Fuel Economy Update for October - 2014 Chevrolet Silverado 1500 Z71 LT Crew Long-Term Road Test

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November 4, 2013

In the month of October, our long-term 2014 Chevrolet Silverado spun an additional 2,137 miles onto its odometer and consumed 124.5 gallons of 87-octane fuel. That equates to 17.2 miles per gallon for the month, which is just a hair less than its lifetime average of 17.3 mpg.

These results so far are less than the truck's EPA combined rating of 19 mpg.

Jason Kavanagh, Engineering Editor

Worst Fill MPG: 12.5
Best Fill MPG: 21.0
Average Lifetime MPG: 17.3
EPA MPG Rating: 19 (16 City/23 Highway Combined)
Best Range: 469.2 miles
Current Odometer: 10,477 miles

Note: Cars are sometimes refueled before their fuel tanks are nearly empty. As such, "best" and "worst" fuel economy entries above are not necessarily the result of an entire tank's worth of driving.

Fuel economy update for October 2013 Hyundai Santa Fe long term Road Test

On 5 november, 2013

We drove our long-term 2013 Hyundai Santa Fe SUV 1,805 miles since last fill-up at the end of September. Its lifetime average has increased to 20 mpg or 0.2 mpg better than we achieved in October.

EPA estimated combined fuel economy of Santa Fe 20 mpg.

Our best and worst thoughts 25.0 mpg and 15.1 mpg unchanged in October, as did our best selection of 424 km.

Worst play MPG: 9.4
Best refill MPG: 25.0
Average lifetime MPG: 20.0
EPA MPG Rating: 20 combined (18 City/24 Highway)
Best range: 424 km
Current mileage: 9,884 km

Kelly Toepke, News Editor @ 9,884 km

Fuel economy update for October-2014 Kia Forte EX long-term Road Test

On 5 november, 2013

We took our 2014 Kia Forte in the latter part of June, so we have to pour fuel in this fine driving Korean compact sedan for a little more than 4 months. During that time we have run the 7,963 miles, which works out to a little more than 1 850 miles per month.

Those numbers put us ahead of schedule in our quest to collect 20,000 miles in one year. From this point forward we just need average 1.563 miles per month to reach our goal. Forte seems popular enough around the Office to handle that easily.

What's more, we are pleased with the MPG numbers we've seen. Our 2014 Kia Forte EX 2.0-liter engine and has a six-speed automatic, which is good for an official EPA rating of 28 mpg combined (24 city/36 highway.) To this point, our 8,000 miles averaging 17.3 mpg, which rounds to 28 mpg.

Nailed.

Our best Highway tank has so far 35.0 mpg, and that came on our overall evaluation loop, a mix of city and highway driving, which is far from boring freeway stint on cruise control. We can beat the 36 mpg Highway numbers, is what I say, and we have nearly 8 months to make it happen.

Worst play MPG: 20.3
Best refill MPG: 35.0
Average lifetime MPG: 27.8
EPA MPG Rating: 28 combined (24 City/36 Highway)
Best selection: 381.0 km
Current mileage: 7,963

Dan Edmunds, Director of vehicle testing @ 7,963 km

Fuel economy update for October 2013 Dodge Dart SXT Rallye long-term Road Test

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U.N. Presents Grim Prognosis on the World Economy

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The report’s main author, Robert Vos, director of the Development Policy and Analysis Division of the United Nations Department of Economic and Social Affairs, said it could take until at least 2017 just to recoup the jobs lost in the United States and Europe since the 2008-9 recession.

He forecast world growth for 2013 at 2.4 percent, “a significant downgrade” from the United Nations’ midyear forecast of 3.1 percent. He said the 2012 growth rate was 2.2 percent, versus the midyear forecast of 2.5 percent.

“I’m afraid this time around we’re not very optimistic about how things are moving,” Mr. Vos said at a news conference at United Nations headquarters.

“A worsening of the euro area crisis, the ‘fiscal cliff’ in the United States and a hard landing in China could cause a new global recession,” Mr. Vos said in the report, “World Economic Situation and Prospects 2013.” He said the forecast growth was “far from sufficient to overcome the continued jobs crisis that many countries are still facing.”

The report’s proposals to avoid that outcome — more government programs that focus on job growth, fiscal coordination and aid to developing countries — are not likely to be widely embraced by policy makers in the United States and Europe, where the preoccupation is on budget cuts and spending discipline. Still, the report provides one of the most complete assessments of the world’s economic trends and reflects what United Nations experts view as the most pressing areas of concern.

Shamshad Akhtar, assistant secretary general for economic development, who introduced Mr. Vos’s report, began by reciting a list of maladies, including record unemployment in Europe, a decline in global trade, volatility in the flows of capital and low food stocks in many poorer countries that have made prices in those countries unpredictable.

While she and Mr. Vos acknowledged the news reports on progress in the debt-reduction negotiations between the White House and Congressional Republicans to avoid dire automatic tax increases and spending cuts that would take effect in January, what has been called the fiscal cliff, they erred on the side of assuming the worst. Both said the shock of those drastic fiscal changes would further weaken economies elsewhere.

“Even if we don’t get to the fiscal cliff, what’s on the table now is not too far from what would happen if the United States goes over the cliff,” Mr. Vos said. “That is reason for some concern.”

He criticized the focus in developed countries on austerity, calling it “detrimental to their own economic recovery,” and said cuts “should not come at the expense of the development efforts of the poorest nations.”

During the economic crisis four years ago, China helped to cushion the impact with huge doses of stimulus spending, but there is no single savior this time. If China’s growth rate of 7.5 percent this year slows to 5 percent or less, Mr. Vos said, “that would have major global ramifications.”

He said growth rates in 2012 fell sharply almost everywhere except Africa, where economies grew in the 5 percent to 6 percent range, helped by strength in oil-exporting countries, spending on basic infrastructure improvements and expanding ties with Asian economies.

But he said Africa remains plagued by armed conflicts and many other challenges, and the strong growth will not hasten the end of the continent’s poverty.

View the original article here

Obama, Romney duel over economy

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Speaking to skeptical voters nationwide from the pivotal battleground of Ohio, President Barack Obama defiantly defended his record on the economy Thursday and painted Mitt Romney as the standard-bearer for those who would bring back George W. Bush's policies.

"I want to speak to everybody who is watching who may not be a supporter, may be undecided, or thinking about voting the other way," Obama said. "If you want to give the policies of the last decade another try, then you should vote for Mr. Romney."

That line drew a chorus of boos from a rowdy crowd of about 1,500 people assembled to hear Obama try to reframe what some Democrats have described as his wobbly election message.

Romney, speaking to supporters at an aluminum plant in Cincinnati moments before Obama's remarks, offered his own version of the choice voters face on Nov. 6.

"If you think things are going swimmingly, if you think the president's right when he said the private sector is doing fine, well, then he's the guy to vote for," he said.

Obama opened his remarks with a direct reference to his much-mocked claim last Friday that the "private sector is doing fine" compared to cash-strapped state and local governments. Republicans including Mitt Romney have seized on that comment to suggest the president is out of touch.

"So, Ohio, over the next five months, this election will take many twists and many turns, polls will go up and polls will go down, there will be no shortage of gaffes and controversies that keep both campaigns busy and give the press something to write about," he said.

"You may have heard I recently made my own unique contribution to that process. It wasn't the first time. It won't be the last," the president said in the verbal equivalent of a dismissive shrug.

"Of course the economy isn't where it needs to be. Of course we have a lot more work to do. Everybody knows that," Obama said from behind a lectern emblazoned with his campaign slogan, "Forward," in front of eight American flags.

Aides had suggested the president's 53-minute speech from Cuyahoga Community College in Cleveland would serve to recast the debate between him and Romney on the sour economy, the top issue on voters' minds. The remarks at times seemed like a blend of the soaring oratory that carried the Democrat to his historic victory in 2008 along with the ponderous, laundry-list politics of unsuccessful "State of the Union" addresses.Obama worked to cast Nov. 6 as "a choice between two fundamentally different visions" about the best path out of the rubble left by the 2007-2008 global economic meltdown—not a referendum on an embattled incumbent at a time of 8.2 percent unemployment.

"The economic vision of Mr. Romney and his allies in Congress was tested just a few years ago," Obama said. "We tried this. Their policies did not grow the economy. They did not grow the middle class. They did not reduce our debt."

"Why would we think that they would work better this time?" said the president, who has used variations on that theme in scores of campaign events all over the country over the past few months.

"We can't afford to jeopardize our future by repeating the mistakes of the past. Not now. Not when there's so much at stake," he said.

In a preemptive rhetorical strike, Romney anticipated Obama's words: "He's going to be a person of eloquence as he describes his plans for making the economy better," Romney said. "But don't forget, he's been president for three and a half years. And talk is cheap. Action speaks very loud."

But the president emphasized the timeline of events. "Our economy started growing again six months after I took office and it has continued to grow for the last three years," Obama said.

The president also pleaded for patience—"not only are we digging out of a hole that is 9 million jobs deep, we're digging out from an entire decade"—and he blamed Republicans in Congress for stalling his efforts to revive the economy.

"What's holding us back is a stalemate in Washington between two fundamentally different views of which direction America should take," he said. "And this election is your chance to break that stalemate."

"If they win the election, their agenda will be simple and straightforward; they have spelled it out. They promise to roll back regulations on banks and polluters, on insurance companies and oil companies. They'll roll back regulations designed to protect consumers and workers while cutting taxes on the very wealthy," Obama said.

The president said he would boost investments in education, scientific research and refurbishing the country's crumbling infrastructure.

Before Obama left Washington, the Department of Labor released official data showing that weekly unemployment benefit applications rose 6,000 to a seasonally adjusted 386,000—the latest sign of anemic hiring and sluggish growth.

And the Gallup polling organization released a survey showing that more than two-thirds of Americans—including half of Republicans—still pin the country's economic ills on former President Bush.

What one might call the blame gap has narrowed considerably: When Gallup first asked Americans in July 2009 whom they faulted for the poor economy, 80 percent laid a great deal or a moderate amount of blame on Bush, and only 32 percent held Obama responsible.

The current numbers show 68 percent of the public blames the former president while 52 percent say Obama deserves the criticism. (The numbers total more than 100 percent because the question was not "which one do you blame more," but how much blame each president deserves individually.)

And on Wednesday, an ABC News/ Washington Post poll showed that only 38 percent of independent swing voters viewed Obama's economic plans favorably, with a majority (54 percent) disapproving. But independent voters judge Romney's economic ideas just as harshly: 47 percent gave his economic approach an unfavorable rating, with just 35 percent finding it favorable.

The Democratic president has crisscrossed the country in recent months pleading for patience from voters still struggling in the anemic recovery and grappling with a stubbornly high unemployment rate above 8 percent. In his speeches, Obama makes a point of charging Bush and Republicans in general with the 2007-2008 meltdown and warns that Mitt Romney's economic program resembles the Bush approach "on steroids."

Among independents, who often play a role in deciding elections, 51 percent assign Obama a great deal or a moderate amount of blame, while 47 percent say he deserves not much or no blame at all. Meanwhile, 67 percent of independents say Bush bears a great deal or a moderate amount of the fault. Only 32 percent exonerate him in whole or in part.

After the speech, Obama headed to New York to make a Flag Day pilgrimage to ground zero and attend a pair of fundraisers aimed at scooping up $4.5 million for his campaign. One of the events will be hosted by actress Sarah Jessica Parker and Vogue editor Anna Wintour. Fifty guests there are due to pay $40,000 each.

"Running for president is an expensive proposition," White House press secretary Jay Carney told reporters aboard Air Force One.

View the original article here

It’s the Economy: Making Choices in the Age of Information Overload

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Recently my wife and I went on an epic hunt to uncover everything possible about baby formula. We scoured more Web sites than I’d like to admit to and learned about all the options: powder, liquid, milk-based, soy, D.H.A.- and A.R.A.-fortified. (I’m still not clear on what A.R.A. is, exactly.) Then we learned that none of it actually matters. Since the Infant Formula Act of 1980, the F.D.A. makes sure that all formula is pretty much the same, no matter which one you buy.

Deep thoughts this week:

1. Big companies pay oodles to send signals of strength.

2. It seemed that signaling would end in the age of Amazon.

3. But it has only increased.

4. That’s a good thing.

Adam Davidson translates often confusing and sometimes terrifying economic and financial news.

Despite knowing this, I still insist on paying twice as much for Enfamil, which its maker claims is “scientifically designed.” (Aren’t they all?) I splurge because Mead Johnson is a 107-year-old company that has been promoting a single baby-formula brand for more than 50 years. I figure that it’s less likely to squander its name by skirting the rules or engaging in shoddy manufacturing than a company with less to lose. This peace of mind costs me about $7 per day.

Economists have a name for these cues that companies employ to convey their hidden strength: signaling. We see various forms of it everywhere, from the wristwatches of wealthy bankers to the nuclear arsenals of developing countries. Technology companies keep massive financial reserves to show potential competitors that they won’t back down in a fight. Why do people pay so much, in dollars and sweat, to go to a top-tier college? It might offer a superior education, but it definitely shows future employers that they are smart and willing to work hard. (Though it can also suggest that the student comes from a wealthy background. That, for some, is an even more powerful signal.) Sixty years ago, Edmund Hillary and Tenzing Norgay signaled their perseverance by climbing Mount Everest. Now, for upward of $60,000, relative amateurs can achieve the same thing, albeit with the help of state-of-the-art breathing equipment, climbing gear and a team of Sherpas.

Signaling is also often associated with consumer goods. In many ways, it was useful. How does anyone really know that they’ve picked the right baby formula, soda or car? They don’t, and manufacturers know that. That’s why our economy is filled with highly promoted branding campaigns that, however superficial or annoying, can be enormously helpful guides. In 1982, Coca-Cola demonstrated its market power with a star-studded commercial, featuring Bob Hope and Joe Namath, to introduce Diet Coke. Pepsi recently paid a fortune to hire Nicki Minaj as a spokeswoman. Even for consumers who don’t listen to her music or trust her expertise in the carbonated-beverage sector, the mere act of paying for a pop-star endorser sends a subconscious signal that their product is so successful that, well, they can afford Nicki Minaj. It also signals that the company is too heavily invested to turn out a shoddy product. For many, that’s a reason to choose the soda over the generic stuff.

In a way, the Minaj endorsement surprised me. I had assumed that kind of signaling was destined to be a relic of the pre-Internet age — a time when people couldn’t pull up an objective review on their phones while perusing the soda aisle. According to some economists, however, signaling seems to be increasing throughout our economy. Why are we listening to signals when we can do the research ourselves?

The Internet is, among other things, a massive, chaotic marketplace. Too much information, it turns out, is a lot like no information. “If we researched every single purchase, we wouldn’t have time to make any purchases,” says Anna Kirmani, a marketing professor at the University of Maryland. “I have better things to do with my time.”

Signaling can be a shorthand to identify whom you want to buy from. That’s why we may need it now more than ever. Hemant Bhargava, a business professor at the University of California, Davis, told me that he has been thinking about signaling as he decorates his new home. Though he is looking for good deals, he still worries about vendors outside the major brands. Bhargava recently found one chandelier for $750 on Amazon and $650 on a cheaper site. He went with Amazon. “The lower price, it bothered me,” he said, indicating that he saw the discount as a signal that the company was willing to cut every cost imaginable. He ended up paying an extra $100 for some peace of mind.

Adam Davidson is co-founder of NPR's “Planet Money,” a podcast, blog and radio series heard on “Morning Edition,” “All Things Considered” and “This American Life.”

View the original article here

It’s the Economy: Who Wants to Buy Honduras?

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Illustration by Peter OumanskiShortly after the 2009 coup that overthrew Manuel Zelaya, Honduras’s newly elected president, Porfirio Lobo, asked his aides to think big, really big. How could Honduras, the original banana republic, reform a political and economic system that kept nearly two-thirds of its people in grim poverty?

Deep Thoughts This Week

1. The world is becoming overwhelmingly urban.

2. Multinationals rarely invest in unstable nations.

3. There must be a better way for rich countries to help poorer ones.

Adam Davidson translates often confusing and sometimes terrifying economic and financial news.

One young aide, Octavio Rubén Sánchez Barrientos, had no idea how to undo the entrenched power networks. Honduras’s economy is dominated by a handful of wealthy families; two American conglomerates, Dole and Chiquita, have controlled its agricultural exports; and desperately poor farmers barely eke out subsistence wages. Then a friend showed him a video lecture of the economist Paul Romer, which got Sánchez thinking of a ridiculously big idea: What if Honduras just started all over again?

Romer, in a series of papers in the 1980s, fundamentally changed the way economists think about the role of technology in economic growth. Since then, he has studied why some countries stay poor even when they have access to the same technology as wealthier ones. He eventually realized something that seems obvious to any nonacademic, that poor countries are saddled with laws and, crucially, customs that prevent new ideas from taking shape. He concluded that if they want to be rich, poor countries need to somehow undo their invidious systems (corruption, oppression of minorities, bureaucracy) and create an environment more conducive to business. Or they could just start from scratch.

Then he decided to put the theory into practice. In 2009, Romer developed the idea of charter cities — economic zones founded on the land of poor countries but governed with the legal and political system of, often, rich ones. There were a couple of interested parties. (The president of Madagascar was intrigued by a preliminary version of the idea, Romer told me, but he was soon ousted in a coup.) Then, in late 2010, Sánchez met with Romer, and the two hurriedly persuaded President Lobo to make Honduras the site of an economic experiment. The country quickly passed a constitutional amendment that allowed for the creation of a separately ruled Special Development Region.

According to Romer, becoming a wealthy country requires better-run cities because that’s where people are headed. Cities might offer horribly paying jobs in factories and domestic service, but many families make the move because they’re still earning far more than they can make by farming. In 1900, nearly 90 percent of the world’s population was rural. By 2000, three-quarters of people in the United States, Western Europe and other wealthy countries were city dwellers. In the next 40 years, the United Nations estimates, the world’s urban population will grow by nearly three billion, largely in poor countries.

It has been an ugly transition. I saw it firsthand a few years back, when I visited a family in San Pedro Sula, Honduras’s business capital. José Avila and Gloria Rodríguez, who worked much of their lives on a banana plantation for 25 cents a day, had recently moved to a lawless slum outside the city so that their children might have a better future. By the time I met them, they had just earned enough money to turn their shack into a concrete house. José was selling computers, and his oldest daughter, Joheny, was a star sock-machine repairwoman. Joheny insisted that she was one of the lucky ones. Many of the other women her age were able to work only as prostitutes or for drug dealers.

Romer’s charter city is trying to avoid this dark side of urbanization by adapting older, more successful models. The United Arab Emirates, Hong Kong and Singapore were able to build well-designed cities that housed and employed millions, in part by persuading foreigners to invest heavily. Dubai created a number of micro­cities — one of which, for instance, is governed by a system resembling English common law with judges from Britain, Singapore and New Zealand.

Adam Davidson is co-founder of NPR's “Planet Money,” a podcast, blog and radio series heard on “Morning Edition,” “All Things Considered” and “This American Life.”

View the original article here

Strategies: Stocks and the Economy, Singing Different Tunes

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“THE test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function,” F. Scott Fitzgerald wrote in 1936. He might have been describing the difficulties faced by current analysts of the financial markets.

The stock market roared through the first quarter of this year, yet most people believe that the economy isn’t really healthy.

That may not be a contradiction, but making sense of it may require some awkward mental gymnastics.

Certainly, the market’s recent rise has been spectacular. While stocks have dithered in April, the Standard & Poor’s 500-stock index returned nearly 30 percent from its low of last Oct. 3 through March this year.

Yet the economic picture has been mixed at best, with unemployment still above 8 percent and the gross domestic product growing at an estimated annualized rate of only 2.5 percent in the first quarter, according to the Wall Street consensus. The latest New York Times/CBS News poll last week found that unemployment and the economy remain the main concerns of most voters, 70 percent of whom said the economy is “very” or “fairly” bad. That was an improvement over October, when 86 percent said the economy was “very” or “fairly” bad, but it’s hardly upbeat.

This kind of dichotomy — market returns that may not accurately reflect the underlying economy — actually occurs rather often, and it poses a ticklish problem, both for professional money managers and for the rest of us.

For example, if you focus on the economy and find that it’s weak, you might think it wise to lighten the risk in your portfolio and concentrate on protecting your assets. On the other hand, if you focus on the market’s momentum and believe stocks are likely to keep climbing, you might try to ride that wave until it crests.

But if you look at both the economy and the market, and believe both that the economy is weak and that the market’s momentum is upward, you may not be entirely comfortable with any course of action. Yet if you’re fortunate enough to have money to invest, you must do something. In a report last week, Ned Davis, founder of Ned Davis Research, an investment research firm in Venice, Fla., put the problem this way: What’s more important, he asked, “being right or making money?” He lands squarely on the side of making money, and says stocks are likely to rise over the next six months or so. But he acknowledged that he must balance his short-term views against his longer-term convictions about the state of the economy.

As a “secular bear,” he says he is convinced that the economy is plagued by deep-seated maladies that will take years to clear up and that, at some point, the stock market will resume a long-term downward trend. But as a close analyst of technical market indicators, he is advising clients that by year-end the market is likely to rise, though with some caveats.

There may well be a correction — a relatively modest decline — in the next few months, his firm has concluded. But it is telling clients that a cyclical bull market is in place — a strong upturn within the longer downward trend.

This may well seem confusing. Mr. Davis said as much, reassuring clients: “I remain a secular bear. I am concerned about the long-term consequences of the Fed’s zero interest rate and easy credit policies and exploding government deficits.”

Despite these worries, he also said that it didn’t make sense, at least right now, to “fight the Fed and fight the tape.”

In a telephone conversation, Ed Clissold, United States market strategist for Ned Davis Research, explained the firm’s analysis, which has a wide following among money managers. Much of the apparent paradox is a question of timing, he said. “Four years from now, you may find that the stock market is trading in the same range as it is today,” he said. But, he added, it is likely to cycle up and down in the interim. And over a much longer time frame, “global deleveraging still needs to be completed, and that will have negative effects for the stock market.”

While the market may consolidate in the weeks ahead, two main factors argue in favor of a continuing upward trend this year, the firm has concluded. The first of these is “the Fed” — meaning the Federal Reserve and other central banks around the world, which have adopted extraordinarily accommodative monetary policies and committed to redoubling their efforts if economic growth falters. The stock market generally responds favorably to loose money.

The second is “the tape,” the momentum of the market and its individual sectors, which continue to show favorable patterns. In essence, what goes up tends to keep going up — until it no longer does.

And there are certainly many factors weighing on the market, both technical and economic.

A short-term consolidation might be in order after a stock market rise as sharp as the recent one; in a benign forecast, a modest decline would prepare the way for a bigger run upward for several months, which Ned Davis Research sees as the likeliest outcome. Stock valuations are already elevated, the firm says, and while that may not be an immediate problem, it implies that some excesses will need to be wrung out of the market down the road.

ENORMOUS problems remain for the global economy. The European financial crisis has been contained but not solved; further flare-ups are quite possible and could derail the market. Longer term, Mr. Clissold said, reversing the credit expansion and reducing debt loads are likely to have negative effects on riskier assets.

Buy-and-hold investors who maintain diversified portfolios and rigorously reinvest dividends and interest can try to ride out these cycles, Mr. Clissold said, and “have what will probably be modest returns” in the years ahead. Market professionals who try to do better than that will need to be nimble indeed.

View the original article here

It’s the Economy: Who Wants to Buy Honduras?

OumanskiShortly after the 2009 coup that overthrew Manuel Zelaya, Honduras’s newly elected president, Porfirio Lobo, asked his aides to think big, really big. How could Honduras, the original banana republic, reform a political and economic system that kept nearly two-thirds of its people in grim poverty?

Deep Thoughts This Week
1. The world is becoming overwhelmingly urban.
2. Multinationals rarely invest in unstable nations.
3. There must be a better way for rich countries to help poorer ones.








Adam Davidson translates often confusing and sometimes terrifying economic and financial news
.

One young aide, Octavio Rubén Sánchez Barrientos, had no idea how to undo the entrenched power networks. Honduras’s economy is dominated by a handful of wealthy families; two American conglomerates, Dole and Chiquita, have controlled its agricultural exports; and desperately poor farmers barely eke out subsistence wages. Then a friend showed him a video lecture of the economist Paul Romer, which got Sánchez thinking of a ridiculously big idea: What if Honduras just started all over again?
Romer, in a series of papers in the 1980s, fundamentally changed the way economists think about the role of technology in economic growth. Since then, he has studied why some countries stay poor even when they have access to the same technology as wealthier ones. He eventually realized something that seems obvious to any nonacademic, that poor countries are saddled with laws and, crucially, customs that prevent new ideas from taking shape. He concluded that if they want to be rich, poor countries need to somehow undo their invidious systems (corruption, oppression of minorities, bureaucracy) and create an environment more conducive to business. Or they could just start from scratch.
Then he decided to put the theory into practice. In 2009, Romer developed the idea of charter cities — economic zones founded on the land of poor countries but governed with the legal and political system of, often, rich ones. There were a couple of interested parties. (The president of Madagascar was intrigued by a preliminary version of the idea, Romer told me, but he was soon ousted in a coup.) Then, in late 2010, Sánchez met with Romer, and the two hurriedly persuaded President Lobo to make Honduras the site of an economic experiment. The country quickly passed a constitutional amendment that allowed for the creation of a separately ruled Special Development Region.
According to Romer, becoming a wealthy country requires better-run cities because that’s where people are headed. Cities might offer horribly paying jobs in factories and domestic service, but many families make the move because they’re still earning far more than they can make by farming. In 1900, nearly 90 percent of the world’s population was rural. By 2000, three-quarters of people in the United States, Western Europe and other wealthy countries were city dwellers. In the next 40 years, the United Nations estimates, the world’s urban population will grow by nearly three billion, largely in poor countries.
It has been an ugly transition. I saw it firsthand a few years back, when I visited a family in San Pedro Sula, Honduras’s business capital. José Avila and Gloria Rodríguez, who worked much of their lives on a banana plantation for 25 cents a day, had recently moved to a lawless slum outside the city so that their children might have a better future. By the time I met them, they had just earned enough money to turn their shack into a concrete house. José was selling computers, and his oldest daughter, Joheny, was a star sock-machine repairwoman. Joheny insisted that she was one of the lucky ones. Many of the other women her age were able to work only as prostitutes or for drug dealers.
Romer’s charter city is trying to avoid this dark side of urbanization by adapting older, more successful models. The United Arab Emirates, Hong Kong and Singapore were able to build well-designed cities that housed and employed millions, in part by persuading foreigners to invest heavily. Dubai created a number of micro­cities — one of which, for instance, is governed by a system resembling English common law with judges from Britain, Singapore and New Zealand.
Adam Davidson is co-founder of NPR's “Planet Money,” a podcast, blog and radio series heard on“Morning Edition,” “All Things Considered” and “This American Life.”

Investing In A Developing Economy - A Possible Solution To Global Financial Crisis

INTRODUCTION

If there were security problems in Nigeria, no businessman would go to the country to explore opportunities, companies like Celtel, MTN, Etisalat, would not have ventured into security risk country to do business. Those who spread rumour about security and corruption problems in Nigeria are saying so to stop others from making money in the country. Figures don't lie. They are the biggest testimonies for how conducive Nigeria's environment for business and opportunities are. If you want to do business in Africa and record good returns on your investment, I welcome you to come to Nigeria. The political environment in Africa, particularly in Nigeria is tremendous.

Dr. Hamadoun Toure,

Secretary General,

International Telecommunications Union,

Cited in the Punch Newspaper, May 13, 2008)

What is happening currently with the Nigerian financial system is far from being affected in any way by the global credit crisis. At global level currently, the banks are under-capitalised, but Nigerian banks are over-capitalised. And I do not think this is a problem at all. I believe that Nigerian banks are under pressure from other economies within Africa continent that are affected by the credit challenges.

- Gordon Smith,

Head of Research, Africa and the Middle East, International Consilium,

(Reported in the Punch Newspaper, June 30th, 2008).

The foregoing statements aptly connote two understandings of the state of Nigerian economy. These understandings show that, the economy is one of the fastest growing economies in Africa and in the world. Although Nigeria has had hash economic history, it has undergone and still undergoing economic reforms, which are aimed at making Nigeria the Africa's financial hub and one of the twenty largest economies in the world by the year 2020. Needless to say that the country has experienced political instability, corruption, and poor macroeconomic management in the past, this was responsible for unpleasant and harsh economic situation. The government relentless efforts to reposition the economy have translated into a remarkable economic growth and development. Several mechanisms have been put in place to sustain this growth and development, capable of balancing the interests of stakeholders. Perhaps, this view must have influenced Gordon Smith submission. He described Nigeria as the most dynamic market in Africa, which is under severe pressure from some countries in Africa to serve as a cushion against the effects of global turbulence. He also noted that some countries like Ghana, Malawi, Mauritius, among others were depending on her at the moment due to global risk exposure and that the country's economy, led by the consolidated banks, was far from being affected by the global credit crisis currently rocking the world's financial giants. He stressed further that foreign investors, who will be patient enough to weigh the Nigerian financial system on the credit risk perspective relative to global events, will find the nation's financial sector more interesting to invest and raise capital from.

Faced with numerous challenges, Nigerian government is determined to strengthen, diversify and make the economy attractive and investment-friendly to both local and foreign investors. The government has adopted total liberalization and globalization as the economic policy, instituted privatization and commercialization programmes of public enterprises, provided total security for business and people, extended invitation to domestic and foreign investors, abolished laws inhibiting competition, embraced and fine-tuned policies to ensure quick realization of growth and development of all sectors of the economy. The effort is already paying off as Nigeria is now the focus for foreign investment thereby increased exponentially Foreign Direct Investment (FDI). Scores of economic missions and delegations from developed and developing countries have visited Nigeria, thus accelerating the growth of the economy at a very fast rate.

It becomes pertinent to direct the course of this discussion to embrace the second understanding of the above statements made by Hamadoun Toure and Gordon Smith. However, it becomes more pertinent to enumerate the inherent investment opportunities in Nigerian economy before discussing the issue of security as raised by Toure.

INVESTMENT OPPORTUNITIES AND SECURITY ISSUE IN NIGERIA

No doubt, Nigeria is an investment haven with countless and lucrative investment opportunities including oil and gas, solid mineral, agriculture, tourism, telecommunication, power and steel, transport, trade processing zone, financial sector, real estate / property, manufacturing, sport and entertainment, and fashion industry. Investors have a wide range of opportunities to choose from. It is important to note that the rate of growth of investment is fantastic and exponential in any of these sectors. Investors are at advantage of presenting their products and services to already-made market taking advantage of the population of over 140 million.

In telecommunication, statistics reveals that mobile phone users in Africa were about 280 million, overtaking United States and Canada with their 277 million users in the opening quarter of 2008. With 70 million connections in 2007, the Continent became the fastest growing region in the world, representing a growth of 38 per cent, ahead of the Middle-East (33 per cent) and the Asia-Pacific (29 per cent).It was also revealed that the fastest growing markets are located in northern and western Africa, representing altogether 63 per cent of the total connections in the region. The record showed that Nigeria, Zambia, Tanzania, The Democratic Republic of Congo, Kenya, Algeria, Tunisia, Ghana and South Africa are highly competitive markets in the Region. The record further contends that two-third of Africa's telephony are in their early phase of development, with penetration rates below 30 per cent at the end of 2007.In percentage terms, it was noted that Africa is the fastest growing market in the world, but also the second smallest in terms of connections after Middle-East.

As Nigeria accounts for 57 per cent of the West Africa mobile phones, the country is acknowledged as the leading and the fastest growing telecom market in Africa. With mobile phone users at 44,932,181 and 734,444 for GSM and mobile CDMA respectively, her contributions to West Africa and Africa's telecommunication growth can not be overemphasized. While the overall economic growth rate stands at 7% per annum, the mobile telephony is about 35-50%. Assuming that each of these connections was busy for a minute in a day, the country telecoms market has the capacity to generate over USD 16 million per day (USD16, 666,667) and close to USD 6 billion per year (USD 5,833,333,300). This is why telecom companies such as Visafone and Etisalat quickly joined the likes of MTN, Globacom, Celtel and other telecoms service providers in exploiting opportunities in the country.

Early this year, one of the main GSM service providers with a subscriber base of over 15 million announced a profit after taxation of USD650 million (78 billion naira) for the year 2007.Putting all these together, one can easily understand Toure's submission describing Nigerian telecoms market as the best investment destination in Africa.

Recognizing the fact that the Nigeria telecoms industry is enormous and there is need to further exploit the sector to its fullest, the Nigeria Communication Commission (NCC) and the Ministry of State for Information and Communications have made their positions clear by extending invitation to global investors for active participation in the sector as they are willing to grant pioneer status and license for prospective applicants for various undertaking such as Fixed telephony, Mobile telephony, Fixed satellite (VSAT),Paging, Payphone, Internet and other value added services.

With the above facts, one can safely conclude that Nigerian telecom sector offers fantastic and lucrative investment opportunities to global investors. And putting into consideration 40% GSM market growth rate in the first quarter of this year (2008), there is potential for high return on investment in this sector.

Agriculture, the dominant sector of Nigeria economy, engages about 70 per cent of the population directly and provides nearly 88 percent of non-oil foreign exchange earnings. It contributes about 41 per cent of the GDP of the country. The sector recorded an overall growth rate average of 7 per cent in the last three years, a major improvement from under 3 per cent in the 90's.

Statistically, 91 million hectares of the country's total land area of 92.4 million hectares is adjudged to be suitable for cultivation. Approximately half of this cultivable land is effectively under permanent and arable crops, while the rest is covered by forest wood land, permanent pasture and built up areas. Among the states, which have the most abundant land, areas are Niger (7.6 million hectares) and Borno (2.8 million hectares).

Agriculture crops in Nigeria are grouped into cereals, root and tuber crops, grains legumes and other legumes, oil seeds and nuts, tree crops, and vegetable and fruits. Governments and the Ministries of Agriculture have made land acquisition easy, encouraged agricultural practices, extended (still extending) invitation to foreign investors and have put in place several incentives to stimulate growth in the sector. Despite, the agricultural potential of Nigeria is barely being tapped and this explains the inability of the country to meet the ever-increasing demand for agricultural products and her rank as 55th in the world (although first in Africa) in farm output.

As the world experiences food crisis and persistent rise in fuel price, the country's agriculture offers unlimited opportunities for foreign investors and the world at large to provide solutions to these crises. Foreign investors will find investments in cultivation of sugar cane, sugar beet, sweet sorghum, starch (corn/maize), palm oil, soybeans, jatropha, and algae. These products are lucrative as they are potential for biofuels, a good substitute for fossil fuel. Presently, there is a very high demand for these crops from the developed economies.

Solid Mineral is another sector with great investment opportunities. Nigeria is endowed with numerous mineral resources. Recent policy reforms have brought the solid minerals sector to the fore. The emphasis is on encouraging massive foreign investors' participation in this sector as less than 0.5 per cent is contributed to the Gross Domestic Products from Solid mineral sector. However, the Ministry of Mines and Steel and the Ministry of state's focal attention in the last one year is to strategically place the country in a better position to explore and exploit just seven minerals in the plethora of minerals so as to increase Gross Domestic Product to 5 per cent within the next few years. The seven strategic minerals are coal, bitumen, limestone, iron-ore, barite, gold and lead / zinc.

Coal can be found in Enugu, Benue and Kogi. Within these three districts 396 million metric tones can be demonstrated using JORC classification criteria, while an additional 1,091 million tones of inferred and hypothetical coal resourced for the areas studied is 1481 million tones.

Knowing fully that development of coal will assist in the realization of energy, the Government and the Ministries are inviting foreign investors to participate actively in the exploration and exploitation of the mineral. Companies such as Denver Resources and Western Metals have already committed US$10 million and US$15 million respectively for two coal fields in the country. Another Chinese firm, Grid Xin Yuan International Investment Company that is providing more than half of China's electricity needs is also in the country, indicating their interest in the development of a coal field in Kogi State.

The Bitumen reserve in the country is estimated at more than 27 billion barrels of oil equivalent while iron-ore is estimated at over 5 billion inferred reserves with presence in Kogi, Enugu, Niger, Zamfara and Kaduna States. Gold in just 10 locations is estimated at 50,000 ounces, barites 10 million metric tones and limestone at 2.3 trillion reserves.

Talc with an estimated reserve of over 100 million tones can be found in Niger, Osun, Kogi, Kwara, Ogun, Taraba and Kaduna States.The colour of the Nigerian talc varies from white through milky-white to grey. The talc industry represents one of the most versatile sectors of the industrial minerals in the world. The exploitation of the vast talc deposits in Nigeria would therefore satisfy not only the local demands but also that of the international market as well.

The national demand for table salt, caustic soda, chlorine, sodium bicarbonate, sodium hydrochloric acid and hydrogen peroxide exceeds one million tones. A colossal amount of money is expended annually to import these chemicals. There are salt springs at Awe (Platue State), Enugu, and Uburu ( Imo State), while rock salt is available in Benue State. A total reserve of 1.5 billion tones has been indicated. Government, to ascertain the quantum of reserves, is now carrying out further investigations.

In the same vain, large bentonite reserves of 700 million tones are available in many states of federation ready for massive development and exploitation, over 7.5 million tones of barite been identified in Taraba and Bauchi states, and an estimated reserve of 3 billion tones of good kaolinific clays has also been identified.

Gemstone mining has boomed in various parts of Plateau, Kaduna and Bauchi States for years. Some of these gemstones include Sapphire, Ruby, Aquamarine, Emerald, Tourmaline, Topaz, Gamet, Amethyst, Zircon, and Fluorspar, which are among the best in world. Good prospects exist in this area for viable investment. Understanding that this sector requires urgent investment, the Ministry has directed miners who are still in small artisan levels to form cooperatives so as to benefit from World Bank US$10 million assistance. Apart from this, three Nigerian Banks have also established solid minerals desk with fund of over US$ 8 million each for the development of the sector.

Foreign investors will find this sector worth-investing on as Nigerian governments have put in place various incentives and strategies for investment such as 3-5 years tax holiday, deferred royalty payments, possible capitalization of expenditure on exploration and surveys, extension of infrastructure and provision of 100% foreign ownership of mining concerns.

Recognizing that only a sustained macroeconomic environment and a sound and vibrant financial system can propel the economy to achieve the country's desire to become one of 20 largest economies in the world by the year 2020, on the July 6, 2004 the Federal Government through the Central Bank of Nigeria (CBN), under the leadership of its Governor, Professor Charles Soludo launched a 13-point reform agenda to restructure, refocus and strengthen the Nigerian Financial System. To complement this agenda, another comprehensive long-term reform agenda for the Financial System (the Financial System Strategy 2020-FSS2020) was launched. The grand objectives of these agendas are substantially being achieved. The country financial system now comprises of strong, efficient and internationally competitive banks with an eye for global markets, a capital market with highest returns on investment, in dollar terms, a sound and rewarding insurance industry and other competitive financial participants.

Gordon was right in his submission to have described Nigeria as the most dynamic market in Africa. His view that "foreign investors, who will be patient enough to weigh the Nigerian Financial System on the credit risk perspective relative to the global event, will find the nation's financial sector more interesting to invest and raise funds from" x-rays the truth about the country's financial sector.

The country's banking system is the safest and the soundest it has ever produced in history. It is the fastest growing banking system in Africa and one of the fastest in the world. In fact, the most outstanding contribution towards realization of the country's dream came from this sub-sector. Economic analysts have observed that it has taken Nigeria less than 3 years to achieve what it took South Africa 20 years to achieve in the area of banking. In a short word, a world-class banking system has emerged in Nigeria.

Statistically, banking sector contributes 10 per cent to the Gross Domestic Product (GDP) and represents 60 per cent of the stock market capitalization, while there was a reduction in the number of banks from 89 to 25, the number of banks branches rose by 33 per cent from 3383 in 2004 to 4500 in 2007. The total asset base of banks rose by 104 per cent from $ 26.8 billions ( 3.21 trillion naira) in 2004 to $54.7 billion ( 6.56 trillion naira) by mid 2007; capital and reserves rose by 192 per cent from $2.72 billion (327 billion naira) to $7.98 billion ( 957 billion naira); capital adequacy ratio rose by 42.6 per cent, point from 15.18 per cent to 21.6 per cent and ratio of non-performing loans total loan improved massively by 51.3 per cent, point from 19.5 per cent to 9.5 per cent. The sector has also remained one of the most profitable in the country's capital market. It was noted that 13 out of 21 quoted banks on the Nigerian Stock Exchange recorded returns in excess of 100 per cent since January 2007.

According to the April 2008 edition of the African Business, (the best-selling Pan-African Business Magazine published in London) 18 out of 28 West African Companies with market capitalisation of more than $1 billion are Nigerian Banks. The magazine stated that First Bank Nigeria Plc with market capitalization of $7.4 billion remains the largest company in West Africa. Two other Nigerian banks namely Intercontinental Bank Plc and United Bank for Africa (UBA) remain the second and the third largest companies in the sub-region with market capitalization of $6.2 billion and $4.6 billion respectively.

Apparently, the rising tide of banks in the country from all indications has made the sub-sector very attractive, not only to local investors, but also to foreign investors, and in particular, foreign banks. For instance, the consolidation of Regent Bank, Chartered Bank and IBTC to form IBTC Chartered Bank attracted the interest of the Standard Bank Group, the largest financial institution in Africa with a market capitalization of $ 17.8 billion, whose subsidiary Stanbic Bank, also of South Africa has just sealed a Merger deal for the latest Merger in the country, Stanbic IBTC Bank Plc. In this direction, other foreign banks have started making enquiries with CBN of a possible Merger or take-over.

To further substantiate the opportunities the banking sub-sector offers the global investors, a cursory look into Intercontinental Bank Plc will reveal the success of banking system in the country. Intercontinental Bank Plc is known to be the second largest companies in West Africa to have recorded a phenomenal growth in gross earnings, which stood at $1.45 billion ( 173.5 billion naira) in 2008. This is an increase of 99 per cent over the $728 million (87.4 billion naira) in 2007, profit after tax grew by 102 per cent to $380 million ( 45.6 billion naira) as against $188 million (22.6 billion) in 2007, while the capital base rose to $1.67 billion from $1.31 billion. The bank deposit base soared to $8.75 billion ( 1.05 trillion naira), an increase of 126 per cent from $3.9 billion (468 billion naira) in 2007, while the total assets also recorded a quantum leap to $14.2 billion (1.7 trillion naira), representing a growth of 108 per cent from $6.86 billion( 823 billion).

The bank is also in strategic partnership with BNP Paribas, the world leading energy financing bank, Afrexim Bank; Export Development Canada (EDC); Finance for Development (FMO); China Exim Bank; Export-Import of United States; International Finance Corporation in financing projects in different sectors of the economy. However, it is relevant to say that the success recorded by Intercontinental bank is a good example of the Nigerian banks' strength and prospects, and a testimony to opportunities available to global investors in the country' financial sector.

Apart from the above, Nigerian Capital Market offers viable opportunities as it is positioned to help companies to raise capital, and to generate high returns on investment. Its total market capitalization has grown by over 4000 per cent to $100 billion (12 trillion naira) in March, 2008, up from $2.39 billion (287 billion naira ) in August 1999.Among emerging markets, the Nigerian Capital market remains one of the most viable in terms of returns on equity. Historically, the market has delivered 28 per cent returns.

Insurance industry is not an exemption to this growth and development the country's financial sector is witnessing. Although there are few black spots on the regulatory handling, the industry has equally recorded success in their reforms and operations. With the inflow of robust capital, insurance companies are now faced with the challenges of delivering returns to shareholders, maximizing value and exploring overseas markets. Their presence can be felt in countries like Ghana, Liberia, Sierra Leone, Sao Tome, South Africa among others.

Although Goldman Sachs' report titled "New Market Analyst" with issue number 08/09 released on March 13, 2008 (cited in the Thisday newspaper March 19,2008) posited that Nigeria is a better economy than South Africa, International Monetary Fund (IMF) reported that Nigeria and South Africa got close to 50 per cent of the $53 billion private equity and debt flow to Sub-Saharan Africa in 2007. This underscores the growing confidence of International bodies and foreign investors in country's financial sector and economy at large.

Furthermore, Fitch Rating Agency and the Standard and Poor rated Nigeria BB-(minus) in the area of sovereign credit, high in development of local currency debt market, and low in the areas of debt to GDP ratio and inflation. The opportunities for growth in Nigeria financial sector are still strong as the underlying fundamentals driving the growth are still present. All these and more, position the financial sector and the country at large as a leading and most dynamic market in Africa and present viable investment opportunities to global investors.

Needless to say that the opportunities presented above are typical examples and an evidence of opportunities awaiting foreign investors in other sectors of the economy.

Nigeria is the largest producer and exporter of oil in Africa (although recently placed second behind Angola in the latest OPEC report as a result of Niger Delta Crisis) with a production of 2.5 million barrels and above a day. Besides, the Nigeria is the 7th world's gas reserve holder and the highest flaring nation in the world, with the potential to become a major player in LNG export. It has annual gas flares' capacity to generate over 12000 MW of electricity needed to catalyze the growth of any economy. Although it currently flares an average of 1.2 TCF of gas annually, the sector has the potential to generate great returns on investment.

One of the greatest opportunities awaiting foreign investors is Real Estate / Property. For instance, Lagos Metropolis with a population of about 18 million has attained mega city status. The State has one of the highest urbanization rates in the world according to the World Bank. Consequently, there is an insatiable demand for housing delivery, which has necessitated the introduction of the New Private Estate Developers Scheme. Under the programme, the government will make large parcels of land ranging from 1 to 25 hectares available to corporate organizations capable of undertaking development and delivery of housing units. Such organization must however demonstrate that they have the financial capacity and technical expertise to deliver quality and affordable housing units.

Among other sectors of the economy that foreign investors will find viable and worth-investing on are Transport, Sport and Entertainment, Tourism, Power and Steel, Export Processing Zones, Privatization. And available records reveal that the rate of returns in these sectors is as high as in the sectors discussed above.

Apart from the opportunities mentioned above which our office is strategically positioned to maximize opportunities for the benefit of prospective investors. We also offer consultancy services in the areas of general management, manufacturing, marketing, finance and accounting, personnel, research and development, packaging, administration, international operation, specialized services and other value-adding services. And our strategic partnership with national and international companies put us in position to deliver quality service and high returns on investment.

Nevertheless, there have been fears raised by international observers, agents and bodies that Nigeria is a high-risk nation for investment and other business transactions. This development is attributed to security, multiple taxation, epileptic power supply, bad roads and poor work environment.

It may appear that doing business in Nigeria is challenging because of the activities of a few untrustworthy Nigerians who are unscrupulous. But such are simply characterization of human nature; as it can be found anywhere else in the world. It must be said emphatically that the world has been biased in their judgment and treatment of Nigeria security issue. There have never been terrorist attacks, suicide bombings or kidnapping until recently when the issue of Niger Delta came on board.

Niger Delta region-the source of nation's oil wealth- has become an area of perennial tension, agitation, and recently, militancy. However, a confluence of factors such as environmental damage by oil exploitation, failure to develop the region, lack of job opportunities and sense of deep deprivation from the low share of derivation revenue accruing to the states in the region, has led to the present situation. Acknowledging their situation, the Federal Government has organised a Summit, to be chaired by Professor Ibrahim Gambari, the United Nations Under Secretary General, to provide everlasting solution to the crisis. Frankly speaking, Nigeria is a safe and investment-friendly place and Nigerians are accommodating and industrious.

Cyber Crime is another fearsome crime, which often put-off prospective investors from involving or investing in the business opportunities in Nigeria. This crime was actually imported into the country by expatriates. It has never been part of Nigeria culture. It is perpetrated by a few section of the population. Their operations are carried out via Internet and their targets are people who transact business via the medium. They pose as government officials and sometimes as businessmen with United Kingdom identity who deal in digital products. However the list of their tricks and operations is not exhaustive. With the help of Economic and Financial Crime Commission (EFCC), Independent Corrupt Practices and Related Commission (ICPC), and other Anti-Criminal Agencies, Cyber Crime and their perpetrators are under control and disappearing.

The grand objective of the present administration, as encapsulated in VISION 2020, is to make Nigeria a major industrial and economic power, and one of the 20 largest economies in the World by the year 2020 by providing enabling investment and business environment and maximum security for active participation of local and particularly, foreign investors. The realization of these aspirations had informed the radical and pragmatic reforms designed to increase the attractiveness of Nigeria's investment opportunities and foster the growing confidence in the economy. In this direction, the Federal Government has provided incentives and strategies for investment such as 3-5 years tax holiday, deferred royalty, possible capitalization of expenditure and provision of infrastructures such as road and electricity, just to mention a few.

African economy is witnessing the strongest growth in 30 years; no doubt, Nigeria is one of the major contributors to this development. Most commentators have observed that the opportunities for business and investment in the country look increasingly rosy with GDP growth of 7 per cent in 2007 and 13 per cent in the next 12 years. The International Monetary Fund (IMF) forecast of 9 per cent growth rate for Nigeria in 2008 (which is second to India 10 per cent and ahead of China 8 per cent) lays credence to their observations.

Furthermore, the increase in Foreign Direct Investment, the entrance of multinational companies, the strong financial sector, the favourable and tremendous business environment, the government support, the abundant natural resources, and the population of over 140 million people, among others, put Nigeria in a comparative ( and possibly absolute) advantage over other African countries.

Just as it is difficult to ignore China as a market in the global arena, (one out of every five persons in the world is Chinese) so is it very difficult to ignore Nigeria as a market in Africa (one out of every three persons in Africa is Nigerian). With a population of over 140 million people and its economic potential, Nigeria still remains Africa most important market.

IMPACT OF GLOBAL FINANCIAL CRISIS IN A DEVELOPING ECONOMY

Unlike China and India, African economy(developing economies) is yet to be integrated into the world economy. This is as a result of slow rate of integration and globalization at which the economy is being fixed into the global economic and financial system. Consequently, developing economies will only suffer a limited financial impact from the credit crunch. However, this is not to say that developing economies are in isolation and totally free from the crisis.

To grant a point, this paper will continue to use Nigerian economy for its analysis as it represents a paradigm of a developing economy with valid and considerable variables.

According to the report from a recently concluded Bankers Committee Meeting, which ended on October 20 th, 2008 , the Nigerian banks are safe as they operate at 22 per cent capital adequacy ratio( 14 per cent above the world 8 per cent requirement) and the financial sector is far from being affected by the current global financial crisis. The report also posits that any bail-out scheme is unnecessary as the situation that warranted bail-out schemes in developed economies- poor quality assets and heavy loan losses resulting from exposure to inadequately collateralised mortgage loans- is absent in Nigeria. To underscore its point, the report noted that, as the Direct Foreign Investment in Nigerian banks is comparatively low and the banks connection with their foreign counterparts is loosely fixed, the impact of the crisis will be limited and indirect.

Conclusion

The words of Mr. Dominique Strauss-Kahn, the Managing Director of International Monetary Fund, at a meeting in Washington D.C are the corner stones of the concluding thoughts of this paper. He stressed as follow:

We meet at an extra-ordinarily difficult time- a time of uncertainty and insecurity, with a danger that those fears push us away from- not towards- a more inclusive and sustainable globalization....At its best, multilateralism is a means for solving problems among countries, with the group at the table willing to take constructive action together. When multilateralism is dysfunctional, globalization can be a Babel of Tower, with competing national interests colliding to benefit none. The new multilateralism, suiting our times, is likely to be a flexible network, not fixed system. It needs to maximize the strengths of interconnecting actors, public and private, profit-making and civil society Non-Governmental Organisations (NGOs). The multilateralism must respect state sovereignties while solving interconnected problems that transcend borders...The private sector cannot restore confidence on its own. Macroeconomic policy measures by governments cannot restore confidence on their own. Piecemeal measures on financial markets will not restore confidence on their own. What will restore confidence is government intervention which is clear, comprehensive and cooperative among countries..The world must act quickly, forcefully and cooperatively to contain the ongoing financial and economic downturn.

Thus, the position of this paper is that the confidence will only be restored if "government intervention which is clear, comprehensive and cooperative" is complemented with investment in developing economies with less or no crisis impact as "flexible multilateralism" and cooperative and sustainable globalization is solution that suits our time, not" economic isolationism".

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