Child Observation And Development

Child Observation And Development Observation skills are one of the most important skills for social workers to have. Social work involves imposing on peoples lives. Developing the ability to manage anxieties this creates, is essential, ensuring the child remains the focus within complex situations (Trowell and Miles 2004). Child development theories provide guidance on age-related changes in behaviours, thoughts, feelings, and social relationships (Bee and Boyd 2010). Social workers need knowledge of child development, to make an informed assessment whether a child is developing within the spectrum of normal or if they are a child in need. The observation model was an adjusted version of the Tavistock Model for studying infants. The original model observes a baby, an hour a week for the first one or two years of life, within the family home (Fawcett 2009). The observer does not take notes, as it allows them to notice all behaviours, movements and expressions of the child. Everything is recorded in detail after the observation. This can lead to forgetting some information within the write up. This model encourages the observer to avoid making judgements about the childs behaviour and development until after the observation and to reflect on each observation (Fawcett 2009 and Quitak 2004). The emphasis on reflection is strength of this model. It allows the observer to understand and separate their emotions and from the childs emotions (Trowell and Miles 2004). This skill is essential for social workers to make informed assessment of the child. Unlike the Tavistock Model, I completed five, one hour observations, in a nursery for three and four year olds. I did not take notes until observations 4 and 5, where I noted Sallys language for accuracy. I completed detailed write ups straight after each observation and then took time to reflect upon my emotions and thoughts and Sallys development. The nursery was part of a primary school, run by the local authority. The building was separate to the rest of the primary school. Its situated in a relatively affluent, middle class area, reflected in lower levels of free school meals compared to the general population. The nursery is open five days a week and the parent decides the days and times their child attends. Children can attend 8.30am to 11.30am, 12.30 to 3.30pm or all day from 8.30 to 3.30pm. Each session has between 15-20 children attending and the nursery has a total of forty children registered. The two teachers have degrees in early years education. They work part-time, one on Monday and Tuesday and the other Wednesday, Thursday and Friday. There is a nursery manager and a nursery assistant working full-time and a volunteer supporting two days a week. The nursery manager supports children within the classroom and appears to have equal status to other staff. The nursery is governed by Ofsted. The last report in October 2009 awarded the nursery a level of good. The report stated the overall effectiveness, outcomes, quality of provision and management of the Early Years Foundation stage was good. The staff make home visits to all children before starting nursery, to introduce themselves to the parent and child. The nursery is well equipped for young children. There is a large outside playing area, with plenty of age appropriate toys, including plastic climbing frames, slides, bikes and drawing areas. There are windows all the way around the nursery making it light and airy, and the walls are covered with educational material and childrens work. String hangs across the nursery where childrens work is attached. One end of classroom is the free play area with bean bags, childrens sofas, books laid out and an interactive white board, which the children can use. The other end is for the children sit together as a class. There is a role-play area, containing a childs kitchen, and a water tub with toys in. There are four tables in the nursery one set up for painting and art, one for writing and the other two with different activities everyday on. There are two computers each with educational games opened on them. When the weather is dry children are encouraged to play outside. All the children wear school uniform, navy jumper/cardigan, black trousers or skirt and a white t-shirt. I observed a Muslim, British-Pakistani girl called Sally. She is aged 3 years and 5 months. She attends the nursery five days a week from 8.30am-3.30pm. She is slightly shorter than the average height, has long black hair, with big brown eyes. Her parents are married and her mum works at a local high school teaching I.T. She has an older sister and two cousins attending the primary school. She has been attending day care since about a year old, but began this nursery in September 2012. I chose this nursery because it was a five minute walk from my house. It took a few weeks to contact the nursery manager because they were attending home visits. After speaking with this nursery manager she recommended Sally because she had normal development, attended the nursery regularly and thought her parents would be happy to give consent. I gave the nursery the information from the UEA and the consent letter for Sallys mother to sign, which was returned, signed to me. I did not speak directly to Sallys parents and was not introduced to Sally or the class. When I arrived at the observation I took a seat and started observing, which felt uncomfortable. In future observations, I would ask to be introduced to the class as someone watching how children grow, so I am not a stranger in the room. Sally was aware I was watching her but was unaware who and why I was doing this, which may be confusing for Sally. In future, I would speak to Sally, on my last observation to explain who I was and why I had been watching her. My observations took place 01/10/2012, 12/10/2012, 9/11/2012, 24/11/2012 and 27/11/2012. Originally I organised my observations for Friday mornings between 9-10am. I planned this, so I could compare Sallys development to limit other factors influencing her behaviour, such as tiredness at the end of the day. My first observation was scheduled for 28/09/2012; however, Sally was off sick. I decided to observe Monday 01/10/2012 between 9-10am, because I was at university the following Friday. I had arranged an observation for 26/10/2012 but this was Eid and Sally was off school and the following week was half term. This created the large gap between the second and third observation. I completed my final observation on a Tuesday afternoon, 2.30-3.30pm, because it allowed me to observe Sally being collected by her aunt. Although the observations did not occur evenly spread, I was able to observe the difference in Sally with the different teachers. Observations one and five were completed with one teacher, two three and four the other. I chose observation three to analyse because provides a general overview of all areas of Sallys development. Observation in full 23/11/2012 Child observation 9.00-10.00am Three teachers and 17 children present When I arrived Sally was sitting in the back of the classroom being read a story by a volunteer helper. She was looking at the book at she was read to and listening to it. This lasted for around 2-3 minutes until the teacher rung the bell. Sally got up and put her fingers in the air and started to move her fingers back and forth (all the class do this to show attention is on the teacher). The teacher announced it was time for the good morning song and all the children needed to be seated on the carpet area. Sally moved over towards the carpeted area. She stopped at the Playdough table and began to make small round shapes with the Playdough and out them into paper cake holders. She was cutting the Playdough with a plastic spatula, to break the Playdough up into smaller sizes to fit in the cake holders. There were other children at the table doing the same thing as Sally was there. The teacher said everyone should be sitting on the carpet; Sally looked up and then looked down again to carry on what she was doing. As she noticed the other children leaving she left. She and another boy were the last two to leave the table. Sally sat down on the carpet and pulled her trousers up to her knees and crossed her legs, putting her hands in her lap. She sat swaying for a short period of time side to side gently bumping into the boy sitting next to her, while he done the same towards her, smiling at each other. The teacher went round and said hello to all the children, Sally replied hello loudly with a wave towards the teacher. Sally looked over at me after she said hello and then quickly looked away. The teacher began singing the good morning song, Sally did not sing along except for a few words. The teacher then said she had got the song wrong and Sally, along with all other children began to laugh. Sallys face was animated with a large smile across her face. She had got up on her knees and was kneeling, rocking back and forth. The song began again and Sally sung along. She said Sunday, Monday, Tuesday, Wednesday, Thursday, Friday and Saturday too. When she said the too she said this a little bit loud with her facial features becoming more prominent. Her lips pointed out further as she said too. Sally counted one, two, three, four, five, six, and seven as the days of the week were counted. Sally was sat rocking on her knees as she sung to the song. As the song finished a nursery assistant touched Sallys arm to indicate to sit back on the carpet and move backwards a bit. Sally responded to this and sat back down on the carpet with her legs crossed an arms tucked in her lap. Sally pulled up her socks. She pulled them so they were up as far as they could go, she then continued to tug at them, appearing to try make them go higher up her leg. She did this for both legs. She then began to press the bottom of her shoe as this made the lights in the sole flash red. The teacher told the class they would be doing a Christmas play and they would be getting dressed up and singing. The children were asked to stand up in a circle to practice some nursery rhymes. The class sung humpty dumpty. Sally knew all the words to this and sung along. She temporarily held the childs hand next to her. Sally followed actions of the class to fall down when humpty dumpty had a great fall, then got up after the teacher said they didnt need to fall down. Sally put her hands out in front of her with clenched fists and began to pretend to ride a horse, when the rhyme said all the kings horses. Sally was smiling while she was saying the rhyme. The class then sung Hey Diddle Diddle. Sally smiled during this rhyme but did not say too many words. She was looking around at other children, many of the other children did not say as much as the teacher did to this rhyme. The class was asked to sit back down and the teacher would pick the children sitting well to choose activities to play with. Sally sat with her legs crossed and her arms between her legs, so she ended up sitting on her hands, and she was rocking back and forth. Sally was chosen to pick an activity. Sally went over to the Playdough table and along with another 5 children began to make shapes with the Playdough. My view was blocked by the other children and could not see what shapes she was making but saw her interacting with other children. Sally looked at me a few times while she was playing with her Playdough, but showed no expression on her face as she looked at me. I smiled at her and then looked away around the classroom. Sally did not smile back when I smile at her. Sally then moved over towards the back area where the teacher had gone. She sat down in the back corner on the childrens sofa with a book. She looked through the book quickly looking at each page quickly before turning the page. She sat there for a few minutes doing this, another girl came and sat next to her and looked at the book. My view was partly blocked by the children in front of her dancing. Another girl went over and stood in front of her, they exchanged words. I could not hear what was being said because of the children in front of her. Sally moved over to the table and began to look at the nursery rhyme sheets which were lying on the table. She looked at each one and then moved onto the next sheet. The teacher came over and said to Sally do you want me to read one to you? Which one would you like? Sally replied that one and pointed to a blue sheet. The teacher began to read this. The teacher was then distracted by another child and left after reading the rhyme. Sally got up and moved slightly away from the chair she was sitting on. Sally got up and began to dance alongside the teacher to a train song. The song has a video which is shown on the interactive white board. Sally was put her hands out in front of her slightly bent and made them go round in circles, like a trains wheels. The teacher said I like your dancing Sally, have you been practicing? Sally looked up and smiled at the teacher and carried on dancing. She began to become more animated in her moves, moving around the carpet with her arms going up and down. Sally said my foot and the teacher looked down and said sorry Sally, are you ok? Sally continued to dance to the song. The next song was a song about stars and Sally moved her arms out the side and her spread her legs (like a star) and then began jumping up and down. Sally danced for the whole song. She then danced to the football song, and pretended to kick a football with her leg. The teacher said Sally come here and Sally went over towards the teacher. She stood next to her and she explained the order for the children to choose the song on the interactive whiteboard. Joanne would be before Sally. The teacher told another child this and as she said and then Joanne, Sally said and then meà ¢Ã¢â€š ¬Ã‚ ¦and then me. Smiling and looking in the direction of the teacher. As the song finished she said out loud your turn! To the child who was next to choose the song. A boy went up to Sally as she was dancing and she showed her a toy butterfly. Sally looked at him and smiled and said thats not mine. She briefly took it off him and looked at it and then handed it back to the boy. The boy walked away and as he did another boy came up to Sally and started to push her. Sallys face went from smiling to frowning. The boy stopped as they both got closer to the bookcase, and sally moved away from him, still frowning. The teacher said are you pushing sally Harry? As Sally saw the teacher approach her bottom lip dropped and started to wobble, Sally walked towards the teacher and looked up towards her. She made a few sounds like she would begin to cry. This quickly stopped as the teacher spoke to the boy, Sally now had her back to me but I could see she was rubbing her face as the teacher spoke to Harry. The boy apologised to Sally after the teacher had asked him to sorry Sally. The teacher moved away to a different area of the classroom, Sally followed her. I could not hear what was said, but appeared to ask the teacher a question and tell her a short story. The teacher knelt down to Sallys height and listened and responded to her. The teacher asked Sally whether she wanted to paint a picture for her mum or to do some writing. Sally said writing Mrs (teachers name). Sally followed the teacher to the writing table. She stood at the table for a few seconds then looked at the drawing table. She walked over to get an apron and stood beside the table. She looked at the girl standing next to her, who had just sat on the chair in front of her and then stood up. She went to sit on the chair, but then got up again. They both stood next to the chair. Sally stood looking at the table and the other children sitting at it, clutching her apron. The teacher said to another child the shape was a diamond, Sally said diamond as she stood there. The teacher replied yes. Sally began to draw a shape in the air with her fingers. She made the shape of a diamond. She moved her arm down and outwards, then down and inwards. She then moved her arm back up. The teacher said yes thats a diamond shape. The teacher said to Sally you have to wait until theres a space for you to do ità ¢Ã¢â€š ¬Ã‚ ¦.oh there is a space now James has just finished. Sally walked over to the teacher and looked at her. I could see if she asked for her help to put the apron on. The teacher said I want to see if you can put your apron on, can you do it? The teacher then showed Sally how to put her apron on, putting it over her head and arms through the wholes. Sally sat down at the table and picked up different sponge shapes to print them onto the paper. She printed the amount of shapes she wanted on the paper and then put the sponges back; each sponge had different colour paint. She put each sponge in the correct pot it had come from. She said to another girl can I put that back? she was standing up leaning across the table with her arm pushed out, trying to put the sponge back in the correct pot, which the girl was holding. The girl handed the pot to her. After she had finished her painting she took her paper over to the teacher and stood next to her, showing her. The teacher said lets have a look at your painting, thats lovely. Can you name the shapes for me? sally pointed to each shape saying diamond at the diamond shapes, circles at the circles and squares at the squares. Sally got stuck on one diamond shape as she had printed it in a different direction to the others. The teacher said thats a diamond as well; look if we turn the page you can see its a diamond. She tried to walk behind the teachers chair, between a small gap and a set of drawers. The teacher said what do you say..excuse me please. Sally replied excuse me please. The teacher moved her chair and the stack of drawers and Sally walked through the gap. Sally came and sat next to me at the table I was sitting at, where the teacher was also sitting. Sally was kneeling on the chair. The teacher was talking to another child about the hedgehogs they had previously made. Sally lent across the table and said I did one, I did one. She began to feel the clay hedgehogs she had made previously. They had uncooked spaghetti sticking out of the for the hedgehogs spikes. As she touched them she said ow ow. She turned to look at me and said I just touched a hedgehog holding her hand out in front of her, to show me her hand. I replied are you ok She smiled and turned away. She then turned back to me and said whats your name? I smiled and said Lisa. She turned away again. Sally asked the teacher wheres my hedgehog à ¢Ã¢â€š ¬Ã‚ ¦ I dont want to touch the spikes She had small whiteboards in front of her to write on. She was using her fingers to clear the pen which had been left on it. A nursery helper came over with some tissue for her to use to wipe it off. She looked over to the girl sitting on the other side of the teacher. The teacher was holding a laminated name card with Sarah written on it. Is that how you spell Sarah? Sally asked the teacher. The teacher said yes its similar to your name sss, s for Sally. Sally asked the teacher wheres my name? The teacher found Sallys name out of the stack of name cards and showed her, her name. Sally was still leaning forward towards the table and had not sat back properly on her seat. Her bum was on the front edge of the chair and she was leaning forward, towards the table. The teacher told her she was worried she would fall off her chair and onto the floor and pulled her seat closer to the table. Sally told the teacher you just, just pushed me! the teacher responded saying she meant to push the chair in. Are you ok? Sally said yes and the teacher said sorry. Sally said she was trying to write all the names of the children in the nursery. She was saying James, John, Ellie, Rob drawing small black circles, about three or four in row, resembling a word. The teacher asked her if she was writing the names of all the children in the class. Sally said she was as. Sally wrote a letter resembling a P and the teacher said if you draw a line down from there (pointing to where the circle of the p meets the line down) you can create an R. R for Rob Sally looked at the teacher and asked her how do you spell my name on the board? The teacher wrote Sally on the white board and said can you copy and write your name? Sally used the black whiteboard to attempt to write her name. Sally was writing small black blobs and circles which appeared to be drawing instead of writing. Sally was concentrated and focused on attempting to write her name. She said rub my name out and no one can see; Sally was rubbing the board with her hand to remove the marker pen. The teacher said to her good thing can start again. Observation ended Analysis of one observation Cognitive development Piaget suggested children have an active part in developing knowledge and understanding (Bee and Boyd 2010). He suggests cognitive development progresses through stages, relating to changes in brain structure and intelligence. The stages are sensori-motor stage (0-2 years), pre-operational stage (2-7years), concrete operational stage (7-12years) and formal operational stage (12+ years) (Smith, Cowie and Blades 2005). Sally is 3.5 years, therefore at the preoperational stage of development. During this stage children develop symbolic thought, the ability to think of one thing but representation it in a different form, enabling language development and imaginative play (Smith, Cowie and Blades 2005). The preoperational child has egocentric thinking, focusing only on their view and believing everyone has the same view. They struggle to understand conservation small changes in appearance do not change the object or its quantity (Bee and Boyd 2006). However, Vygotsky suggested Piaget did not acknowledge the impact the social environment has on cognitive development. Vygotsky believed social interaction is vital for cognitive development, he believed children maximise their potential working with more capable others (Schaffer 2004). Vygotsky described the zone of proximal development (ZPD), the difference between the childs knowledge and, with support, what they are capable of learning. A more capable person offers guidance and support, to the child during the task. Demonstrating how to complete a task and giving feedback on whats right or wrong. The guidance provided a level above the childs current level of understanding, but not above what they are capable of learning, its within their ZPD. This guidance is called scaffolding (Schaffer 2004). These are examples, demonstrate Sallys preoperational stage of cognitive development, this is expected for Sallys age. Sally demonstrates symbolic thought through her use of language and through her actions. Sally sung Humpty Dumpty, clenching her fists and began pretend to ride a horse. Sallys ability to use symbolic thought was shown through her action of pretending to ride a horse her thought was represented in her actions. This was also shown when Sallys dancing to a football song. She pretended to kick a football with her leg. Showing Sallys ability to hold the thought of a pretend ball and express kicking it in actions. Sally had difficulty understanding conservation. After painting she struggled to name a diamond because it was a different position. The teacher said, Thats a diamond as well; look if we turn the page you can see its a diamond. This shows Sally struggling to understand shape remains unchanged even if its position on the paper is different. Scaffolding examples are shown between Sally and the teacher. Sally wrote a letter resembling a P, the teacher said if you draw a line down from there (pointing to where the circle of the p meets the line down) you can create an R. R for Rob. Before this Sally attempted to write the names of children in the class, one called Rob. This was within Sallys ZPD because she had created a P; the teacher recognised this and guided her to write an R, from the P. Sally asked how do you spell my name on the board? The teacher wrote Sally on the white board and asked can you copy and write your name? Sally attempted to copy this. This demonstrates the teacher giving examples and guidance to complete an action. Language development Social Learning Theory (SLT) suggests language is learnt through imitation and reinforcement (Smith, Cowie and Blades 2005). Skinner suggested children imitate adults speech, developing language. Noises resembling words are reinforced, and therefore repeated, overtime developing into words. Children use adults for guidance on what sounds and words to make, correct meaningful words are responded to positively, incorrect words are corrected, until speech becomes adult like (Smith, Cowie and Blades 2005). This is supported by children having higher language abilities when spoken to more often and developing the same language and accent as adults they spend time with (Smith, Cowie and Blades 2005). However language is learnt to quickly for this to fully explain language development (Passer and Smith 2003). Chomsky argues language has an innate, biological basis. The Language Acquisition Device (LAD) allows language to be learnt (Smith, Cowie and Blades 2005). LAD identifies regularities in language, tests new words against these, either accepting or rejecting them (Smith, Cowie and Blades 2005). Children appear to develop language through the same stages, understanding certain grammar before others, making similar errors in production and comprehension at each stage (Whitaker 2010) supporting LAD theory. Sheridan (2008) suggests certain speech patterns are evident at ages three and four. At three children ask lots of wh questions (what, when, why), identify objects by function, count up to ten (learnt by repetition) and listen to stories, wanting favourites repeated. At four children know nursery rhymes, use understandable, grammatically correct speech, begin counting objects and can count up to twenty (Sheridan 2008). SLT is evidenced when Sally needs to walk past the teacher. The teacher said what do you sayà ¢Ã¢â€š ¬Ã‚ ¦excuse me please. Sally replied excuse me please. Sally imitated the teachers words; this was reinforced by the teacher letting Sally past. Shes learnt saying this, means other people move out of her way. As Sheridan (2008) suggested for three years, Sally listened whilst being read to, She was looking at the book as she was read to and listening to it. This lasted for around 2-3 minutes until interrupted. In addition Sally counted one, two, three, four, five, six, and seven. Sally sung nursery rhymes, Humpty Dumpty, and Hey Diddle, Diddle and used complex, grammatically correct sentences; Is that how you spell Sarah? and how do you spell my name on the board? Suggesting Sallys language is slightly above whats expected for her age, showing signs of a four year old level (Sheridan 2008). Teachers at the nursery commented her language is above what they would expect for her age. Sallys language development being slightly above expectations could relate to attending a high quality nursery, since an early age. The National Institute of Child and Human Development (NICHD) Early Child Care Research Network (2000) suggested high quality day care is associated with better cognitive and language development although quantity of time in day care had neither positive nor negative effects on these developmental areas. Language development was measured on parental feedback, not standardized testing. Possibly biasing results, parents may not want to think their child is underachieving so exaggerate ability. Social development and play Piaget suggested childrens play goes through stages. Constructive play is the first to be achieved (before 2 years), pretend play (2-3 years), socio-dramatic play (3-5 years) and rule governed play (by 5 or 6 years) (Bee and Boyd 2006). Sally is at the socio-dramatic stage of play. Two or more children take roles to act in a pretend scenario. Dunn and Cutting (1999) found children who pretend play with friends, maintain friendlier play for longer. This helped children develop Theory of Mind understanding others thoughts and feelings. Socio-dramatic play is evidenced in later observations. Parten (1932) suggested different types of play, solitary independent play (alone), parallel play (alongside each other, little interaction), occurs between 2.5 and 3.5 years, associative play (activities completed with others, without organization or direction) occurs between 3.5 and 4.5 years and cooperative or organised supplementary play (organised activities, aiming towards a goal). Evidence is discussed in the next section. Theres limited evidence of Sally playing in this observation. She displays associative play at the table, playing with Playdough and interacting with five other children. Play is not organised, they are completing similar activities without a specific goal. Howes, Phillips and Whitebook (1992) suggest lower quality care can result in children wandering, not being involved in social activities or play with peers and teachers. This can have a negative impact on childrens social and cognitive development. However higher quality care with developmentally appropriate activities, encourage children to socialise and interact with teachers and peers have more socially competent children. Moral development Kohlberg refined Piagets theory of moral development, suggesting three levels of development, each containing two stages (Kohlberg and Hersh 1977). Preconventional Level is level one, containing stage one The punishment and obedience orientation and stage two The Individualism, instrumental purpose and exchange. Level two is Conventional Level, containing stage three Mutual interpersonal expectations, relationships and interpersonal conformity and stage four Social system and conscience. Level three is Postconventional or Principled Level, containing stage five The social-contract orientation and stage six the universal ethical principle orientation (Kohlberg and Hersh 1977). Kohlberg suggested people move up through stages, but few reach the Postconventional level. People understand reasoning one stage above theirs but struggle understanding above this. Being in a social group is important to learn what is morally right and wrong (Kohlberg and Hersh 1977). Therefore children i n day care have the opportunity to learn from others about right and wrong. Children below nine are usually at the Preconventional level, including Sally. Reasoning and judgements are based on what authority says is right or wrong (Bee and Boyd 2010), for Sally this is teachers or parents. Right or wrong is understood as whats punished, children follow rules to avoid punishment. Stage two; rules are followed when in their immediate interest. Good, is what has pleasant results (Bee and Boyd 2010). Kohlberg suggests, despite gender or culture moral development happens this way (Passer and Smith 2003). Although, Sally is British-Pakistani she will progress through these stages. Kohlberg is criticised for having a male bias theory and basing his theory on clinical research using scenarios, not based on real life (Smith, Cowie and Blades 2005). Sally displays moral development resembling stage one. Shes well behaved, following rules during the observation. The class have been told when the bell rings, stop, put their hands up and look at the teacher. When the bell rung Sally go

How has Blake depicted the tiger in this poem? :: English Literature

How has Blake depicted the tiger in this poem? At the very start of the poem it is clear in what way Blake wishes to portray the tiger. The first words he uses -"Tiger! Tiger!" is an aggressive start to the poem thus implying that Blake is trying to put the tiger across as an aggressive animal. The next two words, "Burning bright" give the image of power and awe. This added to the next two lines,- "What immortal hand or eye, could frame thy fearful symmetry?" with words like 'fearful' and 'immortal' reinforces the tiger's image of power and strength and its God-like qualities of immortality and omnipotence. The next stanza gives the tiger an almost mythical status, with the line "In what distant deeps or skies, burnt the fire of thine eyes?" This gives the reader an image of the tiger being some legendary creature from the stars, this coupled with the image of the burning eyes adds another degree of god-like power to the creature commanding more awe and fear. The third stanza gives the reader the image that it took enormous strength to "Twist the sinews of [its] heart. The stanza finishes with the lines "What dread hands and what dread feet?" conjuring quite blatant ideas of dread and extreme fear associated with this mystical beast. The fourth stanza reinforces the creation imagery of the previous with the images of the tiger's creator being compared to a blacksmith giving the idea of the tiger being forged out of metal. "In what furnace was thy brain? What the anvil? Etc" The penultimate stanza gives the final idea in the poem with the almost apocalyptic imagery of 'stars throwing down their spears' giving the tiger an even more awe-inspiring quality. The stanza finishes with "Did he who made the lamb make thee?" Which gives the idea of disbelief at the prospect of a creator making a harmless pleasant creature such as the lamb and a dangerous mighty and awful creature like the tiger. b) Explore the ways Blake uses imagery and repetition in this poem. The most obvious repetition in this poem is the "Tiger! Tiger!" repetition. This, as I mentioned before, gives the poem an aggressive start and almost sets the scene for the rest of the poem, having the readers anticipate an almost violent and powerful poem. This line appears in the first stanza and in the final stanza where it is repeated, save for one word. In the final stanza the lines "What immortal hand or eye, could frame thy fearful symmetry" Are replaced by the line "Dare frame thy fearful symmetry." This gives the idea of

The New America Dream is Green (and Sustainable) Essay -- Localization

Smallville is a city just like any other city in the world. It has crime, pollution, and social inequalities. However citizens everywhere are dreaming of the future. The reason people came to Smallville, or America, in the first place was to live the American Dream. This idea is that if a person works hard enough they can be or achieve anything they want. However, the current system of selfishness and ignorance of the masses has led to the destruction of this idea. In order for these dreams to survive, Smallville needs to promote change. There needs to be more information about the effects people have on their communities and the environment. There needs to be a shift towards long-term sustainability. Before there can be greener technology, ecologically friendly businesses, or sustainable energy citizens need to change their outlook on life. Every individual needs to realize their role in the community. There needs to be more emphasis on people living local, eating local, an d working local. The more localization and less globalization there is the better. The more people use what is readily available to them the more they will realize how important it is not to waste. In order for communities to get a long every individual needs to be respected. There needs to be social equality between men and women, different ethnicities, and an acceptance of the LBGTQ community. Once this is achieved, the New American Dream will be born. This new idea will include being anything you want to be while helping others reach the same goal. Smallville needs to take the steps towards a more informed and aware society so people can achieve their dreams while not destroying the dreams of others around the world. In order for Smallville to r... ...rt. "Accepting the gay person: Rental accommodation in the community." Journal of Homosexuality 36.2 (1998): 31. Academic Search Premier. EBSCO. Web. 25 Mar. 2014. Page explains the struggles an LBGTQ citizen has when finding a place to live freely in a community. It shows that there needs to a major acceptance of the couple or even individuals who are gay by the community in order for the person to feel welcome. People usually do not like to live where they do not feel welcome. This will help me show where major change needs to be within the social realm of society. If people cannot accept each other they cannot join as a community and eventually fix other problems that require cooperation. This article's only bias is justified because it shows real stories of people being harassed. It does not give merit to the side that says these people are really the problem.

Final reflection Essay

After the studying of this semester, my writing skills of business writing, reading skills, and communication skills had a progress. First of all, the process of writing is really important and significant. I learned the process which covers planning, composing and revising from this JGEN class. To be honest, it is really helpful. Before studying the process, I always feel the business writing is hard for me. Currently, I just need to follow the steps of the process and an effective business writing can be finished. In addition, for the business writing, I can use direct and indirect methods to respond the complaint messages, to give the customer’s negative messages and to provide the persuasive letters which attached with business goals. At the same time, the readers’ moods and the emotions which the messages convey also need to be considered. More than that, I was also benefit from the email and letter writing. The techniques of those writings not only can be used in business field, but also can be used to communicate with your teacher and family, etc. For example, I even don’t know the formatting of the email before this class. Moreover, for the resume and job application cover letter, I think it also extremely helpful, because finding jobs is the necessary and the first steps of our careers. The resume should be made personally and specially. Last but not least, the most important thing which I should state is the group project. I want to say that I really enjoy the whole process. From preparation of the report to performing of the presentation, I learned many things, like research skills, discussion which can share the ideas, and practice of the presentation. The effective communication of the group is really inevitable and we made it.

Lease Financing

INTRODUCTION Financial Services basically mean all those kinds of services provided in financial terms where the essential commodity is money. These services include: leasing, hire purchase, consumer credit, investment banking, commercial banking, venture capital, insurance, credit rating, bill discounting, and mutual funds , stock broking, housing finance, vehicle finance, mortgages and car loans, factoring among other things. Various entities that provide these services are basically categorized into (a) Non –Banking Finance Companies b) Commercial Banks, and (c) Merchant Banks. Financial Services in India is too vast and varied too have evolved at one place and at one time. One of the main entities that offer financial services in India is Non-Banking Finance Companies. These NBFCs registered with Reserve Bank of India mainly perform fund based services to the customer. Fund based services of NBFCs include: leasing, hire-purchase and other asset based services whereas fee b ased services of NBFCs include bill discounting, portfolio management and other advisory services.LEASE FINANCING Leasing as financial service is a contractual agreement where the owner (lessor) of equipment transfers the right to use the equipment to the user (lessee) for an, agreed period of time in return for a rental. At the end of the lease period the asset reverts back to the lessor unless there is a provision for the renewal of the contract or there is a provision for the transfers of ownership to the lessee. If there is any such provision for transfer of ownership, the deal is treated as hire purchase.Therefore, a lease could be generally defined as – â€Å"A contract where a party being the owner (lessor) of an asset (leased asset) provides the asset for use by the lessee at a consideration (rentals), either fixed or dependent on any variables, for a certain period (lease period), either fixed or flexible, with an understanding that at the end of such period, the as set, subject to the embedded options of the lease, will be either returned to the lessor or disposed of as per the lessor's instructions†. HISTORY AND DEVELOPMENT OF LEASING The history of leasing dates back to 200BC when Sumerians leased goods.Romans had developed a full body law relating to lease for movable and im movable property. However the modern concept of leasing appeared for the first time in 1877 when the Bell Telephone Company began renting telephones in USA. In 1832, Cottrell and Leonard leased academic caps, grown and hoods. Subsequently, during 1930s the Railway Industry used leasing service for its rolling stock needs. In the post war period, the American Air Lines leased their jet engines for most of the new air crafts. This development ignited immediate popularity for the lease and generated growth of leasing industry.The concept of financial leasing was pioneered in India during 1973. The Firs Company was set up by the Chidambaram group in 1973 in Madras. Th e company undertook leasing of industrial equipment as its main activity. The Twentieth century Leasing Company Limited was established in 1979. By 1981, four finance companies joined the fray. The performance of First Leasing Company Limited and the Twentieth Century Leasing Company Limited motivated others to enter the leasing industry. In 1980s financial institutions made entry into leasing business.Industrial Credit and Investment Corporation was the first all India financial institution to offer leasing in 1983. Entry of commercial banks into leasing was facilitated by an amendment of Banking Regulation Act, 1949. State Bank of India was the first commercial bank to set up a leasing subsidiary, SBI capital market, in October 1986. Can Bank Financial Services Ltd. , BOB Financial Service Ltd. , and PNB Financial Services Limited followed suit. Industrial Finance Corporation’s Merchant Banking division started financing leasing companies as well as equipment leasing and fi nancial services.There was thus virtual explosion in the number of leasing companies rising to about 400 companies in 1990. In the subsequent years, the adverse trends in capital market and other factors led to a situation where apart from the institutional lessors; there were hardly 20 to 25 private leasing companies who were active in the field. The total volume of leasing business companies was Rs. 5000 cores in 1993 and it is expected to cross Rs. 10, 000 cores by March 1995. PARTIES OF LEASE FINANCING ELEMENTS IN LEASE STRUCTUREThis is an explanation of the elements in a lease – the parties, asset, rentals, residual value, etc. This section would also elaborate the unique features of a lease as different from a regular financing transaction. 1. The transaction: The transaction of lease of lease is generically an asset-renting transaction. What distinguishes a lease from a loan is that in the latter, what is lent out is money; in a lease, what is lent out is the asset. 2. Parties to a lease: There are two parties to a lease: the owner and the user, called the lessor and the lessee. The lessor is the person who owns the asset and gives it on lease.The lessee takes the asset on lease and uses it for the period of the lease. Any one can be a lessor, and any one can be a lessee, subject to usual conditions as to competence to contract, or holding of properties. Ownership is no pre-condition for Technically, in order to be a lessor, one does not have to own the asset: one has to have the right to use leasing: the asset. Thus, a lessee can be a lessor for a sub-lessee, unless the parent lessor has restricted the right to sub-lease. 3. The leased asset: The subject of a lease is the asset, article or property to be leased.The asset may be anything – an automobile, or aircraft, or machine, or consumer durable, or land, or building, or a factory. Only tangible assets can be leased – one cannot contemplate the leasing of the intangible assets, s ince one of the essential elements of a lease is handing over of possession, along with the right to use. Hence, intangible assets are assigned, whereas tangible assets may be leased. The concept of leasing will have the following limitations: 1. What cannot be owned cannot be leased. Thus, human resources cannot be â€Å"leased†.Leasing of immovable properties may have complications: 2. While lease of movable properties can be affected by mere delivery, immovable property is incapable of deliveries in physical sense. Most countries have specific laws relating to transactions in immovable properties: if such law provides a particular procedure for a lease of immovable or real estate, such procedure should be complied with. For example, in Anglo-Saxon legal systems (UK, Australia, India, Pakistan, etc. ), transactions in real estate are not valid unless they are effected by registered conveyance.This would apply to lease of land and buildings, and permanent attachments to land . 3. A lease is structurally a rental for the lease period: with the understanding that the asset will be returned to the lessor after the period. Thus, the asset must be capable of re-delivery: it must be durable (at least during the lease period), identifiable and severable. Leased asset is a necessary pre- condition: The existence of the leased asset is an essential element of a lease transaction – the asset must exist at the beginning of the lease, during the lease and at the end of the lease term.Non-existence of the asset, for whatever reason, will be fatal to the lease. 4. Lease period: The term of lease, or lease period, is the period for which the agreement of lease shall be in operation. As an essential element in a lease is redelivery of the asset by the lessee at the end of the lease period, it is necessary to have a certain period of lease. During this certain period, the lessee may be given a right of cancellation, and beyond this period, the lessee may be given a right of renewal, but essentially, a lease should not amount to a sale: that is, the asset being given permanently to the lessee.In financial leases, is common to differentiate between the primary lease period and the secondary lease period. The former would be the period over which the lessor intends recovering his investment; the latter intended to allow the lessee to exhaust a substantial part of the remaining asset value. The primary period is normally non-cancelable, and the secondary period is normally cancelable. 5. Lease rentals: The lease rentals represent the consideration for the lease transaction. This is what the Lessee pays to the Lessor.If it is a financial lease transaction, the rentals will simply be the recovery of the lessor's principal, and a certain rate of return on outstanding principal. In other words, the rentals can be seen as bundled principal repayment and interest. If it is an operating lease transaction, the rentals might include several elements dep ending upon the costs and risks borne by the Lessor, such as: * If the lessor is bearing any repairs, insurance, maintenance or operation Costs, them charges for such cost. Depreciation in the asset. * Interest on the lessor's investment. * Servicing charges or packaging charges for providing a package of the above service. 6. Residual value: Put simply, â€Å"residual value† means the value of the leased equipment at the end of the lease term. If the lease contains a buyout option with the lessee, residual value would mostly mean the value at which a lessee will be allowed to buy the equipment.If there is no embedded purchase option, residual value might mean the value that the lessee or someone else assures will be the minimum value of the equipment at the end of the lease term. This is typical in case of financial leases where the lessor cannot grant a buyout option to the lessee; for the lessor to protect himself against asset-based risks, he would take an assured residua l value commitment either from the lessee himself or from a third party, typically an insurance company.The residual value might also the value that the lessor assures to pay-back to the lessee in case the lessee returns the asset to the lessor: that is, it might be the value the lessor assures as the minimum value of the equipment. Such a lease, obviously an operating lease because the lessor is taking a risk on asset values, is a full payout lease, but the lessor agrees to refund the guaranteed value on the lessee returning the equipment at the end of the lease term. 7. End-of-term options: The options allowed to the lessee at the end of the primary lease period are called end-of-term options.Essentially, one, or more, of the following options will be given to the lessee at the end of the lease term: †¢Option to buy (buyout option) at a bargain price or nominal value (typical in a hire-purchase transaction), called bargain buyout option †¢Option to buy at a fair market v alue or fixed, but substantial value †¢Option to renew the lease at nominal rentals, called bargain renewal option †¢Option to renew the lease at fair market rentals or substantial rentals †¢Option to return the equipment In any lease, which option will be suitable depends on the nature of the lease transaction, as also the applicable regulations.For example, in a full payout financial lease, the lessor would have recovered the whole or substantially the whole of his investment during the primary lease period. Therefore, it is quite natural that the lessee should be allowed to exhaust the whole of the remaining value of the equipment. Regulation permitting, the lessor provide the lessee a bargain purchase option to allow the lessee to complete the purchase of the equipment. Buyout option may characterize the lease However, in many jurisdictions, it is the existence of such buyout option that demarcates between lease and as hire-purchase: hire-purchase transaction.If t he lessor is interested to structure the lease as a lease and not hire-purchase, he would be advised not to provide any buyout option, but Instead, to allow the lessee to renew the lease to continue the use of the asset. In essence, a renewal option achieves the same purpose as a purchase, but the lessor retains his ownership as also his reversionary interest in the equipment. Fair market value options, either for purchase of equipment, or for renewal, are typical of operating leases, but are really speaking no more than assuring to the lessee a continued use of the equipment.If equipment has to be bought at its prevailing market value, it can be bought from the market rather than from the lessor – therefore, the fair market value option carries no value for the lessee. 8. Upfront payments: Lessors may require one or more of the following upfront, that is, instant payments from a lessee: †¢Initial lease rental or initial hire or down payment †¢Advance lease rental à ¢â‚¬ ¢Security deposit †¢Initial fees Margins in leases are taken as initial rental: The initial lease rent or initial hire (the word hire is more common in case f hire-purchase transactions) is a surrogate for a margin or borrower contribution in case of loan transactions. Note that given the nature of a lease or hire-purchase as asset-renting transaction, it is not possible to expect a lessee's contribution to asset cost as such. Hence, the down payment or first lease rent serves the purpose of a margin. Between advance lease rent and initial lease rent – the difference is only technical. The whole of the initial lease rental is supposed to be appropriated to income on the date of its receipt, whereas advance rental is still an advance – normally an advance against the last few rentals.Therefore, the advance rental will remain as a deposit with the lessor to be adjusted against the last few rentals. Types of Lease Agreements Lease agreements are basically of two types. They are (a) Financial lease and (b) Operating lease. The other variations in lease agreements are (c) Sale and lease back (d) Leveraged leasing and (e) Direct leasing. FINANCIAL LEASE Long-term, non-cancellable lease contracts are known as financial leases. The essential point of financial lease agreement is that it contains a condition whereby the lessor agrees to transfer the title for the asset at the end of the lease period at a nominal cost.At lease it must give an option to the lessee to purchase the asset he has used at the expiry of the lease. Under this lease the lessor recovers 90% of the fair value of the asset as lease rentals and the lease period is 75% of the economic life of the asset. The lease agreement is irrevocable. Practically all the risks incidental to the asset ownership and all the benefits arising there from are transferred to the lessee who bears the cost of maintenance, insurance and repairs. Only title deeds remain with the lessor. Financial lea se is also known as ? apital lease‘. In India, financial leases are very popular with high-cost and high technology equipment OPERATING LEASE An operating lease stands in contrast to the financial lease in almost all aspects. This lease agreement gives to the lessee only a limited right to use the asset. The lessor is responsible for the upkeep and maintenance of the asset. The lessee is not given any uplift to purchase the asset at the end of the lease period. Normally the lease is for a short period and even otherwise is revocable at a short notice.Mines, Computers hardware, trucks and automobiles are found suitable for operating lease because the rate of obsolescence is very high in this kind of assets. Differentiation  Between  Operating  lease  and  Financial  Lease BASIS| FINANCIAL| OPERATING| Meaning| Long-term, non-cancellable lease contracts are known as financial Leases. | A Lease which is a short term one and one which does not cover the useful life on a n asset is called an operating lease. Form| In this type of lease, money is provideby lessor and the asset is purchaseform outside| The lessor is carrying on business of leasing and he holds such assets or is a manufacturer of such asset leases its asset| Maintenance| The lessee undertakes the maintenanceof the asset, paying insurance premiumetc. | In this type of lease, repairs and Maintenance is done by the lessor. | Risk ofObsolescence| In this types of lease, the lessee bearsthe risk obsolescence, so far as heUses the asset. In this types of lease, the lessor Bears the risk obsolescence during the period of the lease| Period of Lease| Period of lease – whole useful life ofAsset. | Period of lease – for short time. | Option to Buy| Option to buy for lessee. | Period of lease – for shot time| Accounting| EntriesAccording to the internationalaccounting standard-17, an entry is made in the balance sheet of the lessee on both the side| No entry is made in the bal ance sheet ofthe lessee under this type of lease,because lease is in the form of a hiredasset| 3. Sale and Lease back: It is a sub-part of finance lease.Under this, the owner of an asset sells the asset to a party (the buyer), who in turn leases back the same asset to the owner in consideration of lease rentals. However, under this arrangement, the assets are not physically exchanged but it all happens in records only. This is nothing but a paper transaction. Sale and lease back transaction is suitable for those assets, which are not subjected depreciation but appreciation, say land. The advantage of this method is that the lessee can satisfy himself completely regarding the quality of the asset and after possession of the asset convert the sale into a lease arrangement.The sale and lease back transaction can be expressed with the help of the following figure. ? The owner (Lessee) of the equipment sells it to a Leasing company (Lessor). ? The Lessor, leases the equipment back to the Lessee. ? Under this arrangement, the assets are not physically exchanged but it all happens in records only. ? The seller assumes the role of a lessee and the buyer assumes the role of a lessor. ? The seller gets the agreed selling price and the buyer gets the lease rentals. Two sets of cash flows occur: The lessee receives cash today from the sale. ? The lessee agrees to make periodic lease payments, thereby retaining the use of the asset. 4. Leveraged Lease: Under leveraged leasing arrangement, a third party is involved beside lessor and lessee. The lessor borrows a part of the purchase cost (say 80%) of the asset from the third party i. e. , lender and the asset so purchased is held as security against the loan. The lender is paid off from the lease rentals directly by the lessee and the surplus after meeting the claims of the lender goes to the lessor.The lessor, the owner of the asset is entitled to depreciation allowance associated with the asset. ? 3 parties to the transact ion. ? Lessor ( Equity investo ? Lender ? Lessee ? The Leasing company (Equity investor) ? buys the equipment, through substantial borrowing, and ? with full recourse to the Lessee and without recourse to it. ? The Lender obtains an assignment of the Lease and a first mortgage of the equipment. 5. Direct Lease ? Under direct leasing, a firm acquires the right to use an asset from the manufacturer directly. The ownership of the asset leased out remains with the manufacturer itself. ? Bipartite Lease – Equipment supplier-cum-Lessor and Lessee. ? Tripartite Lease (Sales-aid-Lease) – Equipment supplier, Lessor and Lessee. Single Investor Lease †¢Only two parties – Lessor and Lessee. †¢Leasing company (Lessor) funds the entire investment, having appropriate mix of Equity-cum-Debt Finance raised by the Lessor, is without recourse to the Lessee Risk Assessment of a Lessee The first step in structuring a lease is for the lessor to evaluate and then quantify th e risk inherent in the lease.Risk results from the degree of credit worthiness of the lessee combined with the collateral and residual value of the equipment to be leased. In general if the lessor deems a lease risky, any of the following variables might be affected: 1. Lease yield increased with all other factors except payment amount remaining constant 2. Additional advance payments required. 3. Security deposit required or increased. 4. Guaranteed residual required in lieu of a purchase option. 5. Lease term shortened. 6. Personal guarantee required. 7. Additional collateral beyond the leased equipment. . Increased late fees for delinquent rental payments (5% if 10 days late plus18% interest for e. g. ) 9. Security interest obtained to facilitate repossession 10. All insurable risk insured. Assignment of the risk inherent in a lease transaction is primarily a credit Worthiness decision. Many lessors as well as bankers or other moneylenders base their evaluation of risk on the 10 C’s. They are: ? Character ? Capacity ? Capital ? Credit ? Conditions ? Competition ? Collateral ? Cross-border ? Complexity ? Currency Lessor RequirementsOnce the lessor has assessed the risk and credit worthiness of the lessee and converted that into structuring variables, the lessor must look to its remaining needs and then to the requirements of the lessee. Meeting the sometimes conflicting needs of the lessor and lessee represents the more difficult part of lease structuring. Sometimes a lessor will insist on structuring an operating lease in order to retain tax benefits while at the same time the lessee desires a capital lease so it too may avail itself of the depreciation and tax benefits.Typical lessor requirements that might be at variance with lessee needs in lease structuring are: ? A yield sufficient to meet the lessor’s after-tax weighted cost of capital ? accounting for the lease on the lessor’s books as a capital lease. ? Tax structure of the agre ement as an operating lease to obtain tax benefits. ? a net lease rather than a full service lease ? Residual dependence- the lessor may want the equipment purchased by the lessee to avoid resale problems. On the other hand the lessor may want the equipment returned at the end of the lease due to its increased value.Advantages of ‘LEASING’ to ‘LESSEE’ There are several extolled advantages of acquiring capital assets on lease: (1) Saving of capital: Leasing covers the full cost of the equipment used in the business by providing 100% finance. The lessee is not to provide or pay any margin money as there is no down payment. In this way the saving in capital or financial resources can be used for other productive purposes e. g. purchase of inventories. (2) Flexibility and Convenience: The lease agreement can be tailor- made in respect of lease period and lease rentals according to the convenience and requirements of all lessees. 3) Planning Cash Flows: Leasing enables the lessee to plan its cash flows properly. The rentals can be paid out of the cash coming into the business from the use of the same assets. (4) Improvement In Liquidity: Leasing enables the lessee to improve their liquidity position by adopting the sale and lease back technique. (5) Shifting of Risk of Obsolescence: The lessee can shift the risk upon lessor by acquiring the use of asset rather than buying the asset. (6) Maintenance and Specialized Services: In case of special kind of lease arrangement, Lessee can avail specialized services of lessor for maintenance of asset leased.Although lessor charges higher rentals for providing such services, lessee’s overall administrative and service costs are reduced because of specialized services of the lessor. (7)Off-The-Balance-Sheet-Financing: Leasing provides â€Å"off balance sheet† financing for the lessee, in that the lease is recorded neither as an asset nor as a liability. Disadvantages of ‘LEASINGâ⠂¬â„¢ to ‘LESSEE’ (1) Higher Cost: The lease rental include a margin for the lessor as also the cost of risk of obsolescence, it is, thus regarded as a form of financing at higher cost. 2) Risk of being deprived the use of asset in case the leasing company winds up. (3) No Alteration In Asset: Lessee cannot make changes in asset as per his requirement. (4) Penalties On Termination Of Lease: The lessee has to pay penalties in case he has to terminate the lease before expiry o lease period. Advantages of ‘LEASING’ to ‘LESSOR’ (1) Higher profits: The lessor can get higher profits by leasing the asset. (2) Tax Benefits: The lessor being owner of asset can claim various tax benefits such as Depreciation. 3) Quick Returns: By leasing the asset, the Lessor can get quick returns than investing in other projects of long gestation period. Disadvantages of ‘LEASING’ to ‘LESSOR’ (1) High Risk of Obsolescence: The lessor has to bea r the risk of obsolescence as there are rapid technology changes. (2) Price Level Changes: In case of inflation, the prices of asset rises but the lease rentals remain fixed. (3) Long term Investment: Leasing requires the long term investment in purchase of an asset, and takes long Time to cover the cost of that assetHire purchase financing Hire purchase is a popular financing mechanism especially in certain sectors of Indian business such as he automobile sector. In hire purchase financing, there are three parties: the manufacturer, the hiree and the hirer. The hiree may be a manufacturer or a finance company. The manufacturer sells asset to the hiree who sells it to the hirer in exchange for the payment to be made over a specified period of time. A hire purchase agreement between the hirer and the hiree involves the following Three conditions: ?The owner of the asset (the hiree or the manufacturer) gives the Possession of the asset to the hirer with an understanding that the hirer will pay the agreed installments over a specified period of time. ? The ownership of the asset will transfer to the hirer on the payment of all installments. ? The hirer will have the option of terminating the agreement any time before the transfer of ownership of the asset. Thus for the hirer the hire purchase agreement is like a cancelable lease with a right to buy the asset.The hirer is required to show the hired asset on his balance sheet and is entitled to claim depreciation, although he does not own the asset until full payment has been made. The payment made by the hirer is divided into two parts: interest charges and repayment of principal. The hirer thus gets tax relief on interest paid and not the entire payment. How does hire purchase work? When a customer buys goods on hire purchase there are three parties involved ? The customer – who buys the goods ?The retailer – who sells the goods The finance company – who provides the finance You make the init ial agreement with the customer. Once the security agreement has been signed you are likely to assign the agreement (including your security interest in the goods) to the finance company. The customer makes payments to the finance company. Whether the security interest will revert back to you will depend on the terms and conditions of your agreement with the finance company. The normal tripartite hire purchase process between the dealer, customer and the finance company is as follows: ?When the business connection between the finance company and the dealer is first established a master agreement may be drawn up regulating the conditions upon which the finance company is prepared to consider the hire purchase transactions submitted by the dealer. ?After the customer has selected the goods he desires to acquire on hire purchase, the dealer arranges for him to complete the schedule to a form of hire purchase agreement. The larger finance companies have theirown standard forms of printe d agreement. In the schedule to the hire purchase agreement the dealer will insert the hirer’s name, address, occupation, and certain other details indicating his financial standing. It is also the dealer’ responsibility to insert details about the price and the installments payable. ? The intending hirer is often required to make a down payment as an indication of the customer’s financial reliability. The deposit or down payment is usually paid to the dealer at the time the proposal form is completed and is normally retained by him as a payment on account of the price to be paid to him by the finance company. The deposit having duly paid the dealer sends the appropriate set of documents to the finance company, requesting the company to purchase the designated goods from him. ?If the finance company decides to accept the transaction, the hire purchase agreement is signed by one of its officers and a copy dispatched to the hirer with instructions as to the mode o f the installments. At the same time as a copy is sent to the hirer, the finance company notifies the dealer that the proposal has been accepted and that it is in order for the dealer to deliver the goods, if he has not already done so. Upon notification of acceptance the dealer delivers the goods to thehirer and obtains the hirer’s signature to a form of delivery receipt constituting an acknowledgement by the hirer that he has received the goods in proper condition. ?The hirer makes payment of hire installment throughout the period of hire ? On completion of the hire term, the finance company issues to the dealer a completion certificate whereupon the hirer becomes the owner of the asset. Key features of Hire Purchase: ? Repayment schedules are flexible. An Offer to Hire can be arranged with no deposit or an amount that suits you. ? Balloon payments at the end of the term can be arranged. ? Esanda owns the goods until the final payment is made, at which point you gain automa tic ownership. ? the interest component of the rental and depreciation on the equipment are tax deductible, provided it is used to produce assessable income or the expense is necessarily incurred in carrying on a business. DIFFERENE BETWEEN Hire  purchase AND Lease  financing Hire  purchase| Lease  financing| 1. Depreciation-  Ã‚  Ã‚  Hirer  Ã‚  Ã‚  is  Ã‚  Ã‚  entitled  Ã‚  Ã‚  toclaim  depreciation. 1. Depreciation-  lessee  is  not  entitledto  claim  depreciation. | 2. Payments-  Ã‚  hirer  Ã‚  can  Ã‚  charge  Ã‚  onlyinterest  Ã‚  Ã‚  Ã‚  Ã‚  portion  Ã‚  Ã‚  Ã‚  Ã‚  of  Ã‚  Ã‚  Ã‚  Ã‚  hire  Ã‚  Ã‚  Ã‚  Ã‚  purchasepayments  Ã‚  Ã‚  Ã‚  Ã‚  as  Ã‚  Ã‚  Ã‚  Ã‚  expenses  Ã‚  Ã‚  Ã‚  Ã‚  for  Ã‚  Ã‚  Ã‚  Ã‚  taxcomputation. | 2. Payments-  Ã‚  lessee  Ã‚  can  Ã‚  charge  Ã‚  theentire  lease  payments  as  expenses  fortax  computation. | 3. Salvage  Ã‚  value-  Ã‚  Once  Ã‚  the  Ã‚  hirer  Ã‚  haspaid  Ã‚  all  Ã‚  installments;  Ã‚  he  Ã‚  becomes  Ã‚  theowner  Ã‚  of  Ã‚  the  Ã‚  asset  Ã‚  and  Ã‚  can  Ã‚  claim  Ã‚  itssalvage  value. | 3. Salvage  Ã‚  value-  Ã‚  Lessee  Ã‚  does  Ã‚  notbecome  Ã‚  Ã‚  Ã‚  the  Ã‚  Ã‚  Ã‚  owner  Ã‚  Ã‚  Ã‚  of  Ã‚  Ã‚  Ã‚  the asset. Therefore  Ã‚  he  Ã‚  has  Ã‚  no  Ã‚  claim  Ã‚  over  Ã‚  theasset’s  salvage  value. Principle of hire purchase 1. Consumer installment credit The ground for distinction here is whether the goods are producer goods or consumer goods. Finance provided to consumers for acquisition of consumer durables is called installment credit. Installment credit for consumers is usually extended in one of the following forms: (a) Personal loan: this is made directly by the lending a dealer may introduce company through the consumer. The loan may be unsecured or secured. E. g. by a mortgage on the borrower’s property. b) Hire purchase or conditional sale: here funds are advanced for the acquisition of particular goods, which the customer take under a hire-purchase or conditional sale agreement, acquiring title on completion of payment. Where title is reserved in this way the agreement usually used is a hire purchase agreement, though some companies use conditional sale agreements. Retail hire purchase agreements take three different forms namely ? Direct collection- the dealer sells the goods to the finance house, which lets them out on hire purchase to the customer.This is the most common form of installment financing and is known in the trade as ‘direct collection’ because the installments are collected under a hire-purchase agreement concluded direct between the finance house and the hirer, as opposed to an agreement between the dealer and the hirer which is later discounted under block-discounting agreement. Usually the finance house collects the installments itself from the hirer, and the dealer d rops out of the transaction. Such transactions are called ‘non-recourse’ for the dealer. ? Agency collection: this is a variant of direct collection.As before the dealer sells goods to the finance company but in this case signs the agreement himself as undisclosed agent for the finance company and as such agent collects installments on behalf of the company, usually in return for appropriate commission. Because the agreements are in practice handled in blocks, this form of hire purchase is also misleadingly referred to as agency block discounting, though it is not a form of block discounting at all since there is no assignment of the agreement by the dealer to the finance company and the dealer is acting merely as an agent. Block discounting: in this case the dealer enters into the hire purchase agreement direct with the customer and later discounts it to the finance company. Agreements are usually discounted in blocks at a time; hence it is called block discounting. On ce the agreement is discounted the finance company becomes entitled to receive rentals from the hirer concerned but quite commonly, in order not to disturb the business relationship existing between the dealer and his customer, the dealer is made responsible for collecting the installments and remitting these to the finance company. c) Credit sale: here the title passes to the customer from the outset. Again the agreement may be with the finance house from the beginning or it may be entered into between the dealer and customer direct and later assigned by the dealer to the finance house. (d) Rental: the renting of domestic goods is fast developing as a form of installment credit. It is increasingly the practice and to a very larger extent in the U. S. , of finance houses to enter direct into rental agreements relating to domestic goods. DOCCUMENTS IN HIRE PURCHASEAll the parties must sign a hire purchase agreement and the agreement, among other things, must specify the date when the hiring commences, the number of installments, the amount of each installment, the time for the payment of each installment, the description of the goods and where the goods are kept. Note that the agreement must be in writing. An oral agreement is not a valid hire purchase agreement. Benefits of Hire Purchase ? Retention of cash flow ? Regular Payments ? Existing credit lines preserved ? Cost of acquisition spread overtime ? Repayment schedules can be structured to suit your cash flow. You can obtain the use of goods for minimal cash outlay, so working capital is not significantly affected. ? You may be able to make use of the taxation benefits of hiring. The Hire Purchase Agreement When you buy goods on hire purchase, you and the seller sign a written agreement. ? How many agreements will be made ? How often to pay ? The amount to pay ? When to pay ? Where to pay ? The name and address of the seller Other information in the hire purchase agreement ? What happens if payment is not made as agreed ? The right to repossess goods if one fails to make payments on time ?One’s obligation to keep the goods safe and in good order ? How to return the goods if one cannot pay. This information may be in the fine print on the back of the agreement. If any of this information is missing from the agreement one may not be liable for some of the cost of credit. The agreement cannot be enforced until the required information has been supplied. Lease Financing in Bangladesh: Bangladesh is a developing country, but the national calamity and political unrest sluggish the industrial growth as well as economic growth of the country.In spites of all these hindrance the growth of leasing companies is a significant indication of our bright prospects. Lease financing was first introduced in Bangladesh in the early 1980s. Industrial Development Leasing Company of Bangladesh Ltd. (IDLC), the first leasing company of the country, was established in 1986 under the regulatory framewo rk of BANGLADESH BANK. It was a joint venture of the Industrial Promotion and Development Company of Bangladesh Ltd. (IPDC), International Finance Corporation, and Korea Development Leasing Corporation.Another leasing firm, the UNITED LEASING COMPANY Ltd. started its operations in 1989. The number of leasing companies grew quickly after 1994 and by the year 2000, rose to16. The leasing business became competitive with the increase in the number of companies and wider distribution of their market share. There are, however, 6 other companies conducting leasing business in the country, although they do not use the word leasing in their names. In terms of money value, the leasing business in Bangladesh increased from Tk 41. 44 million in 1988 to Tk 3. 6 billion in 2000. The leasing companies now operating in the country are Industrial Development Leasing Company of Bangladesh, United Leasing Company, GSP Finance Company (Bangladesh), Uttara Finance and Investments, Bay Leasing and Inves tment, Phoenix Leasing Company, Prime Finance and Investment, International Leasing and Financial Services, Union Capital, Vanik Bangladesh, Peoples Leasing and Financial Services, Bangladesh Industrial Finance Company, UAE-Bangladesh Investment Company, Bangladesh Finance and Investment Company, and First Lease International.Lease financing, as organized in Bangladesh, operates with the following objectives: (a) to assist the development and promotion of productive enterprise by providing equipment lease financing and related services; (b) to assist in balancing, modernization, replacement and expansion of existing enterprises; (c) to extend financial support to small and medium scale enterprises; (d) to provide finance for various agriculture equipment; and (e) To activate the capital market byOperating as managers to the issue, underwriters, or portfolio managers. The functions of a lease business include lease financing, short-term financing, house building financing, and mercha nt banking and corporate financing. In this last group of functions, the leasing business in Bangladesh moved away from regular leasing activities and is now involved in stock-market related activities such as issue management, underwriting, trust management, private placement, portfolio management, and mutual fund operation.Broad capital market operations of the lease financing institutions include bridge financing, corporate counseling, mergers and acquisition, capital restructuring, financial engineering, and lease syndication. Prominent among the sectors of the economy that now receive lease financing services are textiles, apparels and accessories, transport, construction and engineering, paper and printing, pharmaceuticals, food and beverage, chemicals, agro-based industries, telecommunications, and leather and leather products.Commercial banks and development finance institutions (DFIs) have been the traditional lending institutions in Bangladesh. In fact, the concept of leas e financing is a relatively new one in the country. Initially, leasing companies had to adopt the role of educators to make Bangladeshi entrepreneurs aware of the benefits of leasing. However, as DFIs demonstrated poor recovery and fund recycling performances, leasing got the opportunity to develop as an alternative source of funding.A few other factors also contributed to development of the leasing business in the country. For example, the commercial banks have been keener in providing trade financing and FOREIGN EXCHANGE dealings rather than long-term loans because of the risks involved and their longer gestation period. The selection of lease proposals is relatively free from extraneous pressure and is subject to a quality level appraisal. Under lease agreements in the private sector, projects are sanctioned and implemented expeditiously, resulting in benefits in time and cost savings.Private leasing companies also attract clients by providing relatively better services. The down payments in leasing are not high and the gestation period is low. Also, in case of lease financing, incidental costs incurred in the process of import clearing, installation, and commercial production are capitalized, which substantially reduce the initial investment. Leasing companies, however, face some problems in conducting their business in the country. The relatively slow growth of the demand side compared to the fast growth of the lease business is one such problem.This leads many leasing companies to operate in partial capacity. The culture of loan default that prevails in the country is also a deterrent. Leasing companies often find it difficult to raise funds through short- or long-term borrowing from money and capital markets. They are hard pressed to deal with the financial assets because of the present laws of the country, which are also not fully enforceable. Leasing business is gaining increased importance in the economy of Bangladesh with its gradual transformation from an agrarian to industrial one.The government periodically revises the trade and industrial policy to create a liberal business environment both for domestic and foreign investment. Increased investment in the energy sector as well as in power, transport, telecommunications, water and sanitation, and safe disposal of wastes is expected to bring further opportunities for leasing industries. The traditional sources of funds of our country in the financial market are – the Commercial Banks, DFIs and the stock exchange. But these sources are not enough to effectively meet the growing demand of capital investments for industrialization of the country.And the backdrop of such scenario, leasing companies came forward in the 80s to serving as an alternative source of financing. At present there are 11 leasing companies operating there business. The name of the leasing companies: 1. Industrial Development Leasing Company of Bangladesh Ltd. IDLC 2. United Leasing Company 3. Uttara Finance & Investment company Ltd. 4. Phonenix Leasing Company Ltd 5. Bay leasing & Investment Ltd. 6. International Leasing & Finance Company Ltd. 7. GSP Finance company (BD) Ltd. 8. Prime Finance & Investment Ltd. 9. Vonike 0. Prime Bank Ltd. COMPANIES AT A GLANCE IDLC: Industrial Development Leasing Company of Bangladesh limited is established in 1985 as a joint venture public Limited Company with the multinational collaboration of International Development Finance Institution ,Commercial Banks, Insurance Company and Foreign Leasing Corporation. During the past fourteen years of its operation, IDLC has played a catalytic role in providing alternative source of term and capital asset financing to the private sector.IDLC’s primary focus has been in the area of 3-5 year term financial leasing with particular emphasis on balancing, modernization, replacement and expansion (BMRE) of existing units. With its pioneering vision IDLC has not only established lease financing as an ef ficient and quality financial service but also laid the foundation for the creation of ten other leasing companies. Today lease financing has grown to be an industry of Taka 3. 5 billion per annum.IDLC and its institutional shareholders have upheld their commitment towards the development of the financial service sector by offering high quality service to local entrepreneurs. To ensure steady and long term growth as well as to sharpen its competitive edge in a changing and challenging business environment. Short-term Finance which have broadened its customer base and are expected to contribute significantly to IDLC’s growth and profitability. IDLC established its first branch office in Chittagong in 1990. In January 1993, the company offered its shares to the public.In terms of market capitalization, it is ranked among the top 20 listed companies in both Dhaka and Chittagong Stock Exchange. Services offered by IDLC: Lease Financing: IDLC provides lease financing for all types of manufacturing and service equipment including vehicle, computer and medical equipment to all the major industrial and service sector. Short Term Finance: With an objective to provide solution to working capital problems, STF Unit provides different financial services to clients.Emphasis is given to identifying clients’ actual need and in providing customized service to cater them. House Financing: IDLC extends loan facilities to Individuals for purchase of apartments, Business houses professionals for purchase of commercial spaces (office space chamber display center etc. ) Bangladesh Finance and Investment Company Limited (BFICL): A non-banking finance company incorporated in Bangladesh on 10 May 1999 as a public limited company. It began business on 15 February 2000. It’s authorized and paid up capital are Tk 500 million and Tk 23 million respectively.The capital is divided into ordinary shares of Tk 100 each. Major business objectives of the company are carrying out direct trade, term and working capital financing, equity participation, housing finance, fund management,financial and industrial counseling and merchant banking activities of all types. Main sectors in which the company has targeted to lease and invest are transport, electric and electronic goods (including computers), leather, textile, printing, marine vehicles and equipment, steel and engineering, fishing boats and trawlers, medical equipment and small scale industries.BFICL purchases property in its own name and pays 60% to 70% of the total price of a particular property to its supplier. After accumulating and adding all other elevant/ incidental costs with the original purchase price such as transportation, insurance premium, and costs related to letter of credit, and the rent or profit/income margin, the company determines the lease price of the property. Then it signs lease contracts with the lessee, generally for two to four years, and hands over the properties to him f or use.The lease contracts require security or collateral from the lessee in various forms. Lease installments, payable generally on a monthly basis, are determined on the basis of the lease price of properties and other relevant factors. Lease contracts are renewed each year. On the expiry of the lease periods/contracts, the lessee can gain the ownership of the leased property/equipment upon payment of 5% of the transfer value of the equipment as salvage value of the property. Alternatively, the ownership and physical possession of the property goes back to the lessor.BFICL provides lease facilities against one or more of the following securities: (a) bank guarantee/insurance guarantee; (b) easily AM-HIFC Ahsania-Malyasia Hajj Investment and Finance Company Limited (AM-HIFC) is a Sharia-based non-bank financial institution licenced by Bangladesh Bank under the Financial Institution Act 1993. The company follows the model of Malaysia`s pilgrims fund and management institution, popul arly known as â€Å"Tabung Hajj† which focuses on mobilizing savings from would-be pilgrims who intend to perform Hajj in the Holy Land.It invests its excess fund in Sharia-based activities. As a Sharia-based financial institution, adherence to Sharia is of paramount importance to us and this is embodied in out Vision and Mission statement. Bangladesh Industrial Finance Company Bangladesh Industrial Finance Company Limited (BIFC) is a joint venture Leasing and Financing Company, promoted by a group of' Foreign and Local Sponsors. Incorporated as a Public Limited Company in August 1996 and icensed by Bangladesh Bank as a Non-Bank Financial Institution in February 1998, BIFC has been rendering innovative, customized, prompt and cost effective financial solutions to the socio-economic growth of the country. Delta Brac Housing Finance Delta Brac Housing Finance Corporation Ltd. (DBH) is the pioneer, the largest and the specialist Housing Finance Institution in the private sector of the country. After commencing operation in the early 1997, the company has registered commendable growth in creating home ownership among more than 7,500 families in Dhaka and other major cities of the country.At the same time, the company has been playing an active role in promoting the real estate sector to the large cross sections of prospective clients who had but yet unfulfilled dream of owning a sweet home. Fareast Finance ; Investment Limited Fareast Finance ; Investment Limited-a leasing and financing company started its business in the early 2002 to serve its clients with high ethical standards and accountability. Fareast believes that each of its activities must provide satisfaction to its customers and will start progress for them.Financial Management Reform Programme FMRP is a five-year programme jointly financed by the UK Department for International Development (DFID) and the Royal Netherlands Embassy (RNE), and executed by the Ministry of Finance, Government of Ban gladesh. Grameen Bank Grameen Bank (GB) has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity.GB provides credit to the poorest of the poor in rural Bangladesh, without any collateral. At GB, credit is a cost effective weapon to fight poverty and it serves as a catalyst in the overall development of socio-economic conditions of the poor who have been kept outside the banking orbit on the ground that they are poor and hence not bankable. Professor Muhammad Yunus, the founder of Grameen Bank and its Managing Director, reasoned that if financial resources an be made available to the poor people on terms and conditions that are appropriate and reasonable, these millions of small people with their millions of small pursuits can add up to create the biggest development wonder. GSP Finance Company GSP Finance Company (Bangladesh) Limited (GSPB) was incorporated in Dhaka , Bangladesh on 29th October 1995 with the Registrar of Joint Stock Companies and Firms. It started its commercial operation from 17th April 1996 under licence granted by Bangladesh Bank (Central Bank) in accordance with the Financial Institutions Act of 1993. IDCOLInfrastructure Development Company Limited – IDCOL's mission is to promote economic development in Bangladesh by encouraging private sector investment in infrastructure projects. IDLC of Bangladesh Ltd IDLC is a multiproduct financial institution, established in 1985 with the collaboration of reputed international development agencies such as: Korean Development Leasing Corporation (KDLC), South Korea, Kookmin Bank, South Korea, International Finance Corporation (IFC) of the World Bank Group, Aga Khan Fund for Economic Development (AKFED), German Investment and Development Company (DEG).Leasing, initiated by IDLC, today, plays a vital role in the mid term financing of industrial and service enterprises. Over the ye ars, IDLC has served the diverse needs of its customers with product offerings ranging from Home Loans for Individuals to Factoring and Work Order Financing for small and medium enterprises (SMEs) and services such as: Lease Financing, Syndication, Corporate Advisory, Bridge Financing, Underwriting, Issue Management, Private Placement of Stocks and Debt Instruments for Corporate Customers. IIDFCIndustrial and Infrastructure Development Finance Company (IIDFC) Limited is a Development Financial Institution, promoted by wide array of financial institutions like ten commercial banks, from both the public and private sectors, three insurance companies and Investment Corporation of Bangladesh (ICB). Union Capital Limited UNION CAPITAL LIMITED is one of the largest investment banks and fastest growing financial institutions in Bangladesh. Previously, it was known as Peregrine Bangladesh which had its origins and businesses rooted in Hong Kong.Out of the local office of the erstwhile Pereg rine Capital Limited of Hong Kong, Union Capital Limited, Dhaka emerged in early 1998 as a Bangladesh-based company led by a group of the foremost entrepreneurs of the country. Union Capital, within a short span of time, has proved its worth as a most forward-working vigorous organization achieving success with its wide international network and strong local base Leasing Law in Bangladesh Leasing is an asset renting activity, and is therefore, governed by common law. The Contracts Act 1872 applies to contracts of leases.Sections 148 to 171 of the Contracts Act cover provisions relating to bailment. As these provisions are identical to those applicable under English law, the chapter devoted to general law of leasing adequately covers the law in Bangladesh as well. It may be noted that the general law of contracts is limited to bailments of â€Å"goods†. â€Å"Goods† include movable property only – immovable property is not covered by common law. As it the common feature of all Anglo-Saxon legal systems, transactions in immovable properties are covered by a separate system of laws.Taxation of Leases in Bangladesh: The taxation system in Bangladesh has been a subject matter of criticism over a last few years. The system is characterized by a large number of incentives, tax holidays and concessions as a result of which the share of corporate taxation to total tax collection by the Govt. has come down drastically over the past few years. Taxes on corporate profits, of both domestically and foreign owned companies amounts insignificant as a 0. 5% of GDP in Bangladesh, compared with more than 6% in developed nations. The main reason cited for this low contribution is the tax incentives granted by the Govt. Which are very liberal as compared to its counterpart countries. It is probably with tax reform in view that the Govt carried out certain reforms in depreciation laws in Budget 1998-99. Among other provisions, the important change that would ha ve a far reaching effect on leasing companies is the change in

Negative Economic Impacts of Tourism Essay

There are many hidden costs to tourism, which can have unfavorable economic effects on the host community. Often rich countries are better able to profit from tourism than poor ones. Whereas the least developed countries have the most urgent need for income, employment and general rise of the standard of living by means of tourism, they are least able to realize these benefits. Among the reasons for this are large-scale transfer of tourism revenues out of the host country and exclusion of local businesses and products. Leakage The direct income for an area is the amount of tourist expenditure that remains locally after taxes, profits, and wages are paid outside the area and after imports are purchased; these subtracted amounts are called leakage. In most all-inclusive package tours, about 80% of travelers’ expenditures go to the airlines, hotels and other international companies (who often have their headquarters in the travelers’ home countries), and not to local businesses or workers. In addition, significant amounts of income actually retained at destination level can leave again through leakage. A study of tourism ‘leakage’ in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand (via foreign-owned tour operators, airlines, hotels, imported drinks and food, etc.). Estimates for other Third World countries range from 80% in the Caribbean to 40% in India. Source: Sustainable Living There are two main ways that leakage occurs: Import leakage This commonly occurs when tourists demand standards of equipment, food, and other products that the host country cannot supply. Especially in less-developed countries, food and drinks must often be imported, since local products are not up to the hotel’s (i.e. tourist’s) standards or the country simply doesn’t have a supplying industry. Much of the income from  tourism expenditures leaves the country again to pay for these imports. The average import-related leakage for most developing countries today is between 40% and 50% of gross tourism earnings for small economies and between 10% and 20% for most advanced and diversified economies, according to UNCTAD. Even in developed regions, local producers are often unable to supply the tourism industry appropriately even if good will is present: the 64-room hotel â€Å"Kaiser im Tirol† in Austria, an award-winning leader in sustainable practices, cannot find organic food suppliers in the local farming networks in the appropriate quantity, quality and reliability, as production cycles and processes are not compatible with its needs. Source: Austrian Preparatory Conference for the International Year of Ecotourism, September 2001 Export leakage Multinational corporations and large foreign businesses have a substantial share in the import leakage. Often, especially in poor developing destinations, they are the only ones that possess the necessary capital to invest in the construction of tourism infrastructure and facilities. As a consequence of this, an export leakage arises when overseas investors who finance the resorts and hotels take their profits back to their country of origin. A 1996 UN report evaluating the contribution of tourism to national income, gross levels of incomes or gross foreign exchange, found that net earnings of tourism, after deductions were made for all necessary foreign exchange expenditures, were much more significant for the industry. This report found significant leakage associated with: (a) imports of materials and equipment for construction; (b) imports of consumer goods, particularly food and drinks; (c) repatriation of profits earned by foreign investors; (d) overseas promotional expenditures and (e) amortization of external debt incurred in the development of hotels and resorts. The impact of the leakage varied greatly across countries, depending on the structure of the economy  and the tourism industry. From the data presented in this study on the Caribbean, St. Lucia had a foreign exchange leakage rate of 56% from its gross tourism receipts, Aruba had 41%, Antigua and Barbuda 25% and Jamaica 40%. Source: Caribbean Voice Enclave tourism Local businesses often see their chances to earn income from tourists severely reduced by the creation of â€Å"all-inclusive† vacation packages. When tourists remain for their entire stay at the same cruise ship or resort, which provides everything they need and where they will make all their expenditures, not much opportunity is left for local people to profit from tourism. The Organization of American States (OAS) carried out a survey of Jamaica’s tourist industry that looked at the role of the all-inclusives compared to other types of accommodation. It found that ‘All-inclusive hotels generate the largest amount of revenue but their impact on the economy is smaller per dollar of revenue than other accommodation subsectors.’ It also concluded that all-inclusives imported more, and employed fewer people per dollar of revenue than other hotels. This information confirms the concern of those who have argued that all-inclusives have a smaller trickle-down effect on local economies. (Source: Tourism Concern) The cruise ship industry provides another example of economic enclave tourism. Non-river cruises carried some 8.7 million international passengers in 1999. On many ships, especially in the Caribbean (the world’s most popular cruise destination with 44.5% of cruise passengers), guests are encouraged to spend most of their time and money on board, and opportunities to spend in some ports are closely managed and restricted. Other negative impacts Infrastructure cost Tourism development can cost the local government and local taxpayers a great deal of money. Developers may want the government to improve the airport,  roads and other infrastructure, and possibly to provide tax breaks and other financial advantages, which are costly activities for the government. Public resources spent on subsidized infrastructure or tax breaks may reduce government investment in other critical areas such as education and health. Increase in prices Increasing demand for basic services and goods from tourists will often cause price hikes that negatively affect local residents whose income does not increase proportionately. A San Francisco State University study of Belize found that, as a consequence of tourism development, the prices for locals increased by 8%. Tourism development and the related rise in real estate demand may dramatically increase building costs and land values. Not only does this make it more difficult for local people, especially in developing countries, to meet their basic daily needs, it can also result in a dominance by outsiders in land markets and in-migration that erodes economic opportunities for the locals, eventually disempowering residents. In Costa Rica, close to 65% of the hotels belong to foreigners. Long-term tourists living in second homes, and the so-called amenity migrants (wealthy or retired people and liberal professionals moving to attractive destinations in order to enjoy the atmosphere and peaceful rhythms of life) cause price hikes in their new homes if their numbers attain a certain critical mass. Economic dependence of the local community on tourism Diversification in an economy is a sign of health, however if a country or region becomes dependent for its economic survival upon one industry, it can put major stress upon this industry as well as the people involved to perform well. Many countries, especially developing countries with little ability to explore other resources, have embraced tourism as a way to boost the economy. In The Gambia, for instance, 30% of the workforce depends directly or indirectly on tourism. In small island developing states, percentages can range from 83% in the Maldives to 21% in the Seychelles and 34% in Jamaica,  according to the WTO. Over-reliance on tourism, especially mass tourism, carries significant risks to tourism-dependent economies. Economic recession and the impacts of natural disasters such as tropical storms and cyclones as well as changing tourism patterns can have a devastating effect on the local tourism sector. Malta has only 380,000 residents, but received 1.2 million tourists in 1999. As 25% of GDP (and indirectly 40% ), tourism generated more than $650 million in foreign exchange earnings. Malta’s high dependence on tourism and a limited number of export products makes its trade performance vulnerable to shifts in international demand. Source: Washington Times Seasonal character of jobs The seasonal character of the tourism industry creates economic problems for destinations that are heavily dependent on it. Problems that seasonal workers face include job (and therefore income) insecurity, usually with no guarantee of employment from one season to the next, difficulties in getting training, employment-related medical benefits, and recognition of their experience, and unsatisfactory housing and working conditions.