Khaama Press (KP) | Afghan News Agency » Business & Economy http://www.khaama.com The largest news and information source in Afghanistan Sat, 19 Apr 2014 18:16:53 +0000 en-US hourly 1 http://wordpress.org/?v=3.9 Do we have the Potential to raise Afghanistan’s GDP? http://www.khaama.com/do-we-have-the-potential-to-raise-afghanistans-gdp-21654 http://www.khaama.com/do-we-have-the-potential-to-raise-afghanistans-gdp-21654#comments Mon, 06 May 2013 06:35:47 +0000 http://www.khaama.com/?p=25680 Do we have the Potential to raise Afghanistan’s GDP?
By: Faazel Ahmad Oria  The Afghan economy has been consistently in a low state from a historical perspective since 1960s. Afghanistan has had a traditional economic system until the invasion of the former Soviet Union. When the Soviet Union invaded Afghanistan, the country experienced a socialist economic system “a centralized system” in late 1970s. Afghanistan Read the full article...]]>
Do we have the Potential to raise Afghanistan’s GDP?

By: Faazel Ahmad Oria 

The Afghan economy has been consistently in a low state from a historical perspective since 1960s. Afghanistan has had a traditional economic system until the invasion of the former Soviet Union. When the Soviet Union invaded Afghanistan, the country experienced a socialist economic system “a centralized system” in late 1970s. Afghanistan experienced an Islamic system of economy during the Taliban regime. Eventually, Afghanistan has adopted a free market economy since the presence of the international community in 2001 which was coupled with the introduction of a democratic system of government for Afghanistan.

In the above mentioned periods Afghanistan has had a poor economy with a low GDP “gross domestic products”. But unlikely, in recent decades according to CSOA’s “Central Statistics Organization of Afghanistan” report, the GDP in our country expanded 9.50 percent in the fiscal year 2011-12 from previous years. In another report by the World Bank, Afghanistan’s GDP in 2011 was worth 20.34 billion US dollars. This indicates that due to the foreign aid and investments, Afghanistan’s economy is growing rapidly.

Beside the foreign aid and investments, Afghanistan’s domestic income sectors are also growing, and playing a key role in increasing the GDP of Afghanistan. Agriculture is a significant sector in Afghanistan’s economy that constitutes 35 percent of GDP. The exploration of natural resources such as; mine explorations has started to play a key role in the increasing revenue.

 The third sector that forms the Afghan economy is the Tax Revenue Department, working under the supervision of Ministry of Finance. This sector has major influences in increasing the GDP of Afghanistan. The income of the revenue department raised to 1.64 billion US dollars in 2012 fiscal year, a 14-fold increase on 10 years ago (Reuters, 2013). And this seems a major increment in national income.  However, the revenue department of ministry of finance faces major impediments in collecting the taxes.

We “Afghans” do not often agree to pay taxes to our government, and we sometimes even scoff to pay the required taxes, so that the government can spend them on welfare projects in society. On the other hand, we have some powerful and rich people, which hold huge investments and properties and are often not paying their taxes to the tax revenue department. The government authorities have admitted that taxing the powerful and rich businessmen is not easy, because most of them are key government officials, tribal and ethnic leaders, and often commands militias. These rich and powerful people have huge influence on government policies and institutions are responsible to collect taxes. This seems hard to collect the taxes starting from an ordinary citizen to those who hold big enterprises. “We have to promote the culture of tax paying in our country”. The government needs to develop policies and increase its influence on these rich and powerful people and make them pay the taxes.

Besides tackling the obstacles, the revenue department in the ministry of finance has played a significant role in raising the national incomes. According to a Reuters report under the previous head of the revenue department Ahmad Shah Zamanzai, the tax department jailed more than 20 tax evaders, froze bank accounts, slapped on travel bans and shuttered the premises of businesses that refused to pay tax. Currently, Afghanistan’s tax incomes to GDP stand above 11 percent, higher than the neighboring country Pakistan (Reuters, 2013).

Despite the above mentioned achievements of the revenue department in ministry of finance, I acknowledge the massive corruption in the ministry of finance and all other governmental institutions. I do not notice a serious motivation against corruption in any ministry or government institutions. Now we have the new head of the revenue department  Abdul Rahman Mujahhid stating that “corruption is a part of public life in Afghanistan” and in the meantime he tends to make the revenue department corruption-free (Reuters, 2013). I can see the contradiction in Mujahid’s statements very well, and I do not consider his statement a strong commitment against corruption. We need some serious and dedicated managers to work hard against corruption and tackle the obstacles on of taxing collection.

Now coming to the main question “Do we have the Potential to raise our GDP “Gross Domestic Products?  To answer this main question, we have to rely on strong management and dedicated managers in agriculture, mining, tax revenue department, and all other key economic sectors. We need serious heads and managers like Ahmad Shah Zamanzai, the previous head of the revenue department, who does not hesitate to confront powerful tax evaders; and so on we need such management in every key economic sectors. Government and the international community needs to focus on major investment projects in housing, mining, and agriculture setting and it will greatly contribute in increasing GDP of Afghanistan.

Economy shapes a country’s future and a stable economy is the backbone of development and prosperity in any nation. Afghanistan had a great opportunity to utilize from the presence of the United States and the international community. To some extent, developmental projects in economic, educational, health, and agriculture have been implemented.  however, the government administration failed to tackle corruption, secondly, the presence of war- lords, lack of rule of law, lack of experts, and the influences of rich and powerful people on government were the major sources of problems. I believe that we have the capacity of growing our economy, only if we decide to seriously work for it.

Works Cited

  • Reuters, (2013).
  • Wikipedia, CSOA “Central Statistics Organization of Afghanistan”
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Why Fiscal Cliff Deal Fails To Neutralize Debt Ceiling Hostage http://www.khaama.com/why-fiscal-cliff-deal-fails-to-neutralize-debt-ceiling-hostage-12365 http://www.khaama.com/why-fiscal-cliff-deal-fails-to-neutralize-debt-ceiling-hostage-12365#comments Mon, 25 Mar 2013 04:32:21 +0000 http://www.khaama.com/?p=24551 Why Fiscal Cliff Deal Fails To Neutralize Debt Ceiling Hostage
What is Fiscal Cliff Deal? The term fiscal cliff has been used at various occasions in the past to refer to fiscal issues. It is already known to the public that Congress created the fiscal mess that it is currently squabbling over. Furthermore, it is quite surprising to see it wrangling over the issue like hapless teens fighting on prom night. There is actually a Read the full article...]]>
Why Fiscal Cliff Deal Fails To Neutralize Debt Ceiling Hostage

What is Fiscal Cliff Deal?

The term fiscal cliff has been used at various occasions in the past to refer to fiscal issues. It is already known to the public that Congress created the fiscal mess that it is currently squabbling over. Furthermore, it is quite surprising to see it wrangling over the issue like hapless teens fighting on prom night. There is actually a lot of action as a result of both political force and resistance; however, that does not seem to excite or satisfy the audience anyways.

Regarding the selection between the winner and the loser, it is suggested to give out credit to the Democrats for their incredible public relations triumph which they however, cannot exploit in the form of policy gains in the future. The fact today is that a deal has been forged quite intelligently, even though every other person has responded with hints of dissension that is quite obvious and distinguished.

Molly Ball has neglected how the major stakeholders are entirely discontented about the whole issue, whereas Dave Jamieson also is a distinguished case of forgotten stakeholders. Although, there is a lot of calamity, tension and disappointment looming over, there is another huge blow that is here to stay – the future of debt ceiling. More likely the whole issue is expected to come up in full bloom in March which has already begun. Experts and critics strongly opine that it would be a series of repetition of what happened in the last round when the Republican legislators took over the debate and openly threatened to cause damage to the international economy. It is believed that they are planning to do all that again.

At the same time, Senator Lindsey Graham said that it would be the best thing that could be done. He further remarked that whatever was about happen is not all what he wanted, however, in the true sense of the word it is called American Democracy, hence the debtceiling. There is no further debate on this issue by the Senator as of yet which clearly tells us that neither his viewpoint has changed nor he has been taken aback by the hurdles.

Effects of Debt Ceiling

The debt ceiling is more or less akin to the fiscal cliff in one significant way at least. It is an image that cannot explain the reality that prevails whereas at the same time simple and quick to instigate as a source to erupt chaos and coerce a state of alarm.  In the more admired perception, the entire idea of raining the debt ceiling has boiled down to the point that it is an act that allows Congress to increase its spending.

People see this standard procedure as one that establishes a whole new space for whole new spending altogether. However, this is certainly not perfectly true since the decision to the take the debt ceiling to a whole new level is in fact a tradition during which the Congress recognizes the expenses of its shared past actions and reiterate its assurance to do good as per its commitment.

At a certain time, it was also rumored that the White House has refused to accept the fiscalcliff deal that was exclusive of immediate disarmament of the debt ceiling. This is considered to be one of the most significant demands put forth during the negotiations by the White House. However, as the debate made its way to the unexpected lash out on New Year’s, this disarmament issue raised its head again as a matter of demand and was substituted with a coherent symbolic perseverance from the president that there was nothing that he could do over the issue of debt ceiling and that his days of doing anything were now over.

However, the fact is that no one person in the country believes the statement given by Obama regarding his stance about what he could do for the debt ceiling issue has now translated into a tough agreement that is expected to stay on for long. On the other hand, staying on the line in a negotiating session is something president Obama is not fond of. The president even said that the issue of debt ceiling was not technical, but political.

Conclusion

The issue of debt ceiling has taken a new shape surrounded by rumors, debates, misstatements and political wrong doings. Some believe that it has become more a matter of egotistical perseverance for those in power; however, many are also expecting a favorable and well-improvised decision as the month of March advances.

Author Bio

Angelina is an expert writer on American politics and has been writing columns for over 30 years. She also has keen interest in history and spends her spare time reading books, blogging and writing for community websites like www.ConsolidatedCredit.org.

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Afghanistan’s economy victim of Politics – Trying to find hope in hopelessness http://www.khaama.com/afghanistans-economy-victim-of-politics-trying-to-find-hope-in-hopelessness-12546 http://www.khaama.com/afghanistans-economy-victim-of-politics-trying-to-find-hope-in-hopelessness-12546#comments Sat, 09 Feb 2013 04:40:34 +0000 http://www.khaama.com/?p=23034 Afghanistan’s economy victim of Politics – Trying to find hope in hopelessness
By: Suleman Fatimie Afghans face yet another deadline, 2014.  The uncertainty continues. While the Afghan Government’s international partners want to stabilize and create an “Afghan good enough” environment, many wonder how this is possible with everyone running towards the exit doors.  Afghans are faced with a barrage of negative and depressing news about their future, Read the full article...]]>
Afghanistan’s economy victim of Politics – Trying to find hope in hopelessness

By: Suleman Fatimie

Afghans face yet another deadline, 2014.  The uncertainty continues. While the Afghan Government’s international partners want to stabilize and create an “Afghan good enough” environment, many wonder how this is possible with everyone running towards the exit doors.  Afghans are faced with a barrage of negative and depressing news about their future, with grim predictions for years to come. Signing strategic agreements cannot be considered a commitment to and a promise of relative stability beyond 2014.   If Afghanistan is to sustain and build on the achievements of the past 10 years, it is imperative that serious attention and resources are mobilized to get the country’s economy on its feet.  Real economic growth and development, even if modest, will create greater employment opportunities, better security, and most critically better living standards for Afghan people; items that should be on the top of our agendas.

Afghanistan’s economy at this moment is donor driven with over 90% of our licit GDP funded through bilateral and multilateral donors.  And with the scaling down of international presence and 2014 deadline looming, unless we take concrete steps and bold decisions, Afghanistan’s economy is headed for severe turbulence with the possibility of crash landing.

In 2005, Financial Times fDi published a magazine titled ‘Courage Rewarded – Afghanistan’s President Hamid Karzai Leads the Reforms’.  The publication focused on opportunities and challenges in Afghanistan but with a positive and encouraging message. “It is true that investing in Afghanistan is not for the faint-hearted but the opportunities are almost limitless.  Those who feel their nerve slipping need only look to the optimism of the country’s government and its citizens,” James Eedes reported in the magazine.  The magazine reported that ‘key ministers and a small team of technocrats – a wafer-thin layer of competent bureaucracy – are working to remove the many obstacles to private sector development’.

The question that needs to be asked now is, what happened to the optimism and reforms initiated to create a pro-business environment?  The answer is that some of the sound reforms have been stalled or reversed, administrative and non-tariff business barriers both at national and provincial levels have increased, and corruption has soared, making it almost impossible to get anything done without paying a bribe. No wonder existing and potential investors are reluctant to expand/re-invest and consider Afghanistan for business opportunities respectively.  It is very difficult to see certainty and the potential for the future.  Most importantly, Afghanistan does not provide a business friendly environment.  In 2006 Afghanistan was considered one of the leading reformers of its business environment and between 2004 and 2007 it steadily improved its ranking in the Doing Business Indicators.  But since then, Afghanistan’s ranking has deteriorated due to lack of a clear vision, lack of understanding of relevant bodies of the reforms and conflicted agendas.  

In 10 years, we could not define what ‘market economy’ means in the context of Afghanistan’s constitution and prevailing economic situation.  While the concept of market economy has been the focus of continuous and elaborate discussions inside Afghanistan, the relevant government and non-government bodies fail and/or ignore to address the core reasons for why we have yet to establish the administrative and legal framework for market economy to function in the context of Afghanistan.  We are still focusing on the symptoms instead of the causes.

We still do not have a sound, practical and implementable national economic vision and policy.  Several national documents claim to have these elements, but none could be implemented because the so-called national economic vision and strategies are not based on ground realities, challenges and opportunities.  Preference has been to deal with economic trends and challenges on ad hoc basis, which has led to laws, regulations and procedures complicating the system even further and creating layers and layers of bureaucracy, obstacles and red-tape.

The encouraging news is that there are still many Afghans interested or already doing business in Afghanistan. These are Afghans who have endured over 30 years of war and uncertainty.  They have every reason to give up, but they are coming back and doing business even if under very difficult circumstances.  Why take the chance if you did not believe in the future?  Therefore it is vital that we keep the hope alive and generate optimism in the future.

Afghans’ entrepreneurial spirit and resilience should be nurtured and, through a collective Afghan driven process, devise plans and actions to deal with the economic turbulence once the donor money starts to dry up.  The government has the mandate and responsibility to at least create a transparent business friendly environment if it cannot ensure certainty beyond 2014.  The government keeps claiming that the private sector is the engine of growth while currently the private sector is choked due to the cumbersome business environment.

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Afghan’s need for political violence insurance http://www.khaama.com/afghans-need-for-political-violence-insurance-745 http://www.khaama.com/afghans-need-for-political-violence-insurance-745#comments Sun, 16 Sep 2012 02:57:14 +0000 http://www.khaama.com/?p=18878 Afghan’s need for political violence insurance
Security is an important aspect here in Afghanistan. It cannot have escaped even the most casual observers notice that violent incidents directed at Military, NGO’s and Civilian targets have shown a dramatic increase on 2011 levels, some reports indicate this to be in excess of a 30% increase in the first Six months of this Read the full article...]]>
Afghan’s need for political violence insurance

Security is an important aspect here in Afghanistan. It cannot have escaped even the most casual observers notice that violent incidents directed at Military, NGO’s and Civilian targets have shown a dramatic increase on 2011 levels, some reports indicate this to be in excess of a 30% increase in the first Six months of this year alone!

The importance of adequate insurance cover cannot be overstated. It would be unthinkable to leave your assets and business exposed. Yet how many of us consider Political Violence cover? What is it, what does it cover?

There are basically two levels of cover most typically offered. One is ‘Terrorism’ cover and the other is‘Political Violence’ cover. So what’s the difference?

Act of Terrorism – The Technical Stuff!

‘Is an unlawful act, including the use of force or violence, of any person or group(s) of persons, whether acting alone or on behalf of or in conjunction with any organisation(s), committed for political, religious or ideological purposes including the intention to influence any government and/or to put the public in fear for such purposes’

… so that’s all covered then…well no!  More Technical Stuff !

IT DOES NOT COVER Sabotage, Riots, Strikes and/or Civil Commotion, Malicious Damage, insurrection, Revolution or Rebellion, Mutiny and/or Coup d’Etat, War and/or Civil War! Each of these has a specific meaning and if the incident in question is as a result of any one of these, then terrorism cover alone will leave you with no insurance cover in place to protect your business or assets! It is of little interest to a policyholder what caused the incident but establishing and agreeing on this can be a protracted affair, ‘Rome wasn’t built in a day’, but you will want your reconstruction dealt with faster than Rome’s !

So what does it cost? Surprisingly maybe not as much as you might think! Factors such as your Sum Insured and the nature of your activities all come into play of course and every case is treated on it’s individual merits.

When considering the alternative of no protection at all this insurance can offer this vital protection and none more so than here in Afghanistan. Current events now show us the future is less than predictable and with momentous changes just over the horizon now may be an opportune moment to consider this vital Insurance as part of your overall portfolio of Insurance covers.

By Peter Gibson- Insurance Corporation of Afghanistan

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Afghanistan’s Assembly Rejected 1391 Budget Plan http://www.khaama.com/afghanistans-assembly-rejected-1391-budget-plan http://www.khaama.com/afghanistans-assembly-rejected-1391-budget-plan#comments Sun, 18 Mar 2012 16:50:27 +0000 http://www.khaama.com/?p=12607 Afghanistan’s Assembly Rejected 1391 Budget Plan
Afghanistan’s House of Representatives has declined the budget for fiscal year 1391 due to “imbalances” in the budget.  The budget has disregarded allocations for the development of different provinces of Afghanistan, according to the members of the House. Moreover, adequate funding has not been taken into consideration for the health and education sectors of the Read the full article...]]>
Afghanistan’s Assembly Rejected 1391 Budget Plan

Afghanistan’s House of Representatives has declined the budget for fiscal year 1391 due to “imbalances” in the budget.  The budget has disregarded allocations for the development of different provinces of Afghanistan, according to the members of the House. Moreover, adequate funding has not been taken into consideration for the health and education sectors of the country.

The Assembly also objected the fourteen million dollars, 1.6% of the total budget, allocated to secure and advance the affairs of the country’s presidency.

Earlier, the Afghan Senate also referred to the budget proposal as “unfair” and called on the Minister of Finance, Mr. Omar Zakhilwal, to provide an explanation for the proposed budget.

The budget is comprised of USD 4.8 billion in total, including USD 2.7 billion related to the re-current budget and the rest to the development budget.

One of the main reasons why the House rejected the budget plan is the unfair allocation of funds, especially for the development of other provinces in Afghanistan. The House brought up Daikandi province in Central Afghanistan as an example. According the members of the Assembly, the mentioned province is in dire need of road construction and implementation plans; however, the current budget has paid less attention to this issue.

Ministry of Finance had said before, in response to these criticisms, that implementation of large projects, including road construction and electricity production, in different provinces are not equally possible.

Mr. Zakhilwal, in a Senate meeting, said: “Projects that generate employment, projects that promise economic growth, projects that enable a country to become self-sufficient, projects for basic infrastructure (such as, highways, power generation projects and dams), cannot be implemented simultaneously in all provinces.”

The members also raised concerns regarding the portion of the budget allocated for the security of the office of administrative affairs and secretariat to the president. The Afghan government says that the protection of the presidency and its senior members of the government is the first priority; hence, substantial money should be allocated for this regard. Furthermore, approximately 3000 individuals employed to maintain security are paid from this budget.

The Parliament also said that about 14 ministries have already consumed less than 40% of their development budget, and they all should give an explanation to the Parliament regarding their spending.

Author: Samadi, www.wadsam.com

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Spanish Village to Raise Funds with Marijuana http://www.khaama.com/spanish-village-to-raise-funds-with-marijuana http://www.khaama.com/spanish-village-to-raise-funds-with-marijuana#comments Wed, 14 Mar 2012 14:19:55 +0000 http://www.khaama.com/?p=12457 Spanish Village to Raise Funds with Marijuana
Our old friend Greece is the headline of any business news site reporting about its debt issue. While Greece is on the verge of receiving another bailout package to fight its debt crisis, we hear a new solution to the adverse economic situation from a small village in Spain. The tiny village of Rasquera with Read the full article...]]>
Spanish Village to Raise Funds with Marijuana

Our old friend Greece is the headline of any business news site reporting about its debt issue. While Greece is on the verge of receiving another bailout package to fight its debt crisis, we hear a new solution to the adverse economic situation from a small village in Spain.

The tiny village of Rasquera with a population of only about 900 has voted to lease land for growing marijuana as a source of revenue to battle the economic crisis in Spain. Spain’s staggering unemployment has only gotten worse, hitting its highest rate 22.8% in nearly 17 years in the third quarter of 2011.

The group that wants to acquire the marijuana, called ABCDA, said on its website that it will make an initial investment of $40,000 but makes no mention of how much it will pay Rasquera per year. A representative who declined to give his name said more details would come when ABCDA signs a formal agreement with the village in the coming days.

ABCDA said the project would create 40 jobs in Rasquera — workers to grow, harvest and package the pot — and the marijuana produced would go to ABCDA members.

The idea is for private citizens to lease or lend land to town hall, which would then create a company to manage the land and lease it to an association of marijuana-smokers in Barcelona.

Under Spanish law, consumption in private of cannabis in small amounts is allowed. But growing it for sale, or advertising it or selling it, are illegal, the anti-drug official said on condition of anonymity under department policy.

The chance of Spain entering a second recession is only impending. If Rasquera’s way of raising money in hard times succeeded, then it would be a novel, indeed!

Author: Samadi  www.wadsam.com

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Economic Development Difficulties http://www.khaama.com/economic-development-difficulties-123 http://www.khaama.com/economic-development-difficulties-123#comments Thu, 13 Oct 2011 11:56:08 +0000 http://www.khaama.com/?p=6936 Economic Development Difficulties
The World Bank’s President Robert Zoellick recently highlighted the fact that more urgency is needed in Afghanistan in order to increase effectiveness in the management of foreign aid spending, by both the non-profit and non-governmental organizations. Foreign aid, spent by the international community in the last decade in Afghanistan, has contributed to some progress, notably Read the full article...]]>
Economic Development Difficulties

The World Bank’s President Robert Zoellick recently highlighted the fact that more urgency is needed in Afghanistan in order to increase effectiveness in the management of foreign aid spending, by both the non-profit and non-governmental organizations.

Foreign aid, spent by the international community in the last decade in Afghanistan, has contributed to some progress, notably in Afghanistan’s economic and social infrastructure, but the overall development process has been quite ineffective. The billions of dollars of aid have not successfully reached the local Afghan people as is reflected in the impoverished conditions in the country that continues to create insecurity, notably in the tribal regions.

Any developmental accomplishments in Afghanistan to date are now facing uncertainty as the international community prepares to withdraw troops. International troop withdrawal will put serious pressure on the capability of Afghanistan’s National Security Forces (ANSF) to create a safe environment that will allow for the continuation of economic development. This leads to question, if the limited economic development that has occurred over the last ten years in Afghanistan will continue with the handover of security or will it become even more ineffective.

The anticipated deterioration of security in Afghanistan will have a direct consequence on the success of future developmental projects in Afghanistan. The areas that already receive limited aid and development will likely receive even less developmental support post 2014.

Ultimately, Afghanistan is facing many obstacles that have the ability to negatively affect sustainable economic development including:

  • Most international aid agencies have lost credibility in Afghanistan as they continue to throw millions of dollars of aid money at ineffective development strategies.
  • Afghanistan does not have an economy that will be able to pay for its own security, leading to insufficient resources to properly fight the insurgency long term.
  • The Afghan economy relies too heavily on foreign aid and foreign military funds.
  • Overall, government capacity is weak as corruption is rampant which harms the effectiveness of aid money.

Furthermore, any agriculture gains in rural areas will once again face the wrath of the illicit opium trade. This is illustrated in the rise of opium production in Afghanistan by 61% this year compared with 2010, according to the UN. Many Afghan farmers will likely feel pressure to grow opium poppies due to added Taliban influence, not to mention the ability of poor farmers to economically sustain their families much better.

Security concerns will also hinder the ability to extract Afghanistan’s wealth of minerals (including coppergoldiron ore, chromitecoal, and lead) that has the potential to create at least billions of dollars in economic spinoff for the country. China’s successful 3.5 billion bid on the Aynak copper mine is a prominent example of the potential that Afghanistan’s resources can have on economic development. However, most of these minerals are located in insecure regions and are unable to be extracted, not to mention attract foreign investment (besides the Wakham corridor).

If the Afghanistan National Security Forces cannot maintain security in Afghanistan, then infrastructure projects that have been already completed, such as schools and hospitals, will run the risk of being torn down. It remains a matter of time before the Taliban take over from the ANSF in certain parts of Afghanistan and destroy infrastructure that goes against their interpretation of Sharia law.

There is no doubt that economic development in Afghanistan post 2014 is facing many challenges and questions. However, there are a few things that the international community can do today in order to increase the effectiveness of economic development after international troop withdrawal:

  • The most effective way to deliver aid money post 2014 will be efficiently training the ANSF. The international community badly needs to increase the amount of trainers they have committed to the Afghanistan National Army (ANA) and Afghanistan National Police (ANP).
  • Post 2014, the international community must be more strategic in delivering aid and development in Afghanistan. The international community will need to put additional trust in the Kabul government the next few years by giving them increased ownership and accountability of aid money. This will allow the Kabul government to be in better position to carry out more effective economic development after troop withdrawal.
  • Today as the international community has some form of leverage in Kabul, they must encourage major reforms in public administration, anti-corruption and the rule of law. Such reforms will remain critical for the success of the adequate delivery of aid and development post 2014.

It will also be important to rely heavily on Islamic based organizations and regional institutes, such as the Aga Khan Foundation (AKD), Organization of the Islamic Conference (OIC) and the Asian Development Bank (ADB).  The Aga Khan Development Network (AKDN) is in position to take a more prominent role post 2014 through channeling donor money into Afghanistan. The Aga Khan has already contributed around 700 million US dollars, including investing in large-scale rural development; healtheducation and microfinance services.

Official governmental international development agencies, such as USAID and the UK’s DFID who will have increased security concerns without their troops would be well- advised to funnel their aid money through the above mentioned institutes and organizations.

Moving forward, the next few years will be critical with regard to the training of the ANSF and their ability to maintain some form of security to allow Islamic and regional organization to deliver on economic development in Afghanistan. The future of sustainable of economic development in Afghanistan will be a daunting task, however, some form of success can be achieved through smart decision making the next few years.

By: Brad L Brasseur

Brad L. Brasseur works on Afghanistan-Pakistan at the EastWest Institute in Brussels. The views of the above article are not attributed to the EastWest Institute but rather to the individual himself. (GMK)

]]> http://www.khaama.com/economic-development-difficulties-123/feed 0 Globalization http://www.khaama.com/globalization http://www.khaama.com/globalization#comments Mon, 20 Dec 2010 08:16:51 +0000 http://www.khaama.com/?p=1420 Globalization
Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around Read the full article...]]>
Globalization

Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

Globalization is not new, though. For thousands of years, people—and, later, corporations—have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages. Likewise, for centuries, people and corporations have invested in enterprises in other countries. In fact, many of the features of the current wave of globalization are similar to those prevailing before the outbreak of the First World War in 1914.

But policy and technological developments of the past few decades have spurred increases in cross-border trade, investment, and migration so large that many observers believe the world has entered a qualitatively new phase in its economic development. Since 1950, for example, the volume of world trade has increased by 20 times, and from just 1997 to 1999 flows of foreign investment nearly doubled, from $468 billion to $827 billion. Distinguishing this current wave of globalization from earlier ones, author Thomas Friedman has said that today globalization is “farther, faster, cheaper, and deeper.”

This current wave of globalization has been driven by policies that have opened economies domestically and internationally. In the years since the Second World War, and especially during the past two decades, many governments have adopted free-market economic systems, vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining feature of globalization, therefore, is an international industrial and financial business structure.

Technology has been the other principal driver of globalization. Advances in information technology, in particular, have dramatically transformed economic life. Information technologies have given all sorts of individual economic actors—consumers, investors, businesses—valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of economic trends around the world, easy transfers of assets, and collaboration with far-flung partners.

Globalization is deeply controversial, however. Proponents of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of living, while opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people. Resistance to globalization has therefore taken shape both at a popular and at a governmental level as people and governments try to manage the flow of capital, labor, goods, and ideas that constitute the current wave of globalization.

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Economic Growth and Consumption http://www.khaama.com/economic-growth-and-consumption http://www.khaama.com/economic-growth-and-consumption#comments Mon, 20 Dec 2010 08:13:59 +0000 http://www.khaama.com/?p=1417 Economic Growth and Consumption
The growth of wealth has been as persistent as the growth of population. Moreover, barring severe disruptions to the global economy, income and consumption will continue to grow faster than human numbers. Supplying the energy and materials needed to support increasing consumption and addressing the environmental problems attendant on their extraction, consumption, and disposal may Read the full article...]]>
Economic Growth and Consumption

The growth of wealth has been as persistent as the growth of population. Moreover, barring severe disruptions to the global economy, income and consumption will continue to grow faster than human numbers. Supplying the energy and materials needed to support increasing consumption and addressing the environmental problems attendant on their extraction, consumption, and disposal may be the most significant challenge to sustainability, especially as more people adopt the materials-intensive, consumptive lifestyle now enjoyed by most people in industrialized nations. There have been dramatic changes in human wellbeing since the early nineteenth century, when the modern pattern of industrial and information-intensive economic growth became clear in the historical record.
Trends in gross domestic product (GDP)—a measure of the total economic activity in a nation’s markets— reflect a nation’s production and wealth per capita and hence give an indication of the well-being of that country’s people.

There has been an average worldwide gain in GDP per person by a factor of 7.9 between 1820 and 1992; in the four ‘‘Western offshoots’’—Australia, Canada, New Zealand, and the United States—economic growth has resulted in a gain of more than 17-fold over this span of approximately six generations, doubling economic output within each human life span. Even in Africa, the region with the weakest record, economic output per capita had tripled by 1980. Indeed, contemporary Africa is approximately at the level of the United States in the 1840s, when Henry David Thoreau undertook his famous sojourn to Walden Pond to escape his countrymen’s materialism.

It is important to bear in mind that economic statistics such as GDP provide only a partial measure of
human well-being. Pollution, which diminishes the value of ecosystem services or valued activities and assets, is excluded from conventional GDP accounts, whereas the costs of abating or repairing the damage caused by pollution are counted as contributions to economic output.

Averages also fail to account for disparities in the distribution of wealth. Disparities in incomes are widening and are likely to continue to do so in the absence of strong remedial actions. The gap is growing between rich and poor countries as a whole and between the rich and poor within many countries. On a global basis, the ratio of the income share of the richest 20% to the poorest 20% doubled during the past 30 years from 30:1 to 60:1.

Demand for energy and materials has approximately tracked growth in total economic output. As consumption has increased, however, use of energy and materials has become more efficient on average. The scenario projection is intended as a reference case against which to test alternative sets of expectations; the reference scenario is not more likely than other forecasts, but it does provide one consistent set of assumptions as a benchmark.

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History of International Trade http://www.khaama.com/1331 http://www.khaama.com/1331#comments Sat, 11 Dec 2010 11:06:52 +0000 http://www.khaama.com/?p=1331 History of International Trade
HISTORY OF INTERNATIONAL TRADE International Trade Traditional Societies. Until the late 19th century, most people virtually everywhere were peasants who produced food and also knew how to fashion many tools and other necessities. What they could not make for themselves, they bought in neighboring towns in exchange for their (usually small) agricultural surplus and a Read the full article...]]>
History of International Trade

HISTORY OF INTERNATIONAL TRADE

International Trade

Traditional Societies. Until the late 19th century, most people virtually everywhere were peasants who produced food and also knew how to fashion many tools and other necessities. What they could not make for themselves, they bought in neighboring towns in exchange for their (usually small) agricultural surplus and a few handicrafts. Long¬distance trading was rare, because output of all products was low and because transportation was expensive, slow, and dangerous. Whatever international trade did occur was usually monopolized by government-licensed private orga¬nizations like the British East India Company. Only goods with a high value in relation to their weight, like precious stones, metals, spices, special fabrics (particularly wool and silk cloth), furs, and wine, could be taken to faraway places and sold profitably. Grain, too, was sometimes traded abroad but, it would seem, in small quantities.
For centuries, trade was concentrated along the shores of the Mediterranean and Baltic seas and around the Asian caravan routes to which they were linked. The focal points of international exchange were the Italian cities of Venice, Genoa, and Florence, the German cities of Augsburg and Niirnberg, the towns of Flanders (in present-day Belgium), and the Hanseatic ports along the southern and eastern shores of the Baltic. Trade hardly touched the lives of ordinary people, however. Neither were their lives much altered by the discovery of the Americas and the circumnavi¬gation of Africa and South America. But those feats of courage and skill did divert trade from the inland seas of Europe to the Atlantic and Indian oceans.

The Industrial Revolution. In the 17th and 18th cen¬turies, technological innovations in Britain opened the way to higher productivity, first in agriculture, then in manufac¬turing. New machinery enabled larger units to manufacture cheap textiles and, a bit later, iron. These first steps toward mass-production led to the mass movement of goods from country to country, for they were accompanied by improve¬ments in transportation and communications. British in¬dustry was soon imitated in France and Belgium.

Despite the remarkable progress of the previous hundred years, international exchanges of goods and services at the beginning of the 19th century represented only about 3 percent of the value of world output. But then the indus¬trial revolution spread to such countries as Germany, the United States, and (a bit later) Japan. In the second half of the 19th century, new industries emerged to produce machine tools, electricity, and chemicals. These industries soon accounted for a substantial proportion of world trade. Railroads and steamships transported bulk loads over long distances; the telegraph facilitated the worldwide circulation of information. As a result of these developments, foreign trade so increased that by 1913 about one-third of everything produced in the world was exchanged over national borders.

The spread of industrialization boosted the demand for raw materials, initially cotton and timber, later metals and fuels. About half of these primary products originated in European countries; the other half came in part from plantations, mines, and similar enterprises established in the colonies to supply goods to Europe. Enclaves emerged in many colonial economies more closely connected with cus¬tomers abroad than with the societies in which they were physically located, societies where peasants continued to farm in the traditional manner. Some countries (not all former colonies) have yet to overcome this division.

Despite the importance of primary products in the inter¬national exchanges of the 19th century, trade was dominated by Europe. Before World War I, less than 25 percent of world trade was transacted among non-European countries, about 40 percent represented the trade of European coun¬tries with each other, and 35 percent, European trade with the rest of the world. Britain remained the chief trading nation, but its share in international exchange diminished, inevitably in view of the rapid development of continental Western Europe, North America, and Japan.

The Era of Free Trade. The foundations of free trade— the removal of restrictions on the movement of goods and services from country to country—were laid by the (mostly British) classical economists. In Britain, protection was very gradually discarded, starting in the 18th century, and by the early 1840′$ was mainly (though not exclusively) confined to tariffs on imported grains. In 1846 even agricultural protection was in principle abandoned.
Contrary to expectations, grain prices did not immediately fall because no countries were capable of exporting sub¬stantial amounts of grain to Britain. The 1850′s and 1860′s, in fact, were a period of sustained prosperity, and, rightly or wrongly, free trade was credited with the responsibility for it. Other liberalizing measures taken in Britain and elsewhere made the years between 1850 and 1880 the era of minimal barriers to trade.

By 1870, however, the development of ocean-going steam¬ships had exposed British agriculture to real competition. Europe (though not, at first, Britain) began turning away from free trade in the late 1870′s, after a prolonged eco¬nomic crisis. Simultaneously, a new and more volatile kind of nationalism forced governments to collect more revenue to pay for armaments. Nationalism also promoted fears in such powers as the United States and Germany that it would be difficult to industrialize if competition from Britain, the leader in this field, were not checked. This increased the popularity of the infant-industry argument for protection.

The 20 th Century. The movement toward protection continued to grow stronger after the beginning of the 20th century. Nonetheless, when World War I broke out, in 1914, protectionism had made relatively few advances, though the world economy was no longer so free from trade controls as it had been 50 years earlier. International trade was, however, still regulated by the gold standard, under which currencies had a fixed gold value and payments imbalances among nations were settled through the transfer of a limited supply of gold reserves. A country could not keep its goods competitive by simply devaluing its currency, nor could it indefinitely sustain a payments deficit. Instead, each trading country had to keep its goods competitive by keeping an edge in production costs.
The Depression. The gold standard was undermined during World War I and replaced during the 1920′s by the gold-exchange standard, under which international settle¬ments were made mainly in British pounds and U.S. dollars. This system, however, allowed the United States and Britain and any countries able to borrow recurrently from them to sustain recurrent payments deficits. Eventually this system collapsed, helping to bring about the Great Depression of the 1930′s. Many governments reacted to the Depression by subjecting foreign trade to new controls. One after another, they formally went off the gold standard, abolishing fixed exchange rates, and sought, by devaluing their currencies and by imposing tariffs and quotas, to improve the com¬petitiveness of their products while protecting them against international competition. This was to be achieved at the expense of other countries—the so-called “beggar-my-neighbor” policy. Since many countries could and did play the same game, the result was international disintegration and stagnating, even decreasing, world trade. Manufacturing output in most countries languished and so, consequently, did trade in primary products needed for industry.

The policy of national self-sufficiency was carried to an extreme in the Soviet Union and in Nazi Germany and Fascist Italy, which sought to achieve autarchy, or national economic independence. Foreign trade in the Soviet Union was taken over by the government and centrally planned. Fascist Italy and Nazi Germany projected a similar program of autarchy, but in those countries government control was less complete and curtailment of external trade less thorough.

The Postwar Years. The disruption of international ex¬change in the 1930′s, combined with the dislocation of World War II, was so great that the absolute volume of trade in the 1940′s may have been lower than it had been in 1913. Undoubtedly, it was not much higher. Mindful of the harm caused by stagnating trade, the Allied countries began planning to improve conditions during the hostilities. They agreed to establish the International Monetary Fund (IMF) to watch over the exchange of currencies. The plans for the liberalization of trade itself were implemented less smoothly. But in the 1940′s a General Agreement on Tariffs and Trade (GATT) standardized the policies of almost all non-Communist countries. GATT was negotiated in the hope of eliminating as many obstacles to trade as possible, espe¬cially quotas and subsidies, by means of the so-called “most favored nation clause,” which ensures that any trade conces¬sion between countries is automatically extended to all members. Under the aegis of GATT, various cycles of trade negotiations have taken place: several in the 1950′s, the Dillon round in 1961, the Kennedy round in the 1960′s, and, in the late 1970′s, the Tokyo round. By the end of the Kennedy round, the industrial countries’ average tariff on manufactures was down to about 10 percent. The Tokyo round set itself the aim of reducing tariffs on manufactures by a further 40 percent.

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Insurance http://www.khaama.com/insurance http://www.khaama.com/insurance#comments Sat, 11 Dec 2010 10:58:12 +0000 http://www.khaama.com/?p=1326 Insurance
A method of protecting against future financial loss. Through insurance, the risk of such loss is transferred to an insurance company or other insuring orga¬nization. HOW INSURANCE WORKS Combined Risks. Insurance purchasers substitute the cost of insurance for the possibility of much larger future losses. To illustrate, imagine that 200 people own antique automo¬biles, each Read the full article...]]>
Insurance

Home Insurance

A method of protecting against future financial loss. Through insurance, the risk of such loss is transferred to an insurance company or other insuring orga¬nization.

HOW INSURANCE WORKS
Combined Risks. Insurance purchasers substitute the cost of insurance for the possibility of much larger future losses. To illustrate, imagine that 200 people own antique automo¬biles, each worth $20,000. The owners realize that their cars could be stolen or destroyed in a fire or collision. Each there¬fore buys a policy that insures against such loss during the next 12 months. Through past experience, the company has found that an average of one out of every 200 antique cars it insures is stolen or destroyed each year. By charging each of the 200 owners $125, the company will accumulate a fund of 200 x $125, or $25,000. That amount will be enough to pay for the expected $20,000 loss. In addition, it will pay the company’s operating expenses, including sales commissions, salaries, rent, office expenses, taxes, and so forth and also fur¬nish a safety margin in case there is more than one loss. From the viewpoint of the policyowners, insurance removes the risk of financial loss of the types and amount covered by their policies.
Insurance companies are able to accept their policyholders’ risks because they insure many individuals and can rely upon the law of large numbers. They know that when a large number of individual risks are combined, the total amount of loss can be predicted with reasonable accuracy. Insurers do not predict which ones of the many risks they insure will have losses. Instead, they forecast the total amount of loss payments for the entire group. That amount plus the cost of operating the insurance business is divided among all of the policyholders.

Features of Insurable Risks. Not all risks can be in¬sured.  Risks like gambling or investments that can result in either loss or profit generally are not insurable. Only pure risks, those whose outcome can be only loss or no loss, can be insured. The costs of fire, illness, and lawsuits are exam¬ples. But while many pure risks are insurable, some are not. Insurable risks usually have four main features.

1) There must be many similar loss exposures. Without this feature, insurers would not be able to make reliable fore¬casts of total insured losses.
2) Losses must be definite, measurable, and important. A definite loss is one that is obvious; its happening is clear and unmistakable. If insured losses were vague and indefinite there would be endless disputes between insured persons and insurers. Losses are measurable when their dollar amount can easily be determined. In contrast, the purely sentimental value of personal trinkets or souvenirs is not easily measur¬able and not readily insurable. Insured losses also must be important. They must be large enough to be worth insuring.
3) Losses must be accidental. This feature requires insur¬able losses to be unintended and unexpected by the policy¬holder. Intentional loss, such as arson or other damage known to have been purposely caused by a property owner, cannot be insured. An example of an expected loss is normal property depreciation; because it is not accidental, it is not insurable.
4) Catastrophic loss must be extremely unlikely. This means that large numbers of the insured objects must not be subject to simultaneous loss. Unemployment compensation is a type of risk that can involve catastrophic loss and therefore cannot be covered by private insurers.
Insurance Pricing. Insurance companies must charge enough to cover their costs. But in two important respects in¬surance pricing differs from the pricing of other products. The first difference is that when an insurer sells a policy it has no way of knowing what its costs for the policy will be. It cannot simply add up the cost of the labor, materials, rent, advertising, and so forth that have gone into “making” the policy. Instead, it must estimate the policy’s ultimate cost, primarily on the basis of past claims submitted by policy¬holders. The second difference between insurance pricing and the pricing of other products is that in the case of in¬surance the cost to the seller depends in part upon who the buyer is. Because insurance costs vary from one policyholder to another, different people must be charged different prices for policies providing the same kinds and amounts of insur¬ance.

Premiums and Rates. The price of an insurance policy is called its premium. Premiums are based upon an insur¬ance rate per exposure unit. For example, the exposure unit in life insurance is the number of thousands of dollars of insurance. If the rate for a particular policy is $15 per thou¬sand and the policy provides $50,000 of coverage, the pre¬mium is $15 x 50, or $750 per year. Various exposure units are used in other kinds of insurance. They include: in fire insurance, $100 of coverage; in workers’ compensation in¬surance, $100 of payroll; and in auto insurance, the number of autos insured.

Class Rates. Most insurance rates are class rates. That is, insured risks are classified on the basis of several im¬portant characteristics and all that are in the same class are charged the same rate per exposure unit. In life insurance, for instance, policyholders are classified on the basis of their age and sex. The rates reflect insurance company records of the likelihood of living and dying at various ages. Class rates are used in auto insurance also, but in this case the rates take into account a greater number of characteristics, including the territory in which the rate applies and the age, sex, marital status, and motor vehicle accident and conviction record of all drivers in the policyholder’s household.

WHO PROVIDES INSURANCE
Insurance is furnished by private insuring organizations and by governmental agencies.
Private Insurance Organizations. There are several types of private insurers.
Stock Insurance Companies. A stock insurance company is a corporation that is engaged in the business of insurance. Like any other corporation, a stock insurer is owned by its stockholders. They elect a board of directors, which appoints the officers responsible for operating the company.
Most of the policies issued by stock companies are non-participating. That means that dividends are not payable to the policyholders. Some stock life insurance companies do issue participating policies. In such cases the policyholders usually receive annual dividends. The dividends are a partial return of the annual premiums, reflecting the difference be¬tween the premiums charged and the amount needed by the company to cover its costs.
Mutual Insurance Companies. Mutual companies have no stockholders; they are owned by their policyholders. A mu¬tual company’s excess earnings, if any, are returned to its policyholders. The return may be in the form of the divi¬dends paid on participating policies or, in the case of short-term policies like auto or home insurance, may be in the form of a reduction in the premiums charged for renewal policies.

Reciprocal Exchanges. This type of insuring organization is sometimes called an interinsurance exchange. It is an asso¬ciation whose members exchange insurance. In other words, the members insure one another. In contrast, both stock and mutual insurance companies, as entities, insure their policy¬holders; their policyholders do not directly insure each other. The administrative duties of a reciprocal exchange are handled by an attorney-in-fact under authority granted by the policyholders.

Lloyd’s of London. The most famous insurer, Lloyd’s is also one of the oldest. Its beginnings go back to late-iyth century London, where Edward Lloyd’s coffeehouse became known as a place where shipowners could find men interested in insuring ships and cargoes. The shipowners would go from table to table at the coffeehouse and other men, called underwriters, would agree to insure portions of their risks. Operations today are basically the same.
Lloyd’s is not an insurance company; it is an association of individuals who provide insurance. The approximately 15,000 members are organized into about 350 groups, called syndicates. Each syndicate is headed by an underwriter, who decides which risks or portions of risks the syndicate will in¬sure. The syndicates operate much like insurance companies, but the security of their policies rests on the financial strength of the individual members. If it became necessary, each syn¬dicate member would be personally responsible for insured losses down to his or her last penny. Much of the fame of Lloyd’s of London is attributable to the insuring of unusual risks such as pianists’ fingers and prizes for holes-in-one at golf tournaments. However, the great bulk of the business insured at Lloyd’s is conventional ocean marine and other property-casualty coverages.

Health Associations. In the United States, nonprofit organizations have been established under special state laws to handle advance payment of hospital and medical services.

The best known are Blue Cross and Blue Shield plans. They usually are governed by boards of directors representing hospitals, the medical profession, and the general public. The plans offer service contracts for hospital or doctor care. Subscribers receive the specified hospital or medical service and the plan reimburses the hospital or doctor furnishing the
care.

CRIME INSURANCE
Crime insurance protects against loss of money or other property by dishonest acts. The auto and home insurance policies carried by families and individuals include this protection. In insuring business firms, a distinction is made between crimes com¬mitted by employees and those committed by other persons. Loss caused by the former is covered by fidelity bonds. Loss caused by people who are not employees of the insured organization is covered by policies that insure against specific types of crime.

Nonemployee Crime. Burglary and rob¬bery are the crimes most commonly in¬sured against. The distinction between the two perils is important, because a policy covering one may not cover the other.

Burglary means the taking of property by breaking into the place where it is kept. A safe burglary policy, for example, covers money or other property stolen by breaking into a locked safe. The policy requires that there be visible marks showing that the safe was forced open. A mercantile open stock burglary policy covers merchandise and equipment taken by burglars who break into or out of a locked building.
In contrast to burglary, robbery means taking property by violence or threat of vio¬lence. A business with robbery insurance is protected against crime loss if an employee or messenger is held up or killed. Some robbery policies also cover property taken by other criminal acts when an employee is aware of the act, such as if a person grabs some merchandise and runs out of a store with it.

Employee Crime. Burglary and robbery policies exclude losses caused by employees of the insured organization. Employee dis¬honesty losses are covered by contracts called fidelity bonds. The protection applies to the loss of money,-securities, merchan¬dise, or other property stolen by employees. It does not cover loss caused by any owner, partner, officer, or director. Fidelity bonds may be written to cover either employees listed by name, specified positions, such as cashier or accountant, or all employees without naming them or their positions. The last of these is called a blanket fidelity bond.

TRANSPORTATION INSURANCE
The risks of truck, train, plane, or ship transportation fall into either of two categories of insurance, inland marine or ocean marine. Neither of the terms is descriptive. Inland marine deals primarily with the risks of land transportation, while ocean marine may cover transportation on inland waters as well as on the high seas.
Inland Marine Insurance. Numerous loss exposures associated with motor, rail, and air transport are handled by inland marine insurance.

Property in Transit. Property being shipped from one place to another is subject to loss or damage from many sources. In¬surance can be either for a list of named perils such as fire, explosion, collision, flood, and so forth, or for all risks of loss that are not explicitly excluded. Policies may be written to cover single shipments or all shipments during a one-year period. Special transit policies have been designed for those who make frequent shipments by parcel post or by registered mail. Another special policy covers shipments by armored car.

Bailee Liability. Bailees are persons or organizations having temporary custody of property that belongs to others. Examples include truckers and other carriers, dry cleaners, and parking garages. Depending upon the circumstances, bailees are re¬sponsible for exercising certain degrees of care to protect the property in their control. A bailee who does not use the required care may be legally liable to the owners of prop¬erty that is damaged. Bailee liability insur¬ance covers that potential loss. Some bailee policies are designed to reimburse the property owners even if the bailee is not legally liable for the damage; such contracts are called bailees’ customers policies.
Fixed Transportation Property. This divi¬sion of inland marine insurance covers fixed property that is used to facilitate transpor¬tation, such as bridges, tunnels, and pipelines.

Floaters. Floaters are policies covering moveable property wherever the property is located. Building contractors, for instance, own earth-moving equipment, compressors, hoists, scaffolding, and other items that are moved from one job site to another and are subject to loss from many sources. A contractor’s equipment floater covers the property, both while at a particular location and while in transit. Other floaters have been designed to insure other kinds of property, ranging from photography equip¬ment to livestock, from wedding presents to oil drilling rigs.
Ocean Marine Insurance. Ocean marine policies furnish protection for four types of losses involving water transportation. The first is damage to the hull of the ship it¬self. Second, the cargo may be damaged. Cargo  insurance  usually  is  provided  by means of an open contract that auto¬matically covers all shipments in which the policyholder has insurable interest. Third, there may be loss of freight, meaning the payment for transporting the cargo. Usually the shipowner will not be entitled to this payment if the cargo is not delivered. The potential loss of freight therefore is customarily made a part of the hull insurance. The last of the losses covered by ocean marine insurance is the cost of legal liability claims. Liability insurance protects the shipowner from bodily injury and property damage liability claims resulting from collisions and other incidents.

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Privatizations Gap http://www.khaama.com/privatalization-gap http://www.khaama.com/privatalization-gap#comments Thu, 25 Nov 2010 04:49:56 +0000 http://www.khaama.com/?p=1044 Privatizations Gap
Like most things done badly in Afghanistan after the invasion in 2001, the US pushed privatizations of all sorts. There are dozens and dozens of private schools and hospitals in Kabul now. They compete with government institutions for rampant profits. Most of the owners of these greedy private businesses have no professional clue about the Read the full article...]]>
Privatizations Gap

Like most things done badly in Afghanistan after the invasion in 2001, the US pushed privatizations of all sorts. There are dozens and dozens of private schools and hospitals in Kabul now. They compete with government institutions for rampant profits. Most of the owners of these greedy private businesses have no professional clue about the businesses they own and operate.  Here a case can be made that sometimes public institutions and services have a needful place in the system and they should not be driven out of business enabling the business Mafia to gain the upper hand and drive services out of reach of the poor and the lower middle class. In Kabul the vast majority is either very poor or very low middle class who cannot pay for basic services like education and health services unless provided by government.

Article was sent to Khaama.com by Ahmad Seyar Hashimi

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