The Russian economy faced a trial by fire in 1998, but has been on the rebound since

IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA

There were too many reasons which led to the financial crisis of 1998 in Russia. It wasn’t obviously a one year thing but a long-lasting line of developments, which “prepared” the crisis. It was the absence of well thought out economic policies, weak monetary and fiscal conditions, a full collapse of control mechanism as far as the execution of laws was concerned, and, certainly, the unfavourable external conjuncture with the Asian crisis that led to the downfall of the ailing Russian economy.

It was liberalisation of prices and extrusion of domestically produced goods from the Russian market, which consequently decreased the tax base along with budget revenues, eventually leading the way to the budgetary crisis. Real tax rates were increased, but the collection of taxes was very poor. According to several sources, only 16% of the total enterprises paid taxes in Russia in 1998 with 40% of the economy functioning in shadow. Money laundering was prospering too. Actual inflation figures were intentionally lowered by decreasing social taxes and increasing deferred inflation (currency depreciation, non-payments, increasing of internal and external State debt, et al) which was already out of the State’s control way back in 1995-96. Attempts to curb this inflation with decreasing of money base led to a shortage of cash to serve commodity turnover. This absence of cash to pay taxes & salaries intensified the budgetary crisis and resulted in a flow of non-payments and high volume of barter deals.

Moreover, monetisation of the Russian economy was at 10% of GDP while the common figure for developed countries stood at 70% of GDP. If the State has no revenue, it has to either issue money or issue debt. Russia chose the second variant. The government started to finance budget deficit through borrowing. GKO pyramid started to develop and was promoted with non-residents getting an access to this market, which also fed speculative blowing of Russian stock market (in 1996-1997 it grew by almost 5 times) and further refusals to pay back debts, which the was not possible for the country to service. Privatisation led to the appearance of the institution of private owners, many of which were not effective. It also brought a spike of crime. However, I could not say that everything was done wrong. The situation was difficult and I am sure that in many cases there was no alternative in decision making.

Liberalisation was essential for the transition to market economy. In the result of a deformation of planned communist economy, GDP fell sharply: ~25% cut from GDP was due to a decrease of war production, ~15% cut due to a decrease of the production of consumer goods of low quality, which were previously bought due to the absence of alternative choices. However, on the other hand, the ruble was depreciating in the currency market and its declining demand was partially explained by the fact that companies, for example, could not care less about paying taxes because of the poor State control.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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RAGHAV BAHL - (network) 18 till he...

IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA

RAGHAV BAHL
(network) 18 till he...

R aghav Bahl is a successful Indian entrepreneur in the field of Media and Entertainment. His media group ‘Network 18’ has done phenomenally well in the past some time. It’s a big expansion plan that Raghav has been working on for his group in the past few years. He is building a well-rounded media entity. He has conceptualised a successful business model, he has launched many successful television channels in the past some time and there is no stopping him. Cliché as it may sound, but for Raghav, ‘sky is the limit’. I really expect his media empire to flourish in the coming years, especially when other prominent media personalities & media houses are joining him in his pursuit to make ‘Network 18’ a goliath in the Indian media terrain. Raghav is a man who’s made his mark in the Media industry. There is a lot more to witness for the world from his side. He is an entrepreneur with an acute business sense and a pioneer. He is truly an inspiration for all Indians. With his unparalleled passion for media, he promises to take Indian media fraternity to newer heights this century.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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IIPM, GURGAON
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The world’s most dangerous jihadists no longer answer to al Qaeda.

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The first wave to join al Qaeda was Afghan Arabs who came to Pakistan and Afghanistan to fight the Soviets in the 1980s. They were, contrary to popular belief, largely well educated and from solidly middle-class backgrounds. They were also mature, often about 30 years old when they took up arms. Their remnants still form the backbone of al Qaeda’s leadership today, but there are at most a few dozen of them left, hiding in the frontier territories of northwest Pakistan.

The second wave that followed consisted mostly of elite expatriates from the Middle East who went to the West to attend universities. The separation from family, friends, and culture led many to feel homesick and marginalised, sowing the seeds of their radicalization. It was this generation who traveled to al Qaeda’s training camps in Afghanistan in the 1990s. They were incorporated into al Qaeda Central, and today there are at most about 100 of them left, also in hiding in northwest Pakistan.

The new, third wave is unlike its predecessors. It consists mostly of would-be terrorists, who, angered by the invasion of Iraq, aspire to join the movement and the men they hail as heroes. But it is nearly impossible for them to link up with al Qaeda Central, which was forced underground after 9/11. Instead, they form fluid, informal networks that are self-financed and self-trained. They have no physical headquarters or sanctuary, but the tolerant, virtual environment of the Internet offers them a semblance of unity and purpose.

Take the case of Mohammed Bouyeri, perhaps the most infamous member of a network of aspiring jihadists that Dutch authorities dubbed the “Hofstad Netwerk,” in 2004. Bouyeri, then a 26-year-old formerly secular social worker born to Moroccan immigrants in Amsterdam, could also trace his radicalisation to outrage over the Iraq war. He became influential among a loosely connected group of about 100 young Dutch Muslims, mostly in their late teens and born in Netherlands. The network informally coalesced around three or four active participants. Mostly they met in Internet chatrooms. Other popular meeting spots included Internet cafes or few apartments of the older members. The group had no clear leader and no connection to established terrorist networks abroad.

On Nov. 2, 2004, Mohammed Bouyeri brutally murdered Dutch filmmaker Theo van Gogh on an Amsterdam street, nearly sawing off van Gogh’s head and pinning a five-page note threatening the enemies of Islam to his victim’s chest. Bouyeri had been enraged by van Gogh’s short film, Submission, about Islam’s treatment of women and domestic violence. After the murder, Bouyeri calmly waited for the police, hoping he would die in the gunfight that he expected would follow. He was only wounded and later sentenced to life in prison. A series of raids against other members uncovered evidence of more diabolical plans.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM - Admission Procedure
IIPM, GURGAON
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IIPM Ranked No. 1 B-School In Global Exposre - Zee...
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