Anne Ferran: Practice Writing Sample

An Australian post-modernist artist and a photographer, Anne Ferran has appropriated imagery from classical and neoclassical sculpture and put it into a contemporary context, producing a series of black and white photography. She was born in 1949 and continues to showcase her photography to our modern society. Ideas Anne Ferran was influenced by classicism in art, especially neoclassical sculpture. Her world is filled with intellectual and cultural ideas and theories; including those of feminism. Ferran’s works are mysterious and had symbolic references. In her many artworks, Anne Ferran used her daughter and her daughter’s friends as models.

Her idea is that the ghostly images of her photograms were invisible secrets of the garments. She believed that it was important to show the understanding of feminism through the robes she used for the photograms. Ferran was interested in clothing because she thinks that there is a strong association with human presence and absence. Her artworks and photography help create a mood of feminine melancholy, silence and stillness. ‘I might start with a museum collection or an archive or a site, but it’s less the history I’m interested in than the historical record and how it comes down to us.

Especially I’m drawn to the gaps, for what else they reveal. ‘ Actions In her many photographs of women in flowing robes, she has brought life into her ideas by controlling the photographic movement and setting up the photo shoot in her own background. She emphasised on the clothes to symbolise the bodies and lives of long-forgotten women and children who once wore them. Anne Ferran’s recent series of coloured photograms use articles of clothing she found in archives, museums and historic sites in Sydney, Canberra, Tasmania and New Zealand. Her photograms are imaginative and filled with oetic memories. Ferran laid costumes directly on the photosensitised paper and briefly exposed them to light. She chose garments that are semi-transparent so that light could travel through. Anne presented the photograms, from a series made at the National Museum of Canberra in 2002, as an installation in a chest of drawers. Each drawer became a light box so that when people opened the drawer, the images were lit from beneath. She wants the audience to reflect on the forgotten lives and personalities of women and children. (Christening Robes) 2001

Debt Sustainability In Developing Countries

This chapter seeks to outline the main purpose of the proposed study on the role of public debt on the economic development of developing countries. In the first section, literature is used to provide background and the problem statement to the study, as it relates to debt and development in developing countries. The second section is centred on the rationale of the study, drawing attention to public debt, specifically in developing countries.

The last section of the chapter will outline the research question and investigations about the topic. 1. 2 Background The role of the public debt to the economic development can be examined from the sources, the uses, and debt management perspectives. In generally the role of the debt is to assist the country’s government to finance its expenditure on development projects, which can no longer be finance with the local income collected, mainly from taxes.

If the income collected is not sufficient enough to finance the country’s expenditure, it is said that the country has incurred the deficit for that year, whereby its spending capacity is more than the level of income. This implies that the country will not have adequate financial muscle to enhance service delivery in the economy. Hence with no financial resources the country’s development becomes constraint somehow.

Therefore it is only through borrowings, adjusting tax system or receiving donation that the uneven gap between country’s income and expenditure can be closed to maintain and support development in the economy. The study has shown that two of the above three options available for the country to get financial assistant are no longer efficient and supportive for economic development. With the case of changing of tax system, some economists, especially neo-classical economists, argue that all taxation creates market distortion and results in economic inefficiency.

Hence this affects the future generation if such a tax system will not be utilized efficiency for development projects. Thus it is considered economically inefficient for government to alter tax systems to try to promote economic development. The main feature of this is that it is a long run aspect to be adjusted for development purposes, to recover for public purposes. Donations as financial assistance to help aid the development these days are believed to come with political interest from the donor side.

The donations may be offered with the purpose of creating financial dependency or with the aim of acquiring economic muscles that are not in place in donor’s country like mineral, goods and services. China’s financial assistance to Africa countries Public debt or government borrowings specifically from abroad are sometimes recommended as a source to finance the deficit and to keep development going in the country; however the literature has shown the light and the dark side about the public debt on economic development, this is found in the chapter two of this paper.

The literature, in particular the empirical part, on the relationship between government debt (internal debt) and economic development in developing countries is scarce. Hence, most studies on this topic emphasize the impact of external debt, debt restructuring on growth, while analyses brings up the impacts of the debt on growth through development. Yet, such analyses become even more relevant to the goal of this paper as governments of developing countries are facing mounting fiscal pressures, with public debt-to-GDP ratios management. 1. 3 Problem statement

The theoretical literature on the relationship between public debt and economic developing in developing countries tends to point to a negative relationship. Basically, this means that growth and development models augmented with public agents issuing debt to finance expenditure on public and capital goods tend to exhibit a negative relationship between debt and economic development. Modigliani (1961), refining the contributions by Buchanan and Meade (1958), he stated that the public debt is an obligation for the next generations of the country.

He supported his argument by pointing out that even when the public debt is generated as an anti-cyclical measure or to finance deficit, the debt will not generally be paid immediately given there is a deficit incurred, so it will be paid in future by the future generations while the current generation is better-off inheriting development at the cost of future generation. According to the benefit-principle theory this implies that, inefficiently utilization of the public debt by the receiver/public agents, will lead to a heavy burden being beard by the future generation.

Levy and Chowdhury (1993) looking at the effects of the public debt on development through growth, concluded that a raise in the national external debt may indirectly slow down the level of country’s GDP by harming investments and encouraging capital mobility due to increase in tax expectations. These findings of the debt affecting growth and hence investment were criticized by Rockerbie (1994), he argued that national debt may cause investment to be biased or unreliable. The reason is that the decreases of investment in many of highly indebted countries are decreasing net and slow growth which harmers’ economics development.

Fosu (1996) argued For to Levy and Chowdhury (1993) views. He said that it is the truth that GDP growth it is negatively influenced by the public borrowings, especially via a diminishing marginal productivity of capital/investments. He supported his argument by mentioning that the lofty burden of debt hinders economic development, mainly because it decreases the efficiency mainly of the developing country’s investment and his study reviled that on average developing countries that have high debt ratio faces approximately 1% reductions in their GDP growth rate yearly.

This reduction firstly heats the country’s GDP growth aspects and at later stage it reflects negative results in development of the country as a whole. During the year (1999), Fosu came to the conclusion that this negative influence of the debt towards economic development might be due to a poor performance and management of debt by the recipient country. Waheed (2006) supported Fosu’s conclusion by saying that the credit/debt recipient countries with primary deficit fill out their deficit also by acquiring domestic debt, this is due to their failure for not utilising the debt collected abroad proper/efficiently (poor debt management).

He stated that the only way to prevent this debt accumulation, recipient countries have to diminish their primary deficit by means of fiscal change and transparency. This can be achieved through proper government expenditure management, prior the deficit, by means of government progress evaluation to prevent rent seeking and bureaucratic behavior practiced by national public agents of developing countries. Safia (2008), in his study of the effects of external debt in the economic growth and development of the developing countries (India, China and Brazil).

He founded that the is a dark side to government debt, he supported this by saying that after a government debt surpasses a certain level, it will not remain a blessing to one’s development, because excessive debt may depress the growth by limiting productivity and weakening investments growth. Alejandro and Petia (2009) on their study that was based on India’s development through debt seem to disagree with Safia’s (2008) findings, they found that the debt does bridge the gap; actually it prevents a big financial and social gap between different regions or social classes, off which result to a sustainable economic development.

This was sustained by India through adjusting its country’s industrial structure, regional structure as well as promotion of the stable development if it’s national economy. In achieving this Indian government acquired external debt that was used to finance investments project and programmes such as World Bank’s energy or transportation programs which helped to eliminate bottle necks and alleviate poverty in economically backward regions in India.

He mentioned that the government of developing countries should strive hard to achieve sustainable economic growth and this could only be achieved through gaining control over their expanding fiscal deficit. Several studies focuses on the effects of the public debt on the domestic capital formation which is affected through the failure of financing the debt (long-term interest rates) as an indirect channel affecting economic development. According Yunhe 2010, the external debt is regarded as the best source of financing government expenditure by the governments of the developing countries than the internal debt.

He mentioned that external debt attracts foreign investors and it is mostly used to finance investments projects that bring economic development through innovation in developing countries. . 1. 4 Motivation of the study Through engaging with the literature, discoveries were made that the governments of developing countries are faced by a multitude of challenges while trying to achieve targets of economic development and growth. This is due to poor debt management, negative effects of debt on investments and GDP growth.

This means a greater amount of exposure to external shocks, while the situation is compounded in some cases by a volatile socio-political landscape internally, as is the case with many developing countries. However, on the other side debt creating flows are a vital part of the financing mechanism of developing countries. Analyzing and summarizing the findings of the above literature stimulates further investigation about the role of public debt as it is a massive tool to bridge the gap of government financing of social and economic infrastructure (good health and education ystem and sanitation, road & transport, science parks etc). This leads to the country’s development and growth. However, on the downside, despite the heavier emphasis on debt as a source of financing, developing countries have a lower tolerance for high debt-to-GDP ratios. Thus, management of the long-term cost and sustainability of these flows is of extreme importance. Notwithstanding the rationale behind the occurrence of debt, the level and rate of growth of public debt should not unduly limit the country’s monetary, fiscal and exchange rate flexibility.

A sound debt management strategy ensures that ample financing is provided for development and growth objectives to be met. While a debt policy can guarantee the sustainability of a country’s stock of debt, the need for this debt flows is eventually determined by fiscal and monetary stance along with developments on the external sector. Conversely, the absence of prudent debt management systems will have serious consequences to effective monetary management as well as fiscal operations. This will place an additional burden on the external account in the shape of a greater amount of resources being diverted to debt servicing.

In essence, debt policy is a dynamic financing policy that has to react to implementation of various public policies and act as a constraint to public policy. 1. 5 Objectives/investigation The present study will explore the impact of public debt on economic development in developing countries. The main objective of the study is to find out the answers to the two questions below: * What makes the debt not to be proportional to development in developing countries? * Should developing countries carry on borrowing for development purpose?

The answers to these two questions will be reached by looking at debt and development in the developing countries that once shared certain similar characteristics and they still do even today somehow. These developing countries will be the four BRICS countries (Brazil, India, China and South Africa) as a case study. Thereafter, findings from the case study will be clustered and merged to recommend specifically South Africa’s development through debt. Furthermore, the main aspects to look at will be the ones that will prosper the channelling of the received debt to provide full service elivery and achieving basic macroeconomic objectives of the developing countries. Firstly, the rationale for borrowing and debt sustainability by the governments of developing countries is explored. Secondly, external debt management and debt management philosophy is ventured into.

Finally, debt management policy framework of developing countries will also be zoomed into. Thereafter, it will be very important that the relationship between debt and economic development is explored, which is what this study also seeks to do. Chapter 2 Conceptual and theoretical framework . 1 Introduction The aim of this chapter is to study the essence of, and rationale for public debt as well as its effect on the economy. In this chapter our study begins with a discussion of the concepts of public debt, by looking at types, size and the composition of the public debt in developing countries. It will be followed by definition of the concepts economic development and developing countries. The theoretical linkage between the public debt and development will be made through outlining the theories on the rationale for public debt.

The chapter will further deal with public debt management and discuss the possible impact of public debt on economic development. 2. 2 The Public debt 2. 2. 1 Concept of Public debt Public debt is “sometime referred to as government or the state debt; it is the sum of all the outstanding financial liabilities of the public sector in which it has legal obligations and responsibility to repay the original amount borrowed (principal amount of the debt) plus the interest (cost of debt servicing) (Anderson, Lena & Otavio 2010:73)”.

To be brief the debt is a term of money owed by any sphere of government (state, municipality, local government or public enterprises) in a country to the lender. Public debt can be raised internally or externally. Internal debt is the borrowings by government from number of sources inside its own country; it includes the domestic central bank, commercial banks, domestic non-bank sectors (local business firms and households). “External debt is the money owed by the national government to the foreign lenders, either to he international organizations such as World Bank or IMF, private and non-private sectors like other governments or groups like sovereign wealth funds (Anderson, Lena & Otavio 2010:73)”.

Governments create the external or internal debt by issuing government bonds, securities and treasury bills for acquiring temporarily or compulsory bail-outs. “Voluntary debt occurs when the loans are provided the public to the government are voluntary in nature (Bushanan 1999”. When the government seeks voluntary debt Government makes an announcement in the media to obtain such loans. The rate of interest is normally higher than that of compulsory debt, in order to induce the people to provide loans to the government (Anderson, Lena & Otavio 2010:95)”. “Compulsory debt is the financial assistance that governments seeks for special circumstances, in most cases the compulsory debt helps to be bail out country’s out of the crisis or war (Anderson, Lena & Otavio 2010:73)”. The government debts are identified by the duration until the repayment. Hence there are different kinds of “public debt by duration”.

2. 2. 2 Types of public debts . 2. 2. 1 Short Term Debt This is the form of a debt that arises through treasury bills that government offers when it requires financial assistance to cover temporary shortages of funds. “The treasury bill is the debt obligation of the national government, representing a charge on the revenues and assets of the country. “This short term debt matures within duration of 3 to 9 months and generally the rate of interest or cost of servicing this debt is low (Van Zyl, Botha, Goodspeed & Skerrit 2009 cited in Black, Caltz & Steenkamp 2008:262)”.

For instance, “Treasury Bill is normally issued for a period of 91 days (Black, Caltz & Steenkamp 2008:263)”. 2. 2. 2. 2 Medium and Long Term Debt According to Black, Calitz and Steenkamp 2008, the majority of public debt is incurred through the sale of government bonds which have a maturity period of three years or more (Medium to Long Term). The main forms of medium to long-term debt are by way of market loans, generally the cost high rate of interest. “These kinds of debts are raised for developmental programmes and to meet other long term needs of public authorities (Gelinas 1998:4)”.

According to Calitz, Black & Steenkamp 2008, public debt arises primarily from the government’s annual budget deficit. Meaning that the debt is acquired mainly if the (money from the budget) national income of the country collected through taxation and other source of income in the previous year may not meet the internal needs of the country (budget deficit). For this reason there is no surplus even to finance the projected expenditure for the following financial year.

Hence the government of the country has to finance its spending with the debt in order to achieve the basic macroeconomic objectives of the country/economic development. 2. 2. 3. The size and the composition of the public debt in developing countries The size of the public debt is expressed as a percentage of the country’s Gross Domestic Product, of which is the total value or amount of goods and services produced domestically during a certain period of time. The size of the debt sometime it is an expressed in terms of per capita, per head of the country’s population.

This tells that out of countries production how much debt constitutes as the percentage of that production. According to Calitz, Black & Steenkamp 2008, South Africa as a developing country it had a total debt of R524 Billion, which was 27 percent of the GDP or roughly R11 300 per head of the population. Looking at the size, this tells that if South African Government wanted to reduce the debt immediately, was suppose to charge or impose a tax of R11 300 on each citizen of the country, which is equivalent to 27 percent.

The lower the deficits the Government of the country that is indebted, the lower the public debt as the percentage of GDP of that country, of which this opens doors for development and economic growth in the indebted country. Now focusing on the public debt composition, most indebted developing countries, quoting from the four BRICS countries(Brazil, Russia, India and China) are faced with the large portion of external debt out of the total debt (domestic and foreign debt) they have.

It is a rear case to find the developing country to have more of debt from domestic that abroad. According to Calitz, Black & Steenkamp 2008, South African Government has traditionally made little use of foreign financing, so that most of its debt is domestic debt. “From the period of 1970 to 2000 the total public debt as the percentage of GDP fluctuated between 10, 9 percent and 1. 6 percent. During this period foreign/ external debt never exceeded 4. 3 percent of GDP (Calitz, Black & Steenkamp 2008:264)”. 2. 3 Definition of Economic development

The role of the public debt to the economic development can be examined from the sources, the uses, and debt management perspectives. In generally the role of the debt is to assist the country’s government to finance its expenditure, meaning to finance the country’s development projects in order to enhance service delivery which will lead the economic development in the country. Economic development “is the process of increasing the standard of living in a nation’s population with sustained growth from a simple, low-income economy to a modern, high-income economy (Graffin 1938:7)”.

According to Todaro & Smith 2009, there are three quality aspects of development. Firstly raising people’s standard of living, their income and consumption levels of basic needs, food, medical service and education; Secondly, creating conditions that credible for the growth of peoples self esteem through establishment of social, political, and economic system and institutions that promote human dignity and respect; Thirdly increasing peoples freedom by increasing range of their variables choice, through enlarging varieties of goods and services available. . 4 Definition of Developing countries. Developing countries are “countries characterized by a relatively low standard of living, undeveloped industrial base, high rate of population, low income per capita, and moderate to low Human Development Index (high poverty, low literacy rate, and general economic and technological dependence on developed economies) (Todaro & Smith 2009:820)”. The development of the developing countries differs from developed countries in their earlier stage.

According to Todaro & Smith 2009, this happens because today’s developing countries are found to be physical and human resource endowed without human capital which encompasses skills, education and health as compared to industrialized economies back then during their development phase. Hence this country suffers from the low efficacy of domestic institutions (economic, political and social institutions) which have to drive development. High inequality and poor institutions facilitating extraction rather than providing incentives for productivity were actually established by colonial powers (Graffin 1938:10)”. Poor research and development in developing countries results leads these countries outsourcing unaffordable advance technology and expertise through the debt/credit, in order to extract the wealth of their nation (physical and human resources). 2. 5 Theoretical Linkage (Debt and development)

Example: National Income R48 000 000 000| National Expenditure R 50 000 000 000| Primary Surplus/Deficit R 48 000 000 000- R50 000 000 000= -R2 000 000 000. | National Debt = R600 000 000| Deficit of R2 000 000 000| Debt servicing cost i. e. 18% p. a R108000000| Failure to repay debt (deficit)| R600 000 000 + R108000000=R7080000000| Borrowings to finance expenditure for the following year | R6 000 000 000 | The above figure shows how the public debt arises and rises.

The first Colum shows that the public debt arises because of fiscal deficit, whereby the national income received for various source of income (48 000 000 000) is less than the national expenditure (50 000 000 000 ),. At the same time the country in question has a debt from previous borrowings. Hence having a deficit of 2 000 000 000 it cannot cut or finance the its debt 6000 000 000 or pay the annual interest of 18%(108 000 000 000). Thus failing to finance the debt lead to the country becoming more indebted because failing to pay the annual interest because of the deficit means the debt rises by the 18%. herefore the country becomes more indebted, again to finance the expenditure or to increase its services delivery for development it will have to borrow(6 000 000 000) again since the income collected was less that its expenditure capacity. According Black, Calitz & Steenkamp 2008 it is stated that the loan finance (debt) is an acceptable method to finance capital expenditure, while current expenditure may be a better candidate for tax finance. 2. 6 Debt Management

Generally debt management is confused with debt operation; “debt management is an art and a philosophy and if practiced professionally can add value to the overall economic development of the country. According to Calitz, Black & Steenkamp 2008, though there has been a lot of discussion on the importance of sound debt management practices since long however countries particularly the Developing countries have failed to institutionalize the debt management function and its participation in public policy formation. Government debt management generally operates more efficiently if responsibility for decision making and implementation is centralized and not spread across several government departments. “Sound debt management practices ensure that the level and rate of growth of public debt do not unduly limit the country’s monetary, fiscal or exchange rate flexibility, or leave the country seriously exposed to changing financial market conditions (Calitz, Black & Steenkamp 2008:281)”.

It also ensures the efficient usage of the debt towards development, without encouraging rent seeking behavior. “Prudent Developing country’s policies (fiscal, monetary and exchange rates policies) are essential in achieving sound national debt levels and structures that do not fail the country’s macroeconomic objectives. Achieving high economic growth and development rate is a primary national objective as it helps in accomplishing the extremely important socio-economic goals of expanding employment and reducing poverty (Calitz, Black & Steenkamp 2008:280)”.

Economic growth which is achieved through efficient investments that generate returns in excess of their cost of capital contributes greatly to country’s debt capacity, public debt levels as a percentage of the size of an economy would depend not only on traditional macroeconomic policies but would also depend on other public policy considerations such as improvement in the national investment climate, saving incentives and opportunities and competitiveness of the real economy. “Debt policy is a dynamic financing policy that has to react to implementation of various public policies and actual performance of the economy.

It is therefore important to look at debt policy within an overall framework of public policy for national development (Gelinas 1998:116)”. Furthermore, debt policy has to deal with explicit and implicit cost of raising debt for the government and how these costs can be reduced within acceptable risk levels. According to Masroor 2009, it is important to note that the Debt policy will not drive public policy but will respond to it and act as a constraint to public policy (over) ambitions.

There exists a myth that prudent debt management is panacea of all economic worries, in reality improving the quality of debt management can achieve only so much; ultimately, fiscal policy determines the borrowing requirements and is the main influence on the stock of debt over time. 2. 7 Impact of public debt on economic development The positive effect of public debt on a country’s development According to Yunhe 2010, there are three ways in which the debt affects the countries development positively.

Firstly she stated that it is important to understand the government debt is a way of acquiring funds, keep balance between countries revenues and expenditure while at the same time evenly offsetting the construction funds. “With the development of a country’s economy, the national financial functions are increasing in size. Therefore chances are that the government of the country’s will lack of the financial resources handle an economic situation as the financial functions are increases. Hence the debts can definitely be a feasible way to fill in this gap (Yunhe 2010:4)”.

Sustainable amount of debt is like a double edge sword, “it can be used as compensation for budget deficits and also helps the country to avoid overdraft from banks that would otherwise cause the problems of currency issuance and inflation, for instants they are period of times whereby government might need large amount of capital to finance economic infrastructure (building road and transport, coverage of energy, tall-gates, harbors, science parks, parastatals and stadiums),However the national income collected(budget) will not be enough to meet domestic needs, and the only best way will be acquiring an external debt(Yunhe 2010:4)”,

Secondly, the debt can affect the development of the country positively through or by adjusting the country’s industrial, regional structure and promote a stable development of the national economy. Like the external debt, it is usually applied to finance investment projects and programs that requires large sum of funding like economic and social infrastructure (poverty alleviation, education and good health system) which helps to eliminate the “bottlenecks” of the development of the national economies.

Specifically these programs are designed to enhance the development of economically backward regions and they help the entire country to benefit from the economic development and thus prevent a big financial and social gap between different regions or social classes. Hence they would definitely contribute to social stability. Since the county’s growth is the component of economic development.

It implies that the positive effects of the debt to the development will somehow be driven through growth, which will need to be enhanced by the government support that will sustain national development planning by implementing strict control on foreign investment. According to Yunhe 2010, this will be beneficial to the national macro-control, greatly lowering the number of blind and duplicated investment while at the same time optimizing one’s industrial structure, making the debt an important way of controlling macroeconomic.

Finally, the third positive effect that the public debt has on an economy’s development is that a debt helps to improve the liquidity when it comes to international payments. According to Mengnan Zhu external borrowings have a direct impact on the country’s international income and they imply capital inflow to the borrowing country, meaning that the earnings from foreign currency improve a country’s payment capabilities and enhance international liquidity while giving a government the opportunity to invest into productivity. Developing the infrastructural key sectors, already mentioned above, and strengthening the export industries can contribute to the adjustment of the domestic industrial structure. They also increase the production of import substitutes, reduce import itself, thus increasing foreign reserve. Finally they can help in the production of exporting goods and enhance export capacity as well as the capacity of international payment (Yunhe 2010:4)” The negative effect of public debt on a country’s development Now we take a look on dark side of the public debt.

Excessive debt deprives growth and development through limiting productivity and weakening investment growth, this results to developing countries to be highly indebted especially if they over rely on the external debt . According to Safia 2008, in his study of the effects of external debt in the economic growth and development of the developing countries, he pointed out that these developing countries should strive hard to achieve sustainable growth.

Thus their governments need to gain strong control over their extending fiscal deficit. In contrast to that, if the government debt is not sustainable, it will put the economic prosperity into a risky situation. Since it should be remembered that the debt also hints at a higher current account deficit, which means the debt most certainly could just as well lead to an unbalanced debt in a country. The public debt is the liability which is meant to play a vital role in developing the entire economy. Developing countries have limited internal sources of financing the country’s expenditure; hence they consider more of external debt (Gelinas 1998:36)”.

The key issue of sustaining the debt is based on the debt management, if they fail to utilize the their debt productively, mobilize investment and create new employment opportunities, they will ultimately be trapped with the dilemma of lower income/revenue which will in turn affect their spending capacity which will hinder service delivery by the state agents, thereby leading to higher debt servicing cost. The failure to service debt on time does not only makes it harder for developing countries to get aid at concessional low rates from lender agencies, but it also increases the country’s risk (Safia 2008:1450-2887)”. Risk would be that the governments of the developing countries will be unable to repay the debt and will have to rely more on domestic borrowings. This handicap will see to it that those governments that are unable to repay this debt will have to rely more on domestic borrowings.

However, “the more domestic borrowings are performed, the stronger domestic interest rate will increase; this then leads to a slowdown in the growth of the economy” says Safia 2008. Looking at the rational for debt financing by focusing on the concept of inter-temporal burden, Black, Calitz & Steenkamp 2008, found that the public debt burden shifts over time from one generation to the next.

This burden of the debt refers to the responsibility for the actual payment of the principal amount interest. They stated that when debt is incurred, it should be used in the most effective manner in order for the benefits to accrue to the present and the future generation through the consumption of public goods and services, specifically capital goods like economic infrastructure and also social infrastructure (good education, health system, sanitations etc).

Hence, since statutory burden of the current debt will be conferred on the next/future generation, it will be fair enough for them to bear the burden of paying interest to bold holders until the bonds expires, because they will be reaping and consuming positive externalities from the social and economic infrastructure created by the use of public debt acquired previously. This point lies on both positive and negative effect of the public debt on the development. They main theme about it depends on the debt management by the sphere of the domestic governments.

Chapter 3 Case studies/ Empirical evidence 4. 1 Introduction This is the chapter that puts the study into practice by touching on the empirical evidence of the public debt crises on the development of the three BRICS countries (developing countries), which is Brazil, China and South Africa. The case studies on these countries focus mostly on the two important economic indicators that provide the signal of whether the public debt does or does not contribute towards the developing countries of these developing countries.

The two indicators are public debt as the percentage of the country’s gross domestic product (GDP) and the primary balance as the percentage of GDP. The public debt as the percentage of GDP shows how much the debt constitutes in the gross domestic product and the primary balance shows the ability of the indebted country to repay or service the debt after the national income has been allocated in all the countries’ expenditures. 4. 2 Brazilian case study The first case study to look at is about the largest country on the South American continent “Brazil”, the country which suffered the most under the results of debt crisis in 1980’s.

According to Anderson, Lena, & Otavio 2010 “the financial crisis of Brazil was due to failure of the country to manage their foreign debt until it exceeded their earning power and they were not able to repay it. The debt crisis in this country resulted after world recession that had caused oil prices to rise, hence developing countries also found them in a desperate liquidity crisis. “The oil producers had believed that rising prices of oil would allow them to repay their additional debt.

However, as interest rates increased in the United States of America and in Europe in 1979, debt payments also increased, making it harder for Latin American countries to pay back their debts ( Schaeffer 2003:90)”. “Deterioration in the exchange rate with the US dollar meant that Latin American governments ended up owing tremendous quantities (Garcia & Manuela 1991”565-619)”. The understand the financial situation of Brazil after the crisis, the following to figures below will show Brazil’s public debt ratio at a percentage of GDP and the primary surplus as the GDP percentage.

From the year 1996 to 2008 Source: World Bank “Brazil economic indicators” Looking at figure (a) we can see that the Brazil public debt as the percentage of GDP rose sharply from the year 1998 to 2002, “this was due to monetization of the debt after the price stabilization and maybe due to default of conversion of the brazil currency of the public bonds expressed in the old money (Pedro & Marco 2006: http://siteresources. worldbank. org)”. From 2003 to 2007 the figure depicts the time of tight fiscal policy with high repo rate and appreciation of Brazilian currency.

To protect the nation’s economy the government of Brazil decided to alter the composition of the domestic and external Debt. “This resulted in a rise in primary surplus to around 3. 5% in the year 2002; hence Brazil managed to bring down its public debt to GPD ratio (Anderson, Lena & Otavio 2010:44)”. According to Pedro 2006, the fiscal adjustments in Brazil were somewhat supported by the drastic increase in taxation. However there was a decrease in primary surplus late 2005 until 2009, which was caused by the sustainability debt policy that resulted in business which implicate economic boom.

On the other hand the interest payment to GDP ratio presented an overall decreasing since 1998 from 1. 8% to 1. 0% in 2007. According to Yunhe 2010, the external debt as the percentage of GDP shows similar trends but at slow level when compared to the whole public debt as the percentage of GDP. According to Yunhe 2010, comparing the budget deficit or the falling primary surplus until 2009 with the public debt ( domestic and external debt) we can tell that the Brazilian Government had a sustainable debt policy ,because it had a stationary budget deficit since the inters payment was declining.

These results indicate that the Brazilian government may have taken hold on an inter-temporal budget constraint; this is the reason why they had sustainable fiscal policy. 4. 3 Case study on China The second case study is based on the world’s largest and currently excelling emerging economy, which is located in East Asia this country, has an average annual GDP growth rate of over 10 percent, “China”. The two figures below represent Chinese financial situation from the year 1992 to 2008. Chinese debt ratio and Primary surplus ratio, both as expressed as the percentage of GDP.

Source: World Bank “China economic indicators” Figure (a) shows that in early 1991’s the Chinese Government was confronted with the low debt to GDP ratio of 5. 9%. starting from the year 1997 the debt drastically increased until it reached its pick of 27% in 2000. after that it contracted, The main reason of the upswing was due to global credit contraction as well as the anticipated Chinese currency appreciation. On the other hand the primary surplus was the mirror image of what happened to the public debt.

Figure (b) show that the primarily drastically decreased from the year 1997 to 2000. Acoording to Yunhe 2010, this seems that the drastically decrease in the primary surplus ratio and high ratio of public debt of China from 1997 to 2000, might be ascribed to the Asian financial crisis which began in 1997. After the crisis, the Chinese government implemented an active fiscal policy for the following 7 years. During that period primary surplus reached a low climax in 2002. “The interest payment of Chinese country had decrease from 0. 879% in 1991 to 0. 38% in 1999 and further decreased to 0. 2% in 2008. This gives a clear light that China’s public debt as a developing country can be considered as stainable, the sustainable financial situation of china was supported by the stationary government deficit as Brazilian government deficit (Greiner and Fincke)”. Putting everything together, we see that these results are similar to the Brazilian one’s, they indicate that the Chinese government may have taken hold on an inter-temporal budget constraint that makes it not to be at risk of suffering debt crisis.

Hence, they currently became lenders to the countries which are believed to be developed, this happened because of the Chinese sustainable fiscal policy. South African Case study This is the third case study that focuses on South Africa’s debt. In 2002 the country’s government debt amounted to R520, 4 billion; this was 38 percentage of the GDP. According to Black, Calitz & Steenkamp 2008, the size of the public debt as the percentage of GDP had rose substantially during the first half of 1990, after which it stabilized in the 48-51 percentage rage.

Many economists warned for the debt trap (government inability to service the debt). Some instruments like systematic reduction of the annual budget deficit and the use of privatization income to reduce government debt were applied to bring down the debt rate as the percentage of GDP, lower to 38. 9 percent during the period of (2002-2004). The following figure below presents South Africa’s debt as the percentage of GDP, Revenue and expenditure (primary balance), from the period of 1989 to 2003. From the above figure it is clear that the most significant accumulation of debt happened at the end of the Apartheid period.

Nevertheless the explosion of debt at the beginning of the 1990s has its origin in the crisis and economic policy response of the Apartheid government in the 1980s. At the beginning of the 1980s the government attempt to stabilize expenditure as percentage of GDP had been abandoned and from 1989 revenues had fallen dramatically, creating the significant explosion of debt that the country experienced in the years that followed. In 1994 the new South African government bucked this trend. It had inherited an economy in disarray and the new political elites had before them three possible options.

First, they could default on Apartheid debt. Second, they could refinance existing debt with more debt from international institutions to address the urgent issues of income redistribution and economic transformation. Third, they could stabilize the economy and reduce public debt via the adoption of an austere fiscal programme. They chose the third option In 1996, after Mr Travor Manuel appointment, he proposed a form of new macroeconomic policy, the Growth, Employment and Redistribution (GEAR) strategy (Lodge 2002: 26). This strategy adds another vote to the ‘Washington Consensus’ in that it focuses on privatization, government ‘right-sizing’, the creation of incentives for Foreign Direct Investment (FDI) such as tariff reduction, the reduction of the fiscal deficit (which in 1994 had reached 9% of GDP) (Lodge 2002: 25). In other words, His goals of a new regime were linked to the history of debt in South Africa pre-1994. The new regime inherited from the Apartheid regime a series of problems that are the consequence of two related legacies of Apartheid: irresponsible borrowing and an over-dependence on national capital.

The new political elite were intent on reversing both of these trends. They wanted to create a fiscal environment characterized by responsible borrowing that would simultaneously make South Africa attractive in the eyes of international investors – both in the sense of FDI and enhancing the creditworthiness of South African state bonds – and allow them to gain independence from national capital. “Their response was an austere fiscal policy and a concomitant drop in capital expenditure and taxation, which only now is beginning to be reversed (Lodge 2002: 26)”.

Coupled with the desire to gain autonomy from national capital is the hope that they could also, as a consequence, insure against dependence upon international financial institutions. “The issue of debt and a cautious approach to transformation became central to any planning of public policies for growth and development (Stasavage 2003: 23)”. Thus although this is a story that has very specific South African characteristics, its origin can in part be traced back to the experiences and failures of development policies around the world in the decades before 1994.

Thus the overriding motivation behind the new political leaders’ choice of option three was their Gill Marcus convinced her party comrades that they did not have a ‘blank slate’ and that if South Africa’s ‘huge debt’ and ‘massive tax shortfall’ were not addressed ‘it [South Africa] was likely to land up in the hands of the IMF (Green 2009). “South Africa lacks credibility, due to the fact that it lacks creditworthiness and remains a relatively risky place in which to invest, and thus, relative to other young representative democracies, again the servicing of South Africa’s public debt remains expensive (Stasavage 2003: 23)”.

In South Africa, International creditor interests are represented (through identification) by an economic elite that does not enjoy formal representation in parliament and therefore both international and national creditors do no control a veto point. “The South African government’s austere response to debt made its bonds more attractive. It has therefore become more, not less, dependent on the constraints of creditors, that is, more subject to investor scrutiny and sentiment (Macdonald 2002: 6)”.

Hence the relationship between debt management, representation and state credibility linked with Development of the country has to be zoomed-in, to assess the transparency of the national fiscal policy, because it is stated in the constitution of the country that “government is made of political representatives, representing the nation’s common interests, not its members’ several interests. Anyone acting as somebody’s representative meets a particular need for them and thus enables the person to do something else (development)”.

Add :consult public eco’s book and duplesis 2009 working paper.. References Alejandro, S. & Petia, T. 2009. India’s Experience with Fiscal Rules. An Evaluation and The Way Forward. IMF Working Paper. Anderson, C. S, Lena, O. C. & Otavio, L. M. 2010. Public Debt: The Brazilian experience. Brazil. World Bank and Brazilian National treasury. Black, P. , Calitz, E, Steenekamp, TJ and associates. 2008. Public Economics. 4th edition. Cape Town. Oxford University Press. pp 262-282. Bettina, F. & Alfred, G. 2010 Do the governments in developing countries pursue sustainable debt policies?

Empirical evidence for selected countries in Africa and Latin America. Journal of Development Studies. pp. 745 – 770 Buchanan, J. M. 1999. Public Principles of Public Debt. A Defense and Restatement. vol. 2. Indianapolis: Liberty Fund. Geoffrey Brennan. Chowdhury,R. 2004. External Debt, Growth and the HIPC Initiative: Is the Country Choice Too Narrow? Chapter 8 in Debt Relief for Poor Countries, ed. by Addison, Hansen and Tarp. Cunningham, R. T. 1993. The Effects of Debt Burden on Economic Growth in Heavily Indebted Nations. Journal of Economic Development, pp 115-126. Diaz-Alejandro, C. 981. Southern Cone Stabilization Plans, Economic Stabilization in Developing Countries. The Brookings Institution Ferraro, V. 1994. World Security: Challenges for a New Century. New York: St. Martin’s Press Fosu, A. K. 1996. The Impact of External Debt on Economic Growth in Sub-Saharan Africa. Journal of Economic Development. pp 93-118. Fosu, A. K. 1999: “The External Debt Burden and Economic Growth in the 1980s. Evidence from Sub-Saharan Africa. Canadian Journal of Development Studies. pp 307-318 García, B. & Manuela, C. 1991. Iberoamérica: Evolución de una Economía Dependiente.

In Luís Navarro García (Coord. ). Historia de las Américas. vol. IV, pp. 565-619. Gelinas, J. B. 1998. Freedom from debt. The reappropriation of development through financial self-reliance. Banglaladesh. Zed books Ltd, 7 Cynthia Street. Graffit, K. 1989. Alternative strategies for economic development. London. Macmillan academic and professional Ltd. Lodge, T. 2002. Politics in South Africa: from Mandela to Mbeki (Cape Town. David Philip. Macdonald, J. 2006. A Free Nation Deep in Debt: The Financial Roots of Democracy. Princeton: Princeton University Press Pedro,C. F. , Marco,B. 006. The Political Economy of Public Debt in Brazil. Available at http://siteresources. worldbank. org/INTDEBTDEPT/Resources/20061012_04. pdf Safia,S. 2008 Does External Debt Economic Growth: Evidence from developing countries. International research journals of finance and economics. pp. 1450-2887 Schaeffer, R. 2003. Understanding Globalization. The Social Consequences of Political, Economic, and Environmental Change. p. 90 Stasavage, D. 2003. Public Debt and the Birth of the Democratic State. France and Great Britain, 1688-1789. Cambridge. Cambridge University Press.

Todaro P. &. Smith, C. 2009. Characteristics of developing countries. Development Economics book. 10th Ed,pp 445. New York University and the Population Council George Washington University ISBN-10: 0321485734. Prentice Hall. Waheed, A. 2006. Sustainability and Determinants of Domestic Public Debt of Pakistan. CSID Discussion Paper No. 137 Nagoya University Japan . Yunhe, Q. 2010. Debt Crisis and Debt Sustainability In Developing Countries: Thesis submitted for Msc Wirtschaftsmathematik Models and Methods in Quantitative Economics. University Bielefeld. pp 4-6.

Bran Nue Dae Notes Analysis

Learning intention: To better understand thematic issues, of Bran Nue Dae and the behaviours, motivations and relationships of the characters. 1. Describe in your own words the events, actions and characters depicted in the animated sequence, the use of both on-screen and camera movement, and the general colour scheme. What might these elements be suggesting to us about the content, mood and themes for the rest of the film? The start has an angel falling down and eventually regains its balance and starts flying above a town when it is knocked down by a bottle who someone threw, which later lands in a pond and scares the fish away.

2.Write a short character sketch of: o Willie: Shy, likes Rosie, protagonist, wants to be a priest, mothers boy, innocent, caring, honest, free o Rosie: Adventurous/risk taking, doesn’t want to get married right away, o Theresa: Religious, wants the best for Willie, Willie and Slipperys’(half) mother o Uncle Tadpole: Funny, adventurous/carefree, drunk, Willies’ uncle, smart, bad influence, Willies’ father o Lester: Sexist, interested in Rosie, antagonist (to Willie), flirt, bad influence, o Father Benedictus: main antagonist, creepy/weird, racist, strict, weird sense of humour, o Slippery: Hippies, German, respectful, Father B’s son, Annie: Hippies, gullible, kind, racist o Pastor Flakkon: religious, aboriginal, o Roxanne: Aboriginal, funny, drunk, married, [Some parts of the movie are choreographed (e. g. Rosie and her friends sitting down in the cinema) to add dramatic aspects-movement] [Humour-(moment when Father B demeans Willie and aborigines) there’s nothing I would rather be-funny and meaningful; it was serious then changed to humour] 3. Write an analysis of the internalised and externalised conflicts experienced by Willie.

For example, examine the conflicting desires between those of Willie and those of Theresa, and how these impact on Willie’s relationship with Rosie. Look at the emotional pressures placed on Willie by Father Benedictus and the power relationship between them. Internal conflict (fighting against yourself): -When Willie watches boy play sport, he thinks of time with Rosie -Rather be with Rosie (Father B: wasting your time, useless) -Feels he’s not good enough Confesses about lustful thoughts<<<can’t become a priest -Thinks he wants to be a priest, thinks he isn’t good enough to be one though

-Trying to live up to his mothers’ expectations 4. Offer an explanation as to why Willie confesses to stealing food from the tuckshop when none of his boarding mates does so. How does this scene relate to the fact that Willie is Indigenous? In other words, why does he begin to sing ‘There’s nothing I would rather be than to be an Aborigine’ in this scene? -they don’t want to be whacked -felt guilty -it was serious then changed to humour saves the little kid 5. Discuss the following possible view about Willie’s departure: he is running away from, and turning his back on a formal education that will benefit him in the years to come, without having considered or thought about his situation at all. Explain whether you would agree or disagree. I would disagree, considering his mother was hoping for the best for him and yet he just ran away, without even thinking about the consequences in the future. 6. The film concludes with Willie and Rosie in each other’s arms, surrounded by a ‘blackout’ image of a heart.

But what is Willie’s future now that he has returned to Broome? What does he mean when he says, near the end of the film, ‘God is here’? What has Willie lost? What has he gained? -Willie has gained what he always wanted truly in his heart, his home and his girl. -Willie lost the chance of being a priest and having respect from everyone. 7. Father Benedictus says to Willie, ‘You want to waste your life like all those useless black fellows up in Broome? ’ Is Benedictus correct or not? What do you think he means by ‘wasting’ a life and being a ‘useless black fellow’? -Incorrect Being a priest, you’re above everyone else -Wasting your life: not being a priest, if you don’t work like white people -Aborigine life: work for what you needed then leisure<<<white people thought of aborigines as lazy 8. During the brawl between Slippery, Annie and Willie at the police station, Uncle Tadpole quietly advances to the counter and removes his hat, bag and vest, while Roxanne sits quietly on a bench. Explain what you think these gestures tell us about Uncle Tadpole’s and Roxanne’s lives and past experiences, and why it is that Annie displays the most outward demonstration of rage.

Select at least two other incidents from the film where Uncle Tadpole’s actions give us an insight into his character and life experiences. -Uncle tadpole and Roxanne were ready for it. -Annie is a hippie and believes in freedom for everyone, rather than being locked up in a cell. 9. Concentrate on the visuals of the night-time dream sequence in the police lockup cells. What is the story told throughout these visuals? In what way is visual symbolism used? Why do you think the central character shifts from Uncle Tadpole to Willie? Through the visuals, it has aborigines circling and dancing. -The visual displays the story of how aborigines were once locked up and then try to rise up. -It shifts from uncle tadpole to Willie because the ‘son’ of the sky (i. e. the sun) symbolises hope and since Willie is part of the younger generation, they’re handing down responsibilities and continuing the aboriginal culture. -I think it shifts from uncle tadpole to Willie because it was a ‘night time dream sequence’ where Willie was asleep/dreaming. -Willie becoming a man. 10.

Listen carefully to the lyrics of ‘Listen to the News’ as sung during the dream sequence. What do you think this song is about? What is the ‘news’ of the title? Explain the emotional impact of the song upon you and upon audiences generally. For example, is it depressing and negative, or does it raise our spirits? -The news is about how people took away their land. -They talk about ways to get it back. -They wonder if it’s the end for their people. -It’s depressing and negative since they are getting something taken away and are unsure of whether or not they’ll be able to survive. 11.

Examine the final scenes of the film, which take place on the beach near Broome and outside the Roebuck Bay Hotel. Write a commentary on how these scenes capture and depict the mood, spirit and theme of racial reconciliation, in terms of plot events, physical movement and gestures of characters, and song and dance. Consider whether there is an underlying element of satire and irony in these scenes. Plot| Song| Physical movement| Dance| Characters| Satire| Irony| Father B, Slipper, Annie eat with Willies’ family. | Father B+ Slippery join in singing, ‘There’s nothing I would rather be’. Slippery hugs Theresa-sudden strong connection to his ‘mutti’. | | | | Christian gathered in front of the pub. | | | | | | | Slippery turns out to be Aboriginal, excited. | | | | | | |

‘There’s nothing I would rather be’ sung happily. | 12. Listen carefully to the words of ‘Long Way Away From My Country’ then describe the purpose of this song. What is it suggesting about the men grouped around the campfire? In what way does this song reflect Willie’s own thoughts and feelings? -relates to Willie: he wants to be with Rosie -Willie prefers to be at home 3. Compare and contrast the way Father Benedictus and Pastor Flakkon, both representative of the role of Christianity in the lives of Indigenous Australians, are presented. Father Benedictus| Pastor Flakkon| -Makes you feel shamed for your sins. | -Forgive and move on. | 14. Discuss why Bran Nue Dae is a musical comedy-romance rather than a straight comedy-romance. What does the music, singing and dancing bring to the film? Can a musical adequately tell a story, expand upon themes and develop meanings without distracting the audience?

Bran Nue Dae is a musical comedy-romance rather than a straight comedy-romance because the musical/dance in the movie emphasizes full-scale scores, song and dance routines in a significant way, i. e. when uncle tadpole began singing in the jail, but also they are centred on combinations of music, dance, song and choreography. A musical can definitely tell a story. Thinking that the song would actually distract the audience is a misconception. Fair enough if some musicals just add it in for the fun of it but for Bran Nue Dae, the music actually has deeper meaning to it. Comedy| Romance| Musical| Satire, irony, parody, puns| -Willies’ desire for Rosie is central to the plot| -Adds comic relief| -used to break up the seriousness-unexpected| -Willie gets the girl and it is implied that they live happily ever after by the heart| -insight into the ‘inner’ character-emotions/thoughts| -Exaggeration: -Characters-Tadpole, Slippery, Annie, Father B-Movements, singing-sound effects and music| -Complication-competition for Rosies’ affections| -moves plots along-closes scenes, introduces new ones| | | -communicates ideas that aren’t- be communicated via action or dialogue|

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