Shakespeare :: essays research papers fc

William Shakespeare was born in the year of 1564 in Stratford-upon-Avon, England. His exact birth date is unknown but it is traditionally celebrated on April 23. In England this day is known as the feast of St. George. He was the third of eight children born to John and Mary Arden Shakespeare. John Shakespeare was a tanner, and a glove maker. He served a term as the mayor of Stratford, a town council man, a justice of peace, and an ale-taster. Unfortunately John could not write. John Shakespeare died in 1601. Since William was his eldest son he received what little land his father owned. Little is known about his mother's life. It is known that she came from a wealthy family. Her family also paid her husband a handsome dowry. William Shakespeare went to a very good grammar school in Stratford-upon- Avon. Two of his instructors were Oxford graduates, Simon Hunt and Thomas Jenkins. William's studies were in Greek and Latin. He developed the ability of keen observation of both nature and mankind. It is said that his education ended here. On November 27, 1582, when William was 18 years old, he married Anne Hathaway. She was ten years older than him. Their first daughter, named Susanna, was born the next year on May 26, 1583. The couple also had twins, Hamnet and Judith, in 1585. Hamnet died at the age of eleven, but it is unknown how. Between the years of 1585 and 1592 no evidence of what happened in Shakespeare's life is known. These years are called "The Hidden Years". It is said that during this stretch of time, he ran away from the law or was the apprentice of a butcher, although a man named John Aubry was told by Christopher Beston that Shakespeare was a school teacher up until 1592 somewhere in London. Beginning in 1592, in London, he became known as an established playwright. In 1593 he found a patron, Henry Wriothsley, to sponsor him. William Shakespeare was also an actor, writer, director, and stockholder in "The King's Men" company. He acted for a company called "The King's Men". This company became the largest and most famous acting company simply because William was performing and working for them. Shakespeare wrote two long poems. His first, "Venus and Adonius", was written in the year 1593. Then a year later he wrote, "Rape of Lucrece".

Role of Finance Companies

Role of Finance Companies Traditional role of Finance Companies The finance companies are much smaller in scale compared with commercial banks, and they are also saddled with more restrictions which will be discussed later in the report. Traditionally, they relied on their personalized and flexible services to attract clients. This is because there are always consumers who are rejected by the commercial banks because adding these consumers to their portfolios would be uneconomical for these commercial banks as their economies of scale cannot offset the transactional costs these clients would bring because of the small margins these smaller consumers bring. These mainly include people or companies who do not have the capital to meet the relatively higher capital requirements of the commercial banks compared to finance companies. One example would be the current business account for companies. The major banks such as DBS and OCBC also offer low startup requirements, but charge a monthly management fee if their balances fall below $10,000 , not a big amount for businesses but possibly a stretch on new and small scale businesses. Hence, finance companies plug that gap with much lower balance requirements that would be more attractive to these business owners. Another example would be home loans by which finance companies offer a wider range of interest rates for a different range of financing needs compared to commercial banks who offer more generic rates on a whole. Emerging opportunities for Finance Companies Financial companies are however, now exploring new opportunities that they have not been able to capitalize on before. For example, Hong Leong has recently been awarding underwriting rights by the MAS, a traditional stronghold of commercial banks. This has redefined the boundaries that a traditional finance company in Singapore held due to regulations under the finance companies’ act. Wealth management, a relatively fast growing new segment in Singapore, has seen Hong Leong also wrestling in with a slice of the pie that many expected the commercial and investment banks monopolize. Industry Performance Finance companies form a small and unique portion of the financial services sector here in Singapore. A large part of their income comes in the form of interest income from loans and also commission fees for services that they offer. By focusing on domestic opportunities, they have managed to avoid exposure to the credit crisis that many others in the sector have been affected by. This has thus helped all 3 firms in the sector to post stellar results over the past year. As shown below, Singapore’s GDP growth YoY was 7. 7%, a slight moderation from the 8. % in 2006. This represents opportunities as the need for financial services increase as people in Singapore gain affluence. Growth of profit for Finance Companies Growth on EBIT ranged from a low of 38. 7% to a high of 65. 2% riding on increased receivables for all 3 finance companies. This is exceptional considering the cloud that has shrouded the financial sector in recent times. In dollar terms, their p rofits grew by SGD$43million to a total of over SGD$150million. Also, operational efficiency was a strong driver of the profit growth. Revenues remained rather stable and it was the decreased operating costs that led to higher profits according to the financial reports released. This could be due to reasons such as improved technical systems or improved employee proficiencies. Growth of property & construction revenue segment There is a strong focus on the â€Å"heartland† consumers and increased demand for housing, particularly in HDB flats, has led to opportunities that finance companies have leveraged on to cement their stake in this niche market. Although commercial banks also offer housing loans, finance companies are able to adapt each individual loan to consumer’s requirements because they enjoy greater flexibility especially for smaller loans that larger financial institutions do not want to accommodate to enjoy the relatively small returns. Looking at the breakdown of loans and advances of Finance Companies, we can see a large part is driven by the building and construction sector in Singapore, which was booming last yea. The building sector was driven by the construction of the 2 integrated resorts and a booming property market last year. A key driver of the industry, construction growth, which represents a large portion of finance companies’ interest income, grew at a rate of 20. 3% in 2007, compared to 3. 6% in 2006. The bull run in the property market, as mentioned, has also contributed to the sector’s good performance. Property agents have described in particular, the HDB resale market as the kingpin of the real estate sector. Projected unit sales are estimated to be at 30,000 by industry players. Average prices rose 17% for 2007. This, coinciding with a new government initiative to encourage singles to live with their parents by providing a grant of up to $9000, has led to a boom for the property market domestically in recent times. The government’s policy to target an eventually population size of 6million citizens would lead to an increased demand for housing as more and more immigrants look to plant their roots here. Thus, we can expect housing loans to continue to be a strong driver of performance for finance companies into the foreseeable future. Increase in SME initiatives The government’s initiative to increase SME competitiveness and promote entrepreneurship has also facilitated the expansion of this revenue segment for financial companies. The founding of organizations such as SPRING help to spur and stimulate the growth of target sectors for these financial companies. Initiatives such as the Micro Loan Programme under SPRING create direct market share for these finance companies for those who are rejected by the commercial banks for loans. A look through the Hong Leong Finance website shows at least 11 initiatives directed at SMEs alone. This shows the importance of this particular revenue segment to finance companies. Therefore, the future of this key driver of finance companies’ success looks to be rosy given the support that SMEs receive domestically from the government. It is also important to note that finance companies give incentives by positioning themselves as service providers for smaller enterprises who require greater flexibility in terms of financing requirements. As mentioned earlier in the report, this is due to the fact that it is uneconomical for commercial banks to process some enquiries and loans because they are uneconomical given the scale of operations. Summing up, the performances of finance companies have been exceptional with impressive growth figures. However, as the recession worries and full effects of the sub-prime issues slowly uncover, finance companies may yet be exposed to underlying issues that may influence performances in the near future. Next, we shall examine some of the trends in the finance company sector and try to identify key issues that may offer insights into what we can expect from these finance companies in the future given what we have already discussed. We would also examine a key player to try and gain insights into how these finance companies operate. TRENDS AND ISSUES IN THE FINANCE COMPANIES SECTOR: SINGAPORE 1. Consolidation within industry One of the most pervasive trends identified in the last decade in the finance companies sector is the consolidation of the industry. This is evident from the number of finance companies that have ceased operations. Some of these companies were forced out of the industry due to regulatory changes, while others, like OCBC Finance, simply merged with their principal companies. Since 1996, 19 finance companies have surrendered their finance companies’ license, with only 3 main finance companies remaining by the end of 2007. Accordingly, the assets and liabilities of finance companies as a whole have declined dramatically over the past decade, before stabilizing and increasing steadily over the past 3 years to around 10 billion dollars. Finance companies’ assets decreasing before stabilizing and recovering, and consolidation. 1. 1 Regulatory changes One of the catalysts for this consolidation is no doubt the regulatory changes that MAS has put into effect. Since December 1994, the Finance Companies Act was revised to raise the minimum capital requirement for finance companies from $0. to $50 million, and existing finance companies were given until 2003 to gather the required amount. This effectively meant that finance companies which did not have the required capital had to either merge with other players in the industry including banks, or raise the required capital. Hong Leong Singapore Finance, the finance company in Singapore today, is the result of such a merger between Hong Leong and Singapo re Finance. Examples of mergers with their parent banks include Maybank Finance, and Overseas Union Trust, which of course was subsequently absorbed into UOB. It could be argued that even without regulatory changes, mergers and acquisitions are inevitable for the smaller companies to survive. Regardless, the changes put into place by MAS has forced the industry to evolve into one with lesser, but stronger players. 1. 2 Increasing competition In 1998, then DPM Lee Hsien Loong remarked in a parliamentary session that the rationale behind these regulatory changes was to â€Å"enable finance companies to have the resources to compete more effectively and increase public confidence in them. Hence, another major reason for the consolidation in the industry can be attributed to the increasingly intense competition from commercial banks and other financial institutions which provide similar services. Loans and other services catered to SMEs, which the full banks typically deemed unprofitable, were traditionally the strong suit of finance companies. From data gathered on the 3 existing finance companies, loans and services to SMEs forms over 40% o f their portfolios. However, in the past decade, many commercial banks have started divisions to tap into the SME market made popular by finance companies. Finance companies thus now have to contend not only with each other, but commercial banks as well. This means that badly run finance companies simply could not contend with the competition and were targets for other finance companies’ acquisitions to boost their own ability to compete. 1. 3Niche markets Finance companies are usually able to compete with commercial banks because they offer services to niche markets (usually SMEs) which then form a large part of their portfolio. In today’s financial markets, Hong Leong Singapore Finance is known to target clients within the SME, consumer housing and the silver industry. Sing Investments and Finance has loans in the construction and property development sectors amounting to 68% of their loans portfolio. However, the population of such niche markets are usually much smaller than mainstream financial markets, and companies need to be able to capture a larger market share within the niches to be able to offer products with a competitive edge over commercial banks. Under the basic tenets of economics, this means that a only a small number of firms are needed to satisfy demand in such niche markets. Hence, there is necessarily a trend towards consolidation of similar firms within the separate niche markets in a ‘survival of the fittest’-style competition, which is the situation being faced with today. 1. 4 Global mergers and acquisition trends Mergers and acquisitions have been widespread and plentiful in recent times, and although this directly impacts the trend of mergers within the finance companies sector, there are also indirect effects to be discussed. One must consider that the increasing prevalence of large, merger companies necessarily means that the pool of smaller companies, of which finance companies cater to, is steadily decreasing. Such large merger companies usually go to commercial banks for the more sophisticated and diverse range of credit options which finance companies are simply unable to provide, either because of regulatory restrictions from the Finance Companies Act, or because they do not have the resources to do so. Again, this results in a net effect of finance companies having to merge themselves to operate effectively and efficiently to capture this diminishing pool of available business. TRENDS AND ISSUES IN THE FINANCE COMPANIES SECTOR: INTERNATIONAL International finance companies Unlike in Singapore, a legal definition of ‘finance company’ exists, there is no clear definition on what constitutes a finance company in the overseas financial markets. However, there is a general consensus that finance companies provide mainly lending services to consumers and small businesses. As with finance companies in Singapore, international finance companies typically target these clients that the major banks overlook, or have specializations in specific industries that make them more attractive to customers seeking credit services within these industries. Unlike Singapore, where only 3 such companies now operate, there are literally thousands of such companies overseas catering to different industries and customer bases, and it will be definitely be out of the scope of this report to discuss each one in detail. Also, the nature of the finance companies sector is such that they are more influenced by regulations and performances of industries within the countries in which they operate, and less affected by global financial trends. A simple example of this is in Singapore, where finance companies have been fairly shielded from the turmoil in overseas financial markets led by the subprime crisis in the US. Instead, they have been doing well, largely owing to the boom in the local property, auto and SME markets. It is thus more appropriate to examine the issues and trends of nternational finance companies in the context of the local markets which they serve, rather than to identify and global trends that affect all financial markets. Hence, we have decided to focus our attention on finance companies operating within 3 countries where financial markets are relatively mature and established, and whose activities are more transparent and in the limelight. These are Australia, Japan and USA. 2. Fin ance companies in Australia The finance companies scene in Australia is thriving, and has witness continued growth in the last 3 years. Another good year was recorded in 2006/2007 with both business and personal lending continuing to grow. Finance companies in Australia have long been a significant sector in the Australian financial services market, offering a wide range of products including business leasing, fleet leasing and personal lending. Such companies provide an alternative source of borrowing to the banks, building societies and credit unions. The two largest finance companies operating in Australia are Esanda and Capital Finance, which collectively represents almost 40% of the sector’s operating profits after tax. Some of the key issues which have impacted profits in the last 2 years include: ? asset growth of 7. 1% leading to an increase in interest income ? increased competition leading to reduced margins and fee income ? increased bad debts expenses ?reduced profits on motor vehicle lending 2. 1 Australia – Reliance on Auto Industry and Industry Trends The auto industry is a major driver of performance of the finance companies sector in Australia, no doubt because the majority of the finance companies are exposed to the sector. This may be in the form of lending to consumers and businesses to purchase their motor vehicles, financing auto dealers’ purchase inventories, or providing fleet management businesses. The growth of finance companies coincides with the auto industry’s boom in the past 5 years, with 4 consecutive years of record sales up to 2005. Provision of loans to purchase large cars dropped 18 percent largely due to the change in consumer purchasing habits from the price hikes in oil. Instead, smaller car sales were up 21 percent, contributing to increased revenues for finance companies. However, the increased affordability of new cars in the last 5 years has created difficulties for finance companies which provide fleet management services, such as BMW Finance and ORIX, since such companies suffer reduced profits on the sale of cars at the end of their lease. In recent times, the focus of many of the larger finance companies have shifted to diversification of services. This is similar to Hong Leong Singapore Finance’s strategy in Singapore, which is to take on the major banks at their own game, such as providing property and construction facilities. GE Money’s expansion into credit cards, mortgages and on-line savings provide another example of Australian finance companies’ diversification. Just as the finance companies are expanding their services to include services provided by major finance players such as banks, so are the majors entering into sectors traditionally dominated by finance companies. This includes areas such as lending secured on receivables, consumer and low-doc lending. This has increased competition among Australian finance companies, which is further crowded by new entrants such as Aussie Home Loans’ plans to target car and personal lending markets. . 2 Australia – Growth in Assets, Personal and Business lending Total assets of the finance companies surveyed increased 7. 1 percent to $37. 5 billion, slightly down from 8. 1 percent growth in the previous year, but this still represents a strong rate of growth. This trend has been observed for the past 4 years, and can largely be at tributed to lending growth in the business and personal sectors. Even though finance companies in Australia only accounts for 5 percent of total Australian loans and advances, their market share is considerably higher in traditionally key markets of business lending and personal lending. This is estimated to be around 10 and 15 percent approximately. Since finance companies in Australia are typically not exposed to the housing mortgage market, they are not affected much by the decline in the housing market that is being experienced in global markets. However, the quality of the assets seem to be an issue for finance companies. Total bad and doubtful debt expense increased 32 percent from 2006. Even when viewed in context in the growth of receivables, the ratio of bad debts to average receivables increased. Hence, unlike in Singapore, it does seem that Australian finance companies suffers somewhat from increase in credit losses. However, this is to be expected since finance companies typically engage in less secure lending to less credit worthy customers in exchange for a higher margin. It must also be said that the amount of credit losses increases pales in comparison with the subprime losses that major international banks have faced even with supposed tighter credit checks. 3. Finance companies in Japan In early 2007, the consumer finance industry of Japan was valued at a total of ? 0 trillion with annual growth of 4%. The key factor influencing this previous growth in the industry might be traced to the equity and real estate bubble burst in the early 1990’s which lowered the collateral of several consumers. This provided a large market segment seeking uncollaterized loans, which were only provided by the consumer finance companies. At the same time, consumer finance companies had an advantage over the banks as they had a wider network of loan offices and had a reputation for quicker loan approval. 3. Japan – Regulatory elimination of ‘grey zone’ lending Significant change is expected in the consumer finance sector of Japan, as new regulations affecting consumer finance companies were passed in December 2006, and are to be withheld by the year 2009. The main crux of the new regulation would be that it lowers that maximum allowed interest rate chargeable on uncollaterized consumers. While the interest rate cap on consumer loans were capped at 20% by the Interest Rate Restriction law, the Capital Subscription law stated that a rate of 29. 9% could be charged, in the event that a written consent to the charges was provided by the consumer. Due to this law, several consumer finance companies in Japan have been providing loans to poor credit clients, at interest rates charged within the ‘grey zone’ (20%-29. 9%). What this new legislation entails would be that these consumer finance companies will need to adapt and reinvent themselves, as they can no longer depend on the ‘grey zone for survival’. What can be expected would be shakeout of the smaller consumer finance companies, consolidation as well as diversification of products. 3. 2 Japan – Regulatory Changes The Japanese Diet revised legislation regarding the Money Lending Business (MLB) law. A previous ceiling of 29. % for consumer loan interest rates set by the Capital Subscription law was repealed and reduced to 20%. This coincides with the ceiling set by the Interest Rates Restriction law, which has an interest rate cap of 20% per annum for such loans. Even then, this cap is only applicable for loans of up to ? 100,000 and below. Fo r loans with principal amounts ranging between ? 100,000 and ? 1,000,000, the cap is only 18% per annum. Loans with principal amounts over ? 1,000,000 are charged a maximum interest rate of 15% per annum. At the same time, the Bank of Japan has in recent years opted to abandon their zero-interest rate policy. At the moment, their interest rates have been set at 0. 5%. It is yet to be seen if there will be any increase in this rate, as it will probably depend on the performance of the Japanese economy as it adapts to this change, as well as the USA downturn. But essentially, with the bottom line raised and the top lines lowered, consumer finance companies are seeing their margins diminishing. The amendment also includes tighter entry restrictions for consumer finance companies, return of excess interest payments made to consumers, as well as restricts the maximum debt a consumer may hold to only one-third of his annual income. At the same time, the lid has been left open for more restrictions to be implemented between now and 2009, during which enforcement for the new regulation is going to be implemented. 3. 3 Japan – Effects on Performance In response to the new legislation, the industry has been suffering since. An estimated loss for the combined consumer loan sector for the fiscal year of 2006 has been made at ? 3 trillion. This can be directly attributed to the diminished market segment as well as several requests for refunds of excess loans from existing consumers. With stock prices of the 4 major players in the industry tumbling even before the announcement of the December 2006 ruling, mostly as a pre-emptive reaction, the situation is dire. This has left the consumer finance companies with the option of either leaving the market, or restructuring themselves to suit the new environment. The two main strategies for remaining in the sector would be expansion and diversification. 3. 4 Japan – Expansion At moment, there is estimated total of 10,000 registered money-lenders in Japan. Of these, there are only 4 major players (Aiful Corp. , Acom Co. , Promise Co. Takefuji Corp. ) that are currently listed on the Japanese stock exchange, whilst the rest are all individually casting small shadows. However, considering the increased requirements for operations as well as the diminished margins, it is now harder to maintain operations as a small player. More sophisticated risk management and cost-cutting are all necessary aspects that need impleme ntation for survival. It is expected that a large proportion of these smaller companies will eventually consolidate to be able to mount a substantial fight for survival or be forced to cease operations. Current estimates are that the eventually, Japan will only be left with 3,000 consumer finance companies. Already, that trend is starting to take shape. The current estimate of 10,000 registered money lenders have already dwindled from a previous figure of 14,000 as of February 2007. Two of the larger players, Acom and Promise have also taken a step further than anyone else in the industry, by negotiating partnerships with major banks, Mitsubishi UFJ Financial group and Sumitomo Mitsui Financial Group respectively. This strengthens their competitiveness, as these consumer finance companies will be able to provide the bank with their expertise in handling smaller and riskier consumer loans, whilst the banks will be able to support these companies as they transcend into a more developed state. 3. 5 Japan – Diversification of Products Traditionally, the Japanese consumer finance companies could be classified into two main group; those dealing in consumer loans; and those providing credit card services. While the former group has been hit hard directly by the new regulation, the latter has been relatively unscathed. The main reason would be that interest rates for credit cards were already below the 20% limitation. Consumer finance companies are now finding that there is an unexplored market that they can now explore, to make up for their losses in the consumer loan segment. To compound incentives for this strategy, the credit market has yet to truly blossom in Japan yet, due to a prior preference for cash instead. For example, credit card shopping only accounts for 10% of consumption in Japan, and this is relative to the 25% figure for the United States. 3Finance companies in USA There are many companies in the USA which provide consumer and business finance services in all sectors of the financial markets. Being the world’s largest financial market, USA has a very diverse group of finance companies that cater to auto, personal, small enterprise, insurance, and mortgage lending, among others. Citi Financial, HSBC Finance, GE Money, Prudential Finance, Zurich Financial, and Capital One are just a few examples of such finance companies. Just as in Singapore and other nations, these finance companies typically serve clients who are either too small or have poor credit ratings to obtain loans from the larger banks. The consumer finance industry in the USA is too large to be discussed in full detail in this report. Hence we will only be discussing a particular type of finance company which in the past year has come under scrutiny from all corners of the financial markets – subprime mortgage lenders. While major commercial and investment banks have all taken in losses amounting to USD 170b from writing down Colleteralized Debt Obligations and Mortgage Backed Securities, mortgage finance companies in the USA have mostly been responsible for the origination of such losses. 3. 1 USA – Subprime mortgage lending by finance companies Subprime mortgage lending by finance companies enabled consumers in the USA with poor credit histories to obtain loans to purchase homes with higher interest rates than that charged by banks. These consumers were previously unable to obtain such loans from the major banks and lenders due to their poor credit histories. To entice consumers to accept such higher interest rates, these finance companies typically include ‘teaser rates’ during the initial periods of the loan where the interest rates were lower, and the rates were then subsequently increased significantly after the introductory period. Because many consumers could no longer afford the high interest payments after the introductory period, many were forced to refinance their subprime loans with another subprime loan. This was acceptable pre-2005 since housing prices were on the rise, and this meant that home owners were building equity which enabled them to refinance loans easily. However, after 2005, home prices started to decline and fell below the value of the loan, and thus could not be used as collateral for refinancing. A steep rise in defaults and foreclosures caused more than 100 finance companies in the US to file for bankruptcy beginning late 2006. Even New Century Financial Corporation, then the nation’s second largest mortgage lender, was not spared. Excessive risk taking and making loans to subprime customers meant that such finance companies were exposing themselves to moral hazard excessively. 3. 2 USA – Securitization of subprime loans Many a subprime finance company did not actually hold on to the subprime loans as assets after making them. Instead they securitized, or sold off the loans to issuers and special purpose vehicles. These financial vehicles bought these loans and other investment grade instruments and repackaged them into the CDOs and MBSes that were to blame for the credit problems in financial markets today. These instruments were subsequently bought up by investment and commercial banks, and hedge funds, due to the impression that the risk from the subprime loans have been adequately spread out. However, this was not the case, since once defaults and foreclosures started to hit the issuers, the values of the CDOs were compromised, resulting in huge write downs by banks. What followed was a large credit crunch in financial markets, the effects of which are still unresolved today. Hence, what was supposed to be a mortgage finance sector problem has been spread to all areas of the financial markets through loans securitization, which was started by finance companies in the US. Regulatory Issues The Finance Companies Act (Cap. 108) was established in 1967 to regulate the growing finance companies sector. Listed in the Act are several restrictions that limit the activities of the finance companies. The purpose of these limitations is to protect investors, by controlling the exposure of the company to riskier asset classes and transactions, since finance companies are less able to diversify such risks away than the major banks. These limitations may include capital structure requirements, restrictions on dealings, necessary approval for expansion and others as well. In essence, the provisions within the Finance Companies Act require that finance companies seek MAS for approval to engage in activities other than the most basic lending and depositing services. Since the major banks have a similar set of banking rules and regulations to adhere to, we will be focusing our discussion on a few key regulatory provisions which are specific to the Finance Companies Act. One regulation of particular interest has already been briefly mentioned in the previous sections of this report. In s7 of the Finance Company Act, there are strict capital requirements in place for finance companies. S7 provides that a registered finance company will need a minimum of $50 million in issued and paid up capital. What this requirement does is to limit the industry to only the stronger players. This requirement, as put in place since January 1995, might be responsible for the running out of the several smaller finance companies, and serves as well as a substantially high barrier to entry. S23 of the Finance Companies Act lists out some of the prohibitions of dealings by finance companies. In particular, s23(1)(e) and (f) aims to limit the amount of risk which the finance companies are able to take. This is done by restricting the issuance of substantial loans which exceed 50% of their total credit facilities, and also by prohibiting unsecured loans and advances exceeding S$5,000. It can be seen from these regulations that MAS understands the higher risk nature of the customers served by finance companies, and tries to protect both the customers and the companies from over-exposure to such risks. While s23(1)(b) prevents investments in foreign currency, gold and other precious metals, and s23(1)(c) prevents any acquisition of shares, stock, debt and other convertible securities in foreign denominations, exemption from these restrictions might be granted as stated under s23(2)(a)&(b). S23(2)(a)&(b) states would be that concessions in these aspects might be granted depending on the ruling of MAS. Furthermore, s53 gives room for the authorities to exempt a finance company for some or all of the provisions in the Act. We feel that this shows that MAS recognizes that not all finance companies are ready to take on such dealings yet, but that they are not shutting the door on such transactions in the future. Prospects & Future developments of Finance Companies Effects of the credit crunch In the short run, we would expect that finance companies would experience a udden growth in their revenue segments due to commercial banks tightening credit. The sub-prime meltdown in the United States has severe implications for all industries. However, rather than affecting the finance companies negatively, we foresee that there is a possibility that they might profit from it instead. With several banks being hit severely, we are currently observing the beginnings of a credit crunch as banks start to tighten their credit and adopting a more conservative stance in negotiating loans. This would even be true in Singapore, as we uncover the extent of Asian banks exposure to collateralized debt obligations. DBS Bank has already booked S$200 million worth of write-downs while UOB has S$45 million worth of write-down. These commercial banks have reportedly tightened credit measures with more reluctance to take on risky debts. What this might imply would be that more consumers will have their loan applications rejected from banks, and will therefore look to finance companies for their capital needs instead. At the same time, the market for loans is expected to grow by 13% in 2008. While this is lower than the 20% growth recorded in 2007, it represents that the market is still expanding despite the tightening of credit by major lenders. At the moment, the total loans made by finance companies are sitting at S$8,389 million. The total loans made by commercial banks, however, stands at S$201,424 million. The above figures indicate that if banks were to lose even a small percentage of their market share in loans to finance companies, this would translate to a potentially significant percentage of loans growth for these finance companies. Hence, if finance companies are able to take advantage of the loss in confidence of the banks, and the tightening of credit by said banks to capture the market left behind by the banks in the wake of the sub-prime crisis, there will be room for growth. Consolidation of the segment In the long run however, we adopt a more pessimistic stance towards the development of finance companies. One of the trends that we mentioned was that of consolidation of the finance companies in the past decade. Three such finance companies remain and have performed relatively well over the past few years or so. However, commercial banks are encroaching into traditional strongholds of these finance companies, such as SMEs and smaller personal loans which were once considered unprofitable to service. This is as commercial banks now want to profit from the higher yielding consumer base that these finance companies rely on as they continue to look into other profitable segments that they have neglected in the past. DBS, OCBC and UOB have in the past decade started moving towards these opportunities that they had forgone in the past. There is also increased competition from new entrants such as GE Money and SingPost who now offer consumers more consumer finance choices instead of the remaining 3 finance companies. This increased competition may reduce revenues in the future, especially for Singapura Finance and Sing Investments, since Hong Leong is far and away the major player in this sector and may be able to better cope with these changes. These 2 smaller firms might find it more difficult to continue to perform as well when banks use their financial muscle and influence to try and break into this market. Thus, we foresee a real possibility of further consolidation and perhaps a change in the structure of the future finance company here in Singapore. Hong Leong Finance is special, in the sense that it is much bigger than the other finance companies in the scene. To brand it as a finance company in the same breath as the other 2 does not do Hong Leong’s reputation justice. However, when compared to the commercial banks, they still do not measure up as significant competition. The other 2 finance companies seem to stand little chance should the commercial banks and corporations start infringing on this niche segment that they have survived on. The implications of these is the sign that the finance companies are in a sunset industry and with the exception of Hong Leong, finance companies might struggle to eke out an existence once competition gets more intense. It may revert to a situation where the smaller firms have to merge or be acquired by a larger finance company, in this case, Hong Leong, or risk not being able to survive in the segment. Hong Leong, as mentioned, is unique in the sense that it is such a dominant force in the finance company sector, but yet unable to make the step up to be on the same level as even the smaller commercial banks. In the near future, we could see Hong Leong forming an entire classification on its own, as the alternative to the commercial banks. Following the entry of commercial banks and other competitors into its traditional revenue segments, Hong Leong has been actively looking for other opportunities to diversify its revenue generating segments. We have mentioned some of these earlier in the report. Recently, Hong Leong was commissioned to take up underwriting duties which provides it with a new area of development where they could vary their income sources. It has also established a wealth management arm in light of the growing sector in Asia as a whole.

Reaction paper on “The little prince” Essay

I. Brief Summary of the Book The story begins when the narrator look back his childhood life. He drew a boa constrictor digesting an elephant. He showed it to the adults he failed to get hearten with their comments. He felt bad with the grown-ups because they told him to stop his drawing career, instead became a pilot, as they believe that it is the sensible thing to do. So he decided to became a pilot and live his life alone. One day, his plane crashed in the middle of the Sahara desert, a thousand miles from any human habitation. At his first night, he went to sleep, he was awakened by the odd voice came from the little boy who asked him to draw a sheep. He was surprised of what he saw. He drew the sheep that the boy wanted, but again he failed by his drawing until he came up with a box and threw out an explanation to it. That is how he made his acquaintance to the little prince. He took him a long time to know where he came from, but little by little he learned that the prince came from asteroid B-612. Everything there is small. Through their conversation, everything was revealed to him. The little prince took much care of his planet. He doesn’t want anything destroyed his home. One day, a rose appeared on his planet. For him, it is the most beautiful creature ever. He fell in love with it but he caught the rose lied to him. So he decided to leave her and not to trust the rose anymore. To cure his loneliness, he went to the other planets to explore. He found himself in the near planet where he met the king who’s clad in royal purple and ermine, which was at the same time both simple and majestic seated upon the throne. For him, all men are just a subject. The king believed that he can rule over everything even the moon, the stars and the sun. Then the little prince asked him to order the sun to set. But the king can’t do that just right away. So the little prince decided to leave even though the king offered him to be a minister in his planet. He thought to himself that the grown-ups are very strange. In the second planet, he met the conceited man who believed that he is the most handsome, best dressed, and richest and the most intelligent man in that planet. He thought that the  little prince is just an admirer. But the little prince him remind him that he is the only man in that planet. Then he leaved the conceited man with his thought that grown-ups are very odd. In the third planet, he met the tippler who lived alone with his collection of empty bottles and full bottles. He spent his time in drinking just to forget the ashamed of drinking. Little prince puzzled and thought that grown-ups are very, very odd as he continued his journey. In the fourth planet, he met the businessman who was very busy that don’t even notice his arrival. The businessman count the stars and write the numbers on a paper then put it on his bank for so many years because he claimed that he own the stars. But little prince explained to him that he just wasting his time in a matter of consequences just what he did in his flower. Then he continued his journey. In the fifth planet, he met the lamplighter. It was the smallest of all but it was strange. The lamplighter was forever putting out his lamp and lightning it again. He said that he just followed the orders. The little prince thought that the lamplighter was so faithful to his orders. In the sixth planet, he met the geographer. His planet was the most magnificent but he has no way of knowing if there are mountains, rivers, or seas in planet because it is not important for him to waste his time to explore. He can’t leave his desk. He just wrote on his thick book the informati on that the explorer gave to him. He advised the little prince to visit the earth because it has a good reputation. The seventh planet he went is the earth. He lands in the middle of the desert and can’t find any humans. Instead, he met a snake who was pleased to stay in the little prince company because he is innocent and honest in all matters and its poison can send back the little prince to its own home. But little prince ignored the offers and continued to explore. He then found a three-petal flower, climb the highest mountain where he found the echo that makes him confused. He also found a rose garden, which surprises and depresses him because his rose had told him that she was the only one of her kind. He met a fox whom he look after and attempts to tame. He also met some humans, who seemed strange to him. A railway switchman who is unsatisfied, and knows people are unsatisfied, except for children who are the only ones that know what they are looking for. And a merchant, who sells pills that, will quench thirst and save valuable time. The story of the little prince was ended in the desert where he was with the narrator  pilot. They finally find a well to satisfied their thirst and they both agree in knowing that people didn’t see the truly importance of life but just lead mechanical or an empty lives. However, the little prince missed his planet so much that he looked for the snake again to bite him and send him back to his planet. But before he leaved, he gave laughing stars to the narrator pilot. And the plane was able to fix then. He is confident that the little prince has returned to his asteroid. The narrator looked at the lovely and sad landscape of the desert and to the star of his new friend that brightly shining in the sky. II. Analysis of the book’s content The moral is the importance of looking, listening and understanding, exploring and experiencing to find the real and true meaning of a thing. At the beginning of the story, the narrator point out that the grown-ups doesn’t see the real meaning of his drawings, instead, they just look at the surface without even understanding and knowing its deeper meaning. Grown-ups forgot how to appreciate little thing, how to understand life better, how to learn from own mistakes and how to live simply, and how to value true friendship. This story reminds us not to be like the grown-ups who don’t care anyone, just himself. Not to be like the rose who is liar, obsessed and very demanding. Not to be like king who rules the things that shouldn’t be ruled. Not to be a conceited man who is self-centered. Not to be a tippler who is nothing to do but to drink liquor forever just to remove his ashamed of drinking. Not to be a businessman who is claimed the things that don’t belong to him just to be rich. And not to be a geographer who doesn’t have time to look around sees what his real world is. Instead, it tells us to be like the lamplighter who is faithful in the orders and very dedicated to do his task. To be like the pilot who admits his mistakes just because of a matter of consequences. To be like the little prince who lives simply, knows how to value friendship and appreciate little things. That’s what the story wants us to learn. It’s better for us to look closely, listen well and understand deeply, explore somewhere and experience everything first for us know how to value life and appreciate everything without hurting and destroying someone and for us not to end for such a fool. III. Relate the moral of the story to any philosophical concept I relate the moral of the story to St. Augustine on the Moral Evil and Moral Obligation. Moral Evil – man’s abuse or misuse of his freedom; Evil is the very negation and privation of being and cannot be the object of God’s positive act of creation. The grown-ups, the king, the conceited man, the tippler, the businessman and the geographer was abused their freedom because of their wrong doings in themselves and in other creatures of God. The grown-ups don’t appreciate little things and their rude comments that hurt the feelings of other people; the king was greedy in power for him to rule the things that should be ruled only by God; the conceited man was selfish and forgot to value people around him; the businessman was not contented of what he had, he wanted to own the other creatures of God; the tippler was abused his health every time he drinks liquor for his only purpose of removing his shame; and the geographer that the only thing he knows is to write the information that the explorer given to him without providing a little time to look at the creations of God. These people are selfish because they just think about for their own happiness. Moral Obligation – humanity must do good and avoid evil; all human are responsible to their neighbors as they are to their own actions. The lamplighter, the narrator pilot and the little prince are the humans that do good and avoid evil. The lamplighter is very responsible in doing his task and faithful even though there are no other people in his asteroid except him; the narrator pilot who knows how to treat a stranger and value a friendship even if he will not see little prince anymore; and the little prince knows how to appreciate little things, how to love all the creations of God and just like the narrator pilot, he knows also how to value a friendship.

buy custom Strategies in the Atrium Gallery essay

buy custom Strategies in the Atrium Gallery essay Atrium Gallery will use several inputs in producing its dresses where it would require materials of different types like silk, chiffon, and cotton which would appear in different colours which will be very appealing to the customers since they will be able to get a choice of the colour that they like because of the wide variety of colours that they will have to choose from. When Atrium Gallery uses very good materials to make their dresses, they would be able to change the quality of their dresses. Changing of quality standards could have both positive and negative impacts on a project. This is because the resources which are available to a company give it an added advantage by cutting costs required to implement the project. This is because the company usually has a prolonged benefit, which makes the creation of projects much easier due to the readily available resources. Production and Material Management Atrium Gallery is going to use the services of skilled and professional staff into the production of its dresses since the dresses have to be designed by designers who are good at that so it shows that to be able to come up with very unique dresses from the close competitors, the designers have to be very professional. When it comes to the quality of the dresses, there will be a skilled professional whose main work will be to inspect and see if the dresses will be very appealing to the customers since the dresses are being produced for consumption by high and middle income women. Critical Operating Factors for the Business to Operate (Key Success Factors) Advantages in sourcing material There are so many advantages of sourcing material which we as Atrium gallery have taken advantage of. The company purchases all the raw materials directly from the suppliers where the company is able to get better deals on the expensive materials which they use to make the luxurious dresses which are very unique. This outsourcing of materials has enabled the company to be able to produce a price which is pocket friendly to all the customers of the Atrium Gallery brand. Come of the advantages that Atrium Gallery gets from outsourcing material is that it gets a supply of materials which is guaranteed, it has simplified processes, it has a better leverage when it comes to the negotiation on the procurement, and it gives the company increased supply chain standards clarity where the company gets quality materials. Technological innovation in the manufacturing or distribution process Some of the technologies which are associated with Atrium Gallery have made it to be able to create markets for all its new designs. This success factor in Atrium Gallery has made the company to be able to leverage on the existing technologies and the new technologies which is more advanced to those that are being used by the close competitors which has enabled the Atrium Gallery to produce high quality dresses for all its global customers so that it can be able to increase its sales and total revenues which would further increase in the profit margin of the company. Atrium Gallery has adapted an online shopping, bar coding, and other computer aided designs which are all results of a better technology. With the adaption of this new technology, the company is able to reduce its costs of production, improve the quality of its dresses, and also lead to future innovation in the company which can be very beneficial to both the company and the customer. Effective pricing strategy A pricing strategy is a price planning which puts into consideration (maximization of profits, revenue maximization) buyers claim, product attributes, prices of competitors, and economic trends. Channel distribution is an organized group of institutions whose aim is to link producers and end customers so as to achieve the marketing goals. It involves activities such as selling, promotion, ordering, information and feedback. Atrium gallery has an effective pricing strategy where it makes use of the price penetration where it puts an initial low entry price for all its luxurious dresses with the expectations that the customers will shift to the new brand because of its low prices. Atrium gallery can put low prices for its dresses so as to increase its sales volume, rather than making short term profits. Advantages of using this pricing strategy are firstly the dresses for Atrium gallery will penetrate into the market quickly due to its fast adoption by consumers. Secondly, low price pe netration will discourage competitors thus giving it a sustainable competitive advantage. Thirdly, it will create a high stock turnover for the firm and lastly it is economically efficient since it is possible to base it on marginal pricing cost. Access to skilled employees Atrium Gallery has a pioneer advantage over all its competitive businesses like the Dolce and Gabbana because of its access to skilled employees. Human capital is very important to a business. Human capital is one of the greatest assets which are used by Atrium Gallery which is brought up by the presence of its internal designers who make up the Fashion and design department in the company (Gerald, 2004). Their innovation which is mostly constant is very important and crucial for the creation of the unique and luxurious designs. Atrium Gallery has a very good access to many talents and incorporates them into the company which can make the company to be an international Corporation (Gerald, 2004). Management Summary Indicative Content Description of team members The team members of Atrium Gallery include the managers and the employees of the company who are solely the people who are responsible for the success of the company. There are several managers who are in charge of the several departments like the accounting and finance department, sales and marketing department, Human resource department, and the production department. The managers and the employees make a very good team since there is the direct communication between the employees and the managers and vice versa. Qualifications All the team members in Atrium Gallery are highly skilled and professional. In order to qualify as a team member, one has to have enough qualifications which can suit him in the position of work. Managers One has to have at least a Masters Degree in Fashion and Design, Accounting, Human Resource, Sales and Marketing or any other Degree from an acknowledged University, at least 5 years of experience from a good communication and interpersonal skills Employees One has to have at least a Bachelors Degree from an acknowledged university A higher Diploma Certificate is an added advantage Be a team player Management Philosophy, Strengths and Weaknesses of the Team Management philosophies are set of beliefs which can be used in the decision making process. The team in Atrium Gallery has very good management philosophies which are aimed at the making of good decisions in the company. The Team members have to be role models since they have to carry out their management responsibilities effectively. The management responsibilities of the executives in the Atrium Gallery include activities like training and management of staff performance, customer interface management, risk reduction in the company, and the engagement of the stakeholders of the company (Sadler-Smith, 2006). For Atrium Gallery to be able to survive in the competitive world, it has to have good leadership management strategy since leaders visualize, strategize, implement, evaluate, and review all the desired projects and programs, so as to be able to achieve their set goals. This information gathering performed by leaders helps in the decision-making processes of the company, which shows the importance of leadership in a business or organization (Bowman Asch, 1996). Good leadership of a company can facilitate the success of its performance through a proper strategy planning, which is initiated by the leaders of the organization through the utilization of the available resources, which, in addition, might be limited within a challenging environment, so as to be able to meet all the expectations of the stakeholders (Lynch, 2006). Financial plan Indicative content Capital requirements The capital financing for Atrium Gallery would come from the existing funds which will include the the cash balances, bank overdrafts, bank loans, shareholders capital, the working capital which we have already invested in the business (debtors and stocks), and the creditors (the suppliers). Most of the funding of the business will come from the owner with no additional investment required Financial projections The financial projections of Atrium Gallery include the income statements, cash flow statements, and balance sheets. The main aim of the financial projections for the company is to ensure that the business can be able to generate cash which is enough to be able to pay up all its backers and also that it can be able to fuel all the business incentives to succeed in the competitive business since Atrium Gallery is in the fashion industry which is a very competitive market. The income statement which is also called the profit and loss account shows all the expenses, the net loss, and the revenue for a specified time. The Net income is got by getting the amounnt by which the total revenue is in excess of the total expenses. The profit which is then got from this calculation is normally retained at the earnings account which has all the earnings which have accumulated of the business when the inception less dividends. The presence of a net loss leads to a reduction in the retained earnings account. The income statements which are projected actually show that the business can be able to earn profits over a specified period of time. The balance sheet on the other hand is a statement which shows the financial position of the business where: Total Assets = Total Liabilities + Owners Equity The owners equity is made up of the residual amount which is the total amount of all the assets that the business owner has a claim over because of the creditor claims and it can be derived from the paid-in capital which is usually the cash which is invested by the owner of the business, and the retained earnings which are usually the profits which have accumulated in the business. The balance sheet in the Atrium gallery helps in the reporting of the financial position of the business after a specific time. For the cash flow statements, revenue is usually not just a cash receipt and an expense in a business is usually not just a cash payment. The net cash flow which is the receipts less the cash payments, and the net income are termed to be very different. Assumptions underpinning the financial projections If inadequately planned or allocated, timing can affect the projects financial cost and companys budget it could show that the company has to incur additional costs, which could put additional strain on the budget, since the company would be forced to plan more costs in the form of labor to successfully complete the project within the stipulated time. Time management is a major key responsibility of a companys project manager. Therefore, a project manager should possess a good sense of time management, which is very important in project cost management. The assumptions for the financial projections are summarised in the table 1 below Table 1: The general Assumptions of the financial projections General Assumptions Year 1 Year 2 Year 3 Plan Month 1 2 3 Current Interest Rate 10% 10% 10% Long-term Interest Rate 10% 10% 10% Tax Rate 30% 30% 30% Other 0 0 0 The break-even point in a business is the point where the costs equals the expenses since there is no net gain and also no net loss meaning that it is the point when the business neither makes profits nor losses. For Atrium Gallery, in the first year, it expects to sell a total of about 97 pieces of dresses from the sales forecast where if it sells less than 1160 pieces of dresses, the business will automatically make a loss, but is it sells more than the 1160 dresses, and then the company would make a profit. It is then the work of the manager of the business to ensure that the dresses which are sold should be equal to or even more than 1160 dresses for the company to be able to make profits. To ensure that the company does not make losses if the number of dresses sold does not reach 1160 pieces, then the company could come up with strategies where they could reduce all the fixed costs by negotiating for the purchases of the materials and controlling all the other costs within the b usiness, they could also try reduce the variable costs, and the increasing of the selling prices of the finished dresses. The Break even analysis in Atrium Gallery indicates the monthly revenue which is needed for the business to reach a break-even point. Buy custom Strategies in the Atrium Gallery essay

The Internet Has Been Overly Commercialized

The Internet Has Been Overly Commercialized The Internet has become like a huge billboard for various industries. And the fact of the matter is that we use the Internet every day. Why Is the Internet so Popular? The year was 1990; this was the year when the Internet was very recognizable†¦ why? The World Wide Web was invented by Tim Berners-Lee. Public networking then became liberally available in the year of 1993, and since then the number of users that are on the Internet has grown to exponential numbers and continues to grow each year. With how technology is growing and the availability of when, where and how you can access the Internet, its no wonder that more people are utilizing the Internet for just about everything that is done. For that point alone, it brings forth a great debatable question: has the Internet become overly commercialized? THE IMPACT OF SOCIAL MEDIA IN OUR EVERYDAY LIFE Some would argue that the Internet has not become overly commercialized†¦ but in all reality of the matter, the truth is yes†¦ the Internet has become overly commercialized since the date of its conception. At the moment from when the Internet was born, the Internet was mainly used by scientist and military officers. The main goal of scientist and military officers being able to use the Internet was to share information that was deemed viable. The purpose of the Internet and them being able to share the information via the Internet was to keep that information safe in case of a nuclear war breaking†¦ they wanted to be able to get that information back. But the Internet became commercialized around 1995†¦ it was something that everyone was using, and with the use of so many people, explosive growth is what the Internet received. People Are Looking for ADS Since the Internet had become so popular and growth was a continued trend from it, people knew it was only a matter of time before companies and advertiser began to use the Internet for their own commercial interests. Since there has been so much commercialized content on the Internet, it seems that more and more that is all that a lot of people that use the Internet come for. They arent getting online to get or read content†¦ the majority of people that are using the Internet now are getting on to see the advertisements that are being displayed. Most users of the Internet are looking for ads that have something to offer rather than the content that can be found on the Internet. With all of the content that is readily available on the Internet, it is very easy to get lost in it. Even if your initial goal in getting on the Internet was to look at good content, or to find out some information that you were in search of, with all of the commercialized content that is on the Internet it is easy to get distracted from your initial reason for getting online. But how, you may be asking, has it become so commercialized? Its not just because of the ads; think about all of the websites that you can visit that promotes movies†¦ or sites that promote televisions shows. You have the sites that are dedicated only to television shows, or the characters that are within these shows. Youre able to see clips of movies before they have come out. You can easily get online and see video games and things that are to come†¦ but what drives this commercialization? Easily put in one word†¦ money. Commercialization Is Increasing Every Single Day All things are about money these days. With the majority of these sites, you will find that the more viewers they have to the site, the more money they make. And even if they do not make money from people viewing the sites, the more people that are able to see the site, the more likely they will go out to see the movie when it comes out; the more likely they are to go out and buy the video game once it is released. People are more eager and persuaded to go out and get something they have seen, especially if they have seen it more than once. And with the way the Internet works today†¦ ads are everywhere. The more ad space that is purchased on the Internet, especially if it is brought on several different sites, the more often the ad is seen. DOES VIOLENCE IN THE MEDIA CAUSE VIOLENCE IN CHILDREN? The Internet has become like a huge billboard for various industries. And the fact of the matter is that we use the Internet every day. Whether we are using it for work, or if were using it for school†¦ its being used, constantly. A lot of our televisions integrate the Internet into what we are viewing†¦ phones use the Internet, and we can easily access the Internet through our phones. The Internet is everywhere we look and is utilized with just about everything we do. Commercialization is here and it is increasing every single day. Yes, the Internet has been commercialized and it grows with each passing second of every day.

Reflection Paper Essay Example | Topics and Well Written Essays - 1250 words - 10

Reflection Paper - Essay Example sues of division of powers between the federal government and the state governments have been debated and amended all along since the republic was founded. Nevertheless, the powers of the federal government have remained on the top and ever increasing since the civil war period (Baumer & Van, 1989). However, there has been success in the actions undertaken by the congress and constitution interpretation to control the powers of the federal government. The philosophy of applying checks and balances has been the base for the success and the stance of the federal government. The congress has the powers of making laws, while the presidency has the veto powers in any legislative act. Additionally, the president has the powers to nominate judges of the Supreme Court, though they have to be verified by the congress. The Supreme Court has the powers to overturn any law that has been passed by the legislature. The essay seeks to describe and reflect on the current status of the key institutions of the federal government, namely; the presidency and the congress (Marshal &William, 2008). The executive branch is also known as the presidency. The federal government powers are bestowed on the president of the United States. The presidency is made up of the cabinet, the vice president, president and other officials, who the president delegates the powers to (Baumer& Van, 1989). The United States president has a unitary executive theory that is provided by the American constitution. The unilateral executive enables the president to have the power to control the whole executive branch. The provision is found in the Article Two of the United States Constitution. The powers that are bestowed by the constitution are universally agreed with the citizens of the United States of America. Nevertheless, these powers have for long faced criticism. In my point of view, they are dangerous and inappropriately granted. The separation of the powers among the various arms of the government

Poverty and Violence in a Complex Relationship Essay

Poverty and Violence in a Complex Relationship - Essay Example This paper will put the complexity into perspective. The question posed by the ‘Economist’ deserves critical consideration because getting viable answers to the causes of violence and poverty can serve as a benchmark. Such knowledge would prove very useful in defining the global priorities in the long-term venture of promoting human development. The fact that peaceful nations in the developing world have registered positive growth In the recent past, in rates that are markedly higher than those in violent nations, establishes a pattern (Heitmeyer, & Hagan, 2003:24). This fact proves Aradau and Brown’s argument that human security is a precondition for human development very relevant (Butcher, & Papaioannou, 2012: 31). Without security, people live under constant fear. The constancy of fear among people has the potential of causing developmental paralysis. The case study illustrated in the ‘Economist’ comparing Burkina Faso and Burundi serves to provide more insight (The Economist, 2011:1). In 1990, the two African states presented an almost equal potential for economic growth. However, the violence that erupted in Burundi following the assassination of its president derailed the economic growth. After more than a decade of instability and violence in Burundi, a comparison to peaceful Burkina Faso portrayed the detrimental effects of violence. Burkina Faso was doing better and had registered a wealth gain of two and a half times. This serves to highlight that violence has the potential of making a nation poor. In the absence of the violence that resulted, probably Burundi would be an emerging economy in Africa.