Florence The Center of Early Italian Renaissance Art

Florence, or Firenze as its known to those who live there, was the cultural epicenter for Early Italian Renaissance art, launching the careers of many prominent artists in 15th-century Italy. In a previous article on the Proto-Renaissance, several Republics and Duchies in northern Italy were also mentioned as artist-friendly. These places were quite serious in competing with one another for the most glorious civic adornment, among other things, which kept a lot of artists happily employed. How, then, did Florence manage to grab center stage? It all had to do with five competitions among the areas. Only one of these was specifically about art, but they were all important to art. Competition #1: Dueling Popes In most of the 15th-century (and 14th-century, and all the way back to the 4th-century) Europe, the Roman Catholic Church had the final say on everything. Thats why it was of major importance that the end of the 14th-century saw rival Popes. During what is called the Great Schism of the West, there was a French Pope in Avignon and an Italian Pope in Rome and each had different political allies. Having two Popes was intolerable; to a pious believer, it was akin to being a helpless passenger in a speeding, driverless automobile. A conference was called to resolve matters, but its outcome in 1409 saw a third Pope installed. This situation endured for some years until one Pope was settled on in 1417. As a bonus, the new Pope got to re-establish the Papacy in the Papal States. This meant that all of the (considerable) funding/tithing to the Church was once again flowing into one coffer, with the Papal bankers in Florence. Competition #2: Florence vs. the Pushy Neighbors Florence already had a long and prosperous history by the 15th century, with fortunes in the wool and banking trades. During the 14th century, however, the Black Death wiped out half of the population and two banks succumbed to bankruptcy, which led to civil unrest and the occasional famine coupled with episodic new outbreaks of the plague. These calamities certainly shook Florence, and its economy was a bit wobbly for a while. First Milan, then Naples, and then Milan (again) tried to annex Florence—but the Florentines were not about to be dominated by outside forces. With no alternative, they repulsed both Milan and Naples unwelcome advances. As a result, Florence became even more powerful than it had been pre-Plague and went on to secure Pisa as its port (a geographical item Florence had not previously enjoyed). Competition #3: Humanist or Pious Believer? Humanists had the revolutionary notion that humans, purportedly created in the image of the Judeo-Christian God, had been given the ability for rational thought to some meaningful end. The idea that people could choose autonomy hadnt been expressed in many, many centuries, and posed a bit of a challenge to blind faith in the Church. The 15th-century saw an unprecedented rise in humanist thought because the humanists began writing prolifically. More importantly, they also had the means (printed documents were new technology!) to distribute their words to an ever-widening audience. Florence had already established itself as a haven for philosophers and other men of the arts, so it naturally continued to attract the great thinkers of the day. Florence became a city in which scholars and artists freely exchanged ideas, and art became more vibrant for it. Competition #4: Let us Entertain You Oh, those clever Medici! Theyd begun the family fortune as wool merchants but soon realized the real money was in banking. With deft skill and ambition, they became bankers to most of present-day Europe, amassed staggering wealth, and were known as the pre-eminent family of Florence. One thing marred their success, though: Florence was a Republic. The Medici could not be its kings or even its governors—not officially, that is. While this may have presented an insurmountable obstacle to some, the Medici were not ones for hand-wringing and indecisiveness. During the 15th-century, the Medici spent astronomical sums of money on architects and artists, who built and decorated Florence to the total delight of all who lived there. The sky was the limit! Florence even got the first public library since Antiquity. Florentines were beside themselves with love for their benefactors, the Medici. And the Medici? They got to run the show that was Florence. Unofficially, of course. Perhaps their patronage was self-serving, but the reality is that the Medici almost singlehandedly underwrote the Early Renaissance. Because they were Florentines, and that was where they spent their money, artists flocked to Florence. The Artistic Competition Florence ushered in the 15th-century with what wed now refer to as a juried competition in sculpture. There was—and is—an enormous cathedral in Florence known as the Duomo, whose construction began in 1296 and continued for nearly six centuries. Adjacent to the cathedral was/is a separate structure called the Baptistery, whose purpose, obviously, was for baptisms. In the 14th-century, the Proto-Renaissance artist Andrea Pisano executed a pair of immense bronze doors for the east side of the Baptistery. These were modern wonders at the time, and became quite famous.Pisanos original bronze doors were so successful that the Florentines decided it would be a great thing entirely to add another pair to the Baptistery. To that end, they created a competition for sculptors (of any medium) and painters. Any talented soul was welcome to try his hand at the assigned subject (a scene depicting the sacrifice of Isaac), and many did.In the end, though, it came down to a competition of two: Filippo Brunelleschi and Lorenzo Ghiberti. Both had similar styles and skills, but the judges chose Ghiberti. Ghiberti got the commission, Florence got more impressive bronze doors, and Brunelleschi turned his formidable talents to architecture. It was truly one of those win-win-win situations, a great new development in art, and another feather in Florences metaphoric cap. There were five competitions that thrust Florence to the forefront of the cultured world, which subsequently launched the Renaissance to the point of no return. Looking at each in turn, the five impacted Renaissance art in the following ways: The Church, stabilized and unified once again under one Pope, provided artists and architects with a seemingly endless supply of subject material. Cities and towns always needed new or improved churches, and churches were always on the lookout for better works of art with which to adorn themselves. Important persons were forever passing on, and they required the appropriate final resting places (elaborate tombs). Florence coveted the finest of these churches and tombs.Florence, having proven itself at least equal to its neighbors, was not content to rest upon its laurels. No, Florence was determined to out-do everyone. This meant building, decorating, and embellishing what was already there, which meant plenty of gainful employment.Humanism, which found a welcoming home in Florence, gave some major gifts to the arts. First, nudes were once again acceptable subject matter. Secondly, portraits no longer had to be of saints or other Biblical figures. Portraits, beginning in the Early Re naissance, could be painted of actual people. Finally, the landscape, too, crept into fashion—again, due to the fact that humanist thought was broader than strictly religious thought.The Medici family, who (literally) could not spend all of their money if they tried, funded all sorts of artists academies and workshops. The better artists that came and taught attracted even more talent until you could hardly swing a cat, as they say, without hitting an artist. And, since the Medici were keen on glorifying Florence, artists were kept busy, paid, fed, and appreciated... just ask any artist what a happy situation this is!Finally, the door contest made it possible, for the first time, for artists to enjoy fame. That is, the heady, dizzying personal sort of fame we usually reserve for actors or sports figures in the present day. Artists went from being glorified craftsmen to veritable celebrities. Small wonder that Florence launched the careers of Brunelleschi, Ghiberti, Donatello, Masaccio, della Francesca, and Fra Angelico (to name but a few) in the first half of the 15th-century alone. The second half of the century produced even bigger names. Alberti, Verrocchio, Ghirlandaio, Botticelli, Signorelli, and Mantegna were all of the Florentine school and found lasting fame in the Early Renaissance. Their students, and students students, found the greatest Renaissance fame of all (although well have to visit with Leonardo, Michelangelo, and Raphael when discussing the High Renaissance in Italy. Remember, if art of the Early Renaissance comes up in conversation or on a test, paste a small (not too self-satisfied) smile on and confidently mention/write something along the lines of Ah! 15th century Florence—what a glorious period for art!

An Analysis of the Wto Communication - 1339 Words

An analysis of the WTO communication ABSTRACT Habermas has defined the relationship between public sphere and public opinion as â€Å"network for communicating information and points of view . . . the streams of communication are, in the process, filtered and synthesized in such a way that they coalesce into bundles of topically specified public opinions.† The report, based on Habermas’s theory of public sphere and public opinion, and with the Doha Round of trade talks as a case study, provides an analysis on the communication strategy of the World Trade Organization (WTO), including the target, content, form of the WTO communication, then summarizes the main characteristics of the communication, symmetrical but lack of democracy and†¦show more content†¦In its communication, the WTO disseminates specific messages and information, at the same time presents its public image. Then I will provide further explanations of the communication forms in these two circumstances. 4.1 Internal communication By internal communication, I refer to the communication carried on between the WTO inside and its members. The WTO internal communication takes place mainly by means of conferences or meetings of different levels in various specialized working groups, councils and committees. * Ministerial conference The governing body of the WTO, responsible for all the decision-making, composed of international trade ministers from all member countries. Meets every two years, and the decisions are generally taken by consensus (Alana Mann, 2012). * General Council The WTO’s highest-level decision-making body, meeting regularly to carry out the functions of the WTO. It has the authority to act on behalf of the ministerial conference. The General Council also meets, under different rules, as the Dispute Settlement Body (WTO, 2012). * Dispute Settlement Body Created in the Uruguay Round agreements for resolving trade quarrels and enforcing the rules and therefore for ensuring that trade flows smoothly (WTO, 2012). * Green Room Refers to meetings of 20-40 delegations, usually at the level of heads of delegations. These meetings can take placeShow MoreRelatedPerformance Dynamics of Beximco Pharmaceuticals Ltd1421 Words   |  6 Pagesmembers share information openly and collaborate on work activities. 3 For internal communication, BPL follows a strictly formalized Intranet based electroniccommunication system as well as informal verbal communication. For external communication BPLuses both internet based electronic communication and an array of printed communicationmaterial. All the external communications are supervised, mostly by Director, Marketing and insome cases by Director, Sales. 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With the developmentRead MoreMyob Analysis881 Words   |  4 Pagesfinancial management software is in high demand for the rapidly growing market. Before the MYOB’s launching in china, the market of accounting software is dominated by several local companies including jindie, yongyou and suda etc. 3. PESTEL analysis Political factors The political system in china is generally defined as collectivism and socialism communist totalitarianism although the latter one is more than an empty title at present due to the reform of market economy. However, the conceptRead MoreChallenges Faced By The Multinational Organizations1396 Words   |  6 Pagesalso increase in the globalisation the multinational firms are becoming more prevalent. The challenges that the present managers of these multinational firms are facing are due to intercultural communication. Many researchers say that the differences in the culture eventually influence the communication, performance and management of the organization. Organizations that are planning to expand their business in the international countries have to face various cross-cultural challenges. Read MoreContemporary development1178 Words   |  5 Pagesmeant by the various PESTLE-C categories? For each category give at least one organization/industry-specific example. 4. In relation to your chosen organization and/or its industry sector briefly explain one of the forces in Porter’s Five Forces Analysis. Illustrate your answer with organization/industry-specific examples. 5. Explain how some of the major operational and/or operational environmental organizations in your chosen industry sector. The Political environment 1. Outline the politicalRead MoreAdvantages And Advantages Of Global Business Essay1416 Words   |  6 Pages various trade agreements need to be acknowledged as these treaties will depend on which location the expansion occurs to. Such contracts that help businesses in Australia are; the WTO (World Trade Organisation), FTA (Free Trade Agreement) and the OECD (Organisation for Economic Co-operation and Development). The WTO as a government international body for example help deal with the rules of trade between nations (DFAT, 2016). The FTA works towards providing better access to markets and reducing costsRead MoreInternational Trade Is An Effective Stimulation Of Economic Growth1557 Words   |  7 Pagesconsumption, improving the quality and quantity of consumption by all nations. To determine whether developing nations are experiencing disadvantage in the international trade, it requires a careful examination with Porter’s Diamond factor endowments. It analysis a nation s competitiveness under four categories: factor endowments, demand condition, related and supporting industries and firm strategy, structure and rivalry. Factor endowments meaning the availability of resources and skills, which can furtherRead MorePrecautionary Principle2845 Words   |  12 PagesEuropean Union. There is a conflict between those who support the principle and those who oppose it. For example, American policy-makers have become increasingly concerned with the use of the concept by the EU, seeing it as a threat to scientific risk analysis as the main tool for regulation used hitherto. Academics in the United States point out that the US had precautionary elements in their regulations during the 1970s; but these elements turned out to be excessively costly and faulty, and so were abandoned

Anthropogenic Pollution And Around Bamfield British...

Anthropogenic Pollution Bioindicators in and Around Bamfield British-Columbia Introduction Dating back hundreds and hundreds of years ago, the act of dumping into waters has been practiced without any thought into the possible damages this could inflict on the ecology of the marine life present. The dumping of garbage and sewage in these waters is detrimental to the species that inhabit it, it can destroy their habitat, and it can destroy themselves as organisms (Chenery AM. et al. 2005). Since these organisms are usually fully submerged in these waters, there is nothing protecting them from being surrounded by polluted waters that could potentially harm them. For the past couple of decades though, and in many areas of the world, people have begun to notice and understand these problems and have begun setting out laws and required permits to do anything remotely close to dumping in waters (Chenery AM. et al. 2005). However, this is only but a single step in a process working towards cleaning and keeping both oceans, and in-land bodies of water, including their organisms, safe from human waste. With the vast diversity of pollutants being introduced to these waters, it is becoming more and more difficult to analyze and identify the exact effects each pollutant has on the water quality as well as the organisms living in them (Howe and Clark, 2014). Scientists, though, have discovered new ways of identifying these negative effects the pollutants have by analyzing certain

Racial Profiling An Issue Longstanding And Troubling...

Nixon 1 Jada Nixon Dr. Hunte ENC 101 30 September 2015 Racial Profiling Introduction Since the birth of our nation, racial profiling has been an issue longstanding and troubling among minority groups and still continues to exhibit severe consequences in communities. Racial profiling can be defined, according to the American Civil Liberties Union, as the discriminatory practice by law enforcement officials [or security personnel] of targeting individuals for suspicion of crime based on the individual s race, ethnicity, religion or national origin. Although this act is not directly illegal, it violates core principles of our democracy: two of them being, the Fourteenth Amendment, which outlines the citizenship of African Americans along with equal protection of the laws, including the right to life, liberty and property, and due process, and the Fourth Amendment, which provides citizens their right against unreasonable searches and seizures. Racial profiling affects a wide range of minority groups. Reports on alcu.org state, â€Å"More than 240 years of slavery and 90 years of legalized racial segregation have led to systemic profiling of blacks in traffic and pedestrian stops† (Racial Profiling). Members of South Asian, Arab, and Muslim co mmunities have also been categorized in regards to travel and terroristic activities by federal law enforcement and airline security due to the events on September 11, 2001. Latino communities have too been profiled and alienated due to theShow MoreRelatedBlack Boy By Richard Wright1220 Words   |  5 Pagesautobiography titled Black Boy Today (2016) about a black boy growing up in the United States, he would write about racial profiling against blacks, the wide education gap between black and white, and the unequal job opportunities for blacks. If Wright was to write Black Boy today, he would examine the phenomenon of racial profiling because it is one of the most serious and longstanding issue in today’s society. Many black are being targeted for suspicion of crime, and in some cases, murdered by a lawRead MoreAfrican American Were Enslaved By Whites On The Southern Plantation1366 Words   |  6 Pagesstill face racial prejudice and discrimination in everyday life. Richard Wright was born after the Civil War but before the Civil Right Era. If he were writing an autobiography titled Black Boy Today (2016) about a black boy growing up in the United States, he would write about racial profiling against blacks, the wide education gap between black and white, and the unequal job opportunities for blacks. If Wright was to write Black Boy today, he would examine the phenomenon of racial profiling becauseRead MoreAnalysis Of The Poem Skittles For Trayvon 1256 Words   |  6 PagesVolcano people are considered the African-Americans and Water people are Caucasians. Lillian gives examples in a mythical way how this country is segregated by the color of your skin. In this time period when the murder of Trayvon Martin occurred, racial tensions between African-Americans and White people were very high. The killer of this innocent teenager, â€Å"George Zimmerman† was pronounced innocent. African-Americans were enraged when the jury ruled George Zimmerman the defendant innocent. The

My Papa Free Essays

Reflective Essay by Liam Shortall Visiting Papa It was March 2011, and my Dad and I had just been to pick up my brand new trombone from the Rath factory in Huddersfield and were heading towards Liverpool Heart and Chest Hospital to visit my grandfather. He had just had been through quadruple bypass heart surgery at the tender age of 79. My grandfather, or Papa, had been suffering from acute pain in the heart, and severe exhaustion :the daily stroll to the shop had now become an impossible task. We will write a custom essay sample on My Papa or any similar topic only for you Order Now After being examined by his local GP on a regular basis for a few months, he was admitted to Liverpool for this major operation. My grandfather was immensely apprehensive and at one point almost refused treatment. One week into his stay, my Dad went with my Uncle Richard to visit him. He was extremely confused; he didn’t know his location and how long he had been there. My Nana had kept my Dad and Uncle informed in regard to his condition but in visiting him they soon realised that she had not revealed the full extent of his ill health. After this particular visit my Dad didn’t really seem himself, he seemed anxious and constantly on edge, a complete opposite to his usual joking self. My papa must have been in a dreadful state. Previous to my visit to Liverpool Heart and Chest Hospital (LHCH) we had been to pick up my new trombone, I was ecstatic. Finally I was getting the instrument that I had being dreaming of for, what felt like forever. And after so many sleepless nights too, the day was finally here! But my happiness was short-lived, I wasn’t to know of the severity of Papa’s condition and my heart soon sank when we entered the hospital. As soon as I walked though the hospital doors, I seemed to feel even colder than I did outside on this winter day: it was so clinical and unwelcoming. Suddenly I felt very uncomfortable in this new environment; never have I felt so selfish and guilty. After hiking through this never-ending maze of wards, through the different sounds and noises coming from various wards, we entered the room my Papa was ‘recovering’ in. I briefly looked around, noticing my Nana standing in the corner of the room with an exhausted and worried expression on her face, trying to force a smile. We walked over to the bed in which my Papa lay looking still and weak with his eyes closed. He ad all sorts of pipes and tubes entering his frail body, and a never ending metronome of multiple beeping sounds came from various machines that had been plumbed into him. This bruising sight still stays with me today. Gently laying her hand on his arm and shaking him softly, my Nana attempted to wake Papa up. He opened his eyes until they were open just enough to glance over at us. He then muttered something that I couldn’t understand. He seemed to va guely recognise who his son was, but when he looked me it was as though he hadn’t seen my before in his life, as though I was merely a stranger at his bedside. Nana explained to us that as a result of his surgery and strong medication he was becoming exceedingly confused and exhausted. My increasingly distressed Nana seemed at an all time low and she had lost all hope for Papa. My Dad had managed to have a half conversation with his Papa, he told me. He said that Papa would say a few words and then stop for breath. Nana then gingerly pulled back the bed sheets that lay on top of him and revealed his chest. There was a large, very noticeable scar surrounded by a sea of black bruises which covered his chest. I stared at my Papa for a while. The Papa I knew so well was so warm hearted, lively and full of humour, so different to the man lying in the bed in front of me . A lump had developed in my throat and my vision became blurry. I blinked and could feel the sting of a single tear run down my cheek. The feeling of not being recognised by someone you know so well and have so many fond memories with, was unfathomable. Knowing there was nothing I could do to help someone that we loved and cared about so much made us all feel so incredibly helpless. As visiting hours came to a close we said our goodbyes to Papa, hoping for the best for his health, but dreading the worst. He of course was too delusional to reply, which felt so demoralising as he always would make a fuss of us leaving after a visit. Nana then walked us back to the car park. She, understandably wanted to get back to my Papa’s bedside. So we awkwardly said goodbye to her and wished her and Papa the very best. Visiting my Papa in hospital affected me in more ways than I ever imagined it would have. Looking back on this experience I realise how important it was and how much of a turning point it was in my life. It made me realise how much we take our loved ones for granted, and how harsh the reality of life actually is, and how precious it is also. I realised how much of an influence my Papa had had on my upbringing. Many of the features of my personality are related to my Papa and his character, which made the worry of something sinister happening so much more awful. It also made me realise the ignorant and selfish attitude I had before this emotional day. And to think how lucky I, and the majority of us actually are. I believe most of us take our good health for granted. And we don’t realise how good we have it compared to others who are in dreadful states, when their personalities are often unrecognisable. How to cite My Papa, Papers

Financial Performance of National Bank of Ethiopia free essay sample

In recent years, the importance of measuring MFI performance has been growing. An important aspect of this trend has been the increasing use of financial indicators that measures MFIs’ performance. However, it is hard to know the true picture of institutions with out the necessary adjustments. Hence, financial statements of NBE WSACA are adjusted for subsidy, loss provision and inflation to know its true picture. Accordingly, financial performance of the institution is analyzed based on PEARLS monitoring systems and MFI performance indicators (ROA, ROE, OSS, FSS and SDI), in which the overall performance was good. However, unadjusted ratios were misleading. 6 1. Introduction NBE WSACA has been in operation since 1985. It has been paying dividends to its members at the end of every year, after putting aside the reserve requirement and other deductibles. From the outset, the association was established with full financial and technical support from National Bank of Ethiopia and the various supports of the bank continue to date. However, these subsidies have never been considered in preparing the financial statements of the association so that it has not been possible to tell about the true performance of the association. This paper, therefore tries to see the real financial achievements of NBE WSACA in 2004, 2005 2006 and 2007 by including the various subsidies it was receiving, loan loss provision and the effect of inflation. Adjusted and non-adjusted financial performances of year 2005, 2006 and 2007 are also analyzed using PEARLS monitoring tool of WOCCU and selected MFI performance indicators. The results are also compared against each other and peer group result of sub Saharan Africa as well as benchmark of 30 credit unions operating around the world. The appropriate interest rate on loan is also suggested as per the indication of SDI. 1. 1 Background Ethiopia is one on the sub-Saharan African countries with a population of about 73 million. More than 85% of the population lives in rural area and agriculture remains the main stay of the economy. The Government applies agriculture lead development as growth strategy. Agriculture contributes 44% of GDP followed by Service and Industry with a share of 46. 3% and 11. 7% respectively. Table 1- Selected Macroeconomic and social indicators of Ethiopia 2005 Population (2005)* Population growth GNI per capita $ (2005)* GDP $ (2006) GDP growth, annual (2005) 75. 17 2. 8% 150 11 billion 11. 6% 2006 2007 7 2005 General Inflation, annual (2005) 8. 8537 2006 8. 9666 2007 9. 3192 Source: National Bank of Ethiopia Annual report (2006/2007) (*) World Bank Group Data and Statistics (accessed on 18/08/08) 1. 2 Financial sector in Ethiopia Traditional financial system in Ethiopia has long history and paramount contribution to economic betterment and social wellbeing of the society. Traditional institutions organized with a sense of cooperation and risk sharing has enabled Ethiopians to experience saving and financial management within its cultural context. Eqqub1 and Edir2 are some of the informal financial institutions that shaped the social bond and interaction. Formal financial institution started as early as 1905 with the formation of Bank of Abyssinia. However, the growth in number and capacity has been limited so that the service has not reached to the majority of the people. Currently, ten commercial banks, nine insurance companies and one development bank are operating in the market. All are owned by Ethiopian nationals. The banking sector was swinging from nationalization in 1977 to liberalization in 1992, which may contribute to its limitation in providing better services in terms of outreach and products. Their focus on big urban areas and the stringent lending policy they have been following have made there service inaccessible to the common citizens. As an alternative finance source, some enlighten employees started to form saving and credit cooperatives taking their working place as a common bond, based on provisions of proclamation No. 241/58. As of June 30, 2006, about 5437 SACCOs were providing financial services to their members. On the other hand, various NGOs (humanitarian organizations) were providing microcredit services as a complementary to their humanitarian and developmental activities. Although some of the NGOs had tried to provide the services through formation of SACCOs by providing revolving fund to organized groups, it had not been sustainable due to its loose 1 Eqqub is a form of rotation savings association in which e regular payment of weekly or monthly are made for the benefit of a large sum at some point in time. 2 Iddir is an informal financial and social institution of a community that serves as insurance when members face emergency situation. 8 foundation. The life of financial services was limited to the life of projects in particular areas. Absence of institutional framework and related legal problems compounded with clients’ lack of knowledge and attitude towards NGOs (loans were considered as donation) had affected loan repayment, in which outreach and sustainability of the service was not possible. In order to address these problems and bring the activities of micro financing within Ethiopia’s monetary and financial policies, Licensing and Supervision of Microfinance Institution, Proclamation No. 40/1996 was issued. The proclamation strongly prohibited provision of financial services without a license from the central bank. Following this, National Bank of Ethiopia has issued various directives as per the power vested in it by the proclamation. Accordingly, most of the NGOs that were providing credit services plus new government sponsored organizations came into the legal system by including nominal shareholders in their ownership structure. Since the enactment of the proclamation, 28 MFIs have registered to operate as a commercial financial institution as it is clearly stated in the proclamation and subsequent directives. Out of the 28, 7 are government owned MFIs established to assist its development strategy. However, they have been practically operating on a double bottom line approach. As of June 30, 2007, the sector has registered a total asset, total deposit and total capital of USD 0. 3 billion, USD 88. 3 million and total capital of USD 93. 6 million, serving total clients of 1. 5 million. 1. 3 Objectives of the study Though licensed MFIs are recent comers to the financial market, Savings and Credit Associations have been in operation for more than three decades. Most of the institutions have been reporting profit and good performance. The financial reports are based on conventional accounting methods that exclude various transactions that affect the quality of the report. Because conventional accounting usually reports the actual costs, not opportunity costs that reflect the real economic cost to society. Government and donor supports come in the form of tax exemptions, indirect government subsidies, in the form of direct financing, via budget subsidies, grants for specific purposes, and contracts to perform certain work and exchange rate fluctuation, inflation, non-performing loans and deposit requirements are the main factors that could affect the quality of financial reporting. Hence, the objective of this paper is to measure the financial performance of NBE WSCA, by including items that have not been captured by conventional accounting practice and then to: 1. Identify the degree of its dependence on subsidy and how much the society cost in supporting the institutions, if any, 2. Forward useful recommendations for its future prospect, 3. Give some light to microfinance sector in Ethiopia on relatively real performance evaluation method. 4. Recommendations related to future improvements in financial reporting if warranted Comparison to peer group of Africa’s Microfinance institutions will also be made to understand better its level of performance. It is proper to note here that the above Factors that affect the quality of the financial reports would be treated if their influence were believed to be significant and reliable information is secured for the adjustment. 1. 4 Methodology In assessing the performance of the selected institution, mainly, secondary data from reliable sources (audited financial statements) are used. The researcher will also try to complete data insufficiency and information gaps through questionnaire, interview and personal discussions. Though performance measurement tools in the sector are usually debatable, the researcher prefers to use adjusted return on asset (AROA), adjusted return on equity (AROE), financial self-sufficiency (FSS) and subsidy dependence index (SDI). In recognition of SACCOs unique feature, PEARLs monitoring tool is also used to evaluate its financial performance. The results will be compared with the peer benchmark result of the micro banking Bulletin of the MIX. 1. 5 Organization of the paper The paper is organized in six parts. In the first part, brief review of the financial sector in Ethiopia will be made. This part also contains objective of the study and the methodology. The second part deals with literature review on performance measures in microfinance with 10 especial emphasis to FSS, OSS, ROA, ROE, SDI and PEARLs monitoring systems. The third part focuses on SACCOs in Ethiopia and its legal framework. The fourth part gives incite on background of NBE WSACA and its services to members. Part 5 deals about NBE WSACA financial performance with and without consideration to the necessary adjustments as well as comparison to Africa benchmark of MBB. Part 6 gives conclusion based on the finding and forwards recommendations. 11 2. Literature Review 2. 1 Microfinance performance Evaluation Microfinance has attracted a number of attentions around the world and many countries and donors have been using it as a tool of poverty alleviation and development strategy. Microfinance has played significant role in embracing large world population who was forgotten and excluded by the formal financial institutions. It has been serving as a litmus paper to banks to show that it is feasible to do business with the poor. It has also put the poor at a higher moral ground by witnessing that the poor are trustworthy and have ideas, visions, talent and capacity to achieve them, if they are given the chance. Nowadays, many actors in the microfinance sector see finance as an effective tool, which can be used to help humanity and society develop. Significant numbers of people around the world have able to generate income and accumulate savings as their capacity allows them to do due to the availability of financial services. â€Å"Microfinance is much more than simply an income generation tool. By directly empowering poor people, particularly women, it has become one of the key driving mechanisms towards meeting the millennium Development Goals/MGD/, specifically the overarching target of halving extreme poverty and hunger by 2015. 3 In their effort to achieve what is expected of them from various stakeholders, microfinance institutions are required to achieve two major performances, social performance and financial performance. The former is the one, which characterizes microfinance institutions, and it includes outreach to the poor and the excluded, adaption of services and products to the target clients, improvement of clients’ social capital and social responsibility of MFIs. Financial performance on the other han d, deals on economic situations such as portfolio quality, efficiency and productivity, financial management and profitability. Nevertheless, unlike commercial banking with its Basle standards, the microfinance industry does not have widely agreed performance standards. â€Å"Recent years have seen a 3 Mark Malloch Brown, Administrator of the United Nations Development Program/UNDP/ 12 growing push for transparency in microfinance. An important aspect of this trend has been the increasing use of financial and institutional indicators to measure the risk and performance microfinance institutions. However, it is hard to achieve transparency if there is no agreement on how indicators measuring financial condition, risk and performance should be named and calculated. †4 Hence, Microrate, Inter-American Development Bank (IBD), the Consultative group to assist the poorest (CGAP), the united states Agency for International Development (USAID), MCRIL and planet Rating agree on the names and definitions of a set of commonly used indicators. Accordingly, the â€Å"Roundtable group† agreed on performance measures such as portfolio quality, efficiency and productivity, financial management and profitability. SEEP network has also developed MFIs performance measure and reporting guidelines. 2. 2 PEARLS Monitoring System World Council of Credit Unions/WOCCU has also developed its own performance measures for SACCOs. Since 1990, the world council of credit unions, Inc. has been using a set of financial rations known as PEARLS, which each letter of the word PEARLS measures key areas of Credit unions operations. Protection, Effective financial structure, Asset quality, Rate of return and cost, Liquidity and Sign of growth. PEARLS ratios are set to serve as executive management tool for standardize evaluation, comparative ranking and tool of supervisory control. (David C. Richardson, 2002). WOCCU has set the following targets for the main ratios in PEARLS: Protection- protection against loan loss is deemed adequate if a credit union has sufficient provision to cover 100% of all loans delinquent for more than 12 months, and 35% of all loans delinquent for 1-12 months. The system evaluates the a dequacy of the protection by comparing the allowance for loan losses to loan delinquency. Microrate inter-American Development Bank Sustainable Development Department Micro, Small and Medium Enterprise Division, performance indicator for MFIs, Technical guide 2 nd edition, Washington D:C, 2002 5 David C. Richardson (2002), PEARLS monitoring system, World Council of Credit unions, WCCU toolkit series number 4 13 Effective financial structure- 95% of the productive asset should composed of 70-80% loan and 10-20% liquid investment. The remaining 5% is unproductive assets composed of land, buildings and equipments). On the ther hand, 70-80% of Credit union liability should be composed of members’ savings to achieve financial independence. In order to finance non-performing assets, improve earnings and absorb losses, members share capital and institutional capital should be greater or equal to 20% and to 10% of total asset respectively. Asset Quality-keeping delinquency rate belo w 5%, maintaining non-earning asset a maximum of 5% and financing the non-earning asset with institutional capital are set to be measure of asset quality for credit unions. Rate of return and costs- operating expense to total assets ratio is set to be less than 10% and other return and costs to be greater or equal to market rate. However, administrative cost should not be greater than 5% of the average total assets. Liquidity- the liquidity indicators show whether the credit union is effectively measuring its cash so that it can meet deposit withdrawals requests and liquidity reserve requirements. This is a measure of savings deposits invested in National Associations or Commercial banks, the minimum amount set to be 15%. In addition, the idle liquid fund should as much as possible closer to zero. Liquidity reserve to savings deposit is also set at 10%. Signs of growth- growth in Credit unions are measured in areas of total assets, loans, savings deposits, shares and institutional capital linked with profitability. The desired goal in this respect is growth, after subtracting inflation of the year. Nevertheless, the key performance and self-sustainability ratios published by the microfinance industry are deceiving if not adjusted to reflect subsidies. This is mainly because many items that significantly affect measuring real self-sufficiency are excluded by conventional accounting practices, which need to be adjusted. 14 2. 3 Adjustments Financial analysts often calculate a number of adjustments based on their purpose of analysis. In general, the following four groups of adjustments are commonly used but there is no precise standard calculation method so that any kind of adjustment should describe the calculation method used (Microfinance consensus guidelines, 2003). 1. Subsidy Adjustments- subsidy adjustment serves two purposes, first, MFIs vary widely for subsidy they receive. Some MFIs get no subsidy at all. Thus, adjustment that offset subsidy will allow for a more meaningful comparison of performance among MFIs with different amounts of subsidy. Second, the industry has accepted that, in the long term, MFIs should be able to operate without subsidy, relying instead on commercial sources and private investment or market rate. 6 There are two types of subsidy adjustments, subsidized cost of fund adjustment and in kind subsidy adjustment. Subsidized cost of funds adjustment looks at the difference between an MFI’s actual financial expenses and the financial expense it would pay if all of its liabilities were priced at market rates. One common way of doing this is to multiply the MFI’s average funding liability by some shadow price-a market interest rate and then subtract the actual financial expense. The difference is the amount of adjustment and is treated as an expense. No single shadow rate is appropriate in all circumstances. Many analysts use as a shadow the rate that local banks are paying on 90-day time deposits (International accounting standards 2002 in CGAP Microfinance consensus guidelines, 2003). In-kind subsidy adjustment on the other hand is provision of goods and services at no cost or below market cost. The usual in-kind subsidies could be office furniture and equipments, consultancy services, free office space and free staff. The adjustment in this case is the difference between what an MFI pays for the goods and services and what it would have to pay for the same goods and services at market rate. CGAP, Microfinace Consensus Guidelines, definition of selected financial rations and adjustments for Microfinance, third edition, September, 2003 15 2. Inflation Adjustment- The value of fixed assets tracks with the rises in price levels. Their real value increases along the lines of inflationary pressures. As such, the value of the fixed assets rises with inflation. Analysts make two adjustments f or inflation to account for this rise: one to total equity and one to fixed assets. Equity is adjusted downwards with inflation; and fixed assets adjusted upwards. In reporting this separate adjustment for fixed assets, the institution must create two counterbalancing entries, one on the income statement and one on the balance sheet. On the income statement, inflation increases the value of fixed assets, recorded as revenue from a revaluation adjustment. On the balance sheet, this adjustment increases the balance of the fixed assets account. The rational behind the inflation adjustment is that an MFI should preserve, at a minimum, the value of its equity against erosion due to inflation. Inflation produces a loss in the real value (purchasing power) of equity. The inflation adjustment recognizes and quantifies that loss. 7 In order to adjust for inflation, subtract net fixed assets from equity and multiply the difference with the period inflation rate. Year to year inflation adjustments create an expense in the income statement and a reserve in the balance sheet equity account, which is cumulative retained earnings consumed by the effects of inflation. 3. Adjustments for non-performing Loans- MFIs’ differ widely in their treatment of loan loss provision expense and write of policies, which can have a large impact on how sound its financial results appear. Hence, three portfolio adjustments have to be made to generate true financial statement. The three main adjustments are: Loan loss allowance and provision expense, write off and reversal of interest accrual on delinquent loans (CGAP, microfinance consensus guide lines, 2003). The MIX makes provision of 50%, 100% and 50% for loans with payments that are late between 90 and 180 days, for loans late for more than 180 days and renegotiated loans respectively. Loan loss allowance and provision expense increases loan loss allowance in the balance heet and provision expense in the income statement. Write off adjustment reduces gross loan portfolio and loan loss allowance with out 7 CGAP, Microfinace Consensus Guidelines, definition of selected financial rations and adjustments for Microfinance, third edition, September, 2003 16 affecting other accounts in the income statement or balance sheet. Reversal of interest income accrued on non-performing loans reduces interest income net profit and equity with the same amount. 4. Foreign exchange adjustments- this is an adjustment related to MFIs, which have assets and liabilities denominated in foreign currency, but handle their accounting in local currency. The change in exchange rate between the two currencies put an institution in gain or loss position. However, there is no agreement how to recognize the gain or loss. 2. 4 Key performance indicators in Microfinance Performance measure in microfinance has been a point of concern due to their double bottom line operation and their reliance on external source of fund in the form of subsidy. Hence, traditional accounting performance measures that have been used for purely commercial undertaking may give unrealistic picture for MFIs that benefit from any kind of subsidy. The failure of the return on asset (ROA) and return on equity (ROE) in measuring the performance of MFIs is due to their reliance on accounting practices that ignore the subsidies received by MFIs, in which without properly reporting and evaluating the subsidies involved, no adequate cost benefit analysis or cost effectiveness analysis of the MFI can be carried out. Basic financial statement indicators, such as net income, hints about an institution’s level of profitability without taking into consideration whether the income is donated or earned, whether loans received by the institution are priced competitively or subsidized , or whether the institution gets in-kind support. A truly accurate assessment of an institution’s sustainability based on adjusted data can help to anticipate the future, when external support may end (CGAP, MIS for MFIs, a handbook, Technical tool series no. 1). 17 The MFI industry, as represented by MIX, correctly recognizes the failure of traditional accounting ratios to measure the performance of MFIs. Accordingly, the ROA and ROE ratios are adjusted in an attempt to account for subsidies commonly received. 8 Accordingly, the mix developed three key ratios: adjusted return on asset (AROA), adjusted return on equity (AROE) and financial self-sufficiency (FSS). 2. 4. 1 Adjusted return on asset (AROA) and adjusted return on Equity (AROE) The prime objective of any commercial activity is to maximize shareholders benefit through maximizing profit. The process by which the profitability of the shareholders can be measured is through determination of retune on equity. Return on asset is an overall measure of profitability that reflects both the profit margin and the efficiency of institutions. It gives an indication how efficient institutions are in utilizing their assets. ROE makes little sense for comparing microfinance institutions, which have widely divergent liability and equity structures. Many have large equity base built up through donor funds; others have little equity and are funded through soft loans. Hence, return on asset is more appropriate to measure MFIs performance (CGAP, MIS handbook, 1998). However, using such traditional indicators to measure performance of MFIs is inadequate because of this ratios failure to reflect the tremendous impact of subsidies received by MFIs (Yaron, 1992a). Therefore, ROA and ROE are adjusted for subsides received, inflation, loan loss provision and exchange rate difference. Adjusted return on asset is determined as adjusted net operating income net of taxes divided by adjusted average total asset. AROA = Adjusted net operating income-tax Adjusted average total Asset. 8 Ronny Manos and Jacob Yaron (2007), what is wrong with â€Å"adjusted† accounting ratios that are commonly used by MF industry to measure financial performance, school of business, college of management. 18 Adjusted return on equity could also be determined as adjusted operating income net of tax divided by average adjusted total equity. AROE= Adjusted net operating income-tax Adjusted average total Equity 2. 4. Operational self sufficiency (OSS) and financial self sustainability (FSS) According to definition of CGAP MF consensuses guidelines, OSS measures how well an MFI covers its cost through operating revenue. In addition to operating expense, it is recommended that financial expense and loan-loss provision expense to be included in this calculation, as they are a normal (and significant) cost of operating. FSS on the other hand measures how well an MFI covers its costs, taking into account a number o f adjustments to operating revenue and expenses, which is the level of self-sufficiency. The purpose of most of these adjustments is to model how well the MFI could cover its costs if its operations were unsubsidized and it were funding its expansion with commercial-cost liabilities (CGAP MF consensus guidelines, 2003) The FSS measure is the prime sustainability performance indicator provided by the MIX, and is the basis for further calculating the AROE and AROA-the subsidyadjusted profitability ratios. Yaron and Manos (2007) on the other hand, argue that the FSS is an inaccurate measure of financial sustainability and that it causes to distortion due to the following reasons: 1. When measuring the subsidy attributed co concessionary funds, the FSS methodology ignores the administrative cost of mobilizing and servicing deposits, (when financial cost of deposits serves as the shadow price-the practice of MBB) 2. The FSS measure treats equity as a cost free item except erosion of net monetary asset due to inflation, 19 3. FSS does not consider exemption of institutions from reserve requirements, which underestimates subsidy received, 4. The FSS methodology does not distinguish between an MFI that generates income from lending to target clients and MFI that uses subsidies received to generate its income from others sources. 2. 5 Subsidy dependence index (SDI) The subsidy dependence index (SDI) asses and quantifies subsidy dependence. Its assessment and calculation requires the application of a certain procedure as well as judgment. The consistence application of these procedures and judgments from period to period is more important than the absolute accuracy of the figures included in the SDI computation. The SDI is the ratio that measures the percentage increase in the average onlending interest rate required to compensate an MFI for the elimination of subsidies in a given year while keeping its return on equity equal to the approximate non-concessional borrowing cost. 9 Subsidy Dependence index (SDI) is calculated as the annual subsidy received by the MFI divided by the income earned by the MFI on its average loan portfolio. It is normally derived in to two stages. First, the annual subsidy received by the MFI is divided by the average annual loan portfolio. Then, the total annual subsidy received by the MFI is divided by the MFI is divided by the interest and fee income earned on the MFI’s loan portfolio. The amount of the annual subsidy received by the MFI is stated as: S=A(m-c) + [(E x m)-p]+K Where: S Annual subsidy received by the MFI A – MFI concessionary borrowed funds outstanding (annual average) M – The assumed interest rate that the MFI would have to pay for borrowed funds if access to concessionary borrowing was eliminated 9 Jacob Yaron (1992), Assessing Development Finance Institutions a Public Interest Analysis, a World Bank Discussion paper 174 0 E – Average annual equity P – Reported annual profit before tax (adjusted, when necessary, for loan loss provisions, inflation, and so on) K – The sum of all other annual subsidies received by the MFI. Then SDI is defined as: SDI= S___ LP x i Where: SDI – Subsidy dependence Index S –Annual subsidy received by the MFI LP †“Average outstanding loan portfolio I –weighted average interest rate on loan portfolio of the MFI As it is stated above as a sensitivity analysis, an MFI has to increase its interest rate on loan in order to avoid subsidy. However, this is not the only means to avoid subsidy or minimize it. Improving loan collection rate, minimizing administrative costs play significant role in driving an institution towards self-sustainability. Striving to achieve self-sustainability and completely remove all subsidies is not always or necessarily politically feasible or economically desirable. However, calculating the SDI measure is still important for three basic reasons10 a. The SDI may be used as a tool to measure dependency and recommend improvement or justify its continuation, b. Measuring the subsidies received by the MFI is always economically or politically desirable as it would improve resource allocation, c. Computing and disclosing SDI provide basic information on the public debate on the use of scarce public funds. 10 Jacob Yaron and Ronny Manos (2007), Determining the self sufficiency of Microfinance institutions, savings and development No. 2 21 2. 6 Benchmarking In the field of microfinance, an agreed upon set of ratios to measure performance has developed. Accurate data, adjusted along common lines, are a pre-requisite for benchmarking. When comparing its own performance against industry benchmarks, an MFI can identify performance variance and highlight the key factors that influence performance. For managers and board members, such system provides a sign post for identifying institutional strength and weaknesses. It also influences the decision of donors and investors. MFIs with different characteristics have been operating around the glob. MFIs differ in their age, charter, depth of intermediation, lending methodology, scale of operation, operating region, target market and outreach, which makes comparison difficult. The way out for such problem is using Peer group performance as a benchmark. In this regard, Microbanking bulletin of the MIX has been preparing simple peer group benchmarks (bases on single characteristics) and compound peer group benchmarks (complex set of variables). 22 3. SACCOs in Ethiopia 3. 1 Legal framework of SACCOs in Ethiopia Savings and credit cooperatives in particular and cooperatives in general have passed through various changes due to continuous political changes in the country. Every new government came to the country was interested to promote cooperatives in its own way with no deep analysis on strong and weak points. The main reason for such radical change was believed to be that government change in the country has never been made in peaceful way. Hence, activities of the going government were grossly considered disgraceful so that new governments were interested to start afresh. During the command economy, promotion and registration of cooperatives were given to different ministries. Accordingly, promotion and registration of savings and credit cooperatives were given to National Bank of Ethiopia (central Bank). Issuance of proclamation N. 47/98 by the incumbent government has given the power to respective cooperative promotion offices under different regional offices. The cooperative promotion structure in National Regional states have different names and they way they are structured is not uniform either. In some Regions the office is named as Cooperative Agency (Ormia, SNNNP. ), in Addis as cooperative Promotion and regulation Department, in Afar, Somalia and Gambella as cooperative bureau. The accountability of the offices also differs from Region to Region. In Oromia, it is organized under Mass organization ( Hezeb aderejajete) which is one sector that reports to the Regional cabinet meetings, in Amhara it is under the Rural and Agricultural development bureau, while in Addis it is under the bureau of trade and industry. In most of these offices including the Federal cooperative Agency, the activities are departmentalized under Promotion, Market, Supervision and Audit, legal services and support activities. Promotion department is again divided into major teams like Agricultural and non-agricultural cooperatives. Promotion of saving and credit cooperatives is undertaken mostly under the non- agricultural cooperative team. The marketing department again can be subdivided into market development, effort, loan follow up (for agricultural input and crop loans). The promotion department is divided into teams based on the type of cooperatives while the marketing is on major marketing and credit activities. 23 (Dagnew Gessese Half a century development of savings and credit cooperatives in Ethiopia, status, challenges and future prospects, April, 2007) The main contributing factor for such mixed and non-standard structure is that the country has been using one proclamation for different nature of cooperatives. This clearly shows that there no clarity on financial services of savings and credit cooperatives. As performance standard measures has not been developed for SACCOs or WOCCUs standard, PEARLS has not been adapted, inspection of SACCOs has been limited to checking for proper record of their transactions to respective accounts. The other manifestation on lack of clarity on financial nature of SACCOs is that in 1996, proclamation No. 0/96, for licensing and regulation of microfinance institutions was issued that has authorized the central bank to license and regulate MFIs. Following this, National Bank of Ethiopia has issued 18 directives to regulate and supervise SACCOs.

How did World War 1 begin and ... free essay sample

How did World War 1 begin and what happened as a result of the war? It all started over the ownership of Bosnia. It was part of the Austro-Hungarian Empire and Serbia wanted to reunion the Bosnian people and lands with Serbia. What sparked the war was the assassination of the Archduke (Franz Ferdinand) of Austro-Hungarian by a group of Serbian nationalists called The Black Hand. Gavrilo Princip was the man who shot the Archduke and his wife. This event initiated the struggle between Serbia and the Austro-Hungarian government. Rivalries started to form and tension between European countries were about to take off. Lines were being drawn and stakes were high, Europe was heading toward war. The atmosphere was extremely tense. Europes greed led to infighting for resources in their respective colonies and the development of independent countries soon took sides and two opposing groups emerged. Entente Powers: Britain / France / Russia / (later the US) Central Powers: Germany / Austria-Hungary /Ottoman Empire Germany therefore supported its ally Austro-Hungary in the war effort and Russia had Serbias back covered. We will write a custom essay sample on How did World War 1 begin and or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page These alliances led a ripple effect and other players like France, Belgium and Great Britain became entangle in the war. Great Britains empire was the strongest, largest, wealthiest and had the most sophisticated navy on earth. Germany, strategically built up their empire to compete and challenge Great Britains platform. Germany had conquered two French provinces (Alsace and Lorraine) and this caused a bitter rivalry between France and Germany. The war produced enormous advances in military artillery and communications. # 1 The use of nerve Gas such as Mustard and chlorine. #2 the weaponization of airplanes. #3 the effective use of submarine as commerce raiders. #4 the upgrade of the machine gun. #5 the mechanization of the tank. #6 the use of newly advanced radar. #7 radio usage exploded onto the scene and the invention of cryptography. On a geographical and political note, the war aided the destruction of colonialism and demolished the rule of the Ottoman empire, czarist Russia, and Austro–Hungary. Another aspect was the development of distrust of U.S towards Europe. The U. S practice of isolation was dissolved. There were also the economic chaos and irresponsibility that helped plunge England, Germany, France, and Russia (civil war) into bankruptcy. Eventually The Great Depression would enter the circle of financial strife that further throw the economic downfall into a black hole. The effects of World War 1 helped Russia usher in the worlds first Communist state, by two factions (Bolsheviks and the provisional) fighting a civil war which killed millions. Later on, they would go up against their main adversary Nazi Germany, and then the US superpower during the Cold War. Germany forms a strong sense of Nationalism that begins, after what is considered as an unfair settlement especially the crushing reparation payments and the shrinkage of their military power as well as the lost of land. The Treaty of Versailles humiliated them and they become increasingly furious and wanted someone to fix the problem. Adolf Hitler gave rise to the nazi party and Germany found its way out of the ashes. All of this would pave way to start World War ll. The war caused an overwhelming death toll which included both civilians and military soldiers/personnel. The total of dead was around 16 million. The Great War had changed the way war was fought.