U.S. policy toward Iran's Nuclear Weapons Program Essay

U.S. policy toward Iran's Nuclear Weapons Program - Essay Example There is no defined way of getting Iran to drop its nuclear program. But a combination of various technologies can be used to corner the country into doing so. The US government should follow both the carrot and stick approach to persuade Iran to comply by its sanctions. It should make sure its policies are bilateral and multilateral to gain support from the other countries. Here is a threefold plan to achieve the same. 1. The third world countries should be convinced regarding the threat of the increased arms proliferation and the advantages the current US sanctions might bring them to gain their support. The Iranian neighbours should be lured in to give more support to the US policies. 2. The Iranian public should be made aware of the losses they incur due to the sanctions. They can play a key role in making their government drop such activities for the general economic growth of the country. 3. The US government should stop imposing more strict sanctions on the Iranian oil market. It should bargain technological help in core areas in exchange of a cease on the nuclear program. Current Status Iran suffers from various rounds of US sanctions currently. The sanctions have banned the supply of heavy weaponry to Iran by any other country. It has prevented the exports of Iranian arms to other countries and frozen the assets of around 39 individuals and 141 companies whom it think is responsible for strengthening the nuclear power in Iran. The latest sanctions proposed by the US on prohibit all foreign financial institutions to have business contacts with Iran's Central Bank. Under requests from the American government the European Union and South Korea have also agreed not to purchase oil from Iran which comes as a heavy blow to Iranian economy. These sanctions have been imposed upon Iran because they have breached to comply with the International Atomic Energy Agency (IAEA) regulations as alerted by the UN's watchdog (Not Quite too Late, 2012). Iran’s Nucl ear Power The US intelligence reports states that Iran purchases advanced technology from Russia and the products necessary to materialize the technology from China. There is an assumption that Iran will develop and test an IRBM or intermediate-range ballistic missile and an ICBM with the support of these countries by 2015. The reports from the CIA state that Iran has close tie ups with North Korea and it is planning to create TD-2 type ICBM and test it within 2015 (Iranian Ballistic Missile WMD Threat to the US, 2000). They also fear a huge range of chemical and biological weapons are stocked by the Iranian government which might be used directly against the US or simply be sold to groups or countries which target the US as their primary enemy. Is it an Imaginary Fear? The US government should consider how far the previous sanctions have prevented Iran from producing the nuclear weapons. It is a proven fact that the sanctions which have been passed on the country for the past 30 ye ars have given very little result. But looking into Iran's ballistic missile history, there is no solid proof that they are capable of developing long-range ballistic missiles or huge nuclear weapons. They created a Shahab-4 which claimed to act as a ballistic missile but turned out to be just an SLV with minimum military applications. Tehran has been boasting about its plan to create

Chapter 9 Discussion Essay Example | Topics and Well Written Essays - 500 words

Chapter 9 Discussion - Essay Example Moral decisions are always required to cater to moral skepticism that haunts all of us in our modern life and moral ideals are virtues that can help us overcome the universal dilemma of right and wrong. However, the issues of right and wrong may not always hold true in different situations. Nevertheless, the moral ideals of honesty, justice and courage are the trinity that can help moral decision-making even when the end or means seem clouded with thoughts of right and wrong. Say for instance, whatever be the situation a person having courage to face the truth can be honest to himself or herself about the true thoughts that are there in his or her mind or he/she can face the truth about the situation honestly with the courage to face it all. Justice can objectively help the person to come to a fair decision where the sense of honesty will always help the person to take the side of truth and not give in to any temptations that are wrong or whatever stands to be wrong in a certain situ ation. The main aim is not to get blinded by passion or personal vengeance or subjective beliefs. Whatever be the situation an honest person will always know what is right or wrong – to support the right side requires the moral ideal of courage and to take a step towards the right decision making takes more than courage – it takes the sense of Justice and impartial and objective decision-making to see the truth and justify it. Without a sense of Justice, which helps to evaluate situation, its merits and demerits, one can fall prey to rash decision-making or one can take up arms against a situation through the sheer impulse of courage, once they know that they are right. However, honesty alone cannot help in objective decision-making that also requires prudence and steeling the will to face the truth, as it may not always be pleasant. Justice is the cornerstone of law and it always imbues in us a kind

Private Equity Essay Example | Topics and Well Written Essays - 3500 words

Private Equity - Essay Example On average, private equity has produced very high returns with low correlations to public stocks and bonds and real estate. In other words, private equity offers the prospect of both high returns and increased portfolio diversification. In some cases, private equity may also provide collateral benefits, e.g., a vehicle to make economically targeted investments or to create or preserve union jobs. Finally, there is also the undeniable appeal of seeking innovative investments (Gompers, 2003). 1. Until the investments go public or are liquidated, investments are carried either at cost or at prices set by later rounds of financing. Except in this latter case, private equity is even harder to accurately value than real estate (Bray,1997). 2. Ultimate returns have varied (and are likely to continue to vary) widely by "vintage year," i.e., the year of initial investment, because of wide fluctuations in the business cycle. For example, the median 1986 private equity fund returned only 8.4% per year through 1997, whereas the median 1990 private equity fund returned more than 17% per year through 1997. 3. ... (In statistical terms, the mean return is much higher than the median.) For example, for venture funds formed in 1988, an upper quartile manager returned almost 18% more per year than a lower quartile one from 1988 through 1997 (21.6% vs. 3.9%). 4. Reputation is very important: The best deals and the largest investment flows tend to go to firms with the best track records. Consequently (and quite unlike public equity markets), success tends to persist. The result, however, is that it is often difficult, if not impossible, for new investors to get into the best partnerships or deals. Here, the services of an established fund-of-funds manager can be of real value (Gompers, 2003). AIM OF THE PAPER Private equity (PE) buy-out deals have profound influence on domestic economies. Since the beginning of this year, they have accounted for more than one third of all deals that have been done on the New York stock Exchange1, and have raised $240 billion of cash for their acquisition plans2. The purpose of this report is to discuss the consequences of this type of buy-out on public markets, jobs, and tax revenues. Nevertheless, The effects of high leverage, which is used by PE firms to finance this class of acquisition, are beyond the scope of this report. DISCUSSION Private Equity investment used to be defined as "an equity investment in a company which is not quoted on a stock exchange". However, currently this definition has many limitations because it does not include investments that are structured as convertible debt and investments in public companies that are taken private3. For the purposes of this paper, Private Equity Buy-Out deal is a subset of

Chapter 9 Discussion Essay Example | Topics and Well Written Essays - 500 words

Chapter 9 Discussion - Essay Example Moral decisions are always required to cater to moral skepticism that haunts all of us in our modern life and moral ideals are virtues that can help us overcome the universal dilemma of right and wrong. However, the issues of right and wrong may not always hold true in different situations. Nevertheless, the moral ideals of honesty, justice and courage are the trinity that can help moral decision-making even when the end or means seem clouded with thoughts of right and wrong. Say for instance, whatever be the situation a person having courage to face the truth can be honest to himself or herself about the true thoughts that are there in his or her mind or he/she can face the truth about the situation honestly with the courage to face it all. Justice can objectively help the person to come to a fair decision where the sense of honesty will always help the person to take the side of truth and not give in to any temptations that are wrong or whatever stands to be wrong in a certain situ ation. The main aim is not to get blinded by passion or personal vengeance or subjective beliefs. Whatever be the situation an honest person will always know what is right or wrong – to support the right side requires the moral ideal of courage and to take a step towards the right decision making takes more than courage – it takes the sense of Justice and impartial and objective decision-making to see the truth and justify it. Without a sense of Justice, which helps to evaluate situation, its merits and demerits, one can fall prey to rash decision-making or one can take up arms against a situation through the sheer impulse of courage, once they know that they are right. However, honesty alone cannot help in objective decision-making that also requires prudence and steeling the will to face the truth, as it may not always be pleasant. Justice is the cornerstone of law and it always imbues in us a kind

Microeconomics Math Problem Example | Topics and Well Written Essays - 500 words

Microeconomics - Math Problem Example For example, if the company decides not to fly, it will still incur the fixed costs as they are not related to the output. It will only save the variable costs. In this situation there's no revenue as firm's planes are lying idle. In this situation the firm will still have to pay its insurance and incur depreciation incurring a loss of $4000. However, if it flies between the two cities it makes a loss of only $2000. Hence, it is better for the company to fly between the two cities. However, if it keeps on making losses and they extend to the long-run, then it is better for the firm to shut-off its operations and invest its capital in an industry, where it could make a normal profit. b) At the product price of $28, the production will fall to 5 units. At his point the firm will be making a loss of = 140 - 175 = ($35). Despite the loss, the firm will continue to produce as it covering its variable costs. c) At the product price of $22, there will be no production at all. Looking at the data, the firm will try to equate its price with MR and the resulting output according to this should be 2 units. However, the revenue gained from this will be only $44, whereas the average costs will be $75, as a result the firm will not produce at all as its revenue is less than average costs and it will only increase the loss if the firm decides to go with the production. S

Discrimination Concerning African Americans Essay Example for Free

Discrimination Concerning African Americans Essay Differences in race lead to divergent levels of economic development within the United States. Analysts often try to explain this phenomenon by observing a specific ethnic groups tradition and cultural ideology. Economists expand their analysis on the economic behaviors of African Americans by taking into consideration personal histories and value systems of the group under study. American families measure economic status in terms of income, and factors associated with material security as a whole. These factors may consist of health care, college funds, and retirement plans. However, African American families lag well behind when conceptualizing economic development under these terms. The reason is due to numerous instances of discrimination that occur in the U. S. Many of Americas public policies aid in the underdevelopment of non-white families. Increased economic development within America is the key to upward political and social mobility. If minorities are denied inevitable rights to equality, access to economic development becomes a highly difficult process. Despite Americas idealized view on equal opportunity, it is valid to assume that economic security has been limited on the basis of race. Therefore, it is important to investigate why white American families are economically better-off than non-white American families. One must take into account aspects of political participation, education, and the number of children a family has in the home in order to understand this research question. Contemporary Viewpoints: The lack of political participation of minority groups is a prevalent issue within the United States, explaining why non-white American families are less economically developed when compared to white American families. According to Douglas S. Massey (1995), minority families increasingly speak languages and bear cultures quite different than the established norms within the U. S. regime. He has found that ethnic groups carry their customs into new generations, leading many non-white families to become displaced and impoverished. Brinck Kerr and Will Miller (1997) believe that it is necessary for non-white American families to participate in elections in order to obtain equal representation that they are now lacking. They go on to say that political representation is the key to higher employment levels, and is a significant determinant to the minority share of professional positions. William H. Frey (1996) finds that immigrants usually encounter highly stratified society characterized by high income inequality leaving little room for upward mobility. In addition, Paula D. Mcklain (1990) assumes that non-white American families will continue to reside in low economic subcultures that are institutionally incomplete if they are represented at much lower ratios relative to the population portions of whites. Susan Welch (1990) has found that minority groups have not even achieved half their population proportions in political elections. These numbers are even lower than what they were a decade ago. She states that other factors that lead to low political participation within minority groups is that a substantial number of non-white American families are not citizens, and therefore are not eligible to vote. Also, Massey has found that America enacts policies that hinder the socioeconomic status of immigrants for they are underrepresented at virtually all levels and institutions in United States government. Moreover, Friedberg and Hunt (1995) have found that non-white American families receive less benefits than white families because of geographic segregation within the community. The various dispersion of minority families in different low-income areas within the U. S. makes it difficult for these families to be represented proportionally. Consequently, Rodney E. Hero and Caroline J. Tolbert (1995) believe minority families can now be easily manipulated by government because they are not equally accounted for. Therefore, non-white American families are not able to take advantage of economically developed determinants such as health care and retirement funds. The inscription of the Statue of liberty expresses to the world to give me your tired, your poor, your huddled masses yearning to breathe free. America continuously contradicts itself on the validity of this concept due to the increasingly economic tension between Caucasian and non-white families. Friedberg and Hunt (1995) give the example of Proposition 187, which makes many non-white American families ineligible for certain services such as public health. Non-white American families are not given the opportunity to take advantage of benefactors the U. S. offers to white American families. Therefore, Non-white American families lack of political participation, and unequal representation in governmental institutions and legislative bodies, leads them to be less economically developed than white American families. Education is another obstacle to economic development that non-white families face. Education is a vital tool to economic security. However, Melissa Marschall (1997) has found that current policies demonstrate minorities have been denied equal access to education. She has found that assignment systems based on assessments of language deficiencies or other individual needs are used to separate non-whites from whites. According to Jeffrey J. Mondack and Diana C. Mutz (1997), inequitable school financing is equally detrimental to non-white students. Funding for public schools comes from property taxes. They go along to say that predomintly non-white schools tend to be in central inner city school districts which have a smaller property tax base. In addition, the Office of Civil Rights has identified practices that are termed second generation school discrimination. Practices such as ability grouping, suspensions, and tracking may appear on the surface to be normal educational practices. When examining these components closer, Brick Kerr and Will Miller (1997) have found they have a negative impact on minority students. Ability grouping is a form of segregation that separates minority students from whites. They have found that before even attempting to teach non-white students, they are diagnosed with having linguistic or intellectual problems. The students are therefore required to take special and bilingual classes, making it difficult for them to succeed. According to Robert E. England (1986), non-white students are many times pulled out of regular classes and placed into bilingual classes only on the basis of ethnicity rather than their understanding of English. Brick and Miller go on to explain that suspensions are a second tactic used to encourage the failure of minority students in school. Non-white students are given more harsh disciplinary sentences than white students. Moreover, studies show that the ratio of minority students kicked out of school is disproportionately higher than whites, making the students more likely to drop out. Marschall has found that schools also advocate differences in ability grouping and discipline, leading to distinctions in tracking between non-whites and whites. The majority white students in high ability groups are often counseled to choose college preparatory tracks. However, minorities in low ability groups are counseled into vocational or general tracks, making them less likely to attend post-secondary education. Mondack and Mutz believe that the overall pattern of racial inequality the school system has created makes non-whites less likely to receive a quality education than whites. This truth makes it difficult for economic development to occur within non-white American families. The number of children in a family lead to increased poverty levels and low economic development within non-white American families. M. Klitsch (1990) has found that minority women have children at an extensively higher rate than that of white women. Also, he states that non-white women represent a small percentage of the population, however they account for a greater number of births. Alejandro Portes and Cynthia Truelove (1987) go on to say that non-white families are generally poorer than white families because of the higher number of children in the home. This leads them to be more likely to live below the poverty line. In addition, Genevieve M. Kenney and Nancy E. Reichman (1998) have found the population of non-whites increases faster than whites every year due to high fertility rates. Similarly, the two have found that fertility rates of non-whites families living in impoverished communities is almost double compared to white families. Klitsch has found that non-white families have an estimated 5. 5 people to a household, while white families only 3. 8. Therefore, these high rates lead to low socioeconomic status, and limited opportunities to increase economic security. According to Kenney and Reichman, the high fertility rates are due to low percentages of minorities who use contraceptives. They have also found that non-white women are less likely to have an abortion than white women. One might view this as a positive aspect. However, Portes and Truelove believe that one must take into account the over a quarter of minority families who have an income below the federal poverty line, which is almost one half greater than those of white families. Therefore, the high number of children within non-white American families make them more likely to experience economic deprivation than white American families. There has been an abundance of scholarly research previously conducted on the economic differences between white and non-white American families. They usually consist of data sources such as the U. S. Immigration and Naturalization Service, and the U. S. bureau of the Census. The Foreign Born Population of the United States and Statistical Reports are used with the previously listed sources to compare ethnic groups (Friedberg and Hunt, pg. 5). These databases yield cross-sectional designs that develop into time series reports in order to make assumptions on variables dealing with GNP and income, proving distinct differences in the races under study. For instance, researchers assume that white families are more economically developed than non-whites. This is because the average white American family makes $44,000 a year, and the average non-white American family does not make half this amount (6-7). These figures are valid in drawing conclusions about correlative relationships, satisfying important ideological factors necessary to study when dealing with the dependent variable of race. A more effective method of analysis was a study derived from interviews in a low income Los Angeles county. The participants were white and non-white females. The study was conducted between January 1984 and May 1985 (M. Kitsch, 136-137). In addition, the sample consisted of a three-stage cluster of census tracks, blocks, and household addresses. This cross-sectional design embodied research dealing with fertility rates of different races. The minority women proved to have higher fertility rates in low income sectors, leading Klitsch to question the different ways non-white American families conceptualize economic development. Non-white American families have to deal with numerous accounts of racial discrimination. It is difficult for a non-white American family to become economically stable in terms of income and security plans. The reason is due to being a minority in a predominately white America. Therefore, non-white American families are less economically developed than white American families because: H1 non-white American families are less likely to participate in elections than white American families. H2 non-white Americans are more likely to be discriminated against in school than white Americans. H3 the more children in a household, the more likely a family will be economically deprived. Implications and Conclusion: Education, political participation, and the number of children a family has all affect the levels of economic development within the household for white American families. Even though education levels has a stronger affect toward higher levels of income, when the three variables are measured together, they are all highly statistically significant. In non-white American homes, education levels appears to be the key determinant of their economic status. Further test need to be measured in reference to how the number of children a family has and political participation affect the economic security of non-white American families. With this, the above hypotheses will prove to have more validity. However, in both cases it was important to measure education, the number of children a family has, and political participation together in order to understand the affect these variables have on each other, and how this affect leads to higher or lower levels of economic development within the family. These multivariate studies are also important in predicting the affect the independent variables will have on total family income in the future. It can be assumed that the highest year of school completed will continue to have a strong affect toward economic development in the future for both white and non-white American families. In addition, the number of children in a white American family and their political participation are significant variables to measure when determining their economic standpoint in future years to come. There are alternative approaches to identifying explanations to why non-white American families are less economically developed than white American families. One example is the difference in income between non-white and white American families who have single parents and ones that have two parents. Another alternative approach is identifying education as only an antecedent variable, and observing how it relates to occupation, the true independent variable under study. From here, one can observe how economic development is related to a persons occupation within the home. As anyone who walks the streets of Americas largest cities knows, there has been a profound transformation of different ethnic cultures within the United States. The rapidity of the change has led to growing competition of economic development between white and non-white American families. This competition has lead to ethnic prejudice and discrimination as the United States continues to assimilate into the melting pot for the American dream. Political participation, education, and the number of children within the home are variables that allow the transition to become a less arduous process for white American families. However, if non-white American families continue to do poorly in terms of economic development because of these variables, non-whites will continue to lag behind the income scale in comparison to whites. Research along these lines will lead to the study of relative differences between ethnic cultures. An example is the discovery of why almost half the number of minorities return to their country of origin after experiences of economic injustice. Previous research may also benefit other analysis in the field of economics by itemizing fertility rates in terms of the higher number of non-white American families who lack the finances to properly nourish their children. These new variables along with my research can in time become valid determinants in explaining why white American families are economically better off that non-white American families.

Analysis of Ghanas Economic Growth

Analysis of Ghanas Economic Growth An analytical review of the effect of conflict, politics and resources on the economic growth of the country. 1.0. Introduction 1.1. Ghana in 1957 Some fifty years ago, Dr Kwame Nkrumah stood before a throng of cheering fellow Ghanaians, proclaiming independence from the British Empire. â€Å"At long last, the battle is ended†, he bellowed triumphantly, â€Å"Ghana, your beloved country is free forever† (Nkrumah, 2007). Such were the words that signalled the end of British rule and the start of a new era for the former Gold Coast, which had succeeded in becoming the first independent nation in Africa. By doing so, she set a hopeful precedent to other former colonies which would shortly and eagerly follow in Ghana’s footsteps. For the â€Å"model colony† the future, at this point, looked bright. As a nation with â€Å"advantages of wealth and attainment unrivalled in topical Africa† (Meredith, 2005, 22), Ghana was expected to take the world by storm, swiftly join the ranks of the industrial nations, and proudly serve as a shining example to the post-colonial world (Dzorgbo, 2002, 2-3). There was nothing far-fetched about this optimism. She was, in 1957, one of the most economically advanced countries in sub-Saharan Africa. Income per head was double that of the Tanganikans, substantially more than the Zambians, and almost on a par with the Rhodesians (Alpine and Pickett, 1993, 64). Contributing to this private wealth was the lucrative trade in the export of cocoa whose production Ghana dominated by this time. Such a presence within the international commodity market helped shore up the already substantial amounts of foreign reserve her government held. Yet all of this failed to happen. Several years after independence, Ghana’s economy began to totter, her foreign reserves evaporated, and reckless public spending placed the country on a financial precipice – all this by the end of the 1960s (Konadu-Agyeman, 2000, 473). There was to be no let-up. The economic downturn continued into the 1970s where Gross Domestic Product (GDP) fell more than three percent each year. Price inflation averaged at around 50 to 100 percent. Worse was to follow. By the beginning of the 1980s, inflation reached more than 100 percent, GDP levels fell further into the abyss, and one of the worst famines hit the country (Sandbrook, 1982, 2). Nothing, it now seemed, could go right. She had little choice but to solicit help from abroad. 1.2. International intervention and neo-liberalism Following the implementation of economic restructuring programmes, created by the International Monetary Fund (IMF) and the World Bank, Ghana finally emerged out of her desperate trough in 1983. Inevitably questions were asked. Why had Ghana struggled for so long? How could she so comprehensively dash the hope and goodwill in the immediate years after independence? Many factors, in the view of the IMF, had contributed to her demise: mismanagement, over-regulation, failure to tackle inflation, and currency over-evaluations headed the depressingly long list (Konadu-Agyeman, 2000, 473). Correspondingly, strings were attached to how IMF funds were to be used: the devaluing of the currency, the Cedi; the withdrawal of subsidies; the retrenchment of labour; the reduction in public expenditure; and the liberalisation of trade and exchange controls. Such measures, which took their cue from a resurgent neo-liberalism, have proved to be a mixed blessing. Even though, on the one hand, the adoption of these policies helped rein in inflation, created steady currency fluctuations and boosted the production of cocoa, they also led, on the other hand, to increased unemployment, ushered in stiff and unfettered competition from abroad, and generated substantial social discontent. So much of the welfare state had been taken away, in fact, that the weak and the poor were falling through the net. But a final verdict on the effectiveness of these policies is still too early to call. Even so, it would be true to say that many of these neoliberal suggestions, which underpin the IMF’s Structural Adjustment Programmes (SAP), have not come from an appreciation of the peculiarities of the African predicament in general or the Ghanaian one in particular. Rather they draw from the successes of the East Asian Newly Industrialized Countries (NICs) which, it is argued, managed to free themselves from the shackles of perennial underdevelopment by creating growth through the export of value-added products. Such a way of proceeding, it has been reasoned, could be replicated within the African context. Much of the reason why Ghana failed in the years after independence from developing economically, this model suggests, was because she promoted a policy of protectionism. Rather than achieve industrial growth and economic development Nkrumah said it would, his policy of Import Substitution Industrialization (ISI), which erected tariffs so as to nurture domestic industry, did the opposite and halted diversification and competitiveness. All of which had now come home to roost, in the opinion of neo-liberalists, who now called on government to shrink. The new policy of SAP, based on exports, has at first glance much to recommend it, especially with regard to Ghana. Even a cursory look at Ghana’s colonial past yields firm illustration of why an export-based economy could make sense. During the days of the British Empire, Ghana had been forced to open up to the international market not least because she offered precious resources and material such as gold, sugar and cotton. Such a colonial emphasis on international trade, to be sure, substantially benefited the colonisers and not the colonised. Even though the British emphasis on exports had the effect of neglecting domestic industry, the legacy the Empire left behind was nonetheless one in which the economy thrived on her exports (Frimpong-Ansah, 1991, 67). Counterfactually-speaking, therefore, had Nkrumah implemented economic policies which aimed to promote exports rather than seek to curtail them, then Ghana may have been spared from the title question: what are you doing here? 1.3. Problems and solutions for the Ghanaian economy If only things were that simple. Even though one might forcibly argue that Ghana’s economy is orientated towards the international market, the kind of exports she has traditionally exported – and is currently exporting – would not have contributed much towards sustained growth. Nor do present circumstances hold hope that things would be any different either. Primarily, as the World Trade Organization has outlined, Ghana is still â€Å"heavily dependent on agriculture, especially cocoa, and on natural resources, notably minerals. Primary production accounts for almost half of GDP; agriculture at 40%, is the most important sector. Manufacturing contributes some 10% of GDP. Services are the second largest component† (WTO, 2001). Much of this primitiveness must be sought, once more, in British colonial policy, which saw little need to invest any substantial sums into creating a more sturdy and versatile infrastructure. Raw materials, such as Ghanaian cocoa, were kept just that – raw – to keep prices down, prevent competition to British firms by not having processing facilities, and turn Ghanaian subjects into obedient consumers of the finished product that would be shipped in from abroad. As Immanual Wallerstein put it with reference to Africa generally: â€Å"Whatever the motive for entering the world agricultural market and whatever the social organization of export production, each colonial administration, as the political arm of the metropole, sought to tie a segment of the African population into the larger imperial economy either as independent producers or as wage-workers, and in all cases as consumers† (Wallerstein, 1986, 18). He could have just as well been talking about Ghana. Such colonial legacies mean that even today Ghana’s raw materials continue to be dictated by external conditions. Since primary products are easily affected by the vagaries of the weather as well as by the fluctuating international market, export-led economic development would almost certainly prove to be a bumpy ride. More specifically, it means that: â€Å"When stocks are low and pries high farmers can increase their planting, but they cannot compress the time it takes crops to ripen to harvest When farmers eventually increase production, prices fall as supplies quickly outgrow demand in importing countries, given that demand does not grow significantly in response to lower prices. The result is a pattern of short-lived booms followed by lingering slumps† (Food and Agriculture Organization, 2004). Such descriptions invoke a viscous circle from which Ghana would find hard to escape. From this lesson follows the glaring need to diversify the country’s economic base, if it is to avoid the ‘booms’ and ‘slumps’ of an economy ensconced within agriculture. â€Å"While traditional exports, such as cocoa and gold, may remain an important source of growth and foreign exchange in the future,† the World Bank contends, â€Å"export diversification will be necessary to accelerate economic growth and poverty reduction and to decrease Ghana’s vulnerability to external price shocks† (World Bank, 2001,1). To be fair, it has not been from a lack of effort that Ghana has failed to diversity sufficiently, for political circumstances have repeatedly conspired to hold up any sustained drive. Liberal approaches to economic development, which Nkrumah’s successors aimed at, fell fowl of a coup, while two later regimes which tried to develop indigenous strategies of development were ousted in similar circumstances. Clearly political conflict and change have impacted hard on Ghana’s economic growth – arguably negatively on the whole – and, if the IMF anoraks are in any way right, stability in the present governmental set-up would finally lead the country to the elusive goal that had seemed possible during the few years after independence. 1.4. Objectives and organization Enmeshed within all these complicated factors, which this introduction has served to outline, the economic growth of Ghana must, at least for the moment, take place within the neo-liberal strictures imposed by the IMF, which has set great store by small government and export-led growth. Conflict, politics and resources will, in this investigation, be reviewed therefore need to take account of the domestic as well as international setting, so as arrive at a more rounded appreciation of how all these factors have affected economic growth in Ghana. Looking at past attempts to create economic growth as well as current trade policies designed to do the same, this study will offer both a historical as well as a contemporary analysis of the Ghanaian economy. Perhaps reaching beyond the remit of the brief, the study will also powerfully suggest that, as things stand as they do, Ghana’s economic future is set to remain a bleak one. More favourable rules of trade must be implemented, the thesis recommends, without which she will not be able to continue to diversify her economic base. To illustrate these points, the investigation is divided into the following chapters. Chapter two, below, will review some of the basic economic models which have found application in Ghana since her days as a colony of the British Empire. Chapter three will then focus on the implementation of these development theories from a historical perspective, analysing the various regimes as well as their ideological leanings which contributed to the kind of policies they came up with. Chapter four will then assume a more specific and contemporary focus, reviewing the extent to which international agreement on trade has impacted on economic growth in Africa in general and in Ghana in particular. Finally, chapter five will consider how tariff and non-tariff barriers, with reference to the EU, have influenced the shape of the Ghanaian economy. 2.0. Theories of Economic Development Before this investigation can examine in detail how various factors have influenced Ghana’s economic growth, one should stop to consider the kind of economic thinking that has undergirded the disparate policies she has resorted to in order to achieve prosperity down the years. Such a detour is necessary if we are to fully appreciate the broader economic and political climates in which policies have been conceived. 2.1. Free trade and nationalism During her time as a colony of the British Empire, Ghana had been forced to adopt a mercantilist system of trade which functioned as the principle form of economic thinking that dictated the way nations engaged with each other, economically-speaking, until the late eighteenth century. Much of modern economic thinking grew out of a backlash against this closed system, which put the nation before the individual and which saw wealth as finite. Inspired by the work of Adam Smith, who wrote his seminal The Wealth of Nations in 1776, liberals criticized how mercantilism elevated the position of the state out of all proportion to the role it should play in the functioning of the economy. By contrast, Smith felt that the state should limit itself to providing three basic duties to society: First, the duty of protecting the society from violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing inexact administration of justice; and thirdly, the duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals to erect and maintain; because the profit could never repay the expense to any individual or small number of individuals, thought it may frequently do much more than repay it to a great society.(Smith, 1863, 286) From this basic framework, in which the individual would have access to basic rights and protection from violence, Smith recommended that the government retreat and allow the individual to develop on their own, especially with regard to economics. â€Å"Every man, as long as he does not violate the laws of justice†, he proclaimed, â€Å"is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.† Not only did he feel his thinking needed to apply to the domestic sphere but also the international one too, for â€Å"commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship† had broken down into a series of international conflicts because homos economicus operated from the assumption that they had to steal from one another rather than share the wealth available. More specifically liberal thinking envisaged a world based on three pillars: first was the belief that free trade promoted economic growth and consumption; second, that it improves societal values and ideals; and third, that free trade would promote a more peaceful international environment because greater interdependence would lead to a convergence of interests among societies (Harlen, 1999, 735). Most pioneering in the implementation of these ideals was Britain which threw down the gauntlet to her rivals by tearing down protectionist barriers, such as the Corn Laws, in the middle of the nineteenth century at a time when mercantilism dictated the opposite and discouraged trade between European powers. Soon European countries followed suite in gradually adopting policies that were more liberal in outlook. Nations such as France, Sweden, Belgium, Portugal and Spain all moved towards the liberalization of their tariff system. But such an open period proved to be short-lived as nationalistic concerns rowed the liberal boat back to shore. By the 1870s, for example, Austria-Hungary increased duties and Germany followed at the end of the decade; France also upped her tariffs in 1881, modestly initially, then sharply in 1892, while other countries returned the favour in kind (Krasner, 1975, 325). Much of the problem had been that, in following Britain, which had embarked upon industrialization much earlier than the European continent, the benefits which European countries could reap from liberalizing their markets would be far from worthwhile, not least because their own infant industries could not compete with those of Britain, which had far more established businesses that had the muscle to blow those of the continent out of the water. Bitter about the lessons that had been learnt at the hands of the British, nationalist economists, while seeing the benefits of free trade, came to point out that liberals â€Å"did not adequately address the problems of how economically and politically weak countries might ensure their national security in a world where free trade did not exist† (Harlen, 1999, 739). Such a dilemma was not only shared by European countries but also by the United States whose economic power was no match to Britain’s at this time. If the United States were to compete on Britain’ terms, economist Alexander Hamilton noted, â€Å"the want of reciprocity would render them [United States] the victim of a system which should induce them to confine their views of Agriculture, and refrain from Manufactures† (Hamilton, 1964, 138). Such a view implied that open competition would only result in the stronger country dictating terms and keeping the weaker one in almost perpetual underdevelopment. Consequently, in order to compete, diversification of the country’s manufacturing base had to be effected, an objective that could only be realized if government helped out and, to cite Hamilton once more, â€Å"encouraged the introduction of foreign technology, capital, and skilled labor †¦ and adopt protectionist trade policies, including tariffs, quotas and bounties, to bolster its fledgling industries†. Similar conclusions were reached by the German political economist Friedrich List, who laid down in his National System of Political Economy the need to dispense with the ideology of free trade in the short term in favour of empowering the state to protect and boost its infant industries and build up a skilled workforce. Only when this was done, List also argued, could countries move towards a policy of liberalization. 2.2. Theories of development Following the end of the Second World War, which signalled the end of colonialism, a similar yet different schools of thought emerged, which centred on the issue of how newly-independent former colonies could ‘catch up’ and attain economic prosperity. Such thinking took shape during the Cold War so that development theory, as it was called, took influences from both the right and the left – from capitalism to Marxism – to produce the following ways of thinking about development: modernization, structuralism, dependency theory and neo-liberalism. Typically, modernists believe development have to be achieved through linear progression, from a ‘traditional’ to a ‘modern’ society’ (Rostow, 1968). During the ‘traditional’ stage the country would be limited by weak government, poor technology and communications and overreliance on subsistence agriculture. Eventually however these societies would accumulate ‘preconditions of take-off’ in which foundations are laid, such as the creation of private business, banks, schools and hospitals; but such a society still lacks the productivity necessary to make the big jump. To achieve ‘take-off’ the economy would need to show signs of rising investment and savings as well as the rapid expansion of industry and agriculture. Even though the economy would have to experience some turbulence along the way towards maturity, it would do so by stripping itself of the very industries that had helped in the take-off. Finally, countries would, under this theory, enter the age of mass consumption when an affluent society would be born. Most importantly, in order to achieve the various stages of development and pass through them, the state had to be interventionist. Even though these thinkers insisted on the virtues of private enterprise, they also insisted that the Third World needed a plan or blueprint which governments could follow. A different take on modernization, which rejected the linear path of development, was Latin American structuralism. Ultimately, it sought the reason for underdevelopment in the unbalance of trade between raw commodity producers and manufacturers. More capital and technology would, it was argued, lead to a turnaround in fortunes. Crucially, developing countries had been apportioned the almost exclusive role of primary product producers within the international division of labour. As Raul Prebisch, a prominent proponent of this analysis, saw it, there were two problems associated with being predominately a primary goods exporter. First, he saw that technological advancement in the industrial core would lead to the creation of synthetics for natural products. Such a shift away from a dependence on raw materials, such as rubber, would have a detrimental impact on the economies of those who sought to profit. Second, he discerned the tendency that as per capita incomes increase, demand for primary products, such as food, would remain stable, while by contrast demand for manufactured goods would rise (Prebisch, 1964, 7). All of this meant that, without the prospect of the developed world consuming more primary products, developing countries had to face the prospect of â€Å"price volatility in the short term and declining terms of trade over the long run†. Such defects in the international system would be overturned through industrialization, which would decrease dependence on primary products and increase ability to export processed products. Importantly, however, structuralism shared with modernization theory the need for government to play a major role in supporting and protecting infant industries through tariffs and non-tariff barriers. Only by doing so, it insisted, could developing counties compete at all. Such was part of the reason why the policy of import-substitution industrialization (ISI) was created and propounded in the hope that an emphasis on industrialization would promote growth. Yet the problem with structuralism was that it took as a given the outer context of the capitalist international economy. Accept this, dependency theorists countered, then there was only the prospect for further dilemmas for developing countries. As a chief proponent of this idea, Andre Gunder Frank showed, in his book Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil, that underdevelopment was caused by the very nature of global capitalism. Two divisional structures had emerged in which one camp would function as the metropolis centre and the other would serve as the peripheral and perennial satellites. Such a structure was largely exploitative in that â€Å"the metropolis expropriates economic surplus from its satellites and appropriates it for its own economic development. The satellites remain underdeveloped for lack of access to their own surplus and as a consequence of the sae polarization and exploitative contradictions which the metropolis introduces and maintains in the satellite’s domestic economic structure†. So he concludes pessimistically that â€Å"economic development and underdevelopment are opposite faces of the same coin† (Frank, 1969, 8). Such thinking formed the basis for the rejection of schemes such as ISI, since they only helped entrench even further a form of â€Å"dependent development† in which developing countries would become wholly reliant on the developed world for capital and investment. As long as this state of affairs continued, dependency theorists warned, developing nations could not share in the wealth of a capitalist world economy. Rather, it was argued, nations should move towards a socialist path of development, with the Soviet Union as a model of a country that had managed to industrialize without recourse to capitalism. Such an interpretation of development, it hardly needs to be mentioned, left room for any viability in the policies of ISI that had emerged under the structuralist banner. As it turned out, ISI failed to deliver on its promises of creating industrial competitiveness. In fact greater inequalities arose due to the way in which certain industries were protected so that they ended up with excess capacity, inefficiency and low quality. More worryingly, the fact that the state controlled licensing and foreign exchange meant that it encouraged â€Å"rent-seeking, corruption, smuggling, and black market as well as inefficiency in the allocation of resources† (Cohn, 2005, 378). Problems identified by dependency theorists proved to be prophetic. 2.3 The return of liberalism Even so, the inadequacies of ISI did not prevent the liberals, emerging out of the shadow of criticisms, from drawing different conclusions. For they sought the root cause of developing countries’ inability to move away from their state not in the unfair international system, which was inherently set up to keep them underdeveloped, but in incompetent government. What needed to be done, in other words, was to keep out the hand of government and allow market forces to operate. Evidence that the neoliberals were correct was provided by the promising growth of East Asian countries which based their economic development on exports. Examples such as Taiwan and Korea, which both witnessed strong rates of growth, conferred confidence on neoliberal analysts who sought the success of these countries to an â€Å"evolutionary process of industrially induced modernization and structural transformation †¦ locating an appropriate development niche within the global economy which may be exploited by implementing sound development policies based on conventional neoclassical economic principles† (Bruton, 1998, 107). From all these examples neoliberals re-built the edifice to their economic thinking. Clear guidelines this time were issued governments to, for example, â€Å"eliminate exchange–rate controls, restrictions on international trade, deregulation of the financial sector, privatization of state enterprises, creation of an unregulated labor market, specialization according to ‘comparative advantage’ and market driven resource allocations, and generally defining a ‘minimalist’ role for the state in development† (Brohman, 1996, 108). Most developed countries, responding to the debt crisis of the 1980s, gradually appropriated these new policies. Within the developing world, however, the legacy of ISI left a chronic balance of payment problem so that many countries had substantial debts they owed to international financial institutions. Responding to the crisis, in which many developing countries were expressing inability to return the debts, the IMF and World Bank issued guidelines in which it was spelt out that these nations should adhere to structural (or neoliberal) reforms so as to achieve growth and stability. There was, in fact, little choice. As Walden Bello and Shea Cunningham have acutely noted, â€Å"Faced with the threat of a cut-off of external funds needed to service the mounting debts they had incurred from the western private banks that had gone on a lending binge in the 1970s, these countries had no choice but to implement the painful measures demanded by the Bank and Fund† (Bello and Cunnigham, 1994). Such a move proved to be a watershed: it marked a shift away from an era of protection to a time of the free market, and it is within this climate that developing countries presently operate. In what follows one will review how these shifts and turns in economic developmental thinking impacted one particular country, Ghana. 3.0. Politics, ideology and economic policy Ever since her independence in 1957, Ghana has chopped and changed economic policy to the extent that she has tried pretty much all the development theories on which policy was forged. During the colonial period, she had been subjected to mercantile policies, which rendered Ghana an exporter of raw materials and an importer of finished consumer products. Tragically, this meant that wider socio-economic developments failed to take place, so that a diversification of her economic and industrial base away from the almost total reliance on a few basic resources could not be effected before British rule ended. 3.1. Nkruman and structural economics When Nkrumah assumed the mantle of power, he intended to push Ghana out of the underdeveloped into the developed world. Conceiving a Ten Year Development Programme, he established an Industrial Development Board (IDB), which was handed the task to develop the country’s manufacturing capabilities with the intent to pass them on to private enterprises when sufficiently grown (Dzorgbo, 2001, 148). But more substantive initiatives were carried out following the visit of Professor Arthur Lewis, a development economist, who argued strongly against any shock industrialization strategy in a country whose domestic market was limited; pursuit of large-scale industrialization would counterproductively remove resources away from the rural areas to the modern sector; and where shortage of labour would be aggravated by demand from industry. Far from adopting ambitious schemes, he put forward a series of modest proposals that were designed to prop up basic infrastructures so that a basis could be laid â€Å"for private foreign investment without the government having to bother offering special investment favours† (Dzorgbo, 2001, 149). Such a policy of â€Å"industrialization-by-invitation†, which was based on modernization theory, took a dim view of the ability of the government to access funds and take industries under its wing in a way Nkumah had initially intended. Even so, many of these recommendations were both enthusiastically and modestly accepted. Between 1950 and 1962, the Ten Year Plan adjusted to sing the tunes of a need above all for strong infrastructure. More specifically, it successfully constructed roadways and bridges to connect the various parts of the country, while it built the hydroelectric Akosombo Dam to secure the energy base needed for industrialization. Efforts were also invested in the setting up of transportation systems, while in the realm of social development, the government increased access its population had to water and education. Free primary education became available for all by 1960 and secondary education was expanded rapidly too. Enrolment in schools almost doubled across the board in the 1960s, with some 36,414 students registering in secondary schools, technical colleges, polytechnics and pre-university schools (Dzorgbo, 2001, 153). Such impressive improvements were capped off by improvements in health care services which saw new hospitals and clinics open. Despite the fact that Nkrumah government had followed and even bettered the recommendations of Lewis to improve the socio-economic infrastructure of the country, it grew impatient of the gradualist approach to economic development. More specifically, it became disillusioned by the â€Å"industrialization-by-invitation† policy because it had not led to the diversification of the economic base necessary for stability in the long run. Even though substantial amounts of FDI had been expected, following adoption of Lewis’ ideas, little of it had materialised. Those which had were taking the country for a ride. For example, during the construction of the Akosombo Dam, Nkrumah sought financial assistance from the United States. Eventually the firm Kaiser Aluminium Company came forward to underwrite some of the costs of the project. But conditions were attached that it as well as it