TANZANIA ECONOMIC GROWTH.

Growth should remain solid this year, benefiting from the implementation of major infrastructure projects, a strengthening global economy and increased power supply. Nevertheless, a further deterioration in the banking system and difficulties in financing the high fiscal deficit pose downside risks. Our panel expects GDP to expand 6.6% in 2017, down 0.4 percentage points from last month, and 6.8% in 2018

http://www.focus-economics.com/countries/tanzania

Understanding retirement risk factors

Learn what to look out for when planning for retirement.

Understanding the risk factors that can come between you and your ability to retire how and when you want is an important step toward meeting your retirement goals. To help increase the likelihood that you’ll have the funds you need when you reach retirement age; keep these four risk factors in mind:

Risk Factor: Longevity

While none of us can predict how long we’ll live, individuals at age 65 have a high probability of spending 20 years or more in retirement.¹ As life spans increase, many people may spend more time in retirement than they spent working.

Risk Factor: Inflation

The longer your time in retirement, the greater the potential that inflation may erode your savings and impact your lifestyle. This makes it important for you to develop an income strategy to help outpace inflation and keep up with the increasing cost of goods and services. Consider this: 

§  A loaf of bread cost $0.68 in 1990; in 2013 the same loaf of bread cost $1.39. That’s an increase of 101% in 23 years.² 

§  A gallon of gasoline that cost $1.22 in 1990, cost $3.58 per gallon in 2013 – representing a 193% increase.²

Risk Factor: Market volatility

Today’s financial markets have become increasingly volatile and complex, leaving many people wondering when they’ll be able to retire and how long their retirement assets will last.

§  A sudden market downturn may have a significant impact to investors who aren’t well diversified or don’t have time to wait out a market recovery.

§  When creating your retirement plan, consider the impact a volatile market could have on your retirement assets. You may be in retirement for 20 or 30 years and the market could fluctuate dramatically during that time.

NGO'S KEY ELEMENTS.

The following steps will help get your own NGO up and running:

Step 1: Test the waters.

Many new activists are ready to commit their lives to “the cause.” Some are even willing to die for it. Most of these enthusiastic newbie are nowhere to be found a few months later.

There’s no need to turn down the volume of your enthusiasm, but before starting your own NGO, consider joining one that does similar work for a while.

If starting your own NGO really is right for you, the experience of working for an established NGO will only strengthen your resolve and direct your passion.

Maybe you’ll find that NGOs are not your life calling after all. Better to learn that early on, before making a big commitment.

Step 2: Start on the right foot.

“The leader’s main job is to make themselves obsolete.” –Lao Tsu

Becoming obsolete should be the fundamental goal of all NGOs. You must constantly strive to work yourself out of a job.

Becoming obsolete works on two levels. In terms of your personal involvement, you should build the NGO to the point where it can function independently of your leadership. The long term goal of your NGO should be to solve a problem and thereby become unnecessary.

Step 3: Clarify your goals.

Set clear and achievable goals for yourself and the NGO.

“Ending world hunger” is a great goal and looks good on your NGO’s t-shirt, but it’s not a problem you can seriously hope to solve.

Finding a niche is good place to start. Positive change usually comes from picking something small, doing it well and following through.

Step 4: Make an action plan.

A plan of action is your chance to make an NGO effective, address any potential negative impacts and make sure your NGO will attract donors and volunteers.

Make sure you are able to follow through with what you start. Think hard about your action plan. Hard work is important, but hard work without a good plan is a waste of time and money.

Step 5: Make a website

It’s never too early to make a website for your NGO. A good website helps you to spread the word, attract volunteers, secure funding and establish a professional appearance. An interactive website can also minimize your need for meetings and micro managing.

Attention spans on the web are very short. Be clear and concise.

Be sure to make an online profile for your NGO at Matador, where you can tap into a network of thousands of potential donors and volunteers.

Some hosting companies give free hosting to NGO sites. Ask around.

Step 6: Get in the know.

Local knowledge is indispensable to every NGO. Even if you grew up in the city where you want to start an NGO, you still need to research and make contacts. Making solid local contacts and understanding the locals’ worldview is especially important if you want to work in a foreign culture.

Good use of local knowledge can really make an NGO effective. Without local knowledge, you may do more harm than good.

Step 7: Assess your NGO’s financial needs.

Money, when it does come, usually requires great amounts of paperwork and sometimes has strings attached. The quality of the work and NGO does and the amount of its funding are often inversely related. That is to say, the NGOs with less money do better work per hour and dollar spent. The crucial point is to to minimize your NGO’s need for money.

That said, money can be really helpful sometimes. Here’s how to get it. Filing for 501c (official non profit) status is a pain and involves costly lawyer fees. No need to waste your efforts there.

Get an established NGO to accept you under its umbrella. Tax deductible donations and grants will go to them, care of your NGO. Setting up this arrangement could be as easy as a 30 minute talk with your local peace center.

Now you are ready to ask for money from businesses, grant foundations, and governments. A is a quick and easy way to accept donations from visitors to your website.

Step 8: Network, network, network.

Make friends with people and organizations doing similar work so that you can learn from their successes and mistakes. Networking also helps you to know when to team up and when to divide your efforts for maximum effectiveness. The links below are good places to start networking:

Step 9: Find balance.

Be realistic about how much time you want to give to your NGO. Taking on projects beyond your comfortable limits won’t yield much benefit in the long run.

You are worth more to your NGO as a part time activist for 5-20 years than letting your passionate burn out in two years. Finding balance between work and personal life is key to success.

Step 10: Re-evaluate everything.

Take a step back and look at what you have done and where it is all headed. Take joy in what you have accomplished, but also make sure your NGO is not becoming self aggrandizing.

How much time, effort and money are being spent on the NGO itself? This is the biggest problem facing all organizations, non-governmental or otherwise.

Your own awareness is the best tool to avoid over-emphasizing the NGO to the detriment of the cause, but don’t hesitate to ask someone from outside of your NGO for an evaluation.

With constant awareness, you can keep your focus and resources flowing to your original goals.

Conclusions

Any volunteer experience can be rewarding. Starting your own NGO can make you feel totally fulfilled.

You will learn and grow as an individual and receive a profound sense of satisfaction not easily found in modern life.

I hope my insights, experiences and mistakes were of benefit. If you have any questions or comments please post them in the comments and I’ll be happy to reply.

THE MAIN CAUSES OF INFLATION.

Inflation is a sustained rise in the general price level. Inflation can come from both the demand and the supply-side of an economy

• Inflation can arise from internal and external events
• Some inflationary pressures direct from the domestic economy, for example the decisions of utility businesses providing electricity or gas or water on their tariffs for the year ahead, or the pricing strategies of the food retailers based on the strength of demand and competitive pressure in their markets.
• A rise in the rate of VAT would also be a cause of increased domestic inflation in the short term because it increases a firm's production costs.
• Inflation can also come from external sources, for example a sustained rise in the price of crude oil or other imported commodities, foodstuffs and beverages.
• Fluctuations in the exchange rate can also affect inflation – for example a fall in the value of the pound against other currencies might cause higher import prices for items such as foodstuffs from Western Europe or technology supplies from the United States – which feeds through directly or indirectly into the consumer price index

Demand Pull Inflation Analysis Diagram

Demand-pull inflation

• Demand pull inflation occurs when aggregate demand is growing at an unsustainable rate leading to increased pressure on scarce resources and a positive output gap
• When there is excess demand, producers can raise their prices and achieve bigger profit margins
• Demand-pull inflation becomes a threat when an economy has experienced a boom with GDP rising faster than the long-run trend growth of potential GDP
• Demand-pull inflation is likely when there is full employment of resources and SRAS is inelastic

What are the main causes of Demand-Pull Inflation?

1. A depreciation of the exchange rate increases the price of imports and reduces the foreign price of a country's exports. If consumers buy fewer imports, while exports grow, AD in will rise – and there may be a multiplier effect on the level of demand and output
2. Higher demand from a fiscal stimulus e.g. lower direct or indirect taxes or higher government spending. If direct taxes are reduced, consumers have more disposable income causing demand to rise. Higher government spending and increased borrowing creates extra demand in the circular flow
3. Monetary stimulus to the economy: A fall in interest rates may stimulate too much demand – for example in raising demand for loans or in leading to house price inflation. Monetarist economists believe that inflation is caused by “too much money chasing too few goods" and that governments can lose control of inflation if they allow the financial system to expand the money supply too quickly.
4. Fast growth in other countries – providing a boost to UK exports overseas. Export sales provide an extra flow of income and spending into the UK circular flow – so what is happening to the economic cycles of other countries definitely affects the UK

Cost Push Inflation Analysis Diagram

Cost-push inflation

Cost-push inflation occurs when firms respond to rising costs by increasing prices in order to protect their profit margins.

There are many reasons why costs might rise:

1. Component costs: e.g. an increase in the prices of raw materials and other components. This might be because of a rise in commodity prices such as oil, copper and agricultural products used in food processing. A recent example has been a surge in the world price of wheat.
2. Rising labour costs - caused by wage increases, which are greater than improvements in productivity. Wage costs often rise when unemployment is low because skilled workers become scarce and this can drive pay levels higher. Wages might increase when people expect higher inflation so they ask for more pay in order to protect their real incomes. Trade unions may use their bargaining power to bid for and achieve increasing wages, this could be a cause of cost-push inflation
3. Expectations of inflation are important in shaping what actually happens to inflation. When people see prices are rising for everyday items they get concerned about the effects of inflation on their real standard of living. One of the dangers of a pick-up in inflation is what the Bank of England calls “second-round effects" i.e. an initial rise in prices triggers a burst of higher pay claims as workers look to protect their way of life. This is also known as a “wage-price effect"
4. Higher indirect taxes – for example a rise in the duty on alcohol, fuels and cigarettes, or a rise in Value Added Tax. Depending on the price elasticity of demand and supply for their products, suppliers may choose to pass on the burden of the tax onto consumers.
5. A fall in the exchange rate – this can cause cost push inflation because it leads to an increase in the prices of imported products such as essential raw materials, components and finished products
6. Monopoly employers/profit-push inflation – where dominants firms in a market use their market power (at whatever level of demand) to increase prices well above costs

OUTSOURCING IN ECONOMICS.

In addition to cost savings, companies can employ an outsourcing strategy to focus on core aspects of a business. Outsourcing non core activities can improve efficiency, streamlining and productivity because another entity performs these smaller tasks better than the firm itself. This strategy may also lead to faster turnaround times, increased competitiveness within an industry and the cutting of overall operational costs. Businesses can reduce labor costs significantly by outsourcing certain tasks, while companies may simultaneously have access to technology without investing large amounts of money to own the technology.

Advantages.

Many businesses find outsourcing the functions of human resources, such as payroll and health insurance, saves enormous amounts of time, effort and energy. HR is one of the non core functions of a firm; other companies may have experts to help with this aspect of human capital. As many as 16% of companies outsource some kind of task that deals directly with human resources.

Disadvantages

Outsourcing also has several disadvantages. Signing contracts with other companies may take time and extra effort from a firm's legal team. Security threats occur if another party has access to a company's confidential information and then the party suffers a data breach. A lack of communication between the company and the outsourced provider may occur, which could delay the completion of projects.

Read more

NOTES ON IMF.

International Monetary Fund (IMF): General Objectives and Major Functions!

A landmark in the history of world economic co­operation is the creation of the International Monetary Fund, briefly called IMF. The IMF was organised in 1946 and commenced operations in March, 1947.

The fundamental object of the IMF was the avoidance of competitive devaluation and exchange control that had characterised the era of 1930s. It was set up to administer a “code of fair practice”, in the field of foreign exchange and to make short-term loans to member nations experiencing temporary deficits in their balance of payments, to enable them to meet these payments without resorting to devaluation or exchange control, while at the same time following’ international policies to maintain domestic income and employment at high levels.

Thus, basically there are three general objectives of the IMF:

(i) The elimination or reduction of existing exchange controls,

(ii) The establishment and maintenance of currency convertibility with stable exchange rates, and

(iii) The widest extension of multi-lateral trade and payments.

In essence the Fund is an attempt to achieve the external or international advantages of gold standard system without subjecting nations to its internal disadvantages, and at the same time maintaining the internal advantages of paper standard while bypassing its external disadvantages.

The following are the major functions of the IMF:

1. It functions as a short-term credit institution.

2. It provides machinery for the orderly adjustments of exchange rates.

3. It is a reservoir of the currencies of all the member countries from which a borrower nation can borrow the currency of other nations.

4. It is a sort of lending institution in foreign exchange. However, it grants loans for financing current transactions only and not capital transactions.

5. It also provides machinery for altering sometimes the par value of the currency of a member country. In this way, it tries to provide for an orderly adjustment of exchange rates, which will improve the long-term balance of payments position of member countries.

6. It also provides machinery for international consultations