For some, planning a business exit can be a predictable, methodical process. We know the competition; we understand market demands, know when we want to sell and might even know the actual date. But for far too many business owners, the business exit comes as a harsh reality and often unplanned event.

Protecting your business and assets against the dreaded six D’s of an unplanned business exit can give whole new meaning to the term “Disaster Management”. While every business may experience unexpected pitfalls, careful planning to ensure risk exposure is minimized can assist in keeping you in the driver’s seat when it comes to managing your company. Familiarize yourself with the six D’s of an unplanned business exit: debt, death, disability, divorce, departure and disaster. Know the enemy and look to address all six D’s in your operating and buy / sell agreements.

The Six D’s of an Unplanned Business Exit

Debt:No one goes into business and plans on it not succeeding, but 40,000 businesses fail every month in the United States. When debt exceeds revenue, it is critical to exit timely in order to minimize loses. Understanding limitations and protecting critical assets are key to successful divesture.

Death:Many businesses are solely dependant on their owner’s abilities, relationships, and passion to drive success, and when there is a death of an owner or partner of a business, it can have significant impact to a business almost immediately. While no one wants to consider their own demise, the strength and longevity of a business relies on being able to plan for such a critical loss even if it means downsizing or reorganization. The survival of a business in relation to key individuals needs to be evaluated and exit strategies planned accordingly.

Disability:Unbelievably, death is not as likely to end the business as a disability. A disability to a business partner can put a significant drain on cash flow, daily workloads, and excess down time, all of which can be devastating. Insurance and financial planning towards alleviating such an impact needs to be carefully evaluated especially when dealing with small business start ups where funding and resources are limited.

Divorce:No one wants to plan for a business or personal divorce, yet while Pre-nuptial agreements may be gaining in popularity many people never look to manage such impact to their businesses. What happens when the partners cannot get along? Or worse, you inherit another partner due to a personal divorce settlement? Exiting the business might be the only alternative you are provided.

Departure:It does not sound as bad as death, but it can wreak the same results. A partner, key employees, or other resources decide to go to the competition, retire, burn out, or win the lotto. When they leave, how does this impact your business going forward?

Disaster:If the five D’s above where not enough to impact your business, there are no limit to the other disasters that may occur that were never planned on: robbery, sickness, employee theft, employee turnover, natural devastating events, etc. In today’s post Katrina, 911 world the impact of the chaos theory is enough to keep even the best business minds awake at night. Plan for the worst; strive for the best and know when to get out if need be.

For the typical business owner, each one of the six D’s has special demands on the family, income, taxes, and control of assets. An agreement, commonly called buy/sell agreements, can be used to plan for the impact associated with the dreaded six D’s. A successful sustaining business exists as a separate entity from personal concerns and risk can be reduced by developing mutually fair and equitable agreements prior to these events occurring.

Business is an evolution and travels a diverse path. While some may look on an unplanned exit as a failure others may see an opportunity for growth and freedom.

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… Rank: wait… Traffic: wait… Price: wait… C: wait…

Important appropriateness of  development of modern economy is its cycled  character. Puriny every structural crisis of the world economy new opportunities are formed. Capital of the countries, which were leaders during last cycle, is being devaluated. Qualification  of lab our forces in field using old technologies are being ruined, while the countries, which managed to create innovational potential proved to be in the center of attracting capital which is independent from the old production. Consequently, the countries that implemented  scientific-technical and industrial capital investment policy in prospective fields will be given a competitive advantage. The realization of  this policy in the phase  of structural crisis gives its authors the opportunity to achieve  economic growth on the  basis of competitive advantage.

Basic scientific and radical innovations are recognized as the main means of overcoming structural crisis, that are implement thought acquiring new achievements and rising the effectiveness of traditional development .

In order to move to the stable stage of economic develop it’s important to increase innovational-investment act vitas and to involve new technological directions and basic technologies at trajectory  of firm economic development. The economic policy that is oriented at encouraging  investment, in innovations provide modernization of economy, also gives rise to its competitiveness.

Innovative way of development in investment policy. Thus, the main importance is given to the innovative type of development, that implies the growth of government role in exercising investment policy. Highly development countries. Take the responsibility of financing fields like fundamental  science and high-risk research, as well as the development of scientific research infrastructure. Spreading new ideas and educating population. The implementation of this functions takes place against the background of high-scale investments. that creates favorable conditions  for production growth on the basis of scientific innovations.

Currently, the government tries to develop institutions that will support vestment in new  technologies, stimulate innovative activities, encourage progressive technological changes, that unities financial tab our and informational recourses.

Currently government  tries to create development institutions , which will support investments in new technologies, stimulate innovative activities, encourage progressive technological changes, that unites financial, lab our and informational resources. The state may avoid the responsibility of developing   the production activities , where special markets and competitive relations are formed. At the same time it must encourage new, high-risk directions of investment activities, that pave the way to creating production on the   basis introducing scientific and technical achievements.

For example the wave of economic regulations that spread from developing countries in the late 8 th lost century covered the traditional branches of economy but it had no connection with high-technological sector, conversely the importance of direct state support institutions for innovation activities were risen. At the same time, the importance of working out state strategy for scientist technical and social economic development grows. The state aims at creating enterprises , that will manage to gain com putative advantage over the companies of inner and foreign markets. They  must consentrate their resourses on prospective  fields of production.

The direct instruments of state influence are oriented at supporting  private initiatives and innovative enterprises that will stimulate investment activities in certain fields and production initiatives.

The necessity of financing science and its current condition:

Active investment process, especially in scientific and technological fields, innovative and scientific-technical activities lays in the foundation for economic growth. Nowadays the decline in scientific technical potential is caused by  the fact that there is no more unity between scientific researches and their usage  former. scientific staff has been dismantled  and number of intellectuals have left the country.

Consequently, the country becomes more dependent on foreign trader.

So, in order to create favorable conditions for economic growth capital renewal is essential, but it’s very complicated, because of  the decrease in state financing and absence of ordering production, Science and education have no inner resources for development.

During the last few years there has been significant  reduction of scientific and educational research expenditures. As a result, the share of expenditures in GWP spent on science in 1999 amounted to 0,97%, which is twice less than in 1990. In 2006, the expenses spent on educational field amounted to only 1,5% of the GWP, which is the lowest index among the transitional countries.

Significant reduction of company’s demand on innovations resulted in increase of financing Scientific field from the state budget. Budgetary expenditures on scientific-research and construction work have been absolutely reduced and they are tend to decline against the GWP as veil as the budgetary share of the expenses. The degradation of Scientific potential is proved by sharp decline in expenditures used in research and construction work pond it resulted in dropping behind highly developed countries. Expenditures on Scientific research in the USA (1998) amounted to 794% per person, in Japan – 715. in Germany 511 and 611in Russia, whilst in Georgia it only amounted to 2,8%.

Due to the sharp decline in financing the Scientific field, renovation of scientific facilities detoriorated. The salaries in Scientific field were decreased, The coefficient of renewing main foundations in Scientific technical field significantly dicreased. According to the latest statistical data, 311 ml. Gel was invested in renewing main capital, that amounted to 60% of all the capital invested, in Georgia Instead of renewing Countrys technical market, most of the capital was invested  in activities connected to local market. 29% of this capital was invested in real estate and construction worth.24% in transportation and communications The problem of heeping, supporting and developing fundamental and research centers of science aggravated. During the Soviet era 20% of production was created in the USSR, but now Georgia’s shave in the  World scientific production in only 0,3%.Implementation of innovations require a wide range of activities, from doing research to producing new output. Priorities of innobative activities change at every stage of economic development.

In order to achieve economic growth in current conditions in the country. it is necessary to develop scientific innovations that create new and don’t take into consideration current directions of technological development This lays the foundation for putting so-called innobative multiplication into motion. which is connected to investments and results in production increase. that creates improved scientific innovations. They exchange old technologies. Introduction of this innovations is exercised by new investments, that encourage the further growth in production. Thus, innovative multiplication makes good influence on production growth and takes the economy out of depression and leads it to a long-term development stage.

Distribution of investments on Scientific – technical works.

It’s relatively typical for developed countries to distribute private and state capital investments even on scientific and technical works. For example, The USA’s private investment share in innovative market amounts to 50%. Similarly, according to the figures of state Expertise, 10% of innovations is given a strategically important status and accordingly they are financed from government sources. Japan finances 33% of all scientific research, 73% of scientific-research and constructive works is implemented on the basis of self – financing in the USA, in Germany this index amounts to 70%, in Japan and UK 62%, France and Italy 57%, So the only possible mechanism for promoting social and economic development is it’s technical modernization and move to innovative type of development.

Technical modernization of equipments and their reconstruction requires attracting important investments in innovative field. Here it is important to activate state policy on scientific and technical branches and to work out important directions for scientific-industrial development of economy. AT the same time, the state, that takes important part on technical modernization of the economic sector must take the responsibility of financing fundamental sector of science and high-risk researches, restore activity of  science financing from the state budget and develop scientific infrastructure. In order to define the proportions of sharing investments its essential to focus on cyclical development of economy and, on Intensive types of re-production, that is reflected on the statistical law of dividing expenditures, for example, spending on fundamental research, applied work, capital investment amounts to 1:3:9:27.

Statistical law of resource division in accordance with scientific-technical potential is used at the production development stage where scientific and technical progress is achieved by practical laws, which help to solve the problems of production stabilization and development.

The reason of decrease in scientific potential the decrease in scientific potential in post communist countries is  caused by lack of restructuring  scientific organizations privatization of research centers has   not brought any desirable results. The reason for this is that enterprises don’t order them to do research. Simultaneously,  scientific staff has got older, the last tend years science suffered from loosing its intellectual potential. In this case, it will  be reasonable to merge different scientific organizations and some research institutions must be transferred to enterprises to manage , in this way  scientific technical potential will become much  stronger.

The sources and ways of funding science restructuring research institutions and dividing it into firms with developed financial, economic marketing and commercial infrastructures will increase the practical use of research work results. Contract based applied science makes the realization of  scientific technical projects they will be implemented at the expense of the state budget, non state expenses attracted by Ventura, sharing  other financial mechanisms. The question of mobilizing these sources  can be solved on the basis of aimed, scientific and technical programs on regional and federal levels in accordance with the market demand.

They can be implemented in the    form of portfolio investments using stock marked tools. Providing  the state with grants and sale guarding institutions by investment agency and trust management has practical  us eye. For forming non budgetary recourses for financial    innovations it is necessary  to use amortization funds on renovation in the part, where production expenses, especially those. spent on research and innovations. are taken into consideration as well as the expenses of wearing out financial expenses , that is included  in the production cost and is reflected on the production prize. In addition to that revenues that  came from selling scientific-technical production, or having the right to own intellectual and industrial units as well as the revenues from scientific and technical units and selling the right to own them must  be considered, too.

The role of innovation foundations .

Practical usage of abovementioned sources is implemented according to the special rules and amounting , on the basis of used methods. The expenses received from these sources are transferred  to a separate  sub account `innovation foundation”  Greeting. State funds for innovations which is aimed at realizing prospective directions  of science  and technical development enables to  work out modern competitive production and organize its production. besides using state budgets expenses,   other  market mechanisms for attracting investments are used as well .

Nowadays mechanism for investing in innovations are used only in case banking structure , which mobilizes recourses and regulates this use in science is taken  into consideration banking  structures directed at investments, accumulate vast sums through creating consortiums and other financial and investment institutions, in order to attract own funds for innovative programs of investment. On condition of Budgetary deficit banks au the phases of innovative   cycle and provide insurance service. Participation of banks in the field creates extra   stimulus for different firms. No other structure manages and controls innovative recourses as the banks.

Effective use of stock market instruments provide opportunities  to attract investments in innovative field. Its main aim is to divide investment recourses among fields and provide inner and foreign  investment flows in more prospective sectors of national economy. Transitional economy doesn’t provide the conditions for populations to transform their savings  into innovative investments and provide economic growth. Monetary potential saved in the country is practically unused. According the same data the amount of savings is much more higher than in the USA and west European countries. In order to invest funds existing in the country in essential sectors of economy it is necessary to make the forms of collective investment perfect, it includes. investment share  funds, credit contacts joint stack and commercial funds . After that government should control their activity and they must draw their . attention to new forms of scientific-innovative and investment forms.

Main stages of innovative development.

Innovative development of economy as any process must be oriented at its stages, levels and phases. First of all the technological basis of the field  whose production has more demand on the market must be renovated. At the  same time the market is expanding  with importing goods, introducing innovations that is oriented at modernizing  recourse-saving technologies and improving consuming qualities. So at this stage our main aim is to create infrastructural and institutional grounds for firming scientific technological  potential. than we have to organize the enterprises that produce and sell new technological range-that enables the country  to restore its positions on the world market of scientific technologies.  Simultaneously the role of the country in production and investment activities that is directed at commercializing innovations must be strengthened. Little  by little of will move from supporting  quantity aspects of scientific technical field to quality aspects and to new  forms of engineering, that use  modern informational technologies.

Main directions of state investment innovative policy of the state in future main directions of  state innovative investment policy are: 1. choosing national priorities of innovative field development for realizing innovative projects, choosing the projects of technologies that influence production growth and rise in country’s  competitiveness. 2. Coordination of activities of  legislative and  executive bodies to work out complex approach to solve this question concerning country’s innovative development, effective functioning of innovative systems and implementation of state’s innovative investment strategy.

3. maintaining and developing scientific and industrial-technological potential of fundamental science, working out employee’s training system for maintaining and developing modern scientific and technological level and developing science to a higher level.

4. Providing favorable economic and financial conditions for activating innovative works, developing ventral, engineering and investment-industrial activities and for rising competitiveness creating  favorable conditions for investing in innovation field enables  modernization of scientific and technical basis of national industry as well as rising the competitions of the country.

New directions of innovative activities and priorities of innovation policy consists of three stages. At on initial stage the main goals are reproduction of the technical basis of the field whose production has stable demand on the market than market expands by producing the goods that replace the imported ones  innovations  are oriented  at modernizing the enterprises, that  use the recourse-saving technologies and improve consuming qualities. So at first it’s necessary to create economic infrastructural and institutional basis for moving to investment stages of state development. At the second  stage the enterprises  that realize the technological order are created. After that the production is introduced on inner and foreign markets that  makes production competitive in the sector where national product were not presented before, and it creates new scopes for demand, where national products dominates to must the demands. At this stage country’s activities are directed at attracting high-scale private investments, creating necessary infrastructure for investment-development their support and perfection.

At the third stage the following important questions must be solved. Country’s support for innovative infrastructure, creating conditions for demand on national products, informational support to enterprises making stable contact with science and industry.

New ways of implementing scientific-innovative  and engineering activities.

A State focuses on new forms of scientific innovation and engineering, that use modern informational technologies and little by little they move from quantity aspects to quality ones, that are implemented in the following way:

1. Maintaining and developing scientific and industrial potential and using them in achieving modern technological level.

2 Choosing rational strategy and priorities for developing innovative field. Implementation  of critical technology and innovative projects in the fields that  influence the effectivness of production and their competitiveness.

3. Creating favorable economic and financial condition for activating innovative works, legal industry and competitiveness.    

-           To implement this measures following practical activities must be exercised:

The process of providing information must be radically improved and commercial structures must be involved in developing scientific educational and innovative activities.

- reconstructing the part of research and project institutions and closing the places working ineffectively.

- Creating the system at venture investment. state support of venture business in scientific technical field is necessary until the industry get interested in them.

- Developing the system of noon. state innovative risk and private  supplly, creating insurance groups within the framework of financial-industrial groups, that will undertake high-risk insurance, that is linked with creating innovative production. insurance companies, together will share the risk.

- Using modern methods for prognosing engineering and scientific production marketing.

-  Developing small innovative business by creating favorable conditions and infrastructure for setting up small enterprises and their functioning.

- Creating suitable legislation, that will regulate relations in intellectual  property field, work out normative acts that are directed at exercising state policy. It foresees involving the results of scientific-technical results in industrial circulation, that is implemented at the expence of the state budget.

- making typical state contracts in order to balance legal interests of the participants in the process from the point of using scientific-technical results.

Thus, following the innovative way of development, must not be the only factor white  working out investment policy. In connection to that, the role of country is defined by creating the mechanisms, which forms national innovative system and develops innovative production.

Creating favorable conditions for developing innovations provides modernization of technological basis of the economy and grows the competitive of national production.

- Preparing typical state contract for balancing legal interests of those who participate in the process of using the results of scientific-technical work.

So the main factor while working out investment policy is to move economy to the innovative way of development. In this regard a country’s main role is to create the mechanisms, that will provide the formation of national innovative system and development of innovative business, that will make the modernization of economy’s technological market of the economy possible and will give risk to competitiveness of national production.

The formation of adequate investment activity model in the market system of economy provides replacement of investment recourse division with new forms of investments. For its part it has to work out the investment policy, that will accord with changed economic conditions.

Official concept of reforming Georgia’s market economy is based on simple monitory principles. Their realization was expressed in size minimizing the country’s role, robotizing foreign economic activities, privatizing state property and forming market structures.

The principles, boundaries and forms of state participation in investment activity

Analysis of Georgian-economic conditions shows that solving important problems in country’s investment development is impossible only on the basis of self regulation, that is distinguished with its low quality. A state needs to strengthen its role in the field of investments, correct economic policy.  At the same time state participation boundaries in the investment process must be defined by taking the way of economic development, that is characteristic to the period of moving to market economy, into consideration conditions of strengthening the state role in the investment process.

Analyzing the possibilities of strengthening state role in investment process, we must take into consideration the fait, that counting’s participation in the process has same boundaries, these boundaries are defined by real financial possibilities, on  the other hand the country must encourage the process of attracting investment rather than blocking them. State participation in investment process is not the same as turning economy to administration process. It implies the increase of a long-term policy of the state, effectiveness of particular activities in the conditions of encouraging investments.

The topic of state participation pineapples in the investment activities is closely linked with limiting necessary financial potential for investment promotion Approximate calculations show that in order to restore the amount of investment to the pre-reform level, foreign investment growth is possible. According to 2002-2012state program in the next five years 10 $ are expected.

As we have at ready mentioned the role of the country as the investor in the market economy is maintained for the fields that are vital and important. More importance is given to regulating the investment process in the way, that creates favorable regime for private investors activities.

The conditions existing in Georgian economic investment strategy is oriented at moving from stable investments to creating necessary investment environment for private investors. These two parts that are essential for the state investment policy must support prosperous fields of production and the policy must have systematic character. 

Defining strategic priorities of investments.

 On defining strategic priorities we must take into consideration competitive advantage exiting on the world market, that is reflected on high-technologies. The brunches which maintain potential advantages are: energy sector, turism, agricultural machines and technologies, food etc .

Investing in innovative production will encourage new directions for investment flow, rising production level and encouraging economic growth. This approach is well known in the world products. Our priority must be effective programs that meet inner needs in economy, in this regard we  have to support national enterprises, and the development of vital brunches of economy.

At the same time it must be taken into account that in the world integrated economy, development of investment cannot be stable and increasing source of profit in producing rival products only in the inner market.

Significant  condition of effectiveness in the state investment policy is to work out the conception of structural alteration in industrial sector. It’s especially concerns about such prioritative approaches according which must be defined the reform strategy and mechanism of industries from different groups, supporting forms and methods from the state, organization models of industrial structures in accordance with real, amongst them institutional conditions in the world economy.

The basis of economic growth and quick development can be large corporations, that have scientific – technical potentials in mobilizing resources and effective  integration possibilities in the world industrial unions. Small business industries, that have really important meaning for the function of market economy, nowadays are singled out with extremely low technical level and lack of investment resources, that make it necessary  to quest  their place in industrial chains of the large structures. The formation of stable and effectively developing, diversificational, corporative unions and financial-industrial groups demand state supporting reinforcement of corporative circle from the state, amongst  them even by means of participation of corporations in the capital. Development of corporative forms will help the realization of long term industrial programs, and create conditions for the stable economic growth.

Stirring to activity of stake investment politics. At a modern stage, stirring to activity of stake investment about the stable economic growth in the basic condition of Georgian economy. Essential approaches of stake investment politics are: the reinforcement of supporting in prroritative tendencies of economic development formation of justifiable and economic conditions of stimulating the interest of investments in the real sector of economy and the agreement between central and regional investment politics.

State investments and supporting in prioritative tendencies of economic development. The realization of up-to-date tasks of economic development demands more active state backing of investment field. Simultaneously, the importance of state investment must be growing up not as mush from the standpoint of size of centralized sources, but from the positions of state guarantees, insurance and orient list of private investors.

The problems of investment budgetary financing. Budgetary financing of investment activities has still been happening on the basis of these approaches that essentially limit the state influence on the course market alterations and structural changings in economy.

Herewith, these shortcomings are not as mush conditioned by restricted possibilities of budgetary system, as by complicated and wrong strategies of sharing centralized investments and the lack of effective control of their usage.

Failures in the state investment politics make it necessary to solve this problem, as afterwards not having orientation or having defective one becoming the problem investors. Analysis confirms the existence of distinct dependence between state priorities and investment motivations of private investors. that must surely be taken into account while working out on perspective tendencies of investment politics. Otherwise  it will be impossible to make ground for stake investment politics and for the agreement of investors’ interests of different levels. Reserved dimensions will again have more passive character and will not guarantee planned results. It must also be mentioned that insufficient or unsystematic backing of separate manufacturers or regions, falls down stimuli of accumulation and afterwards self-financing process and it prevents the formation of business executives market behavior.

While analyzing the problem about the possibilities of manufacturers’ investment support it is impossible not to take into consideration the extreme restriction of budget/ At the same time, modern conditions, the increase of levels in the realization clearness and confirmation of investment politics and consideration of budget planning reality are not less important.

In Georgian economy. where unreliable forms of calculation dominate. it is difficult to male real prognoses about the mass index of money. Budgetary politic is being worked out in the conditions of complicated factors, that aggravates the difficulty of real budget formation and fulfillment of the received one.

State investments, as in the realization of economic growth of prioritative factor; usage of international experience will not be perspective without mentioning up-to-date conditions of Georgian state finances and the inevitability of budget  system alternation. e.g. one of the successful example of economic reforms is the experience of Germany. Its budget system is well formed and it is manifested clearly in the distinction of current and investment expenses in the control of pure usage of budget sources in establishment and protection of maximum size of budget deficit financing at the expense of credits with the sum of for seen investments expenses. This method is called “golden rule” and is established the 115th article of the basic law of Germany.

In Georgian economy, as it is clear from the results of reforms, the compensation of the growth of state non-productive expenses was not happening, correspondingly with the growth of budget investment expenses. On the contrary, it was one of the factors, that conditioned the reduction of state centralized investments and weakening of state investment function. In accordance with, the usage of state investments as the factor of economic growth, requires essential changing’s in the organizations of budget politic and budget system.

While working on the budget, it is necessary to define the prioritative tendencies and use the forming principle of the normative that define the levels of budget, according to the singled out tendencies; division of current and investment budget on the normative basis, denial the possibility of exceeding expenses over incomes while planning the budget; strict definition of sources, how to cover the investment budget deficits. It is also necessary of budget on the usage of sources in control realization technology, in order to reinforce the frscal role of budget fulfillment.

An  important problem, connected to the usage of state investments is their low effectiveness compared with the private ones. While sharing the state Financial resources, used tendencies do not help to increase the effectiveness of investment and restructure national economy.

In the organization of investment process, lack of systematic ground and insufficient quality of budget planning caused permanent  failures in financing the state investment programmers.

This fact approves  that, it is necessary to reinforce the role of selective approach, gather state investments towards the strictly defined prioritative approaches, keep strict control and select competitive projecting during state investment.

Selecting mechanism of investment projects on the basis of competition/ In market economy, where basic criterion of investment is the effectiveness of investment, it is impossible to use the old technologies of sharing unpaidly, among enterprises in centralized capital investments, which don’t stimulate industries to improve their effectiveness, as direct state investments are less effective compared with the private ones. Thus, the most acceptable approach is the state supporting to private investments.

State supporting to private investments is realized in these investment  projects by means of the partial participation of the state, which have passed the competitive casting. The goal of centralized investment resources on the competitive basis is the reinforcement of investment assets, mobilization of private national and foreign investor’s capital towards the prioritative approach in economic development, and the growth of effectiveness in all forms of property such as commercial, budgetary and national-economic investments.

A new rule of financing investment projects in the financial ensuring of investment competent project, gives the right to investors to choose the participation forms. These forms can be as follows:

State investment revocable two year-term credit; its payment percent for the usage, compiles ¼ of central banks refunding rate;

to strengthen the port of these shares of an oncoming enterprise in the state property, that is sold in the market from the income of investment project during two years and the income obtained in this way goes to the state budget.

While taking decision about giving funds from central budget, a leading criterion is to insure the setting of object (industrial powers) into action in the given term, in the conditions of decreasing funds, attracted from the state budget and to increase the effectiveness of the usage of centralized resources.

The obligatory conditions, to present investment projects for the competition are:

In the total amount of money, spent on project realization, the share of centralized investment resources must not be exceeded more than 20%, it must be ensured at the expense of private investor’s own, attracted and borrowed funds.

In total amount of common expenses, investor’s own share mustn’t be less than 20%.

In the field of investors’ supporting, new approaches such as connection to the certification of investment projects, giving state guarantees, creating the budget for development are used.

Certification of investment projects, defines the possibility of increasing state supporting share up to 50%, while such analogies are not producing industrial products for exportation about 30% – for importation, with less price.

In the conditions of budget funds restriction, many investors consider the state guarantees of certified projects, as the most desirable form of state supporting. Guarantees secure about refunding not the total amount of money of risk, but part of it, in case of failure the effective investment project realization, due to the reasons that are not in investor’s compensation; On its side, investor must present counter-guarantees, amongst-mortgage.

Development budget can be formed as the special instrument, that collects investment resources of state budget in order to finance investment projects and attract the funds of private investors.

Development budget resources can be used for partial financing of investment projects, at the initial – competitive, valuable and refundable stages, also the borrowed funds for giving state guarantees on the competitive basis. (When upper limit of guarantees compiles 40% of borrowed funds).

In the competition of procuring the funds for development budget, such investment projects should be taken, that satisfy the following conditions:

Correspondence of development budget to the goals;

Security of positive meanings of pure discounting income;

In the total amount of money for project realization, investor’s own share mustn’t be less than 20%, but for large projects (more than 50 million $ – less than 30%.)

In the countries of developed economy, as a rule, examination of investment projects is made by experts, invited by investors themselves or by the participant financial institutes of project financing.

Selective, restricted supporting of prioritative approaches in industrial development by governments and the competitive selection of effective projects gives distinct results. Foreign experience proves that, such measures, as a rule is an efficacious stimulus of investment attraction and helps to realize projects.

Governance of state property in the state economic sector.

Governance of state property, as the factor of investment effectiveness in the state economic sector. Activation of the state role in the investment field, implies the development of state governance, reaching quantitatively higher level, restructurization of state sector and development for investment providence.

In must be said that, in the countries even under developed market economy, the governance of state sector is fulfilled under strict state governance control, from the interests of national economic development. State sector fulfillers the supporting function only for vitally important and unprofitable industries, but also stimulates local industries.

State sector, must distinctly occupy the leading positions in achieving priorities of economic development and form the potential of economic growth. Simultaneously, investment projects of state industries must be drawn up according to the demands of competition and effectiveness. It is essential that, invested funds to be used purposefully and the movement of financial flows be controlled strictly by the state.

Herewith, while realizing state activities in the real field (amongst in the field of investments), stimulation in  the activities of analogical faces in  non-state sector and not their restriction must surely be taken into account, as enterprises under  the state support are stable on the one hand, but less effective on the other side.

Activation of the state investment role must not be manifested only in effective investment projects of science-capacious industries, high technologies and vitally important fuelds by direct participation. More important constituent part of investment supporting of society in the conditions of market relation development is the encouragement of economic subjects’ investment activities and it must be oriented on progressive structural alteration. This implies the working out of optimum methods of economic regulation, development of accumulation mechanisms and active assistance to turn them into industrial investments.

Formation of institutional-legal and economic surroundings for the stimulation of investments in the real sector of economy.

Greating the available conditions for increasing investment actives by the state, requires purposeful influence on reproductive processes at macro and micro-economic levels. This. most important sphere, where the activation of the state investment role must be manifested effectively and in a new manner, at a new stage of economic reforms is – monetary-credit field.

Monetary-credit methods for investment stimulating. Insuring the growth of stable investments, first of all implies the augmentation of economic monetarism, era diction of money disproportions, reduction of interest rate, renewal of taxation system, depolarization of national currency and its role augmentation.

The increase of economic monetarism is possible by means of restriction of monetary-credit emission. While defining the level of danger of its inflation results, it must be mentioned, that inflation can also be caused by the other factors, besides emission. Thus, struggle against it, cannot be defined only at the basis of emission restriction. First of al it is necessary to provide the functioning of manufacture solidly. The growth of monetarism level in the real sector of Georgian economy is the most indispensable condition, that on its  side is the leading, deflationary factor.

Essential condition to protect against  the inflated results of monetary-credit emission is to create and put in motion such mechanisms, that change macroeconomic conditions and direct money-flows for supporting manufacture. During the process of using such approach, the size of emission defines the objective demand of industrial sector of economy, expert the funds moved to financial markets.

While defining the parameters of purposeful growth of money, calculation of the structure of money delivery is vitally important. Different channels of money emission have heterogeneous sensibility towards the inflation.  Therefore, expansion of money delivery is possible by payment of promissory notes of non financial industries, by means of banks refinancing and under the purposeful direction of emitted sources to finance the industrial investments. Less inflation channel of emission  is financing industrial investments by the state institutes of development.

Basic instrument for the regulation of money flows, is purposefully the state influence on the dynamic of interest rates. e.g Project supporting of the most importantly acknowledged industries for the purpose of investment activation is possible with preferential rates and by credits. Movement of preferential credits, this time must be realized by state banks system of development and the strict control establishment must expel the usage of funds aimlessly and financial speculations.

Experience of the countries under market economy shows that, regulation of interest rates is generally effective method to reinforce business activity in the period of crisis, when disbalance of economic systems situation is deepening. After achieving balanced progress in economic balance and financial sectors, generally the necessity of state interference in economy is lessening and accordingly the role of state influence on the dynamics of interest rates, formed on money markets is also decreasing.

The usage of state regulation is distinctly cyclic. In the conditions of sharp structural disproportions, when the working of market mechanism can’t provide the keeping, on the one hand, development  of surplus production and devaluation of main capital off, but  on the other hand augmentation of investment activity, the role of state influence on economy, amongst in the field of purposeful control on money flow is expanding, but while moving to the stable growth of economy-decreasing  . It is proved  by the practical analysis about getting over the structural depressants  (post war) in Western European countries and in the USA, and by the restoration of economy in France and Germany.

State regulation of interest rates was applied in the countries, under developed market economy (post war-in Japan, during along period –in France and in the USA during the period of so called `Roosevelt’s new policy, as well as the range of those developing countries , that showed the solid high tempers of economic growth (India, China, South – Eastern Asian countries etc). Important scales of accumulation here was reached for the purpose of national manufacture development, as a result of active influence on interest rates ( on its side, accumulation made it possible to hasten the speeds of economic development) also, for this purpose, direct and indirect methods for the purposeful regulation of money flow and inner accumulations convert into investment were used, namely for the formation of development state banks, loan-saving association and other  specialized credit institutes, through founding district  normative of credit politics for non-state banks and rates of preferential taxation.

For example, in Japan, investment financing and production growth conditions were formed through the state control strengthening on using the population savings and interest rates, which were gathered in postal-saving institutions and banks, afterwards their remittance to the state institutes, long-term crediting banks and truste savings banks took place.

Savings transt formation mechanism into investments in the USA was based on the wide development of loan-savings associations, that attracted the savings of private sector for giving purposeful credits to the range of housing construction and industrial branches.

In many developing countries, stable growth of economy was conditioned by localization of the greater share of money flow in the state banks, that locate mobilized savings in industrial investments and crediting resources, in accordance with the installed priorities of social-economic development.

Improving the structure  of mass of money is also connected to the cutting down  the share of cash, that is in circulation, for what it is necessary to set up strict  restrictions about the cash payment in all the field of economy, to continue calculation through computers and widen barren forms of  payment circulation. Taking these measures will expense the business economic field of banking sector and will be propitious for investment potential growth of the banks.

One of the basic task of payment system, at modern stage is its complete renewal, restriction of barter transaction, driving a great part of taxation means out of circulation, as they don’t  play a part of complete recourse in the formation of saving potential. Main ways to solve this problem are following: realization of inter imputation for financing fixed and circulating capitals, reduction the price of credit resources and security of plural debts.

For increasing the regulation effectiveness of money circulation and expel the activation possibilities of such emissive mechanisms, which are not accompanied with the expansion of goods delivery, it is necessary to strengthen the control and currency regulation.

Formation of effective infrastructure of financial market.

A) The influence on the investments activity of banks.

Looking through the previous system of regulation (in accordance with the selective priorities of economic politics) requires changings of the forms and methods in the banking sector and restructurization of banking system in economy, by meant realization of investment functions of the banks. Restructurized banking system must comply the requirements of armful investing  through high trustworthiness and guidance. It must also ensure the appropriate level of credit delivery resources by means of available interest rates for manufacturing fields.

In the growth of investment activity of banking system, it is essentially important to create the system of investment encouragement and insurance. State guarantees existence is one of the condition just for this. Cutting down the normatives of reserve assignments and preferential taxation are also belonged to these activities.

B) Creation of the system of deposit guarantees.

World experience shows that, the establishment of deposit guarantees is the inevitable component for vast mobilization of the population savings. It potentially increases separate institutes as well as the liquidity of the whole system and is the reliable means against taking deposits unexpectedly and frequently out of the banks.

One of the first systems for deposit insurance was formed in the USA in 1933-34, as a result of additional stabilizers investigation in marketing economy. Nowadays, these systems operate in the range of developing countries (Argentina, Colombia and so on).  Herewith in Great Britain, in the USA and in Canada, they are performed with independent state corporations, but in France and Sweden and private banking links. In Austria, Great  Britain and the Netherlands in the case of broken credit organizations, private deposits are given; In Germany deposit delivery of credit institutes are addressed to, while in Canada – deposit delivery, managing the property of bank and giving crediting guarantees are addressed to.

                                                          Economic Dr of Science,

                                                          professor Lamara Qoqiauri

Economic Justice and Democratization of Economy to create Ideal Society

By
Prof Viswanathan,
Director,
International Socio-Economic Research Bureau
(E Mail Id : economist@dataone.in)

DECLARATION OF JUSTICE AND HUMAN RIGHTS

We, the people of all the countries, in harmony with the sovereignty of the Universal Justice hold these truths to be self-evident that every creator has inalienable ‘Right to Ownership’ on his creations and the Natural laws empowers the creators that only he should use his creations exclusively for the welfare and uplift of the human society as a whole, in which he is an inseparable member.

We declare with all judicial power derived from Natural laws that among all creations of man, his creation of capital alone has enormous ‘economic power’ capable of transforming all the socio-economic-political structures and reconstitute them to suit the aspirations of the owners of capital.

We further declare in unequivocal terms since the capital is created by the collective labor of the people as a whole it should be directly owned by the people and then only the people would secure equal ‘Economic power’ and requisite ‘Fundamental Economic Rights’ with which they could establish an ‘Ideal Society’ in the way in which they desire.
In accordance with ‘Economic Justice’ when the capital is directly owned by the people, we declare that the people would naturally secure what we consider the best among the ‘Fundamental Economic Rights’ like ‘Right to live’, ‘Right to work’, ‘Right to Economic Equality’, ‘Right to economic liberty’, ‘Right to Economic Security’, ‘Right to participate in the management’, ‘Right to capital creation’, ‘Right to live with fraternity’, and requisite ‘socio-economic-political rights to pursuit of decent happiness’

We further proclaim when the people secure the above mentioned ‘fundamental rights’ they would succeed ultimately to establish an Ideal Society or Just Society for which they were tirelessly striving in transforming one form of society into another since the dawn of civilization, and to execute their noble concept of ‘One World, One Government, and One Humanity’ and in the end the people would be victorious in choosing what form of ‘Economic System’ that would be the best of all other systems for the establishment of an Ideal Society for which they would secure all requisite authorities of Natural laws that bestow on them.

1. Emergence of Economic Systems:

Different economic systems had emerged on the horizon of the history of mankind whenever different kinds of ‘Capital Ownership’ sprang up. Especially capitalism and socialism emerged after industrial revolution on the determinant factor of ‘capital ownership’. Generally in all economic systems ‘the ownership of capital’ forms the ‘basic structure’ of a society on which the fabrics of super structure of society are determined. The super structure usually exhibits the qualitative fabrics of society such as religion, culture, education, laws, customs and conventions etc. which are determined according to the aspirations of the owners of capital. In short the social elements are dependent factors of capital ownership.

During the turbulent period of 1750s when Industrial Revolution burst upon the England and other European countries it introduced gigantic machines – a kind of capital – in the factory system of production of goods and services. It engulfed the mankind like huge deluge and tossed the world societies and changed each and every super structural elements of society in such a manner not to even to trace out their originality. We, the people, at that period were deeply perplexed and confused what to do as we were in the vicinity of utter economic ignorance.

2. Two Economic Affidavits:

During Industrial Revolution the economic environments in the factory system was not only in muddle but also demoralizing the societies. No one had any knowledge how the economy was operating and how should it be operated. Everyone was expecting for the worst to come. Whole Europe was plunged into utter ignorance. At that crucial period of time it was Adam Smith, the Father of Economics, published his famous book ‘An enquiry into the Nature and Cause of the Wealth of Nations’ in 1776.

3. Economic Affidavit of Adam Smith: In his book Adam Smith spelt out an ‘Economic Affidavit’ solemnly and sincerely that if we, the people, entrusted our capital to a few capitalists in the name of ‘Capitalism’ (Individualism), they would not only change even the sand into gold but also drive the mankind to march towards an ‘Ideal Society’ by modernizing production potentialities with the help of scientific technologies and division of labor. Completely ignoring the working class who constitutes the society, Adam Smith concentered and focused his interest on a few capitalists and advocated that they without the interference of State would accumulate wealth of nations with the help of division of labor using modern machines and assured that the few independent capitalists would moreover create a favorable climate for the establishment of Ideal Society by increasing production many folds. Adam Smith completely neglected the equitable distribution of wealth to the mass working class. He linked the establishment of an ideal society with the mass production but not equitable distribution of wealth. Thus he misguided the whole world convincingly and decisively for a long period during which the working class was thrown into appalling poverty and horrible living hood.

Ricardo and Malthus, drawing he thread of arguments from the wisdom of Adam Smith, eloquently presented their views in favor of a few capitalists and equally convinced the people to surrender their capital in the possession of capitalists who would solve all the socioeconomic problems of mankind. Thus when the people entrusted their capital in the hands of a few capitalists a ‘Capitalistic Mode of Production’ emerged with strong magnitudes in England and some other European countries. This capitalistic mode of production, shattering hitherto existing highly valuable cultures and customs of people, created a complex and conflicting, and highly demoralizing ‘Capitalistic Society’.

The newly emerged ‘capitalistic Society’ forced the social elements such as law, art, culture, customs, religion, education and other economic and political rights and liberties to work for the benefit and security of a few capitalists because on their welfare the welfare of mass working class was depending on. The capitalistic mode of production converted the ‘Right to live’ of mass working class into a dependent factor of the security of the capitalist class who owned the capital and modern factories. This was because if a capitalist collapsed with his factory, the livelihood of the workers working in that factory would also collapse. So all the social elements ranging from culture to human liberty had to work for the security of a few capitalists. Thus the Ideal Society which the people dreamt for long span of time became a myth and mirage. In the capitalistic mode of production the Ideal Society was meant by ‘Capitalistic Society’ representing a few capitalists.

4. Counter Economic Affidavit of Karl Marx:
Having abundant flow of sympathy on the exploited mass working class and endless stream of hatred on the capitalists who caused for the appalling poverty of workers the mentally and morally agitated Karl Marx and Engels declared a ‘Counter Affidavit’ in 1848 in their ‘Communist Manifesto’ and Karl Marx alone in 1867 in his magnum opus the Das Capital. In their counter affidavit they advocated that if We, the people, forfeited our capital from the few capitalists with the help of Bolsheviks (communists) and entrusted the capital in the hands of the ‘State’ under the control of ‘Proletariat Dictatorship’, that the ‘State’ would lead us ‘Towards an Ideal Society’ and establish ‘One World’.* Believing their ‘Counter Affidavit’ word by word, in the October Revolution of 1917 we forfeited our capital from the few capitalists and handed over it to the trustworthy of the ‘State’. The State introduced a ‘Socialistic mode of production’ and on the basis of this, a fearful and subjugating ‘Socialistic Society’ emerged. The working class was engulfed with awe and fearsome and terribly perplexed on the outcome of the ‘Revolution’ and utterly disappointed for not even tracing any hope of achieving ‘Ideal Society’ which their Bolshevik masters promised during the ‘Revolution’.
__________________________________________________________________
*In the words of Karl Marx : “ In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor has vanished; after labor has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-round development of the individual, and all the springs of cooperative wealth flow abundantly – only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe in its banners : From each according to his ability, to each according to his needs!”
– Marx(1875), pp 21-23

Karl Marx and Engels were not alive at that time of October Revolution. They were great champions for working class and ‘buts’ about it. They worried wept for working class, they suffered for working class, they sacrificed everything for the working class, and above all they were exiled, especially Karl Marx, from country to country for the cause of working class, and they really wanted to see the working class of all the countries in an ‘Ideal Society’. But the ‘October Revolution’ in Russia proved that their ‘Theory and Practice’ did not coordinate with each other and did not function in harmony. There was something wrong in the ‘Theory and practice’ which resulted in utter collapse of Socialism at the end process. What was the fault that penetrated for its collapse?
I have same streak of opinion in respect of Adam Smith and Malthus as well. I believe when they advocated that we, the people, should entrust our capital in the possession of few capitalists, they believed that the capitalists would not exploit the working class. But when their theories put into practice it was the selfish capitalists who manipulated their theories as convenient and convincing tools to exploit the mass working class. It was the capitalists who portrayed the theories in a darkest dark when they put them in practice because of their selfish motives. In other words there was unbridgeable disparity ( a deep wide chasm) between the theory and practice which the capitalists utilized it to fulfill their selfish motive of maximization of profit in exploiting the mass working class. What was the terrible fault that was penetrating here also?

Though the original proponents of capitalistic and socialistic theories were not enemies of working class, the executors of these theories, the capitalists on one hand and the ‘State’ on the other hand misled the working class for their selfish motives. The primary fault was that we, the people, instead of retaining the capital with us, separating ourselves into two diametrically opposite poles, surrendered our capital to a few capitalists in West European and North American countries and to ‘State’ in Russia, China and other East European countries.

The inherent contradictions that deeply and widely penetrated in the theories and practices of the two economic systems originated a fierce vicious spiral and exploded like a ‘Big Bang’ and scattered away violently but suddenly all the socio-economic problems throughout the world like inextinguishable fire balls. Instead of establishing an ‘Ideal Society’ these two systems, even after a prolonged period of experiments, have pushed the mankind at the verge of nuclear holocaust and wide spread day – to-day terrorism.

5. Democrism – People’s Direct Ownership of Capital:

As long as more than 200 years, Capitalism had left no avenues unexplored to establish an Ideal Society but disastrously collapsed during 1930s throughout the world due to the pressure of its own weight of self contradictions and brutal ambition of maximization of profit. On the same footing, Communism too after exerting all methods of cruel tortures (Stalin’s roughshod treatment of the kulaks) in the name of ‘Proletariat Dictatorship’ for nearly 75 destroyed itself in 1992 in its own breeding place. As both the systems are now struggling for their own survival, they have now decided to end the ‘cold war’ between them. Since the both the systems pushed us into great disappointments and they did not effective economic techniques to solve our economic problems in accordance with ‘Economic Justice’, we, the people, hereby declare to forfeit our own capital both from the capitalists and the ‘State’ and retain it under our direct ownership in peaceful manner or by force if necessity demands and create a ‘new economic system’ known as ‘Democrism’ on the basis of people’s Direct Ownership of Capital and we, further declare the Natural Laws have entrusted upon us all executive powers to do so as our birth right.

On the People’s Direct Ownership of Capital a just economic system known as ‘Democrism’ will in the world and it will provide us ‘Democratic Mode of Production’ which is an inevitable must for the establishment of an ‘Ideal or Just Society’. I venture to say in short,

“Capitalism is popular and popularly defective;
Socialism is destructive and destructively popular;
Democrism is justifiable and justifiably inevitable.”

Whatever race we relate to, whatever language we speak to, whatever color we cover to, whatever religion we follow to, whatever nation we belong to, we are always being influenced by justice and by its emphatic authority of supremacy. The laws may be in transient from time to time, and vary from country to country, but the concept of justice remains illuminant everywhere. We want justice, only the justice and nothing but the justice. Throughout the long passage of history we have honored justice; we have kept in high esteem the men of justice right from king Solomon to Gandhiji . We have unshakable faith that justice is perpetual and ever pervading. We have always fought for justice and it has united us without any discrimination. In his book ‘Anatomy of Liberty’, William O. Douglas, the Justice to the United States Supreme Court, says this truth in every respect as follows:

“The appetite for justice is indeed a cementing influence amon all races, whatever language they speak, whatever of their skin”
-Douglas,William O. “Anatomy of Liberty” (p: xxiv) : (1965)

The universal fact is that if there is justice there will be harmony and immortality. The scientific facts are immortal because they are based on experimental truths. On the other hand if the socio-economic-political principles want to be immortal they should based on justice, only the justice and nothing but justice and perhaps on natural justice. The capitalistic and socialistic principles lack application of justice and therefore they struggle vainly to solve our life problems and they are marching towards their last destiny – the inevitable grave yard. Keeping the above facts in mind I have with utmost care and concern formulated the economic principles on the natural justice in the name of ‘DEMOCRISM’ which will secure universal acceptability. The genesis of all natural justices is to uphold ‘People’s Direct Ownership of Capital’ for which we have to forfeit our capital from the few capitalists and the ‘State’. Why?

“People’s Direct Ownership of Capital : Why do we want?”

1. Denying the natural justice of ‘Right to live’ by Capitalism and Socialism: (Capital promotes and intensifies war)

We, the people of all the countries, unanimously hate intensely the wars which germinate in any form or for any cause. Naturally we are peace loving people. Despite our strong protests the wars have been fought all over the world and billions and billions of innocent people having no association with the war, have been brutally killed and massacred and the skeletons of these people have been heaped like mountains in graveyards. What cause underlies for these wars? The answer is simply one word – ‘the capital’. It is the ‘Ownership of Capital’ by a few capitalists or the ‘State’ that attributes for all kinds of war that negates one’s ‘Right to live’ in the name of patriotism in particular.

Let us for time being set aside the wars fought before Industrial Revolution. The factory system facilitated for the production of ‘weapons of mass destruction’ that can be employed from the land, from the ocean and from the air. The whole world turned into open battle field for the nuclear bombs, ballistic missiles, supersonic jets, various kinds of military rockets and the military satellites orbiting the earth. Whatever might be the causes of First and Second World Wars, but their consequences were horrible that pushed the mankind to the very verge of its extinction from the earth planet. Why?

Wars before and after Industrial Revolution: Before the industrialization the wars were fought on a particular battle fields and between two hostile warriors only. The range of destruction was very narrow and limited in coverage because the warriors used only spears and swords. The weapons were manufactured in cottage industries or by the warriors themselves. Natural boundaries like mountains, rivers, oceans and great deserts prevented the enemies to enter into a independent country.

After industrial revolution, weapons of mass destruction were produced with the help of highly sophisticated technologies with help of huge capital in factories owned by a few capitalists and the ‘State’. The natural bounties disappeared and the whole world became open battle field. These weapons were maneuvered only by the highly skilled technocrats. The technocrats used these weapons on the common innocent people to terrorize the enemy-governments to surrender immediately. For example, in World War II USA used nuclear atom bombs to bombard on millions of Japanese civilians and terrorized the government to surrender without fighting in the battle field. Nowadays the battle fields are disappeared and the whole world has become open battle field in the face of mighty ballistic missiles and nuclear atom bombs. They can be produced only with the help of scientists and huge capital owned by the ‘State’ and a ‘few capitalists’. As long as the capital is owned by the ‘State’ and ‘few capitalists’ we cannot escape from nuclear holocaust. Originally Capital was created by the working class to assist them to increase their productivity of consumption goods. As soon as the capital went into the illegal ownership of ‘State’ and ‘Capitalists’ it was used for the production of mass destructive weapons. If we scrutinize the expenditure of the world governments we can detect that a large portion of government expenditure has been allocated for ‘military up gradation’ than for the ‘promotion of education’ and ‘elimination of poverty’.

2. ECONOMIC THEORY OF WAR :

Firstly “if the accumulation of destructive capital increases the temptation for war will increase and vice versa”. The destructive capital means the capital that is used for the production of destructive weapons used by military forces. Secondly the difference in economic ideology of a country prompts it to increase its military power to show its ideological success over the other country and spread its ideology over other countries through war. For example USA and Russia used war as a weapon to spread their capitalistic and socialistic ideologies over other countries. The pages of recent past history will illustrate the fact and also the reason for accumulation of nuclear weapons and other variety of scientific weapons of mass destruction. Thirdly on the globalization of world economy the capitalist rich countries invest huge volume of their excessive capital in poor and developing countries. In order to protect their huge capital from nationalization by the beneficiary countries a mighty military force is required by the investing countries. For instance the American war and threatening of war over Arabian countries to protect her huge capital invested in exploration of petrol and fuel industries. Now American capitalists are investing billion and billions of dollar in I T industries of India and other developing countries. The American capitalists believe that they can protect their capital by their country’s military power. If any country try to nationalize these industries it will result in war. Fourthly the over production of industrial goods by rich countries force them to dump their over production in poor countries through their military power.
Economic reason for two world wars : Virtually after Industrial Revolution in most of the European countries the capital was owned by a few individuals. Since the very aim of capitalism was ‘maximization of profit’ the workers were paid less and it resulted in deficiency of effective demand which caused for ‘over production’. These European countries occupied the poor countries by their military power and converted them as their ‘political colonies’ and with the concept of ‘Free Trade’, they dumped their over-production in the colonies and also exploited the wealth of the colonies. India was the notorious example for that.
With the help of exploited wealth these ‘mother countries’ strengthened mainly their military power. The safety and security of the other ‘Dictatorial European countries’ which had ‘State or less individual Ownership of Capital’ were in jeopardy and unprotected in front of the mighty capitalist countries. On detection of the geographical track these countries found that there were no countries in the world to occupy them as their colonies for exploitation in order to increase their wealth and thereby their military power. These lately wakened dictatorial countries sniffed the fact that their ‘political and military supremacy’ would be pulled down rapidly on the downward track. In order to surpass the supremacy of the Capitalistic European Countries the ‘Dictatorial European Countries, found no other alternative except ‘war’ on the Capitalistic European Countries and on their colonies all over the world. The ‘lust for supremacy’ over the other countries forced them to wage two world wars. Napoleon and Hitler waged war against all of Europe because for the sake of supremacy.
Ayn Rand emphatically points out the genesis for the two world wars in his book ‘Capitalism’ as follows:

“……World War I was started by monarchist Germany and Czarist Russia,
who dragged in their freer allies. World War II was started by alliance of
‘Nazi’ Germany with the Soviet Russia and their attack on Polland” *
- Rand Ayn :“Capitalism: The Unknown Ideal” (New American Library-1967) p:37

In this nuclear age we witness a political and economic turbulence all over the world for a mad race for military equilibrium and economic supremacy. Both the Capitalism and Socialism have no blue-print to terminate the opportunity for Third World War. The rich capitalist and socialist countries want to become richer and richer by pushing the vast majority of poor countries to become poorer and poorer as per World Economic Reports. At present the silent turbulence boiling in the poor countries will burst into a Third World War which will be fought between the rich northern countries and the poor southern countries of the world and result in nuclear holocaust. That is why the USA is very keen on preventing the proliferation of nuclear technology among the southern countries using its military might. The only way left for the mankind to stop the flow of ever threatening danger of nuclear war is the execution of economic equality by rich countries in extending their helping hand to poor countries to pull them up from poverty and to reduce the economic imbalance between rich and poor. The capitalist countries will not permit the economic equality within and without but fight for upholding their economic supremacy which will be the ultimate cause for the Third World War.

We, the people, therefore, have no other alternative except to forfeit our capital from the capitalists and the ‘State’ and retain it under our ‘Direct Ownership’ to coordinate with the command of Natural Laws to save the mankind.

2.1. Consequences of World wars and destructive capital:

The First World War was fought between 1914 and 1918. During the span of 4 years the war was fought violently 120 million seconds. Nearly 48 million people (including soldiers) were dead and wounded.* In other words in every 10 seconds 4 people were killed either dead or wounded.
· Nehru, Jawaharlal : “Glimpses World History” : p.637

In the Second World War When the war was virtually approaching its end, on 6th August, 1945 an Atom bomb by name ‘Little Boy’ – a new war machine that the mankind hitherto never experienced – was dropped on Hiroshima. With in 10 seconds one million innocent people were killed. The first world war took 10 seconds to kill 4 people but the second world war, at its end, took 10 seconds to kill one million innocent people. The annihilation depends on the density of population of a city on which an atom bomb drops on. The Super Powers like USA and Russia, have now heaped in their arsenal million times more powerful atom bombs than the one that was dropped on Hiroshima.

No doubt the atom bombs that dropped on Hiroshima and Nagasaki were invented by the nuclear scientists. The billion dollar question is whether the scientists produced them with their bare hands or in cottage industries or in sophisticated industries created by huge capital. No capitalist will ever afford such huge capital for the production of weapons of mass destruction because their aim is always ‘maximization of profit’. Only the State can siphon huge capital for the production of atomic bombs only with the help scientists to threaten the other countries and to enjoy the status of ‘super powers’.

Though the atom bombs are the brain-children of atomic physicists the capital required to manufacture them is funded only by the governments secretly against the wishes of the people. As long as the capital is owned by the governments, irrespective of Socialist or Capitalist governments, they spend huge capital for the production of atom bombs in order to achieve military supremacy over other countries or to attain at least an equilibrium in military power. Extensively it is the hard-core radical politicians brain wash the people under the guise of ‘patriotism’, ‘National security’ and ‘National pride’ for the production of atom bombs and other ballistic weapons. Since most of the atomic scientists are the government scientists they have to produce atom bombs at the insistence of governments in the name of national security.

“In 1943 the Manhatten Project Laboratory at Los Alamos, New Mexico, with
J.Robert Oppenheimer as its director, was assigned the task of developing an
atom bomb. The first test at Alamogordo on July 16, 1945, was an outstanding
success (the desert sand was fused to glass for hundreds of yards around the
the site). In August two atom bombs were dropped on Japan”.

( * – Cantor, Norman F. – “Western Civilization : Its Genesis and Destiny” III –1970; pp:528-529)

I can arrive two conclusions from deducing the above historical facts:
Firstly, we have to free the atomic scientists from the clutches of governments.
Secondly, we have to forfeit our capital from the hands of governments and to keep it under our own control and possession.
Unless we, the people, forfeit our own capital from the governments and restore ‘people’s direct ownership of capital’ we could not prevent the governments from the mad race for producing ‘weapons of mass destruction’ ranging from AK-47 to atom bombs (of 20,000 megaton attack)

When we pay the tax-money to the governments, we intend tacitly that they would spend it to solve our poverty; but they do not do so. In a speech on April 16, 1953, President Eisenhower said :

“Every gun is fired, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed …
The cost of one modern heavy bomber is this: a modern brick school in more than thirty cities…… We pay for a single fighter with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than eight thousand people…………
This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron…….”

Professor Dallas W. Smythe of Illinois said, “Billions for defense but not a cent for socialism. It is not socialism to have the government spend 50 billion dollars for weapons; it would be socialism if the government spent the same amount for education or for public works”.

When we entrusted our capital to the capitalist as well as the socialist governments we constituted a tacit ‘Economic Contract’ with governments. The first and foremost element of the ‘Economic Contract’ was that the governments should utilize our capital to solve our basic economic problems such as poverty, unemployment, economic disparity etc. But the governments in violation of the Economic Contract have spent our capital to destroy our own survival by engaging in the production of weapons- mass-destruction. The governments with the help of scientists produce variety of ballistic missiles and nuclear bombs and test them day in day out to display their scientific genius and military power to other governments. The accumulation of such deadly weapons have now pushed the mankind to the very verge of nuclear holocaust. We, the people of all the countries, therefore, want to recover our capital from the governments and to keep it under our own control and ownership to preserve a perpetual world peace, our birth right.
__________________________________________________________________________________
“Little Boy” is the nick name given to the atomic bomb dropped on Hiroshima on August 6, 1945. It was Monday morning. Little Boy was dropped from the Enola Gay, one of the B-29 bombers that flew over Hiroshima on that day.
Little Boy
After being released, it took about a minute for Little Boy to reach the point of explosion. Little Boy exploded at approximately 8:15 a.m. (Japan Standard Time) when it reached an altitude of 2,000 ft above the building that is today called the “A-Bomb Dome.”
The July 24, 1995 issue of Newsweek writes:
“A bright light filled the plane,” wrote Lt. Col. Paul Tibbets, the pilot of the Enola Gay, the B-29 that dropped the first atomic bomb. “We turned back to look at Hiroshima. The city was hidden by that awful cloud…boiling up, mushrooming.” For a moment, no one spoke. Then everyone was talking. “Look at that! Look at that! Look at that!” exclaimed the co-pilot, Robert Lewis, pounding on Tibbets’s shoulder. Lewis said he could taste atomic fission; it tasted like lead. Then he turned away to write in his journal. “My God,” he asked himself, “what have we done?” (special report, “Hiroshima: August 6, 1945″)
note: Paul Tibbets was Colonel, not “Lt. Colonel,” when he was the pilot of the Enola Gay.
The Little Boy generated an enormous amount of energy in terms of air pressure and heat. In addition, it generated a significant amount of radiation (Gamma ray and neutrons) that subsequently caused devastating human injuries.
The people who saw the Little Boy often say “We saw another sun in the sky when it exploded.” The heat and the light generated by the Little Boy were far stronger than bombs which they had seen before. When the heat wave reached ground level it burnt all before it including people.

The strong wind generated by the bomb destroyed most of the houses and buildings within a 1.5 miles radius. When the wind reached the mountains, it was reflected and again hit the people in the city center. The wind generated by Little Boy caused the most serious damage to the city and people.

The radiation generated by the bomb caused long-term problems to those affected. Many people died within the first few months and many more in subsequent years because of radiation exposure. Some people had genetic problems which sometimes resulted in having malformed babies or being unable to have children.
It is believed that more than 140,000 people died by the end of the year. They were citizens including students, soldiers and Koreans who worked in factories within the city. The total number of people who have died due to the bomb is estimated to be 200,000.

The A-Bombs used over Japan; Little Boy (left) and Fat Man (right)
Just three days after the bomb was dropped to Hiroshima, the second atomic bomb called “Fat Man” was dropped to Nagasaki. Though the amount of energy generated by the bomb dropped to Nagasaki was significantly larger than that of the Little Boy, the damage given to the city was slighter than that given to Hiroshima due to the geographic structure of the city. It is estimated that approximately 70,000 people died by the end of the year because of the bombing.
We strongly believe that the world must learn about weapons of total destruction. We hope that the information presented here will help you understand the pain and devastation that nuclear weapons can cause. We don’t want you to just feel sorry for the people of Hiroshima and Nagasaki, the war inflicted untold pain and suffering on many people in Asia and the Pacific. Rather we want you to work with us to ensure that all of us can live in a safe world.
We hope this document helps you understand what it was, what it means and what we have to do.
____________________________________________________________________

2.2 The cause for dropping atom-bomb on Japan:

There are two theories for dropping atom bomb on Japan. The first is to take retaliation on Japan for its attack on Pearl Harbor. The second is to prevent Socialist Russia to capture Japan. The first theory do not sound reasonable because :

Hitler committed suicide on 30th April, 1945. Immediately on 7th May the Germans agreed to unconditional surrender. Moreover Mussolini and his mistress were killed on April by anti-Fascist Italian partisans. Japan’s position was now completely helpless, and the emperor supported a party in the Japanese government that wished to seek a negotiated peace. The second world war was more or less approaching to its end.
The second theory sounds well because :

On 16th July 1945 President Harry S. Truman - who had assumed office on Roosevelt’s death on 12th April, – was informed that an atom bomb had been successfully tested in New Mexico. The U.S. military found that no other weapon was so awful in destructive power as that of the atom bomb.
At the same time the military forces of Socialist Russia were rapidly advancing towards Japan – the border country of Socialist Russia – to capture it.

The Capitalist America was now in great distress that the Socialist Russia would not only capture Japan but also convert it a Socialist state. To uphold its supremacy America thought that it had no other choice except to execute two things:

1. to prevent immediately the invasion of Socialist Russia on Japan;
2. Instead, it had to capture Japan without sacrificing any more lives of American soldiers in the invasion of Japan.

In order to fulfill the above aims, the Capitalist America was left with only one option that was to use the awful new weapon – the atom bomb – on the civilians to force Japan to immediate surrender. Persuaded by the military strategy, Truman decided to use the bomb and it was dropped on the Japanese city Hiroshima on 6th August, 1945. About 80,000 civilians were killed immediately. Nearly 200,000 died later of radiation or were maimed for life.On the sudden turn of events, Soviet Russia sensed that Japan would go out its hand though it was within its reach. So two days later, on 8th August, Russia declared war on Japan and crossed the Manchurian frontier as the Japanese army remained committed to a fight to the finish.

Since there was a race for supremacy between Socialist Russia and Capitalist America to capture Japan and moreover Russian army crossed the Manchurian frontier, the Capitalist America was forced to act swiftly. So, a second atom bomb – Fat Man – was dropped on Nagasaki on 9th August, 1945 by Capitalist America. Nearly 70,000 civilians died immediately. The following day the Japanese government offered to surrender. On 14th August the terms laid down at Potsdam were accepted and the Second World War was over.

The truth is still solid and sound that the atom bombs were dropped on Japanese cities not because Japan would succeed in the second World War but because the governments of Capitalist America and Socialist Russia were arrogantly desirous to show their supremacy over the other as their economic systems were quite contradictory with each other. Both Capitalism and Communism wanted to prove that it was their system that ultimately led the Second World War towards victory. This ideological conflict between the America and Russia, at the end of the war, resulted in nuclear holocaust of Japan.

There is no assurance to the people of all countries that another nuclear war will not burst out due to the ideological conflicts between the countries or to show their supremacy or for some other reasons the time will decide. Not only America and Russia but all the nuclear countries do not now wish either to destroy all their nuclear weapons or dismantle the industries which produce such weapons of mass destruction. Under these circumstances and ground realities how can we believe and console ourselves that yet another nuclear war will not threaten mankind and cause to vanish the very existence of mankind on the earth. So, we, the people of all the countries, declare to forfeit our capital from the few capitalists and the State and to keep it with ourselves. When we have ‘direct ownership of capital’ we will not allow our capital for the production of nuclear weapons or any other weapons of mass destruction.

3. Economic Justice in jeopardy and in peril:

When we handed over our capital to a few capitalists, we were under strong presumption, that they would in certain sense, solve at least our basic problems of poverty and unemployment. On the contrary, since the very basic aim of capitalists is ‘maximization of profit’ they execute all kinds of nefarious designs to exploit the laborers and treat them like other business commodities. So with the enrichment of new technologies the capitalists always intend to replace the workers or minimize the labor force by sophisticated machines. The capitalists never show any interest to promote the economic justice in solving the human problems like poverty, unemployment, economic inequality, unequal distribution of income and wealth etc.

But now the capitalists in some way or other have promoted the welfare of society only by way of promoting their own self interest. In other words if and only if the capitalists are assured that their self interest would be promoted then alone they will allow the betterment of welfare of other members of society. The welfare of huge majority of society is always considered to be a ‘dependent factor of a few capitalists’ in the system of private ownership of capital.

In other words the Welfare of Society (WoS) operates as ‘function of Interest of Capitalists (IoC)’. We can write it as

WoS = f(IoC) ……………. 1

The Interest of Capitalists, in turn, depends on their ‘Maximization of Profit (Max o P). So the equation becomes

IoC = f(Max o P) ……………. 2

The Maximization of Profit (Max o P) by the capitalists results in the ‘Exploitation of Working class’ (EoW). It may written as

Max o P = f(EoW) ……………. 3

The Exploitation of Working class (EoW) creates ‘Maldistribution of National Income’ (Md o NI).

EoW = f(Md o NI) …………….. 4

The degree of maldistribution of national income exposes how the workers are exploited in a country. Generally speaking in most of the countries the top 10% of population enjoys 80% of the national wealth and only just 20% of national wealth is distributed to a vast majority of 90% of population. The maldistribution of national income has always kept the vast majority of people to suffer with low purchasing power and in due course it results in over production. Due to over production the producers are forced to reduce their volume of production and level of employment. On finding the disequilibrium that the goods are not consumed at the rate at which they are produced the producers are forced to close their industries. The very aim of capitalists, the maximization of profit, not only crushes them but also the whole society. Therefore, the private ownership of capital will be dangerous to the whole society and the national capital capital should be equally distributed among the people for the welfare of the mankind. So, Betrand Russel says:

“Private ownership of land and capital is not defensible on the groundsof justice or on the grounds that is economical way of producing what the community needs”
– Russel, Bertrand : “Political Ideals” (p ; 35)

Equally the Marxian theory of “State Ownership of Capital” lacks perfection and threatens human rights. Marxian theory is formed on adamant and inflexible principle and it will not coordinate with the changing world conditions. It preaches a kind of ‘economic fundamentalism’ which wants the elements of society to remain in rigidity for ever. So Loucks rightly states:

“Errors in the theoretical of Marxian thought are so serious and so basic that they cannot be corrected by interpreting or modernizing Marx not can they be considered superficial”
Loucks : “Comparative Economic Systems” ( p : 166)4.

Poverty in the midst of plenty:

We, the people of all the countries, have accumulated capital more than enough and the goods that could be produced with the help of that capital is more than adequate to eradicate poverty in the world. The statistics of “World Development Report – 1991” substantiate that if we distribute the goods produced equally among the people of all the countries, each one would receive the goods approximately worth of Rs.300 per day, which is more than enough for one’s needs. But in contrary with this fact, two third of world population is now subjected to appalling poverty and suffering with hunger and various diseases for want of adequate notorious food.

The poverty prevails not only between the countries but also within the countries irrespective of whether the country is developed or developing. As there is darkness below the burning candle so is the poverty even in the affluent society due to maldistribution of income and wealth. John Meynard Keynes criticizes the capitalistic system with this ever prevailing paradoxical element of “poverty in the midst of plenty”. Since the capitalism do not know how to distribute income and wealth equally among the people, the capitalists have no moral right or legal right to keep our capital with themselves. They have to honestly return us our capital and we know how to solve our problems under ‘people’s direct ownership of capital’.5.

Absence of Right to Live:

Throughout the length and breadth of the world we can notice the youth both in rural and urban areas bearing great agony in their eyes, having no value for their education are wandering desperately on the streets in seeking employment. The unemployment has pushed them to strip away their dignity, self respect and equal status among others not only in the society but also in their own family. Everywhere they are treated as insignificant trivial and above all less than a human being. In the economic systems, both in capitalism and socialism, they feel that they have deprived of the possession of ‘Right to Live’ at all.

6. Origin of terrorism and economic crimes:

It is partly true that unemployment generates economic insecurity among the youth. But by and large it victimizes the youth an easy prey to drug addiction, trafficking, terrorism, and other socio-economic evils.
The universal accepted fact is that capitalism cannot solve unemployment. The function of capitalism is such that if we want to adhere with capitalism we have to live with unemployment at certain level. The advocates of capitalism have now proved that full-employment in capitalism is only a myth and mirage. Hence as long as capitalism is prevailing in the world, so long as the socio-economic evils will also be pervading in the world as its by products and they will be deteriorating all the well-nurtured cultural fabrics of society. If we want capitalism, we have to learn to live with terrorism and other socio-economic evils.
7. Economic Equality is a Mirage :

It is evident throughout the world, the economic inequality among the people not only within the country but also between the countries is going on widening with an accelerated momentum. In 1982 the per capita income of developed countries in average was 42 times more than that of developing countries like India and China, but the gap was still widening 56 times in 1989. As the gap is going on increasing the poor countries are becoming still poorer and rich countries are more richer. It is natural not only among the people but also among the countries to develop strong feeling of jealousy and hatred, and an impression of inferiority complex and a sentiment of economic slavery. In the complex and confused modern economic systems, the concept and reality of ‘economic equality’ is rushing over beyond the orbit of one’s reach. In this context, our strategic fiscal and monetary policies are reducing to be insignificant to face the challenges. Hence Jawaharlal Nehru rightly blames the capitalistic system of economy for the economic equality:

“Normally speaking it may be said that the forces of a capitalist society, if left unchecked, tend to make the rich, the richer and the poor, the poorer, and thus increase the gap between them”
- Nehru, Jawaharlal : “The Years of Power” (1960) p;294

It would be faulty conclusion that the economic inequality is inseparable function of capitalism alone; even in communist countries we can notice wide economic disparities among the people. Prof.P.T.Baur states:

“….. But there are evident wide differences in income in communist countries after decades of communist rule. And in Soviet Union (a country often thought to be dedicated to the removal of economic differences), the differences in income and living standards are quite as pronounced as in some market oriented societies and this after more than half a century of mass coercion”.*
-* Baur, P.T. : “The Grail of Equality”

The economic equality is one the three basic necessities of ‘Equality, Liberty and Fraternity’ for the establishment of an Ideal Society. But neither capitalism nor communism do not know any effective economic technique to ensure us ‘economic equality’. Hence I venture to say it is futile to allow our capital to remain in possession of some individual capitalists or the State.

8. No Right to Work :

Invariably the ‘Declaration of Independence’ of all the countries proclaim that man has ‘Right to Live’. On the introduction of ‘Division of Labor’ in the modern production system, no one can produce all the goods that require even to lead a very simple life, or a single whole commodity one needs.

On the Division of Labor, everyone is trained to produce only a part of a commodity for which he can receive his wage and with which he has to buy the necessary goods in the market to lead his life. Since a man cannot produce whatever he wants to live, his ‘Right to Live’ solely depends upon his ‘Right to Work’. But no Constitution of any country is powerful enough to provide ‘Right to Work’ as one of the ‘Fundamental Rights’ because the economic systems that the countries pursue are basically defective and incompetent to face the economic challenges. In the absence of ‘Right to Work’ irrespective of what kind of economic system a country follows, the employers never consider man as a man and not even as a commodity. On the other hand they treat man as a ‘rental commodity’ that can be engaged by paying wages as ‘rent’. The defect of economic systems have reduced man and humiliated him as mean and ignoble thing. With full of depression in heart, P.A.Samuelson exhibits the real condition of man as follows:

“Since slavery was abolished, human earning power is forbidden by law
to be capitalized. A man is not even free sell himself; he must rent himself at a wage” *
-* Samuelson, P.A. : “Economics” (p : 52)

9.Absence of Stable Just Price :

Universally in all economic systems – whether it is market oriented economy or State controlled economy – the prices in the market are behaving erratically and disorderly. Especially the prices of consumption goods of poor people are always enhancing. But the income of poor people is not increasing as much as the increment of price of their consumption goods. Consequently this economic phenomenon is horribly crushing the purchasing power of the poor. Hence the fact is universally accepted that ‘the poor people are born in poverty, live in poverty and die in poverty’ Whenever the governments declare that they have contained or reduced the rate of inflation it seems always to the benefit of the rich. The economic systems, existing now, do not know any economic techniques to sustain a just price level at stable for the welfare of the vast majority poor.

10. Injustice to Working Class:

In Jerusalem I heard the Israeli Supreme Court say : “It is better that ten guilty persons be acquitted than that one innocent person be convicted”.
This legal justice should not be confined only to the courts of justice but it should be equally extended to govern both the economic justice and economic systems. The economic systems, on the contrary, conveniently permit the economic criminals to escape from punishment and in turn punish the innocent workers who perform their social duty.

The utmost duty of a worker is to produce socially needed goods and services only; but it is not the duty of the worker to bear the responsibility whether the goods and services he produced are sold out. On the other hand it is the duty of the consumers to buy the goods and services that are produced for their consumption at a just price and at the rate at which the goods and services are produced for them.
On the contrary, the consumers, as a whole, behave in the market, guided by their erratic psychological factors, create time lags in purchasing the goods that are produced for their consumption and sometimes neglect the goods to buy at all. These negative and duly non-responsive factors affect the economy severely and ultimately result in the stagnation of goods in the markets. Due to the stagnation of goods in the market an equal volume of goods stagnated are not produced in the subsequent round of production. On the reduction of production of goods the workers who have fulfilled ‘the production – duty’ of the economy, have to lose their employment. The unemployment of a worker not only affects his ‘Right to Live’ but also of the whole family that depends on him. The unemployment of a worker ruins the education of his children, their future ambition in life and their morality and social dignity and their future economic security.

The present economic systems are not competent and efficient enough to secure and save the “Right to live” of the workers who have honestly accomplished their ‘production-duty’ of the economy.
To strengthen my argument I like to quote the words of Prof. Mrs. Joan Robinson :

“It is true, with adequate organization there need be no unemployment … There is always something useful that can be done even with a man’s bare hands”*
*– Prof. Mrs. Joan Robinson : “Economic Philosophy” (p : 114)

Joan Robinson too finds fault on the economic systems for wide range of unemployment; in other words, the economic systems that we pursue now are the primary reasons for the failure to provide “Right to Live” to the workers throughout the world. In the present economic systems and economic conditions ‘employment’ and ‘Right to Live’ are synonymous or just the same.
What is the basic cause, today, throughout the world, for billions of youth are crushed by the burden of unemployment? It is the cause :
“Every person, only up to the standard of education and technical training that the society has offered to him, can produce socially needed goods with his bare hands or with the help of small and simple capital that he can afford by himself and thus create ‘self-employment’ opportunities and secure right to live by himself. The creation of self-employment creates an expectation in the mind of the of the worker that the society i.e. the consumers should behave with a sense of ‘economic responsibility’ by consuming the goods at the rate at which he produces, at a reasonable price to sustain the livelihood of the worker. But every self-employed youth knows that the ‘economic responsibility’ is absolutely lacking in the minds of consumers. What is deeply rooted in the minds of unemployed youth is ‘a fear about the future’ that the consumers or the society that he belongs to would not perpetually and automatically accept the goods at a reasonable price that he produces by ‘self-employment’. The ‘fear about the future’ in the minds of the youth who wants to venture in ‘self-employment’ is reasonably justifiable. Due to ‘fear on the future’ the unemployed youth are not venturing in self-employment competing with the highly sophisticated industries. It is then whose fault if the youth are unemployed? The present economic systems have no economic techniques or ‘action programs’ to evacuate the ‘fear of the future’ in the minds of the unemployed youth and to induce ‘economic responsibility’ in the minds of society to save the ‘self-employed’ youth from the competition of well-organized industries.

I have to point out it is the fault of the economic systems for the cause of unemployment and moreover I wish to state that the capitalists and equally the governments should not lay blame on the ‘fate’ of the youth for their unemployment. On the other hand the capitalists and the governments are persistently blame the fate of the youth and try to escape from their ‘economic responsibility’. So we have no other alternative except to forfeit our capital from the them and retain it with ourselves as we know perfectly well how to solve our unemployment and other economic problems.

11.Economic Gambles:

The basic intention leading for the invention of money is it should be used as a ‘medium of exchange’ in buying and selling goods and services. On the contrary, our present economic systems have invariably paved way for the money not only to be used as a ‘medium of exchange’ but also at a large extent as a ‘Medium of Economic Gambles’ throwing away the honesty and morality of societies to the winds. The multi-millionaires, today, have idly and futilely invested billions and billions of money in the stock markets as a medium of gambles uprooting the very noble function of money. The electronic media and the news papers extensively propagating the stock market indices for the benefit of the rich gamblers, the economic criminals, who want to earn quick and easy money with out shedding even a drop of sweat. The present economic systems have accepted this kind of economic gambles without any shyness.

In addition, in the cradles of civilization, especially in the places of sports and games like cricket stadium, Tennis courts, Football grounds, Boxing arenas billions and billions of money are set into circulation as a ‘medium of gambles’. With the help of the ‘capital-power’ the capitalists today have vigorously transformed the noble arts, skillful sports, beautiful games and wonderful cultures into easy-money-earning centers instead of promoting these symbols of civilization. The capitalists in the name of ‘promoters’ have developed strong hatred not only in the minds of ‘players’ but also in the minds of ‘audience’. This kind of economic gambles is now rapidly spreading like dangerous virus in all four corners of the world. For example, the ‘Statesman’ in its 10th October 1978 issue states as follows :
“Britain is a gambling nation. Nearly 94 percent of population indulge in an occasional flutter on races, at the gambling tables, on foot-ball pools or on a variety of other sports. 39 percent of all Britons are habitual gamblers. In 1977 an estimated $ 800 million were stated on races and gamblers. In 1977 an estimated $ 800 million were stated on races and other sports”. Instead of producing socially needed goods and services and creating employment opportunities, the capitalists are utilizing ‘our capital’ for economic gambles extensively and demoralizing our long cherished cultures and civilizations throughout the world.
The capitalists now adopt a new business strategy to exploit the consumers : ‘First kill the civilization and then sell the goods’. The capitalists know the consumers will become a easy prey for sexual exposition. So they in all their advertisements use ‘women in half naked beauty’ to enchant consumers to buy their commodities. We know the capitalists are misusing ‘our capital’ to ‘sexually assault’ the consumers to maximize their profit at the cost of cultural destruction and spreading demoralization. With deep mental agony I like to state that millions of young women have now turned as prostitutes as a source of employment and the International Labor Organization (ILO) now recommends to accept prostitution as ‘flesh industry’ which contributes reasonable amount of foreign exchange for many countries.

12.Class distinction and failure of economic machinery :

In lieu of promoting fraternity among the people the present economic systems create various class distinctions such as 1. proletariat and capitalist, 2. consumer and producer, 3. savers and investors. The class distinction between proletariat and capitalist is always underlying at the bottom of strikes, lock outs and innumerable industrial disputes. The class distinction between ‘consumers and producers’ is attributable for the failure of determination of ‘just price’ in the market and for uneven distribution of goods among the people. The class distinction between ‘savers and investors’ is harmfully preventing the requisite acquisition of investment to eradicate poverty and unemployment expeditiously in the world. The present economic systems are full of contradictions without which they can not function. Our capital in the possession of few capitalists and the State is the root cause for all class distinctions. Once the capital comes under the ‘direct ownership of people’ all the class distinctions will disappear

13.Maximization of profit destroys morality of society:

In the present economic systems the industries project their ‘volume of profit’ as the ‘balance of judgment’ of their determination of ‘industrial success’ The industry which earns more profit is considered to be more successful. The mental attitude forces the capitalists even to destroy the natural environment extensively in order to produce goods cheaply. With the sole aim of maximization of profit, the capitalists have no even an iota of concern over the future welfare<

Romania – famous for its beautiful palaces and castles, wonderful liquors and food, Dracula, dazzling women is a beautiful country located in central-eastern Europe. It is the 12th largest country in the Europe. The economy of Romania has shown potential growth in the past few years. Since 2000, Romania has shown a rhythmic growth of 4.5% raised by 8.3% in 2004.

The current economy statement in Romania is steadily increasing the levels of GDP and significantly high levels of Foreign Direct Investment (FDI). The economy investment grade has recently been upgraded by Fitch and P&S. Romania benefits from the rising FDI flows due to the privatization process, and the advantages of its big internal market

Romania is also having a great geographical location at the intersection of some great trade routes joining the Far East with the Western Europe. With population of more than 20 million people, Romania has a large domestic market. After having such great property investment opportunities, Romania is continuously attracting more and more foreign investors to invest in Romania. Stable and encouraging government of Romania is the other reason which is creating great investment opportunities in Romania. The Real estate market in Romania is growing at a rocket speed. Following are some best reasons for investing in Romania.

Reasons to Invest in Romanian Real Estate Property:

1. With strategic and visionary efforts by Romanian government, the economy is becoming stronger and stronger over the years. Romania is one of the fastest growing economies in Europe.

2. Falling inflation and increasing employment are two other boosters of rapidly growing economy. Inflation has dropped to 7.5% low in 2005 from 22% high in 2002. Unemployment rate also fell to 6.2% in 2006 with less than 3% in capital Bucharest which is far lower than the many other developed European economies. With under control inflation and falling unemployment rate Romania is confidently creating the strong property buying opportunities over the country.

3. Foreign investment in Romania is increasing drastically. From 2001 to 2005, foreign direct investment in Romania has reached over 5000 million euros and more 8000 million euros added in 2006. With 55% of FDI in capital city Bucharest, major companies from all over the world are coming to invest in Romania.

4. Along with capital city of Bucharest, other cities in Romania like Brasov, Transylvania, Craiova, Constanta and Iasi are also attracting investors. Transylvania is the Romania’s biggest tourist asset and the expected to attract more investment with immense number of investment opportunities. One more golden opportunity where investors want to invest is in Brasov, the most visited city of Romania. Having facility of international airport, Brasov is also linked with new motorway for fast transportation.

5. Report given by investment experts says that house prices in Romania are expected to increase by 4 times higher over the next 10 years. In past few years, property prices are already raised by 25%. Even such a great rise, property price in Romania are still 20-30% lower than the other eastern European countries.

6. After accession to the EU in 2007, the real estate market in Romania has been influenced dramatically. EU funding to Romania has been invested into the infrastructure development in road, hospitals, schools, bridges etc. EU funds will help to create more jobs and therefore potential customers seeking to buy/rent properties.

7. Low tax rates are the other main reason to invest in Romania. Romanian government has set up a flat rate of only 16% for corporation and income tax. Such low and fixed rate of tax is powering Romania to draw more foreign investors seeking for new business places.

Some other secondary factors are also responsible for great investment opportunities in Romania. Romania has great network of international airports with two in capital Bucharest. Developed and fully facilitate ports in Romania is also boosting its economy drastically. Romania has huge network of telecommunication systems equipped with modern telecommunication equipments. Also there are nearly 48 industrial parks.

As far as it looks, the boom is yet to come! Buying property in Romania will be great ROI in near future. So what are you waiting for? Invest now in Romania for your better future.

We Buy Your Business

For some, planning a business exit can be a predictable, methodical process. We know the competition; we understand market demands, know when we want to sell and might even know the actual date. But for far too many business owners, the business exit comes as a harsh reality and often unplanned event.

Protecting your business and assets against the dreaded six D’s of an unplanned business exit can give whole new meaning to the term “Disaster Management”. While every business may experience unexpected pitfalls, careful planning to ensure risk exposure is minimized can assist in keeping you in the driver’s seat when it comes to managing your company. Familiarize yourself with the six D’s of an unplanned business exit: debt, death, disability, divorce, departure and disaster. Know the enemy and look to address all six D’s in your operating and buy / sell agreements.

The Six D’s of an Unplanned Business Exit

Debt:No one goes into business and plans on it not succeeding, but 40,000 businesses fail every month in the United States. When debt exceeds revenue, it is critical to exit timely in order to minimize loses. Understanding limitations and protecting critical assets are key to successful divesture.

Death:Many businesses are solely dependant on their owner’s abilities, relationships, and passion to drive success, and when there is a death of an owner or partner of a business, it can have significant impact to a business almost immediately. While no one wants to consider their own demise, the strength and longevity of a business relies on being able to plan for such a critical loss even if it means downsizing or reorganization. The survival of a business in relation to key individuals needs to be evaluated and exit strategies planned accordingly.

Disability:Unbelievably, death is not as likely to end the business as a disability. A disability to a business partner can put a significant drain on cash flow, daily workloads, and excess down time, all of which can be devastating. Insurance and financial planning towards alleviating such an impact needs to be carefully evaluated especially when dealing with small business start ups where funding and resources are limited.

Divorce:No one wants to plan for a business or personal divorce, yet while Pre-nuptial agreements may be gaining in popularity many people never look to manage such impact to their businesses. What happens when the partners cannot get along? Or worse, you inherit another partner due to a personal divorce settlement? Exiting the business might be the only alternative you are provided.

Departure:It does not sound as bad as death, but it can wreak the same results. A partner, key employees, or other resources decide to go to the competition, retire, burn out, or win the lotto. When they leave, how does this impact your business going forward?

Disaster:If the five D’s above where not enough to impact your business, there are no limit to the other disasters that may occur that were never planned on: robbery, sickness, employee theft, employee turnover, natural devastating events, etc. In today’s post Katrina, 911 world the impact of the chaos theory is enough to keep even the best business minds awake at night. Plan for the worst; strive for the best and know when to get out if need be.

For the typical business owner, each one of the six D’s has special demands on the family, income, taxes, and control of assets. An agreement, commonly called buy/sell agreements, can be used to plan for the impact associated with the dreaded six D’s. A successful sustaining business exists as a separate entity from personal concerns and risk can be reduced by developing mutually fair and equitable agreements prior to these events occurring.

Business is an evolution and travels a diverse path. While some may look on an unplanned exit as a failure others may see an opportunity for growth and freedom.

www.WeBuyYourBusiness.com

To achieve financial independence, experts encourage even currently employed individuals to consider entrepreneurship. Setting up your own business, no matter how small, is touted as one of the best ways toward building the foundation for wealth. Those who are concerned about having a safety net need not take the plunge recklessly. One can start setting up a small business even while employed.  

Of crucial use to small businesses are credit card services and small business loans. The entrepreneur needs to know how to avail of these tools and how to effectively wield them for maximum business growth.

Credit Card Services

A small business would do well to get reputable credit card services in order to prosper in the current business climate. Availing of credit card services will enable it to accept both credit card and debit card payments. This is true either for brick-and-mortar businesses or internet based online businesses. After all, most consumers nowadays routinely use credit cards or debit cards for payment purposes. It only makes good business sense to be well-equipped for the needs of credit card users and debit card users as well as for the needs of customers who pay in cash.

Merchant services provide credit card services covering a wide range of solutions for the processing of credit cards and debit cards as payment options. These credit card services include traditional terminal equipment at point of sale, where credit cards or debit cards are swiped. It also includes software and high speed IP solutions for both traditional commerce and e-commerce. Credit card and debit card payments can, therefore, be accepted in person or through the internet, by phone or by fax.     

Small Business Loans

Any business – whether a small start-up business, a medium-scaled one or a big business company – will be needing an infusion of additional capital sooner or later. Additional capital is always needed for expansion, additional inventory, additional manpower, new systems, new equipment or a new physical layout.

Capital is not always easy to come by, though. The original investors’ personal coffers may have been emptied by the earlier outlays. Prospective investors may not be keen on shelling out funds in times of crisis. Businesses, therefore, have no choice but to seek business loans.

Getting business loans is a difficult process. Even small business loans are not readily approved. Be prepared to present a lot of documentation and paperwork. For small business loans, the proprietor’s personal credit history is taken into account and related references need to be submitted. Of course, the company’s financial statements are just as important in proving the feasibility of the business and its capacity to repay its business loans. Having a detailed business plan will show your business strategies and projections, demonstrating your business acumen.

Unfortunately, even with all the requirements completed, applications for business loans – including small business loans – are, more often than not, disapproved.

Solutions

Some merchant services provide a comprehensive solution for the needs of small businesses in relation to credit card services and small business loans. The set up is elegantly simple. A small business need only avail of the company’s credit card services to be eligible for merchant cash advances. These cash advances are actually small business loans, except that there is no need to go through the complicated application process for business loans. Repayment is made very easy and worry-free, too. A certain small percentage is built into the credit card processing rates to take care of the advances. This way, repayment is actually done automatically in a very affordable manner and according to income flow.

Small business owners would, indeed, be wise to look into these timely business solutions.

Important appropriateness of  development of modern economy is its cycled  character. Puriny every structural crisis of the world economy new opportunities are formed. Capital of the countries, which were leaders during last cycle, is being devaluated. Qualification  of lab our forces in field using old technologies are being ruined, while the countries, which managed to create innovational potential proved to be in the center of attracting capital which is independent from the old production. Consequently, the countries that implemented  scientific-technical and industrial capital investment policy in prospective fields will be given a competitive advantage. The realization of  this policy in the phase  of structural crisis gives its authors the opportunity to achieve  economic growth on the  basis of competitive advantage.

Basic scientific and radical innovations are recognized as the main means of overcoming structural crisis, that are implement thought acquiring new achievements and rising the effectiveness of traditional development .

In order to move to the stable stage of economic develop it’s important to increase innovational-investment act vitas and to involve new technological directions and basic technologies at trajectory  of firm economic development. The economic policy that is oriented at encouraging  investment, in innovations provide modernization of economy, also gives rise to its competitiveness.

Innovative way of development in investment policy. Thus, the main importance is given to the innovative type of development, that implies the growth of government role in exercising investment policy. Highly development countries. Take the responsibility of financing fields like fundamental  science and high-risk research, as well as the development of scientific research infrastructure. Spreading new ideas and educating population. The implementation of this functions takes place against the background of high-scale investments. that creates favorable conditions  for production growth on the basis of scientific innovations.

Currently, the government tries to develop institutions that will support vestment in new  technologies, stimulate innovative activities, encourage progressive technological changes, that unities financial tab our and informational recourses.

Currently government  tries to create development institutions , which will support investments in new technologies, stimulate innovative activities, encourage progressive technological changes, that unites financial, lab our and informational resources. The state may avoid the responsibility of developing   the production activities , where special markets and competitive relations are formed. At the same time it must encourage new, high-risk directions of investment activities, that pave the way to creating production on the   basis introducing scientific and technical achievements.

For example the wave of economic regulations that spread from developing countries in the late 8 th lost century covered the traditional branches of economy but it had no connection with high-technological sector, conversely the importance of direct state support institutions for innovation activities were risen. At the same time, the importance of working out state strategy for scientist technical and social economic development grows. The state aims at creating enterprises , that will manage to gain com putative advantage over the companies of inner and foreign markets. They  must consentrate their resourses on prospective  fields of production.

The direct instruments of state influence are oriented at supporting  private initiatives and innovative enterprises that will stimulate investment activities in certain fields and production initiatives.

The necessity of financing science and its current condition:

Active investment process, especially in scientific and technological fields, innovative and scientific-technical activities lays in the foundation for economic growth. Nowadays the decline in scientific technical potential is caused by  the fact that there is no more unity between scientific researches and their usage  former. scientific staff has been dismantled  and number of intellectuals have left the country.

Consequently, the country becomes more dependent on foreign trader.

So, in order to create favorable conditions for economic growth capital renewal is essential, but it’s very complicated, because of  the decrease in state financing and absence of ordering production, Science and education have no inner resources for development.

During the last few years there has been significant  reduction of scientific and educational research expenditures. As a result, the share of expenditures in GWP spent on science in 1999 amounted to 0,97%, which is twice less than in 1990. In 2006, the expenses spent on educational field amounted to only 1,5% of the GWP, which is the lowest index among the transitional countries.

Significant reduction of company’s demand on innovations resulted in increase of financing Scientific field from the state budget. Budgetary expenditures on scientific-research and construction work have been absolutely reduced and they are tend to decline against the GWP as veil as the budgetary share of the expenses. The degradation of Scientific potential is proved by sharp decline in expenditures used in research and construction work pond it resulted in dropping behind highly developed countries. Expenditures on Scientific research in the USA (1998) amounted to 794% per person, in Japan – 715. in Germany 511 and 611in Russia, whilst in Georgia it only amounted to 2,8%.

Due to the sharp decline in financing the Scientific field, renovation of scientific facilities detoriorated. The salaries in Scientific field were decreased, The coefficient of renewing main foundations in Scientific technical field significantly dicreased. According to the latest statistical data, 311 ml. Gel was invested in renewing main capital, that amounted to 60% of all the capital invested, in Georgia Instead of renewing Countrys technical market, most of the capital was invested  in activities connected to local market. 29% of this capital was invested in real estate and construction worth.24% in transportation and communications The problem of heeping, supporting and developing fundamental and research centers of science aggravated. During the Soviet era 20% of production was created in the USSR, but now Georgia’s shave in the  World scientific production in only 0,3%.Implementation of innovations require a wide range of activities, from doing research to producing new output. Priorities of innobative activities change at every stage of economic development.

In order to achieve economic growth in current conditions in the country. it is necessary to develop scientific innovations that create new and don’t take into consideration current directions of technological development This lays the foundation for putting so-called innobative multiplication into motion. which is connected to investments and results in production increase. that creates improved scientific innovations. They exchange old technologies. Introduction of this innovations is exercised by new investments, that encourage the further growth in production. Thus, innovative multiplication makes good influence on production growth and takes the economy out of depression and leads it to a long-term development stage.

Distribution of investments on Scientific – technical works.

It’s relatively typical for developed countries to distribute private and state capital investments even on scientific and technical works. For example, The USA’s private investment share in innovative market amounts to 50%. Similarly, according to the figures of state Expertise, 10% of innovations is given a strategically important status and accordingly they are financed from government sources. Japan finances 33% of all scientific research, 73% of scientific-research and constructive works is implemented on the basis of self – financing in the USA, in Germany this index amounts to 70%, in Japan and UK 62%, France and Italy 57%, So the only possible mechanism for promoting social and economic development is it’s technical modernization and move to innovative type of development.

Technical modernization of equipments and their reconstruction requires attracting important investments in innovative field. Here it is important to activate state policy on scientific and technical branches and to work out important directions for scientific-industrial development of economy. AT the same time, the state, that takes important part on technical modernization of the economic sector must take the responsibility of financing fundamental sector of science and high-risk researches, restore activity of  science financing from the state budget and develop scientific infrastructure. In order to define the proportions of sharing investments its essential to focus on cyclical development of economy and, on Intensive types of re-production, that is reflected on the statistical law of dividing expenditures, for example, spending on fundamental research, applied work, capital investment amounts to 1:3:9:27.

Statistical law of resource division in accordance with scientific-technical potential is used at the production development stage where scientific and technical progress is achieved by practical laws, which help to solve the problems of production stabilization and development.

The reason of decrease in scientific potential the decrease in scientific potential in post communist countries is  caused by lack of restructuring  scientific organizations privatization of research centers has   not brought any desirable results. The reason for this is that enterprises don’t order them to do research. Simultaneously,  scientific staff has got older, the last tend years science suffered from loosing its intellectual potential. In this case, it will  be reasonable to merge different scientific organizations and some research institutions must be transferred to enterprises to manage , in this way  scientific technical potential will become much  stronger.

The sources and ways of funding science restructuring research institutions and dividing it into firms with developed financial, economic marketing and commercial infrastructures will increase the practical use of research work results. Contract based applied science makes the realization of  scientific technical projects they will be implemented at the expense of the state budget, non state expenses attracted by Ventura, sharing  other financial mechanisms. The question of mobilizing these sources  can be solved on the basis of aimed, scientific and technical programs on regional and federal levels in accordance with the market demand.

They can be implemented in the    form of portfolio investments using stock marked tools. Providing  the state with grants and sale guarding institutions by investment agency and trust management has practical  us eye. For forming non budgetary recourses for financial    innovations it is necessary  to use amortization funds on renovation in the part, where production expenses, especially those. spent on research and innovations. are taken into consideration as well as the expenses of wearing out financial expenses , that is included  in the production cost and is reflected on the production prize. In addition to that revenues that  came from selling scientific-technical production, or having the right to own intellectual and industrial units as well as the revenues from scientific and technical units and selling the right to own them must  be considered, too.

The role of innovation foundations .

Practical usage of abovementioned sources is implemented according to the special rules and amounting , on the basis of used methods. The expenses received from these sources are transferred  to a separate  sub account `innovation foundation”  Greeting. State funds for innovations which is aimed at realizing prospective directions  of science  and technical development enables to  work out modern competitive production and organize its production. besides using state budgets expenses,   other  market mechanisms for attracting investments are used as well .

Nowadays mechanism for investing in innovations are used only in case banking structure , which mobilizes recourses and regulates this use in science is taken  into consideration banking  structures directed at investments, accumulate vast sums through creating consortiums and other financial and investment institutions, in order to attract own funds for innovative programs of investment. On condition of Budgetary deficit banks au the phases of innovative   cycle and provide insurance service. Participation of banks in the field creates extra   stimulus for different firms. No other structure manages and controls innovative recourses as the banks.

Effective use of stock market instruments provide opportunities  to attract investments in innovative field. Its main aim is to divide investment recourses among fields and provide inner and foreign  investment flows in more prospective sectors of national economy. Transitional economy doesn’t provide the conditions for populations to transform their savings  into innovative investments and provide economic growth. Monetary potential saved in the country is practically unused. According the same data the amount of savings is much more higher than in the USA and west European countries. In order to invest funds existing in the country in essential sectors of economy it is necessary to make the forms of collective investment perfect, it includes. investment share  funds, credit contacts joint stack and commercial funds . After that government should control their activity and they must draw their . attention to new forms of scientific-innovative and investment forms.

Main stages of innovative development.

Innovative development of economy as any process must be oriented at its stages, levels and phases. First of all the technological basis of the field  whose production has more demand on the market must be renovated. At the  same time the market is expanding  with importing goods, introducing innovations that is oriented at modernizing  recourse-saving technologies and improving consuming qualities. So at this stage our main aim is to create infrastructural and institutional grounds for firming scientific technological  potential. than we have to organize the enterprises that produce and sell new technological range-that enables the country  to restore its positions on the world market of scientific technologies.  Simultaneously the role of the country in production and investment activities that is directed at commercializing innovations must be strengthened. Little  by little of will move from supporting  quantity aspects of scientific technical field to quality aspects and to new  forms of engineering, that use  modern informational technologies.

Main directions of state investment innovative policy of the state in future main directions of  state innovative investment policy are: 1. choosing national priorities of innovative field development for realizing innovative projects, choosing the projects of technologies that influence production growth and rise in country’s  competitiveness. 2. Coordination of activities of  legislative and  executive bodies to work out complex approach to solve this question concerning country’s innovative development, effective functioning of innovative systems and implementation of state’s innovative investment strategy.

3. maintaining and developing scientific and industrial-technological potential of fundamental science, working out employee’s training system for maintaining and developing modern scientific and technological level and developing science to a higher level.

4. Providing favorable economic and financial conditions for activating innovative works, developing ventral, engineering and investment-industrial activities and for rising competitiveness creating  favorable conditions for investing in innovation field enables  modernization of scientific and technical basis of national industry as well as rising the competitions of the country.

New directions of innovative activities and priorities of innovation policy consists of three stages. At on initial stage the main goals are reproduction of the technical basis of the field whose production has stable demand on the market than market expands by producing the goods that replace the imported ones  innovations  are oriented  at modernizing the enterprises, that  use the recourse-saving technologies and improve consuming qualities. So at first it’s necessary to create economic infrastructural and institutional basis for moving to investment stages of state development. At the second  stage the enterprises  that realize the technological order are created. After that the production is introduced on inner and foreign markets that  makes production competitive in the sector where national product were not presented before, and it creates new scopes for demand, where national products dominates to must the demands. At this stage country’s activities are directed at attracting high-scale private investments, creating necessary infrastructure for investment-development their support and perfection.

At the third stage the following important questions must be solved. Country’s support for innovative infrastructure, creating conditions for demand on national products, informational support to enterprises making stable contact with science and industry.

New ways of implementing scientific-innovative  and engineering activities.

A State focuses on new forms of scientific innovation and engineering, that use modern informational technologies and little by little they move from quantity aspects to quality ones, that are implemented in the following way:

1. Maintaining and developing scientific and industrial potential and using them in achieving modern technological level.

2 Choosing rational strategy and priorities for developing innovative field. Implementation  of critical technology and innovative projects in the fields that  influence the effectivness of production and their competitiveness.

3. Creating favorable economic and financial condition for activating innovative works, legal industry and competitiveness.    

-           To implement this measures following practical activities must be exercised:

The process of providing information must be radically improved and commercial structures must be involved in developing scientific educational and innovative activities.

- reconstructing the part of research and project institutions and closing the places working ineffectively.

- Creating the system at venture investment. state support of venture business in scientific technical field is necessary until the industry get interested in them.

- Developing the system of noon. state innovative risk and private  supplly, creating insurance groups within the framework of financial-industrial groups, that will undertake high-risk insurance, that is linked with creating innovative production. insurance companies, together will share the risk.

- Using modern methods for prognosing engineering and scientific production marketing.

-  Developing small innovative business by creating favorable conditions and infrastructure for setting up small enterprises and their functioning.

- Creating suitable legislation, that will regulate relations in intellectual  property field, work out normative acts that are directed at exercising state policy. It foresees involving the results of scientific-technical results in industrial circulation, that is implemented at the expence of the state budget.

- making typical state contracts in order to balance legal interests of the participants in the process from the point of using scientific-technical results.

Thus, following the innovative way of development, must not be the only factor white  working out investment policy. In connection to that, the role of country is defined by creating the mechanisms, which forms national innovative system and develops innovative production.

Creating favorable conditions for developing innovations provides modernization of technological basis of the economy and grows the competitive of national production.

- Preparing typical state contract for balancing legal interests of those who participate in the process of using the results of scientific-technical work.

So the main factor while working out investment policy is to move economy to the innovative way of development. In this regard a country’s main role is to create the mechanisms, that will provide the formation of national innovative system and development of innovative business, that will make the modernization of economy’s technological market of the economy possible and will give risk to competitiveness of national production.

The formation of adequate investment activity model in the market system of economy provides replacement of investment recourse division with new forms of investments. For its part it has to work out the investment policy, that will accord with changed economic conditions.

Official concept of reforming Georgia’s market economy is based on simple monitory principles. Their realization was expressed in size minimizing the country’s role, robotizing foreign economic activities, privatizing state property and forming market structures.

The principles, boundaries and forms of state participation in investment activity

Analysis of Georgian-economic conditions shows that solving important problems in country’s investment development is impossible only on the basis of self regulation, that is distinguished with its low quality. A state needs to strengthen its role in the field of investments, correct economic policy.  At the same time state participation boundaries in the investment process must be defined by taking the way of economic development, that is characteristic to the period of moving to market economy, into consideration conditions of strengthening the state role in the investment process.

Analyzing the possibilities of strengthening state role in investment process, we must take into consideration the fait, that counting’s participation in the process has same boundaries, these boundaries are defined by real financial possibilities, on  the other hand the country must encourage the process of attracting investment rather than blocking them. State participation in investment process is not the same as turning economy to administration process. It implies the increase of a long-term policy of the state, effectiveness of particular activities in the conditions of encouraging investments.

The topic of state participation pineapples in the investment activities is closely linked with limiting necessary financial potential for investment promotion Approximate calculations show that in order to restore the amount of investment to the pre-reform level, foreign investment growth is possible. According to 2002-2012state program in the next five years 10 $ are expected.

As we have at ready mentioned the role of the country as the investor in the market economy is maintained for the fields that are vital and important. More importance is given to regulating the investment process in the way, that creates favorable regime for private investors activities.

The conditions existing in Georgian economic investment strategy is oriented at moving from stable investments to creating necessary investment environment for private investors. These two parts that are essential for the state investment policy must support prosperous fields of production and the policy must have systematic character. 

Defining strategic priorities of investments.

 On defining strategic priorities we must take into consideration competitive advantage exiting on the world market, that is reflected on high-technologies. The brunches which maintain potential advantages are: energy sector, turism, agricultural machines and technologies, food etc .

Investing in innovative production will encourage new directions for investment flow, rising production level and encouraging economic growth. This approach is well known in the world products. Our priority must be effective programs that meet inner needs in economy, in this regard we  have to support national enterprises, and the development of vital brunches of economy.

At the same time it must be taken into account that in the world integrated economy, development of investment cannot be stable and increasing source of profit in producing rival products only in the inner market.

Significant  condition of effectiveness in the state investment policy is to work out the conception of structural alteration in industrial sector. It’s especially concerns about such prioritative approaches according which must be defined the reform strategy and mechanism of industries from different groups, supporting forms and methods from the state, organization models of industrial structures in accordance with real, amongst them institutional conditions in the world economy.

The basis of economic growth and quick development can be large corporations, that have scientific – technical potentials in mobilizing resources and effective  integration possibilities in the world industrial unions. Small business industries, that have really important meaning for the function of market economy, nowadays are singled out with extremely low technical level and lack of investment resources, that make it necessary  to quest  their place in industrial chains of the large structures. The formation of stable and effectively developing, diversificational, corporative unions and financial-industrial groups demand state supporting reinforcement of corporative circle from the state, amongst  them even by means of participation of corporations in the capital. Development of corporative forms will help the realization of long term industrial programs, and create conditions for the stable economic growth.

Stirring to activity of stake investment politics. At a modern stage, stirring to activity of stake investment about the stable economic growth in the basic condition of Georgian economy. Essential approaches of stake investment politics are: the reinforcement of supporting in prroritative tendencies of economic development formation of justifiable and economic conditions of stimulating the interest of investments in the real sector of economy and the agreement between central and regional investment politics.

State investments and supporting in prioritative tendencies of economic development. The realization of up-to-date tasks of economic development demands more active state backing of investment field. Simultaneously, the importance of state investment must be growing up not as mush from the standpoint of size of centralized sources, but from the positions of state guarantees, insurance and orient list of private investors.

The problems of investment budgetary financing. Budgetary financing of investment activities has still been happening on the basis of these approaches that essentially limit the state influence on the course market alterations and structural changings in economy.

Herewith, these shortcomings are not as mush conditioned by restricted possibilities of budgetary system, as by complicated and wrong strategies of sharing centralized investments and the lack of effective control of their usage.

Failures in the state investment politics make it necessary to solve this problem, as afterwards not having orientation or having defective one becoming the problem investors. Analysis confirms the existence of distinct dependence between state priorities and investment motivations of private investors. that must surely be taken into account while working out on perspective tendencies of investment politics. Otherwise  it will be impossible to make ground for stake investment politics and for the agreement of investors’ interests of different levels. Reserved dimensions will again have more passive character and will not guarantee planned results. It must also be mentioned that insufficient or unsystematic backing of separate manufacturers or regions, falls down stimuli of accumulation and afterwards self-financing process and it prevents the formation of business executives market behavior.

While analyzing the problem about the possibilities of manufacturers’ investment support it is impossible not to take into consideration the extreme restriction of budget/ At the same time, modern conditions, the increase of levels in the realization clearness and confirmation of investment politics and consideration of budget planning reality are not less important.

In Georgian economy. where unreliable forms of calculation dominate. it is difficult to male real prognoses about the mass index of money. Budgetary politic is being worked out in the conditions of complicated factors, that aggravates the difficulty of real budget formation and fulfillment of the received one.

State investments, as in the realization of economic growth of prioritative factor; usage of international experience will not be perspective without mentioning up-to-date conditions of Georgian state finances and the inevitability of budget  system alternation. e.g. one of the successful example of economic reforms is the experience of Germany. Its budget system is well formed and it is manifested clearly in the distinction of current and investment expenses in the control of pure usage of budget sources in establishment and protection of maximum size of budget deficit financing at the expense of credits with the sum of for seen investments expenses. This method is called “golden rule” and is established the 115th article of the basic law of Germany.

In Georgian economy, as it is clear from the results of reforms, the compensation of the growth of state non-productive expenses was not happening, correspondingly with the growth of budget investment expenses. On the contrary, it was one of the factors, that conditioned the reduction of state centralized investments and weakening of state investment function. In accordance with, the usage of state investments as the factor of economic growth, requires essential changing’s in the organizations of budget politic and budget system.

While working on the budget, it is necessary to define the prioritative tendencies and use the forming principle of the normative that define the levels of budget, according to the singled out tendencies; division of current and investment budget on the normative basis, denial the possibility of exceeding expenses over incomes while planning the budget; strict definition of sources, how to cover the investment budget deficits. It is also necessary of budget on the usage of sources in control realization technology, in order to reinforce the frscal role of budget fulfillment.

An  important problem, connected to the usage of state investments is their low effectiveness compared with the private ones. While sharing the state Financial resources, used tendencies do not help to increase the effectiveness of investment and restructure national economy.

In the organization of investment process, lack of systematic ground and insufficient quality of budget planning caused permanent  failures in financing the state investment programmers.

This fact approves  that, it is necessary to reinforce the role of selective approach, gather state investments towards the strictly defined prioritative approaches, keep strict control and select competitive projecting during state investment.

Selecting mechanism of investment projects on the basis of competition/ In market economy, where basic criterion of investment is the effectiveness of investment, it is impossible to use the old technologies of sharing unpaidly, among enterprises in centralized capital investments, which don’t stimulate industries to improve their effectiveness, as direct state investments are less effective compared with the private ones. Thus, the most acceptable approach is the state supporting to private investments.

State supporting to private investments is realized in these investment  projects by means of the partial participation of the state, which have passed the competitive casting. The goal of centralized investment resources on the competitive basis is the reinforcement of investment assets, mobilization of private national and foreign investor’s capital towards the prioritative approach in economic development, and the growth of effectiveness in all forms of property such as commercial, budgetary and national-economic investments.

A new rule of financing investment projects in the financial ensuring of investment competent project, gives the right to investors to choose the participation forms. These forms can be as follows:

State investment revocable two year-term credit; its payment percent for the usage, compiles ¼ of central banks refunding rate;

to strengthen the port of these shares of an oncoming enterprise in the state property, that is sold in the market from the income of investment project during two years and the income obtained in this way goes to the state budget.

While taking decision about giving funds from central budget, a leading criterion is to insure the setting of object (industrial powers) into action in the given term, in the conditions of decreasing funds, attracted from the state budget and to increase the effectiveness of the usage of centralized resources.

The obligatory conditions, to present investment projects for the competition are:

In the total amount of money, spent on project realization, the share of centralized investment resources must not be exceeded more than 20%, it must be ensured at the expense of private investor’s own, attracted and borrowed funds.

In total amount of common expenses, investor’s own share mustn’t be less than 20%.

In the field of investors’ supporting, new approaches such as connection to the certification of investment projects, giving state guarantees, creating the budget for development are used.

Certification of investment projects, defines the possibility of increasing state supporting share up to 50%, while such analogies are not producing industrial products for exportation about 30% – for importation, with less price.

In the conditions of budget funds restriction, many investors consider the state guarantees of certified projects, as the most desirable form of state supporting. Guarantees secure about refunding not the total amount of money of risk, but part of it, in case of failure the effective investment project realization, due to the reasons that are not in investor’s compensation; On its side, investor must present counter-guarantees, amongst-mortgage.

Development budget can be formed as the special instrument, that collects investment resources of state budget in order to finance investment projects and attract the funds of private investors.

Development budget resources can be used for partial financing of investment projects, at the initial – competitive, valuable and refundable stages, also the borrowed funds for giving state guarantees on the competitive basis. (When upper limit of guarantees compiles 40% of borrowed funds).

In the competition of procuring the funds for development budget, such investment projects should be taken, that satisfy the following conditions:

Correspondence of development budget to the goals;

Security of positive meanings of pure discounting income;

In the total amount of money for project realization, investor’s own share mustn’t be less than 20%, but for large projects (more than 50 million $ – less than 30%.)

In the countries of developed economy, as a rule, examination of investment projects is made by experts, invited by investors themselves or by the participant financial institutes of project financing.

Selective, restricted supporting of prioritative approaches in industrial development by governments and the competitive selection of effective projects gives distinct results. Foreign experience proves that, such measures, as a rule is an efficacious stimulus of investment attraction and helps to realize projects.

Governance of state property in the state economic sector.

Governance of state property, as the factor of investment effectiveness in the state economic sector. Activation of the state role in the investment field, implies the development of state governance, reaching quantitatively higher level, restructurization of state sector and development for investment providence.

In must be said that, in the countries even under developed market economy, the governance of state sector is fulfilled under strict state governance control, from the interests of national economic development. State sector fulfillers the supporting function only for vitally important and unprofitable industries, but also stimulates local industries.

State sector, must distinctly occupy the leading positions in achieving priorities of economic development and form the potential of economic growth. Simultaneously, investment projects of state industries must be drawn up according to the demands of competition and effectiveness. It is essential that, invested funds to be used purposefully and the movement of financial flows be controlled strictly by the state.

Herewith, while realizing state activities in the real field (amongst in the field of investments), stimulation in  the activities of analogical faces in  non-state sector and not their restriction must surely be taken into account, as enterprises under  the state support are stable on the one hand, but less effective on the other side.

Activation of the state investment role must not be manifested only in effective investment projects of science-capacious industries, high technologies and vitally important fuelds by direct participation. More important constituent part of investment supporting of society in the conditions of market relation development is the encouragement of economic subjects’ investment activities and it must be oriented on progressive structural alteration. This implies the working out of optimum methods of economic regulation, development of accumulation mechanisms and active assistance to turn them into industrial investments.

Formation of institutional-legal and economic surroundings for the stimulation of investments in the real sector of economy.

Greating the available conditions for increasing investment actives by the state, requires purposeful influence on reproductive processes at macro and micro-economic levels. This. most important sphere, where the activation of the state investment role must be manifested effectively and in a new manner, at a new stage of economic reforms is – monetary-credit field.

Monetary-credit methods for investment stimulating. Insuring the growth of stable investments, first of all implies the augmentation of economic monetarism, era diction of money disproportions, reduction of interest rate, renewal of taxation system, depolarization of national currency and its role augmentation.

The increase of economic monetarism is possible by means of restriction of monetary-credit emission. While defining the level of danger of its inflation results, it must be mentioned, that inflation can also be caused by the other factors, besides emission. Thus, struggle against it, cannot be defined only at the basis of emission restriction. First of al it is necessary to provide the functioning of manufacture solidly. The growth of monetarism level in the real sector of Georgian economy is the most indispensable condition, that on its  side is the leading, deflationary factor.

Essential condition to protect against  the inflated results of monetary-credit emission is to create and put in motion such mechanisms, that change macroeconomic conditions and direct money-flows for supporting manufacture. During the process of using such approach, the size of emission defines the objective demand of industrial sector of economy, expert the funds moved to financial markets.

While defining the parameters of purposeful growth of money, calculation of the structure of money delivery is vitally important. Different channels of money emission have heterogeneous sensibility towards the inflation.  Therefore, expansion of money delivery is possible by payment of promissory notes of non financial industries, by means of banks refinancing and under the purposeful direction of emitted sources to finance the industrial investments. Less inflation channel of emission  is financing industrial investments by the state institutes of development.

Basic instrument for the regulation of money flows, is purposefully the state influence on the dynamic of interest rates. e.g Project supporting of the most importantly acknowledged industries for the purpose of investment activation is possible with preferential rates and by credits. Movement of preferential credits, this time must be realized by state banks system of development and the strict control establishment must expel the usage of funds aimlessly and financial speculations.

Experience of the countries under market economy shows that, regulation of interest rates is generally effective method to reinforce business activity in the period of crisis, when disbalance of economic systems situation is deepening. After achieving balanced progress in economic balance and financial sectors, generally the necessity of state interference in economy is lessening and accordingly the role of state influence on the dynamics of interest rates, formed on money markets is also decreasing.

The usage of state regulation is distinctly cyclic. In the conditions of sharp structural disproportions, when the working of market mechanism can’t provide the keeping, on the one hand, development  of surplus production and devaluation of main capital off, but  on the other hand augmentation of investment activity, the role of state influence on economy, amongst in the field of purposeful control on money flow is expanding, but while moving to the stable growth of economy-decreasing  . It is proved  by the practical analysis about getting over the structural depressants  (post war) in Western European countries and in the USA, and by the restoration of economy in France and Germany.

State regulation of interest rates was applied in the countries, under developed market economy (post war-in Japan, during along period –in France and in the USA during the period of so called `Roosevelt’s new policy, as well as the range of those developing countries , that showed the solid high tempers of economic growth (India, China, South – Eastern Asian countries etc). Important scales of accumulation here was reached for the purpose of national manufacture development, as a result of active influence on interest rates ( on its side, accumulation made it possible to hasten the speeds of economic development) also, for this purpose, direct and indirect methods for the purposeful regulation of money flow and inner accumulations convert into investment were used, namely for the formation of development state banks, loan-saving association and other  specialized credit institutes, through founding district  normative of credit politics for non-state banks and rates of preferential taxation.

For example, in Japan, investment financing and production growth conditions were formed through the state control strengthening on using the population savings and interest rates, which were gathered in postal-saving institutions and banks, afterwards their remittance to the state institutes, long-term crediting banks and truste savings banks took place.

Savings transt formation mechanism into investments in the USA was based on the wide development of loan-savings associations, that attracted the savings of private sector for giving purposeful credits to the range of housing construction and industrial branches.

In many developing countries, stable growth of economy was conditioned by localization of the greater share of money flow in the state banks, that locate mobilized savings in industrial investments and crediting resources, in accordance with the installed priorities of social-economic development.

Improving the structure  of mass of money is also connected to the cutting down  the share of cash, that is in circulation, for what it is necessary to set up strict  restrictions about the cash payment in all the field of economy, to continue calculation through computers and widen barren forms of  payment circulation. Taking these measures will expense the business economic field of banking sector and will be propitious for investment potential growth of the banks.

One of the basic task of payment system, at modern stage is its complete renewal, restriction of barter transaction, driving a great part of taxation means out of circulation, as they don’t  play a part of complete recourse in the formation of saving potential. Main ways to solve this problem are following: realization of inter imputation for financing fixed and circulating capitals, reduction the price of credit resources and security of plural debts.

For increasing the regulation effectiveness of money circulation and expel the activation possibilities of such emissive mechanisms, which are not accompanied with the expansion of goods delivery, it is necessary to strengthen the control and currency regulation.

Formation of effective infrastructure of financial market.

A) The influence on the investments activity of banks.

Looking through the previous system of regulation (in accordance with the selective priorities of economic politics) requires changings of the forms and methods in the banking sector and restructurization of banking system in economy, by meant realization of investment functions of the banks. Restructurized banking system must comply the requirements of armful investing  through high trustworthiness and guidance. It must also ensure the appropriate level of credit delivery resources by means of available interest rates for manufacturing fields.

In the growth of investment activity of banking system, it is essentially important to create the system of investment encouragement and insurance. State guarantees existence is one of the condition just for this. Cutting down the normatives of reserve assignments and preferential taxation are also belonged to these activities.

B) Creation of the system of deposit guarantees.

World experience shows that, the establishment of deposit guarantees is the inevitable component for vast mobilization of the population savings. It potentially increases separate institutes as well as the liquidity of the whole system and is the reliable means against taking deposits unexpectedly and frequently out of the banks.

One of the first systems for deposit insurance was formed in the USA in 1933-34, as a result of additional stabilizers investigation in marketing economy. Nowadays, these systems operate in the range of developing countries (Argentina, Colombia and so on).  Herewith in Great Britain, in the USA and in Canada, they are performed with independent state corporations, but in France and Sweden and private banking links. In Austria, Great  Britain and the Netherlands in the case of broken credit organizations, private deposits are given; In Germany deposit delivery of credit institutes are addressed to, while in Canada – deposit delivery, managing the property of bank and giving crediting guarantees are addressed to.

                                                          Economic Dr of Science,

                                                          professor Lamara Qoqiauri

The stock market should present you with a wide variety of NEW hot stocks in 2009. Many of them are going to be new technology stocks that come from the nanotech, biotech, financial, energy, healthcare & communications sectors.

Most of them might seem promising, but the truth is that a good number of these trading & investing opportunities could be extremely risky, while others are simply not as good as they look. That’s why it’s very important to know how to choose among the best especially if you want to day trade them.

When you know how to pick and approach the best hot stock trading opportunities, you are able to generate a consistent and respectable amount of money in a very short period of time.

Experienced day traders recognize that trading hot stocks on momentum can be the fastest way to make money in the stock market, especially on uncertain times like these.

You don’t necessarily have to trade momentum hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities for going long or for shorting them to make money when they are poised to fall down.

If You decide to day trade stocks just keep always in mind that for a trader to survive and be consistently profitable, its necessary to keep things as simple as possible. To much confusion and technical indicators will most of the time make you slow in your decisions and froze you up when a good opportunity is right in front of your screen.

In the end, stock market day trading is all about picking the best daily stock opportunities and following your buy and sell signals with ease and simplicity. Once you learn to master your trading decisions, you can aspire to produce consistent profitable results.

My neighbor asked me, “Why would anyone sell a successful company?”. He could not understand why anyone would leave a business that was doing well. Of course successful companies get sold all the time.

So why do these business owners sell? The short answer is that most closely held businesses sell for human reasons, such as burn out, retirement, illness, partnership disputes, family issues or other personal reasons. Usually the business is fine but the human being running the business needs a change. To understand this better it is key to understand the other options for exiting a business.

Close the Business/Liquidation

Closing a business that is profitable never makes sense. Even if the assets are liquidated the price is likely to be pennies on the dollar versus selling the business as a going concern with employees, customers and a reputation that is intact. Not only does the business owner get the lowest value but the employees, vendors and customers are hurt by this type of exit.

Accident, Illness or Death

No one wants to exit their business this way, but many do. The loss of an owner not only creates tremendous issues for the family but also creates a leadership void in the business. Even the most competent management can struggle when a key business leader is lost to a serious accident, illness or death. No one plans for this type of exit but many end up exiting the business this way because they failed to create an alternate plan.

Succession

Succession by a family member or key employee has its benefits. They know the business, its product or service, employees, customers and vendors. Succession can be operationally successful for the exiting owner if they make sure the successor is carefully selected, qualified and groomed for the position. The owner must be careful not to make an emotional choice of a relative or favorite employee but instead choose the successor with the right skills to lead the company into the future. You are not seeking an “Employee” mentality but an “Owner” mentality. If that rare person can be found in the business who can make the transition to Owner, they often do not have the cash needed to purchase the business. They are also likely to want to pay less for the business as familiarity will blind them to many of the value drivers of the company. So although succession can be operationally successful it is rarely a financial success for the outgoing owner.

Sell

Closing or liquidating the business minimizes the value to the owner. Accident, illness or death forces the issue on the owner. Succession provided a very limited pool of options with limited financial reward.

Selling on the other hand allows the business owner to decide their ideal timing, maximize the value of the business they worked so hard to build, coordinate the use of the sale proceeds for financial planning and align their personal goals with the sale of a business. Selling the business allows the business owner to create a wealth event and often significant on-going passive income without having to run their business.

Whatever they are, human reasons are always pushing and pulling on a business owner. Burn out, stress, divorce, illness, partner disputes and limited growth capital are some of the human reasons that push owners out of the business. Retirement, enjoying life, relocating, a new business opportunity and passive income are some of the reasons that pull a business owner out. Whatever the motivation, the fundamental reason a business owner chooses a sale as their ideal exit plan is control. The business owner chooses to understand the value of their business and to proactively pursue the right buyer and the right price. By selling a business you choose to exit your business by choice, not by force.

The professional team at Sunbelt Midwest can help you confidentially sell or buy a business in Minneapolis, Milwaukee, Chicago, and surrounding areas. For more information check out our site at http://www.sunbeltmidwest.com.

To achieve financial independence, experts encourage even currently employed individuals to consider entrepreneurship. Setting up your own business, no matter how small, is touted as one of the best ways toward building the foundation for wealth. Those who are concerned about having a safety net need not take the plunge recklessly. One can start setting up a small business even while employed.  

Of crucial use to small businesses are credit card services and small business loans. The entrepreneur needs to know how to avail of these tools and how to effectively wield them for maximum business growth.

Credit Card Services

A small business would do well to get reputable credit card services in order to prosper in the current business climate. Availing of credit card services will enable it to accept both credit card and debit card payments. This is true either for brick-and-mortar businesses or internet based online businesses. After all, most consumers nowadays routinely use credit cards or debit cards for payment purposes. It only makes good business sense to be well-equipped for the needs of credit card users and debit card users as well as for the needs of customers who pay in cash.

Merchant services provide credit card services covering a wide range of solutions for the processing of credit cards and debit cards as payment options. These credit card services include traditional terminal equipment at point of sale, where credit cards or debit cards are swiped. It also includes software and high speed IP solutions for both traditional commerce and e-commerce. Credit card and debit card payments can, therefore, be accepted in person or through the internet, by phone or by fax.     

Small Business Loans

Any business – whether a small start-up business, a medium-scaled one or a big business company – will be needing an infusion of additional capital sooner or later. Additional capital is always needed for expansion, additional inventory, additional manpower, new systems, new equipment or a new physical layout.

Capital is not always easy to come by, though. The original investors’ personal coffers may have been emptied by the earlier outlays. Prospective investors may not be keen on shelling out funds in times of crisis. Businesses, therefore, have no choice but to seek business loans.

Getting business loans is a difficult process. Even small business loans are not readily approved. Be prepared to present a lot of documentation and paperwork. For small business loans, the proprietor’s personal credit history is taken into account and related references need to be submitted. Of course, the company’s financial statements are just as important in proving the feasibility of the business and its capacity to repay its business loans. Having a detailed business plan will show your business strategies and projections, demonstrating your business acumen.

Unfortunately, even with all the requirements completed, applications for business loans – including small business loans – are, more often than not, disapproved.

Solutions

Some merchant services provide a comprehensive solution for the needs of small businesses in relation to credit card services and small business loans. The set up is elegantly simple. A small business need only avail of the company’s credit card services to be eligible for merchant cash advances. These cash advances are actually small business loans, except that there is no need to go through the complicated application process for business loans. Repayment is made very easy and worry-free, too. A certain small percentage is built into the credit card processing rates to take care of the advances. This way, repayment is actually done automatically in a very affordable manner and according to income flow.

Small business owners would, indeed, be wise to look into these timely business solutions.