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Economy of a country

(in short and simple terms)

Compiled By Aurora Computer Studies

(auoracs.lk)

Aurora Computer Studies (www.auroracs.lk)

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Agenda1. Basics of economy2. Wealth & development3. Costs4. Revenues5. Inflation (Currency rate)6. Economic strategies

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Macro Economy

• Revenue from exports• Money from expatriate workers.

• Foreign investments• New debts• Foreign donations/funds

Revenue

• Private sector activities

• Government sector activities

• Individual (personal) activities

Internal Activities • Cost of imports

• Debts interests & settlements

• Legal outflows of money

• Black money outflows

Cost

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The Formula

Wealth = Revenue - Cost

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Revenues• Revenue from exports• Money from expatriate workers• Foreign investments• New debts• Foreign donations/funds

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Costs• Cost of imports• Debts interests & settlements• Legal outflows of money• Black money outflows

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The Developed Nations

Net Wealth ↑ = Revenue ↑ - Cost ↓

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The Failed Nations

Net Wealth ↓ = Revenue ↓ - Cost ↑

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The Crisis !!• A country has big negative

balance (deficit) in budget.

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The Symptoms• High inflation (Devaluation of

currency)• Relative poverty• High unemployment (for real

jobs)• Political gimmicks and

dictatorship• People prefer to migrate or work

in foreign countries

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Non Solutions

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Non solutions• Print money • Artificially control the economic

parameters• Take more loans• False propaganda (political

gimmicks)• Make the nation fools• Make government jobs

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Non solutions• Print money

o Result in long term inflationo Make the country less attractive for foreign

investments

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Non solutions• Artificially manipulate the economic

parameterso Government mediate to fix the foreign exchange rateo Government manipulate national economic indices to

hide the reality• Why is not work in long terms?

o You can not keep the ball under the water too longo The real data surface from independent bodieso Other countries and foreign investors loos faith and

look aside.

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Non solutions• Take more & more loans

o Add into further interest costso Add into payback installments cost of coming

yearso Sometimes, loans are given with negative

political influence on national interests

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Non solutions• False propaganda (political

gimmicks)o Politically motivated propaganda displayso Deviate attention • Use of ethnic and religion conflicts• Create further social and economic issues• Make less attractive for investments

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Non solutions• Make the nation fools

o Why?• Fooled people do not see the real issues

o How?• State sponsored spreading of myths to make

people fools• Brain washing to form political slaves

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Non solutions• Make more and more government

jobso Need to print more money or increase local tax to

pay them • Add burden to real working community• Real hard working people getting frustrated

seeing their hard earned money being spent for idling political henchmen, look for foreign opportunities/migration

o Productivity of the nation diminish and entire economy collapse

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Real Solutions

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Possible real solutions (short term)

• Cut down all unnecessary costso Unnecessary/unproductive government jobso Luxury benefits to politically privilegedo Nice to have infrastructure projects

• Eliminate corruptions & punish culprits

• Increase tax on selected non-essential consumption items & export goods

• Attract quick foreign investments

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Possible real solutions (long term)

• Productivity based economic cultureo Facilitate equal opportunity for economic activities o Bare minimum public sector

• Open and free market economy• Good governance

o Enforce law and ordero Not politicizing the state sectoro Social welfare of real in needs (Elderly & medical

assistance needed)• Increase the IQ of the nation

o Invest on real productive education

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Possible real solutions (long term)

• Facilitate building local entrepreneurs• Gradually upgrade the infrastructure• Promote market oriented research &

development• Create a nice natural environment

(attract wealthy people)• Stop ALL OTHER BULSHIT done by

governments.

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Thank You !Presented by Aurora Computer Studies(auoracs.lk)