The Economist's Viewpoint

Clean Energy

2010-10-02T14:34:00.000-07:00

In my last post Resource Depletion and Green Economics I have mention how the human race is depleting the environmental resources and ruining the eco-system. But the awareness is been developing since last two decade, and the concept of sustenance of natural and environmental resources are introduced. Developed countries are finding alternative resources of the energy so that the dependence on oil and other carbon emitting fuels like coal which is considered to be the major contributing factor of global warming according to the Intergovernmental Panel on Climate Change and dependence on nuclear energy (Sometimes, this less comprehensive meaning of "alternative energy" excludes nuclear energy as defined in the Michigan Next Energy Authority Act of 2002) can be reduced.

Against conventional resources the alternative resources of energy are given the name of Clean Energy Resources. These clean energy resources will not only help to protect the eco-sys but they will also create new jobs. Against energy resources like fossil fuels there are many other clean resources of energy like water, wind and solar energy. Renewable energy sources such as biomass are sometimes regarded as an alternative to ecologically harmful fossil fuels. Renewables are not inherently alternative energies for this purpose. For example, the Netherlands, once leader in use of palm oil as a biofuel, has suspended all subsidies for palm oil due to the scientific evidence that their use "may sometimes create more environmental harm than fossil fuels.

For instance U.S president is promoting the efforts to build new energy alternatives of conventional energy resources which will reduce the U.S’s dependence on foreign oil, reduce the import bill and will create jobs. A new type of solar plant is being built in U.S that promises to provide clean energy for as many as 140,000 homes. The new type of solar power plant will be built in western state of California and will be called ‘Bright Source’. It will also provide jobs for 1000 people.

Now if we take the developing world the biggest problem is the shortage of energy. For instance in Pakistan the Alternative Energy Development Board (AEDB) is inaugurated. AEDB is working on but energy shortfall in the country has reached to 5000 MW. The government should take immediate steps to control this demand supply imbalance. New Water reservoirs should be created because it is a do or die situation for an agri based economy whose water reservoirs are diminishing. Alternative energy project should be encouraged in the developing world and the developed world should come forward and invest in clean energy projects.

Resource Depletion and Green Economics

2010-09-16T17:02:00.000-07:00

Hello friends I am back with a newer post about the depletion of natural resources and introduction of Green Economics. This is first of the serial of posts that I am going to share with you. Our world’s natural resources are depleting due to excessive extraction to feed the needs of the capitalistic giant, and the rate of extraction of resources is increasing day by day and if we will continue to do so sooner the scarcity of resources will become so swear that we will have to pay it at the cost of existence of our future generations. This excessive extraction of natural resources is also disturbing our ecological system. Due to massive carbon emissions on one side the ambient quality of eco-sys is decreased but it has highly reduced its assimilative capacity. So we have to do inter-temporal decisions by trading off between our needs and future generations. So the concept of Green Economics is introduced.

The concept of Green Economics don’t only relates to the survival of environment by drowning the economy. It tells us how we should take our economy along with the eco-system. But it requires a great effort on the part of all of us because the process of transformation of a system always requires the mental and physical efforts of the agents of that system. Green Economics talks about the introduction of positive alternatives in the all areas and each sector of the economy. In economics the concepts of social cost and social benefits are already familiar, for example to reduce the emissions the governments can put emission taxes on the producers as social cost so that the damage done by emissions could be recovered and due to these taxes the producers will also reduce the emissions. On the other hand to some extent reduced emissions also mean reduced resource depletion. This can happen in many ways but I will discuss two of them.

The first concept is that controlled production process may reduce the residuals and losses so raw material consumption reduces. In the other way the producer may integrate an emission controlling mechanism probably a plant to control the emission. It will help in two ways; one is that the residuals will not be emitted so the emissions will not be controlled at the cost of output and the other way the residuals will be reused as input. So in the bigger scenario it leads to slower depletion. Another example is that if a person uses environment friendly fuels then he must be subsidized as to encourage social benefits.

It necessary to mention that when the state plays the role of enforcer the implementation of these transformations becomes difficult. It is the biggest problem in under developed nations and due to this social welfare programs are difficult to complete in these areas of world. When state act as coordinator then these programs or transformations become easy to implement and the enforcement cost is also saved.

Green economics emphasize the creation of positive alternatives in all areas of life and every sector of the economy. Green economics does not prioritize support for either the "public" or the "private" sector. It argues that BOTH sectors must be transformed so that markets express social and ecological values, and the state becomes merged with grassroots networks of Community innovation. For this to happen, new economic processes must be designed and new rules of the game written, so that incentives for ecological conduct are built into everyday economic life. The State can then function less as a policeman, and more as a coordinator. This is a very different kind of "Self-regulation" than current profit- and power- driven market forces. The basis for self-regulation in a green economy would be community, and intelligent design which provides incentives for the right things.

Article By: Muhammad Abubakar Ali

Fiscal Measures to Control Recession

2010-09-02T14:55:00.000-07:00

In one of my earlier posts “Is it the call to another Great Depression?” I mentioned how the easy monetary measures of Federal Reserve lead the US economy toward the Deflationary situation and suggested that the Black Man’s government should adopt easy fiscal measure to overcome this alarming situation. One of my friends posted me a comment on that article. In fact in response to that comment I was forced to write this new post.

Let’s take the things one by one. We know that US economy is facing a very high unemployment rate (up to 9.5%). Professor Arthur Okun conducted an empirical study and concluded that an increase in unemployment rate by 1% reduces the Real GDP of by 2%; his observation is given the name of Okun’s Law. So the government has to control unemployment rate by deficit spending and many economists recommend deficit spending to end recession, especially a severe one.

When the unemployment rate is high, an increase in government spending creates a market for business output, creating income and encouraging increases in consumer spending, which creates further increases in the demand for business output. This leads to increase in Real output and the employment also increases. Increased demand further leads to increased size of the market, due to government deficits; it further stimulates the economy by raising business profitability, which encourages private fixed investment in factories, machines, and the like to rise.

In the United States, during Vietnam-war era deficits encouraged inflation and at that time the unemployment rate was ideally low. Thus economy has inbuilt capability of recovering all that needed is the implication of the right decisions at the right time.

Article By: Muhammad Abubakar Ali

The Beauty Premium

2010-08-27T15:24:00.000-07:00

There are many way the people differ from each other and one prominent difference is how attractive they are. For example actress Angelina Jolie is good looking, due to this reason her films attract a large audiences so this mean large income for her.

Now we see hoe prevalent are the economic benefits of beauty? The answer is in the study of Daniel Hamermesh and Jeff Biddle published in American Economic Review. They collected the data from surveys from individuals in the US and Canada. The interviewers who conducted the survey were asked to rate the physical appearance of the respondents. They examined that how much the wage of the respondent depends upon the standard determinants like education and experience, and how much they depend upon physical appearance.

They found that the beauty pays. People who more attractive earn 5% more than the people of average look and the people average look earn 5% to 10% more than the people of less than the average. Similar results were found for both men and women. Why there is difference in wage? There are several ways to interpret the beauty premium.

One Interpretation is that good looks are themselves a type of innate ability determining the productivity and wage. Some people are born with the attributes of the movie stars, other people are not. Good looks are useful in the job where worker present themselves to the public such as acting, sales and waiting on table. In this case, an attractive worker is more valuable to firm than unattractive worker. As attractive worker is consumer preference so firms willingness to pay is more to an attractive worker.

A second Interpretation is that beauty is a direct measure of other types of abilities. How attractive a person depends on more than just heredity, it also include the dressing, hairstyle, personal conduct and other types of attributes that a person can control. So a person who successfully projects an attractive image in a survey interview appears to be more intelligent person who succeeds at other tasks as well.

A third interpretation is that the beauty premium is a type of discrimination. This phenomenon occurs when different individuals (workers) in market are offered different opportunities on the bases of differ only by race, ethnic group, sex, age or different personal characteristics. Discrimination represents some people’s prejudice against certain groups in society.

Article By Muhammamd Abubakar Ali (inspiration from Georgy Mankiw)

The Impact of Western Development on the Rest World, 1000-1950

2010-08-24T01:23:00.000-07:00

A major feature of world development which emerges from our macro–statistical evidence is the exceptionalism of Western Europe’s long–run economic performance. By the year 1000, its income levels had fallen below those in Asia and North Africa. In its lengthy resurrection, it caught up with China (the world leader) in the fourteenth century. By 1820, its levels of income and productivity were more than twice as high as in the rest of the world. By 1913 , the income level in Western Europe and its Western Offshoots was more than six times that in the rest of the world.

In order to understand the forces which made for the Western ascension, and the reasons for its greater dynamism than the rest of the world, it is useful to scrutinise the interaction of the West with the Rest over the long run. It is not feasible to embark on a comprehensive survey of all parts of the world economy. This chapter therefore presents four case histories. A great advantage of this detailed scrutiny is that it demonstrates how misleading it is to treat Western experience as homogeneous or monolithic.

The first deals with the Venetian Republic — the richest and most successful West European economy from the eleventh to the sixteenth century.Portugal is the second case. It was never as rich as Venice, but developed ship design and navigational techniques which made it possible to open up new routes and commercial contact with Africa and Asia. Portugal pioneered European expansion into the Atlantic, discovered Brazil in 1500 and began three centuries of colonial development in the Americas.

The Netherlands is the third case. It was the European leader in terms of per capita income between 1600 and 1820, with a high degree of international openness and specialisation, and a very large trading empire in Asia.

The United Kingdom is our fourth case. It followed the Dutch model of international specialisation and commercial development, built a much bigger colonial empire, and was a pioneer in industrial and transport technology.

Concentration on Western exceptionalism may be considered Eurocentric, but Western countries were the most successful and their experience is the best basis for understanding the roots of economic growth. Analysis of their interaction with the rest of the world throws light on the origins of economic backwardness, and the extent to which Western advance may have contributed to this.

The process of Western ascension involved violence against other parts of the world. European colonisation of the Americas involved the extermination, marginalisation or conquest of its indigenous

populations. European contact with Africa was for three centuries concentrated on the slave trade.

There were European wars with Asian countries from the mid–eighteenth to the mid–twentieth century designed to establish or maintain colonies and trading privileges. However, Western economic advance

also involved devastating wars and beggar–your–neighbour policies. Venetian advance provoked conflicts with Genoa, Portugal clashed with the Dutch. The Netherlands was involved in an 80 year struggle for independence from Spain, four wars with Britain and more with France. The United Kingdom was involved in over 60 years of war with other West European countries from 1688 to 1815, and another ten years from 1914 to 1945.

Article by: Angus Maddison in THE WORLD ECONOMY:A MILLENNIAL PERSPECTIVE
Reviewed By: Muhammad Abubakar Ali

In the Memories of Talibaans : Introduction of Islamic Banking in Afghanistan

2010-08-18T21:05:00.000-07:00

If we remember the past few decades we can easily remind the sharia imposed by the Talibaans in Afghanistan which is anyhow still in charge in some parts of Afghanistan. President Obama have indicated to leave Afghanistan and meanwhile DAB's (Da Afghanistan Bank) spokeman Aimal Hashoor announced the Afghanistan plans to issue licenses for three Islamic Banks to offer the services comply with the majority of the population's religion.

The Three banks who are seeking to work in Afghanistan are Afghan United Bank, Ghazanfar Bank and Maiwand Bank. CEO of Afghan United Bank Sayed Mahmood ul Hasssan said the products are limited to Islamic Loans.
Government took this decision because it want to expand the Islamic Finance to draw more assets in economy to reduce the nations dependence on the foreign aid and as being the extremist Muslim society the Afghan's will not tend to use the conventional banking. Afghanistan have received nearly $32 billions in terms of international aid since the U.S attack on Afghanistan in 2001.

According to US department of State the economic growth rate is on average 11.3% p.a since 2004 .
Senior executive vice president of Al Baraka Islamic Kaleem Iqbal said in Islamabad

“Islamic banks can fill the vacuum as conventional banking is not fully developed in Afghanistan, the government would be looking forward to participation by banks in its plans to sell sukuk.”

Sukuk Plan
Afghanistan’s government is limited to using short-term bills and international aid to finance development. Rahimullah Zaker the general director of the market operation’s department said DAB has about 12 billion Afghanis ($261 million) of bills due in 12 months or less outstanding.

Global sales of sukuk fell 25 percent to $8.3 billion so far this year, Issuance totaled $20.2 billion last year, up from $14.1 billion in 2008, and reached a record $31 billion in 2007. The debt is based on asset returns rather than interest to meet Shariah guidelines.

Debt Returns

The difference between average yields on Islamic bonds and the LIBOR narrowed four basis points, or 0.04 percentage point, to 381 yesterday, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index.

Shariah-compliant bonds returned 10 percent this year, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index, while debt in developing markets gained 13 percent, JPMorgan Chase & Co.’s EMBI Global Diversified Index shows.

Malaysia’s 3.928 percent Islamic note yields due June 2015 fell three basis points to a record-low 2.73 percent today, according to prices from Royal Bank of Scotland Group Plc.

Afghanistan, with a population of 29 million, is the poorest country in the Asia-Pacific region, with 42 percent of people living on less than $1.25 a day, according to a report on the Manila-based Asian Development Bank’s website.

Good Growth

The government announced a five-year plan to build its finance industry and reduce reliance on aid in 2009. President Barack Obama told Afghan President Hamid Karzai on Aug. 13 that the U.S. is committed to helping Afghanistan become a “stable, secure and prosperous” nation.

The parliament needs to approve Islamic banking laws before the central bank issues licenses to start Shariah-compliant services, Hashoor said. Afghan United plans to offer Islamic credit cards instead once the bank gets approval to offer full- fledged Islamic services.

Hassan said.

“We will have good growth of Islamic banking in the future as this is where Muslims prefer to invest their money,”

Rama Raju, president of Maiwand Bank, the first lender to provide Islamic loans in Afghanistan, said in an Aug. 15 interview from Kabul.

“We are looking forward to the sukuk auction.”

Courtesy: Bloomberg

Is it the call to another Great Depression?

2010-08-15T22:04:00.000-07:00

"The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy."

Milton Friedman

After the financial crises of the 2008 Federal Reserve (C.B of US) injected money to uplift the credit market. Interest rate was cut down which was already been kept low for about a decade. Normally when interest rate are kept low and large amount of capital is injected in the market it leads to inflation, and as it was expected in the case of Federal Reserve’s easy monetary actions. But the symptoms are showing that another economic depression is going to hit the global economy and large economies are going to face deflation.

One of the drastic reasons is that the US economy is facing and unemployment rate of 9.5% and a fuller picture of unemployment shows a full 16.5% is not been paid. Thus inflation is not possible when people have no money to spend and when they have so much debt to pay. The individual saving rate has increased from 2% to 6%. So it will be helpful to individual to pay off their debts but it means less money to get the economy moving.

Meanwhile with all the C.B’s money and assurance, the financial institutes and not willing to lend and the investors are not willing to spend and sitting on the sidelines. They're waiting on a better economy - and the fact that worker productivity has yet to skyrocket (increased productivity is usually a sign that precedes increased hiring) suggests that they may be waiting for a long time.

So as the economies become slower the risk of deflation is increased. In US during June the overall prices (excluding food and energy) was up just 0.9% the slowest increase in last 44 years in US. Federal Reserve had announced to adopt the easy monetary policy as it will continue to buy treasury bills from the market in order to help the economy by keeping interest rate low.

The plunge in the housing market has been great news for anyone who could buy a house (and get a loan). But on the whole, it's been devastating to communities (which have been decimated by foreclosures), homeowners (who lost so much equity), and the overall market (many homeowners chose to stay put rather than sell for less). And no one knows when it's going to end, both because some buyers are still hoping that prices will fall further and because there's so much inventory out there. It's a vicious spiral that just keeps swirling.

Imagining this scenario on a broad scale explains why everyone is so worried. Once deflation starts, it's hard to stop it.

Unfortunately, the only solution to deflation is increased employment, investment and spending. After two years of heavy monetary intervention, we're not even close. The Fed is right to be concerned. Now it's time for Washington to start paying attention.

This article appeared on page E - 10 of the San Francisco Chronicle, Reviewed by Muhammad Abubakar Ali

Impacts of Information and Communication Technologies in Pakistan

2010-08-05T16:10:00.000-07:00

1. Introduction

What are Information and communication Technologies?

“Information and communication is essential for a society in terms of education, economic and political awareness, social relations, entertainment and well being of the individuals of a society” .

In today’s globalized world information and communication is the base of businesses like media, telecommunication and software industry. TVs, Computers, cell phones, and internet are considered as development and a step forward in the human history. So Improvement in technologies is considers as high economic growth and increasing welfare.

It is common understanding that ICT sector is rapidly growing and very important in development of economy. The data characterizing the relevance of ICT may as well as refer to domestic production, import, export, and consumption of commodities relating to ICTs. So there must be some comprehensive definition of ICT.

The common international definition of ICT is given by Organization of Economic Co-Operation and Development (OECD). OECD is a working party on indicator of information society , it released a guide that defines ICT on more than 70 pages but here we will see the comprehensive definition.

“The OECD defines the ICT “sector” as the combination of industries of manufacturing and services ”

Broadly Information and Communication Technologies impact education, business, communication, entertainment, employment and banking. So we can say it impacts the whole society and its reforms environment. In ICT sectors there are numbers of huge enterprises working around and generating the revenue of billons and trillions of dollars. In simple they are cash cows , we have the examples of INTEL, AMD, MICROSOFT, NOKIA, and SAMSUNG. There are number of other companies that are playing major role in isolated and global economies.

2. Literature View

We took this literature view by through study on the report issued by FBS i.e. Report on ICT indicators and paper issued by INFORMATION TECHNOLOGY AND THE WORLD ECONOMY by Dale W. Jorgenson and Khuong Vu of Department of Economics, Harvard University.

During 2006-07 mobile cellular teledensity 41% registering a growth of 83%. During 2006-07 telecommunication services were available to 89% of the population. Telecom industry has provided 212 thousand jobs . During 2006-07 telecom companies invested U.S $ 2.1 billion. FDI was 1.8 billion $ which was 35% of total FDI of the country. In 2005-06 telecom operators received revenue of193 billion of which 47% were contributed by cellular users. The government received revenue of Rs. 77 billion in the form of taxes and duties from telecom operators, and half of it was contributed by the cellular mobile industry.

The telecom tariff has been reduced continuously and Average Revenue per User (ARPU) is decreased to US $ 3.72. In 2006-07 net 29 million new subscribers were registered. The telecommunication sectors cover the 89%of the whole population of which 40% is covered by cellular mobile industry.

In the connectivity and usage of internet Pakistan has also seen considerable growth. In 1999-2000 there were only half million users of internet and in 2007 they were 3.5 million. Broad band services were started in Pakistan in 2002, till 2007 70940 subscribers were provided with broad band through DSL, optical fiber and wireless services. Among these 80% users are DSL subscribers.

Electronic media is growing very fast in Pakistan. It includes conventional TV, cable TV and FM radio etc. In 2004-05 12.3 million households owned television which was 54% of the total population. Advertisement revenue in Pakistan has increased from Rs. 8 billion in 2002-03 to Rs. 25 billion in 2006-07 and private electronic media provided 16000 jobs in this period.

Information Technology segment of ICT industry is gaining strength with time. By the year 2006-07 850,000 square feet IT-enabled space were leased to IT companies. There are 110,000 IT experts in various fields, 1105 software houses and 60 multinational companies in different cities.

IT Imports (computer and information services) have increased from $ 44 million in 2005-06 to $ 90 million in 2006-07 where as IT exports (computer and information services) have increased from $ 72 million in 2005-06 to $ 116 million in 2006-07 recording an increase of 61%.

The number of personal computers is increasing in the country. About 900,000 were added in year 2006-07.The PCs were 0.22 million in year 2002-03 and after 5 year in 2007 there were 2.35 million PCs which shows as increase of 1000%.

3. Survey Methodology

Survey method is used is the most known method in the present age for the people to know about their opinion, behavior and thinking toward anything. This method was used for the first time in England in 18th century.

This method is also very useful in other subjects beside research e.g. in agriculture, social works, psychology and politics etc.

From study point of view survey methods are of two types

1. Descriptive Survey

2. Exploratory Survey

2.1. Developmental Survey

2.1.1. Cross sectional Survey

2.1.2. Longitudinal Survey

2.2. Inter-related Survey

4. Stages of Survey

Survey is empirical and it’s done with planning. To decide every stage of survey method is called survey plan. These stages are as follow;

1. Formulation of Problem

2. Population and Sampling

3. Tools of survey

4. Data Collection

5. Data Analysis

6. Results and Conclusion

There are also two types of questions

1. Open ended questions

2. Closed ended questions

5. Survey Report on impact of ICTs in Pakistan

5.1 Formulation of Problem

Our world is becoming more and more global by each passing day. Technologies are emerging rapidly and smarter and reliable solutions are available. Due to globalization we are also impacted by these technologies. It is a miser y that we are unable to use these miraculous technologies efficiently so we are not benefitted by them. This survey is conducted to emphasize on the importance and role of Information and Communication Technologies (ICTs) in Pakistan.

This survey is divided into three major Heads. These are

1. Education

2. Employment and Businesses

3. Entertainment and Communication

Each of the head contains different questions.

Education

• Do you use computer for research and educational purposes?

• Do you use online encyclopedias like Wikipedia, Encarta and Britannica?

• Have you ever applied for admission in any foreign university for higher education?

• Did you ever use any online library?

• Do you use Search engine for educational purposes like google, yahoo search and Bing?

• Do you use cell phones for browsing search engines and encyclopedias?

• Do you make conference call for studying?

Employment & Businesses

• Did you have any online job?

• Did internet help you in getting a job?

• Do you know about pay per click e.g. Adsense, Adbright, and Clicksor?

• Do you know about affiliate marketing e.g. Amazon Affiliate and eBay Partners Network?

• Did you ever shopped over the internet from eBay, Amazon or Wal*mart?

• Do you know about bulk SMS Marketing strategies?

• Do you use cellular technologies for money transfer e.g. telenor’s “easypaisa”?

Entertainment & Communication

• Do you use social networks like Orkut, Facebook, AOL, Bebo, Twitter and Hi5?

• Do you watch online tubes e.g. Youtube, Megavideo and Howcast?

• Do you use 3G cellular technologies?

• Do you use cell phone for entertainment like games, songs and clips?

• Do you use cell phone for communication like SMS, MMS and WAP?

• Do you use email and chatting like yahoo, msn and Gmail?

The questioner is attached at the end of this report.

5.2 Population, Sampling and statistical tools

We took a sample of students from different departments of Government College University Faisalabad,Punjab Pakistan.. The sample is selected randomly from the students of Business Management and Administration, Social sciences, computer sciences and from different faculty members from different departments . Survey statistics and questioners are attached in the end of this report. For the purpose of analysis simple percentages of the data are calculated to show the trends of the population.

5.3 Data Collection and Analysis

Table1 shows the response of the respondents to different questions, column with male head shows the response of the males while column with female header shows the response of the females and the combined column shows the average of both males and females against each of the 20 questions.

Table2 shows the head wise percentage trends of the respondents. For example the 56.11% trend of male respondents toward Education is obtained by taking the average of the answers of first seven questions (i.e. first seven question are included in Education head) given by the male respondents and 34.92% trend of females toward Employment and Business is obtained by taking the average of the answers of seven questions (from 8-14. these seven question are included in Business and Education head) given by the female respondents. 76% combined trend of both females and males toward Entertainment and Communication is obtained by taking the average of the answers of six questions (from 15-20. these six question are included in Entertainment and Communication head) given by both male and female respondents.

If we take the male respondents then in education segments 85.71% of male respondents use computer for research and educational purposes, 85.71% said that they know the use of encyclopedias and search engines. 35.71% have applied for admission in any foreign university. 35.71% are using e-libraries, 85.71% browsing search engines and encyclopedias and 35.71% use the cell phone for browsing search engines and encyclopedias. 28.57% make conference calls for group studying. Educational head shows in aggregate 56.11% average.

In employment and business head 0% males have online jobs, internet helped 64.28% to get any job, 14.28% know about PPC advertisement programs. 21.42% know about affiliate marketing . 7.1% shop online, 50% are aware of BSM strategies. 50% are using e-Banking and money transfers. In aggregate 17.34% of the male respondents uses ICTs for employment and business purposes.

If we have a glance at entertainment and communication segments then 64.28% of male respondents are the part social networks and communities. 100% watch online videos and movies, 35.71% are aware of 3G cellular technologies. 85.71% use cell phones for playing games, songs and video clips. 100% use cell phones for communication through SMS, MMS and WAP . 85.71% use internet for e-mailing and chatting. In aggregate 78.56% use ICTs for entertainment and communication purposes.

If we take the female respondents then in education segments 93.75% of female respondents use computer for research and educational purposes, 93.75% said that they know the use of encyclopedias and search engines. 18.75% have applied for admission in any foreign university. 6.25% are using e-libraries, 93.75% browsing search engines and encyclopedias and 43.75% use the cell phone for browsing search engines and encyclopedias. 25% make conference calls for group studying. Educational head shows in aggregate 61.50% average.

In employment and business head 6.25% males have online jobs, internet helped 68.75% to get any job, 37.5% know about PPC advertisement programs. 37.5% know about affiliate marketing . 31.25% shop online, 31.25% are aware of BSM strategies. 31.25% are using e-Banking and money transfers. In aggregate 34.92% of the female respondents use ICTs for employment and business purposes.

If we have a glance at entertainment and communication segments then 56.25% of female respondents are the part social networks and communities. 62.5% watch online videos and movies, 62.5% are aware of 3G cellular technologies. 93.75% use cell phones for playing games, songs and video clips. 93.75% use cell phones for communication through SMS, MMS and WAP . 81.25% use internet for e-mailing and chatting. In aggregate 75% use ICTs for entertainment and communication purposes.

If we take combined look then In education 90% of uses computer for research and educational purposes, 90% said that they know the use of encyclopedias and search engines. 23.34% have applied for admission in any foreign university. 55.67% are using e-libraries, 43.34% use the cell phone for browsing search engines and encyclopedias. 30% make conference calls for group studying. This survey shows in aggregate 60.5% of the sample uses ICTs for educational segments.

In employment and business head 3.34% have online jobs, internet helped 63.67% to get any job, 23% know about PPC advertisement programs. 30% know about affiliate marketing . 20% shop online, 40% are aware of BSM strategies. 40% are using e-Banking and money transfers. This survey shows in aggregate 34.5% of the sample uses ICTs for employment and business head.

If we have a glance at entertainment and communication head then 60% of respondents are the part social networks and communities. 80% watch online videos and movies, 46.67% are aware of 3G cellular technologies. 90% use cell phones for playing games, songs and video clips. 96.67% use cell phones for communication through SMS, MMS and WAP . 83% use internet for e-mailing and chatting. In aggregate 76% use ICTs for entertainment and communication head.

Graph1 shows the trend of the male respondents toward all the twenty questions individually. Graph2 shows the trend of the female respondents toward all the twenty questions individually. Graph3 shows the comparison between the males and females and their combined response to all the 20 questions.

Graph5 and Graph6 show the combined trend of respondents against each of the three heads. Graph6 and Graph7 show the comparison of males and females against of the three heads.

5.4 Conclusion

This is the information age and to compete the ever changing and growing world we have to move fastly and side by side. In literature view we have mention the importance of ICT with respect to economy. After 9/11 big changes began to happen in the world and introduction of ICTs in Pakistan started. Since then Information and Communication Technologies have grown as a sector in Pakistan and have been contributing a major part in economy. As Pakistan is an agricultural economy so it is a do or dies matter to realize our water reservoirs are diminishing and to an agricultural economy it’s a deadliest truth. So it’s time to find new dimensions new resources and to grow up new sectors.

Our survey also shows the importance of ICTs in Pakistan. One can easily observer the trends that how much we have to do? And where we are standing? New generation on their own is doing a lot they are self motivated and intelligent, they have potential and ideas, all we need is to provide proper environment so the plants can become trees and can reform our future. We suggest;

1. Proficiency in ICT skills is now regarded as important as basic reading and writing skills. In order to achieve computer literacy among the entire population, ICTs should be incorporated into the formal education system of a country.

2. It must be noted however, that this process does not begin and end with putting computers in schools. Maximum use and benefits can only be derived through corresponding changes in approach to teacher training, curriculum development and administration.

3. This can only be achieved by involving input from representatives of all stakeholder groups, for the development and implementation of the necessary policies and strategies. To gauge the extent to which this goal achieves development which is sustainable, practical measures will have to be put in place.

4. Foreign investors must be encouraged so we could be provided with opportunities of employment.

5. Taxes on Computer equipments and accessories must be cut off so the computers may become cheep.

6. Government must train the persons with advanced and latest technologies as soon as it is introduced in the market e.g. In Pakistan people are still using Visual Studio 6 which was introduced in 1998.

7. We can see from the survey that people use ICTs for entertainment more than the educational or business use so people should be educated about the miracles of ICTs other than entertainment.

8. Immoral use of ICTs must be discouraged. According to a report by google, Pakistan is one of the countries where pornographic contents are highly browsed. Again awareness is the key factor. So both Government and Private sector should arrange seminars, workshops and awareness programs.

References

1. Pakistan ICT Indicators: www.statpak.gov.pk/depts/fbs/publications/pakistan_ict/pakistan-ict-indicators.html

2. Guide to Measuring the Information Society: www.oecd.org/dataoecd/41/12/36177203.pdf

3. Information Society: en.wikipedia.org/wiki/Information_society_(disambiguation)

4. According to Mobile Cellular Policy Report 2006-07 by PTA

Report By: Muhammad Abubakar Ali

Masturbation : An economics way to understand

2010-08-05T15:49:00.000-07:00

Hay guys I am back with a new post and it’s about public health and safety. The major problem of our country is that people are afraid of talking about. I think most of the guys will find this interesting and beneficial. Today we are going to see how much the masturbation cost and what are its benefits. I am not a medical doctor and I think like an economist thinks. So the best way so far is to conduct a cost benefit analysis and interpret the results. In such an analysis we can estimate the cost and benefits of a certain activity to see its feasibility and reliability.

As we know there are agents in an economy which are supposed as rational agents. A rational agent is one who is well aware of the situations, similarly in our case a rational masturbator will be the one who is well aware of dangers (cost) and benefits of his activity and will efficiently employee his natural resource in a balanced manner.

Now the question arises, why someone will masturbate? To find the answer I have conducted many interviews. In our case firstly we analyze the benefits.
Many people masturbate, at all ages too; it relaxes them, takes pressure away, and makes them feel great, release excess stress. Some people answered that it is better to masturbate rather than you involve yourself in “Zinnah” and majorly it is due to sexual satisfaction. There are many other factors but I’m not taking them in account because they are covered in the reasons I have described above. So we can aggregate all these points as benefits of masturbation. Now we analyze the cost of masturbation. People said when someone masturbate in excess they may lose their health may caught themselves into severe problem even impotency (as they may face stiffness and reduced length in case of males), they can loose their mental abilities especially memory. They forget names, dates and events. So to get rid of these situations they will surely get themselves the doctors, psychiatrists and “Hakims” and will pay them. We can account all these things as the cost of masturbation. I have also used a term the Density, it means how much a person masturbates, the more he/she masturbates the higher the density, the less they masturbate the lower the density.

Now take look on the diagram. The green curve shows the benefits and the red curve shows the cost, we can see when density is low i.e., at point “Qa” the benefits are higher i.e. at point “Ba” and the cost is at point “Ca” here Be⁄Ce>1. At point “E” a rational agent will be in equilibrium. So the “E” point is last point at which one should masturbate and at this point Be⁄Ce=1. Any points rightward to equilibrium will yield more cost than benefits. For instance at point “Qb” the benefits are reduced to point Bb and cost increases to point “Cb” at this point Be⁄Ce<1.

So on the basis of above given analysis one should control his cost and benefits regarding masturbation. I have written this article by keeping in the economics of public safety and health. In the end I will like to discuss that it is intrinsic property of nature that each system has a built-in recovery system, so even if someone has exceeded the equilibrium level he/she should stop the excessive masturbation. By some time the system will automatically obtain equilibrium. If you like the article or for any suggestions send me email.

Article By: Muhammad Abubakar Ali

Terrorism and Economy

2010-08-02T05:52:00.000-07:00

Terrorism is the systematic use of terror especially as a means of coercion. At present, there is no internationally agreed definition of terrorism. Common definitions of terrorism refer only to those violent acts which are intended to create fear (terror), are perpetrated for an ideological goal (as opposed to a lone attack), and deliberately target or disregard the safety of non-combatants.

Terrorism has occurred throughout history, but today the world is experiencing a global rebirth of attacks. Today it no longer affects only small societies, such as isolated third world countries who fell victim to regular terrorist attacks. The terrorist violence that is on the rise today has informed citizen all over the world about different types of terrorism. Also with the resurgence the world is experiencing of terrorism, the Nation's have been to do what they can to eliminate terrorism. Mainly terrorism has social, psychological and especially economic effects on societies. And we’ll have an eye on the effects of terrorism on international markets, businesses and commerce activities.

Extant research on the effect of trans-national terrorist attacks on international commerce has found evidence within a gravity model framework that terrorism reduces bilateral trade flows. The terrorism creates the overall risk environment for businesses in a country. Furthermore, many terrorist attacks actually involve an attacker from a particular country and a target in another country. The effect of terrorism on trade between countries is directly the effect of a terrorist incident involving an attacker from one country against a target in another, like the recent Mumbai attacks have highly affected the Indo-Pak economic activities. The idea is that such bilateral terrorist attacks more closely reflect the affinity and quality of the relationship between the citizens of the two relevant countries and hence, better represent the actual risk posed to traders in the two countries.

The possibility of an international terrorist activity has suggested to policy makers the need to consider the possibility of border closures to interrupt trade, international business travel, tourism and the loss of immigrant labor. In an era of significant globalization, the costs of such measures are substantial. On the other hand, the duration of a worst-case outbreak could be as long as many years and hundreds of thousands could die. The results must be assessed carefully in light of the uncertainties involved and the fact that this could be an extreme event outside the normal range of the data used to estimate the model. Nevertheless, the estimated costs of border closure and the benefits (the dollar value of lives saved and health expenses minimized) are sufficiently close that closing the border merits serious attention as a mitigation strategy if a pandemic breaks out.

The terrorism also effects in socio economic ways. Now a day’s Governments have to increase their non development expenses to ensure the security and safety of the citizens and for provision of proper environment for business activities. However, conducting benefit-cost analyses of terrorism security efforts is difficult for several reasons including: uncertainty about terrorism threat; lack of data on the effects of security measures on reducing terrorism risks, so due to high cost of precautionary expenses welfare activities are highly reduced.

Terrorist activates also effect the international stock markets. Financial markets’ reactions to these sorts of events are especially relevant, as they reflect the immediate investors’ perceptions about the short and medium term economic impact of the attacks ceteris paribus (as normally no additional information except the one referring to the attacks is considered). Thus financial markets are the first to efficiently take on board and transform the news of a terrorist attack into economic information.

Increasing globalization of economic and social activities worldwide makes catastrophe risks from terrorism more and more global due to interdependencies across sectors and over time. A hallmark of the 21st century is that we have entered a new era of catastrophic risks with pressure for the private and public sectors to react extremely quickly even though they cannot always predict the impact that their actions will have. Thus any large scale terrorist activity can put down the global economy. Managing global risks under conditions of uncertainty, interdependency and competing interests is far from simple. The World Economic Forum (WEF) launched the Global Risks initiative to address some of the issues related to these events under a joint initiative with several large companies and the Wharton Risk Management and Decision Processes Center. Building on the WEF Global Risks 2007 report this paper applies pathways to mitigation by the private and public sectors to the risks of terrorism and natural disasters. These pathways include improving insight, enhancing information flow, refocusing incentives and improving investment.

Finally globalization is a powerful real aspect of the new world system, and it represents one of the most influential forces in determining the future course of the planet. It has manifold dimensions: economic, security, political, and others. Two important aspects of globalization are global business and global terrorism, with the two linked. Global terrorism makes use of global business and global business could play a major role in reducing the dangers of global terrorism. Global business looks at the role of security; the role of planning in creating options for response and resilience; how detection should be integrated into the framework both for "expected" and "unexpected" disruptions against terrorism; the execution of business continuity; and issues of corporate culture beyond planning for bouncing back from disruptions. Global business could have an important role as a major player in the development of new global institutions that would combine public and private interests on a multinational basis to counter global terrorism, challenging the acquisition of various resources by global terrorists.

My Note: Dear friends in my institutes I was given a task to write a note on Terrorism and economy. I presented them the above written article. I remember I compiled this article from different online materials but unfortunately I lost the references (I think manly it was from wikipedia). I have also added a lot from myself. I wonder if someone needs this article so I posted it.

Monetary policy and the role of Central Bank

2010-07-31T05:29:00.000-07:00

The policy with which the Central Bank controls the money supply in the economy is called the monetary policy. As Central Bank reduce the money supply in the market the interest rate increases or the other way we can say that to increase the Market interest rate the Central Bank reduces the money supply. Now the question arises that how the Central Bank do so? The simplest answer to this question is open market operations by the Central bank. In open market operations the central bank purchases or sales the bonds, security and treasury bills‎ in open market to control the money supply and inflation rate. When it purchases the bonds, securities and TB from market the money supply in the market increases and increased money supply leads to lower market interest rates. These lower interest rates or low cost of borrowing encourages the borrowers. As a result the domestic consumption increases this leads to demand pull inflation in the economy. So with the help of tight monetary policy the Central Bank increases the policy rate to control the inflation.

New Monetory Policy by The State Bank of Pakistan

2010-07-30T13:34:00.000-07:00

From the beginning of this fiscal year persistent inflation and fiscal problems are resisting the improvement in the Balance of Payment and recovery of the falling economy. Due to uncertainty and worsen economic conditions the gap between national savings and investment has squeezed mainly because of decline in investments. At the same time aggregate domestic demand is exceeding the aggregate supply. Aggregate supply is squeezed mainly due to increased cost of production which is led by energy crises and increase in value of primary inputs. And the external debts has increased to $55.266 billion in January 2010 from $43.141 billion in the corresponding period of 2008, showing a net increase 28 percent in the last two years of the present government. So all this led to worsen inflation in Pakistan and government is not taking appropriate fiscal measures to control this situation. As inflation rate of 11.7% in fiscal year 2010 was 2.7% higher than the announced target of 9.5%. Inflation is projected to remain from 11% to 12% in fiscal year 2011.

To sterilize risks to macroeconomic stability, monetary policy has to take lead for containing aggregate demand pressures emanating mainly from expansionary fiscal position. Therefore, SBP is increasing the policy rate by 50 basis point, i.e. from 12.5% to 13% with effect from 2nd August 2010.