Economy

growth models

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Bring out the differences and similarities between endogenous Growth-models”>growth models and exogenous growth models.

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Sikkim : Tax and Economic Reforms

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Sikkim : Tax and Economic Reforms

The economic liberalization in India , initiated in 1991, with principles of Liberalization , Privatization and Globalization (LPG) of the country’s economic policies, with the goal of making the economy more market and service-oriented and expanding the role of private and foreign investment. Specific changes include a reduction in import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment. Liberalization has been credited by its proponents for the high economic growth recorded by the country in the 1990s and 2000s. And it has positive impact on the state of Bihar as can be visibly seen from various sectors.

India’s GDP has increased thereafter and also  the GSDP of state has increased many folds.  Between 2004-05 and 2015-16, Gross State Domestic Product (GSDP) of Sikkim has expanded at a compound annual growth rate (CAGR) of 19.44 per cent to US$ 2.75 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 19.11 per cent to US$ 2.33 billion.

Agricultural Sector

The state’s economy is largely agrarian, based on the terraced farming of rice and the cultivation of crops such as maize, millet, wheat, barley, oranges, tea and cardamom. Sikkim produces more cardamom than any other Indian state, and is home to the largest cultivated area of cardamom

Sikkim has a suitable climate for agricultural and horticultural products. It supports multiple crops; viz., rice, wheat, maize, millet, barley, urad, pea, soya bean, mustard and large cardamom. Sikkim is the top producer of large cardamom, contributing over 80 per cent to India’s total production.

As per the state budget 2016-17, Sikkim got certified as first fully organic state in India by the Central Ministry of Agriculture and Farmers’ Welfare as well as other recognized agencies of the country.

Organic Farming

Sikkim has been transformed as the first Organic State of the country and the world by design and have opened unlimited opportunities in sectors like Agriculture, Horticulture and Animal Husbandry.

Industrial Sector

Industries plays an important part to the development of the state. State government has taken various measures to provide impetus to the growth of the economy.

There has been a drastic shift in the sectoral contribution from primary and tertiary to the secondary sector. The overall performance of the economy of the state during 2015-16 was encouraging. At a CAGR of 33.91%, the secondary sector witnessed the fastest growth among the three sectors during 2004-05 to 2015-16. It was driven by manufacturing, construction and electricity, gas & water supply. In 2015-16, the secondary sector contributed 67.73% to the state’s GSDP at current prices.

The state follows the North East Industrial Investment Promotion Policy, 2007, which provides several incentives and concessions for investment. Institutional support is provided through various central and state government agencies viz., North East Council, Ministry of Development of North Eastern Region and Commerce and Industries Department.

The main industries like Brewing, distilling, tanning and watchmaking are located in the southern regions of Sikkim.

Tertiary sector

State government has implemented various policies to increase the growth rate of Tertiary sector. Various policies like IT Policy , Tourism Policy gives impetus for the growth of the services sector and hence development of economy. Industrial sector contributes majorly to the development, followed by the tertiary sector at 23.65% and primary sector at 8.62%. The tertiary sector grew at a CAGR of 15.23% between 2004-05 and 2015-16. The growth has been driven by trade, hotels, real estate, finance, insurance, transport, communications and other services. The primary sector grew at a CAGR of 15.55% between 2004-05 and 2015-16.

Tourism provides the main thrust to the economy. With the tranquil climate, the natural beauty and the fine cultural heritage of Sikkim, the growth of tourism has immense possibilities. There are large number of places of tourist attraction particularly the snow clad mountains, the lakes and unspoiled forest areas and valleys of flowers. The advantage of having very fine monasteries in Sikkim can also be taken to attract Buddhist tourists from countries like Japan and the South Eastern countries.

 

Total Receipts and Total Expenditure

For the fiscal year 2017-18, a gross expenditure of Rs. 6364.02 crores has been projected in the budget.

After taking into account recoveries amounting to Rs. 142.20 crores, the net expenditure comes to Rs. 6221.82 crores.

The fiscal deficit remains in adherence to the fiscal management targets set in the Sikkim Fiscal Responsibility and Budget Management Act, 2010, i.e. not more than 3% of GSDP. The contribution from total tax revenue is of the order of Rs. 669.51 crores and in the case of Non-Tax revenue, Rs. 426.46 crores.

The total gross expenditure includes allocations amounting to Rs. 81.76 crores under the dispensation of the North Eastern Council, Rs. 153.66 crores under Non Lapsable Pool of Central Resources, and Rs. 1326.76 crores under Centrally Sponsored Schemes.

In Union budget, the distinction between Plan and Non-Plan has been done away with from the year 2017-18 onwards. This has been done as a measure towards bringing about major fiscal and budgetary reforms while retaining the distinction on the basis of Revenue and Capital expenditures. Since the Union and the States have to work together on the methodology, State has also adopted the same system from the financial year 2017-18 budget.

Tax proposals

Accordingly, the main taxes of the State Government like the Value Added Tax, Central Sales Tax, Entry Tax, Cess and Luxury Tax etc. and also the taxes of the Government of India like the Central Excise and Services Tax, have now been subsumed in the Goods and Services Tax.

Goods and Service Tax (GST)

GST, will replace multiple state and central taxes to create one national market and single tax in the country. This bill seeks to subsume all central indirect levies like excise duty, countervailing duty and service tax and also state taxes such as value added tax, entry tax and luxury tax, to create a single, pan-India market.

GST will be a game changer in the states as they eradicate the cascading effect on goods and services.GST will bring down the cost of goods and services as there will be no cascading effects of taxes. He added that GST is expected to increase revenue by widening the tax base and improving the taxpayer compliance. 7% items are such on which no taxes would be levied, 14% items would be in the lowest bracket of 5% tax, 17% items will have 12% tax, 43% items will have 18% tax, and 19% items, which are generally not used by people will have 28% tax.

Only the Goods and Services Tax will be levied in place of all these taxes in the indirect tax regime. Petroleum products and liquor have been kept out of the GST, as of now. The rates of the tax will be uniform on goods and services in the entire nation. As per the decision taken by the GST Council, the Goods and Services Tax will be implemented from 1st July, 2017 onwards.

The State Government has made all necessary preparations for the implementation of the new tax regime so that the trade and industry of the State do not face any difficulties. E-payment will be made compulsory for the payment of taxes.

 

Banking- Role of Commercial Banks, Issue of NPA, Financial Inclusion

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Table of Content:-

  1. Role of Commercial Banks
  2. Issue of NPA
  3. Financial Inclusion


Role of Commercial Banks

A Commercial bank is a type of financial institution that provides services such as accepting deposits, making business loans, and offering basic investment products

There is acute shortage of capital. People lack initiative and enterprise. Means of transport are undeveloped. Industry is depressed. The commercial banks help in overcoming these obstacles and promoting economic development. The role of a commercial bank in a developing country is discussed as under.

  1. Mobilising Saving for Capital Formation:

The commercial banks help in mobilising savings through network of branch banking. People in developing countries have low incomes but the banks induce them to save by introducing variety of deposit schemes to suit the needs of individual depositors. They also mobilise idle savings of the few rich. By mobilising savings, the banks channelize them into productive investments. Thus they help in the capital formation of a developing country.

  1. Financing Industry:

The commercial banks finance the industrial sector in a number of ways. They provide short-term, medium-term and long-term loans to industry.

  1. Financing Trade:

The commercial banks help in financing both internal and external trade. The banks provide loans to retailers and wholesalers to stock goods in which they deal. They also help in the movement of goods from one place to another by providing all types of facilities such as discounting and accepting bills of exchange, providing overdraft facilities, issuing drafts, etc. Moreover, they finance both exports and imports of developing countries by providing foreign exchange facilities to importers and exporters of goods.

  1. Financing Agriculture:

The commercial banks help the large agricultural sector in developing countries in a number of ways. They provide loans to traders in agricultural commodities. They open a network of branches in rural areas to provide agricultural credit. They provide finance directly to agriculturists for the marketing of their produce, for the modernisation and mechanisation of their farms, for providing irrigation facilities, for developing land, etc.

They also provide financial assistance for animal husbandry, dairy farming, sheep breeding, poultry farming, pisciculture and horticulture. The small and marginal farmers and landless agricultural workers, artisans and petty shopkeepers in rural areas are provided financial assistance through the regional rural banks in India. These regional rural banks operate under a commercial bank. Thus the commercial banks meet the credit requirements of all types of rural people. In India agricultural loans are kept in priority sector landing.

  1. Financing Consumer Activities:

People in underdeveloped countries being poor and having low incomes do not possess sufficient financial resources to buy durable consumer goods. The commercial banks advance loans to consumers for the purchase of such items as houses, scooters, fans, refrigerators, etc. In this way, they also help in raising the standard of living of the people in developing countries by providing loans for consumptive activities and also increase the demand in the economy.

  1. Financing Employment Generating Activities:

The commercial banks finance employment generating activities in developing countries. They provide loans for the education of young person’s studying in engineering, medical and other vocational institutes of higher learning. They advance loans to young entrepreneurs, medical and engineering graduates, and other technically trained persons in establishing their own business. Such loan facilities are being provided by a number of commercial banks in India. Thus the banks not only help inhuman capital formation but also in increasing entrepreneurial activities in developing countries.

  1. Help in Monetary Policy:

The commercial banks help the economic development of a country by faithfully following the monetary policy of the central bank. In fact, the central bank depends upon the commercial banks for the success of its policy of monetary management in keeping with requirements of a developing economy.

 

 


Issue of NPA

A non performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.According to RBI, terms loans on which interest or installment of principal remain overdue for a period of more than 90 days from the end of a particular quarter is called a Non-performing Asset.

However, in terms of Agriculture / Farm Loans; the NPA is defined as under:

  • For short duration crop agriculture loans such as paddy, Jowar, Bajra etc. if the loan (installment / interest) is not paid for 2 crop seasons , it would be termed as a NPA.
  • For Long Duration Crops, the above would be 1 Crop season from the due date.

The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act has provisions for the banks to take legal recourse to recover their dues. When a borrower makes any default in repayment and his account is classified as NPA; the secured creditor has to issue notice to the borrower giving him 60 days to pay his dues. If the dues are not paid, the bank can take possession of the assets and can also give it on lease or sell it; as per provisions of the SAFAESI Act.

Reselling of NPAs :- If a bad loan remains NPA for at least two years, the bank can also resale the same to the Asset Reconstruction Companies such as Asset Reconstruction Company (India) (ARCIL).  These sales are only on Cash Basis and the purchasing bank/ company would have to keep the accounts for at least 15 months before it sells to other bank. They purchase such loans on low amounts and try to recover as much as possible from the defaulters. Their revenue is difference between the purchased amount and recovered amount.

 


Financial Inclusion

Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable.Financial-inclusion

Government of India has launched an innovative scheme of Jan Dhan Yojna for Financial Inclusion to provide the financial services to millions out of the regulated banking sector.

 

 

 

 

Various program’s for financial inclusion are:-

  • Swabhimaan Scheme: under the Swabhimaan campaign, the Banks were advised to provide appropriate banking facilities to habitations having a population in excess of 2000 (as per 2001 census) by March 2012.
  • Extention of  the banking network in unbanked areas,
  • Expansion of Business Correspondent Agent (BCA) Network
  • Direct Benefit Transfer (DBT) and Direct Benefit Transfer for LPG (DBTL)
  • RuPay, a new card payment scheme has been conceived by NPCI to offer a domestic, open-loop, multilateral card payment system which will allow all Indian banks and financial Institutions in India to participate in electronic payments.
  • Pradhan Mantri Jan-Dhan Yojana (PMJDY) was formally launched on 28th August, 2014. The Yojana envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance and pension. The beneficiaries would get a RuPay Debit Card having inbuilt accident insurance cover of Rs.1.00 lakh. In addition there is a life insurance cover of Rs.30000/- to those people who opened their bank accounts for the first time between 15.08.2014 to 26.01.2015 and meet other eligibility conditions of the Yojana.

 

World Trade Organization

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Contents

  • What is WTO? Structure? Agreeements?
  • Rounds of WTO
  • Doha Development Round
  • India’s role in WTO
  • India’s proposals to WTO
  • Trade in Goods
    • Agriculture-notes-for-state-psc-exams”>Agriculture
    • NAMA
    • Rules
    • SPS
    • TBT
  • https://exam.pscnotes.com/trade-in-Services“>Trade in Services
    • GATS
  • Intellectual Property (TRIPS)
  • TRIMS
  • Dispute settlement
  • Development
    • Trade and Development
    • Aid for Trade
    • Special & Differential Treatment
  • Environment
    • Trade and Environment
  • Trade facilitation
  • Other issues

World Trade Organization” class=”read-more content-read-more” href=”https://Sikkim.pscnotes.com/prelims-notes/economy/world-trade-organization/#more-800″>Read moreWorld Trade Organization

Goods and Services Tax — GST

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What is GST?
Services-tax-gst-2″>Goods and Services Tax — GST — is a comprehensive tax levy on manufacture, sale and consumption of goods and services at a national level.

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Concept of Money Supply and High Powered Money

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Money supply is the entire stock of currency and other liquid instruments in a country’s economy as of a particular time. The money supply can include cash, coins and balances held in checking and savings accounts.

word-cloud-for-money-supply_gg63129405Money Supply can be estimated as narrow or broad money.

There are four measures of money supply in India which are denoted by M1, M2, M3 and M4. This classification was introduced by the Reserve Bank of India (RBI) in April 1977. Prior to this till March 1968, the RBI published only one measure of the money supply, M or defined as currency and demand deposits with the public. This was in keeping with the traditional and Keynesian views of the narrow measure of the money supply.

 

 

M1 (Narrow Money) consists of:

(i) Currency with the public which includes notes and coins of all denominations in circulation excluding cash on hand with banks:

(ii) Demand deposits with commercial and cooperative banks, excluding inter-bank deposits; and

(iii) ‘Other deposits’ with RBI which include current deposits of foreign central banks, financial institutions and quasi-financial institutions such as IDBI, IFCI, etc., other than of banks, IMF, IBRD, etc. The RBI characterizes as narrow money.

M2. which consists of M1 plus post office savings bank deposits. Since savings bank deposits of commercial and cooperative banks are included in the money supply, it is essential to include post office savings bank deposits. The majority of people in rural and urban India have preference for post office deposits from the safety viewpoint than bank deposits.

M3. (Broad Money) which consists of M1, plus time deposits with commercial and cooperative banks, excluding interbank time deposits. The RBI calls M3 as broad money.

M4.which consists of M3 plus total post office deposits comprising time deposits and demand deposits as well. This is the broadest measure of money supply.

High powered money – The total liability of the monetary authority of the country, RBI, is called the monetary base or high powered money. It consists of currency ( notes and coins in circulation with the public and vault cash of commercial banks) and deposits held by the Government of India and commercial banks with RBI. If a memeber of the public produces a currency note to RBI the latter must pay her value equal to the figure printed on the note. Similarly, the deposits are also refundable by RBI on demand from deposit holders. These items are claims which the general public, government or banks have on RBI and are considered to be the liability of RBI.

high powered money

RBI acquires assets against these liabilities. The process can be understood easily if we consider a simple stylised example. Suppose RBI purchases gold or dollars worth Rs. 5. It pays for thr gold or foreign exchange by issuing currency to the seller. The currency in circulation in the economy thus goes up by Rs. 5, an item that shows up on the liabilityside of RBI’s Balance sheet. The value of the acquired asset, also equal to Rs. 5, is entered under the appropriate head on the Assets side. Similarly, the RBI acquires debt bonds or securities issued by the government and pays the government by issuing currency. It issues loans to commercial banks in a similar fashion.

 

subsidies, MSP, PDS, FOOD SECURITY

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yojna managing inflation aug 2010 here read FOOD INFLATION IN INDIA: CAUSES AND REMEDIES
https://docs.google.com/file/d/0B_FR6Jkv0z2cNDFuTDdBRnA5YkE/edit?usp=sharing 

 krukshetra tribal development nov 2010here read sucsess stories how farmer get a better prise
https://docs.google.com/file/d/0B_FR6Jkv0z2cU3diSVlkVmNKOTA/edit?usp=sharing 

 yojna monsoon july 2012 here read monsoon and fool inflation
https://docs.google.com/file/d/0B_FR6Jkv0z2cZENhRERWMkJhdHc/edit?usp=sharing

rest there are certain article reports and no doubt ignou booklets there links are
  FOOD SECURITY- TPDS
https://docs.google.com/file/d/0B_FR6Jkv0z2cSTlVcXQ3dDVEV0k/edit?usp=sharing 


Public Finance, Monetary Policies, Inflation & Control Mechanism, Repo Rate, Reverse Repo Rate, CRR & SLR.

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Table of Content:-

  1. Public Finance
  2. Monetary Policies
  3. Inflation & Control Mechanism,
  4. Repo Rate
  5. Reverse Repo Rate
  6. CRR
  7. SLR.

Public Finance

Public finance is the study of the role of the government in the economy. It is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.

It includes the study of :-

  • Fiscal Policy
  • Deficits and Deficit Financing
  • Fiscal Consolidation
  • Public Debt- Internal and External debt

Fiscal policy relates to raising and expenditure of money in quantitative and qualitative manner.Fiscal policy is the use of government spending and taxation to influence the economy. Governments typically use fiscal policy to promote strong and sustainable growth and reduce poverty. The role and objectives of fiscal policy gained prominence during the recent global economic crisis, when governments stepped in to support financial systems, jump-start growth, and mitigate the impact of the crisis on vulnerable groups.

pfHistorically, the prominence of fiscal policy as a policy tool has waxed and waned. Before 1930, an approach of limited government, or laissez-faire, prevailed. With the stock market crash and the Great Depression, policymakers pushed for governments to play a more proactive role in the economy. More recently, countries had scaled back the size and function of government—with markets taking on an enhanced role in the allocation of goods and services—but when the global financial crisis threatened worldwide recession, many countries returned to a more active fiscal policy.

How does fiscal policy work?

When policymakers seek to influence the economy, they have two main tools at their disposal—monetary policy and fiscal policy. Central banks indirectly target activity by influencing the money supply through adjustments to interest rates, bank reserve requirements, and the purchase and sale of government securities and foreign exchange. Governments influence the economy by changing the level and types of taxes, the extent and composition of spending, and the degree and form of borrowing.

Deficit financing, practice in which a government spends more money than it receives as revenue, the difference being made up by borrowing or minting new funds.

Fiscal consolidation is a term that is used to describe the creation of strategies that are aimed at minimizing deficits while also curtailing the accumulation of more debt. The term is most commonly employed when referring to efforts of a local or national government to lower the level of debt carried by the jurisdiction, but can also be applied to the efforts of businesses or even households to reduce debt while simultaneously limiting the generation of new debt obligations. From this perspective, the goal of fiscal consolidation in any setting is to improve financial stability by creating a more desirable financial position.

The public debt is defined as how much a country owes to lenders outside of itself. These can include individuals, businesses and even other governments.public debt is the accumulation of annual budget deficits. It’s the result of years of government leaders spending more than they take in via tax revenues.

 

Monetary Policies

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.
Objectives of Monetary Policies are:-
  •  Accelerated growth of the economy
  • Balancing saving and investments
  • Exchange rate stabilization
  • Price stability
  • Employment generation

Monetary Policy could be expansionary or contractionary;  Expansionary policy would increase the total money supply in the economy while contractionary policy would decrease the money supply in the economy.

RBI issues the Bi-Monthly monetary policy statement. The tools available with RBI to achieve the targets of monetary policy are:-

  • Bank rates
  • Reserve Ratios
  • Open Market Operations
  • Intervention in forex market
  • Moral suasion

 

 

Repo Rate- Repo rate is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds. In the event of inflation, central banks increase repo rate as this acts as a disincentive for banks to borrow from the central bank. This ultimately reduces the money supply in the economy and thus helps in arresting inflation.

Reverse Repo Rate is the rate at which RBI borrows money from the commercial banks.An increase in the reverse repo rate will decrease the money supply and vice-versa, other things remaining constant. An increase in reverse repo rate means that commercial banks will get more incentives to park their funds with the RBI, thereby decreasing the supply of money in the market.

Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is set according to the guidelines of the central bank of a country.The amount specified as the CRR is held in cash and cash equivalents, is stored in bank vaults or parked with the Reserve Bank of India. The aim here is to ensure that banks do not run out of cash to meet the payment demands of their depositors. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy.

CRR specifications give greater control to the central bank over money supply. Commercial banks have to hold only some specified part of the total deposits as reserves. This is called fractional reserve banking.

Statutory liquidity ratio (SLR) is the Indian government term for reserve requirement that the commercial banks in India require to maintain in the form of gold, government approved securities before providing credit to the customers.its the ratio of liquid assets to net demand and time liabilities.Apart from Cash Reserve Ratio (CRR), banks have to maintain a stipulated proportion of their net demand and time liabilities in the form of liquid assets like cash, gold and unencumbered securities. Treasury bills, dated securities issued under market borrowing programme and market stabilisation schemes (MSS), etc also form part of the SLR. Banks have to report to the RBI every alternate Friday their SLR maintenance, and pay penalties for failing to maintain SLR as mandated.

Inflation & Control Mechanism

inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services.It is the percentage change in the value of the Wholesale Price Index (WPI) on a year-on year basis. It effectively measures the change in the prices of a basket of goods and services in a year. In India, inflation is calculated by taking the WPI as base.

Formula for calculating Inflation=

(WPI in month of current year-WPI in same month of previous year)
————————————————————————————– X 100
WPI in same month of previous year

Inflation occurs due to an imbalance between demand and supply of money, changes in production and distribution cost or increase in taxes on products. When economy experiences inflation, i.e. when the price level of goods and services rises, the value of currency reduces. This means now each unit of currency buys fewer goods and services.

It has its worst impact on consumers. High prices of day-to-day goods make it difficult for consumers to afford even the basic commodities in life. This leaves them with no choice but to ask for higher incomes. Hence the government tries to keep inflation under control.

Contrary to its negative effects, a moderate level of inflation characterizes a good economy. An inflation rate of 2 or 3% is beneficial for an economy as it encourages people to buy more and borrow more, because during times of lower inflation, the level of interest rate also remains low. Hence the government as well as the central bank always strive to achieve a limited level of inflation.

Various measures of Inflation are:-

  • GDP Deflator
  • Cost of Living Index
  • Producer Price Index(PPI)
  • Wholesale Price Index(WPI)
  • Consumer Price Index(CPI)

There are following types on Inflation based on their causes:-

  • Demand pull inflation
  • cost push inflation
  • structural inflation
  • speculation
  • cartelization
  • hoarding

Various control measures to curb rising inflation are:-

  • Fiscal measures like reduction in indirect taxes
  • Dual pricing
  • Monetary measures
  • Supply side measures like importing the shortage goods to meet the demand
  • Administrative measures to curb hoarding, Cratelization.

 

 

Concept of Developing, Emerging and Developed countries.

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In 1978, the World Bank, for the first time, constructed an analytical country classification system. The occasion was the launch of the World Development Report. Annexed to the report was a set of World Development Indicators (WDI), which provided the statistical underpinning for the analysis. The first economic classification in the 1978 WDI divided countries into three categories: (1) developing countries, (2) industrialized countries, and (3) capital-surplus oil-exporting countries. Developing countries were categorized as low- income (with GNI/n of US$250 or less) and middle-income (with GNI/n above US$250).

Major Characteristics of Developing Countries are:-

  1.  Lower per-capita income
  2.  Low levels of human capital
  3. High levels of poverty and under-nutrition
  4. Higher population growth rates
  5. Predominance of agriculture and low levels of industrialization
  6. Low level of urbanization but rapid rural-to-urban migration
  7. Dominance of informal sector
  8. Underdeveloped labor, financial, and other markets.

Major Characteristics of Emerging Countries are:-

  1. the small size of the economy,
  2. GNP/Capita much lower than in developed countries,
  3. a reduced opening for accepting foreign investors,
  4. a high volatility of the exchange rate which implies greater risk in trading.

Major Characteristics of Developed Countries are:-

  1. Average income per capita of the population is generally high.
  2. Education level of high average population.
  3. Life expectancy of the population average height.
  4.  Population growth rate per year is relatively small.
  5. The death rate per year is relatively small population.
  6. Life-style market economy.
  7. His wide and varied field.
  8. Economic activity in most industry sectors, as well as export commodities.
  9. The majority of the population lives in cities.
  10. Relatively high level of population health.