Economy

Jamaica Property Tax Increase 2010

2011-06-09T07:12:00.000-07:00

Jamaica Property Tax Increase 2010

Informational guide to starting a college saving plan

2011-02-15T23:08:00.000-08:00

Starting a college saving plan

Numbers of surveys and studies have been publishing describing how parents prepare for future college costs. Imagine your child coming to you with an acceptance letter from "the" college. The one he’s been dreaming of all through high school. That is the one, which perfectly matches to his career aspirations.

A college education is one of the best investments you can make for your child's future. However, the high cost of college may alarm you especially if you have waited too long to begin saving. For example, a Cover-dell Education Savings Account (formerly referred to as the Education IRA), with its annual contribution limit of $2,000, will not offer much help if your child is already in high school. In addition, prepaid tuition plans are attractive, but only if your child is willing to attend a school that participates in the plan.

Fortunately, there is another option for your college savings plan. Created in 1996, state-sponsored college savings plans (or Section 529 plans, after the IRS code that created them) allow flexibility in choosing a school and the opportunity for late starters to make sizable investments while reaping tax breaks.

Only one thing could make you prouder for knowing that you have done your homework, too. Anyway, where your child is accepted or what financial aid offered is not the matter, you have the resources to afford the college of choice.

You probably do not need a survey to tell you what you already know:

· Kids grow too fast.

· College is expensive.

· What is the time to start savings and planning?

Your child’s college tuition fees could be one of the largest expenditures you ever make. In addition, if you have more than one child, the financial commitment is even greater. Millions of others share the financial challenge you face.

New investment programs bring new opportunities, but they may make decisions more difficult for people who want the best education possible for the children in their lives.

Remember, even if your goal seems overwhelming now, the proper planning and saving can put the cost of any college within your reach.

Lot’s of websites analyzes the investment performance figures for thousands of 529 portfolios and ranks the 529 savings plans from best to worst for one-year investment performance, three-year investment performance and five-year investment performance.

The top performing 529 plans

Pros and Cons

Flexibility in contributions and college choice are the biggest advantages of Section 529 plans over other tax-deferred college savings vehicles. Even though these plans are state-sponsored, you do not need to be a resident of the state to participate, although you may miss state tax benefits by participating in an out-of-state plan.

Apart from tax savings, these plans offer the advantage of professional asset management. Each state contracts with a single asset management firm to oversee the plan, so by comparing various state plans, you will be able to choose from several professional management companies.

The primary drawback to Section 529 plans is investment risk. Unlike state-sponsored prepaid tuition plans, returns from Section 529 plans they are not guaranteed. This means that your investment could lose value, perhaps just as your child is beginning college. Although the firms that manage Section 529 plans use less-risky asset allocations to reduce risk as your child nears college, the risk cannot be, eliminate altogether.

You will also want to have a thorough understanding of contribution and withdrawal rules before investing in a plan, since rules vary depending on the state. Pay particular attention to rules regarding transfers, early withdrawals, or withdrawals for things other than college expenses. Penalties imposed if withdrawals are not been used for qualified higher education expenses (generally 10% on earnings only). In producing our rankings, we compared the reported investment performance of a subset of portfolios from each 529 savings plan. Lower the "percentile," much better the details on our methodology, Ranking.

1. Start Your 529 College Savings Plan Early

The earlier you start to save in a 529 plan, the more time your investments have to grow, so open a 529 plan or Coverdell Education Savings Account (ESA) as soon as possible after your child is born.

Saving for your child’s education through a 529 plan gives you the advantage of growing your money tax-free while in the plan and distributions generally not taxed if used for qualified expenses such as tuition or textbooks. Check out Sec.gov and search for “529 Plans” to learn about the types of plans available, including the Prepaid Tuition Plan and the College Savings Plan.

2. Watch Out for 529 Plan Fees

Choose a 529 plan with the lowest possible fees and without any loads. Any fees, loads, or commissions you pay to an investment adviser or mutual fund manager will eat up your returns. The best low-cost investment strategy is to find a plan offering portfolios of index funds or exchange-traded funds (ETFs). Many investors though prefer rolling savings bonds into a 529 plan just watch out for any associated fees.

3. Compare 529 Plans

Compare the features of several home state and out-of-state 529 plans to get the best bang for your education buck. Every state now has at least one 529 plan available, and each 1 can differ greatly from state to state. You should research the features and benefits of your 529 plan before you invest, compare 529 college plans at Morning star 529 Plans.

4. Get a 529 Plan Grant or Scholarship

Some states (but not all) offer tax incentives, contribution matches to 529 plan investors. For example, if you invest in a 529 plan from your home state, your state may match part of your contribution through an educational grant or scholarship. This varies from state to state, so check your state’s 529 plans and research tax treatment before investing.

5. Consider 529 Plan Alternatives

If you’re not comfortable handing over your child’s education savings to a state-based 529 plan with all their rules, fees and regulations then consider an alternative with more financial freedom.

Instead of investing in a 529 plan, put your money into a taxable account at your favorite online brokerage and invest in a portfolio of low-cost and tax efficient index funds, exchange traded funds, and CDs. Depending on your approach, the savings in fees by managing the investments yourself can more than offset the tax savings of a 529 plan. Be sure to do the calculations beforehand to determine if forgoing tax savings to preserve your financial freedom can save you money over the longer term.

A 529-college savings plan is a great way to stash some cash for school. Just be sure to compare 529 plans before signing on the dotted line

Before You Start

Talk to your child about which colleges he or she would like to attend. (State schools may allow you to prepay tuition at today's rates.)

Pull out copies of your household budget and consider ways you could spend less and save more for college.

Ask friends and family members who are currently contributing to a 529 plan for advice about making a well-informed decision.

Tax implications

One of the best ways to increase the affordability of your child’s education is to take advantage of federal tax breaks aimed at families saving and paying for college. These include the following:

Qualified Tuition Programs (529 plans) - Earnings grow tax-deferred and distributions are tax-free when used for qualified post-secondary education costs.

Coverdell Education Savings Accounts - Earnings grow tax-deferred and distributions are tax-free when used for qualified post-secondary education costs. ESAs may be the withdrawn tax-free for primary and secondary school expenses before 2013.

U.S. Savings Bonds - EE and I bonds purchased after 1989 by someone at least 24 years old may be redeemed tax-free when the bond owners, their spouses, or dependents pay for college tuition and fees. In 2011, the tax exclusion is phase out for incomes between $71,100 and $86,100 (between $106,650 and $136,650 for married taxpayers filing jointly). These income limits increase each year.

Individual Retirement Accounts - early withdrawal penalties are waive when Roth IRAs and traditional IRAs are use to pay the qualified post-secondary education costs of yourself, your spouse, your children, or your grandchildren. (Taxes may still be due on the withdrawals, however.)

American Opportunity Tax Credit - In 2011 and 2012, a parent may claim a tax credit for 100% of the first $2,000 and 25% of the next $2,000, of a dependent child’s college tuition and mandatory fees, for a maximum $2,500 annual tax credit per child. Students may claim the credit only if they are not claimed as a dependent on another person’s tax return. The credit is phase out for incomes between $80,000 and $90,000 (between $160,000 and $180,000 for married taxpayers filing jointly). The credit are allowed only for students those who are attending a degree program for at least half time and who have not completed their first four years of academic study before the beginning of the taxable year. It cannot be claimed in more than four tax years for any one student.

Lifetime Learning Credit - A taxpayer may claim a tax credit for 20% of up to $10,000 in combined tuition and mandatory fees for himself, his spouse, and his dependent children. This equates to a $2,000 tax credit. In 2011, the credit is phase out for incomes between $51,000 and $61,000 (between $102,000 and $122,000 for married taxpayers filing jointly). There is no requirement that the student be studying towards a degree or be enrolled at least half-time, and there is no limit on the number of years the credit may be taken.

Tuition and Fees - An above-the-line deduction (this means you do not have to itemize your deductions) for up to $4,000 of the college tuition and related expenses of yourself, your spouse, or your dependent is available in 2011 if your income is $65,000 or less ($130,000 or less if you are married filing jointly). For the taxpayers with incomes between $65,000 and $80,000 (between $130,000 and $160,000 for married taxpayers filing jointly). The deduction limit is $2,000. The deduction is not available if an American Opportunity or Lifetime Learning credit claimed for that student's expenses for the same tax year. This deduction scheduled to expire at the end of 2012.

Deduction for Student-loan Interest - Up to $2,500 in student loan interest may be deducted above-the-line as long as the debt was incurred to pay the college costs for yourself, your spouse, or your dependent, while enrolled as a student at least half-time in a degree program. For 2011, the deduction is phase out for incomes between $60,000 and $75,000 (between $120,000 and $150,000 for married taxpayers filing jointly). A student claimed as a dependent may not take the deduction on his or her own return.

Tax-free Scholarships - Most scholarships and grants are tax-free if the recipient does not have to provide services in exchange for the award.

Tax-free Educational Assistance - Employers may pay and deduct up to $5,250 in college and graduate school costs for each employee under a Section 127 educational assistance plan. The education does not have to be job-related. The benefit is tax-free to the employee, but cannot be use to pay for an employee’s children or other family members.

Other alternatives

Adviser-sold 529 plans

Broker-sold 529s offer definite advantages as well.

The most important benefit is that you will be receiving advice from a financial professional that can extend beyond planning for college. A capable professional will attempt to match the right 529 plans to your particular investment goals and risk preferences and help to coordinate your college planning with your other financial objectives, such as affording a comfortable retirement or minimizing potential estate taxes.

Comprehensive financial planning is no small task. In addition, financial professionals are generally not permitted to dispense legal or tax advice, their knowledge of the quirky rules and restrictions surrounding the income tax and gift tax treatment of 529 plans can help immensely.

In addition, certain mutual funds are available only through broker 529s.

Use our "Find a 529 pro" directory to find a financial planner. The planners listed here are test by us, have access to our professional-level 529 content and tools and many have attended our educational workshops. The directory includes contact information on both commissioned brokers and fee-only financial planners in your area.

Even if you feel capable of doing the research and planning on your own, you may decide that the time you save by using professional financial help is worth the cost, which typically will be either commission-based or fee-for-service. Brokers generally receive a commission on the amount you invest. Fee-only planners bill on an hourly basis or charge a certain percentage of the value of your portfolio.

Still, the question remaining, how will you finance that investment?

Pay as You Go
your child could help pay for college by getting a job, but students must already juggle studies and other college activities. Even a part-time job might detract from their primary focus – getting an education.

You can also plan to pay college expenses out of your future income as long as you realize that doing so might require substantial cutbacks in other areas of your family budget.

Pay Later
Some might suggest that you approach college tuition as you would buying a home – borrow the money to pay for college and simply repay the debt with higher earnings after graduation. Though many parents see advantages in having children contribute to their education expenses, a college education can be as costly as buying a home. How many parents want their children to start out with such substantial debt?

Find Someone to Help Pay
Scholarships and grants are the ideal financial aid. They do not have to pay back. However, according to the College Board, less then 48% of all federal financial aid comes from scholarships and grants, while the other 47% is loans (The rest is federal work-study and the value of education tax benefits.)

Save Now for More Freedom and More Choice later
saving now is the best way to ensure that you have options later. After all, you would like your child to select a college that offers the best education and not necessarily the best financial aid.

You probably also want the comfort of knowing that you won’t be dependent on outside sources like loans or scholarships to meet college expenses.

Many strategies and investment vehicles are available to help you maximize your college savings. Selecting a suitable strategy and the best combination of investment vehicles is critical. For each option, you face the task of evaluating key characteristics including:

The potential for growth

Risk of loss

Tax implications

Ownership and control

Ease of management

Set aside the cash

Although you cannot set up a 529 college savings account before your baby has a Social Security number, you can set aside some cash to start the program as soon as possible. Most plans can be start with an initial $25 to $50 contribution. You could also start a 529 plan for yourself or a cousin of the child then switch the beneficiary. Ken Nussbaum, a CPA and personal financial specialist with K. Nussbaum & Associates in Richmond, Vt., says that both options have costs and benefits.

"You may miss out on the immediate (state income) tax benefits and a little bit of growth (if you set up the account after the baby is born), but then you also don't have the extra administrative headache of changing the beneficiary," he says.

Develop a funding strategy

You cannot know what your child will want to do for his or her education before he or she is born, but you can certainly use an online calculator to get a sense of what college might cost by the time he or she is 18. You can also come up with a preliminary plan about how much you would like to contribute to the 529 plan and how far that will take you based on typical investment returns.

Compare your choices and select a plan

Years ago, most 529 plans had just a few investment options. Today, the choices can be dizzying. Now is the best time to do research on your options since you are more likely to have the time and energy to do so than when you have a newborn in the house. It is generally best to start with your own state's 529 plans. Visit the website to find out the details of the available plan as well as any state income tax breaks you might receive as a result. Also, decide if you want an age-based plan that adjusts automatically over time or a static plan that you can control yourself. If you are not happy, check out the 529, plans offered through other states.

Talk to relatives

Grandparents and other relatives are often eager to put money aside for a grandchild when he or she is born. "Grandparents might immediately think of doing something like a $1,000 savings bond," says Pietroburgo. "But this is the time you can say, 'Would you mind putting some money into a 529 plan rather than doing a savings bond?'" she says.

"Savings bonds are great but they can get lost, and a 529 really is one of the best savings vehicles for education," Pietroburgo says.

If other family members have expressed interest in doing something for the child, politely encourage them to consider a 529 plan. Sites like FreshmanFund.com allow you to set up an account to which friends and family can easily contribute.

Start smart habits

The best way to get on the right track is to begin now. You can have a small amount of money pulled from your paycheck before you even see it for college savings. In addition, commit to increasing that amount every year or every time you get a raise, says Nussbaum.

"As you get more income, it makes it a lot easier to ratchet up that amount," he says. "Psychologically, it's much easier to go from $200 a month to $400 a month than to go from $0 to $200 a month." If you start today, you will be well preparing by the time your child gets a college acceptance letter.

Establish a savings budget.

One of the first steps you should take in planning for your child’s future college expenses is to establish a savings goal. There are many very useful college cost calculators on the Internet and we encourage you to utilize them. However, you can also get rough an idea of how much you should be saving every month just by referring to the chart below. It shows the monthly savings goal from now through college graduation for a family with one child expected to enroll in the average four-year public university, the average four-year private college, or the average Ivy League college/university.

Minimize taxes.

Take advantage of the fact that your child can receive up to $950 in investment income without paying federal income tax (and at low tax rates above that amount as long as the “Kiddy Tax” does not apply). By gifting income-generating assets into a UTMA account now, or gifting appreciated assets later, you can effectively shift income and capital gains out of your higher tax bracket. The opportunities for tax savings may be even better if you can employ your child in the family business. Remember that any assets gifted to your children are theirs to control when they reach a certain age under state law, and that a student’s assets and income are count more heavily under financial aid formulas. Be sure to speak with your tax adviser before making any tax-related decisions.

Consider 529 savings programs and education savings accounts even for older children. Just because your child is already in, high school does not mean you cannot benefit from tax-advantaged college plans. If you are most recent Form 1040 shows income tax on interest, dividends, or capital gains distributions, you have the chance to save taxes with a 529 plans or ESA even if only for a few years. If your state offers a tax deduction for contributions to its 529 plan, you might even benefit by opening an account and soon thereafter start taking distributions to pay college bills.

Invest tax-free whenever possible. If your child will be attending a private, religious elementary, or secondary school, consider opening an ESA and contributing up to $2,000 per year. However, the K-12 exclusion ends after 2012. If your child still has money in the ESA after high school, it can then be use tax-free for college.

Create the right asset mix between your taxable and tax-free investments. If you maintain a taxable investment portfolio and a 529 plans or ESA, concentrating the growth portion of your investments in the taxable accounts and the income-producing portion in your 529 accounts or ESA. Growth stocks and low-turnover equity mutual funds are already tax-efficient, can take advantage of low capital gains rates, while income-producing investments are less tax-efficient, and can benefit from the tax shelter of a 529 plans or ESA. Capital losses in a taxable investment can also provide a tax benefit, while a 529 plans or ESA cannot produce a capital loss (only a miscellaneous itemized deduction if fully liquidated).

Put the right person in control. Grandparents using a 529 plan to save for a grandchild’s college education should open the account in their names if they want to maintain control and retain the ability to change the beneficiary to another grandchild. However, if the grandparents prefer that the parent control the account, they can simply contribute into the parents’ 529 account (assuming that particular 529 plan accepts contributions from a non-owner). Another easy way to “gift” a 529 plans contribution into an account for a grandchild is to make the check out in the name of the 529 plan and hand the check to the parent who can make sure it is contribute on behalf of your grandchild.

Consider professional assistance. We suggest you consult with experienced and knowledgeable financial, tax, and/or legal advisers about all the matters discussed on these pages. The issues are complex. Be aware that for some financial advisers, 529 plans and ESAs are a new phenomenon. If you are working with one, ask which particular 529 plans are available through the adviser and what makes one 529 plan better than another does. In interviewing prospective advisers, you might even ask whether they have opened their own 529 accounts. It helps to know that the professional you are relying on has personal experience with 529 plans.

Be flexible with your college planning. Programs and investments will continue to evolve. Tax laws will change and so will your own circumstances. Review your financial situation periodically and make adjustments whenever it seems appropriate.

Top 10 web sites for further info

http://www.savingforcollege.com

http://www.sensible-investor.com

http://www.squawkfox.com

http://www.collegesavings.org

http://collegesavings.about.com

http://guides.wsj.com/personal-finance/saving-for-college

http://www.babycenter.com

http://www.genywealth.com

http://www.sheknows.com

http://articles.moneycentral.msn.com

http://finance.yahoo.com

Amazon

2010-12-09T10:27:00.001-08:00

Sri Lankan Foreign Assistance

2010-12-08T06:04:00.001-08:00

Sri Lanka is highly dependent on foreign Assistance and several high-profile assistance projects were launched in 2003. The most significant of these resulted from an aid conference in Tokyo in June 2003; pledges at the summit, which included representatives from the International Monetary Fund, World Bank, Asian Development Bank, Japan, the European Union and the United States totaled $4.5 billion.

Sri Lankan Credit Rating and Commercial Borrowing

2010-12-08T06:01:00.001-08:00

Sri Lanka

had applied for credit ratings from international agencies in its efforts to apply for loans from international markets in 2005 after the election of Mahinda Rajapakse as president. Standard and Poor's has rated Sri Lanka a "B+" speculative rating, four grades below investment grade. Fitch has rated Sri Lanka with "BB-" which is three grades below investment grade. Standard and Poor's maintains Sri Lanka is constrained by providing widespread subsidies, a bloated public sector, transfers to loss-making state enterprises, and high interest local and international burdens. Standard and Poor's estimates public sector debt has reached 95 % of GDP, in comparison to CIA estimates of 89 % of GDP [9]. Sri Lanka in mid-2007 sought to borrow $500 million from international markets to shore up the deteriorating exchange rate and reduce pressure on repayment of the domestic debt market. The head of the opposition UNP, Ranil Wickremasinghe has warned that such intense borrowing is unsustainable and will not repay these loans once elected to power.

Sri Lankan Global economic relations

2010-12-08T04:43:00.000-08:00

Exports to the United States, Sri Lanka's most important market, were valued at $1.8 billion in 2002, or 38% of total exports. For many years, the United States has been Sri Lanka's biggest market for garments, taking more than 63% of the country's total garment exports. India is Sri Lanka's largest supplier, with exports of $835 million in 2002. Japan, traditionally Sri Lanka's largest supplier, was its fourth-largest in 2002 with exports of $355 million. Other leading suppliers include Hong Kong, Singapore, Taiwan, and South Korea. The United States is the 10th-largest supplier to Sri Lanka; U.S. exports amounted to $218 million in 2002, according to Central Bank trade data-U.S. Customs data places U.S. exports to Sri Lanka at $166 million in 2002. Wheat accounted for 14% of U.S. exports to Sri Lanka in 2002, down from the previous year. A brand new port is being built in Hambantota in South Sri Lanka by the Chinese government as a part of the massive Chinese aid to Sri Lanka. This will ease the congestion in Sri Lankan ports, particularly in Colombo. In 2009, 4456 ships visited Sri Lankan ports.

Sri Lankan Agriculture

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The agricultural sector of the country which producing domestic consumption such as rice, coconut and grain also a part of the culture since 2500 years. The tea industry which existing since 1867 is not a part of this sector of agriculture, it is mainly focusing on export market rather than domestic use in the country.Ganja or cannabis is mostly grown for the needs of Ayurveda, the indigenous medicine of Sri Lanka.

Sri Lankan Apparel and textile industry

2010-12-08T04:39:00.001-08:00

The apparel industry of the country which producing high quality ready made garments and the main exporters are USA and Europe. There are about 900 factories throughout country serves world's leading fashion designing companies like Victoria's Secret, Liz Claiborne and Tommy Hilfiger.

Sri Lankan Tea industry

2010-12-08T04:38:00.000-08:00

The tea industry (operating under the Ministry of Public Estate Management and Development) is one of the main foreign exchange gaining industry in Sri Lanka also became the world's leading exporter in 1995 shared 23% of the total export higher than Kenya shared 22%. The central highlands of the country, low temperature climate throughout the year, annual rainfall and the level of humidity are more favorable geographical factors for production in high quality tea. The industry was introduced to the country in 1867 by James Taylor, the British planter who arrived in 1852. Recently, Sri Lanka has become one of the countries exporting fair trade tea to the UK and other countries. It is reckoned that such projects could reduce rural poverty^.

Sri Lankan Tourism

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Unawatuna Beach is one of the finest tourist destinations in southern coast.Tourism is one of the main industries in Sri Lanka. Major tourist attractions are focused around the islands famous beaches located in the southern and eastern (e.g. Pasi Kuda) parts of the country, ancient heritage sites located in the interior of the country and lush green resorts located in the mountainous regions of the country. Also the precious stones such as rubies and sapphires frequently found in Ratnapura and its surrounding areas also a major tourist attraction in the country. The visiting tourists in areas where precious stones are available can visit Adam's Peak, Sinharaja Forest Reserve, Udawalawe National Park and Kitulgala (place of "The Bridge on the River Kwai" was filmed) as well.

The 2004 Indian Ocean Tsunami and the past civil war have reduced the tourist arrivals, however the International media reports published about the improvements in industry of January 2008 by 0.6%, March 2008 by 8.6%when comparing to last year's (2007) figures.

Sri Lankan Energy

2010-12-08T04:34:00.000-08:00

The energy policy is governed by the Ministry of Power and Energy, while the production and retailing of electricity is carried out by the Ceylon Electricity Board. Energy in the country is mostly generated by hydro power stations in Central Province. The Sri Lankan Government (GOSL) and many individual "green groups" in Sri Lanka have been focusing on eco-friendly solutions to energy development and the country is undergoing changes to enforce stricter environmental policies in industries, both public and private.

Sri Lankan Transportation and roads

2010-12-08T04:31:00.000-08:00

Most Sri Lankan cities and towns are connected by the Sri Lanka Railways, the state-run national railway operator. The Ceylon Transport Board is the state-run agency responsible for operating public bus services across the island. The trains in Sri Lanka are very well maintained and both the National Railway and CTB employ highly qualified and experienced local engineers. Rail accidents have been minimal in Sri Lanka compared to most developing nations and train travel is rather punctual and schedules are usually well followed.
The total length of Sri Lankan roads exceeds 11,000 kilo meters (6,840 mi), with a vast majority of them being paved. The government has launched several highway projects to bolster the economy and national transport system, including the Colombo-Katunayake Expressway, the Colombo-Kandy (Kadugannawa) Expressway, the Colombo-Padeniya Expressway and the

Outer Circular Highway

to ease Colombo's traffic congestion. The government sponsored "Road Development Authority" or RDA has been involved in several large-scale projects all over the island in attempt to revolutionize the road network in Sri Lanka. The highway system is just like any highway system in any developed country with clear signage, proper paving, parking spaces, bus stops, bicycle lanes, lane indicators, luminous lighting, traffic lights and pedestrian crossings. Sri Lanka's commercial and economic centers, primarily the capitals of the nine provinces are connected by the "A-Grade" roads which are categorically organized and marked. Furthermore, "B-Grade" roads, also paved and well maintained, marked etc. connect district capitals within provinces.

Sri Lankan Financial institutions

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The Central Bank of Sri Lanka is the monetary authority of Sri Lanka and was established in 1950. The Central Bank is responsible for the conduct of monetary policy in the country and also has the supervisory powers over the financial system.^[8] The current chairman of the Central Bank is Ajith Nivard Cabraal.
The Colombo Stock Exchange (CSE) is the main stock exchange in Sri Lanka. It is one of the most modern exchanges in South Asia, providing a fully automated trading platform. The vision of the CSE is to contribute to the wealth of the nation by creating value through securities. The headquarters of the CSE have been located at the World Trade Center Towers in Colombo since 1995 and it also has branches across the country in Kandy, Matara, Kurunegala, Negombo and Jaffna.^[9] In 2009, after the 30 years long civil war came to an end, the CSE was the best performing stock exchange in the world.

Sri Lankan Macro-economic trend

2010-12-08T04:26:00.000-08:00

This is a chart of trend of gross domestic product of Sri Lanka at market prices by the International Monetary Fund with figures in millions of Sri Lankan Rupees.

Year	Gross Domestic Product	US Dollar Exchange
1980	66,167	16.53 Sri Lankan Rupees
1985	162,375	27.20 Sri Lankan Rupees
1990	321,784	40.06 Sri Lankan Rupees
1995	667,772	51.25 Sri Lankan Rupees
2000	1,257,637	77.00 Sri Lankan Rupees
2005	2,363,669	100.52 Sri Lankan Rupees

For purchasing power parity comparisons, the US Dollar is exchanged at 113.4 Sri Lankan Rupees only.

In 1977, Colombo abandoned statistic economic policies and its import substitution trade policy for market-oriented policies and export-oriented trade. Sri Lanka's most dynamic industries are food processing at the moment. Also secondly textiles & apparel, food & beverages, telecommunications, insurance & banking. By 1996 plantation crops made up only 20% of exports (compared with 93% in 1970), while textiles and garments accounted for 63%. GDP grew at an annual average rate of 5.5% throughout the 1990s until a drought and a deteriorating security situation lowered growth to 3.8% in 1996. The economy rebounded in 1997-98 with growth of 6.4% and 4.7% - but slowed to 3.7% in 1999. For the next round of reforms, the central bank of Sri Lanka recommends that Colombo expand market mechanisms in non plantation agriculture, dismantle the government's monopoly on wheat imports, and promote more competition in the financial sector. A continuing cloud over the economy is the fighting between the Government of Sri Lanka and the LTTE, which has cost 65,000 lives in the past 15 years. Government provides employment for 13% of the work force and follows state enterprise oriented policies. Privatization of such enterprises has stopped and reversed, with several new state enterprises launched.

Sri Lankan Labor

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More than 20% of the 6.1 million-strong labor force, excluding the north and east, is unionized. Trade union membership is on the decline. There are more than 1,650 registered trade unions, many of which have 50 or fewer members, and 19 federations. Many unions have political affiliations. The Ceylon Workers Congress (CWC) and Lanka Jathika estate workers union are the two largest unions representing workers in the heavily unionized plantation sector. The president of the CWC also is Minister of Livestock Development and Estate Infrastructure. The CWC's agenda includes political issues. Some of the stronger and more influential trade unions include the Ceylon Mercantile Union, Sri Lanka Nidhahas Sevaka Sangamaya, Jathika Sevaka Sangayama, Ceylon Federation of Trade Unions, Ceylon Bank Employees Union, Union of Post and Telecommunication Officers, Conference of Public Sector Independent Trade Unions, and the JVP-aligned Inter-Company Trade Union. The unemployment rate has declined in recent years and hovers at 10%. The rate of unemployment among high school and college graduates, however, remains proportionally higher than the rate for less-educated workers. The government has embarked on educational reforms it hopes will lead to better preparation of students and fewer mismatches between graduates and jobs. In addition, it also has begun a youth corps program to provide employment skills to the unemployed.

Sri Lankan Economic history

2010-12-08T04:19:00.000-08:00

Sri Lanka began to shift away from a socialist orientation in 1977. Since then, the government has been deregulating, privatizing, and opening the economy to international competition. Twenty five years of civil war has no doubt slowed economic growth , diversification and liberalization, and the political group Janatha Vimukthi Peramuna (JVP) uprisings, especially the second in the late 1980s, also caused extensive upheavals.The Mahinda Rajapakse government stopped the privatization process and indeed launched sveral new ones (Mihin Air). Still, Sri Lanka, retains her vaunted high human development index with widespread and near total literacy rate (90.1%), result of universal education policies, widespread health delivery, low infant mortality (one of the lowest in the region). It has 555 government funded hospitals.

Following the quelling of the JVP, increased privatization, reform, and a stress on export-oriented growth helped revive the economy's performance, taking GDP growth to 7% in 1993. Economic growth has been uneven in the ensuing years as the economy faced a multitude of global and domestic economic and political challenges. Overall, average annual GDP growth was 5.2% over 1991-2000. In 2001, however, GDP growth was negative 1.4%--the first contraction since independence. The economy was hit by a series of global and domestic economic problems and affected by terrorist attacks in Sri Lanka and the United States. The crises exposed the fundamental policy failures and structural imbalances in the economy and the need for bold reforms. The year ended in parliamentary elections in December, which saw the election of a more pro-capitalism party to Parliament (while the socialist leaning Sri Lanka Freedom Party retained the Presidency).

The government of Prime Minister Ranil Wickremasinghe of the United National Party has indicated a strong commitment to economic and social sector reforms, deregulation, and private sector development. In 2002, Sri Lanka commenced a gradual recovery. Early signs of a peace dividend were visible throughout the economy. Sri Lanka has been able to reduce defense expenditures and begin to focus on getting its large, public sector debt under control. In addition, the economy has benefited from lower interest rates, a recovery in domestic demand, increased tourist arrivals, a revival of the stock exchange, and increased foreign direct investment (FDI). In 2002, economic growth bounced up to 4%, helped by strong service sector growth. Agriculture staged a partial recovery. At present Agriculture in Sri Lanka needs keen attention as it directed towards disastrous situation. Industrial sector growth, however, faltered for the second consecutive year due to weak demand and lower prices for Sri Lanka's exports. The government was able to exert fiscal control, and inflation trended down. Total FDI inflows during 2002 were about $246 million and are expected to exceed $300 million in 2003. The largest share of FDI has been in the services sector. Good progress was made under the Stand By Arrangement, which was resumed by the International Monetary Fund (IMF). These measures, together with peaceful conditions in the country, have helped restore investor confidence and created conditions for the government to embark on extensive economic and fiscal reforms and seek donor support for a poverty reduction and growth strategy. However, the resumption of the civil-war in 2005 led to a step increase defense expenditures. The increased violence and lawlessness also prompted some donor countries to cut back on aid to the country. Sri Lanka has also accumulated a 9.2 % deficit and the central bank has not intervened since late 2006 to print more currency . A sharp rise in world petroleum prices combined with fallout from the civil war has led to inflation hitting 20%.

Sri Lankan Economy

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With an economy of $43.323 billion (2010 estimate)($106.87 billion PPP estimate),and a per capita GDP of about $5,300 (PPP), Sri Lanka has mostly had strong growth rates in recent years. It is far ahead of its other core south Asian peers such as Bangladesh, India and Pakistan.

The main economic sectors of the country are tourism, tea export, apparel, textile, rice production and other agricultural products. In addition to these economic sectors, overseas employment contributes highly in foreign exchange, most of them from the middle-east.

Since becoming independent from Britain in February 1948, the economy of the country has been affected by natural disasters such as the 2004 Indian Ocean earthquake and a number of insurrections, such as the 1971, the 1987-89 and the 1983-2009 civil war. The parties which ruled the country after 1948 did not implement any national plan or policy on the economy, veering between left and right wing economic practices. The government during 1970-77 period applied pro-left economic policies and practices. Between 1977 and 1994 the country came under UNP rule and between 1994 and 2004 under SLFP rule. Both of these parties applied pro-right policies. In 2001, Sri Lanka faced bankruptcy, with debt reaching 101% of GDP. The impending currency crisis was averted after the country reached a hasty ceasefire agreement with the LTTE and brokered substantial foreign loans. After 2004 the UPFA government has concentrated on mass production of goods for domestic consumption such as rice, grain and other agricultural products.

An informal Economy

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An informal economy is economic activity that is neither taxed nor monitored by a government, contrasted with a formal economy. The informal economy is thus not included in that government's Gross National Product (GNP). Although the informal economy is often associated with developing countries, all economic systems contain an informal economy in some proportion.
Informal economic activity is a dynamic process which includes many aspects of economic and social theory including exchange, regulation, and enforcement. By its nature, it is necessarily difficult to observe study, define, and measure. No single source readily or authoritatively defines informal economy as a unit of study.
The terms "under the table" and "off the books" typically refer to this type of economy. The term black market refers to a specific subset of the informal economy. The term "informal sector" was used in many earlier studies, and has been mostly replaced in more recent studies which use the newer term.

Micro economics are focused on an individual person in a given economic society and Macro economics is looking at an economy as a whole. (Town, city, region)

GDP

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The GDP - Gross domestic product of a country is a measure of the size of its economy. The most conventional economic analysis of a country relies heavily on economic indicators like the GDP and GDP per capita. While often useful, it should be noted that GDP only includes economic activity for which money is exchanged.

Economic measures

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There are a number of ways to measure economic activity of a nation. These methods of measuring economic activity include:

Balance of Trade

Economic sectors

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The economy includes several sectors (also called industries), that evolved in successive phases.

The ancient economy was mainly based on subsistence farming.

The industrial revolution lessened the role of subsistence farming, converting it to more extensive and mono-cultural forms of agriculture in the last three centuries. The economic growth took place mostly in mining, construction and manufacturing industries.

In the economies of modern consumer societies there is a growing part played by services, finance, and technology—the (knowledge economy).

In modern economies, there are four main sectors of economic activity:

Primary sector of the economy: Involves the extraction and production of raw materials, such as corn, coal, wood and iron. (A coal miner and a fisherman would be workers in the primary sector.)
Secondary sector of the economy: Involves the transformation of raw or intermediate materials into goods e.g. manufacturing steel into cars, or textiles into clothing. (A builder and a dressmaker would be workers in the secondary sector.)
Tertiary sector of the economy: Involves the provision of services to consumers and businesses, such as baby-sitting, cinema and banking. (A shopkeeper and an accountant would be workers in the tertiary sector.)
Quaternary sector of the economy: Involves the research and development needed to produce products from natural resources. (A logging company might research ways to use partially burnt wood to be processed so that the undamaged portions of it can be made into pulp for paper.) Note that education is sometimes included in this sector.

Other sectors include the

Public Sector or state sector
Private Sector or privately-run businesses

Social sector or Voluntary sector

The industrial revolution

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The first economist in the true meaning of the word was the Scotsman Adam Smith (1723–1790). He defined the elements of a national economy: products are offered at a natural price generated by the use of competition - supply and demand - and the division of labor. He maintained that the basic motive for free trade is human self interest. The so-called self interest hypothesis became the anthropological basis for economics. Thomas Malthus (1766–1834) transferred the idea of supply and demand to the problem of overpopulation. The United States of America became the place where millions of expatriates from all European countries were searching for free economic evolvement.
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, and transport had a profound effect on the socioeconomic and cultural conditions starting in the United Kingdom, then subsequently spreading throughout Europe, North America, and eventually the world. The onset of the Industrial Revolution marked a major turning point in human history; almost every aspect of daily life was eventually influenced in some way. In Europe wild capitalism started to replace the system of mercantilism (today: protectionism) and led to economic growth. The period today is called industrial revolution because the system of Production, production and division of labor enabled the mass production of goods.

History

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As long as someone has been making and distributing goods or services, there has been some sort of economy; economies grew larger as societies grew and became more complex. Summer developed a large scale economy based on commodity money, while the Babylonians and their neighboring city states later developed the earliest system of economics as we think of, in terms of rules/laws on debt, legal contracts and law codes relating to business practices, and private property.
The Babylonians and their city state neighbors developed forms of economics comparable to currently used civil society (law) concepts.^[3] They developed the first known codified legal and administrative systems, complete with courts, jails, and government records.
Several centuries after the invention of cuneiform, the use of writing expanded beyond debt/payment certificates and inventory lists to be applied for the first time, about 2600 BC, to messages and mail delivery, history, legend, mathematics, astronomical records and other pursuits. Ways to divide private property, when it is contended... amounts of interest on debt... rules as to property and monetary compensation concerning property damage or physical damage to a person... fines for 'wrong doing'... and compensation in money for various infractions of formalized law were standardized for the first time in history.

Etymology

2010-12-08T03:47:00.000-08:00

The English words "economy" and "economics" can be traced back to the Greek words οἰκονόμος "one who manages a household" (derived from οἴκος "house", and νέμω "distribute (especially, manage)"), οἰκονομία "household management", and οἰκονομικός "of a household or family". The first recorded sense of the word "economy", found in a work possibly composed in 1440, is "the management of economic affairs", in this case, of a monastery. Economy is later recorded in more general senses including "thrift" and "administration". The most frequently used current sense, "the economic system of a country or an area", seems not to have developed until the 19th or 20th century.

Economy

2010-12-08T03:44:00.000-08:00

An economy consists of the economic system of a country or other area, the labor, capital and land resources, and the economic agents that socially participate in the production, exchange, distribution, and consumption of goods and services of that area. A given economy is the end result of a process that involves its technological evolution, history and social organization, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions.
Today the range of fields of study examining the economy include social sciences such as economics, sociology (economic sociology), history (economic history), anthropology (economic anthropology) and geography (economic geography). Practical fields directly related to the human activities involving production, distribution, exchange, and consumption of goods and services as a whole, range from engineering to management and business administration to applied science to finance.
All kind of professions, occupations, economic agents or economic activities, contribute to the economy. Consumption, saving and investment are core variable components in the economy and determine market equilibrium. There are three main sectors of economic activity: primary, secondary and tertiary.

Economy

Jamaica Property Tax Increase 2010

Informational guide to starting a college saving plan

Starting a college saving plan

Only one thing could make you prouder for knowing that you have done your homework, too. Anyway, where your child is accepted or what financial aid offered is not the matter, you have the resources to afford the college of choice.

You probably do not need a survey to tell you what you already know:

· Kids grow too fast.

· College is expensive.

· What is the time to start savings and planning?

Your child’s college tuition fees could be one of the largest expenditures you ever make. In addition, if you have more than one child, the financial commitment is even greater. Millions of others share the financial challenge you face.

New investment programs bring new opportunities, but they may make decisions more difficult for people who want the best education possible for the children in their lives.

Remember, even if your goal seems overwhelming now, the proper planning and saving can put the cost of any college within your reach.

Lot’s of websites analyzes the investment performance figures for thousands of 529 portfolios and ranks the 529 savings plans from best to worst for one-year investment performance, three-year investment performance and five-year investment performance.

The top performing 529 plans

Pros and Cons

Apart from tax savings, these plans offer the advantage of professional asset management. Each state contracts with a single asset management firm to oversee the plan, so by comparing various state plans, you will be able to choose from several professional management companies.

1. Start Your 529 College Savings Plan Early

The earlier you start to save in a 529 plan, the more time your investments have to grow, so open a 529 plan or Coverdell Education Savings Account (ESA) as soon as possible after your child is born.

2. Watch Out for 529 Plan Fees

3. Compare 529 Plans

4. Get a 529 Plan Grant or Scholarship

5. Consider 529 Plan Alternatives

If you’re not comfortable handing over your child’s education savings to a state-based 529 plan with all their rules, fees and regulations then consider an alternative with more financial freedom.

A 529-college savings plan is a great way to stash some cash for school. Just be sure to compare 529 plans before signing on the dotted line

Before You Start

Talk to your child about which colleges he or she would like to attend. (State schools may allow you to prepay tuition at today's rates.)

Pull out copies of your household budget and consider ways you could spend less and save more for college.

Ask friends and family members who are currently contributing to a 529 plan for advice about making a well-informed decision.

Tax implications

One of the best ways to increase the affordability of your child’s education is to take advantage of federal tax breaks aimed at families saving and paying for college. These include the following:

Qualified Tuition Programs (529 plans) - Earnings grow tax-deferred and distributions are tax-free when used for qualified post-secondary education costs.

Coverdell Education Savings Accounts - Earnings grow tax-deferred and distributions are tax-free when used for qualified post-secondary education costs. ESAs may be the withdrawn tax-free for primary and secondary school expenses before 2013.

Individual Retirement Accounts - early withdrawal penalties are waive when Roth IRAs and traditional IRAs are use to pay the qualified post-secondary education costs of yourself, your spouse, your children, or your grandchildren. (Taxes may still be due on the withdrawals, however.)

Tax-free Scholarships - Most scholarships and grants are tax-free if the recipient does not have to provide services in exchange for the award.

Other alternatives

Adviser-sold 529 plans

Broker-sold 529s offer definite advantages as well.

Comprehensive financial planning is no small task. In addition, financial professionals are generally not permitted to dispense legal or tax advice, their knowledge of the quirky rules and restrictions surrounding the income tax and gift tax treatment of 529 plans can help immensely.

In addition, certain mutual funds are available only through broker 529s.

Still, the question remaining, how will you finance that investment?

Pay as You Go your child could help pay for college by getting a job, but students must already juggle studies and other college activities. Even a part-time job might detract from their primary focus – getting an education.

You can also plan to pay college expenses out of your future income as long as you realize that doing so might require substantial cutbacks in other areas of your family budget.

Save Now for More Freedom and More Choice later saving now is the best way to ensure that you have options later. After all, you would like your child to select a college that offers the best education and not necessarily the best financial aid.

You probably also want the comfort of knowing that you won’t be dependent on outside sources like loans or scholarships to meet college expenses.

Many strategies and investment vehicles are available to help you maximize your college savings. Selecting a suitable strategy and the best combination of investment vehicles is critical. For each option, you face the task of evaluating key characteristics including:

The potential for growth

Risk of loss

Tax implications

Ownership and control

Ease of management

Set aside the cash

"You may miss out on the immediate (state income) tax benefits and a little bit of growth (if you set up the account after the baby is born), but then you also don't have the extra administrative headache of changing the beneficiary," he says.

Develop a funding strategy

Compare your choices and select a plan

Talk to relatives

"Savings bonds are great but they can get lost, and a 529 really is one of the best savings vehicles for education," Pietroburgo says.

If other family members have expressed interest in doing something for the child, politely encourage them to consider a 529 plan. Sites like FreshmanFund.com allow you to set up an account to which friends and family can easily contribute.

Start smart habits

The best way to get on the right track is to begin now. You can have a small amount of money pulled from your paycheck before you even see it for college savings. In addition, commit to increasing that amount every year or every time you get a raise, says Nussbaum.

Establish a savings budget.

Minimize taxes.

Be flexible with your college planning. Programs and investments will continue to evolve. Tax laws will change and so will your own circumstances. Review your financial situation periodically and make adjustments whenever it seems appropriate.

Top 10 web sites for further info

Amazon

Sri Lankan Foreign Assistance

Sri Lankan Credit Rating and Commercial Borrowing

Sri Lankan Global economic relations

Sri Lankan Agriculture

Sri Lankan Apparel and textile industry

Sri Lankan Tea industry

Sri Lankan Tourism

The 2004 Indian Ocean Tsunami and the past civil war have reduced the tourist arrivals, however the International media reports published about the improvements in industry of January 2008 by 0.6%, March 2008 by 8.6%when comparing to last year's (2007) figures.

Sri Lankan Energy

Sri Lankan Transportation and roads

Sri Lankan Financial institutions

Sri Lankan Macro-economic trend

This is a chart of trend of gross domestic product of Sri Lanka at market prices by the International Monetary Fund with figures in millions of Sri Lankan Rupees.

Gross Domestic Product

US Dollar Exchange

1980

Pay as You Go
your child could help pay for college by getting a job, but students must already juggle studies and other college activities. Even a part-time job might detract from their primary focus – getting an education.

Save Now for More Freedom and More Choice later
saving now is the best way to ensure that you have options later. After all, you would like your child to select a college that offers the best education and not necessarily the best financial aid.