Microcredit may be too Small to Work

Microcredit may not be an effective way to fight poverty
Grameen Bank in Bangladesh first micro credit bank

Argument
Grameen-style initiatives have limited capacity to fight global poverty
Does not work in countries with neoliberalism: include macroeconomic policies focused on eliminating inflation rather than expanding job opportunities. Have produced slower economic growth, increasing inequality, and no progress in reducing poverty

Grameen's model develops an alternative to traditional collateral as a basis for lending to the poor. Poor would become destitute if these things were taken from them because they couldn't make their payments

average lending rates of Grameen= far exceed standard measures of affordability.  

Annual interest rates on group loans range between 30-50%

Defenders: contend that, accounting for the risks to the lender, these rates are appropriate; and that anything less will not attract profit-seeking bankers into this market
Response: According to this approach, microfinance can only reach its full global potential if it can attract profit-seekers into the business, not just aid agencies and private do-gooders.

For any of the poor's microenterprises to be successful  they need access to decent roads and affordable means to move their products. 

Proposal
government guarantees be set at 75% of the total amount of loans that commercial banks make to microfinance institutions (means that, with a 75% government loan guarantee, if the market rate for a microcredit loan was 40%, the subsidized rate would be 10%). This would make the loan affordable for borrowers while still maintaining market incentives for lenders. 

With this new proposal, can Microcredit save the poor? 

source: global issues in context, microcredit 

Microcredit Gives Women a Chance

Microcredit may be a way to fight the inequality many women feel in Africa.

Microfinance:the provision of financial services to the poor in a sustainable way, and utilizes credit, savings, and other products to help families take advantage of non-risky income-generating activities

70% of the worlds poor are women but traditionally women have had the disadvantage in access to credit and other financial services

Microfinance often targets women
-could help rebuild the mindset of African women, so that they enter into marriages as equals and look after themselves
-women have been socialized to be unquestioning and subservient
-financial freedom, however little, is a great boon to women's psyche

Women for Change encourages communities to form associations and gives them resources to start income-generating activities

What will this new found independence change about African culture long term and what will happen to the poverty levels in Africa?
Source: http://ic.galegroup.com/ic/ovic/ViewpointsDetailsPage/ViewpointsDetailsWindow?failOverType=&query=&prodId=OVIC&windowstate=normal&contentModules=&mode=view&displayGroupName=Viewpoints&limiter=&currPage=&disableHighlighting=false&source=&sortBy=&displayGroups=&search_within_results=&action=e&catId=&activityType=&scanId=&documentId=GALE%7CEJ3010637224

The Two C's That Run China's Economy

Communism, coupled with Capitalism, is what has turned China into the strong economic nation it is that is greatly overlapping the United States.

Official Economic Policy: a "socialist market economy with Chinese characteristics"

When private enterprises allowed in 1978:

    -business and companies have been created rapidly

    -fierce competition has ensued between them

Communist Party of China carefully follows and controls the country's growth

   -state-owned enterprises maintain a dominating presence in the domestic market

   -often prevent competition 

  

The Government's careful direction has helped China weather the storm of the global economic crisis

-from 2003-2007 China experienced  13% GDP increase

"The centrally controlled market economy allowed the government to disperse the funding quickly with acute oversight and influence as the investments were financed by state-backed enterprises"

So although communism is viewed as somewhat of a taboo considering the dictators that have manipulated its true teachings, China is able to successful run on either a more strict version if capitalism or a more lenient version of communism depending on how you look at it

Either way it seems to be working tremendously for China. 

Would our country ever benefit from giving more economic control to the government?

Source: China's Economy dances between Communism and Capitalism http://www.policymic.com/articles/7356/china-s-economy-dances-between-communism-and-capitalism

Date: 7 months ago so timely

Writer: Warren Rizzi received a BA from Boston college and recently finished a year long fellowship teaching and studying at a university in northeast China 

although the article is opinion based he backs it up with facts taken from other reliable websites and is also a very reliable source in that he understands China's economy from studying there

policymic is the website used and although it is not completely credible the source is

Synthesis and Plan

I have learned that in order to become rich, you have to have a capitalistic economy even if you are run by Communism (China). You also have to have some control over oil although oil in your own country can make a lot of war. Also the wealthiest people in the world are coming from countries that aren't the U.S. and they are younger, work faster, more women, and no families.

Plan on answering how China is able to have a capitalistic economy even though communist.
look at the Middle East to see how oil has affected them.
check for other factors that make you rich

Same questions will be answered as before: Why do some countries become rich?

Forget Family, Become Rich?

Russia 2012: Now has the most billionaires among all the European nations
China 2012: has the most billionaires in the Asia Pacific region

But....
Russia and China in 20th century
      controlled by communism
         population starving and dying quickly
         almost no means of income being produced
         money being wasted on communist projects

Facts about Russia's and China's wealth
-both produced their first billion dollar fortunes just 15 years ago
-youngest among the list of rich (some 15 years younger than their U.S. and U.K. counterparts)
-have the highest percentage of self-made fortunes (Russia 100% China 83%)
-could not inherit anything because of the influence of communism before that point
-have the lowest rates of family involvement in management of their fortunes
-China has a high number of self-made women billionaires
-the rich of both countries rarely own or help philanthropic foundations

Are we moving to a world where, in order to be rich, we must work harder younger, give up a family, and become cold towards our fellow human beings?  

source: http://www.forbes.com/sites/kasiamoreno/2012/03/30/why-chinas-rich-and-russias-rich-share-many-traits-2/  Why China's Rich and Russia's Rich Share Many Traits
Authority: Kasia Monroe and she is an editorial director of Forbes Magazine so therefore has credibility when understanding the economies of these two countries
Accuracy: Yes sources were cited but she mostly took her facts from the Forbes magazine itself, which is a very trusted source on understanding the economy and the rich
Timeliness: Published 03/30/12 so very recent.



   

   

Don't Underestimate the Big Guy

Africa has a ton of natural resources. Why are they so poor when Japan has almost no natural resources and is very rich?

African Resources: oil, diamonds, gold, iron, cobalt, uranium, copper, bauxite, silver, petroleum, but also woods and tropical fruits

Why are they not selling this?
-William Easterly is Professor of Economics at New York University, and co-director of its Development Research Institute.
“Western media and celebrity activists portray Africa stereotypically, mired in helpless destitution, when in fact the continent is making economic and social strides. While many African countries are still very poor, markers such as rises in gross domestic product, as well as cell phone and Internet use, should be celebrated and encouraged. Those who want to help Africa should consume more African goods and create less negative propaganda”
-basically states that Africa has goods to sell but Westerners keep focusing on the negative of their continent

Africa through history
-Since the beginning of civilization Africa has been pointed too as the different one
-countries use up resources and do not help africa at all
-Ex: Dutch held control of a country in Africa, Rwanda, when left turmoil ensued because of the corruption
-Europeans created an image of Africa that was the perverse opposite of Europe's - its mirror image
-Abolitionists argued that Africa was a place of suffering because the slave trade provoked war, disease, famine and poverty
-Anti-Abolitionists argued Africa was such an awful place that becoming a slave seemed like escape
-Either way, Africa was full of 'savagery' and constant war

"What man or nation has ever become rich by holding out a begging bowl?”
Source: Opposing Viewpoints; Africa Through Western Eyes - The World's Dark Continent or Capitalism's Shining Light? and Opposing Viewpoints; Africa Needs Trade More Than Aid

Oil: the energy that hurts?

Oil is the main energy source for the entire world. It makes many countries rich. But it also causes turmoil in many others. 

Qatar
-considered the 2nd richest country in the world
-oil accounts for 60% of the country's GDP
-country has free health care for all
-capital expected to keep growing
Source: Gale Opposing Viewpoints Other Rising Middle East Nations in the Twentieth Century and Global Issues in Context Qatar

Iraq
-oil production jumped 20% in this year alone
-threat to the shaky democracy
-filled with corruption and greed
-disagreements on oil-production and revenue sharing
Source: Gale Opposing Viewpoints  Iraqi Oil a Double-Edged Sword

You could take examples from the Persian Gulf monarchies or Saudi Arabia who all benefit from their oil or you could look at Venezuela, Nigeria, and Russia, all who were harmed by their abundant oil.
The real question is does having oil make you better off in the end? 

Taken from: http://topics.nytimes.com/top/news/business/energy-environment/oil-petroleum-and-gasoline/index.html and http://en.wikipedia.org/wiki/Oil_platform 

The Tiny Country That Thought It Could (And Did)

   Japan: How it became and stayed rich

   Japan's trade only really flourished when it used capitalistic ideals, advanced technology, modernized, and stayed open for the world to trade. And I can prove it. 

   In order to understand why the tiny country of Japan has a better economy than say Africa, which is a much larger country with a lot of natural resources, the reader must delve into Japan's history. As with most countries, the economy of Japan has had it's ups and downs.

 The First Down: 

-Japan had a relatively flourishing trade with mostly other Asian countries until the 1630's

-shogunate(ruler) issued a series of decrees that banned trade, foreign travel, and the building of ships
-seclusion lasted til the late 1850's
-did foster closer trade with the Asian countries
-trade declined between even these countries as supply and demand lessened
-weak technology skills attributed to this decline as well  because Japan did not benefit from inventions made due to seclusion
-Notice how in this down Japan did not have technological skills, was not trying to modernize, and had a seclusion policy that kept it from trading with the rest of the world
The First Up:
-Commodore Matthew Perry (of the U.S.) demanded the opening of Japanese ports
-Japan had little power so was forced to do that
-was able to keep opium out of the country unlike China (notice how dependent China became)
-new western technology introduced
-Capitalistic ventures flourished with this technology
-this industrialization was needed in order push Japan towards becoming a world power in trade
The Second (Small) Down
-during World War 2downturn
-Japan cut off from normal trading partners 
The Second Up (Continues Still Today)
- opened up again when U.S. finally decided to start reform japan
-democracy, education, and capitalism implemented with the U.S. reforms
So Japan is saved from poverty through capitalism and democracy. Who should be saved next?
Source: World History in Context, Japan (a history of world trade)
Taken from: http://www.telegraph.co.uk/finance/financialcrisis/9491427/Japan-trade-deficit-widens-as-EU-exports-plunge.html and http://www.tofugu.com/2012/03/30/the-richest-man-in-japan/

How do rich countries become and stay rich?

What I know:
-they tend to be rich with resources as well
-have military dominance
-need a flourishing trade
-U.S. China Britain Japan
-communism (in Russia) often stops wealth from coming in but China was able to use capitalism to become rich
-capitalism
-freedom seems to help
-turmoil in country tends to lead to less money
Why I want to learn about it:
-Africa has many resources but cannot become rich
-Russia is still struggling and is a huge country
-Japan has almost no resources and is very small yet somehow they become rich
-richest country in the world uses oil to stay rich
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