sea level is rising every year. Texas is considered as one of the most uneducated states in the country. The government is doing efforts by introducing plans to save the environment and make this state a better place to live. The policies shared by the government may boost up the economy but the government needs to invest more in infrastructure, environment, education and reforms. Poorly designed policies look impressive in the start but as the time goes on their effects are disastrous.

Conclusion

The policies of government for tax, economy and services needs to be changed or should be revised at least to make this state a better place for living. While the state having a strong economy, multiple new taxes or ongoing taxes need to be increased in order to generate a high revenue. The services offered by the state are extremely poor and they can only be improved if government spends more revenue while making sure the air and water pollution is under control creating a low probability for weather storms and other health issues. Thus, a proper check and balance policy needs to be introduced.

References

1. Tax Policy Center. Page 5 Website. https://www.taxpolicycenter.org/briefing-book/what-options-would-increase-federal-revenues
2. Wikipedia. Economy of Texas. Website. https://en.wikipedia.org/wiki/Economy_of_Texas
3. Dennis Hensley. 2016. The Context of Texas Politics. Website. https://slideplayer.com/slide/6378493/
4. Louise Gaille. Vittana.org. Website. https://vittana.org/22-living-in-texas-pros-and-cons

The conflict within Syria, which started in 2011, has been going on for just over 10 years and has caused major impacts on the country as a whole and its future development. They have many short-term impacts but will also face many long-term impacts such as education and the long-term impact this will have on the younger generation. Hospitals and the healthcare system are also struggling greatly due to underfunding which has led to many excess deaths and this has resulted in a lower life expectancy. Infrastructure has also felt the effect of the war as many buildings and houses collapse leaving people on the streets, where they are vulnerable to diseases and infections spreading rapidly. This essay will explore to what extent and how the outgoing conflict within Syria has had an impact on the country’s development.

The conflict has not just affected the overall development of the country, but also education and the younger generation living within Syria. There is evidence that shows just how severe this impact could be on the UNICEF website, where they stated, “The crisis in Syria has taken a devastating toll on education leaving over 7,000 schools damaged or destroyed and 2 million children out school”. The Syrian conflict has had and continues to have an extremely large impact on education and the younger generation. A reported 8.4 million children are affected by the conflict in some way- this is more than 80% of the children in Syria. Almost 100% of the younger generation were accessing and using the education system before the war broke out, so this is a drastic drop that the Syrian war has caused- 100% down to 20%. Many children can’t go to school due to the physical building being severely damaged or destroyed, but others can’t due to safety concerns, schools being used for refugee shelters or military bases and due to fleeing and so not having access to education. Therefore, the Syrian conflict has had an extremely large effect on education and the younger generation.

The conflict going on in Syria has also severely affected infrastructure which has then resulted in grave economic loss. The Borgen Project, which helps countries experiencing conflict to repair infrastructure, wrote on their page in 2018, “The prolonged crisis has resulted in the destruction of infrastructure systems including the provision of water, electricity and sanitation”. The Syrian conflict has caused a great amount of damage to infrastructure which then results in the spreading of diseases and viruses, loss of hospitals and health care facilities and people ending up on streets, in need of shelter, due to the destruction of their houses. The outgoing war in Syria has already cost them over 226 billion dollars in GDP. This is around four times the amount of the overall Syrian GDP. Experts have also estimated that 27% of Syria’s housing stock and half of the country’s medical and educational facilities have been damaged beyond repair or destroyed. Therefore, infrastructure, or lack of, has and will continue to have for the foreseeable future, a huge impact on Syria’s development.

The Syrian conflict has also taken a huge toll on healthcare and the healthcare facilities within Syria. The World Health Organization wrote on their page in 2019, “8 years of conflict has taken a huge toll on a health system that was once among the best in the region’. The conflict in Syria has not only impacted education and infrastructure, but also healthcare and their demand of supplies. Many hospitals and doctors’ surgeries have been destroyed due to the use of weapons or forced to shut down because of underfunding. This has led to many people dying unnecessarily due to lack of access to healthcare and supplies or not being able to get the right treatment or medication. The life expectancy in Syria has dropped by over 20 years since the outbreak of the war. Before the conflict, the life expectancy within Syria and surrounding areas used to be around 79.5 years, however it has now dropped to just 55.7 years. It has the lowest life expectancy of the Middle East region with Afghanistan next. Therefore, healthcare and the lack of supplies, has and will unfortunately continue to have a large, long-term impact on Syria’s development.

In conclusion, the Syrian war has and will continue to have a great impact on the country’s development as well as surrounding countries. The future for Syria will be a very different one as the younger generation will not have been educated or been put through the education system as they should have, and the healthcare facilities will take ‘many generations’ as experts have said to be back to where it was before the conflict commenced. Infrastructure and the impact this has had on economic loss will take an extremely long time to all be rebuilt and engineered. Therefore, the impact that the conflict has had on Syria’s development is a very great one that will take a long time to get back.