Urbanization and Its Effects

Introduction Chapter No. 1 Urbanization brings about a social change. This is most prominent in the expansion of entrepreneurship and industrialization. It is known that the progress of the landless laborer and the absorption of wealth into a few hands promote urbanization. A lot of people say that urbanization is the predictable outcome of economic growth, with the increase of expert craftsmen, merchants, and proprietors. Urban growth or urbanization brings an attraction for the people residing in rural areas. They get attracted by the luxuries, comforts and opportunities which people of cities are enjoying. Both the natural increase (population growth) and net migration are the major contributory factors to urban growth. As in other parts of the world, although the urban growth in Pakistan is dominated by the natural increase, about one-fifth of this growth is certified to internal migration. Internal migration or urbanization has played a major role in the expansion of the population density in the major cities of Pakistan. Internal migration has also been very important in the fast growth of these cities. Urbanization is more rapid than a population growth. People are moving from rural areas to urban areas for a better living standard, to seek better quality education, mesmerizing work places. Besides all the positive aspects of urbanization, it also has a negative impact on the economy which includes the loss of agriculture land, urban food supply like vegetables, wheat, rice, maize etc. , the devastating of habitats and urban diseconomies. Economy of Pakistan thus has both negative as well as positive effects of urbanization. Further moving on with the details of effects of urbanization on Pakistani economy, we need to know the conditions of the economy of Pakistan at present. The economy of Pakistan and the effects of urbanization on Pakistani economy are discussed in below: Economy of Pakistan: The economy of Pakistan is placed to be the 27th largest in dollar terms. Pakistan is surrounded by chemical industries, textiles, agriculture, food processing and other industries, which makes it the semi-industrialized economy. The economy of Pakistan has suffered a lot in the past from high inflation rates, increasing poverty levels, low quality of education, terrorism and a fast growing population. The economy of Pakistan has been going through hard times since last 5 to 6 years. The gross domestic product (GDP) of Pakistan is US$167 billions, which makes it 48th largest economy in the world Today Pakistan is said to be having the 2nd largest economy in the South Asia. In Pakistan GDP growth and a prominent rise in the industrial and service sector remained in the range of 6% to 8% in 2004 to 2006, due to the transformation by the Musharraf government in the year 2000. In year 2005 World Bank named Pakistan to be the top reformer in its region and in the top 10 reformers throughout the world/globally. Pakistan’s GDP gross domestic product is estimated to be $475. billion if measured by purchasing power parity (PPP). The per capita Income in Pakistan is estimated to be 23% to 28%. GDP growth rate was stable during the mid of 2000 at a rate of 7% however it slowed down due to the economic crisis of 2008 to 4. 7%. Pakistan has a high inflation rate of 24. 4% and a low savings rate which makes it difficult to sustain a high growth rate. In year 2005 inflat ion rate jumped to more than 9% and reduced to 7. 9% in year 2006. Following the route, in year 2008 petrol prices hit the highest price in Pakistan as high as 25. 0%. The State Bank of Pakistan is adopting the policy to tighten its monetary policy to preserve the growth of Pakistan. In year 2007 and 2008, the prominent rise in the international oil and food prices on combining with the internal political confusion leads to macroeconomics imbalances in Pakistan. In year 2008, Pakistan faced a balance of payment deficit. The government agreed to an International monetary standby agreement to overcome the balance of payment crisis. But all through year 2009-10 its current account strengthened and foreign exchange funds stabilized mainly due to reduced oil prices and record remittances from workers abroad. Unfortunately, in July-August 2010 the agriculture output reduced which contributed to a jump in inflation. Government funds were spent on the recreation and reconstruction which led to limited recourses with the government. Pakistan keeps on emphasizing on the reduction of poverty, illiteracy, terrorism and social protection. It also works hard to enhance the weakest sections of the society. Pakistan also has a vital infrastructure, especially in water management, transport, communication, education and energy. The economy is of Pakistan is divided into three sectors; agriculture, industry and services. The contribution to total GDP is mentioned below in terms of percentages. Agriculture includes farming, fishing and forestry. Industry includes mining, manufacturing, construction and power production. Services include communications, finance, transportation etc. The distribution will total less than 100% if the data is incomplete. Agriculture has a contribution of 21. 2% in the total GDP of Pakistan. Industry sector has 25. 4% share in the total GDP of Pakistan whereas services sector has the highest contribution of 53. 4%. Pakistan is facing economic and political instability these days. The government is also destabilized and losing its control. The rapid development of cities is a regular and a persistent demographic occurrence in most of the developing countries including Pakistan. This rise has led to an increase in the degree of urbanization. In Pakistan, the most recent study says that 34% of the people are living in urban areas and about 66% of people are living in rural areas. It has been predicted that the level of urbanization in 2015 would increase by 39. 5%. The most recent study, states that the growth rate of Pakistan is 1. 73% and the population density of Pakistan is 177. 37 people per sq. km. Pakistan is grouped with countries having moderate level of urbanization; it has the highest share of population living in cities (urban areas) among the South Asian countries. It has also been projected that about half of Pakistan’s population will be living in cities by the year 2030. Year 2011 has proved out to be another difficult year for the economy of Pakistan because it could only achieve the growth of 2. 4% against the target of 4. 5 %. This was even worse and weaker than the growth rate achieved in year 2010. The slowdown in the growth was predicted right at the time country suffered from devastating effects of the flood in August 2010. Growth was in a weak position, as the government had to transfer funds for the rehabilitation and recreational purposes for the flood victims. Another important factor that constrained growth was the energy crisis/power shortage in the country. Numbers of industries are shifted in Bangladesh due to energy shortfall, rising furnace oil prices, have forced power producers to run below capacity. The resulting shortage of power has added to the energy deficit to the country. If we look at the agriculture sector of Pakistan in detail we will come to know that it showed a strong improvement after the devastating impact of the floods in early 2011. This recovery was mainly due to livestock sector, along with minor crops and some major crops (wheat and sugarcane). Despite the significant losses caused by the floods, growth in the livestock subsector was adequate to provide much needed momentum to agriculture growth. Trade and payments is the backbone of the Pakistani economy, in year 2011 total exports recorded a constructive growth of 27. % for the period of first ten months (July-April) against an increase of 8. 0% in the similar time period of previous year 2010. In total, exports have gone up from $15,773. 2 million to $20,154. 2 million in the period. On the other side imports in the first ten months of the current year 2011have gone up with an increase of 14. 7% against the same period of the last year reaching to 32. 2%. Education is considered to be very important in any economy, if we look at the literacy rate of Pakistan basing on the age groups then we see (10 years and above age group ) the total literacy rate in year 2008-2009 was 57. % which has increased to 57. 7% in year 2009-2010, which increased by 0. 5% in the current year. And if we look at the literacy rate basing on the provinces wise then the literacy was as follows; Sindh 58. 2 percent; Punjab 59. 6 percent; Balochistan 51. 5 percent; Khyber Pakhtoonkhwa 50. 9 percent. Total expenditures budgeted for health services are Rs. 42. 0 billion out of which Rs. 18. 7 billion for development in health care centers and Rs. 23. 3 billion for current expenditures which is equal to 0. 23 percent of GDP which is 79 billion in contrast to previous year. Pakistan’s total population according to the census of 2011 is 177. 10 million and it is considered to be the 6th popular country in the world. And if the population keeps on increasing with the same tendency it will be 191. 7 million by year 2015 and 242. 1 million by 2030. The growth rate in Pakistan is calculated to be 2. 05 percent at present and the total fertility rate is 3. 5 children per woman. In Pakistan the life expectancy is 67. 9 for women and 64. 18 for men. And if we talk about the labor force of Pakistan we may conclude that it is the 9th largest country in the world basing on the size of its labor force which is 54. 2 million. Pakistan has given a great attention towards its infrastructure i. e. transport and communication and if we talk about the communication sector of Pakistan, then we may conclude that only 3 percent of the total population is using post paid connections whereas prepaid connection users are 97 percent. The total cellular subscribers have c rossed 102. 8 million so far in Pakistan. Now that we have given a glance at the current position of the economy of Pakistan, we need to know what Urbanization is. And why is it increasing at a very rapid pace in Pakistan? Urbanization: After going through the economy of Pakistan in detail, we now need to know what urbanization is. Urbanization is a transformation of rural life to urban life. Urbanization takes place when people living in rural areas (villages) decides to move to urban areas (cities or towns) to seek better living standards or for seeking better employment opportunities or to maximize their incomes. One of the definitions of urbanization is stated as, â€Å"Urbanization is the transformation of rural conditions (farms and small towns) to urban conditions (huge cities). We can also say that urbanization is the migration of population from rural areas to urban areas. † This definition tells us that urbanization takes place when a rural life transforms into an urban life. Rural life is a life where people work on farms and fields, whereas urban life is a complete opposite life where people work in big offices, they have better quality education, they dresses up professionally for their offices, they uses best possible ways of communication and transportation. Urban life provides us with better quality living, better education facilities, better job opportunities, better infrastructure and better entertainment facilities apart from work. Another definition that I would like to state here is, â€Å"The change in a country or a region which is caused by the movement of the population from rural to urban areas is known as urbanization. † The definition clearly explains that when people migrate from villages towards towns or cities, migration takes place. Migration of people from villages towards cities causes a change in that particular region where immigrants plan to live in. The changes that can be seen within that particular region may be more food consumption, increase in rate of unemployment, increase in rate of poverty, it may also effect literacy rate; mortality rates are also being affected. Another definition of urbanization that I came across is, â€Å"Urbanization can also be termed as the quick and huge growth of and migration to cities from the villages. Urbanization is the name for the movement of people from rural (villages) to urban areas (cities), thus results in increasing the population. † This definition is also similar to the above definition. This definition also makes clear that urbanization takes place when people of the rural areas tends to move towards the urban areas, this movement is quick and thus it increases the growth of the particular area of the cities as compared to rural life. By this definition we can come to know that apart from the increase of the population in any particular area of a city or movement of people from the rural areas. It is also more of a change in the employment sector; the industrialization sector; the service industry sector and also the agriculture sector. The definition is stated as, â€Å"The increase in the proportion of the population residing in towns, brought about by migration of rural populations into towns and cities, or the higher urban levels of natural increase resulting from the greater proportion of people of childbearing age in cities. Urbanization indicates a change of employment structure from agriculture and cottage industries to mass production and service industries. † Another definition that tells us that urbanization brings a change in the market size, health care services are also increased due to increase in the population size, transportation and communication services are also increased when urbanization takes place. Urbanization brings a change in many sectors either directly or indirectly, because many factors are dependent on urbanization. The definition that tells us about the changing factors and sectors is stated below. â€Å"Urbanization is the rapid population growth, increase in industrialization, increase in transportation and communication, increase in health services, increase in market size etc. † Urbanization comprises of population immigration to an already existing area or a town as a result of which causes expansion of that specific region at the expense of rural land. The process of a society transforming from rural to urban can be stated as urbanization. As the number of people moving into cities rise, urban centers expand too, erasing rural, agricultural and forestland in their wake. Urbanization mainly occurs due to the reasonable economic variations within both rural and urban areas. As agriculture is becoming more and more technologically advanced so it has now been replaced by machines and people are becoming jobless in rural areas because their work is being replaced by the machines. This has tended to move people from rural to urban areas because urban areas have ample job opportunities. In addition to above issue, urbanization is increasing rapidly because rural life and working on farms and fields is becoming unpredictable due to sudden happening of floods, deficiency of any other important seed, fertilizer or pesticides and deadly diseases which are fatal. On the contrary, urban areas posses’ great business opportunities, healthy jobs, better living standards and infinite number of services in terms of universities, schools, hospitals, housing, transportation etc. Great variety of entertainment sources, such as hotels, cinemas, discos, clubs, restaurants etc and many other leisure time places and events which forces people to move to urban areas. We can also say that urbanization is a flow of physical growth of urban areas which is bringing about a global change. The question arises in our minds that why do people choose to migrate? What are the reasons that people choose to plan a shift from rural living standard to an urban living standard? What are the consequences of this shift? To answer these questions, first of all we need to know what a city is. As old as species, people have gathered in the densely populated and highly structured areas, to which we call cities. Cities in the beginning were established 5,000 years ago, but from the past 200 years-with the advent and spread of industrial sector and with the increase in the global population which is rising with a prominent rate, which tells us that cities have grown considerably in size and number. In the beginning of the 20th century only one-tenth of a person lived in the cities, but today the proportion of urban and rural people is approximately equal. It has been estimated that by the start of 2025 about 2/3rd of the world's population will live in the urban areas called cities. In the terms of economics, all cities are same basing on the following functions they perform; for example; manufacturing, retailing, and services (doctors, professors etc). These sources provides plenty of job opportunities for the individuals residing in the cities, thus it provides wealth which ultimately provides a better living standard. The larger a city is the more numerous and highly specialized its functions are. By contrast, smaller cities and towns have fewer functions, which tend to be of a more general nature. Karachi in Pakistan is the highly populated and has high density rate in comparison to other cities like Lahore and Islamabad etc. In large cities we find clinics and hospitals in wide range of places. Big food chains like Mc’Donalds, Kfc, Pizza hut etc are rarely seen in small cities but in the large cities we find them at every passing way. People are tending to move towards the cities because of the attractive opportunities, people of the cities are benefited from. There are lots of wealth opportunities in the cities, new business techniques are used to expand the business. Transportation is used which is considered to be the fastest medium of travelling in the cities whereas in the rural areas people are still using bullock-carts. Cities with best facilities and the best opportunities have made life easier to live. People in the cities can live comfortably and spend a peace full life. They can also enjoy the luxuries of the lives. Whereas people n the rural areas have to travel to the cities, to grab the opportunities and facilities provided in the cities. Many of the people in the rural areas travel due to medical problems. As there is a lack of better hospitals and specialized doctors. Cities can also be defined basing on their social composition. Cities are typically places with a large, dense, and heterogeneous, or varied, population. As cities have expanded and mass communications which has dispersed urban values, however, it becomes increasingly difficult to identify a uniquely urban life style. Now if we compare an urban life with a rural life we get to know the following differences between the two. The contrast between the two has been discussed below. Urban life is the result of individual and corporate efforts, which tends to reduce expenses and time in communicating and transportation, also improves opportunities for jobs, education, housing, and transportation. Living in cities allows individuals along with their families to take benefits from efficient jobs and effective job-places, a worth living life style, and a marketplace competition. People are moving into cities to grab different opportunities provided in cities. In villages, it is difficult to improve one's standard of living beyond basic nourishment because the whole family is dependent on a small family farm. Farm living is dependent on volatile ecological conditions, and in times of deficiency, flood or deadly disease, survival becomes extremely difficult and challenging. Cities, in contrast, are the places where wealth, money, services are in abundance. Cities are the places where fortunes are made and where societal mobility is possible. Businesses, which create great number of job vacancies and excessive amount of capital, are generally situated in urban areas. Whether it is through buying and selling (trade) or tourism (sightseeing), it is all the way through the cities that foreign exchange flows into a country from another country. Therefore it is the wish of every individual living in the rural areas to move to cities and make abundance of money to send back home to their struggling families. There are enhanced and essential services as well in the cities that are not found in the villages. There are great varieties of jobs and plenty of job opportunities in urban areas as compared to the rural areas. Physical condition and physical health is another key factor. People, when become old and weak are mostly sent to cities for a better health check-up with the help of specialized doctors and hospital. There are also various attractive factors which becomes a reason that why people of the villages tend to move to the urban areas. Those factors includes cinemas, amusement parks, restaurants, shopping complexes and malls etc. other than entertainment it also provides a better quality of education, namely universities as compared to the rural areas. Effects of urbanization on Pakistani economy: Once we are done with the discussion about urbanization, life in cities, and the contrast of urban life with a rural life. We have to see what effects urbanization has on the economy of Pakistan. It can either have positive effects or negative effects, may be the mixture of both can also be seen. Urbanization in Pakistan has increased very rapidly as compared to any other South Asian country. The people who are migrating from rural to urban, are in search for a better quality of life, but they are totally unaware of the fact that their this move is resulting in a chaos in the urban areas, a burden on the economy as well as an adverse effect on the quality of life. This high, in fact very much high rate of urbanization has also resulted in an increase of  difficulties for the management  as well. Almost 3% to 4% of  the  national population is moving to urban areas every year. The economy of the country in case of GDP rate has improved a bit due to this urbanization. More jobs in manufacturing  and  service sectors have been created. About 27% of the GDP is being produced by the industrial sector . In the coming times, this huge urban population will definitely create a domestic market for goods and services and will provide with technically skilled and equipped manpower resulting in the definite rapid and certain growth  of  the country’s economy. The other important effect of this urbanization on the economy of Pakistan rather than the increase  in GDP is the growing manpower in the sectors of commerce and industry. Industries and private sectors have been a great increase factor in national income. They train their employees in their respective fields as well as in different  interrelated subjects. They provide them with a broader vision of their respective fields where they can create their own ideas, bring new ones, mould the old ones in better forms, thus being more productive and creative. This all multi-training and multi-tasking of  employees  results in the  progress and prosperity of their respective industries and firms. And this ultimately brings a positive effect on the economy, as the productivity increases with technical expertise and so does the income. Urbanization  has also paved the way for women empowerment as well as increase in women employment. Now women being more educated, confident and having vast visions are working together with men  almost in every field. The mutual  work environment  has provided an opportunity of exchange of ideas often where  new methods, new techniques and new ideas are just found turning things more productive and better. Employment of women along with men has raised the number of people working to a very high extent, and this has ultimately resulted in the betterment of economy where not just one is earning  for a family of six, in fact their partner is willing to accompany him/her too. Urbanization results in the increase of industrialization and services sector. People they shift their capital from farm industry to big industries and competitive markets, where they get a chance to maximize their capital and to earn a healthy livelihood for themselves and their families also. By shifting to urban areas they can provide a better life style and a very bright to future to their families and children. Urbanization can bring a change in their living standards, a change in their dressing, a change in their communication and a change in their behaviors. People who shift from rural areas are benefited from the facilities and opportunities available in the urban areas. The effect of urbanization on the economy is that people work in big offices, they have better quality education, they dresses up professionally for their offices, they uses best possible ways of communication and transportation. Urban life provides us with better quality living, better education facilities, better job opportunities, better infrastructure and better entertainment facilities apart from work. A lot of people claim that urbanization is the conventional outcome of economic growth, with the increase of skilled and trained craftsmen, merchants, and proprietors. Urban growth or urbanization brings an attraction for the people residing in rural areas. They get attracted by the luxuries, comforts and opportunities which people of cities are enjoying. Urbanization though has increased the chances of availability  of a better quality of life to the people who are migrating from rural areas to urban areas like towns and cities. They get better health care and educational facilities  as compared to their respective rural areas, yet they become  Ã‚  a reason of a high level burden on the country’s economy. The question is how? The high and fast wave of urbanization has  added a lot more to urban slums. Yet people are still migrating from rural to urban areas and this has resulted  in the increase of difficulty for the  management of the urban areas. The adjustment of these huge migrated masses and providing the basic facilities of  life, in fact quality life to them does not turns out to be an easy task for the management. These people being not highly educated  cannot go for the technical jobs, and what they do is either to get small  ordinary jobs, sitting idle at their homes  or  they earn by begging. All the pressure to feed these unemployed masses comes on the city, provincial or federal government. But how can a government feed them all when there is only 1 or no one to work and so many to eat? In Pakistan, almost 3-5 million people migrate from rural areas to urban  Ã‚  areas each year and approx. 40% of the Pakistani population now resides in the urban areas of the country. This has brought a great burden on the already burdened economy of Pakistan. The aids that are said to be given to Pakistan are mostly used for the military purposes, not in the economic growth sectors. Pakistani economy is really going through a crisis since last few years due to this war on terrorism. The immigrants from our neighboring country Afghanistan, aren’t residing in the rural areas of the country but in the urban ones. And the ones who lived in the rural ones have started migrating towards urban areas in order to secure their lives and children. This also is a burden on the economy, I mean a country whose economy cannot feed its own people properly, cannot provide them with a better quality of life, healthcare facilities, proper education; how can such a country  Ã‚  feed the refugees as well? But being a brotherly neighbour, Pakistan is giving its fullest support i. e. economical and social help to these refugees. They can get jobs anywhere they want to, live anywhere they want to. But the people who aren’t working at all, still need to be looked after by the government and a worse fact is that the ratio of such people isn’t very low, so the economy of Pakistan has been truly burdenized by this factor as well. This trend of urbanization has increased the number of beggars in the cities and towns. At some places there are special beggar mafias and begging has become a profession and a skilled art of  earning money quickly and easily. This thing is now being strictly seen by the government and strict measures have been taken now. This rapid urbanization has also paved the way for increasing crime rate in the  urban areas. When the people migrating from rural areas in spite of all their efforts aren’t able to find jobs or any means of earning, they indulge themselves in anti-state activities and different small and big crimes, because obviously they have to earn something to feed themselves and their families. In spite of all their efforts when they can’t find any legal or right opportunity or way to earn, they get themselves involve in illegal means of earning. The high crime rates involving every crime i. e. mall crime like mobile snatching, money snatching to big crimes like that of target killing or pre planned murders are amongst the most disastrous effects of this urbanization. This high crime rate results  in a frightened and disturbed society, where both, the quality as well as the  quantity of work being done is affected. This disturbs the standards of  economy by disturbing the work potentials of manpower. The consequential population from urbanization has also played an important role in increased crime rates in urban areas. This study of consideration may also be due to the variation in the behaviors of the people living in towns. Following are the factors due to which the crime rates are increasing: factors such as low income, availability of jobs, poverty etc. , and sometimes family conditions such as divorce, single parenthood, frustrated past due to any incident may also be related to increased crime rates. This rapid and high level wave of urbanization has very adversely affected the healthcare sector as well. The shortage of medicines, vaccines, unavailability of doctors, bad hygienic conditions at the hospitals, is some of the main after effects of this strong and fastest wave of urbanization. The  availability of health care facilities  to all its inhabitants is one of the most important and foremost duty of a state. The private sector here though provides much better facilities, is more equipped and trained and is quick than the  government sector, yet it isn’t in the reach of common man to get treated in the private sector because they charge too much for all these  healthcare services but the option of government  hospitals  is open to every commoner, where he can get a better health care service and all other facilities as well. But more population has adversely affected that healthcare sector too. The mess and rush of the people in the government hospitals is also affecting the health care sector. Another major problem in result of urbanization that is rapidly taking place in the economy of Pakistan is â€Å"poverty†. Poverty occurs when the basic food that is the necessity of living is out of the reach of the people. People starve, they beg, and they die because they cannot afford to have meal, three times a day that is merely due to the high inflation rates prevailing in Pakistan these days. Environment confronts and problems of Pakistan are linked first and foremost with an unfair social and economic expansion in the past few years. This challenge is additionally compounded with quick urbanization due to a change of population from rural to urban areas. Consequently, all main cities of Pakistan face unexpected and accidental growth leading to boost in the pollution. This unnoticed growth has taken us to the point where there is a creation of slums areas in the region of city’s edge. Ever since the metropolitan authorities and utility service supplier have confined boundaries in expanding their facilities, urban overcrowding, blocking and jamming is the main reason of ever weakening air and water quality, along with this solid waste management. Under the current scenario, the managers are facing problems in providing sufficient water facilities, improved sanitation and sewerages systems, healthy and hygienic health care services and to ensure a hale and hearty environment. Environmental poverty is primarily connected to poverty in Pakistan. Poverty is the chief obstacle in dealing with the surroundings and their related problems. The demand of the already diminishing natural resources is increasing in Pakistan. Since poor frankly rely on natural resources of the country for their living i. . agriculture, forestry, hunting, fisheries, etc. Poverty collective with a fast growing population and swiftly increasing urbanization is leading to create more and more pressure on the environment. As a result, there is a terrible need to work on poverty elimination. Considering this problem, Benazir Income Support Programme has organized by the current government, is anticipated to have an optimistic effect on poverty elimination. Urba nization is also causing a shortage of food and nutrition in Pakistani economy. Since a part of the population has decided to move to a particular area or a region of the city and it is becoming densely populated and the population size is increasing in a particular city so it is very natural that the food and nutrition needs can’t be fulfilled and thus the economy of Pakistan faces a shortage of food and then it goes for a call to the foreign countries to fulfill its needs of those food items which ran short of supply in the market. This again disturbs the balance of payments of Pakistan. Apart from this agriculture is considered to be the backbone of the Pakistani economy. And Pakistan earns maximum foreign exchange by exporting the wheat, sugarcane, cotton etc as compared to any other items. Ever since urbanization is seen to be rapidly increasing, it is considered to be a setback for the economy of Pakistan because agricultural land is totally being neglected and left barren. This again will push us further towards failure as an economy as well as a nation. The statistical analysis is presented in chapter 2. Recommendations and conclusions are listed in chapter 3. Urbanization is closely related to modernization, industrialization, and rationalization. Urbanization also has adverse effects on the growing density in specific affected areas, mainly in large growing cities and often accompanied by number of other problems and after effects. Another major issue can also be disruption of agriculture uses. In addition to this, there would also be conflicting interests in terms of land use for rural and urban purposes. There would also be a negative impact on the agriculture of industry and also a loss of farm and forest land. Another prominent problem that arises from urbanization is the significant rise in respiratory problems in people living adjacent or very close to urban areas. Following are the factors due to which the respiratory problem occurs are: vehicular and industrial emissions, the toxic smoke arising from the chimneys of the leather factories or tire manufacturing industries, mining and drilling tend to be responsible for greater level of toxins in the air. It has also been acknowledged that global warming is also a resulting problem from increased urbanization. There has also been seen adverse air quality in houses and buildings within urban areas due to air conditions outside the buildings and houses. Respiratory infections may also occur from excessive exposure to nitrogen oxides, which results in decreased lung function. The consequential population from urbanization has also played an important role in increased crime rates in urban areas. This study of consideration may also be due to the variation in the behaviors of the people living in towns. Following are the factors due to which the crime rates are increasing: factors such as low income, availability of jobs, poverty etc. , and sometimes family conditions such as divorce, single parenthood, frustrated past due to any incident may also be related to increased crime rates. Some of the issues of urbanization that can be seen in any economy are Employment; Sanitation; Housing; Sewerage; Water; Social welfare; Role of government; Political machines (controlling organizations); increased Crime rates; Respiratory problem. Employment problem occurs when there are less job opportunities or may be due to Less capabilities amongst the people of the rural areas, this problem can be seen due to lack of technical education. People living in urban areas get technical education to achieve the highest rank of designations in the offices or their work places. Increased rates of urbanization can also cause an increase in the crime rates. Increased crime rates are due to frustration caused amongst the people when they are unemployed or any other personal/family problems like divorce and single parent upbringing. When the population increases in a particular region of the city many other problems are seen like housing, sanitation problems and transportation problems etc. , this causes frustration amongst the people thus increasing the crime rates. Sometimes government is also biased towards the immigrants. This also causes a gap amongst the people.

Deception in ResearchÂÂ

Deception in Research The article I chose from Capella Library was about Deception in Research. While exploring my area of interest may require misleading or not completely informing your subjects about the true nature of your research, as a general rule, serious deception should be avoided whenever possible, since it put at risks the integrity of informed authority. For research involving deception the use of deception must be justified in the procedure to show that the research cannot be performed in the absence of deception and the benefits of the research will sufficiently be more important than any risks that deception may create.Research participants cannot be deceived about significant aspects of the research that would affect their willingness to participate or that would cause them physical or emotional harm. Deception must be explained to participants (debriefed) as early as reasonable. A debriefing script must be included in the procedure and should include a detailed desc ription of the ways in which deception was used and why; when and by whom the debriefing will be administered should also be included.True â€Å"informed consent† cannot be given if the true nature of the research is deceptively presented. This situation is dealt with administratively via a waiver of portions of the information consent regulations. Deception is a word used to end arguments, not to begin them. To accuse researchers of deception is to remove them from the ranks of those with whom legitimate human relationships can be pursued. For an example, let’s look at in the article of Deception in Research on the Placebo Effect.Experiments exploring the placebo effect, however, suggest justifiable ethical concerns, owing to the use of deception. The ethical intend to conduct of deceptive placebo research include (1) review and approval by an independent research ethics to establish the use of deception and that the study protocol offers sufficient value to justify t he risks it poses to participants, including the use of deception; (2) disclosure in the informed-consent document that the study involves the use of deception; and (3) participants at the conclusion of research participation.This also concludes that in order to supply to public accountability, articles reporting the results of research using deception should describe temporarily loyalty with these participant-protection rules. Ethics is one of the most crucial areas of research, with deception and research increasingly becoming a crucial area of discussion between psychologists, philosophers and ethical groups.Examples of Deception and Research to show how ethical concerns have changed during the 20th century, it is useful to look at some examples such as Deception in Psychological Research. Deception has been attacked repeatedly as ethically unacceptable and morally reprehensible. However, research has revealed that subjects who have participated in deception experiments versus no deception experiments enjoyed the experience more, received more educational benefit from it, and did not mind being deceived or having their privacy invaded.Such evidence suggests that deception, although unethical from a moral point of view, is not considered to be aversive, undesirable, or an unacceptable methodology from the research participant's point of view. The repeated assumption of the unacceptability of deception seems to be due to the fact that deception has been evaluated only from the viewpoint of moral philosophizing. This has led to the repeated conclusion that deception is reprehensible and seems to have created a perceptual set to view deception immediately as aversive.However, the perception of the unethical nature of deception seems to be minimal in studies that investigate innocuous public behaviors and enhanced in studies that run the risk of harming research participants or in studies that investigate private behaviors. When this knowledge is combined with t he fact that research participants do not mind being deceived, and that it can also be viewed as immoral not to conduct research on important problems, the scale seems to be tilted in favor of continuing the use of deception in psychological research.Is it ethically permissible to use deception in psychological experiments? We argue that, provided some requirements are satisfied, it is possible to use deceptive methods without producing significant harm to research participants and without any significant violation of their autonomy. We also argue that methodological deception is at least at the moment the only effective means by which one can acquire morally significant information about certain behavioral tendencies. Individuals in general and research participants in particular, gain self-knowledge which can help them improve their autonomous decision-making.The community gains collective self-knowledge that, once shared, can play a role in shaping education, informing policies a nd in general creating a more efficient and just society. Reference: 1. Deception in Research on the Placebo Effect Franklin G Miller,*  David Wendler, and  Leora C Swartzman Author information  Copyright and License information  See â€Å"Placebo: Physician, Heal Thyself† , e388. This article has been  cited by  other articles in PMC. 2. Harrington A, editor. (1997) The placebo effect: An interdisciplinary exploration.Cambridge (Massachusetts): Harvard University Press. 272 p. 3. Deception in psychology: moral costs and benefits of unsought self-knowledge. Bortolotti L, Mameli M. SourcePhilosophy Department, University of Birmingham, Birmingham, B15 2TT, 2006 Jul-Sep;13(3):259-75. 4. 2002;12(2):117-42. Deception in research: distinctions and solutions from the perspective of utilitarianism. Pittenger DJ. Source Department of Psychology, University of Tennessee at Chattanooga, 615 McCallie Ave. , Chattanooga, TN 37403, USA

Ethics on Smoking Industry

INTRODUCTION: Ethics occupy an important place in today’s modern business world. Every organization makes use of ethics to make day-today decisions and fulfill societal expectations. This essay brings to light ethical and social responsibility that every individual and company should follow in order to become better citizens for society. Essay presents analysis based on real case of Philip Morris, a tobacco company in U. S. A versus Mayola – a widow, who took legal action against company for her husband’s death due to smoking. Essay draws balanced argument based on evidences about unethical behavior of tobacco company and smokers personal responsibilities for their actions. We have used Ethical decision-making model of Lagenderfer and Rockness to frame our analysis. ETHICS & BUSINESS Ethics in simple terms means set of moral principles or list of rules, which can determine whether particular action undertaken is ‘right’ or ‘wrong’. All the activities undertaken by society are based on ethics. Ethics can be personal as well as professional. Personal ethics are based on individual’s values, beliefs, attitudes and actions while business ethics are based on certain principles or code of conduct to guide individual or a group in accordance with societal expectations. Business ethics can be defined as â€Å"study of business situations, activities and decisions where issues of right or wrong are addressed†(Crane, A& Matten ,D, 2007,P. 5). Thus, ethics helps in making decision and is a key for solving problems. Today, society is facing considerable increase in number of ethical issues such as fraud, exploitation, misleading advertisement and increasing pollution. Birt, Chalmers, Beal, Brooks, Byrne, Oliver, 2008, P. 65). CORPORATE SOCIAL RESPONSIBILITY It is essential for every organization to undertake corporate social responsibility along with its goals and objectives. According to (Birt et al. , 2008, p. 70) Corporate social responsibility can be referred to responsibility that an entity has to all its stakeh olders, including society in general and physical environment in which it operates. There are many companies, which lack sense of corporate social responsibility and acts against interest of society. RELEVANT FACTS DETERMINED UNDER CASE: Today, business is giving rise to numerous ethical issues, as many companies are involved in exploiting its customers, selling harmful products in markets, false marketing of products and increasing environmental and health issues. Many tobacco companies like Phillip Morris are selling harmful and addictive products like cigarettes that cause serious diseases like lung cancer and heart attack. Analysis of Phillip Morris v. Mayola, Williams case brings down certain relevant facts that give rise to ethical issues. Mayola took a legal action on Philip Morris on the grounds of false and misleading advertisement and marketing undertaken by company for its products. It is fact that Philip Morris knew that tobacco was harmful for health still he advertised his product as non-addictive and safe and Williams death was caused by smoking. Second, fact is that Philip Morris appealed solely against damages that company had to pay to other smokers who did not bring any actions against court. Their appeal was only based on excessive damages that company was supposed to pay to strangers. This clearly indicates that he is very well aware of harms caused by his cigarettes to smokers and did not appeal on the grounds that his products were safe and less addictive. It is also relevant fact that Supreme Court made decision in favor of Philip Morris that company is not liable to pay excessive damages to Ms Williams on the grounds that damages were proper under Oregon statute but was excessive under federal constitution (BBC article, 20 Feb, 2007). This indicates that ethical laws are still complex and not clearly stated under constitution. ETHICAL DILEMMAS FOR BOTH SMOKERS AND COMPANY: Ethical dilemma arises when there is a situation with conflict of interest. We have built certain arguments based on ethical dilemmas from perspective of both smoker and company. We have constructed evidence-based arguments on unethical behavior by Philip Morris Company, which includes major ethical issues, such are selling harmful products, misleading and false advertisement, acting against societal expectations and caring out unethical business practice. Company is involved in producing and selling harmful tobacco products that contains high amount of nicotine, are addictive, and can cause serious health issues such as lung cancer and heart attack. Company acts unethically by encouraging people to smoke and their conflict of interest with societal ethical standards and expectations. According to (Janine and Ruth, 2008) company prevents old smokers from quitting and targets young people and children. Company adopts new and innovative marketing approaches to promote its products like direct mail advertising and sending coupons with discounts. Low tar† cigarettes were developed in response to the health concerns of older smokers in 1970, but experts found them no advantageous to health and did not help smokers to quit. Company lacks in corporate social responsibility as they perform activities that are against interest of society in general and physical environment in which it operates. Company undertakes massive fraud by acting d ishonestly having financial motive in mind. Company is involved in false advertisement indicating their products to be less addictive, more filtered and safe. According to ( Rosner, 2006, P. 193-196) company tries to create illusion by sponsoring cigarette cessation programmes and try to make society believe that they act in ethical way, but their real motive behind it is to promote company’s goal of selling cigarettes and meet their financial interests . Their misleading marketing activities makes lots of people to go for smoking. Philip Morris promised to shut down instantly if their cigarettes were found to be harmful but has failed to keep its promise, which gives rise to ethical dilemma. According to (David & Silva, 2004, p. 9-22) Company uses their political and economic influence to create an environment that encourages continued consumption of cigarettes. Company is accused of political lobbying. They lobby legislators and officials in finance ministry in order to keep tobacco prices low and thus encouraging people to smoke. Philip Morris was after minimizing total tax burden on cigarettes in order to keep smoking affordable . Article in Ethical Corporation magazine (2004) states that company declares itself responsible and argues that there is increasing demand for cigarettes by customers and if they stop selling it, someone else will take their position. Company tried to safeguard themselves on the grounds that they are selling legal products, which are not banned by government and are acting in ethical way by warning its customers against dangers associated with smoking. Thus, company gives rise to ethical dilemmas as it has an intension to make huge profits by selling harmful products that are responsible for death of millions of people and still trying to gain creditability as responsible company. From perspective of smokers in general, they give rise to ethical issues by consuming harmful products that are not ethically accepted by society and do not take warnings given by companies and government seriously. It is unethical to blame companies solely responsible for damages caused to them and bring their own actions against company. Their behavior can give rise to ethical dilemmas as their actions have a deep impact on their children and makes smoking more desirable for their kids in future. They also lack in personal and social responsibility by giving rise to health issues and environmental concerns for society in general. CONCLUSION: Thus, we conclude that tobacco is one the world’s greatest preventable health problems. According to our analysis, we came to a balanced conclusion that smokers should take responsibility for their actions and companies should behave ethically by making its customers fully aware about the dangers of smoking. It is very essential to undertake combined ethical and social responsibility by both smokers and tobacco companies to avoid millions of deaths due to smoking and to act in favor of societal expectations. Tobacco companies should stop giving misleading advertisement and marketing activities, which indicates their products to be safe and less addictive. They should stop encouraging consumption of tobacco among young and old and should ban children from its consumption. It is the responsibility of companies to support smoking cessation programs and help smokers to quit not just for sake of creating illusion but also to act in favor of societies interest in general and to build better image in society. Company should change their unethical business practices of creating massive fraud to fulfill its financial motive and provide support to government activities that help smokers to quit. Smokers should follow their personal ethics and should take responsibility for smoking. They should take warnings given by tobacco companies and government to quit smoking seriously. They can search on internet for more information or consult doctor to improve heir knowledge about serious health issues caused by smoking. Smokers should not escape from their personal and social responsibilities towards society and their families. It is unethical to bring their own action against company and solely blame company for health issues caused by smoking. It is moral duty and responsibility of every citizen to bear risk associated with their actions. It is responsibility of government to take care of its citizens and find solutions for their health relating issues. We believe that Political parties should not accept any funds from Tobacco Company for their campaign and government should ban any kind of commercial ads for cigarettes in magazine, newspapers or on television. Government should support smoking cessation programs and quitting and should be alert if tobacco company provides any support as they may mislead government by doing indirect advertising for their products. We recommend that there should be strict tobacco control strategy that restricts consumption of all tobacco products. Thus we conclude that it is ethical, moral and social responsibility for smokers, tobacco companies and government to stop consumption and selling of harmful products for betterment of society and environmental concerns. REFERANCE )Birt, J. ,Chalmers, K. ,Beal, D. , Brooks, A. , Byrne, S. , & Oliver, J. (2008). Accounting: Business Reporting for Decision Making. (2nd ed). John Wiley & Sons: Milton, Old. 2)Crane, A. , Matten, D. (2007). Business Ethics: Managing Corporate Citizenship & Sustainability in Age of Globalization. (2ND ed). Oxford University Press: New York. 3)David, A. , Silva,V. ( 2004). Building Blocks for Tobacco Control: a handbook tools for advancin g tobacco control in xxist century. Publisher World Health Organization: Geneva 4)Rosner, F. (2006). Contemporary Biomedical Ethical Issues and Jewish Laws. KTAV Publishing House: New Jersey 5)Janine, C. , & Ruth, M. (2008). False Promises: Journal of American Geriatrics, 56(9), p1716-1723, 8p, 1 chart retrieved on 5/ 09/2009 from Academic Search Premier Database. 6)Tobacco firm wins payout appeal: BBC news article https://news. bbc. co. uk/2/hi/business/6379767. stm retrieved on 6/9/2009. 7)Philip Morris executive declares his company ‘Responsible’: Article from Ethical Corporation Magazine: http://www. ethicalcorp. com/content. asp? ContentID=2345 retrieved on 8/09/2009.

Fantasy Story on crazy teachers

It was I who first came up with the thought that teachers at Pemberton High are crazy. In fact, some of them might not even be human! It wouldn't surprise me if I walked into the teacher's lounge one day and saw them slouching in large leather recliners peeling off their faces and talking in some strange alien language. For a start, there's my maths teacher Mr Henman. His real name is Jim Davidson, but due to his love of tennis he calls himself Mr Henman after Tim Henman. Call her anything but Mr Henman and watch out. His face goes all red and he looks like a six-foot brick wall with a bad attitude. His ring finger is about a foot long and when he wags it at you it's as though you're looking at a withering garden snake. He's over six feet tall and towers above the other teachers, even Mr Jones, our P.E teacher: And he's a big old lump! Mr Henman is a retired, yes you guessed it, tennis player! He'll pick you up by your ears and drop you on your head if you talk about Tim Henman or tennis in a bad way. As I said he's a retired tennis player. For sixteen years he tortured other tennis players and umpires alike with his skill and bad attitude. Now he spends his days torturing us. Mr Henman is pure crazy! Last week he asked the class if there was anyone who had not handed in their money for the school trip. No one raised their hand, but, I knew that my friend Timmy Anderson had not. He lives alone with his mum and sister and they sadly can't afford the trip. Mr Henman knew it too! I knew he was trying to make fun of Tim. â€Å"You'd better raise your hand,† I whispered, leaning close to Tim. â€Å"I'm not going,† he said. â€Å"Why?† Tim didn't answer but I knew. â€Å"Don't let him find out,† I said out of the corner of my mouth. â€Å"Otherwise, you know what he's like he'll say something to the whole school!† I could tell that Tim got nervous after that. He shifted in his seat and wouldn't look up front. Mr Henman goggled at Tim in the way a hungry lion would look at a raw steak. I could tell he had some diabolical plan brewing in his head. As the bell rang everyone went for lunch. I was walking with Tim and as we passed the teacher's lounge I noticed that the door was left partially open. This was it this was what I had been waiting for! This was my opportunity, I had to take it. I could sneak inside and listen to the teachers talking. I could prove that they were aliens or something worse. â€Å"Go on I'll catch up,† I told Tim. He jogged and caught up with my sister Nicole. I checked the hallway to make sure no one was coming. When I was certain it was safe, I strolled over to the door. I pulled it back a little and stuck my head inside. I couldn't hear anyone so I quickly slipped in and pulled the door to behind me. A walled coat rack separated me from the actual lounge. Still, it was quiet and I guessed that all of the teachers were down eating their lunch, peered around the corner and saw an empty room. As it was empty I decided that I would try again later and turned to go back out. That's when I heard someone coming. I was almost hysterical as I raced around looking for someplace to hide. I saw a door across the room and hoped it was another way out. I was still thinking when I heard the door open. I sprang across the room like a rabbit and in no time I was on the other side of the door. I pulled it shut and quickly realised that I was in a closet. It wasn't a solid door but one with wooden slats that ran across it. I could see out the door and hoped that whoever had come in wouldn't notice me. I almost fainted when the Headmaster and Mr Henman ambled into the room. Mr Henman sat at the little table and the head poured each of them a cup of coffee. They were only a few feet in front of me. The head sat opposite Mr Henman â€Å"Have you finished collecting for the school trip?† the head enquired. Mr Henman looked at him for a minute and then said, â€Å"Yes. All done. Everyone is going this year.† The principle took a sip of his coffee and said, â€Å"I hope this is not like last year. You can't keep paying for your kids to attend these things.† â€Å"It's not like that at all,† he said. â€Å"The kids raised money this year to help each other out. They're all paid up.† â€Å"You're sure?† he pressed her. â€Å"Last year you paid out of your pocket for almost ten kids, Jim.† â€Å"I'm sure,† he said. The head said, â€Å"Good.† He finished his coffee and left the room. Now I was really curious. What was he trying to pull? Was he trying to set Tim up for something? My ears were burning red. Mr Henman took something from his pocket and put it on the table. I squinted and saw that it was a small calculator, then he pulled out a pencil and a piece of paper. He worked something out on the calculator, wrote it on the paper and then replaced it back in his pocket. Then he pulled out his mobile. Mr Henman dialled a number and I was able to listen in on his call. â€Å"This is Jim Davidson,† he said. He looked around the room as if he was expecting someone. â€Å"Yes, I'm calling about my car payment this month. I'm afraid I won't be able to make it.† There was a long pause and then she spoke again. â€Å"I guess you could come get it at Pemberton High.† That evening as I rode the bus home, I saw Mr Henman walking from school. Earlier, I watched a man tow his car from the car park. And I noticed other things that I guess I just never paid attention to. He didn't have a nice coat like the rest of the teachers. Mrs. Bailey had a real nice pair of suede boots. Mr Henman sported a pair of old tennis shoes. He didn't look mad though, In fact, he had a smile on his face. I don't know if I'd ever seen him smile before. Maybe he was one of those people who weren't concerned about the number of possessions he owned? Maybe he was one of those people who was just happy to be living in such a prosperous area and working to help further children? Or maybe he was just a man with happy thoughts in his mind? I arrived home amazed by the look that had shone from Mr. Henman's face, as I saw him walking from school. Had that been nearly any other human being, but especially the adults that I know, they would have been in tears. Boy did I learn something about teachers that day. Especially Mr Henman. I learnt that he's not as crazy as I first thought he was, but a happy, contented man who was often misunderstood. I don't think I'll tell Tim, though. Sir wouldn't like that very much. He's not crazy, but neither am I!

Government policies on citizenship Essay Example | Topics and Well Written Essays - 500 words

Government policies on citizenship - Essay Example In Canada for example, the citizenship act states that citizenship becomes automatic for any person born in Canada or born of Canadian parents after February 14th, 1977. This is the citizenship status acquisition by birth. The same is true for children born in the United States or born of American parents (they immediately qualify to be citizens). Citizenship by birth is however challenged when it comes to children who are not born in these respective countries but whom are adopted by the parents who are citizens of these nations. According to the Canadian citizenship act, there is a gray area where this issue is concerned. The issue has however been mentioned by the Department of Justice though the meaning remains vague and ambiguous. The same cannot be said to be true in the US as there is no mention of such matter by the department of State Bureau of Consular affairs which is charged with the responsibility of citizenship. This probably explains why questions are raised about couples who adopt children outside the jurisdiction of the United States and what will become of such children where citizenship is concerned. Most of such individuals when they grow up are forced to apply citizenship through naturalization method and this is not tight since their adoption is by American citizen parents just like those born by them. When it comes to naturalization, the United States Citizenship and Immigration Services categorize the people who should or should not receive citizenship. This department handles such issues because most of the rules surrounding this type of naturalization depend on how long an individual has been in the country which is under the jurisdiction of immigration. In both countries (Canada and USA), the rules of application of citizenship by naturalization are strict and require the individual to have permanently resided in those countries for a number of years. The

Coaching and Performance Improvement Analysis Essay

Coaching and Performance Improvement Analysis - Essay Example In this paper, I am going to talk about the coaching and performance improvement I have undertaken with the Production Supervisor of our organization. He had been hired three months ago after our previous supervisor left very abruptly for a competing organization with just a month’s notice. However, since he had served for five years with the organization he was allowed to leave without too much fuss. Since he had left in the middle of the year the Human Resources Department did not have much time or choice but to hire a candidate with experience from a related but different industry. It was thought that owing to the candidate’s experience, he would soon pick up the skills and knowledge about the production function but sadly he has not been able to come up to the mark after even three months on the job. Productivity is suffering and as the Training and Development Manager I had been asked to step in and give the supervisor the required coaching so as to improve his und erstanding of the skills needed in the textile business (he has come in from the engineering sector and had been overseeing the production of motorcycle parts) as the situation is a little different here. Although he does have the required level of interest and understanding, he is a little apprehensive about taking charge of the workers who are aware of his inexperience in the textile sector and sometimes exploit this situation to their advantage. To cover his lack of skills he has developed an authoritative attitude which does not settle well with the older and more experienced staff. Analysis of the Root Causes of His Production Deficiency After a close observation and personality analysis of the Production Supervisor I have come to the conclusion that he just needs a little coaching to come up to the expectations of management regarding the task assigned to him. Although it seems that he is in the wrong industry, I am confident from what I have observed about him that he can soo n come up to the requirements of the job even though the industry he represented in the past is far removed from this present one. The basic requirements of managing the production process are to schedule the production process in terms of orders placed and deliveries to be made or shipments to be affected as per schedule is already known in advance. Although his lack of skills and knowledge is evident for the time being in this industry, the real issue is that he is trying to compensate by being authoritative and a perfectionist, afraid of taking a wrong step and not knowing fully about the alternatives available to him. He is frustrated because his efforts to take charge are not being appreciated by the older and more experienced employees under his control, as they were used to managing the function with a minimum of interference. However in his zest to contribute, he likes to be seen as doing something most of the time. There is no lack of motivation, but one can see that his me thods to take charge are not working with some staff. I could have intervened directly with the staff on his behalf, but would rather he do it himself.

The comparison of Lukoil & BP Case Study Example | Topics and Well Written Essays - 2750 words

The comparison of Lukoil & BP - Case Study Example The company registered thelargest trading volumes among foreign companies tradedon the London Stock Exchange (IOB) in 2005 and at home, the Russian Trading System - also in 2005. Sales coverage includes the 59 regions Russia and 16 other countries -Azerbaijan, Belarus, Georgia, Moldova, Ukraine, Finland, Bulgaria, Hungary, Cyprus, Latvia, Lithuania, Poland, Serbia, Romania, Czech Republic, Estonia, and the USA. Distribution operational capacity stood at 199 tank farms and 5,405 gas stations by the end of the year 2004. This includes 779 Mobil gas stations throughout the USA (LUKOIL, 2006a). BP was formerly known as British Petroleum and is a British energy company with headquarters in London. After merging with the Amoco Corporation, the company was named "BP Amoco". After a single year of joint operations, the company drop the Amoco name and BP now stood for "Beyond Petroleum". The company is regarded as one of the oil, natural gas and petrol leaders in the world. In the 2006 Fortune Global 500 list of companies, BP was ranked 4th in the world for turnover with sales at $268 billion which was down from 2nd in 2005 and 1st among oil companies the. The 2006 Forbes Global 2000 ranked BP as the 8th largest company in the world with profits in 2005 amounting to $22.341 billion. The number of service stations stood at 28,500 with 15,900 based in the USA alone. Proven reserves amount to 18.3 billion barrels of oil and gas (57/43 percentage distribution). The company is active in 26 countries with production activities in 22 of them. (BP, 2006b) Methodology In this paper, we will be comparing which company between LUKOIL and BP is more investment equitable. BP, having been in the business since 1889 (Amoco), has established itself as the foremost leader in the global oil industry as we have seen in the company's profile. However, as we will be seeing later, LUKOIL has seen a tremendous growth in performance. The BP, being well established in the industry, has certain advantages over LUKOIL such as business management expertise honed by years in the industry and a larger market share and production capacities. But this edge may very well be overcome with the current performance of LUKOIL. To determine which of the two will be more equitable, we will be looking into the financial health of the company especially the equity returns. We will also be considering the economic trends and the political factors that affects the profitability of LUKOIL and BP as these are major determinants of the risk involved in investing in the company.. Special focus will be given to the developments in Russia, which have contributed to the tremendous growth of LUKOIL. Equity Profile LUKOIL Return on Equity Profile (LUKOIL, 2006c): 2001 2002 2003 2004 2005 Equity, mln USD 12,385 14,000 17,472 20,811 26,804 Net Income, mln USD 2,109 1,843 2,571 4,248 6,443 Return On Equity, % 18.4 14.0 16.3 22.2 27.1 BP OIL Return on Equity Profile (BP, 2006a): _________________________ 2001 2002 2003 2004 2005 Equity, mln USD 63,251 68,254 75,524 81,456 86,647 Net Income, mln U