Payroll Basics in Sap

Payroll Basics (PY-XX-BS)  PurposeThe Payroll is based on an international payroll driver. This payroll driver was modified for each country. The country-specific payroll drivers take the statutory and administrative regulations of a country into account. Since the payroll driver has a modular structure, you can use the Customizing functions to quickly modify the payroll procedure to meet the particular requirements of your enterprise. Process FlowWhen you access Payroll, the payroll driver calls the accompanying payroll schema, which consists of a sequence of functions.For each activity, the individual functions import data from internal tables and payroll relevant files. Payroll is then performed as follows:ResultAfter the payroll run, you can transfer the payroll results to Financial Accounting, or perform evaluations and create lists and statistics. **************************************************************************************************************Payroll Driver  De finitionProgram you use to run payroll.StructureFor each Payroll country version there is a country-specific payroll driver with the technical name RPCALCx0 or HxxCALC0: * For programs with the technical name RPCALCx0, the x is replaced with a country indicator, for example, D for Germany, F for France, or X for â€Å"Other countries†. * For programs with the technical name HxxCALC0, the xx is replaced with the ISO code of the respective country, for example MX for Mexico, or ID for Indonesia.The program RPCALCX0 (Payroll driver international) contains no data about tax and social insurance regulations for net remuneration calculation. The other payroll drivers contain this data. IntegrationA relevant country-specific personnel calculation schema, in which personnel caclulation rules and functions are stored, contain the steps that a payroll driver should perform during payroll. All data is stored in internal tables and saved in payroll-relevant files. *********************** *******************************************************Payroll Schema  DefinitionThe payroll schema contains calculation rules to be used by the payroll driver during payroll. SAP has developed country-specific schemas which are based on schema X000. With country-specific reports, the first character in the name refers to the country indicator (for example, D for Germany, F for France). StructureA schema consists of the following parts: * Initialization The system performs the following steps: * Updates the databases * Imports equired infotypes * Gross calculation of pay The system performs the following steps: * Processes basic data and time data * Queries off-cycle payroll runs * Reads payroll account of the last period accounted * Processes time data and calculates the individual gross values * Performs factoring * Net calculation of pay The system performs the following steps: * Calculates net remuneration * Performs bank transfersIntegrationAll data is stored in internal tabl es and saved in files with a cluster structure. ***************************************************************************************************************Payroll Relevant Files  DefinitionPayroll files contain data for payroll and payroll results. StructureThe system requires the following files for payroll: * Pnnnn (nnnn = number of the infotype) The Pnnnn files contain data that has been entered in the respective infotypes for an employee. * PCL1 The PCL1 file contains primary information, in other words, data from the master data and time recording systems. PCL2 The PCL2 file contains secondary information, in other words, derived data and all generated schemas. IntegrationWhen you start payroll, the system imports the relevant master data from the Pnnn files (for example, basic pay and tax class) and imports the time data from the PCL1 file to the IT table. The system imports the payroll results from the previous month from table ORT (for example, to form averages). The s ystem processes this data and saves the payroll results and generated schemas in the PLC2 file. *****************************************************************************************************Internal Tables for Payroll  DefinitionTables that are used for storing data during the payroll run. UseWithin Payroll, data is processed in internal tables that the system fills and reads during the payroll run. The system also changes the data in these tables during the payroll run. The results of processing are then available for other steps. The read and change access to these tables is enabled using functions that are executed in a personnel calculation schema and using operations that are executed in personnel calculation rules.StructureThe following are some of the tables used in all country versions for Payroll:Internal Tables for Payroll Table| Short text| Description| WPBP| Work Place/Basic Pay| Table WPBP is filled by the infotypes Actions (0000), Organizational Assignment (00 01), Planned Working Time (0007), Basic Pay (0008), and Cost Distribution (0027). It contains important organizational and payment-relevant data, and different partial period parameters. For more information on table WBPB, see Payment-Relevant Information in the Payroll Result. | RT| Results Table| Table RT contains the result wage types of the current period for which payroll is run.Data is transferred from table IT to table RT using the operation ADDWTE. | CRT| Cumulative Results Table| Table CRT contains the cumulations of wage types in table RT over a certain time period. | BT| Payment Information| Every entry in the Bank Transactions table (BT) of an employee, corresponds to a payment that was created in a payroll period for this employee. However, the employee is not necessarily the payment recipient of all payments. For more information on table BT, see Payment-Relevant Information in the Payroll Result. C0| Cost Distribution| Table C0 contains global information about the co st distribution for wage types. Certain costs can be distributed to other cost centers than the master cost center. The information is taken from the Cost Distribution infotype (0027). | C1| Cost Assignment from Different Infotypes| Table C1 contains information about the individual cost assignment for individual wage types. You can use the infotype Recurring Payments/Deductions (0014) and Additional Payments (0015) to assign the wage types to a cost center that is different to the employee's master cost center. V0| Variable Assignment| Table V0 contains various additional information about the wage types. | GRT| Output Table from Gross Part| Table GRT is table RT according to the gross amount in a split payroll schema. | ARRRS| Arrears| Table ARRRS contains deductions that could not be taken and so are transferred to the following period. | DDNTK| Deductions not taken| Table DDNTK contains deductions that could not be taken in the current period. | ACCR| Month End Accruals| Table A CCR contains special information on a posting period assignment for month end accruals. BENTAB| Benefits| Table BENTAB contains cumulations for certain benefits plans. | FUND| Financing| Table FUND contains information about fund commitments. This information is taken from HR Funds and Position Management. | AVERAGE| Frozen Averages| Table AVERAGE contains information about frozen averages. | MODIF| Modifiers| Table MODIF contains various modifiers that can be used as additional keys for access to Customizing tables. The system sets the modifiers in payroll with the function MOD (Determine Employee Groupings) and operation MODIF (Set Employee Groupings). VERSION| Information on Creation| Table VERSION contains creation data for the payroll result, for example the Release and payroll program. | PCL2| Update Information PCL2| Table PCL2 contains information about the last change access to a payroll result. | VERSC| Payroll Status Information| Table VERSC contains organizational inform ation about the payroll result. | STATUS| Status Indicator| Table STATUS contains eight different status indicators. | The system exports the data in these tables at the end of payroll processing in cluster tables in table PCL2 (RP cluster 2) using function EXPRT.The cluster tables are in a country-specific cluster, for example RD (Payroll result, Germany), on the database. In this way, the data is available for other processing steps, for example, evaluation. Other internal tables are not exported after the payroll run but are deleted, since they are only required during the payroll run. Internal tables for Payroll that are not exported Table| Short text| Description| IT| Input Table| During the payroll run table IT is filled with data that is to be processed. Data is transferred to table RT using operation ADDWTE.Table IT must be empty by the end of the payroll run or the personnel number is rejected. This is checked with the personnel calculation rule X070 (Cancel, if table is no t empty). | OT| Output Table| Table OT only exists temporarily during processing. If a personnel calculation rule is called using the PIT function, a loop is performed for wage types from table IT. The results are written to table OT using the operation ADDWT. At the end of the loop, table IT is restructured from table OT. | DT| Difference Table| Table DT is used to transfer retroactive accounting differences within retroactive chains. ORT| Old Results Table| Table ORT is table RT from the last payroll result (usually from the previous payroll period). Tables LRT and VORT are also formed from table ORT. | LRT| Last Results Table| Table LRT is table RT from the last payroll result (usually from the previous payroll period). It is formed from table ORT but only contains the wage types that are relevant to the current period and required often. This is controlled using personnel calculation rule X006, which reads processing class 06. | VORT| Summarized ORT| Table VORT is a version of t able ORT in which certain splits are eliminated. |

Bill Rights

The Theory that the Fourteenth Amendment incorporates the Bill of Rights established the foundation for the Warren Court’s criminal procedure revolution. The U. S. Supreme Court has incorporated many of the protections and prohibitions in the Bill of Rights. These protections are available to criminal offenders. In this paper, I will discuss which protections do not apply to the states. And the differences between the two laws: procedural and substantive. As you continue on reading, you know about, which protection is considered procedural and substantive.The protection against â€Å"ex post facto† laws means that the State cannot pass a law after a person has committed a crime and then prosecute the person for the first crime. You can only be prosecuted under the laws that in effect at the time of the crime. The protection against â€Å"Bills of attainder† prevents the State from passing a law meant to punish a certain person without judicial process. The Fourth Amendment provides general protection against arbitrary search and seizure of person(s) and property. However, there are many exceptions to the Fourth Amendment that includes a warrant.It still, does not provide broad protection of the general public from inappropriate police conduct. The Fifth Amendment provides a handful amount of protection. The protection against â€Å"double jeopardy† (which means being tried more than once for the same offense) comes from this amendment. The right to remain silent came from a defendant’s Fifth Amendment right not to be compelled to be witness against himself. This Amendment provides a broad right to due process of law. The most important Amendment is the Sixth.This Amendment gives criminal defendants the right to assistance of counsel, the right to compel witnesses to appear at trial, the right to cross-examine witnesses at trial, the right to trial by jury, and the right to be informed of the nature of charges that have been fi led against them. The right to speedy a trial allows the defendant’s trial to be waived and prevents the state from incarcerating a defendant. Procedural law comprises the set of rules that govern the proceedings of the court in criminal lawsuits as well as civil and administrative proceedings.The court needs to conform to standards setup by procedural law, during proceedings. These rules ensure fair practice and consistency in the â€Å"due process†. Substantive law is a statutory law that deals with the legal relationship between people or the people and the state. Therefore, substantive law defines the rights and duties of the people, but procedural law lays down the rules with the help of which they are enforced (Procedural Law vs. Substantive Law, 2013). Procedural law is exactly what the name implies. It sets out the procedure for how a criminal case would proceed.Every state has their own set of procedures which is usually written in a set of rules called a â₠¬Å"code of criminal procedure†. Substantive law deals with the â€Å"substance† of your charges. Every charge is comprised of elements. Elements are the specific acts needed to complete a crime. This law requires that the prosecutor prove every element of the crime in order for someone to be convicted of the crime. I believe that the Fourth Amendment is procedural because it takes procedures to be able to search and seizure a person(s) and their property.You just can’t go in and search with a reason and a warrant. To obtain a warrant you have to have a reason and steps to receive it. The Fifth Amendment is substantive because it deals with the structure and facts of the case. It defines the rights and duties of the defendant. The Sixth Amendment has the most procedural rights. It enable the right to a speedy a trial, impartial jury, informed of nature and cause of accusation, confront opposing witnesses compulsory process for obtaining favorable witnesses and rig ht to counsel. In conclusion, the U. S.Supreme Court has, through the due process clause of the 14th Amendment, incorporated many of the protections and prohibitions contains in the Bill of Rights. While reading this paper, you now know the protections that are available to criminal offenders through the bill of rights that do not currently apply to the states. You also read about the differences between procedural and substantive protections for the criminal offenders in the Bill of Rights. Included in this paper, you read about which protections were procedural and substantive in the Bill of Rights.

An Analysis of Nickel and Dimed by Barbara Ehrenreich Essay

An Analysis of Nickel and Dimed by Barbara Ehrenreich - Essay Example She rapidly discovered that even the lowest professions necessitate very tiring psychological and physical labors. Plus only one profession is not sufficient, one needs as a minimum as two if he or she plan to live in the house. Nickel and Dimed discloses the low salary America in all its obstinacy, unease and astonishing liberality, a territory of fast food and a thousand distressed tactics for continued existence. Instantaneously highly praised for its imminent, absurdity and infatuation, this book is altering the mode America perceives its working deprived. After a large number of economic history has ensued ever since the late 1990's, America went into a downturn in 2001 that characteristics of two to three years of unemployed upturn. The American's went into two conflicts that assisted them to succeed back the enormous budget shortages that they had misplaced in the 1990's, quite a few of the state's immense companies battled for the label of biggest and meanest insolvency in U.S. account and the extreme enthusiasm in the accommodation marketplace fueled by sub prime loans ran out, almost certainly declaring them of an economic slump, if not a depression, in the up-coming year. The story that Ehrenreich enlightens in this book is still a moderating interpret and it has, actually, urbanized implications in the following years that reverberate even more powerfully nowadays. Barbara Ehrenreich, a 21st century American, who still... Barbara Ehrenreich, a 21st century American, who still adheres to the belief of Socialism. At the idea of Lewis Lapham, editor of Harper's, she determined to strive to see how people moving from benefit to work may be charging and if she could endure on the minimal wages offered by a chain of low rank professions. Therefore, for the next two years, she labored as a waitress in Key West, Florida, as a home cleaner in Portland and as a Wal-Mart dealer in Minneapolis, captivating nil with her but only some garments and a laptop on which to document her imitation. In fact, she utilized her personal car throughout the first task but after that she used care on rent. At this height of the economy, Ehrenreich writes down, there are actually two stern tribulations that have to be addressed, firstly, search for a reasonable place to reside and finding services to compensate for it. An Analysis of Nickel and Dimed by Barbara Ehrenreich 3 All through her stopover, Ehrenreich discovers that at the pay rates remunerated to waitresses, maids and seller clerks almost all employees have to do together at some end, unless they have partners or spouses who put in considerable wages. Even then, if there are children, the problems can be just as sensitive. For instance, as working at Wal-Mart, she gets familiar with a woman who works six hours per day at Wal-Mart for $7.00 for each hour and then an eight hour swing at a general company for $9.00 per hour. The working underprivileged do not gain from the wide-ranging riches, although, they are influenced by it as

The differences between the battle of Waterloo and the Battle of the Essay

The differences between the battle of Waterloo and the Battle of the Somme - Essay Example This paper presents brief report of The Battle of Waterloo and The Battle of The Somme. The waterloo battle started at almost noon when the French army launched an attack on Wellington’s fortified farmhouse and buildings that were at Hougoumont. The waterloo battle was the last stand by Napoleon, in which England together with its allied powers decided to fight against Napoleon’s army after they had returned to power in 1815. During the battle, Napoleon launched attacks on the British lines but was not successful in breaking through. At the culmination of the battle that took three days, the British troops were able to go through the French ranks and authoritatively defeat the French soldiers. When the battle came to an end, Napoleon was exiled and Louis XVII resumed to the helm. On the other hand, Battle of Somme is more often than not remembered for its nonsensical slaughter when the British soldiers advanced into no man’s land and were attacked by the Germans. In reality, the battle of Somme was one that was characterized by a lot of destruction and huge losses were suffered by the two sides. The land that was gained by the British at the end of the war was comparatively small. In the end, the battle was not decisive and had not contribution towards wearing down the German troops who were eventually outnumbered when the United States joined the British forces. It had more than a million casualties and was among the bloodiest wars to ever take place in human history.

Finance Essay Example | Topics and Well Written Essays - 2250 words

Finance - Essay Example Overview The term liquidity refers to the ability of the firm to cover its debt obligations through its liquid assets, without incurring a large loss. For example, if a firm wants to repay its outstanding commercial paper obligation of one month, then it might issue new commercial papers instead of selling its assets (The Economist 2001). Thus, liquidity risk involves the inability of the firm to meet its current and its future collateral needs and cash flows, without affecting the overall financial operations of the firm (FRBSF 2010, 1). The financial firms are generally sensitive regarding funding the liquidity risks, as transforming debt maturity such as purchasing assets with the short-term deposits, funding the long-term loans or debt obligations, are the major business areas. As a response to the liquidity risk, the financial firms generally maintain and establish a system for liquidity management. This system helps in assessing the prospective requirements of funds and also en sures that the funds are accessible during the appropriate time. Before moving on to discuss the solutions firms prepare to meet out the liquidity risks, we will discuss the types of liquidity risk that prevails (Nikolaou 2009, 10-11). Figure 1 Source: (Fiedler 2002). There are two types of liquidity risks that would be discussed in this study, namely: a) Market Liquidity Risk, and b) Funding Liquidity Risk. The Market Liquidity Risk means that the assets cannot be sold in the market due to constraints in liquidity in the market. It can be due to widening of the offer spread, expansion of holding period, or making unambiguous liquidity reserves. The Funding Liability Risk means having risk when the liabilities cannot be met, when they are due, can be met when the price is uneconomic, or is systematic. There are different situations or causes due to when liquidity risk can be assessed. The situation when not a single buyer is available in the market to trade for an asset or assets, l eads to liquidity risks. Liquidity risk can be denoted as a financial risk which occurs due to uncertain liquidity. Liquidity risks might arise when the credit ratings of the firm falls, or when it experiences a sudden outflow of cash (Drehmann, and Nikolaou 2009, 4-5). The recent disintegration of several huge financial institutions reveals the critical nature of the liquidity risks and also depicts the critical role that it plays for the regulators, globally. The Bank of International Settlements (BIS) was among the first to adopt the comprehensive regime of testing liquidity risk and protecting the institutional stakeholders. The Financial Service Authorities (FSA) has also issued policy statement PS09/16, for strengthening the liquidity standards. Liquidity risk can be regarded as both eccentric as well as systematic. It plays a crucial role for the banking entities and the other industries too. Liquidity risks may vary between assets, liability and time. It includes the institu tional stakeholders like the creditors, debtors, owners, etc (Oracle Financial Services 2009, 2-4). Risk Measurement The recent fluctuations in the financial market included the payment system and several banking processes which are directly related to short-term forecasting. The control system should be such so that it can measure the liquidity risks and the performance with relation to the models utilized for market and credit risks.

Peer response Article Example | Topics and Well Written Essays - 250 words - 6

Peer response - Article Example Second, the topic and subject of research that was shared was relevant and seen to be applicable in current settings: homeschooling or distance education. With the prolific use of the internet, one of the significant applications is the access to knowledge through the online medium. One of the initial comments was the dismal regret for the inability to locate more scholarly research on the subject of â€Å"how do homeschooled students do compared with traditional-schooled students†. A quick look at scholarly journals generated only 11 results; which validated the comment. As such, one strongly believes that the lack of studies on the subject matter should be a motivating factor to pursue the study. There are vast options to discern the most appropriate research methodology and could be applied using a nearby university that offers distance education courses in additional to the traditional classroom-based

How proteins in the diet are disassembled and then reassembled to form Essay

How proteins in the diet are disassembled and then reassembled to form useful proteins in the body - Essay Example These enzymes are dipeptidases, carboxypeptidase and aminopeptidase. Since the intestinal absorption of proteins is only possible in amino acid form and peptide form so they must be broken down into amino acids and peptides. These absorbed peptides are dipeptides and tripeptides. After absorption they are transported into the cells by various transporters and channels depending upon the internal environment. Up till now, all the disassembly of proteins is extracellularly done. After this, the entire breakdown is done inside the cell called intracellular protein degradation. Inside the cell, they are taken by phagocytosis; the food vacuole is fused with lysosome. The lysosomal enzymes further degrade di and tri peptides into amino acids. Different digestive enzymes have different specificity towards their substrate. For example trypsin cleaves positively charged residue including arginine and lysine. Similarly, chymotrypsin cleaves the aromatic residues consisting of tyrosine, phenyla lanine and tryptophan. Elastase breaks the bond of small non-polar residues (alanine and glycine). If these digestive enzymes are activated without any stimulus (as protein in the diet is the stimulus for their secretion), it will lead to auto-digestion of the pancreas leading to pancreatitis, that’s why they are always secreted in an inactivated form. This inactivated form is called zymogen. Zymogen for trypsin is called as trypsinogen. It is activated by enzyme enterokinase (secreted by duodenal mucosa). Pepsin is also secreted in an inactivated form as it leads to auto-digestion of stomach. That inactivated form is called as pepsinogen which is activated in an acidic medium. The pancreas secretes the precursors of a number of proteases, such as trypsin and chymotrypsin. The intracellular degradation of protein results in the formation of amino acids. They are also degraded by ubiquitin system. After entering in the blood, amino acids are used for several purposes. One of t hem is also the formation of proteins for the body. Protein is also a structural component of cells. Plasma membrane and membranes of cellular organelles is also made of proteins. So amino acids in the blood are used for the protein formation. It is a complicated process. Any mistake or error in this can lead to many diseases as discussed in the end of this essay. The assembly of proteins is called as Protein biosynthesis. It is called as Translation which involves the assembly of proteins. Translation is only possible if mRNA is available and it is formed by the process called translation. The reassembly involves two processes transcription and translation. In transcription an mRNA is generated. It is template of one strand of double helix DNA. Transcription involves three steps: initiation of mRNA, elongation of mRNA chain and termination of transcription. Each and every step is regulated by a large number of proteins. These are transcription factors co-factors and coactivators. T heir major function is to ensure that the correct and required sequence of gene is transcribed. The process of transcription occurs in the nucleus. The double helix DNA is "unzipped" or opened by the breakdown of hydrogen bonds between the two strands by helicase. Primer attaches to the site and is followed by an initiator. Then elongation of the chain occurs by placing nitrogenous bases. The bonding occurs between adenine and uracil and guanine and cytosine.

Assignment Example | Topics and Well Written Essays - 250 words - 11

Assignment Example The mashup software made this map so interactive that it enabled guests to reserve or to get confirmation of the reservation or to make any query by just clicking an event on the map. Mashup even enabled the guests to receive photos of hosts and the house. Wiki was used to manage the customer relations. Information regarding location and contact were there on wiki for each volunteer. There were wine-related cartoons, advertisements on wiki. Even an interactive location map was integrated with wiki so that guests can make their reservation and get other information. Web 2.0 technologies have redefined the World Wide Web communication by permitting users to comment on a blog or create content (Gonzalez, April 6 2008). This has enhanced the quality of interaction. Stormhoek used blogs to find out the hosts and guests for 100 wine tasting events which would increase their sales. This increase in sale was due to the proper use of blog which was created and operated with the help of web 2.0 technologies. Blog spam refers to random comments posted automatically by the marketers for the purpose for promotions. It is a problem because it is an illegal use of somebody else’s blog to get more clicks. Blog spam gets the traffic away from the original blog to the visitor’s blog (Hill, 2006). Wackà ¥, F. June 18 2004, Corporate Blog – A Short definition, Your Guide to Corporate Blogging, Retrieved from http://www.corporateblogging.info/2004/06/corporate-blog-short-definition.asp (November 7,

Prevention of Violence in American Society Assignment

Prevention of Violence in American Society - Assignment Example Chante seems to regret her decision. It is because she confessed to the jury that she tampered with the evidence and did not commit murder. It gets also seen that after she had pulled into her garage, she lowered the door and sat down and then began crying and apologizing to Biggs who was moaning. Therefore, even though she made a call to help herself, we see her crying and regretting her decisions and apologizing to Biggs. She also blabbed, â€Å"Lord, I’m sorry, what do I do?† (MSNBC 2). Thus, it is evident that she regretted her decisions. First, once she hit the man, she could call 911 and ask for help from the police or any ambulance in order to save. Biggs could have survived because as she drove into her garage he continued to lose some blood; hence, making it more difficult to save his life. Alternatively, she could have driven to a nearby fire station, hospital or police station instead of driving towards her garage where she could not find any help. Therefore, the only step that Chante could have taken in that situation involves the police or other parties like health officers and not involving her friends who have no idea on handling the case. In this case, she could have saved Biggs’s life and get pardon on the jury for trying to save the Biggs’s life that got lost due to excess bleeding. The today’s technology could have changed the situation. The presence of CCTV in town makes it easier to monitor what went on in a certain event. The police could have easily identified the incident and follow her before she could do anything to tamper the evidence. The CCTV will also show the footage and determine how she reacted all that time after she hit the man and determine her real intentions in the event. Thus, the jury would have heard more evidence and change the verdict in the case, and the jury could have taken less time to determine the truth of the case.

End of Poverty Guide Essay Example for Free

End of Poverty Guide Essay Sachs throws out the normal ways of thinking about the causes of poverty in countries, for instance that people are lazy or stupid, or the countries are not democratic, and that corruption is wide-spread. Fifty percent of the world’s population exists on less than one dollar per day. He believes that much of the problem is structural, which can only be dealt with through the help of the rich countries. Sachs believes, first of all, that all current debt owed by the poor countries should be cancelled. Secondly, if the rich countries would increase their development aid from .2% to .7% there would be enough money available to increase the economic growth so that all countries would no longer be extremely poor. If MAI is to become known as an agency which teaches a new way of dealing with poverty, then we need to become aware of this book and Sachs understanding and approach to poverty. Chapter Twelve really speaks to CHE. I have tried to review what has appeared to me to be the most salient points, chapter by chapter. All chapters are not treated equally. I primarily do this exercise for myself to help me understand the key points from the book. If they are of any help to others, then that is a plus. I have gone into more detail in the other synopsis I have done because of the possible guidance this book can give us for a new paradigm for dealing with poverty individually, locally, nationally and globally (which in reality we are already on the road in doing). Some things are both structural and governmental issues and I am not suggesting that we get involved in these, but change must begin at the village level and then we can scale up our strengths from there. Chapter OneA Global Family Portrait Sachs sets the stage for his thesis and book using examples of Malawi, Bangladesh, India, and China to show different levels of poverty. He talks abut the ascending ladder of economic development for countries. †¢ Lowest are those who are too ill, hungry, or destitute to get even a foot on the bottom rung of the development ladder. They make up the bottom 1/6 of the world’s population, or one billion people. They are the poorest of the poor and live on less than $1 a day. †¢ A few rungs up the ladder at the upper end of the low-income countries are another 1.5 billion people. They live just above the subsistence level. These two groups make up 40% of the world’s population. CHE targets both of these groups, and especially with the first group. †¢ Another 2.5 billion include the IT workers of India. Most of them live in the cities and are moderately poor. †¢ One billion or one-sixth of the world come from the rich developed countries. Sachs says the greatest tragedy of our time is that one-sixth of the world’s population is not even on the first rung of the ladder. A large number of the extremely poor in level one are caught in the poverty trap and cannot escape it. They are trapped by disease, physical isolation, climate stress, environmental degradation, and extreme poverty itself. He breaks poverty into three levels: †¢ Extreme poverty means households cannot meet basic needs for survival. This only occurs in developing countries. World Bank says their income is less than $1 a day. †¢ Moderate poverty is where needs are generally just barely met. World Bank says this represents countries where their income falls between $1 and $2 per day. †¢ Relative poverty generally describes household income level at being below a given percentage of the average national income. You find this in developed countries. He then presents the Challenge of our Generation which includes: †¢ Helping the poorest of the poor escape the misery of extreme poverty and help them begin their climb up the ladder of economic development. †¢ Ensuring all who are the world’s poor, including moderately poor, have a chance to climb higher in economic development. He believes that the following can be done: †¢ Meet the Millennium Development Goals by 2015. †¢ End extreme poverty by 2025. †¢ To ensure well before 2025, that all of the world’s poor countries can make reliable progress up the ladder of economic development. †¢ To accomplish this with modest financial help from the riches countries, which will be more than is now provided per capita. Chapter TwoThe Spread of Economic Prosperity Sachs uses several graphs in this chapter. I will not go into detail on these, but I will point out some salient points: †¢ All regions of the world were poor in 1820. †¢ All regions experienced economic progress, though some much more than others. †¢ Today’s richest regions experienced by far the greatest economic progress. As an example, Africa has only grown at .7% a year while the USA at 1.7%. This may not seem much, but when compounded year-by-year, it results in the great differences between the two. †¢ The key fact today is not the transfer of income from one region to another, but rather that the overall increase in the world’s income is happening at different rates in different regions. Until the 1700’s, the world was remarkably poor by today’s standards. A major change was the industrial revolution coming to certain regions and not to others. The steam engine was a decisive turning point because it mobilized the vast store of primary energy which unlocked the mass production of goods and services. Modern energy fueled every aspect of the economic takeoff. As coal fueled industry, industry fueled political power. Britain’s industrial breakthrough created a huge military and financial advantage. But Britain also had existing individual initiative and social mobility than most other countries of the world. They also had a strengthening of institution and liberty. Britain also had a major geographical advantageone of isolation and protection of the sea, in addition to access to the oceans for worldwide transportation for their goods and importation of other countries’ goods. Sachs then goes on to outline what has fostered major economic growth: †¢ Modern economic growth is accompanied by people moving to the cities, or urbanization. This means fewer and fewer people produce the food that is required for the country. Hopefully, food price per farmer decreases as larger plots are farmed more productively. This also means sparsely populated land makes good sense when many farms are needed to grow the crops, but sparse land makes little sense when more and more people are engaged in manufacturing in the cities. †¢ Modern economic growth fostered a revolution in social mobility which affected social ranking of people. A fixed social order depends on status quo and agrarian population. †¢ There is a change in gender roles with economic development. This affects living conditions as well as family structure. The desired number of children decreases. †¢ The division of labor increases. By specializing in one activity instead of many, producti vity increases. The diffusion of economic growth occurred in three main forms: †¢ From Britain to its colonies in North America, Australia and New Zealand. (It was therefore relatively straight-forth to transfer British technologies, food crops and even legal institutions.) †¢ A second diffusion took place within Europe that ran from Western Europe to Eastern Europe, and from Northern Europe to Southern Europe. †¢ The third wave of diffusion was from Europe to Latin America, Africa, and Asia. Sachs believes that the single most important reason for prosperity spread is the transmission of technology and the ideas underlying it. The technological advances came at different times. †¢ The first wave revolved around the invention of the steam engine which led to factory-producing goods. †¢ The second wave in the 19th century was led by the introduction of the rail and telegraph. It also included the introduction of steam ships instead of sailing ones, and the construction of the Suez Canal. †¢ The third wave was initiated by electrification of industry and urban society. Along with this came the development of the internal combustion engine. †¢ The fourth wave came in the 20th century with the globalization of the world due to new methods of communication starting in Europe. †¢ There came a time of a great rupture which took place with the start of World War I, and sidetracked economic development for awhile. This led to the Great Depression which led to World War II. †¢ A fifth wave took place right after World War II, and in 1991. It began with the massive efforts of reconstruction of Europe and Japan right after World War II. Trade barriers began to come down. There were three worlds: the first was the developed West, the second was comprised of Socialist countries, and the third was made up of undeveloped countries (which were made up of the old colony countries). The world therefore progressed on three tracks. The problem was that the second and third worlds did not share in economic growth and actually went backward. By closing their economies, they closed themselves off from economic development. So what did this mean to the poorest of the poor countries? †¢ They did not begin their economic growth until decades later. †¢ They faced geographical barriers of being land-locked †¢ They faced the brutal exploitation of the colonial powers. †¢ They made disastrously bad choices in their national policies. Chapter ThreeWhy Some Countries Fail In this chapter, Sachs looks at the cause of poverty and possible solutions. He first deals with, how a family’s per-capita income might increase: †¢ The first way is through savings either in cash or similar assets like animals, etc. †¢ The second way is shifting to crops that bring a higher yield per hectare, and then adding value to the crop (which is what we teach in our PAD training). †¢ The third way is adopting new technology, which improves their productivity. †¢ The fourth way is resource boom, which means to move to a much larger and more fertile farm. The flip side of increasing their economic growth is by decreasing their per capita income which is more than just the opposite of the above factors: †¢ Lack of savings is of course one way to reduce per capita income. †¢ Lack of trade, meaning that a household hears of the new crop but cannot take advantage of it and stays with what they have. †¢ Technological reversal is when something like HIV hits an area and children lose their parents etc. †¢ Natural resource decline is where the land becomes less and less fertile producing less and less crops. †¢ Adverse Productivity Shock is where a natural disaster hits like a drought, tsunami, earthquake, typhoon, etc. †¢ Population growth lessens per capita income where the father has two hectares of land and it is divided among his five sons at his death. Now Sachs begins to get into the true heart of poverty on a country level: †¢ The poverty trap itself is where poverty is so extreme that the poor do not have the ability by themselves to get out of the mess. †¢ Physical geography plays a major role where countries are land-locked with poor or no roads, a lack of navigable rivers, or situated in mountain ranges or deserts with an extremely high transportation cost. The low productivity of the land is another factor in the geography. †¢ The fiscal trap is where the government lacks the resources to pay for the necessary infrastructure on which economic growth depends. †¢ Government failure happens when the government is not concentrating on high priority infrastructure and social service projects. †¢ Cultural or religious barriers especially as it relates to gender inequality play a significant role in dampening economic growth. †¢ Geopolitics such as trade barriers can impede economic growth. †¢ Lac k of innovation and technology plays a role if people cannot try new things because they cannot risk failure, or because they do not have funds to do so. Sachs believes that over the span of two centuries, the lack of using new technology is why the richest and poorest countries have diverged. †¢ He shows a scatter-gram graph showing there is a demographic trap as well. The higher the fertility rate, the lower rate of economic growth there is in a country. When they have too many children, they cannot invest in education, nutrition, or health, except maybe for the oldest male. One of the best ways to lower the number of children per family is through the education of the girls. Sachs then goes into detail in putting countries into different classes. He points out that none of the rich countries in North American, Western Europe or East Asia have failed to grow economically. All the problems lie in the developing world where 45 of these countries had a fall in GDP. Not all of these countries are in sub-Saharan Africa. He also points out that the oil-exporting and ex-Soviet countries, all high income countries, did not increase their economic growth evenly, primarily because of their authoritarian political structure. He also points out that the most important factor is agriculture. Those countries that used high yield cereals per hectare and that used high levels of fertilizers are the poor countries that tended to experience economic growth. In Africa, the land is much less densely populated but they use neither high yield cereals nor fertilizers and they had falling food production per capita. But they also have far less roads for transporting extra crops to markets and they depend on rainfall which is generally more erratic than high-producing agricultural countries. He also goes on to point out the following: †¢ Economic growth is rarely uniformly distributed across a country. †¢ Governments also fail in their role in allowing growth that might enrich the rich households, while the poorest living in the same area seldom seem to benefit. †¢ Another detriment to growth can be culture especially as it relates to women inequality. Chapter FourClinical Economics (CE) Sachs compares clinical economics to clinical medicine. He lays out five parameters for Clinical Economics: †¢ CE is made up of complex systems. The failure in one system can lead to cascades of failures in other parts of the economy. You therefore need to deal with very broad and multiple issues. †¢ CE practitioners need to learn the art of clinical diagnosis. The CE practitioner must hone-in on the key underlying causes of economic distress and prescribe appropriate remedies that are tailor-made to each country’s condition. †¢ Treatment needs to be viewed in family terms, not individual terms. The entire world is part of each country’s family. If countries work together they can have far more impact than working in isolation. †¢ Good CE practice requires monitoring and evaluation. More than just asking if the goals are being achieved, but also asking â€Å"why?† and â€Å"why not?† †¢ The development community lacks the requisite ethical and professional standards. Economic development does not take its work with the sense of responsibility that the task requires. It demands that honest advice be given. He points out where economic development practice has gone wrong: †¢ The rich countries say, â€Å"Poverty is your own fault. Be like us, have a free market, be entrepreneurial, fiscally responsible and your problems will be gone†. †¢ The IMF period of structural adjustment which supposedly dealt with the four maladies of poor governance, excessive government intervention in the markets, excessive government spending, and too much state ownership were not solved by the IMF prescription of belt tightening, privatization, liberalization, and good governance. †¢ The responsibility for poverty reduction was assumed to lie entirely with poor countries themselves. He then lays out his differential diagnosis for poverty reduction. He believes the Millennium Development Goal (MDG) goes a long way in reducing poverty. Once the diagnosis is completed, a proper treatment regime must be carried out. In doing differential diagnosis, questions must be asked in each one of the following areas: †¢ Identify and map the extent of extreme poverty from the household level all the way up through the community to the country to the state in all areas of life. †¢ The second set of questions deals with the economic policy framework. †¢ The third set deals with the fiscal framework. †¢ Fourth deals with physical geography and human ecology. †¢ Fifth, the questions deal with the patterns of governance. History has shown that democracy is not a prerequisite for economic development. †¢ Sixth are questions which deal with cultural barriers that hinder economic development. †¢ The last are questions that are related to geopolitics which involves a country’s security and relationship with the rest of the world. The next six chapters, five through ten, deal with specific countries that have gone through this process, and their results. His results are quite impressive. I will not deal much with each country, but an individual chapter might be of interest to the RC involved if he is interested in such things. Chapter FiveBolivia’s High Rate of Inflation Problem: A hyperinflation rate of 3000% (30 times) between July 1984 and July 1985 with a longer term hyperinflation rate of 24,000%. Lessons Learned: †¢ Stabilization is a complex process. Ending a large budget deficit may be the first step but controlling the underlying forces that cause the budget deficit is much more complex. †¢ Macroeconomics tools are limited in their power. †¢ Successful change requires a combination of technocratic knowledge, bold political leadership, and broad social participation. †¢ Success requires not only bold reforms at home, but also financial help from abroad. †¢ Poor countries must demand their due. Chapter SixPoland’s Return to Europe Problem: By the end of 1989, Poland had partially suspended its international debt payments. The economy was suffering from high rate of rising inflation and there was a deepening political crisis. Sachs’ approach in Poland, as in other countries, was built on five pillars: †¢ Stabilizationending the high rate of inflation, establishing stability and convertible currency. †¢ Liberalizationallowing markets to function by legalizing private economic activity (ending price controls and establishing necessary laws). †¢ Privatization identifying private owners for assets currently held by the state. †¢ Social netpensions and other benefits for the elderly and poor were established. †¢ Institutional Harmonizationadopting, step-by-step, the economic laws, procedures, and institutions. Lessons Learned: †¢ He learned how a country’s fate is crucially determined by its specific linkages to the rest of the world. †¢ Again the importance of the basic guidance concept for broad-based economic transformation, not to stand alone with separate solutions. †¢ Saw again the practical possibilities of large-scale thinking †¢ He learned not to take â€Å"no† for an answer, press on with your guidance. †¢ By the time a country has fallen into deep crisis, it requires some external help to get back on track. †¢ This help may be in the form of getting the basics right which includes debt cancellation and help to bolster confidence in the reforms. Chapter SevenRussia’s Struggle for Normalcy Problem: The Soviet Union relied almost entirely on its oil and gas exports to earn foreign exchange, and on its use of oil and gas to run its industrial economy. In the mid- 1980’s, the price of oil and gas plummeted and the Soviet Union’s oil production began to fall. Sachs suggested three actions of the West (but generally they were ignored by the West): †¢ A stabilization fund for the ruble. †¢ Immediate suspension of debt repayment followed by cancellation of their debts. †¢ A new aid program for transformation focusing on the most vulnerable sectors of the Russian economy. Lesson Learned: †¢ Despite much turmoil and rejection much went right so that eventually Russia became a lopsided market economy, still focused on oil and gas. †¢ Russia has a gigantic land mass which causes it to have few linkages with other nations of the world. †¢ Their population densities are low and agrarian and food production per hectare remains low. Over history, 90% of the population has been rural, with cities few and far between. This hinders economic growth. †¢ Without adequate aid, the political consensus around the reforms was deeply undermined, thereby compromising the reform process. Chapter EightChina Catching Up after a Half Millennium Being Isolated Problem: China lost its economic and cultural lead that it had in its early history. Sachs points out five dates which caused this: †¢ 1434 China had been the technological superpower. This year Emperor Ming closed China to the rest of the world and stopped their advanced ship fleets from going out to the world. †¢ 1839 China finally ended its economic isolation. †¢ 1898 Several young reformers tried to gain power and were stopped. †¢ 1911 Ching Dynasty collapsed and by 1916 China was falling into civil unrest. Their military took control of the empire. †¢ 1949 the rise of the Maoist Movement. He then compares China to Russia: †¢ The Soviet Union and Eastern Europe had massive foreign debt while China did not. †¢ China has a large coastline that supported its export growth, while Russia and Eastern Europe do not. †¢ China had the benefit of large off-shore Chinese business communities which acted as foreign investors, while Russia and Eastern Europe did not. †¢ The Soviet was experiencing a drastic decline on their main export product, oil and gas. †¢ The Soviet Union had gone further down the industrialization road than China. Chapter NineIndia Market Reform Which Was the Triumph of Hope Over Fear Problem: India was controlled by a business, British East India Company, which was driven by greed, and it did everything to maximize profit for the company at the expense of the country. Though India’s population throughout history has been Hindu, vast numbers of Muslims and Christians lived in and sometimes dominated the land. India had poor political and social structures because the land was broken into many small kingdoms governed by many different leaders. In addition, India has the caste-system of stratification of peoples. With independence from the British in 1947, Nehru looked for a path to self- sufficiency and democratic socialism. The Green Revolution had a major impact on the country as high yield crops were introduced. By 1994, India now faced four major challenges: †¢ Reforms needed to be extended especially in liberalization and the development of new and better systems. †¢ India needed to invest heavily in infrastructure †¢ India needed to invest more in health and education of its people, especially the lower castes. †¢ India needed to figure out how to pay for the needed infrastructure. Lessons Learned: †¢ The 21st century is likely to be the era when this poor country’s economic development is substantially reversed. †¢ The country has announced electricity for all as well as essential health services and drinking water for everyone. These are achievable goals and the basis for much-needed investment. †¢ The Hindus did not stifle growth. The Green Revolution and then market reforms overrode the rigidness of the caste-system and the slow growth of the 1950’s and 1960’s. †¢ India has become increasingly urbanized, thereby further weakening the caste-system. †¢ Democracy is wearing away age-old social hierarchies. †¢ India has grabbed the potential of the internet and IT and is leading the way for developing nations in this regard. †¢ India’s varied geography and its miles and miles of shoreline fosters its market position for the manufacture of products. Chapter TenAfrica and the Dying Problem: Three centuries of slave trade were followed by a century of colonial rule which left Africa bereft of educated citizens and leaders, basic infrastructure, and public health facilities. The borders followed arbitrary lines, not historic tribal lines which now divided former empires, ethnic groups, ecosystems, watersheds, and resource deposits. The West was not willing to invest in African economic development. Corruption was not the central cause for their economic failure as he showed. In the 1980’s, HIV became the worse killer of mankind. In 2001, life expectancy stood at 47 years, while East Asia stood at 69 years, and developed countries at 78 years. Sachs spends time looking at the major diseases of malaria, TB, diarrhea, and HIV. He says poverty causes disease and disease causes poverty. Lessons Learned: †¢ Good governance and market reform alone are not sufficient to generate growth if a country is in a poverty trap. †¢ Geography has conspired with economics to give Africa a particularly weak hand. Africa lacks navigable rivers with access to the ocean for easy transport and trade. †¢ Africa lacks irrigation and depends on rainfall for their crops. †¢ Farmers lack access roads, markets, and fertilizers, while soils have been long depleted of their nutrients. Chapter ElevenThe Millennium, 9/11, and the United Nations. The beginning part of this chapter deals with the Millennium Development Goals. Sachs says that the goals and commitment to reach them by 2015 convey the hope that extreme poverty, disease, and environmental degradation could be alleviated with the wealth, the new technologies, and global awareness with which we entered the 21st century. He says the first seven goals call for sharp cuts in poverty, disease, and environmental degradation, while the eighth goal is essentially a commitment to global partnership. Because you have all seen them, I am not including them here. Regarding 9/11, he says we need to keep it in perspective. On 9/11, 3000 people died for once and for all, but 10,000 people die each day from diseases that are preventable. He believes we need to address the deeper roots of terrorism of which extreme poverty is an important element. The rich world needs to turn its efforts to a much greater extent from military strategies to economic development. President Franklin Delano Roosevelt spoke of freedoms we were fighting for in WWII and for which we still should be attempting to accomplish: †¢ Freedom of speech and expression everywhere in the world. †¢ Freedom for every person to worship God in his own way everywhere in the world. †¢ Freedom from want which translates into economic development. †¢ Freedom from fear which translates into a worldwide reduction in armament, a reduction to such a point that no nation will be in a position to commit an act of physical aggression against any neighbor. One major thing he is suggesting is that the rich countries elevate their giving to .7% of their GNP from the average of .2% it is today. The rest of the chapter is about President Bush and the USA policies and actions. Chapter TwelveOn-The-Ground Solutions for Ending Poverty This chapter is really talking about CHE, but Sachs does not realize it. He says that the world’s challenge is not to overcome laziness and corruption but rather to take on geographic isolation, disease, vulnerability to climate shocks, etc. with new systems of political responsibility that can get the job done. He talks about a village of less than 1,000 in western Kenya, in a Sauri sub-location (in Siaya district in Nyanza province) that he visited, which opened his eyes. He found what we find place after place that they are impoverished, but they are capable and resourceful. Though struggling to survive, presently they are not dispirited but determined to improve their situation. He then goes on to describe the needs of a rural African community, the same type of community that we deal with every day, as shown in the abundance of applications we receive for CHE. A major problem, he feels, is that the farmers do not have the money to buy fertilizer that would impact their crop productivity drastically. Also they have no school or clinic. He then begins to calculate what it would cost per person to bring a school and teachers, simple clinic and staff, medicines, agriculture inputs such as seed and fertilizer, safe drinking water and simple sanitation, and power transport and communication services. The total cost for Sauri is about $350,000 a year, which converts to $70 a person per year, which could revolutionize the community. If he did CHE, the total cost and per person cost would be greatly reduced. He then goes ahead and extrapolates this up for the country of Kenya to $1.5 billion. At the same time he points out that Kenya’s debt service is $600 million a year and that it needs to be cancelled. But one problem that donors talk about is corruption needing to be eliminated. If countries do not eliminate corruption, they would not be eligible for relief. Also, a budget and management system need to be designed that will reach the villages and be monitorable, governable, and scalablea set of interventions to ensure good governance on such a historic project. The key to this is to empower village-based community organizations to oversee village services. Most of what he says in this chapter sounds like CHE to me, but we can do it at even a lower cost and we have the experience to implement it. That is why I said earlier that we need to talk to Sachs about CHE. He then goes on with this theme but changes the venue from rural to urban in Mumbai, India in a slum community built smack up against the railroad tracks, one-house deep. He points out the outstanding needs are not latrines, running water, nor safety from trains, but empowerment so they can negotiate with the government. He then mentions that several groups have been found and empowered to do this in this community. Again sounds like CHE for urban poor. Sachs says what this community needs is investments in the individual and basic infra-structure that can empower people to be healthier, better educated, and more productive in the work force. CHE deals with the individual side of the equation. He ends this chapter by discussing the problem of scale. He says everything must start with the basic village. The key is connecting these basic units together into a global network that reaches from impoverished communities to the very centers of power and back again. This, too, is what we are talking about when we describe scaling-up and creating a movement and then forming it into councils and collaborative groups. He believes the rich world would readily provide the missing finances but they will wonder how to ensure that the money made available would really reach the poor and that there would be results. He says we need a strategy for scaling up the investments that will end poverty, including governance that empowers the poor while holding them accountable. I believe CHE fits his prescription. Chapter ThirteenMaking the Investments Needed to End Poverty Sachs says the extreme poor lack six kinds of capital: †¢ Human Capital: health, nutrition, and skills needed for each person to be productive. †¢ Business Capital: the machinery, facilities, and motorized transport used in agriculture, industry and services. †¢ Infrastructure Capital: water and sanitation, airports and sea ports, and telecommunications systems that are critical inputs for business productivity. †¢ Natural Capital: arable land, healthy soils, biodiversity, and well- functioning ecosystems that provide the environmental services need by human society. †¢ Public Institutional Capital: commercial law, judicial systems, government services, and policing, that underpin the peaceful and prosperous division of labor. †¢ Knowledge Capital: the scientific and technological know-how that raises productivity in business output and the promotion of physical and natural capital. He spends several pages on charts showing income flow. He also uses the example of child survival and how it applies to the six kinds of capital. He makes the point that even in the poorest societies, primary education alone is no longer sufficient. He says all youth should have a minimum of 9 years of education. He says technical capacity must be in the whole of society from the bottom up. He talks about trained community health workers and the role they can play. Villages around the world should be helped in adult education involving life and death issues such as HIV. The main challenges now is NOT to show what works in small villages or districts but rather to scale up what works to encompass a whole country, even the world. Again sounds like CHE and where we are going. He goes through several examples where major diseases are being dealt with such as malaria, river blindness, and polio, as well as spread of family planning. He also briefly talks about the cell phone revolution by the poor in Bangladesh and how East Asia has established Export Processing Zones, all of which are improving the life of the poorest of poor nations. Chapter FourteenA Global Compact to End Poverty He says the poorest countries themselves must take seriously the problem of ending poverty and need to devote a greater share of their national resources to accomplish this. Many poor countries pretend to reform while rich countries pretend to help them. The chronic lack of donor financing robs the poor countries of their poverty-fighting zeal. We are stuck in a show play that is not real. There are two sides in a compact. In this compact, there should be the commitment in the rich countries to help all poor countries where the collective will to be responsible partners in the endeavor is present. For the other poor countries where authoritarian or corrupt regimes hold sway, the consequences for the population are likely to be tragic but the rich countries have their limits also. He spends time looking at several countries that have Poverty Reduction Strategies where some are working and some not. Ghana is a star in his book. He says a true MDG-based poverty reduction strategy would have five parts: †¢ A Differential Diagnosis which includes identifying policies and investments that the country needs to achieve the MDGs. †¢ An Investment Plan which shows the size, timing and costs of the required investments. †¢ A Financial Plan to fund the Investment Plan, including the calculation of the MDG financing gap, the portion of the financial needs that donors will have to fill. †¢ A Donor Plan which gives multi-year commitments from donors for meeting the MDGs. †¢ A Public Management Plan that outlines the mechanisms of governance and public administration that will help implement the expanded public investment plan. During the 1980’s and 1990’s, the IMF forced Structural Readjustment on the poor countries which did not work. The poor were asked to pay all the expenses for new services. They then moved to a compromise called Social Marketing where the poor were asked to pay a portion of the expense. But neither plan worked because the poor did not have enough even to eat, much less pay for electricity. He says a sound management plan should include the following: †¢ Decentralize. Investments are needed in all the villages and the details for what is needed needs to be established at the village level through local committees, not the national capitol or Washington DC. †¢ Training. The public sector lacks the talent to oversee the scaling up process. Training programs for capacity building should be part of the strategy. †¢ Information Technology. The use of information technologycomputers, e-mail and mobile phones needs to increase drastically because of the dramatic increase of knowledge that needs to be transmitted. †¢ Measurable Benchmarks. Every MDG based poverty reduction strategy should be supported by quantitative benchmarks tailored to national conditions, needs, and data availability. †¢ Audits. No country should receive greater funding unless the money can be audited. †¢ Monitoring and Evaluation. Each country must prepare to have investments monitored and evaluated. He then goes through the following Global Policies for Poverty Reduction: †¢ The Debt Crisis. The poorest countries are unable to repay their debt, let alone carry the interest. Therefore, for each country that agrees to the guidelines noted previously, their debt must be cancelled if there is to be true poverty reduction. †¢ Global trade Policy. Poor countries need to increase their exports to the rich countries and thereby earn foreign exchange in order to import capital goods from the rich countries. Yet trade is not enough. The policy must include both aid and trade. The end of agriculture subsidies is not enough for this to happen. †¢ Science for Development. The poor are likely to be ignored by the international scientific community unless special effort is made to include things that help the poor. It is more critical to identify the priority needs for scientific research in relation to the poor than to mobilize the donor community to spur that research forward. That would include research in tropical agriculture, energy systems, climate forecasting, water management, and sustainable management of ecosystems. †¢ Environmental stewardship. The poorest of poor nations are generally innocent victims of major long-term ecosystem degradation. The rich countries must live up to the ecology agreements they have signed. The rich countries will have to give added financial assistance to the poor countries to enable them to deal with the ecosystem problems. The rich countries will have to invest more in climate research. Chapter FifteenCan The Rich Afford to Help the Poor? He asks the question â€Å"Can the rich countries help the poor?†, and his answer is â€Å"Can they afford not to do so?† He gives five reasons that show that the current effort is so modest. †¢ The numbers of extremely poor have declined close to 50% two generations ago to 33% a generation ago to 20% today. †¢ The goal is to end extreme poverty, not all poverty, and to close the gap between the rich and the poor. †¢ Success in ending the poverty trap will be much easier than it appears. Too little has been done to identify specific, proven, low-cost interventions that can make a difference in living standards and economic growth (CHE does this). †¢ The rich world is vastly rich. What seemed out of reach a generation or two ago is now such a small fraction of the vastly expanded income of the rich world. †¢ Our tools are more powerful than ever, including computers, internet, mobile phones, etc. He then spends time in doing calculations to show how this can be accomplished. First he starts with the World Bank. They estimate that meeting basic needs requires $1.08 per person per day. Currently, the average income of the extremely poor is 77 cents per day, creating a shortfall of 31 cents per day or $113 per person per year. He then shows that this represents only .6% of a nation’s GNP. The MDG target which many countries have agreed to is .7% of their GNP. Later on, he shows that the USA is only spending .15% for aid to the world. Sachs then spends time on a six-step process to do a needs assessment to come up with the real number needed: †¢ Identify the package of basic needs. †¢ Identify for each country the current unmet needs of the population. †¢ Calculate the costs of meeting the unmet needs through investments, taking into account future population growth. †¢ Calculate the part of the investments that can’t be financed by the country itself. †¢ Calculate the MDG financing gap that must be covered by donors. †¢ Assess the size of the donor contribution relative to donor income. He proposes that interventions are required to meet the following basic needs: †¢ Primary education for all children with a designated target ratio of pupils to teachers. †¢ Nutrition program for all vulnerable populations. †¢ Universal access to anti-malarial bed nets for all households in regions of malaria transmission. †¢ Access to safe drinking water and sanitation. †¢ One-half kilometer of paved roads for every thousand population. †¢ Access to modern cooking fuels and improved cooking stoves to decrease indoor air pollution. He states extreme poverty (a lack of access to basic needs) is very different from relative poverty (occupying a place at the bottom of the ladder of income distribution) within rich countries, and goes through a more detailed approach of implementing the six steps. He points out that not all donor assistance is for development. Much is used for emergency relief, care for resettlement of refugees, geopolitical support of particular governments, and help for middle-income countries that have largely ended extreme poverty in their country. Also, only a small portion of development aid actually helps to finance the intervention package. Much of it goes for technical assistance which is not part of the MDG numbers. He spends time on the question, â€Å"Can the USA afford the .7% of their GNP?† He responds with a deafening â€Å"Yes!† He does this in multiple ways, one of which is to show that the increase is only .55%, which would be hardly noticed in the US’s average 1.9% increase year-by-year of its GNP. Chapter SixteenMyths and Magic Bullets This is an interesting chapter because Sachs shoots down commonly held beliefs concerning the causes and solutions for poverty. He uses Africa as his case to do so:. †¢ Contrary to popular conception, Africa has not received great amounts of aid. They receive $30 per person per year but only $12 of that actually went to be used in development in Africa. $5 went to consultants of donor countries, $3 went to food and emergency relief, $4 for servicing Africa’s debt and $5 for debt relief. In reality, in 2002, only six cents per person went to development. †¢ Corruption is the problem which leads to poor governance. By any standard of measure Africa’s governance is low, but not due to corruption. African countries’ governance is no different than other poor countries in the rest of the world. Governance improves as the people become more literate and more affluent. Secondly, a more affluent country can afford to invest more in governance. †¢ There is a democracy deficit. This is also not true. In 2003, 11 countries in Africa were considered free, with 20 more partially free, and 16 not free. This is the same as is found in other regions of the world. Democracy does not translate into faster economic growth. †¢ Lack of modern values. Again, this is also false. Virtually every society that was once poor has been castigated for being unworthy until its citizens became rich and then their new wealth was explained by their industriousness. He traces this trend in multiple countries. One major factor that does cause change is the change in women’s position in society as their economic situation improves, which accelerates the growth. †¢ The need for economic freedom is not fully true. Generally market societies out perform centrally planned economies. This leads to the thought that all is needed is that the people must have the will to liberalize and privatize which is too simplistic. He shows that there is no correlation between the Economic Freedom Index and annual growth rate of GDP. †¢ The single idea of Mystery of Capital put forth by Hernando de Soto which relates to the security of private property including the ability to borrow against it is also incorrect. Most poor hold their assets such as housing and land. †¢ There is a shortfall of morals which is thought to be the main cause of HIV in Africa. A study shows that Africa men are no different in the average number of sexual partners they have than any other part of the world. †¢ Saving children only to become hungry adults leads to population explosion. Actually it has been shown that the best way to reduce the fertility rate is to increase the economic status. In all parts of the world (except the Middle East) where the fertility rate is over 5 children, those countries are the poorest ones. As children survive, the parents feel less of a need to have more children which is a result of improved economic conditions. †¢ A rising tide lifts all boats. This means extreme poverty will take care of itself because economic development will pull all countries along to improvement. A rising improvement does not reach the hinder lands or mountain tops. †¢ Nature red in tooth and claw means that economic improvement is based on survival of the fittest and those who cannot compete fall behind. This is a Darwin thought which seems to still prevail throughout the world. Competition and struggle are but one side o f the coin which has the other side of trust, cooperation, and collective action. He rejects the doomsayers who saying that ending poverty is impossible. He believes he has identified specific interventions that are needed as well as found ways to plan and implement them at an affordable rate. Chapter SeventeenWhy We Should Do It There are several fallacies which affect the USA’s giving: †¢ The American public greatly overestimates the amount of federal funds spent on foreign aid. The US public believes that the government is providing massive amounts of aid. A 2001 survey by the University of Maryland showed that people felt that US aid accounted for 20% of the federal budget versus the actual of .15%. That is 24 times smaller than the actual figure. †¢ The American public believes that the US military can achieve security for Americans in the absence of a stable world. This has been proven untrue especially with 9/11. †¢ There is a fallacy in belief that there is a war of cultures. For many, this relates to Biblical prophesy of Armageddon and end times. The problem in the US is not opposition to increased foreign aid but a lack of political leadership to inform the public how little the US does supply, and then asking the US public to supply more. Hard evidence has established a strong linkage between extreme poverty abroad and threats to national security. As a general proposition, economic failure (an economy stuck in a poverty trap, banking crisis, debt default or hyper-inflation) often leads to a state failure. A CIA Task force looked at state failures between 1954 and 1994 and found that the following three factors were most significant in state failure: †¢ Very high infant mortality rate suggested that overall low levels of material well-being are a significant factor in state failure. †¢ Openness of the economy showed the more economic linkages a country had with the rest of the world, the lower chance of state failure. †¢ Democratic countries showed fewer propensities to state failure than authoritarian regimes. He then reviews what the US government has committed to since 9/11: †¢ Provide resources to aid countries that have met national reform. †¢ Improve effectiveness of the World Bank and other development banks in raising living standards. †¢ Insist on measurable results to ensure that development assistance is actually making a difference in the lives of the world’s poor. †¢ Increase the amount of development assistance that is provided in the form of grants, not loans. †¢ Since trade and investment are the real engines of economic growth, open societies to commerce and investment. †¢ Secure public health. †¢ Emphasize education. †¢ Continue to aid agricultural development. In reality, little progress has been done by the US to the accomplishment of these goals. But he does spend time discussing where plans were established and that funds were flowing where massive amounts of aid were provided by the USA: †¢ End of World War II with the Marshall Plan which revitalized Europe and Japan. †¢ Jubilee 2000 Drop the Debt Campaign started slow but ended up with large amount of national debt being cancelled in the poorest of countries. †¢ The Emergency Plan for HIV is providing $15 billion to fight this pandemic. The bottom line of this chapter is, â€Å"OK, USA and other rich countries, you are saying good things, now step-up to the plate and do what you have agreed to do.† Chapter EighteenOur Generation’s Challenge Our generation is heir to two and a half centuries of economic progress. We can realistically envision a world without extreme poverty by the year 2025 because of technological progress which enables us to meet basic needs on a global scale. We can also achieve a margin above basic needs unprecedented in history. Until the Industrial Revolution, humanity had known only unending struggles against famine, pandemic disease, and extreme povertyall compounded by cycles of war, and political despotism. At the same time, Enlightenment thinkers began to envision the possibility of sustained social progress in which science and technology could be harnessed to achieve sustained improvements in the organization of social, political, and economic life. He proposes four thinkers which led this movement: †¢ Thomas Jefferson and other founders of the American Republic led the thought that political institutions could be fashioned consciously to meet the needs of society through a human-made political system. †¢ Adam Smith believed that the economic system could similarly be shaped to meet human need and his economic design runs parallel to Jefferson’s political designs. †¢ Immanuel Kant called for an appropriate global system of governance to end the age-old scourge of war. †¢ Science and technology, fueled by human reason can be a sustained force for social improvement and human betterment led by Francis Bacon and Marie-Jean-Antoine Condorcet. Condorcet put much emphasis on public education to accomplish the goals. One of the most abiding commitments of the Enlightenment was the idea that social progress should be universal and not restricted to a corner of Western Europe. He said now it is our generation’s turn to help foster the following: †¢ Political systems that promote human well-being †¢ Economic systems that spread the benefits of science, technology, and division of labor to all parts of the world. †¢ International cooperation in order to secure a perpetual peace. †¢ Science and technology, grounded in human rationality, to fuel the continued prospects for improving the human condition. He then spends three or four pages discussing the good and bad points of the Anti-globalization Movement which is taking place. He also spends time discussing three movements which made these kind of changes in the world in their time: †¢ The end of Slavery †¢ The end of Colonization †¢ The Civil Rights and Anti-Apartheid Movement He closes with discussing the next steps which are: †¢ Commit to ending poverty †¢ Adopt a plan of action built around the Millennium Development Goals †¢ Raise the voice of the poor †¢ Redeem the role of the United States in the world †¢ Rescue the IMF and World Bank †¢ Strengthen the United Nations †¢ Harness global science †¢ Promote sustainable development †¢ Make a personal commitment to become involved Summary This is an interesting book with new perspectives for me, and which is beginning to be taken seriously by the world. I believe, as stated earlier, that MAI’s role is on-the-ground solutions for ending poverty through CHE which is spelled out in Chapter 12. But, as also noted, we can do it at a far lower cost than he estimates because of our commitment to empowering people to do things on their own and primarily with their own funds.

Problem of food shortage

Problem of food shortage Evaluation of agricultural strategies against food crisis One of the major problems in recent years which is really controversial among countries in the world is the problem of facing food shortage especially in developing countries. This problem is due to some main reasons: high food prices, scarcity of food. These reasons which are mentioned have some serious effects on people health and life. For example different kinds of diseases or malnutrition are really significant because of lack of food. Generally governors name this critical situation food crisis. Different countries after some discussions decided to find a practical and real solution to rescue their people. There are some common strategies such as money charity, food aid, using new technologies in agriculture or usage of Genetically modified food which is a new technology which can cause producing better and more food. In this essay we are discussing about agricultural solutions related to the problem of food crisis and the evaluation of this method in some developing countries. Agricultural improvement has some parts to discuss, for instance irrigation methods and using fertilizers technology, but we are focusing on the effect of fertilizers. ( George Charles Lowrison, 1989) In general Fertilizers are compounds which are giving to plants to improve their growth and crops quality. Some of them can be absorbed by the root of the plants and the others can be sprayed. These components can be divided in two main groups organic and chemical (Inorganic) compounds. For instance the manure of animals is the good examples of organic fertilizers and Nitrogen, Phosphorus or Potassium compounds are inorganic chemicals. Some of them are soluble and some of them are insoluble. Most fertilizers which are soluble in water can be solved in soil water and absorb by the root of the plant. In this process fertilizer is not the only factor for growth, the plant needs sunlight, water, soil and different gases from the earth to start a process that Biologist name it growth and because of that the plant will grow. Growth is a general word but, scientist defines growth as a multiplication and also increasing the plant cell size. (Lagried, Bockman andKaarstad, 1999) During the last two decades some countries face some natural disasters such as drought, flood or sudden climate change which are causing many problems in agriculture area. Because of climate change some crops which needed specific situation to grow could not grow, therefore a huge decrease in the amount of crops were seen. And also flood due to climate change caused destroying many farms which were under cultivation. Due to this problems it can be seen a significant food shortage. As a result some governments decided to find new strategies in terms of agriculture. The agriculture improvement has its own categories in response of food crisis. Different arguments have been presented in the recent years. Using fertilizers and methods of irrigation or preserving soil from erosion are some main methods. Gary Toenniessen, director of food security at the Rockefeller Foundation believes that using fertilizer can affect the amount of nutrients in soil, therefore the amount of crops will incr ease significantly especially in dry regions.(Gray Toennessen,Accessed date: Dec 2009) The International Federation of Organic Agriculture Movements released a report and argued against chemical fertilizers on the grounds that they can have bad effect on ecological cycles and creating a dependence on chemicals.. Agricultural experts and many policy makers had an argument about using fertilizers and its effect on the amount of food. Based on their arguments they believe that using fertilizers in African countries will decrease famine among them. According to Bill Doyle, the CEO of Saskatchewan-based Potash Corp, using fertilizers for increasing yields against food crisis could be really useful. He emphasized that using the combination of three main fertilizers which are potassium, Nitrogen and Phosphorus can boost the crop yield by as much as 60%. Because of preventing people from famine the world can not feed hungry people without the application of fertilizers in their farms. He be lieves the world must increase the speed of using these substances to feed about eighty million people around the world. Although overuse of fertilizers has some environmental damages. For instance some serious problems will occur in ground water and it will pollute the rivers. The other effects which the fertilizer can have are in decreasing the soil water therefore it causes scarcity of water to irrigate the farms. (Doyle, 2009). Dr Norman Borlaug who is an agriculturalist and the winner of Nobel Pease prize has some ideas about using fertilizers in the recent years. As far as doctor Norman Borlaug concerned hunger often go hand-in-hand. He thinks one of the sufficient compounds which is really important against this crisis is fertilizer. It can have a dramatic increase in the amount of crops. In each year the world population grows by eighty million, therefore the number of consumers will increase. As a result these people need food and crops to live individually. Currently the u sage of grains is really low. In the last decade the usage of seeds has grown among people and its not really easy to provide enough food for people.Dr Norman ((If the farmers stopped growing food today, we would only have enough grains in the worlds storage bins to feed the worlds population for 58 days)). (Dr Norman, 2008) The arguments of this expert person shows feeding 6.6 billion people are really hard and it seems a good idea to use these chemicals. In recent years fertilizers are responsible for between forty and sixty percent of food production. These substances improve our soils in each harvest and it causes a kind of promotion in quality and quantity of food. Because of using the elements in the soil the amount of necessary compounds in the soil will decrease each year, therefore fertilizers are supplying the sufficient nutrients in soil to increase the amount and quality of the crops. Based on research in United Nation Food and Agricultural Organization (FAO) agricultural products will be sixty percent higher in the year 2030 in comparison to the current year. The agricultural data over the past fifty years shows that the total world grain production such as corn,oats,wheat and rice increase 0.905 billion metric tons in the year 1965 to 2.091 billion metric tons in 2007. This dramatic increase in world grain production is because of 122 percent increase in crop yield. One of the countries that have a project against its food crisis is Kenya. It is situated in east Africa and situated near Indian ocean. This country is the forty seventh largest country in the world with the population of about 38 million people. (Source: World Bank).Unfortunately this country face many problems in the recent years, but one of the major problems is the food shortage. Many projects have been started against this problem; however researching about agricultural strategies is really significant. One of the projects which was started in January 2003 and still is on going is fertilizers supply as a cure for famine. The agriculturalist in this country use a kind of chemical fertilizers namely Mavuno.. A period of five year drought cause a serious famine for decades. members of cooperating farmer groups in Trans-Nzioia district have increased their maize yields from 8 to 22 bags per acre. In Embu and Kirinyaga districts, farmers harvested more yields it reached from 5 to 20 bags per acre. Approximately 10 bags on average are required to achieve household food security. This project has illustrated that demand for new improved fertilizers the provision of small bags of fertilizers and seeds enabled even the poorest farmers to achieve incremental gains in food and income over a few seasons. Many farmers purchasing 1kg bags quickly graduate to larger amounts. As a result fertilizer supply in this country would be really useful against food crisis. One of the developing countries in Africa continent is Ethiopia. This country is situated in northwest of Africa with the population of 78 million. The staple food in Ethiopia are oil seeds and cereals. People are suffering from famine and there is no proportion between the food demand and supply. Consequently these people are suffering from malnutrition and many diseases. In the year 2002 environmental policy of Ethiopia made some rules to protect the environment and also increase the amount of food in this re gion. They used chemical fertilizers in smallholder agriculture had a great effect on the quality and quantity of food. After this experience they tried these chemicals in larger farms and again they reached to the same results in their crops especially Cotton. Because of starvation problem in Ethiopia a Tigray project started in 1996 to fight this disaster and rescue their people. The project showed an increase in the amount of yields after some years. One of the crops which had a good result after fertilizer treatment was pea. In general fertilizers have a major role in better and more crops in this country. As discussed in the previous paragraphs, it seems starvation is one of the critical situations in the current world and this problem lead people to become ill and malnutrient. Consequently scientists, agriculturalist, and governments decided to find a long term solution to increase their yields. Finally after some experiences and arguments they reached to the common idea about using specific compounds which are fertilizers to increase the food to feed their people and rescue them. Generally fertilizers can greatly increase productivity in the current century. After some researches about this project I believe in this idea that using these types of chemicals would be greatly effective on food production and it could be a reasonable solution against famine disaster in developing countries. 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