Types of ownership Both Cadburys and Sainsburys and plc’s (public :: Business and Management Studies

Types of go forthpower Both Cadburys and Sainsburys and plcs ( cosmos restrict companies). Company registered as a plc under tTypes of ownershipBoth Cadburys and Sainsburys and plcs (public limited companies).Company registered as a plc under the provisions of the Companies Act1980. The familiaritys name must carry the rowing public limited companyor initials plc and must switch authorized share capital over 50,000,with 12,500 paid up paid to the company by the shareholders. Plcsmay prolong shares to the public and are more tightly regulated thanlimited companies. Converting a private limited company into a publicone has advantages, such as the ability to raise share capital.However, it does have potential injurys, such as being subjectto the scrutiny of the financial media and city analysts (thecompanys financial records must be available for any member of thepublic to scrutinize). If the founder of a plc perceives the companyshare price to dishonor the company they may waste the companyprivate once more, as Richard Branson did with Virgin in 1989.Sellingshares means that you can raise money quickly. A disadvantage ofselling shares is that it is very expensive. throttle companies areowned by shareholders. These are people who own shares in the company.Shares are the parts into which the value of the company is divided.So if a business is determine at 100 million and there are 200 millionshares, each share will be cost 50 pence.All shareholders have limited liability. They are only liable for theamount they have put into the business. If a company c mislays down,shareholders can only lose the money they have invested. They will notbe liable for anything else.Limited companies are owned by their shareholders. Large limitedTypes of ownership Both Cadburys and Sainsburys and plcs (public Business and Management StudiesTypes of ownership Both Cadburys and Sainsburys and plcs (public limited companies). Company registered as a plc under tTypes of ownershipBoth Cadburys and Sainsburys and plcs (public limited companies).Company registered as a plc under the provisions of the Companies Act1980. The companys name must carry the words public limited companyor initials plc and must have authorized share capital over 50,000,with 12,500 paid up paid to the company by the shareholders. Plcsmay offer shares to the public and are more tightly regulated thanlimited companies. Converting a private limited company into a publicone has advantages, such as the ability to raise share capital.However, it does have potential disadvantages, such as being subjectto the scrutiny of the financial media and city analysts (thecompanys financial records must be available for any member of thepublic to scrutinize). If the founder of a plc perceives the companyshare price to undervalue the company they may take the companyprivate once more, as Richard Branson did with Virgin in 1989.Sellingshares means that you can raise money quickly. A disadvantage ofselling shares is that it is very expensive. Limited companies areowned by shareholders. These are people who own shares in the company.Shares are the parts into which the value of the company is divided.So if a business is valued at 100 million and there are 200 millionshares, each share will be worth 50 pence.All shareholders have limited liability. They are only liable for theamount they have put into the business. If a company closes down,shareholders can only lose the money they have invested. They will notbe liable for anything else.Limited companies are owned by their shareholders. Large limited

Nature of Logic and Perception :: essays research papers

According to the American hereditary pattern dictionary, the definition of Logic is the study of the principles of reasoning, especially of the bodily structure of propositions as distinguished from their content and of method and validity in deductive reasoning. It also says that logic is valid reasoning. I believe that logic and diminutive implying are closely related in that logic is used in the process of thinking critically. Perception, as stated in the American Heritage dictionary, is the process, act, or faculty of perceiving. Perceiving is to become aware through any of the senses.I think that a lot of my behavior or actions are driven by my feelings or attitudes. An example would be if I were feeling angry my action could be to yell at the person I was angry with. I think that my feelings or attitudes are driven by my beliefs. I come from a dysfunctional family, like most of us I guess (assumption), and my grow was the indigenous care giver in our home. I have seven fellows and sisters however I was raised with my two youngest sisters so I was the oldest in the house. My older brother is thirteen years older than me and my older sister is just one year old than me. Growing up, I had some a few life-threatening memories of my older brother, but I had no memories of my older sister. Actually I should say that I have no visual memories of my sister. My mother told me stories of my sister. The weird function is that growing up, it seemed like she had this long relationship with here, but in reality it was only a little over a year. After I was born, my mother separated from her husband and lost custody of her daughter and never saw her again until recently when my youngest sister found her. Boy that was an Oprah story Anyway, the reason I bring all this up is because my perceptions growing up regarding my mothers life were full of pain.

Columbia Space Shuttle- Final Mission :: American History, NASA

Columbia Final MissionWayne Hale, Deputy Shuttle ManagerWroteLast year we dropped the torch through our complacency, our arrogance, self assurance, sheer craziness and through our continuing attempt to please everyone. Seven of our friends and colleagues paid the ultimate price for our failure. Yet the nation is giving us another chance..We must(prenominal) not FailMore then three years ago the Space Shuttle Columbia went down in flames, due to the damage caused just not limited to, a piece of insulating foam that broke off the external tank and struck the wings leading edge. The foam struck with sufficient pull back to create an opening in the wing which allowed hot plasma to enter during reentry. No one thought that foam could cause this much damage since zero like this had resulted from previous instances where the foam had come off. In the beginning NASA was faced with a tight budget given to them by the government. This budget was large enough to build a state of the art air craft but wasnt enough to develop an escape system that might of proving to be useful in this case. The culture of NASA was a factor that created this mistake, The mantra Prove to me that theres something wrong. The chain of command was not equal the small guys couldnt voice their opinions and annoyings because of the position they held in the organization. Another concern was that they miscalculated the risk of the foam creating any damage just because it never destroyed another shuttle. The facts were clear that the foam had the ability to create some damage, and this was apparent in many other space shuttle launches. Foam debris was classified as an in-family event- a problem within NASA experience base that was not considered a safety of flight issue. NASA even knew that foam debris tended to fall off the left bipod ramp and that ten percent of the fights recorded loss foam from this area. everyplace the years NASA decided to put their concerns of foam damage to the side and called it an acceptable thing to happen during common flight procedures instead of finding a style to prevent it. On its first day in orbit NASA engineers came to the conclusion that the foam debris that hit the left wing might have caused surd damage to the shuttle and could prevent it from a safe reentry.

Graduation Speech -- Graduation Speech, Commencement Address

The Class of 2012. How long have we heard these words applied to us? Long years starting with broken crayons in kindergarten to inside-out sweatshirts in middle school to deep English essays 13 years of learning from the simplest counting to complicated algebra and calculus, from reciting our rudiment to reading Shakespeare. Imagine, us coming out of our respective middle schools into this monster of a campus. With three times as many people people who drive. sight who have cars and are legal adults. Weve been here for four years. Count the quarters there are 16 of them. Remember freshmen year that infatuation with older students, and how universe friends with a senior gave you immeasurable social status? There were some sophomores who didnt tease us for being freshmen, and we clung to them. Remember walking in late to every class on the first day of school, and maybe the second... maybe the third... Every morning we rode the yellow school bus. Our first pep assembly was amaz ingly loud and we walked out half-deaf. The cheerleaders were trying to get us to shout something, alter we figured out it was double-oh. Remember when our commitment to graduation banner was stolen out of the program library? And that first last, day of school promising to meet everyone again come September. Four down, 12 to go. Sophomore year. Well, maybe by the time we were sophomores we may not have been completely settled into our own high-school persona but at least we knew where we were. And maybe, that first day of school, we still were late to every single class. We intentional the meaning of the word sophomoric that year, and teased the freshmen, getting some symbolic retribution for what the sophomores did to use the year before. Eventually... ...ers ago, so were we. Yesterday has passed. Now we stand on the bound of adulthood. We have counted the cost, weve counted the quarters and paid the price, weve paid four years. Sixteen quarters. Right now we all have a legacy that weve left on Ayer highschool School, a legacy developed from four years of walking down the halls, eight semesters of sitting in the classrooms and sixteen quarters of developing our personalities. We were the anxious freshmen, the obnoxious sophomores, the lazy juniors and the graduating seniors. But, in 10 years, who are we going to be? Will we still drink Sobes, Jones or Yogochinos? Have the same wallpaper on our computing device monitors? Will we still fly out at any hour of the night to go to Dicks or Taco Bell? some(prenominal) the answers, what weve each learned here will remain at the core of the people we become. We are the Class of 2006.

Shakespeares Hamlet - The Importance of the Ghost Essay -- GCSE Engli

Hamlet and the Non-expendable specter All literary critics agree that the Ghost in Shakespeares tragedy Hamlet is not an expendable character. Without the Ghost the show could not go on. He is absolutely essential to the plot, to ever aspect of the bid. W.H. Clemen in Imagery in Hamlet Reveals Character and Theme describes the pervasive influence which the Ghosts words have on the entire play Perusing the description which the ghost of Hamlets father gives of his drunkenness by Claudius (I,v) one cannot help being struck by the vividness with which the process of poisoning, the malicious spreading of the disease, is portrayed Sleeping within my orchard, My custom evermore of the afternoon, Upon my secure hour thy uncle stole, With juice of cursed hebenon in a vial, And in the porches of my ears did pour The leperous distilment whose effect Holds such an enmity with blood of man That swift as quicksilver it courses through The natural gates and alleys of the body, An d with a sudden vigour doth posset And curd, like eager droppings into milk, The thin and wholesome blood so did it tap And a most instant tetter barkd about, Most lazar-like, with vile and loathsome crust, All my smooth body. A real event described at the beginning of the drama has exercised a profound influence upon the whole imagery of the play. What is later metaphor is here still reality. The picture of the leprous skin disease, which is here in the start act described by Hamlets father, has buried itself deep in Hamlets imagination and continues to lead its subterranean existence, as ... ...Hamlet. Ed. gain Nardo. San Diego Greenhaven Press, 1999. Rpt. from The Masks of Hamlet. Newark, NJ University of Delaware Press, 1992. Shakespeare, William. The Tragedy of Hamlet, Prince of Denmark. Massachusetts Institute of Technology. 1995. http//www.chemicool.com/Shakespeare/hamlet/full.html Ward & Trent, et al. The Cambridge History of English and American Literature. New York G.P. Putnams Sons, 190721 New York Bartleby.com, 2000 http//www.bartleby.com/215/0816.html West, Rebecca. A administration and World Infected by the Disease of Corruption. Readings on Hamlet. Ed. Don Nardo. San Diego Greenhaven Press, 1999. Rpt. from The Court and the Castle. New Haven, CT Yale University Press, 1957. Wilkie, Brian and James Hurt. Shakespeare. Literature of the Western World. Ed. Brian Wilkie and James Hurt. New York Macmillan publishing Co., 1992.

Constantine the Great :: History

Constantine was born in Naissus on 27 February in AD 285. He was the son of Helena, an inn keepers daughter, and Constantius Chlorus. Constantine became a member of the court of Diocletian when his father, Constantius Chlorus was elevated to the rank of Caesar. He proved an officer of much promise serving under Diocletians Caesar Galerius against the Persians. posterior on, He was leading a battle against Maxentius, and on his way to rome, he saw a flaming cross in the sky that said By this sign, thou shall conquer. The next day his army was victorious against the more numerous army. Constantine saw this victory as directly related to the vision he had had the wickedness before. Henceforth Constantine saw himself as an emperor of the Christian people. With his victory over Maxentius at the battle of Milvian Bridge, Constantine became the dominant figure in the empire. The senate warmly welcomed him to Rome and the two rest emperors, Licinius and Maximinus II Daia could do l ittle else but agree to his demand that he henceforth should be the senior Augustus In this position, he ordered Maximinus to cease his repression of the Christians. notwithstanding this turn toward Christianity, Constantine remained for some years still very tolerant of the old pagan religions. As time went on Constantine should become ever more relate with the Christian church. He appeared at first to have very little hold of the basic beliefs governing Christian faith. But, gradually he became more introduce with them, So much so that he sought to resolve theological disputes among the church itself. This willingness to resolve matters through peaceful debate showed one side of Constantine, and his unrelenting enforcement of the decisions reached at meetings showed the other.

Of Mice and Men †Essay †Lonely Characters Discussion Essay

In the opening chapter of Of Mice and Men John Steinbeck immediately introduces the subject of loneliness and the reality of men living rattling temporary lives with no real direction. Loneliness is an inevitable fact of life that not even the strongest toilette avoid. Throughout the story, readers discover many sources of loneliness and isolation.Candy is an old ranch worker who lost his hand a few years back succession working. He is a lonely man who owns an old, smelly, disabled dog that can hardly walk. This re completelyy was his only companion. In the hold on his dog was shot. Candys life was heading in the isolation direction even further. The quote on page 59 Spose I went in with you guys. Thats three hundred and fifty bucks Id put in. Howd that be? This was his effort to try and join in with George and Lennies ideate ranch.Crooks is a black Negro Stable Buck who wears glasses and has a busted back. He is an extremely lonely man and probably the loneliest in the invent ion due to his complexion. He is treated by the others in a rude manner and is left sitting in his little room helpless with an self-conscious bed which makes his back worse. The quote on page 67-68 You got no right to come into my room. This heres my room. Nobody got any right in here but me. This is how he reacted to the treatment he was getting, but in the end he was quiet a nice guy to know.Curleys Wife is a very lonely woman who wears red mules, has red fingernails, full rouged lips and hair rolled in clusters. She has no name throughout the entire phonograph record to reinforce how insignificant a person she is. Her life with her husband was vigor to do with loving each other because she didnt even like Curley because he was not a nice bloke. The quote on page 87 Coulda been in the movies, an had nice clothes tells us that her ambition was to become an actor. In the end she ended up being attained by Lennie after trying to become his friend.George and Lennie, although unh appy at times, are not lonely, because they share a very close bond with each other, and have traveled together ever since Lennies Aunt Clara died. The only thing that seems to keep them working for next to nothing is the thought of owning their own ranch someday. In the final chapter Lennie states triumphantly on page 103 An I got you. We got each other, thats what, that gives a hoot in quarry about us. In the end George felt he had to shoot Lennie himself, so that he would die instantly, rather than suffer as Curley killed him slowly and painfully. Lennies murder was Georges final act of friendship. But it also ended their long friendship and now George would be lonely as he traveled almost from job to job.In conclusion the loneliest people in this story are Crooks, Candy and Curleys Wife. The friendship between George and Lennie was a strong bond all throughout the story, but it all ended when tragically George shot Lennie because he could no longer protect him any further.

Review of Related Studies Essay

A lot has been written about what proviso oversight is, and how it relates non only to similar damage and to concept like buying, procuring, and sourcing, but also to concepts like management, logistics, and issue chain management. Most authors differentiate purchasing, procurement, sourcing, and supply management as follows they start by stating that purchasing includes operational activities that be carried out more or less exclusively by one department, namely the purchasing department. The sequence of activities here usually starts with the pack identification and ends with the tracking of purchasing activities.Procurement is then defined as being broader in scope and including some activities of strategic relevance. According to Dobler/Burt (1996), procurement includes not only purchasing but also tasks that are strategic in nature. The same logic is then applied to supply management as common fig 1 shows. See on page 38 for the figure. Monczka/Trent/Handfield(1998) use t he terms purchasing and procurement interchangeable throughout their book. In their view, purchasing and procurement are functional activities that most often refer to day-to-day management of material flows and information.They also define sourcing a cross functional process that involves element of the firm other than those who work in the purchasing department, the sourcing management team may include members from engineering, quality, design, manufacturing, marketing, accounting, strategic planning, and other department Kaufmann (1995) describe sourcing an integrative management approach to designing all supplier relations in the sense of a total relationship management Arnold (1997) uses the term supply management as an umbrella term for the concept of procurement, materials management, and logistics.According to him, the latter includes inbound logistics, and internal logistics, as well as outbound logistics. Tempelmeier (1995) defines purchasing as contract-centered (as oppo sed to logistical activities implying the physical movement of goods). He defines procurement as all activities aiming at supplying the company with needed inputs. Corsten (1995) the process of purchasing denotes the act of acquiring the plaza right of the procurement goods.He defines procurement in a similar way as Tempelmeier. Sourcing is the process of planning and handling outside sources. He defines supply management as procurement with a strategic focus that acts proactively and contributes significantly to company performance. Koppelmann (1995) uses the term Procurement Marketing for nearly exactly the same hard-boiled of activities as Dobler/Burt do for supply management. There is also some discussion about the types of purchases that fall under each of the definitions.International authors like Dobler/Burt (1996), Monczka/Trent/Handfield (1998), and van Weele (1995) bounce the scope of purchasing, procurement, sourcing or supply management to materials, services, and ca pital equipment. They do not include the supply of the company with financial resources or personnel. German authors like Arnold (1997), Fieten (1986), Pieper/Pfohl (1993), Tempelmeier (1995) designate differently They say that from a theoretical standpoint all inputs have to be considered. Some of them like Arnold and Pieper/Pfohl however, pragmatically restrict the scope of purchasing, procurement, or supply management to materials.

Jollibee Essay

Tony Tan Caktiongs Jollibee has been champion of the most admired, most copied, most innovative and most professionally-run company here in the Philippines. It has been the number one fastfood chain overtaking giants such as Mc Donalds and Kentucky Fried Chicken or KFC. How did a local jolly red bee knocked down a international red-haired clown named Ronald? Lets see another inspiring story of the founder of one of my ideal businesses. With its success, a Jollibee franchise has now a quest after pr churl of P25+ Million (US$ 500,000+). WowTony Tan Caktiongs Life and his Jollibee company is another rags to riches story of an entrepreneur that truly inspires everyone. Tony was the third of seven siblings born(p) to poor parents who migrated from the Fujian province in China to look for a better life here in the Philippines. Tony to return back to Manila and pursue his feed in Chemical Engineering at the University of Santo Tomas (UST).In 1975, Tony and his colleagues went on a vis it to a Magnolia Ice Cream plant located in Quezon City and intimate that it was offering franchise when he saw a poster for it. By the month of May, with his family savings, he took P350,000 to grab the franchise opportunity and opened two Magnolia ice cream parlors named Cubao Ice Cream House. They all worked hands-on but as the business propels, they noticed they could not do it all so they started to set up an organization hired store managers, and trained people.Tony started with just two ice cream. Then after two years, he offered chicken and hamburger sandwiches, because customers were telling them they didnt want to be eating ice cream all the time. They prepared the food in the back kitchen, and soon noticed that people were lining up more for hamburgers than for ice cream. Then in 1978, when they already had six ice cream parlors, they asked themselves Why dont we change into a hamburger signaling?That was also the time they mulish to incorporate and realized they neede d a brand name. They were looking for a image that would represent the group, and because Tony was very impressed with Disneyland characters, they decided on a bee. The bee is a busy creature that produces honey one of lifes sweetest things. They thought it would be a very good symbol to represent everybody. They decided they would all be very busy and happy at the same time, because if they were busy but not happy, it would not be cost it. Thats why they put the word jolly and just changed the y into i to form a brand name JOLLIBEE.It wasnt long out front we heard that the multinationals were coming in including McDonalds. Friends started asking us if we were going to get a McDonalds franchise but I remember saying, if you franchise, you cant grow outside the Philippines, says Tony.

Aid and Two Gap Model

Aid and the Two Gap Model Aid is a burning reward these days. The question of countries accepting external assistance has intrigued economists and the planetary public for a quite a magical spell. Television talk overions and news stem articles have frequently focused on this issue enchantment politicians try to fight this take stunned in the parliaments. Furthermore, many atomic number 18 trying to unravel the enigma of promote and its effects on produce. This paper, in the little word space provided, lead try to establish a relation surrounded by promote and branch.It leave behind do so by first defining attend to and evolution and accordingly moving on to some of the weighty works which arsehole be used to understand this link. We will discuss the ii- shot model and hence move on to the Solow and Harrod-Domar model, fine-looking empirical examples in each case. Finally, we will dismantle two countries and try to inspect the reasons for their different p rocess evaluate using the logic used in the discussed models. Aid can be defined as any voluntary modify of resources. It can be either public (provided by presenter countries or multilateral donor organization such(prenominal) as the IMF and The World Bank) or private (given by nongovernmental organizations. . The Organization for Economic Corpo balancen and Development defines assistant as any transfer of m singley or resource that fulfills the following criteria a) The objective of the transfer should be noncommercial. b) It should be given for the purpose of frugal development. c) The wrong of the transfer should be concessional (interest commit should be less than the prevailing interest rate in the grocery store OR the maturity period should be long-lasting than usual). Aid should non be mixed with grant which is often used interchangeably with this term.Aid is any transfer that has concessional terms piece of music grant is a invent of service that does not requi re the repayment of the principal. In this paper, we will often measure wait on in the from of official development assistance (ODA) which is a cheerful indicator of inter field tutelage flow. On the other hand, we will measure yield by scrutinizing the plowsh be change in gross domestic product. One of the most wide used framework for analyzing the effects of caution on progeny is the two- gaolbreak model which holds a key berth in policy decisions related to unusual assistance.The two gap model is based on the Harrod Domar equation g = s/v where s is rescues rate v is great output ratio Capital output ratio is assumed to be constant. The two gap model assumes that a growing country faces either a nest egg gap or a alien switch over gap. The savings gap occurs when a country faces a shortfall of savings to match Investment in attaining an mean harvest-tide rate. In such a case, exotic borrowing or aid can extension the savings and help bridge the gap between sa vings and investing. This allows a country to achieve the targeted offshoot rate. Ft < I S (Savings gap)A foreign exchange gap takes place when a countrys exports are not enough to finance its imports. In such situations, aid is handy as it fills the foreign exchange gap and provides countries with sufficient exchange to evanesce the required level of imports. At a given point in time, only one of the two gaps is binding. Ft < M X (Foreign Exchange gap) future(a) this further, we fit empirical data into this model. Zambia is a developing country that has continuously received aid since the mid(prenominal) 1960s. In 1992, almost 80% of Zambias enthronement was financed by foreign aid.Since, Zambia has received aid over such a long period, the two gap model predicted that its per capita GDP would reach $2300 by the hitch of the century. On the contrary, its GDP per capita in 2007 re principal(prenominal)ed merely half of what was expected . i. e. $1300. The fig. below sum marizes the analysis of the Zambian economy. To essay whether the Zambian case is an exception or does the model always fail to predict the reality, we scrutinize on various factors which could have blocked the path of fruit for this country. Zambia has been infected by violence and instability right-hand(a) from its independence, with bloodshed and massacres a common feature.In addition, economic growth has been hindered by the outbreak of civil war and influx of refugees from the neighboring countries. Corruption is another problem that has stalled growth which can be seen from the fact that Zambia is ranked 101 on the corruption perception index. Very recently, Sweden and Netherlands stop aid to Zambia due to rampant corruption allegations. all told these problems add to the ineffectiveness of aid on the growth of Zambian economy which can explain why the two-gap model failed to forecast the ineptness of aid.The effect of aid on growth can also be explained using two basic bu t important models, namely Harrod Domar model and the Solow model. Although the upshot of aid on growth is a multidimensional and complex process we only take into account the effect of aid on variables defined in these two models. The principal(prenominal)(prenominal) focus of our discussion will be the saving rate which comes out to be the most supreme variable in both these models. We start through with(predicate) the basic Harrod Domar model. Capital output ratio, capital labor ratio and labor output ratio are assumed to be constant. virtually of the important relations are as follows S=s. Y (2) (3) (1) g= (s/v)-(? ) S=I Where Y is income S is substance saving I is Investment ? is depreciation of capital harmonise to this model, growth can be plusd by increasing s, lessen v or decreasing ?. We shall mainly focus on the relation of aid on growth through the savings rate channel. Countries ask for aid mainly due to its comprehend beneficial effect on the savings rate. As shown, saving equals enthronisation in the Harrod-Domar model, subsequently an increase in savings will result in an increase in investment.This increase is supposed to encourage the growth rate of the telephone receiver country. Michael P. Shields offer an interesting explanation of the relation of foreign aid on growth in his paper foreign aid and domestic savings the laboring out effect. If foreign aid is expected to increase savings, then equation (3) becomes g=(s+fa)/v -? Where fa is foreign aid as a proportion of income (4) (s+fa) represents the total funds available for backing investment. According to this equation, an increase in foreign aid is supposed to increase the total saving funds and hence investment by an equal sum total.This suggests that an each additional dollar of foreign aid should result in a one dollar increase in investment in the economy of the recipient country. Reality however is not that perfect and it is too generous for anyone to assume such a one -to-one increase in investment from aid. Famous economist Edward Griffin offers a blame of such approach. According to him foreign aid should be taken so as to supplement income rather than having a direct meet on savings. In such a case, an increase in income by the amount of foreign aid fa would increase consumption by (1-s). a, thus increasing the investment by s. fa. In such a case, domestic savings can be crowded out by foreign aid by the net amount (1-s)fa which equals (s-1)fa. Markedly, foreign aid can crowd out private savings and investment, resulting in a decrease in growth as suggested by the Harrod Domar model. The main obstacle in the way of growth in the Harrod-Domar model is the phenomenon of aid filtering out into increased consumption (1-s). fa. Aid has to be spent on investment or has to increase the saving rate (both ultimately come out to be the kindred) for a country to grow.To see a practical example of this, we take care Pakistan, which is a country large ly dependent on foreign aid. During the period 1952-2002, the total amount of aid given to Pakistan equaled 63703 million US dollars. Ghulam Mohey-ud-din examines in his paper Impact of foreign aid on economic development in Pakistan, the reasons for aid not resulting in the required growth for Pakistan. He carrys three main reasons for the failure of aid to account for growth. First of all, a staggering 58% of this total aid (approx. 6945 million US dollars) was bind to development of large projects while only 13% (approx 8281 million US dollars) accounted for non-food and do it aid. Such a large portion of aid (58%) going towards consumption invariably meant that the effect on savings was going to be very minute. Thus, pecuniary aid tended to crowd out saving and investment. Secondly, while the nominal aid gradually increased, in reality, aid as a percentage of gross national income fell from approximately 7. 6% in 1960 to nearly 3% in 2002. This meant that aid was not contra ctable up to the required increase in the GNI of Pakistan.Thirdly, along with the increase in aid came the charge of burgeoning foreign debt. This required huge amounts of debt servicing which reduced Pakistans current account. As previously explained, aid was already not resulting in much growth due to it crowding out savings and investment. An additional burden of debt servicing did the government no better. Accordingly, its GDP growth rate was subject to constant fluctuations and Pakistan could never attain sustainable growth. The growth rate reached a card of 10. 22% in 1953 but since then, the average growth has gone down with the exception of one or two years.In 2002, the GDP growth rate stood at 4. 73%. Aid during a whole half of a century could not result in sustained economic growth. Another approach that looks at the doctor of foreign aid on growth is the scantiness trap. many poor developing countries face an inability to grow at reasonable rates due to getting stuck in a poverty trap, which can be defined as a self-reinforcing mechanism which causes poverty to persist. We use the Solow model to analyze how aid can be used to whiff countries out of this poverty trap and onto the path of self-sustaining economic growth.We assume the basic assumptions of Solow model to be true. Thus, we assume constant re diverges to scale production usance and diminishing returns to capital. The final and important relation of the Solow model is ? k=s. y-(n+? ). k (5) k is capital per actor n is population growth Philipp Harms and Matthiaz Lutz depart from this received Solow model by assuming that people have to satisfy their basic consumption needs for which savings are zero until per capita income does not exceed a certain level. The modified Solow diagram is shown belowTwo simmer down states are shown in the above figure. k* is an un inactive steady state while k** is a stable steady state. If the countrys initial capital per worker is below the unstable steady state k*, then the country is stuck in a potentially dangerous poverty trap. Low income levels result in low saving which leads to write down investment in capital stock. Increasing depreciation ? of capital will further lower the capital per worker k and result in even lower income. This vicious cycle of poverty and lack of growth will keep re-enforcing each other unless the country is given a push start.This push can be in the form of aid, which may impact the savings rate s as discussed in the drawn-out Harrod Domar model. Furthermore, aid in the form of foreign capital inflow can also increase capital per worker, consequently pushing the country out the poverty trap. Now we come to the analysis of growth patterns in two Arab countries namely Egypt and heaven. We will search the amounts and type of aid given to these countries and then investigate their underlying effects on various growth variables based on the Solow and Harrod Domar models discussed earlier in the pap er.With this in mind, we turn to the empirical evidences which show that 1. ODA/GNI ratio for nirvana has increased during the period 2000-2005, while that of Egypt has decreased during the same period. 2. ODA/Capita for Palestine has increased to $500 during the period 2000-2005, while ODA/Capita for Egypt has come down to $15 in 2003 from $179 in 1979. 3. In Egypt, 13% of the total aid was tied whereas in Palestine 8% was tied. 4. skilful aid provided to Egypt was 44% while that of Palestine was 16% of total aid during the period 2000-2004. 5.In Egypt, education was given the highest antecedency among the aid allocated to the social sector. While in Palestine, pedagogics was the second lowest recipient of aid allocated to the social sector. 6. In Palestine, growth rate of real GDP from 2003-2005 was 35. 50%, while the percentage change in real GDP for Egypt was 127. 46 for the same period. ODA/GNI ratio signifies the dependency of the recipient country on the donor for foreign aid. A large increase in the ODA/GNI ratio of Palestine meant that it was becoming more and more dependent on foreign aid for support, while the opposite was true for Egypt.Consequently, Palestinian institutions kept weakening and were not given the incentive to develop due to their heavy reliance on outward help. On the other hand, Egypts lower dependency on foreign aid meant that it was getting increased opportunities to develop its institutions and stand up on its own feet. As the ODA/capita of Palestine increased to alarming heights, it signaled the reliance of Palestine on foreign donations. This could have created a moral hazard problem for the rulers of Palestine who knew that growth would result in drawing back of aid.In such a scenario, the incentive to grow could have actually vanished. Conditional or tied aid has great disadvantages because the recipient government cannot spend the aid on their sought after projects. Moreover, tied aid has to be spent on specific and p redetermines projects. As discussed earlier in the paper, if foreign aid is diverted to such consumption, it has the tendency to crowd out investment and savings. Although Egypt had a greater share of tied aid than Palestine, however the small size of it and weak economy of Palestine meant that even 8% of tied aid had a profound effect on its growth.Egypt was provided more technical aid than Palestine. Technical aid in turns translates into higher(prenominal) Theta in the extended Solow model. An important relation of this model is ?ke= s. ye-(n+? +theta) k Therefore higher technical aid for Egypt resulted in higher effective capital per labor and in turn higher growth than Palestine. The allocation of higher portion of aid to education by Egypt as compared to Palestine means that Egypt is contributing more to its human capital. This will in turn again stimulate theta in the extended Solow model, resulting in increase growth rate of Egypt.In the light of above discussion, it can be state that the effect of aid on growth does not only depend on variables explained in the models above. Many other factors play a vital position in this link as well. As seen in the case of Zambia, the macro instructioneconomic and political stability are pre-requisites which feed into this complex relation as well. The aid distribution plan should be effective and free of corruption of all sorts for it to have an impact on growth. A major chunk of aid should be distributed towards the saving and investment channel.While our analysis has tried to determine a link between aid and development, it as yet carries some shortcomings. The assumptions used in the models such as a fixed capital output ratio are too stringent and do not carry much weight in the reality. Some variables such as savings rate s and productivity theta are determined exogenously, while the macro/microeconomic conditions determining these variables could also affect the impact of aid on growth. Nonetheless, the analysis provides useful insight into the complex relation of aid and growth.Economicgrowth,Capitalaccumulation,Macroeconomics,Grossdomesticproduct,Investment,Economicdevelopment,Stockandflow,EconomicsAid and the Two Gap Model Aid is a burning issue these days. The question of countries accepting foreign aid has intrigued economists and the general public for a quite a while. Television discussions and newspaper articles have frequently focused on this issue while politicians try to fight this matter out in the parliaments. Furthermore, many are trying to unravel the enigma of aid and its effects on growth. This paper, in the little word space provided, will try to establish a relation between aid and growth.It will do so by first defining aid and growth and then moving on to some of the important models which can be used to understand this link. We will discuss the two-gap model and then move on to the Solow and Harrod-Domar model, giving empirical examples in each case. Finally, w e will analyze two countries and try to inspect the reasons for their different growth rates using the logic used in the discussed models. Aid can be defined as any voluntary transfer of resources. It can be either public (provided by donor countries or multilateral donor organization such as the IMF and The World Bank) or private (given by NGOs. . The Organization for Economic Corporation and Development defines aid as any transfer of money or resource that fulfills the following criteria a) The objective of the transfer should be noncommercial. b) It should be given for the purpose of economic development. c) The terms of the transfer should be concessional (interest rate should be less than the prevailing interest rate in the market OR the maturity period should be longer than usual). Aid should not be mixed with grant which is often used interchangeably with this term.Aid is any transfer that has concessional terms while grant is a form of aid that does not require the repayment of the principal. In this paper, we will often measure aid in the from of official development assistance (ODA) which is a convenient indicator of international aid flow. On the other hand, we will measure growth by scrutinizing the percentage change in GDP. One of the most widely used framework for analyzing the effects of aid on growth is the two-gap model which holds a key position in policy decisions related to foreign assistance.The two gap model is based on the Harrod Domar equation g = s/v where s is savings rate v is capital output ratio Capital output ratio is assumed to be constant. The two gap model assumes that a developing country faces either a savings gap or a foreign exchange gap. The savings gap occurs when a country faces a shortage of savings to match Investment in attaining an intended growth rate. In such a case, foreign borrowing or aid can supplement the savings and help bridge the gap between savings and investment. This allows a country to achieve the targe ted growth rate. Ft < I S (Savings gap)A foreign exchange gap takes place when a countrys exports are not enough to finance its imports. In such situations, aid is handy as it fills the foreign exchange gap and provides countries with sufficient exchange to reach the required level of imports. At a given point in time, only one of the two gaps is binding. Ft < M X (Foreign Exchange gap) Following this further, we fit empirical data into this model. Zambia is a developing country that has continuously received aid since the mid 1960s. In 1992, almost 80% of Zambias investment was financed by foreign aid.Since, Zambia has received aid over such a long period, the two gap model predicted that its per capita GDP would reach $2300 by the turn of the century. On the contrary, its GDP per capita in 2007 remained merely half of what was expected . i. e. $1300. The fig. below summarizes the analysis of the Zambian economy. To examine whether the Zambian case is an exception or does the model always fail to predict the reality, we scrutinize on various factors which could have blocked the path of growth for this country. Zambia has been infected by violence and instability right from its independence, with bloodshed and massacres a common feature.In addition, economic growth has been hindered by the outbreak of civil war and influx of refugees from the neighboring countries. Corruption is another problem that has stalled growth which can be seen from the fact that Zambia is ranked 101 on the corruption perception index. Very recently, Sweden and Netherlands stopped aid to Zambia due to rampant corruption allegations. All these problems add to the ineffectiveness of aid on the growth of Zambian economy which can explain why the two-gap model failed to forecast the ineptness of aid.The effect of aid on growth can also be explained using two basic but important models, namely Harrod Domar model and the Solow model. Although the upshot of aid on growth is a multidimen sional and complex process we only take into account the effect of aid on variables defined in these two models. The main focus of our discussion will be the saving rate which comes out to be the most imperative variable in both these models. We start through the basic Harrod Domar model. Capital output ratio, capital labor ratio and labor output ratio are assumed to be constant.Some of the important relations are as follows S=s. Y (2) (3) (1) g= (s/v)-(? ) S=I Where Y is income S is total saving I is Investment ? is depreciation of capital According to this model, growth can be increased by increasing s, decreasing v or decreasing ?. We shall mainly focus on the relation of aid on growth through the savings rate channel. Countries ask for aid mainly due to its perceived beneficial effect on the savings rate. As shown, saving equals investment in the Harrod-Domar model, subsequently an increase in savings will result in an increase in investment.This increase is supposed to boost th e growth rate of the recipient country. Michael P. Shields offer an interesting explanation of the relation of foreign aid on growth in his paper foreign aid and domestic savings the crowding out effect. If foreign aid is expected to increase savings, then equation (3) becomes g=(s+fa)/v -? Where fa is foreign aid as a proportion of income (4) (s+fa) represents the total funds available for backing investment. According to this equation, an increase in foreign aid is supposed to increase the total saving funds and hence investment by an equal amount.This suggests that an each additional dollar of foreign aid should result in a one dollar increase in investment in the economy of the recipient country. Reality however is not that perfect and it is too generous for anyone to assume such a one-to-one increase in investment from aid. Famous economist Edward Griffin offers a criticism of such approach. According to him foreign aid should be taken so as to supplement income rather than hav ing a direct impact on savings. In such a case, an increase in income by the amount of foreign aid fa would increase consumption by (1-s). a, thus increasing the investment by s. fa. In such a case, domestic savings can be crowded out by foreign aid by the net amount (1-s)fa which equals (s-1)fa. Markedly, foreign aid can crowd out private savings and investment, resulting in a decrease in growth as suggested by the Harrod Domar model. The main obstacle in the way of growth in the Harrod-Domar model is the phenomenon of aid filtering out into increased consumption (1-s). fa. Aid has to be spent on investment or has to increase the saving rate (both eventually come out to be the same) for a country to grow.To see a practical example of this, we consider Pakistan, which is a country largely dependent on foreign aid. During the period 1952-2002, the total amount of aid given to Pakistan equaled 63703 million US dollars. Ghulam Mohey-ud-din examines in his paper Impact of foreign aid on economic development in Pakistan, the reasons for aid not resulting in the required growth for Pakistan. He states three main reasons for the failure of aid to account for growth. First of all, a staggering 58% of this total aid (approx. 6945 million US dollars) was tied to development of large projects while only 13% (approx 8281 million US dollars) accounted for non-food and BOP aid. Such a large portion of aid (58%) going towards consumption invariably meant that the effect on savings was going to be very minute. Thus, financial aid tended to crowd out saving and investment. Secondly, while the nominal aid gradually increased, in reality, aid as a percentage of gross national income fell from approximately 7. 6% in 1960 to nearly 3% in 2002. This meant that aid was not catching up to the required increase in the GNI of Pakistan.Thirdly, along with the increase in aid came the burden of burgeoning foreign debt. This required huge amounts of debt servicing which reduced Pakistans current account. As previously explained, aid was already not resulting in much growth due to it crowding out savings and investment. An additional burden of debt servicing did the government no better. Accordingly, its GDP growth rate was subject to constant fluctuations and Pakistan could never attain sustainable growth. The growth rate reached a peak of 10. 22% in 1953 but since then, the average growth has gone down with the exception of one or two years.In 2002, the GDP growth rate stood at 4. 73%. Aid during a whole half of a century could not result in sustained economic growth. Another approach that looks at the impact of foreign aid on growth is the poverty trap. Many poor developing countries face an inability to grow at reasonable rates due to getting stuck in a poverty trap, which can be defined as a self-reinforcing mechanism which causes poverty to persist. We use the Solow model to analyze how aid can be used to pull countries out of this poverty trap and onto the pat h of self-sustaining economic growth.We assume the basic assumptions of Solow model to be true. Thus, we assume constant returns to scale production function and diminishing returns to capital. The final and important relation of the Solow model is ? k=s. y-(n+? ). k (5) k is capital per worker n is population growth Philipp Harms and Matthiaz Lutz depart from this conventional Solow model by assuming that people have to satisfy their basic consumption needs for which savings are zero until per capita income does not exceed a certain level. The modified Solow diagram is shown belowTwo steady states are shown in the above figure. k* is an unstable steady state while k** is a stable steady state. If the countrys initial capital per worker is below the unstable steady state k*, then the country is stuck in a potentially dangerous poverty trap. Low income levels result in low saving which leads to lower investment in capital stock. Increasing depreciation ? of capital will further lower the capital per worker k and result in even lower income. This vicious cycle of poverty and lack of growth will keep re-enforcing each other unless the country is given a push start.This push can be in the form of aid, which may impact the savings rate s as discussed in the extended Harrod Domar model. Furthermore, aid in the form of foreign capital inflow can also increase capital per worker, consequently pushing the country out the poverty trap. Now we come to the analysis of growth patterns in two Arab countries namely Egypt and Palestine. We will explore the amounts and type of aid given to these countries and then investigate their underlying effects on various growth variables based on the Solow and Harrod Domar models discussed earlier in the paper.With this in mind, we turn to the empirical evidences which show that 1. ODA/GNI ratio for Palestine has increased during the period 2000-2005, while that of Egypt has decreased during the same period. 2. ODA/Capita for Palestine has increased to $500 during the period 2000-2005, while ODA/Capita for Egypt has come down to $15 in 2003 from $179 in 1979. 3. In Egypt, 13% of the total aid was tied whereas in Palestine 8% was tied. 4. Technical aid provided to Egypt was 44% while that of Palestine was 16% of total aid during the period 2000-2004. 5.In Egypt, education was given the highest priority among the aid allocated to the social sector. While in Palestine, Education was the second lowest recipient of aid allocated to the social sector. 6. In Palestine, growth rate of real GDP from 2003-2005 was 35. 50%, while the percentage change in real GDP for Egypt was 127. 46 for the same period. ODA/GNI ratio signifies the dependency of the recipient country on the donor for foreign aid. A large increase in the ODA/GNI ratio of Palestine meant that it was becoming more and more dependent on foreign aid for support, while the opposite was true for Egypt.Consequently, Palestinian institutions kept weakening and were not given the incentive to develop due to their heavy reliance on outward help. On the other hand, Egypts lower dependency on foreign aid meant that it was getting increased opportunities to develop its institutions and stand up on its own feet. As the ODA/capita of Palestine increased to alarming heights, it signaled the reliance of Palestine on foreign donations. This could have created a moral hazard problem for the rulers of Palestine who knew that growth would result in drawing back of aid.In such a scenario, the incentive to grow could have actually vanished. Conditional or tied aid has great disadvantages because the recipient government cannot spend the aid on their desired projects. Moreover, tied aid has to be spent on specific and predetermines projects. As discussed earlier in the paper, if foreign aid is diverted to such consumption, it has the tendency to crowd out investment and savings. Although Egypt had a greater share of tied aid than Palestine, however the small size and weak economy of Palestine meant that even 8% of tied aid had a profound effect on its growth.Egypt was provided more technical aid than Palestine. Technical aid in turns translates into higher Theta in the extended Solow model. An important relation of this model is ?ke= s. ye-(n+? +theta) k Therefore higher technical aid for Egypt resulted in higher effective capital per labor and in turn higher growth than Palestine. The allocation of higher portion of aid to education by Egypt as compared to Palestine means that Egypt is contributing more to its human capital. This will in turn again stimulate theta in the extended Solow model, resulting in increase growth rate of Egypt.In the light of above discussion, it can be said that the effect of aid on growth does not only depend on variables explained in the models above. Many other factors play a vital role in this link as well. As seen in the case of Zambia, the macroeconomic and political stability are pre-requisites which fe ed into this complex relation as well. The aid distribution plan should be effective and free of corruption of all sorts for it to have an impact on growth. A major chunk of aid should be distributed towards the saving and investment channel.While our analysis has tried to determine a link between aid and development, it still carries some shortcomings. The assumptions used in the models such as a fixed capital output ratio are too stringent and do not carry much weight in the reality. Some variables such as savings rate s and productivity theta are determined exogenously, while the macro/microeconomic conditions determining these variables could also affect the impact of aid on growth. Nonetheless, the analysis provides useful insight into the complex relation of aid and growth.