Exchange Rate Mechanisms And Regimes In India Finance Essay

Exchange Rate Mechanisms And Regimes In India Finance Essay India has gone through several stages of economic development ever since it received Independence on the 15th of August, 1947. Most notable of these stages would be the liberalisation of the economy in 1991. Until the liberalization of 1991, India was largely and intentionally isolated from the world markets, to protect its economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment (FDI) was restricted by upper-limit equity participation, restrictions on technology transfer, export obligations and government approvals.* Following a Balance of Payments crisis in the year 1991, India was literally forced to open its doors to international business, a notion previously held as most evil to the countrys growth by its leaders. It had to change its stance on several aspects of international trade, including the Exchange Rate policy adopted. But, in hindsight, we would all agree that liberalisation was a smart, if delayed, move on part of the countrys government. The economy is flourishing like never before. India is now considered a powerhouse on the global stage rather than a Third-World country. The countrys international transactions are now becoming a worrying concern for yesteryears champions like the United States and Great Britain. Since liberalization, the value of Indias international trade has become more broad-based and has risen to Rs. 63,080,109 crores in 2003-04 from Rs.1,250 crores in 1950-51. Indias major trading partners are China, the US, the UAE, the UK, Japan and the EU. The exports during April 2007 were $12.31 billion up by 16% and import were $17.68 billion with an increase of 18.06% over the previous year.* This document will give a brief overview of the Exchange Rate policy currently adopted by the countrys central banker, the Reserve Bank of India (RBI), which has made all of this possible. *Source: Wikipedia Economy of India (http://en.wikipedia.org/wiki/Economy_of_India) History of Exchange Rate Regimes in India* During the period 1950-1951 until mid-December 1973, India followed an exchange rate regime with Rupee linked to the Pound Sterling, except for the devaluations in 1966 and 1971. When the Pound Sterling floated on June 23, 1972, the Rupees link to the British units was maintained; paralleling the Pounds depreciation and effecting a de facto devaluation. On September 24, 1975, the Rupees ties to the Pound Sterling were broken. India conducted a managed float exchange regime with the Rupees effective rate placed on a controlled, floating basis and linked to a basket of currencies of Indias major trading partners. In early 1990s, the above exchange rate regime came under severe pressures from the increase in trade deficit and net invisible deficit. In the aftermath of a balance of payments crisis in 1991, stabilization was undertaken simultaneously with structural reforms over wide areas of the Indian economy. This dramatic change in context fundamentally altered the manner in which monetary policy began to be formulated, especially the forex policy adopted by the country. This shift led the Reserve Bank of India (RBI) to undertake downward adjustment of Rupee in two stages on July 1 and July 3, 1991. This adjustment was followed by the introduction of the Liberalized Exchange Rate Management System (LERMS) in March 1992 and hence the adoption of, for the first time, a dual (official as well as market determined) exchange rate in India. However, such system was characterized by an implicit tax on exports resulting from the differential in the rates of surrender to export proceeds. Subsequently, in March 1993, the LERMS was replaced by the unified exchange rate system and hence the system of market determined exchange rate was adopted. However, the RBI did not relinquish its right to intervene in the market to enable orderly control. In addition, the foreign exchange market of India was characterized by the existence of both official and black market rates with median premium. However, such black market premium steadily declined during the following decades until 1993. RBIs official position on the current Exchange Rate Policy: The objective of the exchange rate management has been to ensure that the external value of the Rupee is realistic and credible as evidenced by a sustainable current account deficit and manageable foreign exchange situation. Subject to this predominant objective, the exchange rate policy is guided by the need to reduce speculative activities, help maintain an adequate level of reserves, and develop an orderly foreign exchange market. *Source: International Economics Historical Exchange Rate Regimes of Asian Countries (http://intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=15) Exchange Rates In international transactions, if we export goods to other countries, our exporter in India would like to be paid in Indian Rupees whereas the foreign buyer would like to pay in his home currency. If the buyer is in United States, he will pay only in US Dollars. Thus, it becomes necessary to convert this US Dollars into Indian Rupees. The rate at which USD is converted into Indian Rupees is known as Exchange Rate. In short, exchange rate is the ratio used to convert one currency into another. Exchange rates are quoted under two methods: Direct method Indirect method. Direct Quotations While quoting the exchange rate for a currency if the unit of foreign currency is kept constant and its value is expressed in terms of variable home currency the method of quoting exchange rate is known as Direct Quotation. In this case, the unit of home currency will be varying for every unit of foreign currency. e.g., USD 1 = Rs. 48.85 GBP 1 = Rs. 75.2550 Effective from August, 6, 1993 we have changed our system of quoting exchange rates to Direct Quotations. By adopting this system, we have fallen in line with the International practice. It has become more transparent for the dealing public and it will be easier for them to follow up the movement of exchange rates. Indirect Quotations When the unit of home currency is kept constant and the unit of home currency is expressed in terms of variable units foreign currency, then this method of quoting exchange rate is called Indirect Quotation. Prior to August 1993, we were following this system for quoting exchange rates. e.g., Rs.l00/- = USD 2.2400 Rs.l00/- = GBP 1.2400 Two Way Quotes In other commercial transactions whenever we enquire the price of a commodity the seller will immediately quote his selling price. But in Foreign exchange market exchange rates are always quoted for buying and selling i.e., one rate for buying and the other rate for selling. For example, if Bank X calls for the rates from Bank Y for USD/INR Bank Y will quote: USD/INR = 42.15/16 It means that Bank Y is prepared to buy USD at Rs.42.15 and sell at 42.16. This method of quoting both buying and selling rates is known as Two Way Quotation. For all practical purposes if we treat Foreign Exchange as a commodity, the logic and application of this Two-way quotation can be understood easily, i.e., a trader will always be willing to buy a commodity at a lesser price and sell at a higher price. The principle or maxim involved in this method of quotation is: BUY LOW SELL HIGH (Under Direct Quotation) Different Transactions and Relevant Exchange Rates In the above examples, (a) is an outward remittance, which does not involve any additional labor. Bank will be recovering the rupee equivalent from the customer and remit the foreign exchange to their correspondent Bank as per their drawing arrangements with instructions to pay to the lending financial institution on behalf of their customer. If it is a remittance relating to an import bill, (b), as a banker, bank will be verifying the documents, entering them in their register, presenting the bill to the importer for payment and also check whether all the conditions stipulated by the correspondent bank are complied with. For this nature of involvement of manpower, Bank is eligible for some additional compensation. This compensation will be loaded or adjusted while quoting the exchange rate for this import transaction. In other words, the exchange rate for import transaction will be costlier to the customer when compared to the exchange rate for clean outward remittances. The differe nt rates quoted for these two transactions are TT selling and bill selling. Likewise, Bank will quote different buying rates for export bills and for other clean inward remittances. Following are the different rates, which are quoted to the customer depending upon the nature of transaction: Buying Rates: A.l. TT Buying Rate: (NATURE OF TRANSACTIONS) Clean inward remittance (TT, PO, MT, and DD) for which cover has already been provided in ADs Nostro Account abroad. Conversion of proceeds of instruments sent on collection basis. [When proceeds are credited to Nostro Account] Cancellation of outward TT, MT, PO, DD etc. Cancellation of forward sale contract. Undrawn portion of an Export Bill realised. A.2. Bill Buying Rate: (NATURE-OF TRANSACTIONS) 1. Purchase/ negotiation/ discounting of export bills and other instruments. Selling Rates: B.l. TT Selling Rate. (NATURE OF TRANSACTIONS) Outward remittance in foreign currency (TT, MT, PO, DD) Cancellation of purchase transactions, i.e., Bill purchased earlier is returned unpaid Bill purchased earlier is transferred to collection account. Inward remittance received earlier (converted into rupees) is refunded to the remitting bank. Cancellation of Forward purchase contract. Remittances relating to payment of import bills, which are directly received by the importer. Crystallisation of overdue export bills. NOTE: If the remittance is a clean remittance i.e. no documents are to be handled by the banks, TT Selling rate will be applied. B.2. Bill Selling Rate. 1. Transaction involving remittance of proceeds of import bill (except bills received directly by the. importer) NOTE: Even if the proceeds of the import bills are to be remitted in foreign Currency by way of DD, MT, TT, and PO rate to be applied will be Bill Selling rate. 2. Crystallisation of overdue import bills. Apart from the above, separate rates will be quoted for selling and buying of Travelers Cheques and Foreign currency notes. Calculation of Merchant Rates FEDAI has provided detailed guidelines for calculation of exchange rates for merchant transactions. Following factors are to be taken into account by banks before quoting rates to customers: STEP 1. Arrive at the cover rate i.e. the rate at which ADs will be covering the transaction in the market immediately the customer delivers the instrument. It may also be treated as the rate at which the AD can dispose off / acquire the Foreign Exchange in/from the market. STEP 2. Load the prescribed profit margin. EXCHANGE MARGIN: FEDAI has left the discretion of loading profit margin to the individual banks. It is now purely at the discretion of the individual Bankers to load the appropriate exchange margin and improve the exchange rate depending upon the volume and nature of the transaction. STEP 3. Rounding off the transaction to the nearest 4 decimals, i.e., .0025/50/75/00. EXAMPLE: Exporter has submitted a bill for USD 100,000. Inter-bank exchange rate 48.02/03 Profit margin 1.5 paise STEP 1: Select the appropriate base rate at which the bank can dispose off the USD against Indian Rupee in the market. In this case, Bank may be able to dispose off USD 100000 at Rs. 48.02 in the Inter Bank market at the market-buying rate. STEP 2: Load the prescribed profit margin: Base rate Rs.48.02 Deduct the profit margin: Rs.48.0200 0.0150 = Rs.48.0050 Since Bank will be paying Indian Rupees to exporter customer, Bank will be deducting their profit margin from the rupee proceeds. STEP 3: Round off to the nearest 4 decimals. In the above transaction, Bank will be quoting the rate as 48.0050 to the customer. Cross Rates / Chain Rule If a Corporate wants to purchase Euro (EUR) since this currency is not normally quoted in India, AD will procure US Dollars from Inter-bank market against Rupees and will contact any of the overseas market to get Euro by disposing the US Dollars. E.g., A customer wants to retire an import bill for EUR 50,000 and the Inter Bank rate for USD/INR is at 39.02/03 and the overseas market rate for EUR/USD is 0.8920/30. In order to arrive at the EUR/INR exchange rate Bank will be applying following Chain Rule method. It should be noted that the market quote for EUR/USD is expressed under Indirect quotation i.e., one unit of Euro will be equivalent to how much USD. First leg of the transaction is, Authorised Dealer procures USD against Indian Rupees from inter-bank market: USD $1 = Rs.39.03 i.e. to procure US$ 1, AD will pay Rs.39.03 in the Interbank. With this USD, AD will go to London market and procure EUR paying USD 0.8930 for one EUR. By applying Chain Rule : 1 EUR = USD 0.8930 1 USD = INR 48.03 Then 1 EUR will be equivalent to 0.8930*39.03 = INK 39.8907 Rounding off to 4 decimals = Rs.39.8925 This method of arriving at the value of other currencies through US Dollar or any other third currency is known as Cross Rate or Chain Rule. Card Rates Dealing room of all banks as soon as open for that days business, works out the exchange rate for all the major currencies and for all types of transactions. This rate will be communicated to all branches of the bank. This rate will be the indicative rates and this rate will be applicable only for transaction up to the prescribed level i.e., smaller value transactions. Spot Rates Forward Rates We have learnt that exchange rate is the price at which one currency can be bought or sold for another currency. The date on which currencies are exchanged can be any date from the date starting from the date of transaction to any future dates. Transactions may be either Spot or forward depending upon the delivery of the Foreign Exchange. Under Spot, we have CASH-SPOT, TOM-SPOT. If the exchange of currencies takes place on the same day of transaction, it is known as CASH DEAL. If the exchange of currencies takes place on the next working day, i.e. tomorrow, it is known as TOM-DEAL. If the exchange of currencies takes place on the second working day after the date of transaction it is known as SPOT DEAL. Normally exchange rates are quoted on spot basis i.e., the settlement will take place on the second working day after the date of transaction. Wherever foreign exchange will be delivered after SPOT date, it is known as Forward transactions. Going back to the above Import transaction, if the Importer gets the information that his shipment will be reaching India only after 3 months it is possible that due to exchange fluctuations he may have to pay more in Rupee terms. If he feels that the exchange rate on the third month, at the time of retirement of the import bill, will not be favorable to him, he may like to fix an assured rate for his future transaction. This type of fixing the exchange rate for a future transaction, at the desired time earlier to the date of actual transaction is known as Forward contracts. Premium/Discount on Direct Quotations If we are familiar with commodity or share market it would be known that spot rate, forward rates are different, and they need not be the same. This is so because the anticipated demand and supply and the cost situations at the forward date may not necessarily be identical with that of the existing at present. The commodity/share could be quoted at a higher (premium) or lower (discount) rate for future deliveries. We shall illustrate this with an example: Spot interbank rate of USD 1 = Rs.39.25 3 months forward USD 1 = Rs.39.95 If one has to buy dollar three months forward against Rupees, he has to pay 70 paise more for the same dollar, i.e., 3 months dollar will be costlier by 70 paise compared to spot rate. Therefore US Dollar is said to be at premium in forwards vis-a-vis rupee. In direct quotations premium is always added to both the buying and selling spot rates. In another situation: Spot interbank rate of USD 1 = JPY 108.50 3 months forward USD 1 = JPY 106.50 From the above illustration it will be seen that the USD/JPY for 3 months forward is available at a cheaper rate as compared to spot. In other words USD is cheaper by 2 JPY forward compared to spot. i.e., USD is at discount in forwards vis-a-vis JPY direct quotations. Discount factor is always deducted from the buying and selling spot rate. From the above it is now clear that if we compare spot and forward rates we are able to arrive at the following three possibilities: a. If the spot rate and the forward rate are the same they are at par. b. In direct quotations if forward rate is more than the spot rate the base currency is said to be at premium. c. In direct quotations if forward rate is less than the spot rate the base currency is said to be at discount. Quoting Forward Rates Forward differentials are always quoted in two figures like, 15/16 and 15/14. It will be either at ascending or descending order. If the first figure is less than the second figure {in ascending order} then the base currency is said to be at premium. In direct quotations premium is always added to both the buying and selling rates. If it is a buying transaction for the bank, the quoting bank will add lesser of the two premium figures so as to give minimum rupees. Likewise if it is a selling transaction, the quoting bank, will add higher of the two premium figures to take the maximum amount in rupees for selling a foreign currency. EXAMPLE Interbank market rates: Spot USD: Rs.39.2025/2100 1 month forward 15/16 a) We have an export bill transaction. Since the forward differentials are in ascending order the base currency, USD is at premium. Hence, it should be added with the spot rate to arrive at the forward rate. Out of the two premium figures (15/16) since Bank will be giving Indian rupees, they will give minimum amount in rupees. Step 1: Spot buying rate USD 1 = Rs.39.2025 Step 2: To arrive at the forward rate: Since the base currency is at premium and Bank has to give rupees, add the minimum premium, i.e., add 15 paise to the spot rate. Spot buying rate USD 1 = Rs. 39.2025 Add premium = Rs. 00.1600 Rs. 39.3625 Hence, the forward rate for this export transaction will be Rs.39.3625. b) In an import transaction, while recovering rupees from the importer customer, for one-month forward rate, Bank will add the maximum premium i.e. 16 paise and the forward rate for Banks selling transaction would be: Spot selling rate USD 1 = Rs. 39.2100 Add premium = Rs. 00.1600 Forward rate for selling = Rs.39.3700 If the forward differentials are on the descending order i.e., 25/24, the base currency is said to be at discount. In direct quotations, if the base currency is at a discount, discount factor is always deducted from the spot rate. When two discount figures are quoted if it is a buying transaction (export bills) in which bank will be giving rupees, they will be deducting higher of the two figures and give minimum rupees. EXAMPLE: Interbank market Spot USD 1 = Rs.39.2725/00 1 month forward 25/24 (paise) To arrive at the 1-month forward rates: Buying Selling (Export bill) (Import bill) Inter-bank Spot 39.2725 39.2800 Deduct the discount 0.2500 0.2400 1 month forward rate 39.0225 39.0400 From the above example, in direct quotations, in selling transactions, lesser amount of discount is deducted to take maximum rupees for every dollar. RBI Regulations on Forward Contracts A person resident in India may enter into a forward contract with an authorized dealer to hedge an exposure to exchange risk subject to production of satisfactory documentary evidence about the genuineness of the underlying exposure. This has been relaxed on 1.12.2001 -vide RBI guidelines EC/CO/FMD/453/18.07.01 /2001-02 wherein Reserve Bank permits Authorized Dealers to book FWD contracts based on a declaration of an exposure subject to: FWD contracts booked in aggregate, should not exceed 50%of the average of previous 3 financial years actual import/export turnover subject to a cap of USD 100 Mn or equivalent. Declaration to AD about amount booked with other Authorised Dealers Undertaking to produce supporting documentary evidence before maturity of the FWD contract. Substitution of contracts for hedging trade transactions may be permitted on satisfactory reasons Contracts involving rupee as one of the currencies, once cancelled shall not be re-booked although they can be rolled over at ongoing rates on or before maturity. This restriction shall not apply to contracts covering export transactions, which may be cancelled, rebooked or rolled over at on-going rates.

Commercialization of the Navajo Sand Painting Practice

For the West, art has traditionally been considered as the mark of civilization, in so far as humanity is able to capture and render the essence of beauty and preserve this through their â€Å"artwork.† ( Gilbert, 1982; Errington, 1994; Witherspoon, 1977)   Indeed, art may even be a purely Western construct â€Å"since textiles and jewellery, clothing and cosmetics (to mention only a few of the contexts where aesthetic choices operate) are not usually considered by us to be Art with a capital ‘A'.† (Gilbert, 1982: 168) The understanding and appreciation of non-Western â€Å"art† has therefore been problematic for many scholars, given that branding such cultural products and practices as such carries with it the enthnocentric connotations of the Western definition which usually defines â€Å"art† based on the value system of Western culture (Gilbert, 1982: 167-168; Errington, 1994: 203; Clifford, 1988:221) that, as Robbins (2005) points out, has become more and more concerned with the accumulation of material wealth and the derivation of fulfillment from the consumption of products (Robbins 2005:20) and where the perception of beauty is lamentably static. (Witherspoon, 1977:152) Critics have likewise noted that â€Å"art† in the West has often connoted being â€Å"art by intention,† which are produced and valued to be perceived for their beauty and for the monetary value that they carried.(Errington, 1994: 201) This is distinguished from what is considered as â€Å"art by appropriation† or the things that were produced for purposes other than art but are appraised to be of high value with antiquity or the possession of an indigenous or unique identity, thereby alienating them from the culture that produced them. Witherspoon (1977), for instance, emphasizes the importance of defining indigenous behavior, institutions, and practices within the context of their culture or at the very least, â€Å"against the backdrop of their view of the world or their ideological frame of reference.† (Witherspoon 1977:4) This includes confronting the fact that these cultures often evolve or even change with their exposure to other cultures and vice versa. The dilemma over the treatment and definition of non-Western art is illustrated, for instance, in efforts to preserve Navajo sand paintings so they could be sold and collected (Errington, 1994: 203). The sand paintings which were originally used in Navajo religious rites and healing ceremonies have been described as â€Å"true masterpieces of art† for their â€Å"instinctive awareness of the basic principles of design, colour harmonies, and contrasts.† (Foster, 1963:43) Ironically, the sand paintings were created by the Navajo not for art’s sake but as an integral part of religious healing ceremonies to locate and reestablish of an individual in his or her right place in the the universe and thus cure his or her illness. These paintings often utilized colored sand, cornmeal, and other bits of material to depict the Navajo’s vision of the cosmos and to symbolize their socio-economic life and other cultural elements.(Robbins, 2005: 14; Foster, 1963: 43) Foster (1963) notes that the Navajo was able to make over a thousand designs from symbols and patterns that were unique to them, and how, after the sand painting had been painstakingly drawn, the shamans would proceed to rub parts of the design on the individual who was to be cured while praying through chants. For the Navajo people, the sand paintings were indeed relevant not only as a religious tool but also as a source of magic. Horrified by the fact that these intricate sand paintings were often destroyed by being sat on or rubbed off during the healing process and thrown out afterwards, â€Å"concerned† individuals found ways to keep these intact using glue and other materials. (Errington, 1994: 203) This concern to preserve the end product of a cultural practice for its artistic or aesthetic value, however, contrasts sharply with the Navajo’s concept of beauty that lies more in the creative process that is inextricably linked with their way of life itself. Thus, beauty for the Navajo lies not in the sand painting that has served its purpose in curing a community member’s illness but in the entire religious ceremony where the sand painting is but a small component. The careless tendency to preserve or collect â€Å"art† from other cultures therefore engenders the superimposition of   another culture’s value systems and assumptions of meaning on the cultural practices or even the products of cultural practices (Errington, 1994: 205). This is especially true in the case of the sand paintings, where the preservation enabled them to become â€Å" durable and portable, able to be moved to new locations, and hung on the walls as â€Å"art†Ã¢â‚¬  (Errington, 1994:205). With this transformation from a religious and highly significant part of Navajo tradition to a home or museum artifact, the Navajo sand painting tend to lose its significance as it became divorced from the culture that produced it. Thus, the Navajo sand painting seem to have lost its meaning as it became more and more commercialized. Approriated as art, the practice became insignificant insofar as the culture and the community that practiced it disintegrated, devoiding sand painting of its ritual meaning and significance. Works Cited: Clifford, J. (1988). The Predicament of Culture. Cambridge: Harvard University Press. Errington, S. (1994). What became authentic primitive art? Cultural Anthropology, 9(2). Foster, K. (1963). Navajo sand paintings. Man, 63. Gilbert, M. (1982). Art: the primitive view. The British Journal of Aesthetics, 22(2). Robbins, R. H. (2005). Global Problems and the Culture of Capitalism. Boston, MA: Allyn & Bacon. Witherspoon, G. (1977). Language and Art in the Navajo Universe. Michigan: University of Michigan Press.                                       

Discuss the Difficulties in Seeking to Adopt a Common Social Policy and Social Welfare Agenda Among the E.U. Member States.

Assignment 2-Take Home Exam (Question 3, 5 and 6) Question 3 Discuss the difficulties in seeking to adopt a common social policy and social welfare agenda among the E. U. member states. Introduction A social policy is a public policy and practice in the areas of health care, human services, criminal justice, education, and labor. (Malcolm Wiener Centre) In European Union, it has passed a long way to seeking adopt a common social policy and social welfare agenda among the E. U. member states. Caune et al has summarized the process of social policy into three steps followed by the milestone of EU.First stage was to create a common market and keep the national welfare policies. During the first stage E. U. did seek to establish a certain policy, such as freedom of movement for workers and freedom of establishment and equal pay and rights for migrant workers. The second stages was Maastricht treaty that creating Maastricht criteria as new economic policy regime and established ‘sof t law management’. The thirds stage was focus onwards coordination and competition of national welfare policies. The treaty of Lisbon which is the recently moment in E.U. social policy, it defines E. U. seeks to assess the significance of the poverty/social inclusion open method of co-ordination in terms of what it indicates about the EU’s engagement with social policy. From the historically, EU was did a lot of works to creating social policy and social welfare agenda. But E. U. still faces many difficult to making a common social policy among E. U. states. Furthermore, this essay will mainly discuss on the difficult in seeking to adopt a common social policy and social welfare agenda among the E. U. ember states which are based understand and analyzed the history and concept of E. U. social policy. Discussion From the three stages of form a social welfare system, we could found European Union has really well social welfare systems as an example for the rest of the wo rld. It has maintained social equality among EU members which defend weaker market participants and guarantee them acceptable standards of living. However, EU is now face great challenges, such as rapid growth in EU expansion and integration, growing competition among member states for investments.Most of them are now becoming difficult to a adopt a further common social policy EU, such as increasing about personal expectancy, population migration process, growing income inequality and the existing social exclusion. These difficulties are mainly coming from two sources which are national and European level. If EU aims to form a common social policy, they will firstly facing a problem of different social policies pursued by member states. Rutkauskiene indicated that there is† no unanimous opinion about all existing social policy in EU. (Rutkauskiene, 2009) Every member states have their social policy depends on different typology, such as Mediterranean model and antipodean mode l. These different social policy models in the place which lead EU faces a huge challenge-too many different social policy model in the members will hinder the process of adopt a common social policy in EU. One of the objectives of common social policy is maintain social equality among EU member state but each member state has a different economic situation that leading to different budget on social welfare expenditure.Hence, there will be conflict between different countries investment on the social welfare. One of the example are from the EU integration process, employee are free to move to a low cost countries and also employee from poor countries can move to a member state that has a better work condition. The enlargement or integration of European has becoming one of the difficulties in order to adopt a common social policy in EU because it has direct on the social issues, such as unemployment rate and fair work rights.Traser describe enlargement had already, in 2004, caused pu blic anxiety about large numbers of low-skilled and semiskilled workers from the new Member States seeking both employment and benefits in the EU-15, and displacing national workers with cheap labour. (Traser, 2005) The issues about free movement of employee is only one example about the differences of economic situation between member states but it can be a main difficulties for EU to adopt a common social policy because the members state are only stand for their own country and competing with other member states.In the European level, EU are also did a lot of work trying to leading member states participate on the process of adopt a common social policy but it is difficult as well. Since the Maastricht Treaty a concept of ‘soft law’ management measures are used to implementation of the EU activates. This has given to the control measures that are based on voluntarism, education and the sharing of best practices. (Rutkauskiene, 2009) In other world, member’s sta te is voluntary participation in an exchange of information or action.The European council collected all these soft measurement 2000 in Lisbon and give them a name of ‘Open Method of Coordination. (OMC)† (European Council Web) In the European council website explained OMC- set goals are monitored and supervised, best practices are shared and there is a scope to share. (European Council Web) But there are one important feature of the OMC is that goals and achievement are established at the EU level, while the measure and practice to achieving them are left for national governments. Many scholar are debate the disadvantage of this method.OMC is the lack of obligation to implement any agreements, and the lack of sanctions for failing to meet any obligations (Szyszczak, 2006). In other words, EU did not give in to any suggestion about policy to national government, and national government did not need to adequately orient their active measures according to OMC goals. Moreove r, each member states can present their own conclusions on the certain policy areas in their national actions plans, such as pension and health care area. Rutkauskiene has found a greatest number of faults in pension’s area caused by OMC. Rutkauskiene, 2009) Everyone is too different in their personal needs and clamming to adequate for all is not feasible. So a government policy should be set a minimum pension sum to be guaranteed and set of this agreement among EU member states. In other worlds, it is necessary that guidelines for changes in indicator evaluation are set, thereby blocking the way for different understanding about social affairs. From the different argument on OMC policy we can it was mainly established a principle of turning into coordination among EU member state but it facing difficulties turning this policy into an operational manner.Vandenbroucke state the post challenge of Lisbon treaty is EU need an operational social policy. (Vandenbroucke, 2002) Unfor tunately, according to the discussion that the current OMC policy has some disadvantaged that made difficulties for EU to adopt a common social policy. Conclusions This essay has started with an introduction milestone of adopt the EU social policy. The difficulties in adopt a common social policy among EU member states have been compounded furthermore by the fact that large number of state in EU and each of them implementing a different social programs and social policy measures.Then we look on how European Union to dealing with this difficulties of great variety in the social policy systems. We have been chooses the current model to coordinate of social affairs in 2000 at the signing of Lisbon strategy which are Open Method of Coordination. Based on the analysed from different academic literature, â€Å"the main shortcomings of the OMC were identified as the lack of obligation and no sanctions for failing to carry out the activities set out in the agreements reached. (Rutkauskiene , 2009) Hence, the inefficiency of current policy is other main difficulties in adopt a common social policy. At the end, the process of adopt a common social will be forward in the future and the difficulties are also coming continuously at different stages. Reference Arnaudova, F. Z. L. A. A. (2011). Growth, well-being and social policy in Euroep: trade-off orsynergy. European Social Policy Centre Concuil, E. , from http://ec. europa. eu/invest-in research/coordination/coordination01_en. htm Daly, M. (2006). EU Social Policy after Lisbon.Queen's Univeristy, Belfast. Malcolm Wiener Center for Social Policy. Retrieved 10 Jan 2013, from http://www. hks. harvard. edu/centers/wiener Palier, P. R. G. a. S. J. a. B. (2011). The EU and the Domestic Politics of Welfare State Reforms. England. Rutkauskiene, L. (2009). Problems in the formation of the common EU social policy: Vilnius Univeristy. Szyszczak, E. (2006). Experimental Governance: The Opend Method of Coordination. European Law Jou rnal. Traser, J. (2005). Report on the free movement of workers in EU-25: who's afarid of EU enlargment? Brussels:European Citizen Action services. Vandenbroucke, F. (2002). The EU and Social Protection: What should the Euroepan Convention Propose. Retrieved from http://econstor. eu/bitstream/10419/44291/1/644397675. pdf Vobruba, G. Debate on the enlargement of the Euroepan Union. University of Leipzig. Question 5 the single market is the fundamental economic underpinning of the EU. Discuss why  this single market is problematic in the EU with regards to the digital technology sector Introduction The Europe commission in a 1985 white paper launched the single market programme.The main purpose of single market is ‘seeks to guarantee the free movement of goods, capital, services, and people – the EU's â€Å"four freedoms† – within the EU's 27 member states. †(European Commission Web) It was launched as the fundamental economic integration of the EU. It creates large benefit to the enterprise and EU-citizens. The European commission and the EU’s executive arm, has target ‘energy, digital and transport sectors as priorities for depending market integration. †(Egen) In relating to the digital technology sector, the world economic is now more deepening on the digital technology.A 2010 study commissioned by the European Policy Centre from Copenhagen Economics showed that an integrated European Digital Single Market (DSM) would lead to an increase in GDP of at least 4%, with concrete benefits for consumers and citizens. (Economics, 2010) European commissions have already been set in motion about importance of digital single market. For example, Monti report had already highlighted the importance of developing the digital single market, which was also reflected in the digital agenda and the single market act.However, there are still many problem existed in the EU with regards to the digital technology sector. This e ssay will outline of the reasons of why this single market is problematic in digital sector, which are mainly because of less enforce on inappropriate regulation in the member states and cost effectiveness and differences in provision of the infrastructure and ‘old national monopolists’. Discussion In Pablo’s report, which has summaries the European commission need to work more on to build trust and confidence in digital single market.Echeverria has indicated that â€Å"European Commission need to stresses that the consumer rights directive marked an important step forward in terms of increasing legal certainty for consumers and businesses in online transactions, and today constitutes the main consumer protection instrument for online services. † (Echeverria) A single market strategy will require a higher level of legal regulations in regarding to issues such as cybercrime, data privacy and spam while ensuring free movement and the possibility of transacti ons on the internet.Otherwise this single market will be a problematic in digital sector because of the existence of a patchwork of different legal provisions and barely interoperable standards and practices. Also the consumer can’t access the full benefits from this strategy if this regulation is poor. European commission’s report of building the digital single market has identified more and more pollution is using the digital technology now. (Commission, 2011) Peoples are now using more internet service to making a convenience life, such as the online cross border trade.Moreover the digital single market will allow citizens to have access throughout the EU to all forms of digital content and services. So in order to creating single market digital sector, if people are not use digital service in a safety environment then there will be a data protection problems. The other reasons of why  this single market is problematic in the EU with regards to the digital technol ogy sector, which is cost effectiveness. In Zuleeg’s report has determine that a single digital market will require large scale investments in fixed and mobile networks, with much of this investment needing to come from private operators. Zuleeg, 2012) Especially in the European finical crisis period, Europe government and private operator will need to have spent more to support this investment by developing new investment vehicles and guarantees. Michelle Egan also defines a digital single market is a long way of investment and still have many barriers now. (Egan) But the single market in digital sector will improve productivity and contribute to increasing Europe’s medium to long term competiveness. It also brings out benefit beyond the economic which it can help some societal problem, such as fragmented labor market and environment problems.According to all of this facts, we can finding the single market can bring large benefit to citizens and social but it will nee d to put extra investment by government and private operator. So this single market will bring out a conflict between internal users and external stakeholders because of cost effectiveness. A study by Copenhagen economic has list out â€Å"there is a range of national and international operators, totalling close to 100 mobile operators. â€Å"(Copenhagen economic) In the Australia digital sector there are mainly one operator provide the most mobile and internet infrastructure which are Telstra.The digital sector is fragmented in European compared with other countries. The most of the digital companies are competing on a national scale instated of across borders. None have continent-wide operations and provide difference in provisions of infrastructure. One of the example is there are still less operator can provide mobile service across borders and also with a high roaming fees. However the single market strategy in digital sector is trying to integrate these companies into one gr oup.This single market strategy may become problematic in the digital technology sector because a fragmented supplier industry may hamper certain developments. From the overall finding, we can operator is the main stakeholder with a large impact on the digital sector. The study by Copenhagen has further explained this fact as â€Å"a lack of market consolidation with ‘old national monopolies’ keeping their strong position in local markets due to government protection in the past. â€Å" The operators are stress on their profit and ignore the importance of single market.One of the major benefits of European single market is increasing competition, leading to lower prices and better welfare for consumers and society as a whole. But the operator has main power in the national market and can refuse price convergence. Conclusion At the end, the single market in digital will have large impact on European economy either in public sector or employee or consumers or producer s ides. But according to the nature of digital technology sector which is fragmented industry and investment barriers so the single market has being a problematic in this industry.Reference Completing the internal market White paper from European Commission to European Council (1985). Brussels. Commission, E. (2011). Building the digital single market-cross border demand for content services. Echeverria, P. A. On completing the digital single market Economics, C. (2010). The conomic impact of a european digital single market. Egen, M. Twenty years after the completion of the EU's single market programme, member states have still not eliminate all barriers to trade. London: The london school of economic and politcal science. Zuleeg, F. (2012).A digital single market by 2015. eSharp. European Mobile Indsutry Obeservatory. (2011) Monti, M. (2010). A new strategy for the single market. â€Å"The Single Market†. Europa web portal. http://ec. europa. eu/internal_market/index_en. htm. Retrieved 03 January 2012. Question 6 what are the problems to be encountered in forming a European sense of identity among the citizenry of the EU? Introduction A sense of a national identity is â€Å"the person's identity and sense of belonging to one state or to one nation, a feeling one shares with a group of people, regardless of one's citizenship status. (Smith, 1993) Usually, these are nation-states but it also can implied an entity group of European Union. McCormick writes sense of European identity as â€Å"a related term of Europeanism refers to the assertion that the people of Europe have a distinctive set of political, economic and social norms and values that are slowly diminishing and replacing existing national or state-based norms and values. †(McCormick, 2010) Johan Borneman indicates the practices of Europeanization in term of languages, money, tourism and sex and sport. Borneman 1997) European Union are getting practice on this through the creation of the European single market, the expanded the European Union from twelve members in 1985 to twenty-seven members in 2007 and link the legislative and policy frameworks of EU with European identity. As we explained before EU has a long history of this integration process but there are still many problems encountered in forming a European sense of identity among the citizenry of the EU. There are especially in some countries are having this problems such as British.Moreover, this essay will discuss on the main problems that are in forming a European sense of identity among the citizenry of the EU. It also will consider some examples in English. Discussion Medrano has summarized the main problems into three section which are â€Å". 1) conflated behaviour in referenda on reform treaties of the European Union, support for European integration, and identification with Europe, 2) conflated different dimensions of European identity, and 3) failed to unpack the various meanings that citizens a ttach to the idea of identification with Europe† (Medrano, 2010)In the detail, the first problems are mainly concerned on the public debate on European identity. Many people see no opportunity to influence supranational decisions effectively because there are lacks of intermediary actor primary covering European issues. In the public, the media or journalists are both have lack of supporting on EU news. Vreese said â€Å"It is difficult to ‘sell’ an EU story. † (Vreese, 2004) Medrano has asked many journalists do you agree you play an important role in ‘crating a European identify’. (Medrano, 2010) The most of them unanimously agreed that the answer should be ‘NO’.Some journalists believe their role is to create engagement and interest and not to influence identity. One of the examples is in British, the public opinion is divided and the country is becoming the most of skeptic members in EU with regards to EU policy of common curre ncy and the enlargement. There is other problem influencing public opinion about Europe, such as difference in social-demographic characteristics. Most of researcher has find men being more supportive of Euro-pan integration and higher levels of education are associated with being more positive towards the EU.The second problems listed by Medrano, can be described as there are having many dimensions of European identity either by national or citizen. If there are too many dimensions of European identity that will results a lack of precision use in the use of the sense of European identity. The official dimensions of European identity is a precondition for a democratically legitimise European Union with feeling of belonging together of the people living in the member states, including the awareness and the support of common values, achievements and aims.But in related to a real case the European identity is far lagging behind national identity. Fukuyama has given one example of Franc es created a strong national identity by built around the French languages. (Fukuyama, 2012) In order to compared within the EU’s dimension, EU are more stress on political and policy identity but the nation’s dimensions are more focus on culture and social level. EU has 27 members within different culture and religion. These countries have already built on different level of national identity.EU is now trying to integrate this national identity into one common identity which is European identity. So EU needs to conflate different dimension of European identity. The third problems is failed to consider the citizen’s ideal about European identity. The EU defines concept of European identity are most physically based, such as free movement of goods and service. But the officials should to promote a sense of belonging to Europe citizens emotionally. Medrano stated there are lacks of identification with Europe among citizens are mostly interested in the emotional di mension of identification. (Medrano,2010)Besides of Medrano’s measured three problems, there are still many other problems in order to create a sense of European identity. One of these problems are EU has less use any knowledge or instruments of identity policy to deliver the sense of European identity, such as education. Walkenhorst writes â€Å"without a sense of commitment and knowledge of citizenship rights the European peoples cannot establish a democratic identity in the sense of supporting the EU as a legitimate political system†. (Walkenhorst, 2004) EU also will not being able to demonstrate its benefits for the European citizen without using an instrument of identity policy.For instance, provide more education or program on spread the sense of European identity will also help to avoid the problems of different religions. EU has different religions identity, such as Christian and Muslim. The concept of European identity need to consider the ideal of multicultur alism and democracy. Conclusions This essay draws an analysis of the problems encountered in forming a sense of European identity which are based on an understanding what is a sense of European identity and how could generate a sense of identity.Since the firstly forming a European Union, EU are trying to creating a sense of European identity. A sense of national or regional identity is an emotionally feeling belongs to a group. EU did a lot of work that letting people are physically feeling of European citizen, such as free movement of people and goods. One of the examples, are Eurostar given people are more mobility in traveling around European. However, EU is now facing problems on ignored the citizen’s emotionally feeling of European identity and conflicts of different dimension about European concept of identity.Each member state and citizens has different dimension about European identity. The best way to solve this problem is using accurate instrument to spread the ide al of European identity, such as education and media. But the fact is there is lack of use media and education that results a problems in forming a sense of European identity. Reference Adrian Favell, E. R. , Theresa Kuhn, Janne Solgaard Jensen and Juliane Klein. (2011). The Europeanisation of Everyday Life: Cross-Border practices and Transantional Identitifcations Among the Eu and Third-Country Citizens. Foweler, J. B. a. N. (1997).Europeanization. Annual Review. Retrieved from http://www. jstor. org/stable/2952532 . Fukuyama, F. (2012). European Identities Retrieved from http://blogs. the-american-interest. com/fukuyama/2012/01/10/european-identities-part-i/ Margaret R, A. (2008). Perceptions of European Identity among EU Citizens: An Empirical Study. McCormick, J. (2010). Europeanism: Oxford University Press. Medrano, J. D. (2010). Unpackiing European Identity: CAIRN, INFO. Smith, A. D. (1993). National identity: Univeristy of Nevada Press. Versteegh, M. L. C. (2010). European Ci tizenship as a New Concept for Euroepan Identity.

A Report On The Chinese Gross Domestic Product - 941 Words

ABSTRACT In financial matters, inflation is a supported increment in the general value level of products and 30 percent in all the nations that effectively diminished triple digit swellings in the 1980s. . Hypotheses of industrious swelling can be grouped into those that stress the profit represented as a wellspring of government fund and those that underline the expenses of completion inflation. Analyzing the sources and ingenuity of moderate variations.Recent scenario of variations or inflations were activated by thing value stuns and were brief; not very many finished in higher expansion. This article presents contextual representation of china. which includes the ill effects of moderate expansion and four that effectively moved down†¦show more content†¦The most critical issue is the conflicting nature in macroeconomic strategy detailing between the expansion related overabundance liquidity and extreme livelihood market. This paper examines the connection of coefficient and causa lity between the swelling rate and unemployment for the time . Shockingly, the exact demonstrated is ineffectual to discover a causal relationship between the swelling rate and unemployment rate in China. The complex financial nature of China biases the generalizability in China. The real relationship between the inflation rate and unemployment in China is further examined in this paper. Productive proposal towards this issue is given toward the end of this paper. China is confronting the inflationary weight from the value increase in crude material. Aside from that, the monetary extension in the course of recent years likewise blows up a few data elements, for example, work, land, assets, expense of capital and so forth. Accordingly, the monetary advancement in China is compelling power to the production of inflation. China is confronting a serious inflation issue originating from the hot cash; the Chinese government might apply its socialist summon to proper control. Further, the Chinese government does control real substantial underwriting organizations and all nearby banks in China. Profoundly centralization gives the Chinese government a