Economic Development Middle East and South Asia Essay

Economic Development Middle East and South Asia - Essay Example The dramatic increase of oil prices can be related to the Arab-Israeli war that occurred in the year 1973 and the Iranian revolution which occurred in 1979. The oil producing states in the Middle East have directly benefited from the high export earnings brought by oil earnings. Further, there has been a decrease in the employment opportunities due to the blooming economies of these oil producing states (Askari 9). Non oil producing countries in the Middle East have also benefited even though they do not produce oil. Their citizens have crossed borders to seek for employment opportunities as well as suitable markets for doing business. Further, several citizens in the non oil producing countries have migrated in order to earn money as teachers, construction workers and engineers in the oil fields. The earnings from the employment opportunities for these citizens have very important for the growth of countries like Egypt, Jordan, Yemen and Palestine. During the period of economic development in the oil producing countries in this region, non oil producing countries also gained from the high levels of foreign aid they were able to get from the oil producing countries (Askari 9). The increased oil revenues in the Middle East brought about several developments, especially in the social scene. The country’s infant mortality as well as life expectancy was improved. The infant mortality rates were halved while life expectancy in the Middle East region rose to over ten years. On the education sector, more citizens were able to enroll for school. Adult education levels were also on the rise (Rodney 45). Further, another benefit for increased oil revenues led to the decreased gap between the poor and the rich. This show that while the revenues from oil were increasing, some countries developed faster than the others in their national wealth. The major oil producing countries especially those with low population in the gulf were able to substantially improve the lives of their citizens. The income level per person in these countries would in some cases, surpass those of the European countries. On the contrary, countries such as Jordan and Yemen have remained t o be the poorest in the region as well as in the world (Rodney 45). The economic growth, however, came to a decline in 1986. This period witnessed the decrease of oil prices from $28 per barrel to $10 per barrel. This huge drop in the price of oil was as a result of the overproduction of oil in these states. Consequently, the huge economic gains that had been made started to decrease. This decline in the economy led to the loss of employment opportunities as well as numerous job losses. Further, the non oil producing countries were not able to get foreign aid they had previously enjoyed from the oil producing countries (Rodney 45). Economic future The Middle East is currently being challenged by various factors in their economies. The most evident factor is the rapid population growth. The average population growth in the Middle East currently stands at 3% per year. This means that the population in a given state will double in every 20 years. The increased rate of population growth in this region is one of the highest in the world. The sub Saharan region in Africa still leads in the population growth rate in the world (Askari 10). Large population growth leads to various challenges in the economy and the available resources.

Issues in financial management Essay Example | Topics and Well Written Essays - 2000 words - 1

Issues in financial management - Essay Example So firms make effort to keep their share price high, otherwise some other firm might be able to acquire a huge number of their shares and be successful in a hostile takeover (Metafilter) . A hostile takeover will result in the current management being dissolved by the company taking over. Progressive companies are always looking for new projects and opportunities, and to pursue them capital is an essential ingredient. Companies want to raise the price of their stock for future issues of stock (Investopedia). So in future when companies raise capital through stocks, they receive large amounts of premium; moreover even when it borrows, firms charge less interest on credible debtors, so it also helps in raising funds cheaply. Companies are concerned about their market capitalization; it refers to the size or worth of a business enterprise and can be calculated by multiplying the current market price with the number of shares outstanding. If the worth of the company falls, investors will be less interested in it and the company will lose its status (Henneman). Employee stock option/ownership is again a strong motivation for raising share price value for management. Employee stock options are a form of non-cash benefit that gives an employee the right to buy the company’s share at a particular price at a future date (Balsam, Chen and Sankaraguruswamy). So management puts an effort to raise the share value above that value to take benefit of this option. Moreover the management raises the stock price to please their stockholders and to maximize their value. The reason is that the shareholders elect the board of directors which elects the CEO. So the CEO has to please the board which then wants to please shareholders to get re-elected. Share price represents a number of aspects of a company. These aspects include company management, business’s current and future earnings and net assets, goodwill in the market, future outlook, credibility etc. The present