NEOMARXISM; WH THE ADOPTION OF PRICE STABILITY?

                                 

                   

WHY THE ADOPTION OF  PRICE  STABILITY  ?

           MULTIPLE VS NAROW MANDATE;A COMPLEX GOAL

According to several empirical studies there is a conflict between the pursuit of developmental objectives such as full employment and phenomenal growth rate  and the pursuit of price stability at the same time .We admitted many central banks usually have or carry  a multiple mandate in their kits  while some preferred a narrow goal. The variety at least in the short term  informed the conflicting nature of these objectives In a general sampling study a tight money condition meant to induce  price stability could increase mass unemployment and engineer a decline in economic growth rate . In a liquidity squeeze the intention is to ensure exchange rate and price stability respectively but could induce systemic instability through unusually high interest rates and endanger financial sector soundness .

 One of the elementary means  of fighting inflation is to take some heat from the economy by slowing it down .By its nature as admitted in the long run may also fuel mass unemployment .Conversely to speed up the economy is a fundamental method to reduce the growth of unemployment and according to conventional understanding if carried too f

ar tends to balloon inflation. In a tight money climate rising prices can be curbed by apex institution by slowing down the speed at which it creates new money  with purpose to reduce growth in spending relative to borrowed money .This in turn is targeted to ensure total spending is aligned accurately with absorptive capacity of the economy or near production of goods and services .It can slow down or even stop inflation through high or phenomenal  interest rate. Slowing the economy above danger point only to begin to swell unemployment in the long run .Its unequal effect tends to damage housing and specifically SMEs business. The easy money condition can then  be introduced to cut unemployment  .

   Monetary policy management challenges are harder to confront patching here and there with no meaningful macroeconomic environment created conducive to sustainable economic growth .The conflicting nature of monetary policy changes is hinged on the distraction of swinging  interest rates. In spite of the diversity macroeconomic price stability as endorsed still retain foremost priority which in the long run for the umpteempth time could attain all other conflicting alternatives.

On the other hand as admitted by the Keynesians that the role of monetary policy is not well defined and paraded in the process limited influence on the  economy .That inflation is already a  natural phenomenon gathers pace so quickly and often very difficult to bring down. In the  succeeding chapter’ the rise and fall of Great historical boom’, we portrayed with the evidence of history the great evils of inflation at the  threshold of great history until this day .With better understanding  and fraudulent perusal  of how economies work again one repeats it is still not exactly clear whether humanity and most especially economists had a good  understanding  even in the simplest tense  the-- least [nor the  most] confused nature of inflation  which besides being fundamental economic problem  is still  the only natural condition for transcendent economic growth that monetarists and similar studies have contended  against .

In Such economies where price stability  was adopted though might be  necessary  could have grown in multiples had the multiple policy objectives been retained especially in an integrated  heavily diversified  financial system or restructured economies .  Even now the U.S. is a major evidence  and  where it was adopted as in the case of U.S. the requisite financial system model is grossly also  lacking which could have created far greater wealth in that great country and  it was a total failure especially with the rise of post U.S. meltdown  and a possibility of far worse and  greater storm pending even if phenomenal boom is recorded  as bibliomaniasis increases—.

THE  FED;THE GREAT NEMESIS OF AMERICA  AND GLOBAL BEHEMOTH

According to late  Rudi  Dornbusch a respected economist at M.I.T.once noted ‘none of the postwar expansions  died of old age ’ He concluded ‘ they were all murdered  by the Fed ’.

.To support this fact ; democratization of consumption was one of America’s contribution to the world economy and the rise of consumer society was more or less a traditional call to thrift .Therefore the 1920s was a great decade of tech boom . But it was halted by the  same innovation that catapulted its boom.Instamental credit took off  during the period so that by 1929  some 75 percent of  household appliances bought were made on credit –an increase from just 20 percent –a decade before .Thrifts was under threat and frugal habits were murdered save the hardworking immigrants .And the balance that favored credit financed consumption boom together with stock market crash  led to Great depression  .When the Keynesian diagnosed the crisis it was seen as the deficiency of aggregate demand and the remedy was :  stimulate public and private consumption and employment and growth in the process would recover.

According to an economic historian Tucker David of Memphis University  “Keynes interpreters demoted thrift from a virtue and a motor of progress to a vice ’’. The successive postwar prosperity was another undertaker for the burial of thriftiness in the American society .In Europe and Japan savings grew astronomically as they rebuild war torn economies . In the immediate post-world war 11 precisely in 1949  the quaint nature of thriftiness was endorsed by the use of general purpose credit cards introduced during the period and took off  in the mid-70s –a decade when deficit began .And by 1984 71 percent of Americans between age 16—65 were card carrying members .Fed policy induced by this Keynesian trap cycle was to blame even though expanding social welfare programs like social security and Medicare particularly beneficial to old age people without the need to save or that  democratization of consumption is a fundamental fact behind economic growth.

Likewise , Since the end of  world war 11  besides the dotcom burst  or the one in 2001 all the recessions from the beginning of this period were caused by sharp increase in inflation [ based on conventional interpretation ]  -- a reflection of barbarous  speculative dementia and inhuman changes in the  monetary policy directions . The fed is no less a serial killer  and with no alternative choice  until it is drowned  by one pony trick . Martin Mayer a financial journalist –the author of more than 30 books including ‘The Fed ;The Inside Story Of How The World Most Powerful Institution Drives The Market ‘, and a fellow of the Brookings institution noted is ‘a combination of large economic  common  senses  with large  doses  of  luck and some short quick fixes that may yet have long term nasty consequences ’.It lacks direction and its confidence rests on one trick --quick fixes of short term interest rates in the face of multifaceted problems. Several years after or less than a decade after Mayer ’s declaration  and various  predictions by media critics and academic scholars heavily ignored by  the politicians the  U.S. had  experienced another round of financial crisis .The same model that catapulted financial  crisis and behind the great depression  is still being practiced today .

                MORIBUND  INDUSTRY MODELS

On a more serious note margin trading of 1930s given rebirth widely contributed to the meltdown .Likewise the  credit rating agencies hardly prevent credit crunch but heighten it . The same hedge fund model that led to the collapse LTCM a large  hedge fund in 1990 saved by the Fed. Is still being practiced today .We remember and recall the 1986 institutional investor article that touted the double digit performance of Julia Robertson Tiger Fund that posted stellar performance in addition to other remarkable performances returned the industry to profitability since the exit of bearish market of 1974 when they lost more than 70 percent within two years in a market downturn that started in 1968 simply because  they departed from Alfred Winfred Jones [hedge fund patriarch]  initial investment  strategy using a leveraged long only strategy as opposed to combination of short selling by  hedging his long stock positions  , incentive fee of 20 % as managerial compensation  and the use of leverage [ borrowed money ] shared risk  making them more susceptible to market downturns. Although the Tiger Fund and contemporaries of the 80s despite harsh investment climate produced more than 50 percent  annual returns [ contrary to Jones more than 85 percent net of fees that outperformed top mutual fund ] and   which lured many traditional mutual fund managers in the early 90s spiking a return to boom .With the coming of tech burst of late 90s the stellar performers including Robertson’s Tiger Fund crashed in spectacular fashion in a period in which Tremont Partners reported they were as high as 4,000 hedge fund of different sizes and shapes of investment  .Nevertheless some media critics have argued that despite trouble appearing again in the last few years investors today have access to healthier fund especially due to increased competition and past fall out . The industry continues to thrive past meltdown  especially with the rise of fund of funds simplistically defined as top mutual funds that invests in multiple hedge funds providing investors  greater portfolio diversification and minimum investment requirement of 25 ,000 dollars accessible to the common man  . .More complex tools increased trading knowledge and  more fi nancial products as they claim had made the industry better than ever before . They were 500 hedge funds in 1990 worth 38 billion dollars but today about 6 ,000 hedge funds controlled close to 1.5 trillion dollars . With the failure of some hedge funds and the rise of the meltdown the models are not foolproof to economic security and a major contributor to financial instability.

Where were the sovereign wealth funds during the crunch ? Now they are bouncing back to reckoning after contributing to the previous crisis .These state controlled wealth fund investment properties  have the capacity to unknowingly engineer a far worse global financial crisis in the year to come if we fail to develop all inclusive global financial to incorporate the resolution proffered in this textbook The fears are already there but actually do not unravel the depth of crisis they could engineer if world fail redistribute wealth and income across the globe .From France , Germany to the United States the fears and perplexity have been made known and a major point of intensive debate in view of their political and economic threat .

These forbodings are more or less a spillover effect of  globalization contraption and advocacy of free trade that this territory failed to control after gaining so much from it and now the previously strangulated territory now commands  terrifying proportion of global wealth funds . In few years to come if care is not taken they would soon control virtually every asset both private and public that matter mainly  in the  western world .How can they be contained ? Is it by regulation ? No ! Or if regulation ,then what kind of regulation ? Definitely not conventional form . Anyway , but by increasing review of global financial system and its sensitivity to existing climate .Will the developed region ? The answer is no . This may sound petty to the mighty when the consider the pride of great powers and the successive decline from grandeur .

Why did they contribute potentially to so much  threat and exacerbated by growing fears in this territory ?  The growing wealth of a number of countries some from erstwhile communist enclaves run by socialist regimes  .China ,  India the Gulf states  and Russia  have integrated their national wealth into global economy   For open economy like Germany for instance no protection can be done .

 The investment of government budgetary surpluses began the globetrotting of SWF which has persisted for decades starting with a couple of countries investing a considerable part of their state owned funds like Kuwait the UAE , Norway and then Singapore . Also nations Like Japan and U.S. have reserve funds and should be to create sovereign reserve funds[SRF] to counter the damaging effects of SWF in their border by plunging into developing countries  for broader investment –a market that is far richer or  four or five times richer than their saturated home market. And the world can become wealthier . But where will they invest ? Anyway ,  the microfinancial markets [ new models ] provide this new avenue which by potential could control close to 600 trillion dollars –that is four or five times richer than  the global pool of capital markets of 140 trillion dollars dominated by Europe [ $30 trillion  ] and America .A market that  behemoth SWFs LARGELY IGNORED due to stark ignorance on their part immobilizing their hard earned wealth for development of  saturated region in favor of huge unstable gains to the detriment of the two parties –a great undoing of the meltdown  .

Investment in government bonds and state controlled  enterprises in the developed region constitute their priority  . For instance China the world second largest holder of U.S.  treasury bills and bonds  invested most of its currency reserves in dollar assets . With the creation of the agency to manage the investment funds a flood of Chinese investment is projected in overseas tech companies , mines oil fields to support further growth towering above 10 percent or  probably to hedge against unfavorable currency  movement  as Yuan gains .

In the UAE  the estimated capital assets of Abu Dhabi Investment Authority in 2008 put at 875 billion dollars is the world largest SWF spreading around the world buying into global companies . In JULY 2007 another investment fund Dubai international capital invested in companies  like Daimler [3 percent ] and EADS in Germany [2% ] WHERE Kuwait investment also had earlier bought 7 percent stake . In Singapore the two investment funds  there  mainly Temasek holdings and the Government of Singapore investment  corporation controlled approximately  $ 100billion  and $ 330 billion respectively in addition to port operator PSA  are similarly investment cosmopolitans. Russian investment strategy and privately and publicly owned corporations are known around the world especially in Germany where it has become a household name and a major point of concern from aerospace energy and telecommunication among others .

 The existing pressure  created by this unregulated industry  and deterring of unwanted investments is becoming a paramount precedence across every sector of affected region . The solution proffered was to strengthen regulation   .  Roland Koch noted a couple of plans drawn in Germany to protect its industry in a nation which does not have a regulatory framework for  SWF in her economy .It is typical of those that erstwhile made gain to begin to protect themselves developing shock resistance against  previously juicy gravy trains . The question is ; how far will they go ? it may take an eternity to answer .What the world need is to create a parallel structure for the balance to be truck in the global capital movement rather than allowing  hapless nations  to export and import inflation in place of productivity .Those funds presently immobilized into developed world  could have been invested in the local microfinancial markets and charged as high as  50 Percent interest rates or  returns at most  without the risk of  market equity volatility .How so extremely wealthy are the poor or will they  be in a new dawn

THE NATURE  OF  INTERNATIONAL FINANCIAL          ARCITECTURE .

The design of international financial system that forces developing territories to immobilize their scarce financial resources to get further into debt [though with reduced current effect ] to accumulated reserves heavily deceived that such can be used to defend their stability and to resist speculative attacks on their national currency . More than 90 percent of these countries under UNCTAD survey fuel their national reserves with net total inflow . This was reported to be  extremely greater for the emerging markets than in 1980s .Immobilizing resources that could be used for development and the high opportunity cost involved which is high is a point of concern  .In 2000 ,  70 percent of  world currencies with central banks is denominated  in dollars   . The developing region provide access to long term  cheap sources of capital to the richest territories .

The liberalization of balance of payment capital is an intrinsic element contributing to the instability of world economy .The neoliberal economic policy authored by the U.S. several decades [ must give way to neomarxist economic policy to create the world trade with a human face ] dragged these regions into opening their economy beyond their regulatory ability and management prudency .The globalization of world financial system  transferred  instability  across  the world affecting territories   based on the level of market exposure . The activity of SWFs ,  private equity corporations  and  hedge funds that operate from tax havens with little or no information about their activity have the capacity to destablised world economies and financial markets  be it in developing  or rich countries . Hot money speculative trading and huge or excessive  gambling or betting posed unrivalled threat that  contributes to international systemic risk 

BAIL OUT  OCTOPUS AND  INCREASING  SYSTEMIC RISK

 In ‘The Spring Of  Zombies ’Professor J. Stiglitz once noted ‘America ‘s strategy for fixing its financial system is costly and unfair  for it is rewarding the people who  caused the economic    mess ’Philip Stevens a financial Journalist writing in ‘ The Banker’s Fall Will Be Fatal’  also noted that banksters [ to rhyme with gangsters ] that sold Peruvian bonds which became worthless  to small investors in the swindles of  1920s were later rescued by taxpayers money. He re-echoed Ron Chernow declaration of THE DEATH OF BANKER depicting the declining grip  of Wall Street on the world financial system .A decade after this declaration another depression had happened even though the Americans refused to admit that it was depression but rather  retagged it as meltdowns .  Again the taxpayers money came to the rescue .

According to Stiglitz ‘ Zombie banks –dead but still walking among the living are in Ed Kane ’s immortal words ‘gambling on resurrection ’ Bad accounting had a field day –carrying impaired assets on their books not writing them fallaciously believing might turn healthy at maturity repeating saving and low debacle of 80s  .To worsen he case were allowed on account of poor collateral to borrow cheaply from the Fed . which also  banked on betting to muddle through in addition to government guarantees  encouraging them to take further risky position  . Whereas lending rates far too high yet from low cost funds .After the fall of five investment banks   the remaining deadpans wobbling were recapitalized making a repeat of the messy affair courting the undertaker all over again .

This climate regarded as development vicious cycles that turning  over in America every decade not every century anymore  since the tulip bulbs crisis  and speculative activity of 1630s  as some claimed which began since the 20s tech boom and burst cycle  and the great depression of the 30s that followed  .                 

Today increasing systemic risk is a central challenge facing  the American financial system and the developed world at large ..This is the greatest problem in any economy besides sovereign risk  that could be easily resolved in a system with a human face-one leads to the other   .How can this be implemented ? Hedging against systemic risk is the sole panacea or a safety net against economic free fall .This makes the financial system to remain healthy managing risks beyond individual managerial and corporation capacity .It has often being believed that government and the regulatory authorities have the political muscles to prevent systemic risks .Not anymore . Who should such risks ? Obviously if only government can do so but not with the existing brand of regulation .What strategic options are available to regulatory authorities preventing such risk ?

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                      ANGUISH OF  CENTRAL BANKS

In the 1979 Per-Jacobson lecture delivered by Arthur F.Burns  Chairman ,    Board of Governors of the Federal Reserves System    U.S.A. [1970—78 ] He noted that  despite the aversion of Central Banks to inflation and with powerful instruments at  its disposal were  unable to tame its evils resulting into  total failure and concluded that this anguish of central banking[abuse of political power ] was caused by the constraints imposed  by  modern  democracy .

Central bankers worldwide due to innovation shortfall  have the same mentality .No doubt history cannot be exonerated . The psychological dismemberment of human intellectual appraisal as a result of historical brutish profile of inflation informed this benighted judgment which has come to stay since the evolution of modern  field    and   study of macroeconomics. This is regarded as biblio-auto-phobia  [B.A .P.—a mental disease influenced by dogmatism that strained  critique schools of thoughts central to modelers’ infection]  which is intellectual depression and the weariness of learning informed by depraved freedom of thoughts. This leads to Biblio myopia . It is   popularly known as intellectual  terrorism [effect ] of the earlier generation  and to a larger extent a western tool for deprivation of  its  global captives.  The animation of BAP cycle fuels biblio maniasis in the long run  .It is advisable for Central Bankers to avoid this infection by relying more on discretion than the fixed rule the so –called k—percent  growth rule since there is no substitute for discretion sound judgment and intuition .

A .Burns was not alone  in this intellectual depression  cycle and perpetually haunted state of  psychological trauma like his  ilk’s -even at old age were afflicted and tortured by this multiple infections  of  bibliomaniasis—anti innovation s. syndrome  .Only very few scientists  survived  this infection [BAP ] such as Copernicus   Newton  Darwin Einstein and other few rationalist—idealist school of philosophy  stood out when judged by their standard works.  The modelers  who could only  identified the monetary phenomenon  like others before them by sampling out certain types and  symptoms quarantined and then generalized  on a limited perspective vaguely propounding theories tirelessly that suits malfunctioning robust system and most especially to the detriment of developing history which feeds from the dirty crumbs of poorly prepared meals of the imperial warlords  .This nemesis is a closely guarded secret behind the imperfect market .Self critical minds are very limited even among great thinkers .

With the increasing growth in the global incidence of mass poverty and the propensity of  these models  to  perennially  refute the spread of wealth profiting from global  scarcity  as world population increases  it is not obvious that the exponent of monetarism like his brothers  had a better grasp of this so called evils-the most confused language in mortal history  nor exactly was it completely  true that he did revolutionize how policy makers and economists treated money and inflation even  his best diagnosis fell on a wrong soil and struggled in the face of  tireless proven evidence.  

Since the days of Adams Smith although more wealth had been created than ever before which was made possible only by the increase in world population, exploitation of world market resources and  scarcity  and unprecedented  growth in polished  world  production technology; free market economic principles though necessary at that time  if at all relevant or exists  have not changed really despite brief  meaningful  distractions from the Keynesians .With the coming of monetarism adopted better treatment of money to salvage the more --only the richest more challenges still remain .

In a restructured financial system it is possible for the governments especially of developing history  or central banks to inflate their way out of trouble [Macro financial neo monetarist post Keynesianism—MNPK/MANEPOKISM resolves stagflation problems and similar puzzles that fuel mass poverty   ] –a notion deemed ineffective  and futile  by Professor Friedman  especially in the stagflation 70s . And to prove otherwise that central banks  had to adopt a new strategy  –a stable monetary framework . This means setting a target for the growth of money supply –a model popularly known as  monetarism.  That central banks should limit inflation by targeting money supply growth rate rather than aiming for inflation  directly-- a total error according to him  since money can be controlled easily than prices .

Although the abandonment of exchange rate targeting according to various   academic literature by majority countries  in the developing history was linked to the importance of policy flexibility  and the need to achieve compulsory short term growth. Nevertheless monetary targeting central advantage lies in its ability to tackle evolving local macroeconomic puzzles and external shocks arising by enabling the monetary authorities to quickly realign effective mix of monetary policy instruments. It tends to transmit accurate signals to economic agents about monetary policy directions  fueling central  bank desires to curb inflation and attain balance of payment  viability .In a practical point of view it is the use of market and non market [indirect and direct ] monetary instruments to coordinate and regulate the use of domestic credit, money supply, exchange rate, inflation rate and  interest rate which are regarded as critical intermediate instruments working towards the attainment of price stability [Nanna:2002]

Empirical studies like Nnana [2002]  corresponding A .Burns have shown this regime lacks transparency bedeviled by poor accountability and credibility  and usually characterized by occasional time inconsistency, expansionary monetary policy, higher bouts of inflation ,exchange rate depreciation and volatile macroeconomic environment  . Factors such as lack of central banks operational autonomy and particularly  operating under severe structural barriers and political interference in central banks regulatory activities  including mandatory  large fiscal deficit financing, maintaining inappropriate interest regime, exchange rate overvaluation, poor payment system and political instability .Excessive monetary expansion is inconsistent with monetary targeting objectives .[Nnana ;2000]  .

IT is also not completely  true that monetary policy tends to be effective  where operational autonomy is granted to Central Banks .Though empirical evidences abound in the 90s in which a growing waves of autonomy was noted across the world . About 40 countries in the world including some in Africa followed this trend . And also according to Alesina  and Summers Clinton top cabinet officers in the survey of OECD territory during the period noted the effectiveness of the instrument  . This credibility was however short-lived  with the  recent U.S. meltdown.—a  misgivings earlier entertained by Friedman. The U.S.fed had a decentralized system from the beginning which was a  spillover effect of its free banking skeptics and detractors who opposed its foundation until 1913  beginning with regional feds unlike the Bank of England as a  true central bank.. By 1951 through the autonomy of Truman times following the Treasury –Federal Reserve Accord which led to the expansion of  active federal fund market  and the ability to set short term interest .This separated and varied the distance between the white house and the fed .

With the appointment of A. Burns in 1970 and the Nixonian consolidation of this golden autonomy during the period  mandatorily recommending and emphasizing  on complementarity capacity building  and  policy  consensus  and the former later complaining of anguish of central banking it is not totally proved that autonomy  of an apex institution  relentlessly  better qualify for effective macroeconomic development  and totally translated perennially  into total growth  and sustainable  economic boom .This is well justified given the level of economic crisis  that happened every decade besides countless recessions since depression not every century. Nevertheless It also won the  battle with the Treasury to become the world leading regulator of the world  financial system beginning from her soil. This was no mean feat.

With rise in the use of inflation targeting beginning from the 90s sweeping across the economies from New Zealand Australia  to South Africa and a host of other testing grounds it is still not yet Eldora do in the great  fight against inflation .Due to capacity problems that beset monetary targeting according to the study led to its abandonment and inflation targeting was touted as the instrument of choice and a better option  for  monetary management .   It is  disheartening to observe that though a better option but because of the towering influence of fiscal dominance that forces central bank to miss inflation target and the lack of disposable up-to-date data to help in forecast planning coupled with poor and ineffective transmission mechanism distorting feed back the targeting practice may not also be successful .

As earlier emphasized that there is conflict in the pursuit of price stability and achievement of developmental objectives such as employment growth and high growth rate .According to the study and other complementary literature like McCollum and Nelson [1998] , Hoffmaister [1999] , and Mish kin [1999 ] that despite its ability to fight inflation it cannot be successfully adopted by central banks with multiple objectives such as Fed.. Today as usually historically  and conventionally  inflation still remains a monetary phenomenon .that defied the effectiveness of all the strategic management options nor even in a policy mix .

We noted the importance of the autonomy as basic requirement for effective monetary targeting and central banks performance  . But  actually the truth is that American greatest problem is that global behemoth grossly undermining transcendental growth the world greatest contributor to the GDAs empire  a great builder and destroyer of wealth and under developing her soil and the world economy at large. Besides the increasing fruits and gain  of technology;  there is no foolproof that Americans and America are better off in the field of macroeconomics of the pre 1913  than now. We need not re-harsh this fact that the system  is the best and the worst in the world that sits on top of world newfound wealth in the private equity  sovereign wealth funds and hedge funds and  hardly could manage them and lost a golden boom that could have far  exceeded the 90s  .

The United States  has created diverse tech products that  by now could have turned the world into a paradise wracking up the prestige for all time but it appears that time being no longer on her side and already deposed by China ’s rising image in the international power community . Only  a miniature of her patent wealth had been tapped despite having  the best financial system  lacking the financial system needed to manage  and to spread this wealth waiting to liberate humanity from mass  incidence of  global poverty hitherto considered impracticable by  the fed . ,wall street banksters and the depraved congress that  lacked the milk of human kindness . For America to regain or reenact her golden age --like roaring 90s the fed which has consistently fed only Wall street banksters must [not should ] be scrapped or at worst for a face saving palliative her entire   operation  restructured and the entire financial system heavily diversified .But why ?Besides mysterious reason which is the ability to empower development separatists ,  the common reasons are diffused from the pages and  references to antecedence 

         BUDGETARY DEFICIT AND UNSUSTAINABLE BOOM 

Historical references  beginning from the Burns  period indicated that the evolution of U.S. fiscal or budgetary  deficits in effect public sector dissaving which was less than 1 percent in 1970s  swelled to 2.4 percent of GNP in 1990 .Business saving measured as retained corporate earnings after depreciation fell or  was less than 1percent ;Personal savings dropped below 4.5 percent of post tax household income . Above all U.S. savings rate stood at one-sixth of Japanese rate.[Forbes;1991].The nightmare did not just end there . And prior to the meltdown deficit sored and soared to record levels less  than  8 percent of GDP .Economists have proven that real middle class incomes failed to recover from the levels attained prior to last recession in 1991 .

The tax cut of the Bush era that  was claimed would cure all economic problems by  trickling down to all policies and expected to stimulate saving rate worsened the nightmare . Unfortunately rather than stimulate  savings household savings by the 90s plummeted to zero nor did it stimulate  mass employment either  making labour force participation to be lower than  in the 1990.Tax reduction for the rich rather as a total panacea to economic ills contributed immensely to public sector dissavings. [J.Stiglitz ; 2008 ]The rich were better off and the poor poorer .

With rise of the meltdown after  the  end  of  unsustainable  boom in the first  half of this decade [2000-10] certain factors were  blamed for the credit crunch both domestic and multinational . It is certainly true that the deficit which had begun to pile up from the distortion of the  70s was a major contributory factor . The  global imbalance was one of the main factors mainly large current account deficit in the U.S. was a mismatch to  large current account surpluses of Asia –[the world largest consumer market] and other parts of the globe . This was surprisingly a stark contrast to Asian 97/98 financial crisis when the region depended on too much foreign capital .Now it became the nemesis of the global pawnbroker and could no longer renounce nor relish the profile of the  stigma—a bitter pill to swallow . High savings rate across the border created the imbalance . Then large capital inflow that demand for U .S. assets was a major factor that led to breakdown of market discipline and enhanced by failure of regulation  .And financial assets’ supplier throwing away ethical behavior traded risky and dead assets .

The fed was certainly to blame for these excesses irrespective of  Burns ‘ anguish of central banking .

Before farther analysis the lesson that was learnt is that what had worked for the developed region in times past no longer works in its favor that is why there is need for a new  world financial system that caters for all  and of respective countries in the international community to heavily diversify their financial systems in a review of international financial architecture and in particular of better mechanism to ward off system risk .

World immobilization of global capital of the hapless region which has persisted since the 70s  could  one day impoverish Washington again with possibility of a greater storm which  usually  profits like the rest of developed region from cheap capital of the developing  region that intensively require  consistent flow of capital at low interest rates  to develop their homes rather fueling growth elsewhere  and more importantly as the fed could no longer  manage the imperial capital annexed  through discriminate liberalization of balance of payment capital of the developing history .This  indicates  lack of robust and appropriate system with which it could have launched another round of unprecedented golden boom in her history .Moreso  as  a payback time might be around the corner .A system that encourages market discipline and without the need for a regulator  is vital for a new dawn  without  a dominance of monetary policy which contributed mainly to the meltdown .

The meltdown had shown vividly that both the monetary policy and the crusade of regulation  failed to do the job. As suggested by some economists that in good times you better have surpluses especially in the territory where the budgetary deficits were too large prior to the storm . Though a better option so as to adjust with appropriate  fiscal space however  the scope for sustainability  is low . The world needs to rethink sustainable sources of lasting growth or else Americans would continue to suffer of scarcity in the midst of plenty .Unless we return to new model the world economy will persistently falter

    

  FREIDMAN ‘S  DIAGNOSIS  IN  A   WRONG  MACROECONOMIC  SETTING

Indeed  Freidman diagnosis  is one of the best diagnoses today  in  the macroeconomic  history . Unfortunately  by practice the nature of the existing  neoliberal free market does not support its effectiveness irrespective of the fact that critics lampooned the monetary  diagnoses brilliant as they were lacked details and precision by remedy. This is  a major reason behind the difficulty in the practice .In this regard they believed  controlling money supply proved far harder in practice .No wonder he did grumble that they were badly implemented .  But how?  This indicates that with the increasing body of literature in the emerging fields of  meta-economics  and  Para -macroeconomics  that a particular macroeconomic theory better suits or fitted into a distinctive financial system in addition to the grade and level  of psychological state will backing the implementation and this standard varies markedly both by usage and effectiveness from one peculiar system to the other .Whereas the western models are everywhere and the same with little or no alteration . Indeed BAP crisis is a fundamental infection and a global intellectual  economic crisis .We desire changes in orientation for a new order to begin.

  MARKET REDISTRIBUTIONISM: CALLING FOR  A  NEW   GLOBAL  ORDER

As we shall see briefly in the subsequent pages a new world order is vital for transcendent and universal  growth to be attained .Central banks worldwide are the same –birds of the same feather  have no direction and the pursuit of price stability is a charade and mirage and this failure of result orientation  unmasks the escalating atrophy in the attainment of  the objectives that already lack clarity from the source and yoked in a contraption of ambiguous theories .

The world poverty will continue to balloon as innovation is shortchanged

and central banks made to believe that they fared better in this direction .

TO play a cameo here in a redistributionist Para--macroeconomic schools of thoughts the laws of inflation are completely controversial but the most effective ever modeled  and  far different  from mainstream monetarist thoughts and Keynesian bias averse and belief . No monetary policy and regulatory framework  ever contribute to sustainable growth and meaningful development and intermittently and persistently due to existing nature  is envisaged to engineer more  economic and financial crisis occasionally especially in the U.S. every decade like the U.S. meltdown and similar storms   until the basic advanced  theory of inflation formation is first appraised imbibed and then the role of  monetary policy can then be properly defined and the kind of system to operate with before result potential can be  effected and optimized  .But for the adoption of price stability indeed is a  mirage before times .

The redistributionist school  believes that since inflation is the only natural condition for economic growth  it can never be controlled and that evidence of price stability in an economy is very hard to prove  .During the supposedly make-believe price stability period inflation is only  hidden  and  that price stability[elusive nature] attained  in the earlier times is deceptive masquerading only for the phenomenon to regain momentum after earlier humiliation  whether controlled  or uncontrolled and that is why monetary policy persistently shifts direction in vain gaining nothing  perennially firing the wrong salvo whether missing or hitting the target or not . For instance according to Bernanke the savings and loan crisis of the 80s which costs taxpayers a whooping $150billion  was caused by the cumulative powers hidden harms and unexpected inflation of the 1970s that greatly reduced the mortgage loan value made by the  S&L  in an earlier low inflation era. This obviously indicates or meaning that the gains and efforts of  previous seemly robust monetary policy activity were a mirage and  make-believe contributing to the trap of succeeding generation and inbuilt systemic risk that led to later crisis. So whatever gains and benefits of price stability  made in the low inflation era is a counterfeit with the unfolding great  nemesis of time . World economies will perennially evolve along the trend without lasting economic impact   .This is  positive destruction or negative construction that leads to financial calamity in the long run  .  Hence the adoption is a dangerous pursuit without apprehension of the basic formula of inflation formation  .

 It believes that the imbalance in the power triangle community is a fundamental cause of [man made] inflation in the long run. This indicates that Para economic factors are major or primary catalyst behind the bibliomaniac phenomenon ;and Unless economists and policy  makers  desire a proper handling  of inflation as  a resource for mass development  financial crisis would continue forever .It argues that it is the understanding behind it  that causes inflation and the poor treatment of money that causes financial crises and not inflation itself .Inflation speaks universal language that no one understands and not a monetary phenomenon  by the nature of its source  as many would believe but  a bibliomaniac BAP-enabled   phenomenon , so to say power triangle phenomenon . This shows that  the psychological estate of an average economists must be evaluated and rehabilitated .

Certain theoretical ambiguities with the best  available evidence suggests  that in the long run inflation is harmful to output and hamper economic welfare and the best contribution a central bank can make to assure growth is achievable in the long run is to pursue a price stability induced policy over the medium term . This consensus view as enshrined in the primary goal of ECB which …..is to maintain price stability ,’ fully  defines and exploit  the pedigree of this ambiguity as  they annex central banks precedence and rationality worldwide .Those who support price stability –narrow minded and those with multiple goals –broadminded eat the same excreta even though the latter has a better target. Already monetary policies that focused on short term stabilization cyclicality barely succeeded or destined to fail due to fine tuning uncertainties constraining the  ability to fight inflation in the medium term with weaker growth volatile output and higher unemployment .Consequently commitment to price stability is strained at this point for the apex institution being tempted with quick monetary policy fixes that may be counterproductive  so as to tackle economic problems .And the only surest strategy is to raise the economy ’s growth potential but the ability to do this is grossly lacking and manifested in the poor use of productivity  factors marshaled from poor stock of knowledge.

Although structural features such as too much government involvement in business as some appraised , high level of taxes, poor policy framework , competition restrictions especially in the product markets underdeveloped financial markets ,employment protection laws , high unemployment ,minimum wage laws, low infrastructure and job creation disincentives also contributed in an economy that has no human face . These  items  are maneuvered  and driven by whims and caprices of poor models and poorly performing systems . We make bold to affirm that those who support high inflation as compliments to lower employment can radiate economic thoughts better but with no clear model  to overshadow opposition  lack mettle to bring about the profound change that market redistributionism pledges in a new world order. 

The path of world prices and movement is a function of  the swings and imbalances in the power triangle. The structure of political system social system has a more overbearing influence on movement of world prices than the ability of market itself . The market itself not price movement which dictates the trend without the hidden impact of this mystery muse .These three complexes [with economic system complexes ] authors inequalities of wealth from the existing market tussle that causes inflation to be unbearable but by nature is a positive instrument  .

 Man  [social oligarchs ] profiting from the imbalances invented its own brand of inflation as opposed to what nature gives  balding and imprecating vital and universal development for moribund and self serving development and building its pressure from the contagion and transferable power market tussle  .This was born by the inequity in the power market that usually  feeds in the long run into societal inequity by influencing price level through the art of information arbitraging process . The path of  world prices move along this line . This brand and nature of inflation is artificial or better still can be regarded as dual-- cord  inflation[or bi--inflation ] trickling the abused effect of   information inflation –an innovation of information arbitragers [ separatists league] [which is necessary for arbitraged  development in an army of ignorant men and societies  ] at one end of the tunnel down to the mainstream economy to influence price level .

Now its forms and nature can be treated differently  .In other words the abused effect of  Information inflation—nature driven [or information instability-a spillover of the power web in equation  ]  then promotes price instability and economic and political instability  in the long run through the activities of oligarchy oriented inflation --- Oli-flation] whether arbitraging is efficient or not .That remains the fundamental diagnosis behind the man-made inflation .Since innovation as an information resource is grossly inadequate leading to formation  of  oliflation and  innoflation , this authored secondary  man-made inflation [ cost push and then demand pull on prices  ] .Contextually indeed information instability wrought by oliflation using community power tussle and innoflation  fuels price instability in the long run .Out of these hepthtacentric theory of inflation be it naturalist , post naturalist and confucianist schools of inflation only two forms  are positive and the sole panacea to effectively   maneuver  inflation and inflation components in the neomarxist free market to contribute to lasting economic growth  .The first dual-cord inflation groundswells into secondary dual cord inflation –an evidence of  four basic types operating from the Para macroeconomic terrain alone [the last in the terrain being reguflation –nurtured by regulation arbitraging ] feeding  into the macroeconomic  horizon at the same time even though only the secondary element was diagnosed and fallaciously being elusively  prevented . That is why price stability based on the existing  Confucian school of inflation can never be attained. Naturally in such scenario monetary policy and the crusade of regulation put together not only  works in vain but is remorseless  abettor of  crisis climate vicious  chain cycle   .It is the most trickish game in the intellectual mortal history .

 This contributes to development deflation in the long run as opposed to observation of  the development ethonomy of the naturalist school of market redistributionism [MARSOLISM] which promotes development inflation[or capital density] using the expertise of development arbitrators [in contrast to development arbitragers ] that creates universal prosperity and not of information arbitragers that promote development arbitraging  for the prosperity of capitalism to the detriment of universal welfare and prosperity  . This indicates oliflation as a mode of the Confucian school is the author of inequality of wealth [upon which cost push and demand pull ] and a major abettor of social economic and political misery and the fundamental cause of inflation [two types] as man knows it today  . This diagnosis is the answer to mass poverty resolution and could herald  the return of man to golden age  . For a larger stretch of mortal history humanity or professionals  including economists and policy makers  are  confused along this Bibliomyopic  trend line [BTL-syndrome is also regarded enlightened ignorance which promotes BAP cycle ] .It can never be resolved  because humanity had a great love  as they were from the antiquity until now   for lucre –the center circle of commerce and for repression of his fellow men .Anyway by observing this diagnosis and following this T.I.N.A. model inflation could eventually be tapped as positive resource for economic growth and stable prices for the first time in macroeconomic history be attained  as relevant  .

The challenge facing  market redistributionist schools of logic [MARSOLISM] in the unfolding  study of Para- -economics is how to develop awareness  and influence decision managers policy  makers and economists with mentality , how to bypass or forgetting racial sectarian , national and established dogmatism along this line imbibing the ethonomy [ belief system] of the naturalist school diverting attention from the confucianist school if possible  that advocates man made inflation –a major bias and the sole creed of world economists  or chooses still a better alternative in the post -Confucianist  school of market redistributionism that combines or is an ablution of better ideals from the 1^st two schools which proffers market solutions .The thinking of  every economist should be modeled along this unknown trend line that is fraught or  characterized by unidentified ambiguity in the study of dismal science of macroeconomics  .Humanity is in the midst of world greatest maelstrom  and which strandline do we really need to  follow ?

The history of inflation study no doubt has toed the path of confucianist school of inflation as man broke away from Taoism age philosophy  into Confucian age philosophy  .And their beliefs or ethonomy are already known leaving debate open for the appraisal of remaining schools  as better alternative and preference for policy makers  or economists might decide to follow refined confucianist school of inflation  instead  . Now we can make a difference as they graphically operate distinctive systems .How do we choose between these stigmatized alternative choices ? To the skeptics that remains the most controversial argument of all time  .Then we can confidently and strategically deployed several models of free market effectively since inflation is the fundamental study in the monetarist macroeconomics .

We have noted based on the projected study development which opens its template with neomarxism and neomarxist free market respectively[the latter not yet expatiated ] it is expected to be the broadest  study of economics [ but note: Para economics –economics made easy /economics without tears/economics without barriers ] operate the  infinity trend line of political economic  models and philosophies to last until the  golden age civilization is procured which is to evolve from the present day modern  Civilization which equally matured and  graduated from the primitive age civilization perhaps a 10,000 years period probably from the Neolithic [--the 6^th age of man ].These are three types of civilization through recyclical renewal had operated and strangulated the seven [7] ages of man  from the time immemorial  . The renewal is expected to forever persist according to law of nature and mother nature respectively into unforeseeable years ahead .

It is somewhat disheartening  that the present day study  of economics and the field  of macroeconomics despite being broad  is  inadequate and inappropriate lack direction  for the return of man to the golden age even as we retain the price system . This informs our choices in the redistributionist schools in the  identified  nature of inflation that can guarantee relative level of stability equity in  the society after  ensuring equity, near equity or  a relative level of equity  in the power community .We live in the capitalist world and the defective man made inflation nature  is often the crave and   usually would usually be  the  preferred choice of every one that loves lucre except a Marxist or a socialist .or neomarxist that loves moderate gain The gains of technology and  technological wealth respectively were shortchanged under clouds of market model  disincentives  were immobilized  and  not spread to all .

However the advantages derived from man-made inflation by virtue of development antecedence  are many such as the evolution  and exit of  barter system, the  development of factors of production , wealth management such as creation , acquisition  investment   and accumulation , and the  development of  modern production system such as advanced by Adams Smith  flagging off the classical economics in addition to a host of other innovations exhumed by successive generations of  economists and models which rode on the heels and  wheels of existing body of knowledge  can not just be whisked away  like that but an integral part of macroeconomic history  .The challenge is how to spread mass development and civilization to all races nationalities and countries under sun

The point is clear ; the self interest of a capitalist [as  a conduit for oliflation ] is anathema to social interest of the economy even though they helped accumulate wealth only to use it to  fuel the fortune  of separatists’ leaguers through  the process of information and development arbitraging respectively profiting social misery and mass ignorance  .The society is enriched in the process nevertheless the universal prosperity is mortgaged and in place of social interest where self interest ballooned to widen the web in equation . .Both trade at polar opposites .Both are good with lofty ideals but which one is loftier ? It is the most ideal way to create wealth but majority are shortchanged from heavily  untapped social economic and political  privileges and a major contributor to man made inflation through the information arbitraging process . Until every earthling have access to relative level of income world economy will never know peace and stability .So we need evolve a virile credit models to develop cottage productive sector   .That is the  main bone of contention in the market redistributionist schools . It is the major cause behind the rise and fall of great history and inflationary antecedence .

We need re-harsh a bit of this antecedence from the ancient Egypt into modern times to get a feel of the implication of man-made ill-contrivance and Frankenstein monster widely known to all that has  contributed to unprecedented economic growth and attendant uncontrollable crisis after crisis in a tireless chain  .  At this critical juncture the mode  of  development antecedence needed a reform or complete or total change in the practice of macroeconomics  so as to spread the gains of technology to all. Spreading the optimum benefits of cultural trinity across nations hitherto marginalized by separatists remain the fundamental focus of market redistributionism and creating a privilege and that all the gains of neomarxism under DUCAPOT rule  should be spread to all. Marsolism believes in a new world order that by equal access to cultural trinity optimization privileges redistribution will be possible and marginalized classes will have better standard of living and live in a poverty stricken free world .

                             

 EVOLUTION AND THE AGE  OF   MICROFINANCE   

It  is  unusually observed  that the concept  of  microfinance today  is the world  fastest growing  market technology and  the most  effective economic  model  ever contrived by man. It is more  appropriate  to poverty stricken climes  and redistributionist societies offering reliable salvation dividends complete with robust financial innovation required to empower extremely impoverished people of the world .It  is basically maneuvered not  only for grass root empowerment but also for development of sustainable  income generating  projects thereby uplifting  the living standard of the abject citizenry .And  in many  cases so to say help the poor build wealth  and exit  poverty . According to Grameen [1966] ‘it is the right of the poor ‘.

Initially the objective of the study was to target the industry in its pristine form and make comprehensive analysis in comparison to global practices. However it  was found out that a  growing body of relevant  researches and existing  literature abound which are hereby reviewed  in  this  piece  in  a  vigorous analysis resting  the earlier resolve . sections  This   paper touches introduction or the background , the  concept  of microfinance   concludes and touches or exhumes the local environment in Nigeria and its challenges and untapped potentials.  The expositions are spread into several chapters for ease of appraisal.

                   2.0 THE CONCEPT OF MICROFINANCE

Microfinance is  the provision of financial services  to the poor the  unbankable and the low income households without access  to formal  financial institutions[Conroy ,2003] Besides  being banking  to the poor its progammes are  broad based  which   make loans accessible to  the poor and savings mobilization are endorsed especially for advanced [MFIs]  in  addition  to other financial services are provided  to micro enterprises and  SMEs  needy businesses

Nevertheless of all the sectors of microfinance micro credit is a foremost element and a leading component in the industry opening up the economy of the underprivileged and a new lease of life for the marginalized communities and economically active poor.

                                          2.1 MICROCREDIT  

According to Wikipedia  micro credit specifically refers to small loans to the unemployed to poor entrepreneurs and to those living in poverty who are considered unbankable .It is a unit of microfinance which is the provision of  a broader range of   financial services to  the poor It is also the  extension of  informal credit to the micro entrepreneurs. This  helps them engage in productive  venture .It has been touted as the last panacea for poverty alleviation in some countries .It succeeded immensely  being a largely driven private sector initiative and avoided being extremely  politicized  and consequently has also outperformed  all forms of development  lending [Abolo,2001]

Given  the unwillingness  of  the formal financial  institutions   and the poor innovation of the  sector which tends to be reluctant to micro enterprises  citing too much transaction costs associated with micro loans processing or the unreliability of  MSMEs dubbed as high risk  .A new market  for micro credit was developed where the  risk of default processing and other administrative  expenses for business start up are manageable

Micro lending is a more effective complementary means to financial intermediation and a viable alternative to traditional practice of economic development .It empowers both individual and community for sustainable growth and development.

Its sets of principles are different from general financing or credit such as employment generation trust building micro entrepreneurial  capacity building micro entrepreneurial initiative development socialist development lending and a strategic tool for socioeconomic development .Micro lending empowers the individual which has a multiplier effect as they contribute economically to the development of the communities they live over the long haul .It is also a saving grace to the lab our market as formal sector large sized companies ’ decline .

                 THE IMPORTANCE OF WOMEN AND GLOBAL ECONOMY

Women have been vital resource a predominant focus and increasing priority of micro credit institutions and agencies worldwide. Women loans are repayment proof nearly freed of default and more beneficial to the family than loans to men and have more socioeconomic impact while bridging gender inequality gap. They are a good credit risk asset managing credit more efficiently invest income towards family welfare .They also benefit higher social status as they develop capacity to provide increasing sources of family income .Experience has also shown that of the 1. 2billion poor people worldwide  women are in the majority and are responsible for the upbringing of tomorrow ’s children .The consequence  is that the poverty of  women usually affects more humanity than it seems figuratively which leads to physical and  social underdevelopment of their children  laying foundation in stark negligence  for tomorrow’s mass poverty .

An  increasing number of  Microfinance institutions [MFIs] are beginning to focus on women borrowers – truly  the  world worst poor people .SKS microfinance Promujer  Nemaste Direct  LAPO in Nigeria  and the Grameen Foundation  among others currently emphasize  on the predominance of  women in the socioeconomic arena    and  informal  sector  market economy.

                              FEATURES OF MICROCREDIT

1. Those that lack collateral

2. Individuals with no steady employment

3. Lack of client verifiable credit history

4. Extension of micro loans and clients are unbankable.

5.Encourage grass root empowerment

6.Execute self employment projects and boost micro entrepreneurial development.

7. The target is largely the informal sector.

                      THE ORIGIN  AND  TRADITON   OF   MICROCREDIT

According to Wikipedia  micro credit as a financial innovation originated  from  Bangladesh  where it  has succeeded  in  liberating  the  extremely  impoverished local peoples mainly the unbankables  enabling them exit poverty and build wealth and generate capital  through  self empowerment  and sustainable income generating  projects .Its success today has largely encouraged the adoption of micro credit technology into mainstream banking and attempt  was made to reclassify this league [unbankables] for the very first time  as pre bankable.

With this reclassification it is increasingly gaining ground and credibility in the mainstream finance industry  and various micro credit projects were contemplated  by large finance organization as reliable source of future growth .When it was begun by ACCION and  GRAMEEN in its modern incarnation in the mid-70s as a pilot projects only a very few gave it a chance of survival  let alone its nascent or  burgeoning global  institutional appeal .It  is  the industry  of  now and the future the  next big thing the last hope of the underprivileged  and the ideology of market  communalism.-the building block to Marxist homeland.

With the scathing remarks of the 1970s hardly dying away humanity had entered a new dawn and eventual potential relief for the less privileged was found as the industry evolved . The concept of micro credit can be traced back to portions of Marshall plan in the immediate post world war 11 the middle of 20^th century .Some sources also link it back to the mid-1800s and the writings of abolitionist/legal theorist  LYSANDER SPOONER who was a crusader of the benefits of  numerous micro loans to the poor for entrepreneurial activities  as a way to alleviate  Poverty .The New York Providence Fund is another tested historical source. All put together are launching pad to the incarnation and burst of the post -70s  .

                 THE ANCIENT CONCEPT AND MORDERN  RENAISANCE

There are historical differences between the ancient and modern concept of micro credit as expatiated .But the origin of  the ancient started in Egypt where the ancients had  found a means  of buying now and paying later [creditisation] and the Egyptian equivalent of the term ‘charge it ’came into being .When the Greeks came along a bit  later with their belief in the worth of  an individual citizen freeman became an exalted thing . That someone can be trusted in all aspects of life even commercial transactions influenced credit economy and the use of micro credit began to spread .The Romans  came later and were only their followers established procedures for this budding market Which evolved as micro loans setting penalties for default or failure to pay .

Therefore this indicate that  socialist lending began before capitalist  lending  and a proof that the ancients  started micro credit  and the entire credit market and provided a means of recording transactions laying down laws and establish man ‘s right to go into debt using the laws to regulate debtor[poor] – creditor [MFIs] relationship. Although it persisted through the millennia but the practice was heavily resisted due to its inadequate perusal as an incentive for egalitarian market economic building until fairly recent times. By the turn of 20^th century when lending was well developed transcendent growth in science and modern   theories beginning from LYSANDER’S  among others  it regained  Pre eminence .though at a very slow pace until the 1970s of the YUNUS and ACCION

The industrial revolution [1770-1914] could not have been possible without micro credit and the evolution of the works of cottage factories during the period  such as the pin manufacturing shops  noted by Adam Smith-[the exponent of laissez faire and classical economics ] could not have been possible without it and a contributory factor to Anglo Saxon or Germanic civilization .

     THE     ADVENTURE   OF    MULTIDIMENTIONAL   MICROFINANCE

 With the emergence of  roaring 70s pragmatic microfinance has come to stay much touted  as  the  last  panacea in the eradication of  mass poverty and empowerment of the poor around the world .Beginning with micro credit  or micro lending has come to include a broader  range of value  -  added services [ credit savings micro insurance  micro housing  micro leasing etc]  Originally  according to Enugu Forum [ 2006] it is based on  traditional forms of community  financing  amalgamating ideals of traditional finance and development assistance – a sort of socialist lending has grown to become a household  name in the territories of Africa Latin America and  Asia  The microfinance movement evolved  in the early 1980s.and Bangladesh and Bolivia were noted as major protagonists at the forefront of the movement which has gained increasing patronage over the last 20 years from  multilateral agencies [ donor ] international financial  institutions [IF Is] and commercial bankers flocking to the business.

        THE  ROLE OF MICRO INSURANCE AND SUSTAINABLE  CAPACITY BUILDING

Getting down to the brass tacks  it is to be noted that the long standing boom in the industry cannot be possible without micro insurance It is the lynchpin of successful micro credit projects  oriented towards the sustainability of this venture especially undertaken  in a sensitive and responsive  economy.

Simply put micro insurance is the provision of grass root insurance services as a basic strategic tool to securitize the micro and  small  businesses from alarming  corporate mortality in an economy .According to experts  its services provide a lasting solution against unpremeditated mortality common among MSMEs especially those trading with microfinance credits .  Micro insurance  as a tool of  microfinance is oriented to reduce specific perils faced by low income and poor families . Churchill  defines it as “ the protection for the low income population against specific dangers in exchange for regular payments of proportional premiums to the probability and costs  of the involved risks ”

It is therefore designed with the objective of protecting the poor people having in mind the unpalatable business environment that surrounds  them and also their needs probabilities  and possibilities with product driven for this segment ignored by traditional insurance markets  ( Daniel : 2009). .It includes general insurance principles parading tailor made designated products coverage premiums  and services to suit this segment of the population   .IT is the bedrock of sustainable economic development and especially in the Asian countries has gone very far and some countries in Africa  like Kenya and  Ghana have also taken giant strides in this field

Evidence of  checkered antecedence abound in the nation’s history in which concerted efforts were made by successive administrations in the empowerment of the people through various micro credit projects and several poverty alleviation progammes. Although each of this scheme  Started well initially but fizzle out  along the line closing shops while the target masses returned to their former poor state . Their essence  was  to  serve  these unbankables and  marginalized   MSMEs .Insurance experts have noted that the schemes did die a  natural death  due to lack of  insurance .Consequently  could not provide a lasting solution to intended suffering  masses .BETTER LIFE FOR WOMEN  INITIATIVE and NAPEP were  prominent samples .This ignorance has ravaged  the country for along time  both   public and private sector  have wasted  millions of lives that could have  been saved  .

With  the incursion of  microfinance banks [MF Bs]  in the problem has  persisted  haunting  ignorant  depositors patronizing their services where unsecured micro credit is the order of the day .Educating the masses on the method  to insure their deposits seem not to be their immediate priority .The  policy makers and industry operators perhaps are ignorant of the  implication  and  increasing corporate mortality in the country .The schemes practitioners are only interested in putting  down a condition   for accessing funds that are at best not truly insured  failing to save the future of the funds .

   FAILURE  OF   INSURANCE  PRACTITIONERS  TO CREATE  MASS  AWARENESS                                                                                                                                                                                                                                                                                                                                                                                  

Insurance  businesses  in Nigeria   are basically metropolitan based and  hardly any awareness   being created  in  the countryside .As the formal sector insurance industry potential businesses and  market decline the level of awareness has refused to grow .Those who care about grass root limit their attempts to life  products  which is usually comprised of long gestation period not attractive and  affordable to the peasants  with no surplus funds to throw round or at best concentrated on third party motor insurance .They believed the grass root poor or common man has no muscle to flex around or pay much premium in comparison to former market size (Nwoji, 2008). Hardly a few concentrated efforts on grass root penetration even though  they claim to do so .This is vital because the poor need insurance more than the privileged considering the over 148million un served potential market .in the country .Using the country as the case study in Africa we can be sure of the far worse climate in the rest of Africa excluding South Africa

According to experts micro insurance  is the solution to the failure of micro and small businesses especially those with micro credit  from MFIs It ensures sustainable capacity building both for the institution [supplier] and the target audience in the long run .In Nigeria today more than 90  percent do not have any  form of insurance .Infact only one percent of Nigerians have one form of insurance or the other probably  some 1.5million people.  Hence it offers a reliable medium to address this huge gap and deplorable cultural barrier  that separates the nation from development market .Daniel[2009] also concluded it is characterized by low premium low coverage limits and sold as typical risk pooling and marketing arrangement are usually designed for low income people concentrating on marginalized grass root businesses  not served by mainstream typical social or commercial  insurance companies  .It is also characterized by the following ;

1.     Targeted Low income population .

2.     Cover  specific risk  protection .

3.     Proportional premium payment is equiproportional .

4.     low premiums  and  maximum  sums  insured  are low .

5.     Premium flexibility  payment .

6.     Focus on  mass consumption [policy holders ]

7.     Claims documentation are easy .[ Daniel : 2009 ]

 

Ojinaka [2009] argues that it is more profitable  than all industrial risks put together. It is very  cheap pose fewer problems than the traditional insurance in  addition to the fact that the poor cannot instigate claims. To avoid failure of micro insurance projects it suggests group bonding based on societies bodies unions and associations as precondition for success .This distribution channels will be prime movers compounded with appropriate regulation monitoring and enforcement. Its sustainability would translate into sustainability of micro credit projects in the long run preserving capacity building .

          OPERATIONAL STRATEGY   PACKAGING   AND MARKETING  ARRANGEMENT

Micro insurance  follows simple marketing arrangement For every micro credit project to be undertaken it should be attached .For instance where money is given to a borrower for a motor cycle  or  a  sowing machine insurance package  could be included using the distribution channels. It is a form of security and not a luxury the study noted .The road to sustainable  economic growth  can  be harnessed through this practice  liberating our people from mass poverty and sustain wealth  creation capacity. The strategy will take  care of mass market the petty traders farmers SMES and not saturated top market

Few companies that have tested the virgin market in the country   can testify to its growing appeal and profitability. In 2009  the Group managing director of Mutual Assurance Akin  Akinbiyi  affirmed this potential   That his company main product was micro insurance He concluded  that with total income of  1.3billion naira coming from the sector in 2008 alone covering policies worth 100,000 naira  and per capital  premium payment stood at100 naira .While it also paid  over 300 million naira during the period as brokerage  fees  and  commission  on businesses in the sector .It is a promising experience that refocused the business as he pledged  never  to  run after government  account again.

Not only  will it grow the economy it  will also potentially combat crime violence theft and  prevents slums through development finance insurance .It can also prevent  frequency of losses boost  competitiveness  and life  expectancy bridge gender inequality protecting education employment  generation  sanitation influenced population control and parade intimidating corporate profitability as in the case cited above .Unfortunately Nigeria is a non starter in the business compare to other advanced countries of Europe and Asia .The role of micro insurance is  to build capacity  nurture sustainable social development maneuvered to eradicate mass poverty transforming the dividends of successful micro credit project into dividends of  our nascent democracy .

 

        GROWING   INTERGRATION  AND  GLOBAL   PERSPECTIVE

Due  to its increasing appeal and growing role  towards economic development countries of the world have increasingly adopted this practice so as to provide cushion and  to protect their small businesses which are  exposed to several risks such as micro health ,fire ,burglary , death property insurances and family responsibilities and therefore providing the low income people who lack fallback position whenever there is a loss .Developing countries like India ,Bangladesh ,Brazil , Bolivia South Africa , Philippines and Kenya are in the forefront of the this new crusade .It is noteworthy to affirm like mutual Assurance in Nigeria  AIG life in Uganda the entire Brazilian industry  and Coco life in the Philippines have adopted the practice

Today an estimated  80 million people out of a whooping  6.5 billion people are covered fully indicates grossly underserved  and highly untapped world market .It served a little above 30 million people insurance clients in China and India respectively .While only one out of five households has access in Africa  to financial services including less than 4% that have access to microfinance and less than 1 % have had access to commercial finance ; the proportion is much lower in micro insurance ,just 0.3 % of the continent poor are insured .Also statistics show that in Ghana and Tanzania only 5—6 % of population were reported to have had access to financial services in 2004.

According to Daniel [2009] 23 of world top 100 poorest countries ,which represents close to 400 million people no single micro insurance activity was found .Since statistics show that only less than or 20 percent of people in the developing countries earn their daily income from formal market and  more than 75 percent of the world poorest people live in remote rural areas[Akosile ,2008 ] , this  is an indication which reflects the huge potential of micro insurance as microfinance grows around the world .

     MICROHEALTH  AND GRASSROOT MEDICARE INDUSTRY

MICROHEALTH is the provision of lowly affordable grass root-oriented health services using sometimes local technology where appropriate to heal  patients . For mainstream medical practices to be patronized its services must be affordable to command mass appeal in the communities where ordinary access to basic entities make life unbearable .To provide affordable to all encompassing and sensitive  healthcare there is no other solution to micro health robust framework . It will solve capacity building problems inadequate health services poor  reward system and the challenges of inadequate health workers especially in Africa  ..

Current aid is inefficient , failing poor people and only eight cents in the aid dollars are channeled  into government plans including training and salaries of teachers and health workers .Critics against aid donors have contended that donors should change their method of providing money making long term commitment   and national support possible .According Oxfam , With this shortfall of over 4 million health workers  and support staffs    needed a quarter of them are needed in Africa    but the 600, 000 health workers  that WHO noted were in Africa is grossly inadequate . Braindrain was partly   blamed  for t he debacle and also poor resources personnel   .

Tanzania produces for instance 640 doctors nurses and midwives a very passing year and to reach WHO recommended level in a decade it must produce 3 ,500  teachers etc . each year provided no atrophy or attrition is experienced by practitioners during retirements , migration and deaths. The

direct costs to Africa for every health workers migration is put at 500million

[ECA: 2004] . As a of poor pay package and poor reward system they are forced to migrate to better climes .In other words fragmented and underpaying public health systems in the health sector lost competent personels to donor funded , private sector and developed countries  as  a result of this complications . It was found out in Ethiopia health workers could earn three times as much working American donor agency as they could at local ministry of health . It is no longer news that most of Nigerian nurses and doctors have moved  Saudis and the U.S. in search of golden fleece .

There is no alternative to providing adequate healthcare and  surmounting this burden in the developing territories  than to patronize the activity and practice of local medicine men where appropriate and make health care services affordable to masses .Self empowered can take of their health responsibilities knowing that health is wealth once economic freedom is secured.

  OTHER SUBDIVISIONS  AND  NEW INSTITUTIONS  IN THE MARKET

Besides micro credit  trade  micro insurance and micro health other sectors in the market  include micro housing micro leasing  Micro industry micro leisure micro banking and development finance a new innovation of Development Finance Group [DIG] .All this can be noted in the advanced microfinance market [ AMM]of the world which are largely under tapped even in  Asia etc.

With the new microfinance technology recently advanced by Microfinance Africa [MIFA] undoubtedly the world first potential microfinance rating bureau specifically focusing on highly untapped African market The entire world microfinance market had been reclassified as Advanced Grey Market [AGMMs] They are  advanced but certainly a grey market .Given the magnitude or enormity of mass poverty bedeviling the territories of Asia and Latin America .Excluding the OECD Club the rest of the world are classified as Blockbuster Grey Market [BGMMs] .That is un developed microfinance market of the world . Even in the advanced market some 10 percent  poverty levels were found in the 90s [also AGMMs].The grey market of Africa Middle East parts of Asia and Latin America is highly extreme and  a blockbuster in that regard .We know the strategic benchmark is usually mass poverty  ravaging more than 80 percent   of world population should we use UNDP Poverty profile as calibration and not World Bank ineffective poverty line concept

The entire formal market size institutions and models can easily be reclassified repackaged and imbibed into lower cadre microfinance  market where suitable  to enable the market diversify risk spread and  serve the complex needs of the  economically active poor while  keeping undiluted  the ideals of structural microfinance . .This is naturally expedient  thing  to  do and must be fully adhered. Given the fact that  the size of the  existing market institutions at a given  period    determines the adequacy  proportion  of development capacity and sustainable practice vital  to harness sustainable mass poverty relief  and  possibly  eradicating the menace  especially where microfinance neokeynesian  [MNKs] ethics are imbibed by  state political  will

This needs a good development planning .Many Institutions can be nurtured such as micro- finance hedge funds[MHFs/MIHEFs] microfinance investment banks[MIBs] and houses[MFHs] microfinance discount houses[MIDIHOs/MDHs] micro venture capital [MVCs] community sovereign wealth funds[COSOWEFs] private wealth fund [PWFs] micro asset managers [MAMs] micro mutual fund [MMFs] private equity microfinance corporation/shops [PEMS] and micro investment security institutions[MISIs] and a host of others have been advanced by [MIFA]as a means to spread wealth .

This is more suitable for territories with large informal sector which often constitutes 70-80 percent  of the economy A nation can then have dual financial system adding the micro financial system to serve the  huge informal market  albeit better   with grass root  oriented  laissez fairer regulations  and micro prudential standard that are affordable to the micro financial markets Most informal sectors if not all are heavily un served  and similarly underserved even with the effort of informal institutions tirelessly providing inefficient services .The above institutions would serve in the micro financial  markets expected to contain the size of  a thousand credit markets in the country  .

According to Microfinance Africa  [MIFA] a budding microfinance development investment corporation and microfinance rating bureau ,  in   Nigeria alone they are to cut across the nation’s  entire 97,000 economically passive communities .With a good political backing the nation can create wealth worth more than  the U.S current G.D.P[15trillion dollars/2009 prices] prior to the maturity of Vision2020 and poverty can be eradicated in a decade or two even less based on the level of political backing  –It is an effective model one to tame the evils of inflation that the Keynesians and the monetarists  and the entire macroeconomists  have struggled in vain after over the last  30 years or more .But we seem not to believe our intellectual power desecrated  in favor of western models [i.e. outdated neoliberalism] that could not spread  wealth to the impoverished nations and   the potential of our population market[POM]  which is the major criteria in this micro-metric redistributionist  dual financial model .

Should China adopt this dual micro financial model how much wealthier will she be in terms of  GAPco-efficients  [not GDP] and then making efficient GDP size  in the long run since it has a very large poverty market and population market respectively. Nigeria can even be far richer than she does in this regard if  we consider the untapped wealth of her natural wealth the POM  size and making money from the export of this service to the rest of the developing territories  where the model actually fit in the same way  as the British export her financial services indisputably as the best in continental Europe Not left behind the full exploitation of her highly untapped  technology base and optimization of 60 percent of her arable land lying moribund it can indeed be a world superpower while  exploiting  the mystique of her ancient esoteric knowledge system like the IFA oracle in the Yoruba land  among other untapped esoteric religious power spread nationwide fully exploited  and  turned into science like the Anglo-Americans 

  MICROFINANCE DEVELOPMENT  AND  EMPOWERMENT       MANAGEMENT .

Humanity is in the age of microfinance .The world first potential micro financial system though not yet admitted and the model [ neomarxist free market economy as a new generation of  free market ] not  yet captured in practice existed in Afghanistan .It was reported according to World bank that in the aftermath of decades of  corruption and devastating crisis and bloody conflicts Afghanistan had no single functioning bank by the end  of  2001 . And so people and traders in the country turned loan sharks and usurers who demanded 80 percent interest annually or even higher . With the help of world bank and  other donors five years later can access  loans on a petty basis and other micro financial products and services  from the existing  MFIs which spread across  the 22 of nation ’s 34 provinces

It has the potential for becoming the world fastest growing economy once the model is captured and practiced .  Demands for loans far exceeded supply despite interest  being  higher than 30 percent  annual rate vital  to

cover the cost of start up of financial institution in the rural areas .These MFIs are the first evidence of formal sector Afghans have seen for years .helping to start businesses reaching out to farmers designing new ways of survival and livelihood  rather than the usual ways of growing opium poppies .

Based on increasing evidence  it has also been shown to vividly contributes in a significant proportion to nutrition ,education  ,health  ,financial security  ,education , housing , women empowerment , creating a sense of  entrepreneurial energy among those that patronize its services .This potentially promotes lasting peace and social stability as people find a means of breaking  chains of mass poverty .Banking to the poor can create a  condition of lasting peace  and the potential  surpasses elitist mainstream finance if well harnessed  .It works effectively in its distinctive system since entails a whole range of financial services to the poor .The war in Afghanistan can only halted and discouraged by financial and economic freedom which is possible only by promoting this noted structure .

The World bank being the world largest microfinance donors contributing 1.2 billion dollars or 6 percent of its total lending in 2005 to credit bureaus policy advice credit lines  and strengthening market infrastructure  to thrive microfinance global  market infrastructure  represented by CGAP  as a consortium of development agencies both public and private housed at the bank  which controlled 95 % of  microfinance  global capital must be divested or streamlined of its activities or operation vested in a separate bodies to cater exclusively for the sector  while preaching this model or its dual redistributionist brand as relevant to countries with peculiar climate

                   A   NEW  GLOBAL   ORDER : WLMNs/WOMILONs

Truly speaking in the World League of Microfinance Nations [WLMNs]  no top market nor  the  middle market is found .That could be extreme! We may  come down to the level of poly-myopism  in the  industry and classify the noted markets as both top and mid-ranged while the least Developed Microfinance Nations [LDMNs] or  territories are non-starters mainly in  the Microfinance Dark  ages. Their grades are sensationally hyper-critical  and objectively over sensitive using the  menace enormity as measurement criteria and highly unprejudiced. In the succeeding chapter the best performer in Asia is rated C+ in terms of corporate impact  over social obligation .

The neo Marxist free market  is envisaged  to rival neoliberalism presently and even though through its instrumentality is far older than neoliberalism  has no global structure .With the rise of Breton Wood treaty United Nations was formed in 1944 and named by FDR .The World Bank and the IMF followed thereafter spreading the tentacles across the globe .Hence a global structure was created based on the Keynesian ideology and by the late 70s to early 80s Adam Smith free market principles gained renaissance through the ideology of  neoliberal exponents  Milton Freidman and  Fredrick Von Hayek . The rise of globalization was added plus to western powers profiting immensely from its inequity  .

On the hand the antiglobalisation protesters worldwide unfortunately  protesting at the cost of their lives have no voice which neomarxism brought as relief to their  salvation door .It is expected to cover world poverty market—approximately 80 percent of world population which are perennially marginalized  .To erect structure for elusive equalitarian globalization they  also need a voice –the international macro financial architecture to complement the effort of  global mainstream market .

WLMNs/WOMILONs  is equivalent to U.N. owned by elitist  nations. OR can be called United Nations For Macro finance [ UNFORM /UNFM ] .World Bank For Microfinance [ WBFM/WOBAFORM] and the international monetary fund for microfinance [ IMM/IMOFORM ].Allied agencies or subsidiaries  shall be established to complement their effort .

This marks the rise of  new global order creating vital equity that is missing for a larger stretch of modern history .Nations eligible within the ranks of WOMILONs   by observing this  STRATEGIC VISION -- Neomarxist manifesto [WONOMO] should sign  the world Neomarxist treaty [WONT].

 This complete the Equalitarian globalization crusade as the ultimate thesis Of Abrahamic  equalitarian curve  which states dual class power triangle [DUCAPOT ] should take guard and control of P.T. Community as a prelude to world harmony and balance of power equity  presently  controlled by class power triangle [CAPOT ] –a group of development separatists leaguer . This is necessary  Since it is difficult to scrap the old order due to its sovereign power  creating in the process  a diversified  world financial market and  dualised system .This would to check mate the excesses of old order such as the imperial liberalization of balance of payment capital and the immobilization of scarce foreign exchange earnings of the utopian nations should be guided against . WONT or World Neomarxist consensus as equivalent to  Washington consensus Can be beginning of new world order .           

               THE PRESENT GLOBAL ORDER COMPARED

THE BACKGROUND  PRINCIPLES OF  MICROFINANCE

CREATING  A  CONDUCIVE CLIMATE   FOR    ENTREPRENEURIAL   DEVELOPMENT

During the industrial revolution or Lysander’s period around 1800  J.B.  Says  a French economist  observed that  an entrepreneur is the one that shifts resources  out of an area of lower yield into a more profitable avenue parading higher productivity and greater yield .But Says hardly   mentioned  who an entrepreneur is .Centuries after the coinage by Says there had been total confusion about the emerging terminology The definitive appeal was highly vague and ambiguous It is not exactly clear whether a trader or a businessman who hardly create something new is an entrepreneur neither does  he create a new satisfaction nor a new demand Today it seems to include every tom dick and Harry in the business   Is that so ?

Although  the neoclassical economist introduced the word  into our lexicon  the coming of Joseph Schumpeter did more than locate the place of entrepreneurship in the economic analysis Corroborating Lysander’s to a larger extent  Schumpeter once described the role and impact of combining  credit plus new means of income production flows .This  is  regarded as ‘ fundamental  phenomenon of economic development ‘ and the process known as enterprise is noted as the soul of  human material progress . Factors influencing this practice such as cultural development [dominant values] , human capital availability , institutional development and policy choices  according to [Utomi,2008]. are fundamental resources available to leadership for the prosperity of  their nations. Any abrasion against these ideals better explains why nations are poor .

Unknown  to the study More worrisome is the fact the ability of even leadership is heavily constrained in an ocean of ignorant follower ship or where objective follower ship is grossly lacking This would certainly bounce  back as  unbearable burden  on the former and could truncate earlier golden effort .Entrepreneurial revolution will be very hard  to  attain in the developing  territories unless a certain level of information democracy is  first attained . This promotes mass enlightenment as the very first requirement of advanced economies .The reason is clear; objective follower ship often  makes the work of ordinary leadership more effective . How so wise to follow this ideal which has distinguished the poor nations from the rich and mighty .Information democracy provides institutional incentives for the development of Utomi development factors [UDF] does not need an effective leadership where objective follower ship the very first requirement that could potentially nurtures the former is seriously  lacking or ill which can only capitalize capital underdevelopment. Since they control the natural forces that throw up incentive to nurture this leadership effectiveness it holds the ace for rapid capital development of vastly underdeveloped nation . Therefore the relative  proportion of information democracy existing in a socio- economic system determines the size of a nation ‘s development capacity

The truth is that only enlightened follower ship can demand for development It is a fundamental phenomenon of  socioeconomic development that catalyses entrepreneurial development as the very soul of human material progress .The submission also is that only robust socioeconomic system  can nurture maintain sustain and safeguard virile economic system as a platform for entrepreneurial revolution Building up cottage industry from the scratch into a multinational is made possible by such Para macro- economic efficiency. Once social value is created  economic value where created and possible   can then be  sustained  and leveraged for capital development [not sustainable development ] to build  which is the last  stage in the development cycle. market. If indeed this process ‘enterprise ‘ is the soul of human material progress information free market  as a social enterprise  is the very soul of social material progress  .Value innovation can truly  be cultivated by it which is the  primary function of an entrepreneur .

A micro entrepreneur was identified as the steam engine  of industrial revolution   The  strategic impact of this revolution which was nothing less than  the promotion of economic freedom and was first made possible by art of  social freedom [information democracy] promoted by the Renaissance [1300-1600]  Although a leading exponent of monetarism professor Milton Friedman once noted that without economic freedom there can be no political freedom  Circumstances over the last 500years of western civilization has proven otherwise that social freedom is the totality of all freedom brands in the face of ever elusive cultural freedom underpinning the institution of liberty and that without intellectual freedom there can be no spiritual freedom and without spiritual freedom also  there can be no intellectual freedom

.Also without intellectual freedom  there can be no economic freedom and without economic freedom there can be no political freedom. This formed the auto –freedom art of social enterprise or what is called the Great Charters Of Liberty [GCL]  functioning according to noted equation which provide a virile framework for a robust socioeconomic system .Inability to liberate the auto-run device of this art has often dampen development zeal in the  developing countries market greasing the cycle  of counter-development trap imbroglio boosted by the separatist league  and then the elusive search for mass development and entrepreneurial revolution  perennially persisted in vain.

 Utomi [2008] once noted why is high value enterprise  not so easily pursued  by a lot of interested individuals that really desired to make huge profit .This is not really linked to risk or unpredictable outcomes per say but the realm of this socioeconomic system is structurally beleaguered  perpetually  alienating the nation from  potential development density that might take  centuries to   nurture     and  recover .Therefore the cost implication of development  forgone accumulated over time multiply as mass poverty truncating the effect leverage  of development market policy choices and successive institutional legacies without remorse

The  practice  of microfinance today in Nigeria has been fraught with structural indignities. Unmanageable credit risk steep interest rates  increasing repayment defaults strategic market deleveraging   and lack of national  disposable data resources are symptomatic evidence of  poor performance and lack of national micro financial system .Even where the risk or noted defects are avoided the entrenchment and optimization  of the system is another matter The climate noted above must be created for any successful microfinance projects to be cultivated They formed the principles of  socioeconomic microfinance that will  ensure a sustainable and conducive platform for its cultivation  launching entrepreneurial revolution in the long run. These are background principles not related to the industry but a necessity for its success .

 And Upon this framework the fundamental principles of microfinance can be successfully launched . It not only determines the quality of the practice but  also strengthens  and multiply its socioeconomic impact .In the microfinance developed territories or advanced grey market besides OECD Club  this is grossly lacking or less exploited which fully explains why poverty is still very high there Besides India which unluckily has extensive population market Bangladesh and Bolivia are a poor sample of the industry  general problem and the ailment  of  microfinance usual ineffectiveness and market  insensitivities .  Policies and institutions have been a colossal failure due to this challenge that took half a millennium for the Anglo Saxon  to  battle  which can only be prevented  by resolving the identified socioeconomiasis  .The dichotomy between the rich and poor nations was linked to this factor .It is both internally and externally imposed  and no matter how they try it keeps strangulating every projected future development agenda from attainment in the territories.

           

                                           Resolving The Puzzles Of Microfinance 

The concept of microfinance unleashes a new chapter in human history never to be equaled in terms of mass appeal and heavily untapped potential as the sole antidote to rescue the poor from mass poverty and ensuring and safeguarding in the long run sustainable economic growth and  capital development .

Microloans,microcredit and microfinance we noted are industry technical terms interchangeably used to refer to grassroots  market technology and local progammes specifically designed to extend informal sector credit to the unbankable and the economically active poor .It helps them undertakes economic activities and boosts self sustenance ensuring financial freedom in the long run .It not only promotes micro productive sector grows self sufficiency but also as an avenue that represent the society underprivileged .

For the umpteenth time according to Wikipedia-the free encyclopedia and various sources "micro credit is the extension of very small loans  and   advances (micro loans )to the unemployed to  poor entrepreneurs and to those living in poverty who are not considered bankable”. These individuals lack collateral steady unemployment and a verifiable credit history and therefore cannot meet even the most minimal qualification for access to traditional credit .Micro credit is a unit sector of microfinance which "is the provision of a broader range micro financial services to the very poor”. Therefore micro housing, micro leasing ,micro credit trade which [pioneered microfinance],micro insurance micro industry etc among other subsidiary  components constitutes wide range microfinance based services .

Most conventional sources including wiki have contended that micro credit as a financial innovation originated from Bangladesh ;where its potential universal effectiveness  just like India has been proven beyond a reasonable doubt and innate capacity to empower the poor. According to Grameen indeed "it is the right of the poor " .

                                  THE QUALITY  OF  MICROFINANCE

There is no alternative to salvation from poverty .Although some sources and a growing body of literature such as Abolo [2001] and Hulme [2008]have contended against this fact and interrogated :Is microfinance necessary ? or Is microfinance the answer to alleviating poverty ? The answer given is: only partly .And that microfinance alone cannot alleviate address nor eradicate the terrible condition or environment that THE POOR LIVE .

Infact a couple of studies  advanced also contained similar details that it hardly  alleviates poverty .The industry critics  never cease to make big claims citing the fact ;for instance Mohammed Yunus the founder of Grameen and the  acclaimed father of microfinance admits that 5 percent of Grameen exit poverty on annualized basis making economists probably to point that few credible estimates abound to prove the long run evidence of the effect of microcredit on poverty reduction .Another study reported by the Economist magazine in 2009 [July 18^th] which surveyed close to 2,000 households in the rural Bangladesh it had a considerable influence on education of borrowers school age  children in contrast to the sons of non borrowers by  a ratio of 62 percent against the enrolment level of  34 percent .Poverty action lab researchers at MIT  in patnership with an Indian microfinance firm in Hyderabad  did a random test on 52 slums that have access to microcredit and those 52 slums where access was denied .Another study in the Philippines by Dean Karlan and Jonathan Zinman [ both academics of Yale University and Dartmouth college ]. These reports could find evidence that  microcredit actually reduce poverty within the period of the survey . That only one in five loans led to the creation of new business operation in the city of  Hyderabad . Though this report also admitted that misfiring of target and diversion of funds contributed to near zero impact .  .Even with this glaring evidence the report heavily underestimated the capacity of microcredit in reducing poverty .And these are professionals .Skepticism and faithless individuals  are many everywhere and Yunus   may be one in a BILLION  people .

That it does not and cannot improve nor can attend to roads telecommunication ,cannot provide electricity water supply ,health and boosting quality of education .fortunately with the evolution of development finance now  speaking of advanced financial services to the poor by newly focused MFIs like DIG which have embraced a more expanded vision of broad based microfinance services; this jinx is getting broken .In addition to MIFA advanced technology and neomarxism there is no alternative strategy  to salvation from mass poverty. With appropriate system a new dawn has begun in human history .

             INDUSTRY CRITICS   AND MICROFINANCE GOLDEN AGE

So many misconception abound questioning  the ability  of  microfinance to eradicate mass poverty .Scholars and academics have fallen in this trap which indicates the level of warped intellectual capacity [ BAP cycle]existing in the researching process  . A true definition of microfinance alone is enough to convince a thinking person that it is the only roadmap  to freedom from poverty  and a safer world . Even without any solid research through case studies and anecdotal reports which supports its effectiveness  searching through 100 or more of articles to determine those that used enough qualitative data as emphasized by Sociologist Jon Westover before we can conclude about  its potential capacity ;knowing fully well that the thinking of researchers ordinarily by majority are not well  refined nor mature even when its effectiveness is proven by rigorous analysis . According to Westover none of them employed randomized control trials exactly as those reported  by  M.I.T. Jameel poverty Action lab  and Innovations for Poverty Actions         

  In the Microfinance Revolution 1980 Marguerite Robinson concludes “Microfinance could provide large scale  outreach profitably ”  In the 1990s It began to “develop by the day as an industry ”and by the 2000 its objective is to satisfy huge unmet demand on broader scale and reducing poverty .

We are about to enter  its golden age of   development should neomarxism be enforced and dual redistributionist financial system model deployed  after comprehensive restructuring following ABREC golden formula . With a micro financial system it is supposed to have a central bank for microfinance[CBM] including its allied regulatory authorities and credit markets-primary and secondary trading  micro financial instruments and micro credit securities  [ not of stock market model] AND allied agencies and diverse institutions with distinctive [Para]macroeconomic theories to drive the virgin system  to complement the shrinking  formal market and outdated neoliberal empire in every country of the world and a global structure to be created for it as emphasized in the ‘Age of Microfinance’[ subtitle: A new Global Order ] .Consequently all the anxieties such as unprofitability undercapacitation   and misgivings  posed against microfinance industry will be finally put to bed  as the industry enters its golden age implementing the golden formula of ABREC  .Indeed it is the richest industry ever in the history of man and largely the most untapped due to enlightened ignorance [worse than traditional ignorance which is flexible ] even among great thinkers and great researchers alike .

With this simplest but hardest logic resolving every problem in the industry with its own different study of economics and entrenching redistributionist market  dualism through complementary  neomarxism in an economy  more wealth can be created than ever before in the history of man catering for its self  population growth and immediate capital needs of $250billion estimated generating more and serving the needs of  those marginalized from formal market. The poor and their region never need development aid a sort of further imprecation on development ;because they need no help but trade for complete freedom . Fears about the unprecedented rate of capital flowing rapidly into the industry and the potential risk can be put to rest once neomarxist free market vie competitively with [TO BE REFINED ] neoliberal free market .That is twin economy or dual economic machine under Neomarxist arm of  Marsolism  .That is the only way to all  inclusive financial system [ but multiple or dual ] and the surest strategy in which funds  flowing to the sector can be managed effectively well spreading wealth or opportunity to the high and low ,rich and poor  .This strategy is financial system deregulation diversification and decentralization OR financial system deregulation diversification and.decentralisation.liberalisation  [FSSDD/FSSDDOL].

 Every donor subsidies will be highly profitable and more than commercially viable once the transition roadmap sailed through peacefully  .Huge unmet and massive demand will be easily tackled and all obstacles to building sound commercial micro financial industry according to the piece ‘Poverty Problem’ such as inappropriate subsidies ,poor regulation and supervision institutional inefficiencies and a host of factors noted in other studies and the needs of the poor which are  manifold from lifecycle needs ,personal emergencies ,disasters and investment opportunities as emphasized in Stuart Rutherford ’s book The Poor and their Money  and other similar studies can easily be met .

Their vulnerabilities easily  reduced and eradicated as they grow their savings and little money in the system multiply  as the rich does in the mainstream market building up their assets with potentially far richer market than formal market worldwide  .The adoption of this system and neomarxist free market which preaches capitalism for all will put to  an end  microfinance movement which has lasted a century and a half ;because previously a fugitive  and a refugee living from hands to mouth will at last find a home .Any need to contribute to the goals of microfinance movement as emphasized by Brigit Helms in her book :Access for All: Building Inclusive Financial System , may be seen to live in the past .Provided with the adoption it finally has a home and the end of marginalization insanity for the WUTOCO –segment of global economy  .Only this nature promotes an inclusive financial system. With this optimistic projection for  adoption the goal of microfinance movement if any worldwide would then be the campaign movement for the adoption of the system  . This informed argument is vital  because the orientation of the CAPOT rule truly  is far different from the poor and the same system cannot be used to support the two due to over-excessive exploitation of the poor .We affirmed with the assessment of developing history like Nigeria immobilization of poor little capital to enrich the rich further impoverishing the poor is intolerable  such as the rural banking and community banking of 1990s and still persists ; who have no access to loans and credit from the same banks that have received mercilessly  their balances is a recipe for social and economic instability in the long run .

In Nigeria we have observed that less than 5% of banks customers have access to credit and only a  modicum similarly have had access to loan in the microfinance banks –a sub sector in which poor technology abound .No country is closer to the adoption of the dual financial system than Nigeria but because of lack of philosophy political economic ideology and how micro financial system looks like the moribund institutions that are already dead prowled in vain promising elusive salvation . Infact according Zaka Khaliq , Nigerian foremost and no .1 and most consistent microfinance  journalist ;observed  that existing lack of confidence in the industry will soon lead to its death. Other factors like declining deposit mobilization and low savings , mass withdrawal of deposits , deploying security operatives to attack  borrowers by lenders , poor recovery rate , excessive interest rates ,  poor regulation poor skilled labour ,insider abuse and a host of other f actors are prominent in the business .The adoption of neomarxist financial system will resolve with periodical reforms  this technical  barrier .This vital also across the world .Should it be adopted , World economies especially developing countries  will initially grow exponentially more than 10 times or like never before in mortal history.

In the reviewed  piece Poverty Problem ’s  subtitle ‘ What ‘s holding them back ’ the author  admitted as usually emphasized that employment  challenges besides the world poor have no access to financial services contrary to mass privileges in the developed world which  bridge the gap when times are tough . No life or health insurance , cumulative untreated diseases and mass illnesses and the death of  the breadwinner constitutes unbearable burden . No access to credit to buy machinery , bad climate destroys farm yield making them poorer and floorboards and hidden walls that can  be easily haunted with potential fire flood  or risk of theft are turned to savings coffers .Where access are provided mainly from informal sector  creditors  as the only source during rough times  to improve businesses but unfortunately at exorbitant access ..The annual interest rates usually from 300% to 3,000% indeed is a penal  and  a serfdom of a lifetime .Consequently all the gains go to pawnbrokers or usurers further widening the world poverty bracket . These people work in vain and a society with no human face  . A neomarxist system easily resolves this poverty problem with robust regulatory and self regulatory mechanism  put in place in every country  and also adopted in the new world financial architecture possibly under almighty deregulator is the best solution  ever proffered in  human history to all economic misery and mass deprivation resolving  every noted challenge  in the study and similar literature .Note this is vital to spread wealth  hoarded by CAPOT RULE to marginalized unbankables  and the underprivileged utopians of the world  . .

The capacity of macro finance [extended/advanced microfinance]is more than proven to eradicate global poverty with ideals that may be considered crazy in the mainstream market . There is no alternative strategy than to imbibe neomarxist manifesto [NEMO] or neomarxist consensus [ NECON] to replace Washington sectarian consensus in this most critical period of  human history and to recognize that humanity is more or  less in a potential  neomarxist age and the goal of  microfinance movement worldwide should be to  unite and campaign for the adoption of the system and its distinctive macroeconomic ideologies  for the sake of universal welfare and prosperity and not capitalist welfare and the prosperity of the development separatists . 

 HO]

 In the 13^th chapter we briefly rated the efforts of these thousands of  MFIs worldwide as not too good enough inspite of  giant stride being made like never before pulling millions out of poverty .The corporate vs. social obligation is  perennially in default and can be resolved by the solution provided and repeated all over this edition .Then the world can become a safer place to be with equal opportunity created for all and everybody that is willing according Marx be owners and workers .A new dawn has just begun .                              

                 

   

                                         

        CHARTING  A  NEW  HORIZON   FOR  SUSTAINABLE DEVELOPMENT  CAPACITY BUILDING AND NATION BUILDING

                 DEVELOPMENT TRANSITION AND  ROADMAP

The principal problem associated with development is the issue of capacity .By building  adequate capacity  development can not only be created but also sustained in the long run .Investing in capacity building is equivalent to nation building in the long run which depends on the enterprise of capacity to sustain polity and then nationhood by creating national wealth that outlived its times as the legacy of posterity  .A thorough adoption of this simple formula is a tested roadmap and a reliable  transition towards the end of poverty in the society of man .Developing adequate capacity  or sustainable capacity building is  a  foremost criteria to capital development .

As we earlier emphasized in the second chapter development is about  people and development means people . Jeffrey Sachs in his famous book The End Of Poverty ……..how to make it happen in our time observed that poor countries lack six major kinds of capital :

1.Human capital :this includes health  skills and competence needed to  make each citizen or influence economically productive .person ;

2. Business capital : facilities machinery and transport infrastructure needed in agriculture services and industry ;

 3. Infrastructure : Roads , rail water power  , telecom . , airports and seaports which are elementary outputs of basic development to promote mass development  and business productivity ;

 4 . knowledge capital :scientific and technological knowledge which can grow mass productivity is highly underdeveloped .This should  be nurtured for the promotion of production physical and natural capital ;

 5. Public institutional capital : Bureaucratic bottleneck and  distortion is a major bane . Commercial law , judicial systems , public sector services  and effective control that could ensure peaceful and   progressive division of labour  must be put in place to promote  mass development ;

 6 . Natural capital : arable land fertile ecosystems , rich soils and biodiversity. This provides ecological services needed by humanity for earthly sustainable living .

As we noted investment in people can take care of this responsibility and effectively manages these enormous assets for national development .That is the only challenge facing  the under developing nations  .The burden that this region has come to face is how to create wealth .In the World Bank report [‘where is the wealth of nations ? measuring capital for the 21^st century ’]  , it showed that intangible capital is near to zero in the major oil countries like Nigeria ,Algeria and Venezuela   and often negative . The classic ‘resource  curse ’as noted by Auty and Gylfason [2001]  was also documented .

When Richard M. Auty first used the term resource curse in 1993 he used it to describe the recklessness of  oil rich territories and their failure to use their resources to benefit their economies and boost wealth generation and counter-intuitively had lower growth rate than countries without abundance of natural assets or natural resources  .Studies by Jeffrey Sachs Mark Warner among numerous literature have shown link between natural resource abundance and poor economic growth .

Empirical evidences abound . In the Opec  territory between 1965—98 per capital in this region decreased on average by 1.3 % whereas in the developing world grew by 2.2 percent on the average  [Akinjide:2006] . The World bank further find out that  What is the most important component of wealth creation across nations ? It also interrogates whether natural wealth increased or decreased as countries develop . O f course it does decrease as long as flaccidity matures or develops .Then it noted the top 10 wealthiest states such as Switzerland , Denmark –the food basket of Europe , Sweden , oil rich Norway , Luxembourg –Belgium , Austria ,France , United States and  Germany .Except for Norway none of this depended on natural capital or resource for national development since they utilized effectively the Sach’s golden formula [SGF/SAGOF] which has taken them half a millennium to nurture . Even for Norway where natural resources including oil and gas from the North Sea  constitute negligible 12 % of total wealth , her mainstay is  SAGOF  .Whereas the bottom countries  such as Chad Madagascar , Guinea –Bissau , Nepal, Niger , Congo , Burundi , ,Mozambique Ethiopia and Nigeria which scored second to the last with Congo the percentage was noted to be horrible  .  For instance  in   a monocultural nation like Nigeria crude oil accounts for  over 70% of  its earnings  and 95 % of  export  receipts in a  country in which 98 percent are poor

Likewise in his book The Origin Of Wealth  Eric Beinhocker  also admitted what is generally accepted by all economists  that wealth is the product of  human efforts and labour using the sweat from our brows and the knowledge in our brains for cultivation and accumulation .In other words it is not investment in natural resources land geography and building  that is vital for national development per say   but in people .This investment in strategy and technology that boost growth  which can only be successful for the umpteempth  time by starting from  the grass root empowering our people and opening up our communities for mass development . And that of all markets  in the country  human resource  or  labour market is the most maligned and abused  market .

                 DEVELOPMENT  AND  NOT  DEMOCRACY

We have repeated this several times that it is somehow baffling that virtually everything that comes out from developed world are consumed and imbibed  hook line and sinker without remorse and without  reflection  or shame by the developing world including its  form of government we have adopted today which as claimed is symptomatic of development .Whereas democracy as they claimed being the best form of government is easily contended on the ground that it is  not a foolproof or  an arbiter  that represent mass  development in the longer term. These are the two poles entirely  clashing each other .Normally democracy is meant to promote development if not it should be abrogated for a better alternative . How can we make democracy work ? Does it seem an alternative not workable or exist ? Let us first look briefly at the politics  and  antecedence of democracy in the developing world .

The Greek writer Aristotle in the  4^th century B.C. , noticed these types of government :-- where power is held by one man is called monarchy ; where power is held by a few is called Aristocracy ;where power is held by the mass of the people ,this  is democracy .These forms according to Martha Stewart in The British Approach To Politics are described as mere  appearances rather realities and these types in order of sequence could be fronted for by the following : tyranny ,oligarchy and ochlocracy . Infact oligarchy or ochlocracy brazenly  fronts  for democracy in virtually in every developing society while the capital  ‘word’ lives in limbo . Every form of government can be  good and can be  bad it all depends on the human system which will drive the governance system and  chains . When the power belongs to the mass of the people they called it democracy but oligarchy in the same polity has conned the good aims of democracy if any and hence retards development that democracy is supposed to promote or provide . Hence democracy in the 3^rd world must scraped or revamped for it to be effective . If not a good alternative should be  found . . 

A media writer once argued the latter  position that democracy retards development .I  think the truth  is the most profound around .Definitely it is . He argued the thesis that the developing  region needed development rather than democracy was a brainchild of the  post war period waxed strong in the 70s when the cold was at its peak .Samuel Huntington  and a group of American political scientists argued volumes that democracy or undesirability of democracy for a country that have not  reached a particular level of   economic development .On the other hand they also argued what developing countries needed was good governance backing it up with appropriate data and historical instances . Writing in Democracy and Development Sola Fasure at defunct Comet [now The Nation ]  commented ‘ when the cold war ended the argument changed ’and the consensus was that democracy is good for every body .. But he bungled a good argument that ‘the lies and propaganda of the past will simply not go away ’ .Were they truly lies or propapaganda because democracy did fail to promote absolute development .

We assess democracy by  global appeal  spread  and impact . The growth of democratic institutions that started in mid-70s spreading wildly over the  next  two decades  into Latin America former Soviet region and the SSA region in its third wave as coined by Huntington suddenly grounded to a halt .According to freedom house a democracy watchdog there were 118 electoral democracies in 1996 around the world .Almost a decade later they  were 117 in relative proportions rated free partly free or not free were static since the 90s

Usually in the 3^rd world the impact vs. development is close to zero because structure to make democracy  effective if at all indeed vital to development is grossly missing .The democratic interest had persisted but development in this region had stalled and  the grand hopes have not been realized  .Four years ago the former soviet had gone from frontier land of democracy to waste land  within a decade The south American experiencing crisis of democracy from weak state institutions to corrupted political elites  .Some reports argued 15 -20 years after the gains of political freedom personal security economic well fare were not better than in the previous period .

Africa is still the basket  case of democracy unworkability in which authoritarian democracies have failed . This is working perfectly in the former soviet block-mainly Russia  and especially East Asia  and including China North Korea , Vietnam , Laos  and Singapore . These are some of the world fastest growing economies . Majority of African countries have slumped further into poverty and gross underdevelopment in which every form of government has failed . The human system or institution  is the major problem. 

There is no doubt that  western Democracy foisted on the developing region has grossly under-performed and heavily retarded development as they failed invest in their people ballooning mass poverty .We need not be deceived  . This is simple .In 1992 before an audience in Philippines  .Singapore ’ s Lee kuan Yew  remarked ‘I do not believe  that western democracy  leads to development . I believe that what a  country needs to develop is discipline more than democracy ’ .And good governance is a function of the relative stability of political discipline that is mature enough to curb the excesses of democracy that disrupts the flow of development to the people .He observed  ‘the exuberance of democracy leads to indiscipline and disorderly  conduct which are inimical to development ’.

It is no longer news that this belief transformed Singapore preaching new ideology  and consolidating this fact that each  nation must determine the nature of development model and pattern that suits its economic climate and demographic institutions .The belief in the superiority of governance in the case of India –the world largest democracy and the Asian tigers .The three authoritarian democratic states between 1960---1987 , grew at astonishing rate of 6.4 % per capital whereas the liberal democracy in spite of its highly educated and  committed leadership still  recorded a paltry 1.9 percent per capital and western style democracy has dampened the possibility of  radical changes in favor of the poor  .

Radical changes in favor of the poor and efforts at land reforms were stressful and frustrated by powerful landed elites  in brazil and Venezuela prior to the election of left wing government in this region to effect reform in the new century. Development is a turbulent process which involves distribution of resources   mobilizing every available resource to dominate forces of nature and ensure that every stakeholder in the society is affected .It should be noted that institutions that have supported and sustained western democracies were evolved  over the last 400 years .The  British parliamentary institutions  the oldest was developed over the course of a millennium .

Political scientists and media scholars have contended this could  be strenuous for late comers to development which need to adopt home grown institutions to quicken their pace of  rapid development or else may not catch up with the rest of the world .

           THE DECADENCE  OF DEMOCRATIC INSTITUTIONS

The  decadence of democratic institutions permeates every part of the developing countries .We shall use the basket case of  Nigeria as the case study at this point .The deputy editor at Business Day Charles Ike-Okoh and the fellow Journalist Badejo Ademuyiwa  in the research report entitled  ‘ National Assembly : World ’ s  Biggest Democracy Cost Centre [ 2] ’[10 Tuesday 10 February 2009 ] .In the intro , they affirmed ‘ Since June 2007 the house of representatives  has not passed 10 bills because most of their time is spent sharing money .’ According to a former legislator  ‘‘It is hard to determine what the lawmakers take home monthly .Nobody knows it except  an insider . It has been  done in a  way that nobody  can  discover it. Only the banks can tell the exact amount a federal legislator collects monthly ’’.He called for removal of secrecy through the order of the CBN  and the backing of government . This he believed would not be possible and can even be politicized by CBN .

The report shows that the national  Assembly  member ’s  monthly salaries in the early part of Yaradua vs. Good luck regime earned 4.5million exactly the size of a local government  allocation from federation accounts in 1999  while the speaker collects 33 million naira . From January  2008 onward each collects 10.7 million naira and Speaker collects between 75 million to 100million naira .  The senator earned 44million naira  monthly and  528million naira  annually and 128 million naira annually for the reps ..

Every budget year they bring up several projects and then huge money allocated to recurrent expenditure is eventually shared among themselves after passage of fraudulent bills plus huge  constituency funds, Which do not also reach the grass root  .

To worsen the case nobody audits their accounts  because the auditor general  of the federation which ordinarily audits the National Assembly and public account committees with supervisory powers in both houses   are easily being  bought over .National Accounting Standard Board [NASB]is also being  compromised and sanctioning for erring auditors and  professional accountants  is common .Selfless service is very hard to come by and corruption to borrow Stewart ’s  ‘has turned  a  bad habit into a mortal disease’ .Every institution is consumed by this intrigue and moral decadence .Consequently less than a quarter of  1%  of national population controls more than two-thirds or 80-90 % of national budget and wealth  in a country in which more than 3 million join labor market every year .And one can imagine the kind of impact that  a house that is often divided itself will have and where fight , exchanging of blows and rancor had persisted among members like primary school pupils will have .

The question is : Is democracy promotive of development , decadence or corruption ?Are we at this stage fit for adoption ? The military had not helped either even though the best development and the worst corruption era were perpetrated through them .The nation’s hand is tied . .What can we do ?  It is the same story across AFRICA  in which 150billon dollars  is siphoned  annually  by corruption .It is a bitter truth to swallow that we do not need western style democracy that lee Kuan Yew  believed is an abettor of indiscipline and  corruption .The solution proffered  also take care of new form of government that is responsive to developing territories like Nigeria .

Above all it preaches development and investment in people .and first and foremost its peculiar financial system model must first  evolve prior  to  its adoption  using DUCAPOT rule to touch the grass root .Therefore the importance of microenterpreneurs and SMEs cannot be underestimated which is the arrow of development

DEVELOPMENT INITIATIVE AND INDUSTRIAL REVOLUTION

Professor Alexander Geshenkron  in  a  comparative study conducted

‘Economic Backwardness In Historical Perspective ; A Book Of Essays [1962] England ‘ . He noted the success of industrial revolution in England  rested largely on the success of SMEs which requires little capital to operate in  addition to founder’s specialized entrepreneurship . As  an  economy categorized as moderately developing  Germany also flourished during the period through them. And  depended  heavily  on the Banking sector for their success .

Likewise the quantum leap by  Japanese economy during the similar period  presented a more remarkable picture of the power of these wealth machines to support her  phenomenal  development  prior to World war 11 .The secret behind this economic miracle  according to Professor  Yamamuva  was simply  cultivated  by phenomenal growth in commercial lending to micro enterprises .This was made possible through the  great Zaibatsu – an equivalent of  modern development banking model . Today the world sole super power the United States followed similar universal pattern of mass development .For instance Banks in Louisiana were noted to have relied heavily on SMEs as engine of growth and so heavily financed them for purposes of economic welfare  of the Nation ‘s citizens It is the same logic everywhere .The developing countries  also after independence have pursued   and implemented  similar policies  to no avail .owing to socio psychological self imposed barriers and the unceremonious truncation that came later through external aggression .We should not fail to remember that China and India are both 2^nd and 5^th largest economies on earth .Their strength rest largely on SMEs in addition to micro enterprises .

                     AMERICAN POST CIVIL  WAR  RECONSTRUCTION

The American brutal civil war finally came to an end  on April 9,1865 when General Robert E. Lee surrendered to the north country .The Americans came to discover the magnitude of the social and economic damage was far inestimable especially for a nation already in its glorious path to industrial stardom .They were confronted with the big question of how to rebuild the war-torn   economy .Their challenge was to build the world most  powerful industrial superpower  and building the  largest  economic powerhouse means unseating the British economy into distant obscurity .And so they turned to entrepreneurship as a sport in the reconstruction effort and took this challenge farther than any other nation in the mortal history  .

There is no doubt that during the post war reconstruction effort some American entrepreneurs actually stood out with unmatched record and indelible profile in their generation  for all time .These four barons can be regarded as the most ferocious players during the period charting away out of economic horrors with  the  most aggressive entrepreneurial and selfless disposition never seen in the world prior to the period . Andrew Carnegie did not waste time transforming the American steel industry into most competitive mass market worldwide while cutting down the monopolists .In the oil industry John D.Rockefeller   was extensively  felt and a phenomenon until this day with a stroke of master strategy transformed  the under developing nature  of the then industry into world behemoth today making America to consolidate its leading status .He not only displaced the monopolists but extended his distribution channels across the world mainly in China and Japan .

Particularly of note  John Pierpont Morgan holding history by the neck rewrote the pages of American entrepreneurship from the backwoods and backwaters of  history into world leading economy .He shoved aside competition to become defacto world  central banker and America central banker even before the coming of the Fed. .He was also a foremost venture capital single handedly acting as intermediary par excellence  and midwiving  crucial capital flows into American SMEs risking even his   private capital to save his country from the gold panic of 1893—95 and the successive stock market panic of 1907 .Like his colleagues no deep seated patriotism can be better than this earning an unrivaled place for themselves in the annals of American antecedence .

Starting from the grass root they rose beyond their borders to become the envy of the world giving back to the communities most of  the wealth they had generated  donating varsities schools  charities hospitals and libraries creating a conducive environment for new generation of SMEs to thrive .

America as a result of barons was able to dominate the world using the economic power of SMEs  to engineer her political power supremacy. .Microsoft ,Dell ,Wal-Mart , Compaq , Hp, Home Depot , Intel ,MacDonald’s , IBM , Gateway , Oracle , Apple and  Cisco etc all started as SMEs before transcending borders to become household names all over the world .With one of the highest per capital income in the world it is also the major source of private workforce .

                 SMES   AS   THE  ENGINE  OF  GLOBAL  ECONOMY

In the U.K. . as well as the European union SMEs contribute 99 percent and 98 percent of private workforce .A total  of  3.7 million business in the former and controlling 65 % of business turnover in the latter . In most countries of the world according to ILO SMEs accounted for over 60 percent of non formal sector employment .Most of the new jobs created over the last 10 or 20 years  in Europe and  America  for example have come from SMEs .SMEs accounted for over 80 percent of enterprises  in virtually all countries of the world .They also contributed 15—20 percent  of the GDP in most countries . In the European union it comprised of 98 percent of all enterprises .The 2001 ILO figures that over 150 million youths are employed and over 80 percent living below 1 and 2 dollar a day can easily be taken care as SMEs develop robustness vital to sustainable economic growth .

Coming down home to Nigeria , the federal bureau of statistics  shows that  97 percent of businesses employed  less than 50 people . It produces 60 percent of  employment and output . They control the informal sector  which in turn controls 70 percent  of the economy . Unfortunately for instance in  Nigeria SMEs mortality ratio is said to be 80 percent in the first five years of operation . Like elsewhere around the world if indeed it is recognized that it accounts for  80 percent of  entire workforce  in most countries of the world , why then do the lips service by world powers and national governments continue in succession  in the world poorest region  ?

                                 SYNOPSIS

IN the nutshell  nations that valued their people do not fail to

cater for these industries with which the destiny of the people depends .Not only there can be no panacea to reducing poverty without effective strategy to redistribute wealth to the marginalized sector of the society , laying  solid  foundation to preserve our most uncertain posterity already haunted by  injustice .With this we believe Neomarxist age resolves the entire puzzles of mankind and potentially has the leverage to end and eradicate mass poverty ,  undoubtedly –man’s greatest battle field .