Engr. Luis L. León sends a letter to Gen. Plutarco Elías Calles giving news of his daily life, the sale of his house to settle the debts and the serious economic situation of the country. He analyzes the agricultural situation and states that productivity has decreased. He claims that farmers and "ejidatarios" need stability and guarantees from the government. He states it is necessary to enforce the law, respect small properties, stablish the legal bases to give and restitute "ejidos"and respect the property of harvests, buildings and tools. He claims that the government is moving to the extreme left, which is provoking chaos in agriculture. Memorandum signed by Juárez on March 31, 1938 in which he analyzes the economic situation since 1932. He states that commerce increased until 1937 and then it started to decrease. He also claims that agriculture is in crisis due to corruption and a disorganized structure. Regarding financial policies, he states there has been serious mistakes in the administration of public funds. The author analyzes the agricultural situation as well as the situation of the workers and worker unions. He states group interests are favored, which causes distrust, unproductiveness and discouragement. On the other hand, he states that the government is using funds of institutions such as Bank of Mexico and National Railroads for government programs, which in addition to the oil expropriation is creating a disturbing scenario. The author analyzes the situation of the Bank of Mexico, the monetary system, the National Railroads, industry, mining, and silver and oil production. Juárez obtained the information from the Bulletin of the National Bank Commission from November to December 1937. In October 1939, Gen. Plutarco Elías Calles sends a letter to Luis L. León discussing the report by Juárez. However, he refers to an analysis of the European conflict, which is not mentioned in the previous report. Therefore, he is probably refering to a different report presented by Juárez. Gen. Plutarco Elías Calles analyzes the European conflict and press articles published in London in which David Lloyd George; former Prime Minister of the United Kingdom talks about Chamberlain and Churchill. Gen. Plutarco Elías Calles also discusses a speech given by Hitler, which according to him, represents an important and clever political document. Gen. Plutarco Elías Calles states that Germany, after the victory in Poland, is not interested in war and that it is necessary to wait to know the position of England and France. He asserts it is likely that the U.S. will work as a mediator. Lastly, he mentions politics in Mexico. Reply by Luis L. León expressing that the perspective of Gen. Plutarco Elías Calles regarding the European conflict is realistic. Engr. Luis L. León sends a letter to Gen. Plutarco Elías Calles regarding the situation in Mexico with the administration of President Manuel Ávila Camacho. He asserts President Manuel Ávila Camacho will work to solve the issues with oil, railroads, agriculture, small property and entitlement of "ejidos". Memorandum related to rubber by Engr. Luis L. León, signed on February 1942 and sent to Mr. Jorge Henríquez in which he informs that due to the war in the Pacific, there is a shortage of rubber. He says it is urgent to establish plantations in intertropical zones to produce rubber. He makes a study of the viability to create a rubber company in Mexico, the investment needed, markets, etc. / El ingeniero Luis L. León escribe al general PEC, que vive en San Diego, Cal., en el exilio, comentando los problemas de su vida cotidiana, la venta de su casa para pagar deudas, lo grave de su situación económica que es reflejo de la del país, ya que no hay crédito y la moneda no tiene estabilidad, con lo que el clima de desconfianza es generalizado. En seguida analiza la situación de la agricultura, cuya productividad ha disminuido notablemente lo que está creando una corriente de opinión a favor del respeto a la pequeña propiedad porque algunos se dan cuenta de que el agrarismo es destructor y anárquico; la agricultura como actividad económica para ganarse la vida requiere seguridad y garantía por parte del estado más aún en un país tan individualista como el nuestro, donde el agricultor si no tiene certidumbre en la propiedad de su parcela no siembra. Lo mismo el pequeño propietario que el ejidatario si no hay garantía baja su producción. El remedio para estos males es hacer cumplir la ley, respetar la pequeña propiedad, y las bases legales para la tramitación de dotación y restitución de ejidos; respetar la propiedad de cosechas, aperos, edificaciones y herramientas. Que el campo y sus productos no sean botín de líderes, caciques y burócratas. Pero este programa no es el vigente para los altos mandos del gobierno que cada vez avanza más hacia la extrema izquierda sin que nadie oponga firme resistencia al agrarismo a ultranza que sólo ha provocado caos y anarquía en el campo. Memorándum firmado por Juárez y fechado el 31 de marzo de 1938 en el que analiza los diferentes rubros de la economía nacional desde el crecimiento y desarrollo que tuvo en 1932 cuando adquirió un impulso que se mantiene a pesar de la política social extremista que se ha ido poniendo en práctica. el comercio y la industria crecieron y se desarrollaron en forma sostenida hasta 1937 cuando, afirma, se inicia un descenso serio. La agricultura está en grave crisis provocada por una acción agraria demagógica, corrupta y desorganizada. En cuanto a las políticas financiera y económica del país se han cometido errores fundamentales en el manejo de los fondos públicos. El autor analiza la situación del campo, de los empresarios, de la industria, de la clase trabajadora, de los sindicatos, etc., que se manejan con demagogia, favoreciendo intereses de grupúsculos sobre los de los actores reales de la economía, lo que ha provocado desconfianza, improductividad y desánimo. Por otro lado el gobierno aumenta impuestos, echa mano de los fondos de instituciones que siempre habían sido respetadas como El Banco de México o Ferrocarriles para allegarse fondos que destina a proyectos populistas; y si a ello se agrega la expropiación petrolera con todo lo que conlleva: disminución de la producción, de los impuestos que pagaban las compañías, pago de nómina, etc., además del descrédito internacional, el panorama es desolador. De acuerdo con las estadísticas publicadas y los informes que tiene a la mano expone y analiza la situación del Banco de México, del Sistema Monetario, del crédito, de los Ferrocarriles, de la industria, la minería y de la producción de plata y de petróleo. Maneja números, datos, estadísticas, utilidades, pérdidas, pasivos y activos; Juárez obtiene la información del Boletín de la Comisión Nacional Bancaria, de noviembre y diciembre de 1937. En octubre de 1939 el general PEC escribe a Luis L. León comentando el informe de Juárez pero da a entender también que en el mismo se analiza el conflicto europeo, así como la situación económica nacional y el informe de Juárez que aparece en este expediente no menciona la situación europea, por lo que debe referirse a otro. El general PEC sí hace a Luis L. León un análisis del conflicto europeo; de artículos de prensa aparecidos en Londres en los que David Lloyd George, ex primer ministro inglés cuando la Primera Guerra Mundial, quien hace una requisitoria contra la política de Chamberlain y los exaltados estilos de Churchill; también comenta un discurso de Hitler que según el general PEC es el documento político más hábil, medular y de mayor importancia en los últimos tiempos en el que hace un llamado a la paz y propone un arreglo definitivo a todos los conflictos europeos. Afirma que Alemania ha demostrado, después de su conquista de Polonia, que no tiene interés en la matanza, por lo que la guerra se encuentra en estado de quietud, que hay que esperar las posturas de Inglaterra y Francia. Comenta la actitud de Rusia ante la toma de Polonia, cuya atracción por los Balcanes no es posible ignorar. Afirma que es posible que Estados Unidos entre como entidad mediadora, con lo que es posible se llegue a un arreglo que evite el cataclismo. Por último al comentar la política mexicana asegura que las perspectivas son halagadoras. Respuesta de Luis L. León afirmando que la percepción del general PEC sobre el conflicto europeo es realista y clara y sus apreciaciones apegadas a la verdad. El ingeniero Luis L. León escribe al general PEC con optimismo respecto a la situación del país con el nuevo gobierno del Presidente Ávila Camacho, quien corregirá los errores que han sumido al país en la bancarrota y la desorganización: que la Hacienda Pública enfrenta un terrible déficit; los ferrocarriles, petróleo, servicios, agricultura, etc., enfrentan grandes problemas, que tendrán que ir solucionándose. En cuanto a la producción agrícola, la política agraria demagógica y caótica ha provocado una disminución de la producción, todos estos problemas parece que don Manuel los enfrenta con serenidad y ponderación ya que no ha perseguido a nadie, sus acciones se han encaminado a sustraer al Ejército de la política; a liberar a los Ferrocarriles del caos; a dar un programa a las dependencias del gobierno; ha instaurado medidas de respeto a la pequeña propiedad y de transparencia al manejo de titulación de parcelas ejidales a fin de dar garantías al hombre del campo. Todas las medidas tienden a restablecer la confianza perdida después del gobierno cardenista que llevó al país al desorden y a la debilidad económica. "Memorándum sobre hule" elaborado por el ingeniero Luis L. León, firmado en México en febrero de 1942, y dirigido a la atención del señor Jorge Henríquez en el que expone que a causa de la guerra del Pacífico se presenta en América una terrible escasez de hule o caucho al grado que ya se anuncia el control y racionamiento de artículos fabricados con este material, que la crisis tiende a agudizarse por lo que es urgente establecer plantaciones de árboles productores de hule en regiones intertropicales para producir el hule que se consume en el continente y hace un estudio de la viabilidad y éxito de crear una industria del hule con plantaciones en México; la inversión necesaria, el plazo de recuperación de la misma, los mercados, etc. El estudio se divide en tres partes. La primera se refiere a la plantación de árboles de hule, qué países lo producen, cuáles lo consumen y qué cantidades y en qué condiciones está México a ese respecto. Concluye que el negocio es remunerativo en México siempre que se plantee sobre bases económicas y de técnica agrícola moderna. La segunda parte analiza las posibilidades de plantar hule en México de acuerdo con su clima y tierras; qué tipo de planta sería la más conveniente y cuál es el estado de las plantaciones de hule en México; y la posibilidad de cultivos alternos. Concluye que México es un país indicado para hacer plantaciones huleras, que tiene regiones propicias para ello y aconseja qué tipo de planta debe considerarse de acuerdo a su productividad y cómo debe ser el cultivo para alcanzar el mayor provecho posible. Por último en el tercer capítulo analiza cuáles son las bases sobre las que debe planearse una explotación hulera para atraerse la fuerte inversión de capitales que requiere. En las conclusiones hace una síntesis de sus propuestas y soluciones.
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With President Milei's election in Argentina, dollarization is suddenly on the table. I'm for it. Here's why. Why not? A standard of valueStart with "why not?'' Dollarization, not a national currency, is actually a sensible default. The dollar is the US standard of value. We measure length in feet, weight in pounds, and the value of goods in dollars. Why should different countries use different measures of value? Wouldn't it make sense to use a common standard of value? Once upon a time every country, and often every city, had its own weights and measures. That made trade difficult, so we eventually converged on international weights and measures. (Feet and pounds are actually a US anachronism since everyone else uses meters and kilograms. Clearly if we had to start over we'd use SI units, as science and engineering already do.) Moreover, nobody thinks it's a good idea to periodically shorten the meter in order to stimulate the economy, say by making the sale of cloth more profitable. As soon as people figure out they need to buy more cloth to make the same jeans, the profit goes away. PrecommitmentPrecommitment is, I think, the most powerful argument for dollarization (as for euorization of, say, Greece): A country that dollarizes cannot print money to spend more than it receives in taxes. A country that dollarizes must also borrow entirely in dollars, and must endure costly default rather than relatively less costly inflation if it doesn't want to repay debts. Ex post inflation and devaluation is always tempting, to pay deficits, to avoid paying debt, to transfer money from savers to borrowers, to advantage exporters, or to goose the economy ahead of elections. If a government can precommit itself to eschew inflation and devaluation, then it can borrow a lot more money on better terms, and its economy will be far better off in the long run. An independent central bank is often advocated for precommitment value. Well, locating the central bank 5,000 miles away in a country that doesn't care about your economy is as independent as you can get!The Siren Vase. Greek 480-470 BC. Source: The Culture CriticPrecommitment is an old idea. See picture. It's hard. A country must set things up so that it cannot give in to temptation ex post, and it will regret and try to wriggle out of that commitment when the time comes. A lot of the structure of our laws and government amount to a set of precommitments. An independent central bank with a price-level mandate is a precommitment not to inflate. A constitution and property rights are precommitments not to expropriate electoral minorities. Especially in Argentina's case, precommitment is why full dollarization is better than an exchange rate peg or a currency board. A true exchange rate peg -- one dollar for one peso, as much as you like -- would seem to solve the temptation-to-inflate problem. But the country can always abrogate the peg, reinstitute currency controls, and inflate. An exchange rate peg is ultimately a fiscal promise; the country will raise enough taxes so that it can get the dollars necessary to back its currency. When that seems too hard, countries devalue the peg or abandon it altogether. A currency board is tougher. Under a currency board, every peso issued by the government is backed by a dollar. That seems to ensure adequate reserves to handle any conceivable run. But a strapped government eyes the great Uncle-Scrooge swimming pool full of dollars at the currency board, and is tempted to abrogate the board, grab the assets and spend them. That's exactly how Argentina's currency board ended. Dollarization is a burn the ships strategy. There is no return. Reserves are neither necessary nor sufficient for an exchange rate peg. The peg is a fiscal promise and stands and falls with fiscal policy. A currency board, to the governmentFull dollarization -- the country uses actual dollars, and abandons its currency -- cannot be so swiftly undone. The country would have to pass laws to reinstitute the peso, declare all dollar contracts to be Peso contracts, ban the use of dollars and try to confiscate them. Dollars pervading the country would make that hard. People who understand their wealth is being confiscated and replaced by monopoly money would make it harder -- harder than some technical change in the amount of backing at the central bank for the same peso notes and bank accounts underlying a devalued peg or even an abrogated currency board. The design of dollarization should make it harder to undo. The point is precommitment, to make it as costly as possible for a following government to de-dollarize, after all. It's hard to confiscate physical cash, but if domestic Argentine banks have dollar accounts and dollar assets, it is relatively easy to pronounce the accounts in pesos and grab the assets. It would be better if dollarization were accompanied by full financial, capital, and trade liberalization, including allowing foreign banks to operate freely and Argentinian banks to become subsidiaries of foreign banks. Absence of a central bank and domestic deposit insurance will make that even more desirable. Then Argentinian bank "accounts" could be claims to dollar assets held offshore, that remain intact no matter what a future Peronist government does. Governments in fiscal stress that print up money, like Argentina, also impose an array of economy-killing policies to try to prop up the value of their currency, so the money printing generates more revenue. They restrict imports with tariffs, quotas, and red tape; they can restrict exports to try to steer supply to home markets at lower prices; they restrict currency conversion and do so at manipulated rates; they restrict capital markets, stopping people from investing abroad or borrowing abroad; they force people to hold money in oligopolized bank accounts at artificially low interest rates. Dollarization is also a precommitment to avoid or at least reduce all these harmful policies, as generating a demand for a country's currency doesn't do any good to the government budget when there isn't a currency. Zimbabwe dollarized in 2009, giving up on its currency after the greatest hyperinflation ever seen. The argument for Argentina is similar. Ecuador dollarized successfully in much less trying circumstances. It's not a new idea, and unilateral dollarization is possible. In both cases there was a period in which both currencies circulated. (Sadly, Zimbabwe ended dollarization in 2019, with a re-introduction of the domestic currency and redenomination of dollar deposits at a very unfavorable exchange rate. It is possible to undo, and the security of dollar bank accounts in face of such appropriation is an important part of the dollarization precommitment.) The limits of precommitmentDollarization is no panacea. It will work if it is accompanied by fiscal and microeconomic reform. It will be of limited value otherwise. I'll declare a motto: All successful inflation stabilizations have come from a combination of fiscal, monetary and microeconomic reform. Dollarization does not magically solve intractable budget deficits. Under dollarization, if the government cannot repay debt or borrow, it must default. And Argentina has plenty of experience with sovereign default. Argentina already borrows abroad in dollars, because nobody abroad wants peso debt, and has repeatedly defaulted on dollar debt. The idea of dollar debt is that explicit default is more costly than inflation, so the country will work harder to repay debt. Bond purchasers, aware of the temptation to default, will put clauses in debt contracts that make default more costly still. For you to borrow, you have to give the bank the title to the house. Sovereign debt issued under foreign law, with rights to grab assets abroad works similarly. But sovereign default is not infinitely costly and countries like Argentina sometimes choose default anyway. Where inflation may represent simply hugging the mast and promising not to let go, default is a set of loose handcuffs that you can wriggle out of painfully. Countries are like corporations. Debt denominated in the country's own currency is like corporate equity (stock): If the government can't or won't pay it back the price can fall, via inflation and currency devaluation. Debt denominated in foreign currency is like debt: If the government can't or won't pay it back, it must default. (Most often, default is partial. You get back some of what is promised, or you are forced to convert maturing debt into new debt at a lower interest rate.) The standard ideas of corporate finance tell us who issues debt and who issues equity. Small businesses, new businesses, businesses that don't have easily valuable assets, businesses where it is too easy for the managers to hide cash, are forced to borrow, to issue debt. You have to borrow to start a restaurant. Businesses issue equity when they have good corporate governance, good accounting, and stockholders can be sure they're getting their share. These ideas apply to countries, and the choice between borrowing in their own currency and borrowing in foreign currency. Countries with poor governance, poor accounting, out of control fiscal policies, poor institutions for repayment, have to borrow in foreign currency if they are going to borrow at all, with intrusive conditions making default even more expensive. Issuing and borrowing in your own currency, with the option to inflate, is the privilege of countries with good institutions, and democracies where voters get really mad about inflation in particular. Of course, when things get really bad, the country can't borrow in either domestic or foreign currency. Then it prints money, forcing its citizens to take it. That's where Argentina is. In personal finance, you start with no credit at all; then you can borrow; finally you can issue equity. On the scale of healthier economies, dollarizing is the next step up for Argentina. Dollarization and foreign currency debt have another advantage. If a country inflates its way out of a fiscal mess, that benefits the government but also benefits all private borrowers at the expense of private savers. Private borrowing inherits the inflation premium of government borrowing, as the effective government default induces a widespread private default. Dollarization and sovereign default can allow the sovereign to default without messing up private contracts, and all prices and wages in the economy. It is possible for sovereigns to pay higher interest rates than good companies, and the sovereign to be more likely to default than those companies. It doesn't always happen, because sovereigns about to default usually grab all the wealth they can find on the way down, but the separation of sovereign default from inflationary chaos is also an advantage. Greece is a good example, and a bit Italy as well, both in the advantages and the cautionary tale about the limitations of dollarization. Greece and Italy used to have their own currencies. They also had borders, trade controls, and capital controls. They had regular inflation and devaluation. Every day seemed to be another "crisis" demanding another "just this once" splurge. As a result, they paid quite high interest rates to borrow, since savvy bondholders wanted insurance against another "just this once."They joined the EU and the eurozone. This step precommitted them to free trade, relatively free capital markets, and no national currency. Sovereign default was possible, but regarded as very costly. Having banks stuffed with sovereign debt made it more costly. Leaving the euro was possible, but even more costly. Deliberately having no plan to do so made it more costly still. The ropes tying hands to the mast were pretty strong. The result: borrowing costs plummeted. Governments, people and businesses were able to borrow at unheard of low rates. And they did so, with aplomb. The borrowing could have financed public and private investment to take advantage of the new business opportunities the EU allowed. Sadly it did not. Greece soon experienced the higher ex-post costs of default that the precommitment imposed. Dollarizaton -- euroization -- is a precommitment, not a panacea. Recommitments impose costs on yourself ex post. Those costs are real. A successful dollarization for Argentina has to be part of a joint monetary, fiscal, and microeconomic reform. (Did I say that already? :) ) If public finances aren't sorted out, a default will come eventually. And public finances don't need a sharp bout of "austerity" to please the IMF. They need decades of small primary surpluses, tax revenues slightly higher than spending, to credibly pay down any debt. To get decades of revenue, the best answer is growth. Tax revenue equals tax rate times income. More income is a lot easier than higher tax rate, which at least partially lowers income. Greece and Italy did not accomplish the microeconomic reform part. Fortunately, for Argentina, microeconomic reform is low-hanging fruit, especially for a Libertarian president. TransitionWell, so much for the Promised Land, they may have asked of Moses, how do we get there? And let's not spend 40 years wandering the Sinai on the way. Transition isn't necessarily hard. On 1 January 1999, Italy switched from Lira to Euro. Every price changed overnight, every bank account redenominated, every contract reinterpreted, all instantly and seamlessly. People turned in Lira banknotes for Euro banknotes. The biggest complaint is that stores might have rounded up converted prices. If only Argentina could have such problems. Why is Argentina not the same? Well, for a lot of reasons. Before getting to the euro, Italy had adopted the EU open market. Exchange rates had been successfully pegged at the conversion rate, and no funny business about multiple rates. The ECB (really the Italian central bank) could simply print up euros to hand out in exchange for lira. The assets of the Italian central bank and other national central banks were also redenominated in euro, so printing up euros to soak up national currencies was not inflationary -- assets still equal liabilities. Banks with lira deposits that convert to Euro also have lira assets that convert to euro. And there was no sovereign debt crisis, bank crisis, or big inflation going on. Italian government debt was trading freely on an open market. Italy would spend and receive taxes in euros, so if the debt was worth its current price in lira as the present value of surpluses, it was worth exactly the same price, at the conversion rate, in euro. None of this is true in Argentina. The central problem, of course, is that the government is broke. The government does not have dollars to exchange for Pesos. Normally, this would not be a problem. Reserves don't matter, the fiscal capacity to get reserves matters. The government could simply borrow dollars internationally, give the dollars out in exchange for pesos, and slowly pay off the resulting debt. If Argentina redenominated interest-bearing peso debt to dollars at a market exchange rate, that would have no effect on the value of the debt. Obviously, borrowing additional dollars would likely be difficult for Argentina right now. To the extent that its remaining debt is a claim to future inflationary seigniorage revenues, its debt is also worth less once converted to dollars, even at a free market rate, because without seigniorage or fiscal reforms, budget deficits will increase. And that leads to the primary argument against dollarization I hear these days. Yes it might be the promised land, but it's too hard to get there. I don't hear loudly enough, though, what is the alternative? One more muddle of currency boards, central bank rules, promises to the IMF and so forth? How do you suddenly create the kind of stable institutions that Argentina has lacked for a century to justify a respectable currency? One might say this is a problem of price, not of quantity. Pick the right exchange rate, and conversion is possible. But that is not even clearly true. If the state is truly broke, if pesos are only worth anything because of the legal restrictions forcing people to hold them, then pesos and peso debt are genuinely worthless. The only route to dollarization would be essentially a complete collapse of the currency and debt. They are worth nothing. We start over. You can use dollars, but you'll have to export something to the US -- either goods or capital, i.e. stock and bonds in private companies -- to get them. (Well, to get any more of them. Lots of dollars line Argentine mattresses already.) That is enough economic chaos to really put people off. In reality, I think the fear is not a completely worthless currency, but that a move to quick dollarization would make peso and peso claims worth very little, and people would rebel against seeing their money holdings and bank accounts even more suddenly worthless than they are now. Maybe, maybe not. Just who is left in Argentina counting on a robust value of pesos? But the state is not worth nothing. It may be worth little in mark to market, or current dollar borrowing capacity. But a reformed, growing Argentina, with tax, spending, and microeconomic reform, could be a great place for investment, and for tax revenue above costs. Once international lenders are convinced those reform efforts are locked in, and Argentina will grow to anything like its amazing potential, they'll be stumbling over themselves to lend. So a better dollarization plan redeems pesos at the new greater value of the post-reform Argentine state. The question is a bit of chicken and egg: Dollarization has to be part of the reform, but only reform allows dollarization with a decent value of peso exchange. So there is a genuine question of sequencing of reforms. This question reminds me of the totally fruitless discussion when the Soviet Union broke up. American economists amused themselves with clever optimal sequencing of liberalization schemes. But if competent benevolent dictators (sorry, "policy-makers") were running the show, the Soviet Union wouldn't have failed in the first place. The end of hyperinflation in Germany. Price level 1919-1924. Note left-axis scale. Source: Sargent (1982) "The ends of four big inflations." A better historical analogy is, I think, the ends of hyperinflation after WWI, so beautifully described by Tom Sargent in 1982. The inflations were stopped by a sudden, simultaneous, fiscal, monetary, and (to some extent) microeconomic reform. The fiscal problem was solved by renegotiating reparations under the Versailles treaty, along with severe cuts in domestic spending, for example firing a lot of government and (nationalized) railroad workers. There were monetary reforms, including an independent central bank forbidden to buy government debt. There were some microeconomic reforms as well. Stopping inflation took no monetary stringency or high interest rates: Interest rates fell, and the governments printed more money, as real money demand increased. There was no Phillips curve of high unemployment. Employment and the economies boomed. So I'm for almost-simultaneous and fast reforms. 1) Allow the use of dollars everywhere. Dollars and pesos can coexist. Yes, this will put downward pressure on the value of the peso, but that might be crucial to maintain interest in the other reforms, which will raise the value of the peso. 2) Instant unilateral free trade and capital opening. Argentina will have to export goods and capital to get dollars. Get out of the way. Freeing imports will lower their prices and make the economy more efficient. Capital will only come in, which it should do quickly, if it knows it can get out again. Float the peso. 3) Long list of growth - oriented microeconomic reforms. That's why you elected a Libertarian president. 4) Slash spending. Reform taxes. Low marginal rates, broad base. Subsidies in particular distort prices to transfer income. Eliminate. 5) Once reforms are in place, and Argentina has some borrowing capacity, redenominate debt to dollars, and borrow additional dollars to exchange pesos for dollars. All existing peso contracts including bank accounts change on the date. Basically, you want people to hold peso bills and peso debt in the interim as claims on the post-reform government. Peso holders have an incentive to push for reforms that will raise the eventual exchange value of the peso. 6) Find an interim lender. The central problem is who will lend to Argentina in mid stream in order to retire pesos. This is like debtor in possession financing but for a bankrupt country. This could be a job for the IMF. The IMF could lend Argentina dollars for the purpose of retiring pesos. One couldn't ask for much better "conditionality" than a robust Libertarian pro-growth program. Having the IMF along for the ride might also help to commit Argentina to the program. (The IMF can force conditionality better than private lenders.) When things have settled down, Argentina should be able to borrow dollars privately to pay back the IMF. The IMF might charge a decent interest rate to encourage that. How much borrowing is needed? Less than you think. Interest-paying debt can simply be redenominated in dollars once you pick a rate. That might be hard to pay off, but that's a problem for later. So Argentina really only needs to borrow enough dollars to retire cash pesos. I can't find numbers, but hyper inflationary countries typically don't have much real value of cash outstanding. The US has 8% of GDP in currency outstanding. If Argentina has half that, then it needs to borrow only 4% of GDP in dollars to buy back all its currency. That's not a lot. If the peso really collapses, borrowing a little bit more (against great future growth of the reform program) to give everyone $100, the sort of fresh start that Germany did after WWII and after unification, is worth considering. Most of the worry about Argentina's borrowing ability envisions continued primary deficits with slow fiscal adjustment. Make the fiscal adjustment tomorrow."You never want a serious crisis to go to waste," said Rahm Emanuel wisely. "Sequencing" reforms means that everything promised tomorrow is up for constant renegotiation. Especially when parts of the reform depend on other parts, I'm for doing it all as fast as possible, and then adding refinements later if need be. Roosevelt had his famous 100 days, not a 8 year sequenced program. The Argentine reform program is going to hurt a lot of people, or at least recognize losses that had long been papered over in the hope they would go away. Politically, one wants to make the case "We're all in this, we're all hurting. You give up your special deal, preferential exchange rate, special subsidy or whatever, but so will everyone else. Hang with me to make sure they don't get theirs, and in a year we'll all be better off." If reforms are in a long sequence, which means long renegotiation, it's much harder to get buy in from people who are hurt earlier on that the ones who come later will also do their part. The standard answersOne standard critique of dollarization is monetary policy and "optimal currency areas." By having a national currency, the country's wise central bankers can artfully inflate and devalue the currency on occasion to adapt to negative shocks, without the inconvenience and potential dislocation of everyone in the country lowering prices and wages. Suppose, say, the country produces beef, and exports it in order to import cars. If world demand for beef declines, the dollar price of beef declines. The country is going to have to import fewer cars. In a dollarized country, or with a pegged exchange rate, the internal price of beef and wages go down. With its own country and a floating rate, the value of the currency could go down, leaving beef and wages the same inside the country, but the price of imported cars goes up. If lowering prices and wages causes more recession and dislocation than raising import prices, then the artful devaluation is the better idea. (To think about this question more carefully you need traded and non-traded goods; beef, cars, and haircuts. The relative price of beef, cars, and haircuts along with demand for haircuts is also different under the two regimes). Similarly, suppose there is a "lack of demand'' recession and deflation. (90 years later, economists are still struggling to say exactly where that comes from.) With its own central bank and currency, the country can artfully inflate just enough to offset the recession. A country that dollarizes also has to import not-always-optimal US inflation. Switzerland did a lot better than the US and EU once again in the covid era. This line of thinking answers the question, "OK, if Argentina ($847 bn GDP, beef exports) should have its own currency in order to artfully offset shocks, why shouldn't Colorado ($484 bn GDP, beef exports)?'' Colorado is more dependent on trade with the rest of the US than is Argentina. But, the story goes, people can more easily move across states. A common federal government shoves "fiscal stimulus" to states in trouble. Most of all, "lack of demand" recessions seem to be national, in part because of the high integration of states, so recessions are fought by national policy and don't need state-specific monetary stimulus. This is the standard "optimal currency area" line of thinking, which recommends a common currency in an integrated free trade zone such as US, small Latin American countries that trade a lot with the US, and Europe. Standard thinking especially likes a common currency in a fiscal union. Some commenters felt Greece should keep or revert to the Drachma because the EU didn't have enough common countercyclical fiscal policy. It likes independent currencies elsewhere.I hope you're laughing out loud by now. A wise central bank, coupled with a thrifty national government, that artfully inflates and devalues just enough to technocratically exploit price stickiness and financial frictions, offsetting national "shocks" with minimum disruption, is a laughable description of Argentina's fiscal and monetary policies. Periodic inflation, hyperinflation and default, together with a wildly overregulated economy with far too much capital and trade controls is more like it. The lure of technocratic stabilization policy in the face of Argentina's fiscal and monetary chaos is like fantasizing whether you want the tan or black leather on your new Porsche while you're on the bus to Carmax to see if you can afford a 10-year old Toyota. Another reason people argue that even small countries should have their own currencies is to keep the seigniorage. Actual cash pays no interest. Thus, a government that issues cash earns the interest spread between government bonds and interest. Equivalently, if demand for cash is proportional to GDP, then as GDP grows, say 2% per year, then the government can let cash grow 2% per year as well, i.e. it can print up that much cash and spend it. But this sort of seigniorage is small for modern economies that don't have inflation. Without inflation, a well run economy might pay 2% for its debt, so save 2% by issuing currency. 2% interest times cash which is 10% of GDP is 0.2% of GDP. On the scale of Argentinian (or US) debt and deficits, that's couch change. When inflation is higher, interest rates are higher, and seigniorage or the "inflation tax" is higher. Argentina is living off that now. But the point is not to inflate forever and to forswear bigger inflation taxes. Keeping this small seigniorage is one reason for countries to keep their currency and peg to the dollar or run a currency board. The currency board holds interest-bearing dollar assets, and the government gets the interest. Nice. But as I judge above, the extra precommitment value of total dollarization is worth the small lost seigniorage. Facing Argentina's crisis, plus its catastrophic century of lost growth, lost seigniorage is a cost that I judge far below the benefit. Other countries dollarize, but agree with the US Fed to rebate them some money for the seigniorage. Indeed, if Argentina dollarizes and holds 10% of its GDP in non-interest-bearing US dollars, that's a nice little present to the US. A dollarization agreement with Argentina to give them back the seignorage would be the least we can do. But I don't think Argentina should hold off waiting for Jay Powell to answer the phone. The Fed has other fires to put out. If Argentina unilaterally dollarizes, they can work this sort of thing out later. Dollarization would obviously be a lot easier if it is worked out together with the US government and US banks. Getting cash sent to Argentina, getting banks to have easy payment systems in dollars and links to US banks would make it all easier. If Argentina gets rid of its central bank it still needs a payment system to settle claims in dollars. Accounts at, say, Chase could function as a central bank. But it would all be easier if the US cooperates. Updates:Some commenters point out that Argentina may be importing US monetary policy just as the US imports Argentine fiscal policy. That would lead to importing a big inflation. They suggest a Latin American Monetary Union, like the euro, or using a third country's currency. The Swiss franc is pretty good. Maybe the Swiss can set the world standard of value. Both are good theoretical ideas but a lot harder to achieve in the short run. Dollarization will be hard enough. Argentines have a lot of dollars already, most trade is invoiced in dollars so getting dollars via trade is relatively easy, the Swiss have not built out a banking infrastructure capable of being a global currency. The EMU lives on top of the EU, and has its own fiscal/monetary problems. Building a new currency before solving Argentina's problems sounds like a long road. The question asked was dollarization, so I stuck to that for now. I imagined here unilateral dollarization. But I didn't emphasize enough: The US should encourage dollarization! China has figured this out and desperately wants anyone to use its currency. Why should we not want more people to use our currency? Not just for the seigniorage revenue, but for the ease of trade and international linkages it promotes. The Treasury and Fed should have a "how to dollarize your economy" package ready to go for anyone who wants it. Full integration is not trivial, including access to currency, getting bank access to the Fed's clearing systems, instituting cyber and money laundering protocols, and so forth. Important update: Daniel Raisbeck and Gabriela Calderon de Burgos at CATO have a lovely essay on Argentinian dollarization, also debunking an earlier Economist article that proclaimed it impossible. They include facts and comparison with other dollarization experiences, not just theory as I did. (Thanks to the correspondent who pointed me to the essay.) Some quotes:At the end of 2022, Argentines held over $246 billion in foreign bank accounts, safe deposit boxes, and mostly undeclared cash, according to Argentina's National Institute of Statistics and Census. This amounts to over 50 percent of Argentina's GDP in current dollars for 2021 ($487 billion). Hence, the dollar scarcity pertains only to the Argentine state....The last two dollarization processes in Latin American countries prove that "purchasing" the entire monetary base with U.S. dollars from one moment to the next is not only impractical, but it is also unnecessary. In both Ecuador and El Salvador, which dollarized in 2000 and 2001 respectively, dollarization involved parallel processes. In both countries, the most straightforward process was the dollarization of all existing deposits, which can be converted into dollars at the determined exchange rate instantly.in both Ecuador and El Salvador, dollarization not only did not lead to bank runs; it led to a rapid and sharp increase in deposits, even amid economic and political turmoil in Ecuador's case....There is a general feature of ending hyperinflation: People hold more money. In this case, people hold more bank accounts once they know those accounts are safe. Short summary of the rest, all those dollar deposits (out of mattresses into the banking system) allowed the central bank to retire its local currency liabilities. Emilio Ocampo, the Argentine economist whom Milei has put in charge of plans for Argentina's dollarization should he win the presidency, summarizes Ecuador's experience thus:People exchanged their dollars through the banks and a large part of those dollars were deposited in the same banks. The central bank had virtually no need to disburse reserves. This was not by design but was a spontaneous result.In El Salvador also, Dollar deposits also increased spontaneously in El Salvador, a country that dollarized in 2001. By the end of 2022, the country's deposits amounted to 49.6 percent of GDP—in Panama, another dollarized peer, deposits stood at 117 percent of GDP.El Salvador's banking system was dollarized immediately, but the conversion of the circulating currency was voluntary, with citizens allowed to decide if and when to exchange their colones for dollars. Ocampo notes that, in both Ecuador and El Salvador, only 30 percent of the circulating currency had been exchanged for dollars four months after dollarization was announced so that both currencies circulated simultaneously. In the latter country, it took over two years for 90 percent of the monetary base to be dollar‐based.Cachanosky explains that, in an El Salvador‐type, voluntary dollarization scenario, the circulating national currency can be dollarized as it is deposited or used to pay taxes, in which case the sums are converted to dollars once they enter a state‐owned bank account. Hence, "there is no need for the central bank to buy the circulating currency" at a moment's notice.Dollarization starts with both currencies and a peg. As long as people trust that dollarization will happen at the peg, the conversion can take a while. You do not need dollars to soak up every peso on day 1. Dollarization is, above, a commitment that the peg will last for years, not a necessary commitment that the peg will last a day. I speculated about private borrowing at lower rates than the sovereign, once default rather than inflation is the only way out for the sovereign. This happened: ... as Manuel Hinds, a former finance minister in El Salvador, has explained, solvent Salvadorans in the private sector can borrow at rates of around 7 percent on their mortgages while international sovereign bond markets will only lend to the Salvadoran government at far higher rates. As Hinds writes, under dollarization, "the government cannot transfer its financial costs to the private sector by printing domestic money and devaluing it."A nice bottom line: Ask people in Ecuador, El Salvador, and Panama what they think:This is yet another lesson of dollarization's actual experience in Latin American countries. It is also a reason why the vast majority of the population in the dollarized nations has no desire for a return to a national currency. The monetary experiences of daily life have taught them that dollarization's palpable benefits far outweigh its theoretical drawbacks. Even more important update:From Nicolás Cachonosky How to Dollarize Argentina The central problem is non-money liabilities of the central bank. A detailed plan. Many other blog posts at the link. See his comment below. Tyler Cowen on dollarization in Bloomberg. Great quote: The question is not how to adopt a new currency, it is how to adopt a new currency and retain a reasonable value for the old one. Dollarization is easy. Hyperinflate the Peso to zero a la Zimbabwe. Repeat quote. Emilio Ocampo on dollarization as a commitment device. One of the main reasons to dollarize is to eliminate high, persistent, and volatile inflation. However, to be effective, dollarization must generate sufficient credibility, which in turn depends critically on whether its expected probability of reversal is low.... The evidence suggests that, in the long-run, the strongest insurance against reversal is the support of the electorate, but in the short-run, institutional design [dollarization] can play a critical role.Fifty years ago, in testimony to U.S. Congress, Milton Friedman argued that "the whole reason why it is an advantage for a developing country to tie to a major country is that, historically speaking, the internal policies of developing countries have been very bad. U.S. policy has been bad, but their policies have been far worse. ... (1973, p.127)."In this respect, not much has changed in Argentina since. Craig Richardson explains how dollarization failed in Zimbabwe, a wonderful cautionary tale. Deficits did not stop, the government issued "bonds" and forced banks to buy them, bank accounts became de linked from currency. Gresham's law prevailed, the government "bonds" circulating at half face value drove out cash dollars. With persistent government and trade deficits there was a "dollar shortage."
Abstract: Transcription of Utah International shareholder's meeting to finalize the merger with General Electric. The meeting took place December 15, 1976. Speakers are Edmund Littlefield (EL), Bruce Mitchell (BM), Charles Travers (CT), and seven unknown speakers labeled by number as they appear. Also, when the audience speaks as a group, it is labeled All. This document is transcribed verbatim, with a few changes included to provide clarity. December 15, 1976 Transcript: EL: I see we are playing to a packed house and I would like to suggest that there is a whole row of seats down here in the front that we would be glad to have you come use. Well good morning ladies and gentlemen, would the meeting please come to order. Welcome to this special meeting of the shareholders of Utah International, called for the purpose of considering the proposed merger with the General Electric Company. I am Edmund W. Littlefield, Chairman of the Board and Chief Executive Officer. On my left are Alexander M. Wilson, President and Chief Operating Officer and Director, and Bruce T. Mitchell, Secretary of the company. It is my privilege to introduce to you the other members of our board of directors who are here today, Alf E. Brandon, Senior Vice President of the company; Val A. Browning, Chairman of the Board, Browning; Thomas D. Dee, Vice President of First Security Bank, Ogden, Utah; William R. Hewlett, President of Hewlett-Packard Company; J. B. Ladd, President of Ladd Petroleum Corporation, a subsidiary of the company; Arjay Miller, Dean, Graduate School of 2 Business, Stanford University; Paul L. Wattis Jr., President of Wattis Construction Company; and last and certainly by no means least, a gentleman who's served on this board for fifty-six years, Marriner S. Eccles, former President and Chairman of the Board of the company and now Honorary Chairman of the Board. [Applause] Thank you. These gentlemen, together with the two of us on the platform, who you met earlier, constitute the Board of Directors. Unfortunately, Ernest C. Arbuckle, Chairman of the Board of Wells Fargo Bank and our host for this meeting is unable to be with us today. Fred J. Borch, George Eccles and Bill Kimball are also unable to be with us. Ernie, unfortunately, is undergoing some surgery at this time. We also have with us today representatives of Arthur Anderson, our auditors, Pillsbury Madison and Suite our counsel, and Lehman Brothers and Dean Company, and our investment brokers are also present here today. I now ask the secretary to report on the notice of the meeting, the presence of a quorum, and other matters relating to this meeting. BM: Mr. Chairman, there are available the following documents: 1) A list of the stockholders of Utah International Inc. as of the close of business on October 29, 1976 being the stockholders, entitled to notice of and to vote at this special meeting. 2) An affidavit of the company's transfer agent to the effect of written notice of the special meeting was mailed to each stockholder entitled to vote more than twenty days before the date of the meeting as required by Delaware general corporation law. 3) A signed registration of all stockholders and proxy holders 3 present at the meeting. Management proxies received and other proxies who are personally present represent more than the majority of 31,540,032 shares of stock entitled to vote at the meeting, and constitute a quorum for the transaction of business. This meeting is accordingly properly called and constituted, and is empowered to proceed as a special meeting of the stockholders of Utah International Inc. EL: Thank you, the Board appoints Mr. J. B. Nelson and Mr. Swineheart of Utah International Inc. and Mr. Dennis Conco of the Crocker National Bank, inspectors of election to inspect assigned proxies and credentials presented to the meeting and to conduct a voting to receive and count the votes and to determine the results of the meeting. In the notice of the Special Meeting in the attaché proxy statement, the only item of business to be considered by the stockholders is a proposal for the adoption and approval of the agreement in plan, the reorganization and agreement of merger as amended by which Utah International Incorporated will become a wholly owned subsidiary of General Electric Company. The secretary is requested to submit the resolution which has been prepared for this purpose. BM: Mr. Chairman, the resolution is as follows: resolved that the merger of G. sub of Delaware Inc. with an end to this corporation as set forth in the agreement and plan of reorganization dated as of April 1, 1976; as amended by an amendment dated as of August 13, 1976, attached are annex one and annex two respectively, and the agreement mergers set forth as exhibit A to said annex one to the proxy statement dated October 29, 1976, and mailed to stockholders of record at the 4 close of business on October 29, 1976. Also included are the terms and conditions of the purposed agreement and plan of reorganization as amended, along with the agreement of the merger, providing among other things, for this corporation to become a wholly owned subsidiary of General Electric Company, and the mode of carrying such terms and conditions into effect; as well, the manner and basis of converting the shares of common stock of this corporation into shares of common stock of General Electric Company, as therein provided be and hereby are, approved. 1: Mr. Chairman, I'm a stockholder and I would like to move the adoption to resolution. EL: Thank you. Is there a second? 2: Second. I hereby second the motion. EL: Thank you. It has been moved and seconded that the resolution which the secretary has read be adopted. The affirmative vote of a majority of the outstanding shares of the corporation will be required to carry the motion and adopt the resolution. Before opening the matter for general discussion, I would like to make some comments. This is a special meeting of the shareholders of Utah International Incorporated. It is special in two ways, first in the statutory sense in that it is not a regular annual meeting, but calls specifically to consider and act upon the merger of Utah and General Electric. It is also special in the sentimental sense in that it is destined to be the last public held meeting of this fine company whose antecedents go back to January 1900, when its 5 predecessor was incorporated with six shareholders. When the business of the day is done, Utah International will be merged with a single shareholder. General Electric has of record some 529,000 shareholders, Utah 23,000. These are located in fifty states and in many foreign countries. The actual number of shareholders is far greater. For often the shareholder of record is a broker or trust department of a bank acting as a nominee for many, many shareholders. You received a rather weight proxy statement. If the proxy material required and printed for the Utah and General Electric shareholders meetings today were stacked one on top of the other the pile would be over three and a half miles high. If the individual pages were laid end to end these would cross the continental United States three and three-quarter times. The proxy statement contains, and it's a hundred and seventy-six pages, considerable detail of the terms of the merger, historical financial and operating information of both companies, formal statements of the merge company and other information which the Board of Directors of the respective companies and or the Securities and Exchange Commission deem pertinent and appropriate to put before the shareholders so they may arrive at an informed decision. The merger has been recommended by each Board of Directors. It has been examined on Utah's behalf by the investment banking firms of Lehman Brothers Incorporated and Dean Whitter and Company Incorporated. Each of whom has expressed the opinion that the exchange ratio is fair and equitable to the shareholders of Utah. The same information has been put before the shareholders of General Electric, who met today, this morning, in Stratford, 6 Connecticut at 9:30 AM eastern standard time and they have approved the merger. The Utah shareholders have also considered the merger, and the company is in receipt of proxies representing over 86% of the shares issued and outstanding. The proxies have been instructed how the shares are to be voted and as a consequence, the outcome of the voting on the proposals before us has already been determined and from a practical standpoint, nothing we can say or do here will in fact change that. Even though the outcome is ordained I have no intention of conducting these proceedings in a perfunctory manner. Many of us in this room have devoted most of our working lives to the furtherance of the fortunes of Utah International and we come to today's proceedings with mixed emotions. We recognize and stipulate that it is in the best interest of the Utah shareholders and its employees, that over the years we have given much of our substance into making this company what it is today. We are proud of our handy work and I believe properly so. We do not intend to let this moment pass into history, without noting these accomplishments and recording the concerns that caused us to believe that a merger between these two great companies would serve the best interests of the shareholders of each. Let's pick up the story twenty years ago when the company had 257 shareholders, some 2,400 employees and gross revenues less than 43 million dollars of which 76% was derived from performing contract construction. The stock was traded over the counter at a book value of $1.12 a share and trade from a low of $1.18 to a high of $1.51. That year the company earned 4.2 million dollars or 16 ¢ a share, and paid a dividend of 4.9 ¢ a share. With that as a 7 starting point let us examine the progress that has been recorded. Gross revenues grew, not always steadily, but over the years have climbed to over 944 million in the last fiscal year. The composition of these gross revenues has changed as the nature of the company has changed. Until we sold our heavy construction assets in 1969, construction was the major source of gross revenues. With the sale of construction assets to 1969, and the dredges in 1971, mining became and remains overwhelmingly the dominant business of the company. Gross revenues from land development have been on the decline. More recently through the acquisition of Ladd Petroleum and other companies, gross revenues from oil and gas have become a significant item. As our business grew, so have our earnings, from the 4.2 million earned in 1956, earnings have risen to 178.8 million dollars the past year and have set record highs in each of the last 12 years. In only three out of the last twenty years have earnings been lower than the preceding year. Earnings have increased from 16 ¢ in '56 to $5.67 this year and the dividend has gone from 4.9¢ to $1.15 this year. As the company grew and prospered the stock was listed on the New York Stock Exchange. As you can see the number of shareholders has increased very substantially. Inevitably, death and taxes forced the estates of some of the long time shareholders to bring shares to the market. The company sold convertible debentures to obtain funds for expansion and conversion of these debentures, and our merger with Lucky Mc, Ladd Petroleum and LVO have also contributed to the increase in the number of shareholders. There has been some modest decline in the number of shareholders since the acquisition of LVO in 1974, but 8 today we still have almost 100 times as many shareholders as we did twenty years ago. The increase in the number of employees required the conduct growing business of the company has not tracked the change in either gross revenues or net income. Construction is a labor intensive activity, while mining is capital intense. Our employment peaked in 1958 at 12,000, dropped sharply when we sold our heavy division assets, but has gradually expanded as the company's mining activities have grown rapidly. Our mineral sales backlog was insignificant twenty years ago, and even ten years ago was only about a sixth of its' size today. Nevertheless, the creation of the mineral sales backlog was and is an important aspect of Utah International's character and one that distinguishes it from most other mining companies. Very frankly, when we were embarking upon the rapid expansion of our mining business, we had neither the capital, nor the credit to finance the growth at the pace we wished to pursue without resorting to forward sales of new production to strengthen our credit. We made a virtue out of a necessity and today Utah's mineral sales backlog has grown from a modest 1.1 billion dollars in '66 to 6.1 billion dollars today. 96% of this backlog is represented by long term contracts with escalation clauses protecting against future cost changes. It was the existence of this backlog which in considerable measure excited investor interest in the shares of Utah International and caused the price of the stock to increase dramatically over the years. From a low of a $1.18 in 1956, the stock has closed at a higher price than the preceding year in sixteen out of the last twenty years, including the $65 price of the stock on October 31 the close of this 9 last fiscal year. In the early years, the stock sold close to its' book value. Again, in the early years, price earnings ratios on the stock were also modest, generally below twelve times the earnings. As the investing public came to realize the growth, earnings and the qualities of those price earnings ratios rose and remained for several years in excess of twenty times earnings, until the last few years, when investors have not been willing to accord so high a multiple for Utah shares, nor in fact for virtually shares of all other growth companies. Those who have invested in Utah shares and maintained faith in its management and its future have fared well. Earnings have grown at the compound rate of 19% for the last twenty years, 23% for the last fifteen years, 28% for the last ten years, and a startling 37% for the last five years. If you had invested a thousand dollars in the stock in 1956, you would have received in the interim dividends of $4,291, and the stock would have appreciated to $42,900. If you had made the same investments, but reinvested your dividends in Utah shares at the last price for each of the ensuing years, your $1,000 investment would have been worth $69,800 at the close of fiscal 1976. While I have not attempted to research the matter thoroughly, certainly there are few, if any, companies who have served their shareholders so well and so consistently in a period measured in five year, ten year, fifteen year or twenty year spans. Why then would a company who has so outstanding a record consider a merger even with the best of companies? The reason lies in the changing nature of the company's business and the source of its profits, present and prospective. Twenty years ago the company derived 87% of its' gross revenues from North 10 America, Later, even though we were heavily involved in contract construction outside North America, our gross revenues were well balanced for most of the time during the last twenty years. Ten years ago, only 8% of our mining revenues came from outside of North America, but this has been changing drastically in the last six years. As the next slide shows, 1976 witnessed 74.3% of the gross revenues earned outside North America and only 25.7% within North America. All of our land development and oil and gas gross revenues are earned within North America, but today only 22% our mining gross revenues are earned within North America and only 13.6% in the United States itself, far more significance, in my view, than the source of gross revenues or the sources of gross profit and other income. In the remarks that follow, I shall refer to this income account category simply as gross profits, but please consider it includes income from affiliates, joint ventures and partnerships as well as the gross profit earned by the parent company and its subsidiaries. This figure has grown from 8.7 million dollars in '56 to over 353 million dollars this past year. In the earlier years, the share provided by affiliate companies like Marcona and Cypress Pima, joint ventures and partnerships was a significant factor in the total. Reaching a high of 51% in 1967, but earnings from these sources have not been significant the last two years, dropping to a half of 1% in 1975 and actually producing the loss of 9 million dollars in 1976, the decline being primarily the result of the ill fortunes that have befallen Marcona. Mining has become increasingly the source of the company's gross profit. As you can see, ten years ago in 1966, mining contributed 31% of 11 the total of 22.7 million dollars gross profit, while in 1976 it contributed 344.7 million dollars or 97% of the gross profit and other income of 353.7 million dollars. However, it is not the concentration of gross profit and mining that so concerns us as it is the concentration of mining gross profit in a single commodity in a single country. Let's compare gross profits in '66 with those of '71 and those of '76. The well diversified business we enjoyed in '66 and indeed even in '71 has given way to a growing concentration of earnings from coal. Not only was our business increasingly concentrated in coal, but the earnings potential was increasingly concentrated outside North America. Earnings from North American sources provided 56.4% of gross profits in 1966. This has followed the 7.7% in 1975 and 14.2% in 1976 when the sharp increase in uranium increases did boost North American income. However, this trend toward increasing concentration of earnings from metallurgical coal produced in Australia is likely to continue for two probable reasons. The first indication is found in the mineral sales backlog which total 6.1 billion at the close of '76 with 71.3% of this related to future production outside of North America and 69.3% represented by metallurgical coal. The second reason this trend is likely to continue comes because of the undeveloped reserves that we have in hand. Certainly, one of the companies most promising investment prospects is the new metallurgical coal mine called Norwich Park in Australia, and we have abundant other coal reserves in the Queensland area that can and should be developed in the future using both surface and underground mining methods. Pursuit of our most promising prospect will make Utah less 12 diversified rather than more diversified and more dependent on Australia for the major share of its' gross profits and its' futures growth. I repeat that this concentration of mining was not in our view in and of itself alarming, but the composition of the mining gross profit and the concentration coking coal produced in a single country, and so primarily is a raw material for the steel industry in Japan and Europe, was too much concentration of risk for our company standing alone to bare. We cannot, and we should not, be so dependent on either a single commodity or single country no matter how solid either or both now appear. The attitude of the Australian government when the Labor Party was in power was a matter of extreme concern to us and this concern was no doubt deepened by having Marcona's assets in Peru expropriated by the government. We have great confidence in the people and political institutions of Australia and in the present government, and we are proceeding to increase our investment there because we have the coal reserves to do so and an attractive investment opportunity. However, with this abiding faith in Australia, in our view, this concentration of earning power in a single country and in a single mineral is too great a risk to be born alone, either by the shareholders of Utah or the employees of Utah whose livelihood while employed or in retirement are necessarily deeply affected by the fortunes of Utah International. This concern about the concentration of Utah's earning power was evidently shared by the investment community, which no longer was willing to assign a price earnings ratio of twenty-six to twenty-seven times earnings that prevailed in 1971, 1972 and 1973, but dropped the ration to 13.9% in 1974 and 13 to 13.3% in 1975. Thus we found ourselves faced with a paradox of having both our earnings and our dividends sharply increasing and the price of our shares flat and failing to respond. Certainly in these circumstances it seems only prudent to seek diversification of this risk. There were two broad courses that could be pursued. The first was to go on an aggressive acquisition program and seek to acquire other companies. This course of action posed considerable peril. First, the magnitude of the assignment was mind boggling, even if we were to attempt to reduce the risk to say roughly 50% and on the assumption that we could acquire other companies at ten times the earnings, we were faced with the necessity of attempting to acquire in short order, assets of around 1.5 billion dollars. Obviously, any effort to do this in the mining field would very quickly bring us under attack from the Federal Trade Commission or the Department of Justice. This in turn meant that we had to seek these investments outside the field of our expertise and in areas of business we knew little or nothing about. We were almost certain to make mistakes along the way. All in all the prospects of trying to diversify by a series of acquisitions seemed an unpromising and even perilous course to follow. The other broad path to diversification was to seek merger with a company already diversified, but the company had to be large enough to digest a 2 billion dollar bite. This narrowed the field. There are indeed companies larger than General Electric, but none so well diversified nor in my view so ably managed. 14 The risks that were of concern to Utah International standing alone were not the least unreasonable to take when the assets of General Electric and Utah were combined. General Electric is one of the largest and most diversified industrial corporations in the world. It is engaged in well over a hundred different businesses and in most of these it occupies a leading position in the market it serves. These businesses range from consumer items to capital goods, from fairly simple and well known technologies to the most advanced technologies required for aerospace and the jet age. While General Electric operates in more foreign countries than does Utah, its' business is far more oriented to the domestic market, and the merged company will be nicely balanced between domestic and foreign operations. There will be no undue concentration of merged company. Out of the merger, the Utah shareholders will in my view be exchanging the prospect of a faster rate of growth with its attendant risks in exchange for greater diversification, higher yield, and a premium on their shares as the other parties to the bargain. The General Electric shareholders will acquire assets with earning power and potential for growth that would indicate an increase in General Electric's earnings per share, entering into the natural resource business giving GE still further diversification and what I believe to be, although my views are obviously biased, the best mining organization and the best mining company in the world, each of the parties to the bargain is benefited. It is the biggest merger ever undertaken and I am confident that history will prove it to have been the best. 15 Before entertaining discussion of the motion that is before us, I would like now to introduce to you the principle officers of the company who are with us today and whose labors are responsible for the record of accomplishments that I have presented to you. First, Edwin C. Demoss, Senior Vice President Manager of Mining Division and newly named President of Lucky Mc Uranium Corporation, Ed Demoss; Keith G. Wallace, Senior Vice President Manager of Australia Division; John S. Anderson, Vice President Manager of Domestic Coal Operations: James T. Curry, Financial Vice President and Treasurer; W. Drew Leonard, Vice President of Corporate Purports and Internal Audit; Ralph J. Long Vice President Manager of Australian Operations; Charles K. McArthur, Vice President Manager of Metal Mining and newly named Manager of Mining Division; Boyd C. Paulson, Vice President Manager of Construction Services; M. Ian Ritchie, Vice President of Technical Services and newly Manager Operations Lucky Mc Uranium Corporation; Robert O. Wheaton, Vice President Manager of Exploration. Thank you. Nor would the list be complete without acknowledging that there are others in the audience that have made great contributions, but who are now retired. Let me ask those that I have spotted here to stand and be recognized: Albert L. Reeves, formerly Senior Vice President Secretary of the Director of the company, Albert; Orville Dykstra, Financial Vice President; Joseph K. Allen, Vice President; Weston Bourret, Vice President; and Charles Travers, Vice President. Thank you very much, and now the chair will entertain the discussion of the motion and will be pleased to answer such questions as we can regarding the purposed merger. Are there questions or discussions? If there is no 16 discussion of the resolution, if not the matter will… the meeting will proceed to vote upon the motion to approve the purposed merger with General Electric. 3: Mr. Chairman? EL: Yes? 3: Would you describe the status of the attitude of the federal government towards this motion? EL: What we did was to put the matter before the Department of Justice and asked in advance for their approval under the business advisory clearance procedure. While it was sometime in coming, it was forthcoming. To meet the concerns they expressed about it, Utah has agreed and has put its uranium assets in a separate subsidiary company that is now called Lucky Mc Uranium Corporation. When the merger becomes effective, the voting stock of that the company will be put in the hands of five independent voting trustees who will see to it that the company will elect the board of that company, and see to it that that company's affairs are conducted in a way that does not help GE in such things as the sale of its nuclear aspects. That company is not allowed to sell uranium to GE, but from the standpoint of the government we think we are completely in the clear. Any other questions? If not, any stockholder who is present who has not executed a proxy should raise his hand in order that the inspectors of election may give him a ballot, which he may now cast. If you have sent in your proxy you need not cast a ballot unless you wish to do so. Are there those that would like to vote in person? One here, one there, Boyd, one up here too. Boyd, 17 there's two in the back of the room, three. Will the inspectors of election proceed to collect the ballots? Those who have ballots would you raise them when they are completed so they can be picked up? Thank you. Over here Boyd. If the ballots are all collected would you please advise us of the inspectors report? Are you ready to speak to that? John, there's another one up here. You will bring them to me and I'll read the numbers, right. BM: Mr. Chairman? EL: Mr. Secretary? BM: The inspectors report that more than 27,147,464 shares of common stock of the company were voted in favor of the resolution and that not more than 200,456 shares of common stock were voted against such resolution. Accordingly, the purpose merger has been approved. When the exact number voted for and against the resolution has been ascertained, the inspectors will execute a certificate setting forth such number. EL: Thank you Mr. Secretary. We have acted on the business that was to come before the meeting. Is there any other business to come before the meeting? CT: Mr. Chairman, I would like to present a resolution at this meeting of these shareholders. My name is Charles Travers, I am a stockholder and I retired from the company. You've heard the view from the top. I think now maybe you ought to get the view from the ranks. The view from the top had to necessarily be 18 austere, maybe Mr. Chairman I can be a little more lighthearted. I started at Utah about twenty-four years ago. Mr. Littlefield hired me. I remembered the office in San Francisco as a very small office, very small and compact and you had to go in the front door, which was the only entryway, and there was a row of offices on your left as you walked in. Those were the executive offices. Mr. Littlefield's office was the first office as you came in the door and he assigned me an office down at a sharp right angle off the main corridor. I also remember as a young fellow reading Horatio Alger's book, Ragged Dick, and in that book the way it said to get ahead in business, one of the ways at least, was to get to the office early and beat the boss in if you could. Well I found that was a very difficult task at Utah. You had to go through the front door and Mr. Littlefield always kept his door open, his light on. The first morning was a Monday morning and I got in about ten minutes ahead of time. I think our starting time was 8:15, but Mr. Littlefield said hello to me as I came in the door. We went on through that week. I got my time narrowed down a little more each day. By Wednesday, I was down to five minutes to 8:00 and on Friday I got there at twenty minutes to 8:00 and Mr. Littlefield said good morning to me every time I came in the door. So that weekend I figured out that there was a better way to do this and I'd get in real early and I'd beat him to the punch. So on Monday morning, I got there twenty-five minutes past 7:00, I walked in the door and the office was dark there was no light on, the door was open and Mr. Littlefield was not there. So I went to my office and at 8:15 I came sauntering down figuring now this is where I get my punch line. He's going to see me going out the door, he's 19 there and I say hello to him this time first. I looked in, the light was on, but Mr. Littlefield wasn't there. So I walked over to his secretary and said, "Where is Mr. Littlefield?" and he said, "Oh, he went to Chicago." [laughter] He left on the seven o'clock train. With all that due diligence I figured we ought to get ahead pretty fast some way or the other. And so I waited for my first year. You had to be in the Utah profit sharing plan one year in order to get your first statement. I waited my first year and I got my first statement. I have it here with me and I'd like to tell you that the date of it is December the 15th 1954. That's exactly twenty-two years ago to this day and here is what it says, extract: "Seasons greetings. Utah Construction Company retirement plan based on profit sharing, December 15, 1954. Dear fellow employee, your account in the retirement plan based on profit sharing on October 31, 1954 stood as follows: balance on October 31, 1953, zero. Added during the year by income, zero. So October 31, 1954, zero. And then it says during 1954, the net profit earned did not reach the levels your profit sharing permits. Your company would be required to make a contribution to the plan." And then it says, "Despite the fact that it is not required to do so, your company through its management is desirous of sharing with you a portion of the profits earned during 1954. To accomplish this, the board has approved a contribution of $50,000." Then it says, "we're going to try to get the IRS approval for that, and if so we will contribute the $50,000 to your fund, but if not we'll have to pay your share in cash. If the amount is received by you in cash, you will have to pay income taxes on it. Your share of the $50,000 contribution would be $201.75." I was beginning 20 to think that Horatio Alger wasn't right after all, $201.75 for getting in all those first eighteen months at 7:30 in the morning didn't seem fair to me, but nobody quit. I didn't, management didn't. About three weeks ago, I received this news release from the company in the mail, it's dated as of December 3, 1976 and here's what it says in the first few lines: "Utah International Inc. reports record earnings for fiscal 1976, San Francisco. E. W. Littlefield, Chairman of the Board, reported today that Utah International earned $178,821,000 or $5.67 per share. This fiscal year ended October 31, 1976." We have come a long way since those days in 1954. But Utah had more than profits. It had the forward look. My view from the ranks runs something like this: Utah's profit sharing and incentive plans were way ahead of their time back in those days. Mr. Littlefield, to my knowledge, had a rare understanding of the corporations standing in the social structure, what the corporation's obligations were to society. Utah's mine lands were restored to better than what nature had them long before that became a primary concern of many people in the United States. Utah's mining operations were conducted on a basis of we'll go sell the merchandise and then we'll get the production and that reduced the risk very greatly. Even today, Utah's section on environment stands out as a very aggressive and important function that helps to finish the project properly in the eyes of the people of this country. Well, I could go on and spend many more minutes saying that, but I think it's time now for me to present my resolution and I would like to do that. Mr. 21 Chairman, I will give you a copy of the resolution so you will have it for the record and I would like to read the resolution. EL: Thank you, Charlie. CT: The resolution says resolve about the stockholders of Utah International Inc., meeting for the last time as public shareholders in San Francisco, California on this 15th day of December 1976, do hereby express their gratitude and sincere appreciation to Edmund W. Littlefield, Chairman of the Board and Chief Executive Officer; Alexander M. Wilson, President and Chief Operating Officer and the Director; Marriner S. Eccles, Honorary Chairman; and to all the officers, directors and employees of Utah International Inc. for their devoted services in behalf of the shareholders. 4: Mr. Chairman, I move the resolution. EL: Thank you, Mr. Travers. I must say Charlie, you always speak well, but you don't speak briefly. [laughter] I think that comes from attending too many meetings of Town Council in Alameda. The motion has been presented to the shareholders, is there a second? Thank you, I must say that those of us at this end of the room, I'm sure have an abiding faith and agreed with its sentiments, but since we do not control the vote. I will put it to vote. All those in favor please say aye. All: Aye 22 EL: Opposed? Thank you. Thank you very, very much. And thank you Charlie. [applause]. There's no other business, the proposed merger has been approved. I thank you. Excuse me. 5: On behalf of all of the stockholders, I wish to thank all of the officers and directors of Utah International for having worked so well for us. I also think at this time, it would be appropriate to bow our heads in silence for one minute in memory of E. O. Wattis who was founder of Utah International and also for all of those who worked and lost their lives to make the company what it is today. Amen. EL: If you would amend that to include all of the founders the chair will entertain it. On the assumption that it is so included, we will so do. Thank you. With the merger approved and not further business, I'll entertain that motion to have the meeting adjourned. 6: I'll back the motion. EL: Thank you, is there a second? 7: Second. EL: All those in favor, please say aye. All: Aye. EL: Opposed? Thank you, the meeting is adjourned. ; This is a myriad of items throughout the UC/UI collection. It includes the minutes of the stockholder's meetings with both Utah International and General Electric, correspondence, a reel-to-reel tape of the merger meeting and the official merger documents. ; 4.25 x 6.5 - 8.5 x 11 in. handwritten or typed on paper ; Reynolds Securities Inc. Transamerica Pyramid 600 Montgomery Street San Francisco, Calif. 94111 Telephone 983-8000 Members New York Stock Exchange, Inc. and other leading exchanges Main Office 120 Broadway New York, N. Y. 10005 December 13, 1976 Mr. Edmund W. Littlefield Utah International 550 California Street San Francisco, Ca. 94104 Dear Ed: I regret that I will be unable to attend the meeting Wednesday because I will be in the East for a Directors meeting. This is an occasion that I hate to miss, but I am sure that many of your other happy stockholders will be there. Sincerely, Gerry Gerald F. Brush GFB: 1c
The number 1 edition of volume XXII of the year 2021, eight research articles, five review articles and one corresponding to the special section, university life. The first research article RELATION BETWEEN THE ENVIRONMENTAL ATTITUDE AND THE PURCHASE OF SOCIALLY RESPONSIBLE PRODUCTS IN THE CONSUMERS OF MEDELLÍN, COLOMBIA, written by Diana María López Celis of the Konrad Lorenz University and Mónica Eugenia Peñalosa Otero of the Jorge Tadeo Lozano University, address the responsible consumption issue and its relationship with the environment. The research was carried out in the city of Medellín - Colombia and 390 people over 18 years of age were surveyed. Data analysis was carried out, the results of which yielded interesting aspects such as a change in people's buying behavior, with a view to preserving the environment. In second place is the article EFFECTS OF THE FEATURES OF VIDEOS ON YOUTUBE THAT INCREASE THEIR POPULARITY: AN EMPIRICAL ANALYSIS by Carlos Fernando Osorio Andrade, Augusto Rodríguez Orejuela, Fernando Moreno Betancourt, professors at the Universidad del Valle, make an immersion in the world of multimedia platforms and use YouTube as a source of information to analyse the effect of some aspects such as: the strategy of the message, the consistency of the brand and the technical characteristics of the video on the popularity or download of videos corresponding to 4 cell phone companies , specifically Tigo, Movistar, Claro , Avantel. Third, in the article TYPOLOGIES OF POVERTY IN CALI: AN ANALYSIS BASED ON SISBEN, written by María Isabel Caicedo Hurtado and María Castillo Valencia of the Universidad del Valle in Colombia, a comparative study of the poverty conditions of the people surveyed by the Identification System of Potential Beneficiaries of Social Programs (SISBEN) for 2009 and 2019. This information is used to estimate the different types of poverty, based on the monetary poverty line and basic needs dissatisfied households in the city of Cali. The conclusions are very interesting in that there is evidence of an impoverishment of the people who enter the SISBEN and the inclusion of the poor in communes or neighborhoods of the city that had not previously been registered. In the fourth article ANALYSIS OF VENEZUELAN MIGRATION IN THE CITY OF PASTO: CHARACTERISTICS AND PERCEPTIONS OF MIGRANTS written by Bayron Paz Noguera; Oscar Alpala Ramos; Evelyn Villota Vivas, presents a socioeconomic characterization of the Venezuelan migrants who are in the city of Pasto and includes the reasons that led them to leave their country. For the research, which is also exploratory, a survey was applied to 180 people in which questions were included that allowed conclusions to be drawn regarding the situation of migrants in the city. It is interesting in that it shows empirically that some reasons for the exodus are insecurity, poverty and discontent with the government of Nicolás Maduro. In the fifth place is presented the article ENTREPRENEURSHIP AND DESIGN: CHARACTERIZATION OF ENTREPRENEURIAL INITIATIVES OF INDUSTRIAL DESIGNERS by María Cristina Ascuntar Rivera and Francisco Rafael Ayala Gallardo who make an analysis of the entrepreneurial initiatives of the students of the industrial design program of the University de Nariño in Colombia, which is presented as one of the degree options at this institution. The documentary review is established for a period of 18 years (2000-2018), 201 research projects were reviewed in different modalities of which only 5% corresponded to the modality of business creation. It is concluded that it is necessary to strengthen entrepreneurship and the modality of business creation, among other recommendations. In the sixth research article, BUSINESS INTENTION AND CULTURAL DIMENSIONS IN MASTER'S STUDENTS IN ADMINISTRATION IN COLOMBIA written by Edwin Ignacio Tarapuez Chamorro, Juan Manuel Aristizábal Tamayo and Adriana Patricia Uribe Urán, the dependence between business intention and the cultural dimensions of MBA students in Colombia, based on Hofstede's studies on culture, and as reference two variables: ease of doing business, included in the Doing Business study of the World Bank (2013) and the assessment of the entrepreneurial environment in Colombia contained in the General Entrepreneurship Monitor (GEM). For the research, a non-probabilistic survey was applied to 485 people from 36 face-to-face programs in 14 cities in Colombia divided between high income and low income, obtaining interesting results regarding the six dimensions studied. In the seventh research article CONSUMER DECISION MAKING AND CONSERVATION IN COSTA RICA presented by Pablo Andrés Sánchez Campos, an analysis of the consumer decision-making of respondents in Costa Rica and the influence of conservatism in this type of decision is carried out. The data are analyzed using statistical techniques and instruments that provide interesting conclusions to the investigation. In the eighth research article SOCIAL MEDIA MARKETING EN EMPRESAS AGRÍCOLAS CUBANAS written by Rudibel Perdigón Llanes and Hubert Viltres Sala, the importance of the use of social networks and the Internet for increasing profits and the visibility of companies is taken up. In the investigation, information was collected from 61 companies of the Agricultural Business Group of the Ministry of Agriculture of Cuba, concluding that it is necessary to reinforce their positioning due to their low index of digital positioning, which hinders their economic growth. Within the group of review articles is the one presented by Luis Améstica Rivas, Andrea King Domínguez, Carlos Cruzat Valenzuela, and Constanza Stuardo Solar from the Universidad de Chile called ADMINISTRATION AND FINANCIAL PERFORMANCE COUNCIL. A BIBLIOMETRIC STUDY. The authors carried out an interesting review of 4,468 articles related to the business area, using bibliometric techniques supported by the VOSviewer software, in order to establish the importance and relationship between decision-making by Boards of Directors and financial performance of the companies. The second review article is the one presented by Claudia Magali Solarte Solarte, Martha Lida Solarte Solarte, Gloria Alicia Rivera Vallejo of the Universidad Cesmag located in Colombia called THE ROLE OF ENTREPRENEURSHIP IN CONFLICT AND POSTCONFLICT: A SYSTEMATIC REVIEW OF LITERATURE. With the help of specialized databases such as Scopus, Scielo, Redalyc, Science Direct and Google Scholar, the authors explored some general terms related to entrepreneurship, in view of their interest in determining how entrepreneurship becomes a possible alternative of productive reintegration for ex-combatants and victims of the armed conflict in different countries of the world. In the third review article, TOURIST COMPETITIVENESS. AN APPROACH FROM THE DEPARTMENT OF BOYACÁ, COLOMBIA written by Ana Milena Serrano Amado, Luz A. Montoya Restrepo, Nidia Paola Amado Cely, the determining factors of the competitiveness of tourist destinations in the Province of Sugamuxi were identified, using the Crouch and Ritchie model. Some existing competitiveness models were reviewed and interesting conclusions were established with a view to generating a growing tourism dynamic in said province. In the fourth review article, TERRITORIAL DEVELOPMENT AND SOLIDARITY ECONOMY: ANALYSIS FROM THE CONCEPT OF DEVELOPMENT, THE ENVIRONMENT AND THE INCORPORATION OF COMMUNITIES IN A TERRITORIAL DEVELOPMENT STRATEGY, the authors Helmer Fernando Llanez Anaya and Claudia Patricia Sacristán Rodríguez, propose a analysis framework to articulate territorial development and the solidarity economy from three dimensions: the idea of development, the environmental dimension and the incorporation of communities in a territorial development strategy. For them, they conducted a document review using databases such as Redalyc, Scielo, Research Gate, scopus and Web of Science through the metasearch engine of the Javeriana University library. In the last review article OFERTA EXPORTABLE DEL CACAO FROM THE DEPARTMENT OF NARIÑO, (2010-2018), the authors Yhancy Eliana Coral Rojas, Gladys Omaira Melo Mosquera, Darlan Arley Agredo Madroñero and Jenny Katherine Moncayo Rosero, from the Universidad de Nariño in Colombia , carry out a secondary review on the cocoa sector in Colombia, using the general database of exports of Nariño of the official platform of the DIAN entity that presents the export declarations of each region in Colombia, the information platform of Legiscomex and the ranking tool by tariff subheading and by department of and the ordering variable in FOB value (US $). With the data obtained, some recommendations are established for the cocoa sector of the department of Nariño. ; La edición No 1 del volumen XXII del año 2021, contiene ocho artículos de investigación, cinco de revisión y uno correspondiente a la sección especial, vida universitaria. El primer artículo de investigación RELACIÓN ENTRE LA ACTITUD AMBIENTAL Y LA COMPRA DE PRODUCTOS SOCIALMENTE RESPONSABLES EN LOS CONSUMIDORES DE MEDELLÍN, COLOMBIA, escrito por Diana María López Celis de la Universidad Konrad Lorenz y Mónica Eugenia Peñalosa Otero de la Universidad Jorge Tadeo Lozano, abordan el tema de consumo responsable y su relación con el medio ambiente. La investigación de desarrolló en la ciudad de Medellín – Colombia y se encuestaron 390 personas mayores de 18 años. Se realizó el análisis de los datos, cuyos resultados arrojaron aspectos interesantes como un cambio en el comportamiento de compra de las personas, con miras a la preservación del medio ambiente. En segundo lugar se encuentra el artículo EFECTOS DE LAS CARACTERÍSTICAS DE VIDEOS EN YOUTUBE QUE AUMENTAN SU POPULARIDAD: UN ANÁLISIS EMPÍRICO de Carlos Fernando Osorio Andrade, Augusto Rodríguez Orejuela, Fernando Moreno Betancourt, profesores de la Universidad del Valle, hacen una inmersión en el mundo de las plataformas multimedia y utilizan YouTube como fuente de información para analizar el efecto de algunos aspectos tales como: la estrategia del mensaje, la consistencia de marca y las características técnicas del video sobre la popularidad o descarga de videos correspondientes a 4 empresas de telefonía celular, específicamente Tigo, Movistar, Claro, Avantel. En tercer lugar, en el artículo TIPOLOGÍAS DE POBREZA EN CALI: UN ANÁLISIS CON BASE EN EL SISBEN escrito por María Isabel Caicedo Hurtado y María Castillo Valencia de la Universidad del Valle en Colombia, se elaboran un estudio comparativo de las condiciones de pobreza de las personas encuestadas por el Sistema de Identificación de Potenciales Beneficiarios de Programas Sociales (SISBEN) para en el año 2009 y para el año 2019. Se utiliza esta información para estimar las diferentes tipologías de pobreza, en función de la línea de pobreza monetaria y necesidades básicas insatisfechas de los hogares de la ciudad de Cali. Las conclusiones son muy interesantes en tanto se evidencia un empobrecimiento de las personas que ingresan al SISBEN y la inclusión de pobres en comunas o barrios de la ciudad que antes no se habían registrado. En el cuarto artículo ANÁLISIS DE LA MIGRACIÓN VENEZOLANA EN LA CIUDAD DE PASTO: CARACTERÍSTICAS Y PERCEPCIONES DE LOS MIGRANTES escrito por Bayron Paz Noguera; Oscar Alpala Ramos; Evelyn Villota Vivas, se presenta una caracterización socioeconómica de los migrantes venezolanos que se encuentran en la ciudad de Pasto y se incluyen las razones que los llevaron a salir de su país. Para la investigación, que además es de tipo exploratorio, se aplicó una encuesta a 180 personas en la que se incluyeron preguntas que permitieron extraer conclusiones respecto a la situación de los migrantes en la ciudad. Es interesante en tanto demuestra empíricamente que algunas razones para el éxodo son la inseguridad, la pobreza y el descontento con el gobierno de Nicolás Maduro. En el quinto lugar se presenta el artículo EMPRENDIMIENTO Y DISEÑO: CARACTERIZACIÓN DE LAS INICIATIVAS EMPRENDEDORAS DE LOS DISEÑADORES INDUSTRIALES de María Cristina Ascuntar Rivera y Francisco Rafael Ayala Gallardo quienes hacen un análisis de las iniciativas emprendedoras de los estudiantes del programa de diseño industrial de la Universidad de Nariño en Colombia, que se presenta como una de las opciones de grado en esta institución. La revisión documental se establece para un período de 18 años (2000- 2018), se revisaron 201 proyectos de investigación en diferentes modalidades de los cuales únicamente el 5% correspondió a la modalidad de creación de empresa. Se concluye que es preciso fortalecer el emprendimiento y la modalidad de creación de empresas, entre otras recomendaciones. En el sexto artículo de investigación, INTENCIÓN EMPRESARIAL Y DIMENSIONES CULTURALES EN ESTUDIANTES DE MAESTRÍA EN ADMINISTRACIÓN EN COLOMBIA escrito por Edwin Ignacio Tarapuez Chamorro, Juan Manuel Aristizábal Tamayo y Adriana Patricia Uribe Urán, se analiza la dependencia entre la intención empresarial y las dimensiones culturales de los estudiantes de Maestría en Administración (MBA) en Colombia, tomando como base los estudios de Hofstede sobre la cultura, y como referentes dos variables: la facilidad para hacer negocios, incluida en el estudio Doing Business del Banco Mundial (2013) y la valoración del entorno emprendedor en Colombia contenida en el General Entrepreneurship Monitor (GEM). Para la investigación se aplicó una encuesta no probabilística a 485 personas de 36 programas presenciales en 14 ciudades de Colombia divididas entre altos ingresos y bajos ingresos, obteniendo resultados interesantes en cuanto a las seis dimensiones estudiadas. En el séptimo artículo de investigación TOMA DE DECISIONES DE CONSUMIDORES Y CONSERVADURISMO EN COSTA RICA presentado por Pablo Andrés Sánchez Campos, se realiza un análisis la toma de decisiones de consumo de encuestados en Costa Rica y la influencia del conservadurismo en este tipo de decisiones. Los datos se analizan utilizando técnicas e instrumentos estadísticos que aportan interesantes conclusiones a la investigación. En el octavo artículo de investigación SOCIAL MEDIA MARKETING EN EMPRESAS AGRÍCOLAS CUBANAS escrito por Rudibel Perdigón Llanes y Hubert Viltres Sala, se retoma la importancia que tiene el uso de las redes sociales e internet para el incremento de utilidades y la visibilidad de las empresas. En la investigación se recolectó información de 61 empresas del Grupo Empresarial Agrícola del Ministerio de la Agricultura de Cuba, concluyendo que es necesario reforzar el posicionamiento de las mismas debido a su bajo índice de posicionamiento digital, lo que obstaculiza su crecimiento económico. Dentro del grupo de los artículos de revisión se encuentra el presentado por Luis Améstica Rivas, Andrea King Domínguez, Carlos Cruzat Valenzuela, Constanza Stuardo Solar de la Universidad de Chile denominado CONSEJO DE ADMINISTRACIÓN Y DESEMPEÑO FINANCIERO. UN ESTUDIO BIBLIOMÉTRICO. Los autores realizaron una interesante revisión de 4.468 artículos relacionados con el área de negocios, utilizaron técnicas bibliométricas apoyadas por el software VOSviewer, con el propósito de establecer la importancia y relación entre la toma de decisiones por parte de los Consejos de Administración y el desempeño financiero de las compañías. El segundo artículo de revisión es el presentado por Claudia Magali Solarte Solarte, Martha Lida Solarte Solarte, Gloria Alicia Rivera Vallejo de la Universidad Cesmag ubicada en Colombia denominado PAPEL DEL EMPRENDIMIENTO EN EL CONFLICTO Y POSTCONFLICTO: UNA REVISIÓN SISTEMÁTICA DE LITERATURA. Con la ayuda de las bases de datos especializadas como Scopus, Scielo, Redalyc, Science Direct y Google Scholar, las autoras exploraron algunos términos generales relacionados con el emprendimiento, en vista de su interés por determinar la manera cómo el emprendimiento se convierte en una posible alternativa de reinserción productiva para excombatientes y víctimas del conflicto armado en diferentes países del mundo. En el tercer artículo de revisión, LA COMPETITIVIDAD TURÍSTICA. UNA APROXIMACIÓN DESDE EL DEPARTAMENTO DE BOYACÁ, COLOMBIA escrito por Ana Milena Serrano Amado, Luz A. Montoya Restrepo, Nidia Paola Amado Cely, se identificaron los factores determinantes de la competitividad de los destinos turísticos en la Provincia de Sugamuxi, utilizando el modelo de Crouch y Ritchie. Se revisaron algunos modelos de competitividad existentes y se establecieron interesantes conclusiones con miras a generar una dinámica turística creciente en dicha provincia. En el cuarto artículo de revisión, DESARROLLO TERRITORIAL Y ECONOMÍA SOLIDARIA: ANÁLISIS DESDE EL CONCEPTO DE DESARROLLO, EL MEDIO AMBIENTE Y LA INCORPORACIÓN DE LAS COMUNIDADES EN UNA ESTRATEGIA DE DESARROLLO TERRITORIAL, los autores Helmer Fernando Llanez Anaya y Claudia Patricia Sacristán Rodríguez, proponer un marco de análisis para articular el desarrollo territorial y la economía solidaria desde tres dimensiones: la idea de desarrollo, la dimensión ambiental y la incorporación de las comunidades en una estrategia de desarrollo territorial. Para ellos realizaron una revisión documental utilizando bases de datos como Redalyc, Scielo, Research Gate, scopus y Web of Science a través del metabuscador de la biblioteca de la Universidad Javeriana. En el último artículo de revisión OFERTA EXPORTABLE DEL CACAO DEL DEPARTAMENTO DE NARIÑO, (2010-2018), los autores Yhancy Eliana Coral Rojas, Gladys Omaira Melo Mosquera, Darlan Arley Agredo Madroñero y Jenny Katherine Moncayo Rosero, de la Universidad de nariño en Colombia, realizan una revisión secundaria sobre el sector cacaotero en Colombia, utilizando la base de datos general de exportaciones de Nariño de la plataforma oficial de la DIAN entidad que presenta las declaraciones de exportación de cada región en Colombia, la plataforma de información de Legiscomex y la herramienta ranking por subpartida arancelaria y por departamento de y la variable de ordenamiento en valor FOB (US$). Con los datos obtenidos se establecen algunas recomendaciones para el sector cacaoterio del departamento de Nariño. ; O número 1 do volume XXII do ano 2021 contém cinco artigos de pesquisa, cinco artigos de revisão e um correspondente à seção especial Vida universitária. Primeiro artigo de pesquisa RELAÇÃO ENTRE A ATIVIDADE AMBIENTAL E A COMPRA DE PRODUTOS SOCIALMENTE RESPONSÁVEIS POR CONSUMIDORES DE MEDELLÍN, COLÔMBIA, escrito por Diana María López Celis da Universidade Konrad Lorenz e Mónica Eugenia Peñalosa Otero da Universidade Jorge Tadeo Empréstimo temático de consumo responsável e sua relação com o meio ambiente. Pesquisa de desenvolvimento na cidade de Medellín - Colômbia e 390 pessoas tinham mais de 18 anos. Foi realizada a análise dos dados, cujos resultados trouxeram aspectos interessantes como a mudança no comportamento de compra das pessoas, com vistas à preservação do meio ambiente. Em segundo lugar, o artigo EFEITOS DAS CARACTERÍSTICAS DOS VÍDEOS NO YOUTUBE QUE AUMENTAM SUA POPULARIDADE: A ANÁLISE EMPÍRICA de Carlos Fernando Osorio Andrade, Augusto Rodríguez Orejuela, Fernando Moreno Betancourt, professores da Universidad del Valle, fazem uma imersão no mundo de plataformas multimídia e usar o YouTube como fonte de informação para analisar a eficácia de alguns aspectos como: a estratégia da mensagem, a consistência da marca e as características técnicas do vídeo sobre a popularidade do download de vídeos correspondentes a 4 empresas de telefonia , especificamente Tigo, Movistar, Claro, Avantel. Em terceiro lugar, no artigo TIPOLOGIAS DE POBREZA EM CALI: UMA ANÁLISE COM BASE NO SISBEN, escrito por María Isabel Caicedo Hurtado e María Castillo Valencia, da Universidad del Valle na Colômbia, foi desenvolvido um estudo comparativo das condições de pobreza na Colômbia. eles. pessoas entrevistadas pelo Sistema de Identificação de Potenciais Beneficiários de Programas Sociais (SISBEN) para o ano de 2009 e para o ano de 2019. Essas informações são utilizadas para estimar os diferentes tipos de pobreza, de acordo com a linha de pobreza monetária e necessidades básicas de pessoas insatisfeitas. a cidade de Cali. As conclusões são muito interessantes, tanto que há indícios de um empobrecimento das pessoas que ingressam no SISBEN e da inclusão dos pobres nas comunas da cidade que não eram cadastrados anteriormente. No quarto artigo ANÁLISE DA MIGRAÇÃO VENEZUELANA NA CIDADE DE PASTO: CARACTERÍSTICAS E PERCEPÇÕES DOS MIGRANTES, escrito por Bayron Paz Noguera; Oscar Alpala Ramos; Evelyn Villota Vivas apresenta uma caracterização socioeconômica dos migrantes venezuelanos que se encontram na cidade de Pasto e inclui os motivos que os levaram a deixar seu país. Para a pesquisa, que também é exploratória, foi aplicada uma survey a 180 pessoas, que incluiu questões que permitissem tirar conclusões sobre a situação dos migrantes na cidade. É interessante, tanto empiricamente, que alguns motivos para o êxodo da insegurança, pobreza e descontentamento com o governo de Nicolás Maduro. Em quinto lugar, o artigo EMPREENDEDORISMO E DESIGN: CARACTERIZAÇÃO DAS INICIATIVAS DE DESIGNERS INDUSTRIAIS de María Cristina Ascuntar Rivera e Francisco Rafael Ayala Gallardo, que faz uma análise das iniciativas empreendedoras de estudantes industriais de seus alunos. de Nariño na Colômbia, que se apresenta como uma das opções de graça nesta instituição. A revisão documental está prevista para um período de 18 anos (2000-2018), foram revisados 201 projetos de pesquisa em diferentes modalidades, dos quais apenas 5% correspondem ao método de criação de empresas. Conclui-se que é necessário fortalecer o empreendedorismo e a criação de negócios, entre outras recomendações. No sexto artigo de pesquisa, INTENÇÃO EMPRESARIAL E DIMENSÕES CULTURAIS EM ALUNOS DE MESTRE EM ADMINISTRAÇÃO NA COLÔMBIA, escrito por Edwin Ignacio Tarapuez Chamorro, Juan Manuel Aristizábal Tamayo e Adriana Patricia Uribe Urán, a dependência entre a intenção empresarial e as dimensões culturais de Alunos de MBA na Colômbia, com base nos estudos de Hofstede sobre cultura, e como referência duas variáveis: facilidade de fazer negócios, incluída no estudo Doing Business do Banco Mundial (2013) e a avaliação do ambiente empresarial na Colômbia contido no General Entrepreneurship Monitor (GEM). Para a pesquisa, foi aplicada uma pesquisa não probabilística a 485 pessoas de 36 programas presenciais em 14 cidades da Colômbia divididas entre alta e baixa renda, obtendo resultados interessantes em relação às seis dimensões estudadas. No sétimo artigo de pesquisa TOMADA DE DECISÕES E CONSERVAÇÃO DO CONSUMIDOR NA COSTA RICA apresentada por Pablo Andrés Sánchez Campos, é feita uma análise da tomada de decisão dos respondentes do consumidor na Costa Rica e a influência do conservadorismo neste tipo de decisão. Os dados são analisados por meio de técnicas e instrumentos estatísticos que fornecem conclusões interessantes para a investigação. No oitavo artigo de investigação SOCIAL MEDIA MARKETING EN EMPRESAS AGRÍCOLAS CUBANAS da autoria de Rudibel Perdigón Llanes e Hubert Viltres Sala, retoma-se a importância da utilização das redes sociais e da Internet para aumentar os lucros e a visibilidade das empresas. Na investigação foram coletadas informações de 61 empresas do Grupo Empresarial Agrícola do Ministério da Agricultura de Cuba, concluindo que é necessário reforçar seu posicionamento devido ao seu baixo índice de posicionamento digital, que dificulta seu crescimento econômico. Dentro do grupo de artigos de revisão está o apresentado por Luis Améstica Rivas, Andrea King Domínguez, Carlos Cruzat Valenzuela e Constanza Stuardo Solar da Universidade do Chile denominado CONSELHO DE ADMINISTRAÇÃO E DESEMPENHO FINANCEIRO. UM ESTUDO BIBLIOMÉTRICO. Os autores realizaram uma interessante revisão de 4.468 artigos relacionados à área de negócios, utilizando técnicas bibliométricas apoiadas no software VOSviewer, a fim de estabelecer a importância e a relação entre a tomada de decisão dos Conselhos de Administração e o desempenho financeiro. das empresas. O segundo artigo de revisão é o apresentado por Claudia Magali Solarte Solarte, Martha Lida Solarte Solarte, Gloria Alicia Rivera Vallejo da Universidade Cesmag localizada na Colômbia denominado O PAPEL DO EMPREENDEDORISMO NO CONFLITO E PÓS-CONFLITO: UMA REVISÃO SISTEMÁTICA DA LITERATURA. Com a ajuda de bancos de dados especializados como Scopus, Scielo, Redalyc, Science Direct e Google Scholar, os autores exploraram alguns termos gerais relacionados ao empreendedorismo, tendo em vista seu interesse em determinar cómo o empreendedorismo se torna um possível alternativa produtiva de reintegração para ex-combatentes e vítimas do conflito armado em diversos países do mundo. No terceiro artigo de revisão, COMPETITIVIDADE TURÍSTICA. UMA ABORDAGEM DO DEPARTAMENTO DE BOYACÁ, COLÔMBIA escrito por Ana Milena Serrano Amado, Luz A. Montoya Restrepo, Nidia Paola Amado Cely, foram identificados os fatores determinantes da competitividade dos destinos turísticos da Província de Sugamuxi, a partir do modelo Crouch e Ritchie. Foram revistos alguns modelos de competitividade existentes e estabelecidas conclusões interessantes com vista a gerar uma dinâmica turística crescente na referida província. No quarto artigo de revisão, DESENVOLVIMENTO TERRITORIAL E ECONOMIA SOLIDÁRIA: ANÁLISE A PARTIR DO CONCEITO DE DESENVOLVIMENTO, MEIO AMBIENTE E INCORPORAÇÃO DE COMUNIDADES EM UMA ESTRATÉGIA DE DESENVOLVIMENTO TERRITORIAL, os autores Helmer Fernando Llanez Anaya e Claudia Patricia a Rodríguez, propõem quadro de análise para articular o desenvolvimento territorial e a economia solidária a partir de três dimensões: a ideia de desenvolvimento, a dimensão ambiental e a incorporação das comunidades numa estratégia de desenvolvimento territorial. Para eles, realizaram uma revisão documental em bancos de dados como Redalyc, Scielo, Research Gate, scopus e Web of Science por meio do mecanismo de metabusca da biblioteca da Universidade Javeriana. No último artigo de revisão OFERTA EXPORTAVEL DE CACAU DO DEPARTAMENTO DE NARIÑO, (2010-2018), os autores Yhancy Eliana Coral Rojas, Gladys Omaira Melo Mosquera, Darlan Arley Agredo Madroñero e Jenny Katherine Moncayo Rosero, da Universidade de Nariño na Colômbia , realizar uma revisão secundária sobre o setor do cacau na Colômbia, utilizando a base de dados geral de exportações de Nariño da plataforma oficial da entidade DIAN que apresenta as declarações de exportação de cada região da Colômbia, a plataforma de informação do Legiscomex e do ferramenta de classificação por subtítulo tarifário e por departamento e a variável de pedido em valor FOB (US $). Com os dados obtidos, são estabelecidas algumas recomendações para o setor cacaueiro do departamento de Nariño.
Innovation is a core topic for the social and administrative sciences concerned with organizations management. Hence the name of our journal: INNOVAR, depicted as action and reflection. Insights about innovation are diverse, ranging from the importance of change in production techniques pointed out by Marx, to the structural vision by Schumpeter and the Neo-Schumpeterians about creative destruction as one of the drivers of capitalist development (Chang, 2016). In recent decades, innovation has been gaining an increasingly prominent role in economic and organizational processes due to the emergence and consolidation of the so-called "knowledge-based society" (Drucker, 1994; Castells, 1996; Dubina, Carayannis & Campbell, 2012).Innovation demands the confluence of multiple factors and dimensions, such as creativity, science and technology, the interactions between University, business and society, as well as competition, the role of the State and innovation financing, among others. Precisely, the intersection between the role of the State and innovation financing has been one of the research interests of the Italian economist Mariana Mazzucato. In her book The Entrepreneurial State - Debunking Public vs. Private Sector Myths, Mazzucato (2016) advocates for a change in the understanding of the role of the State within innovation processes. Using empirical evidence from the sectors of communications technology (exemplifying companies like Apple), renewable energies and the pharmaceutical sector, Mazzucato points out to the active and paramount role of the State in contemporary innovation, considering that states have been investors and executors of projects in the base of innovations such as the touch screen, the cps, the Internet or Siri, which were later exploited by private companies. Whether in the field of military defense, aeronautics or the energy sector, investments by the State and the resulting projects have been vital for the conception and subsequent diffusion of innovations. The characteristics of high-risk investments that can be undertaken by the State added to the way it brings together and articulates multiple capacities and institutions, constitute transmission chains that are essential for innovation.Mazzucato's contribution is questioning a series of myths around innovation that suggest this phenomenon arises only by the activities of private entrepreneurs and investors. This perspective, now dominant, demands a downsized State focused on encouraging private forces, so that the invisible hand and competition promote the emergence of new knowledge leading to innovations. Mazzucato's book (2016) opens wide paths for research since it does not deny the relevance of companies and innovative entrepreneurs, but it calls to recognize, characterize and assess the importance of public organizations and projects in the dynamics of innovation. All of this encourages the academic research interests of INNOVAR, to which we summon Ibero-American academic community of the Management Sciences.Our current issue is made up by four of our traditional sections: Strategy and Organizations, Marketing, Human Factor, and Business Ethics. These gather ten papers by Colombian and international partners.Three research papers are published in Strategy and Organizations section.As a results of an international cooperation, Professors Julio César Acosta, from Externado de Colombia University, Mónica Longo-Somoza, from the Council of Education of the Community of Madrid - Spain, and María Belén Lozano, from the University of Salamanca - Spain, introduce their work "Does Family Ownership Affect Innovation Activity? A Focus on the Biotechnological Industry". This work tried to identify the profile of innovative firms in order to analyze whether family ownership is a feature related to innovation initiatives and processes. For that purpose, a hierarchical cluster analysis is performed in a sample of 243 Spanish companies within the biotechnology sector. It is concluded from the study that innovative Spanish firms belonging to this sector are non-family-owned firms. The negative relationship between innovation and family ownership could be explained by the conservative behavior of family-owned companies, which avoid taking the risks demanded by innovation.Professors Valentin Azofra, from the University of Valladolid - Spain, Magda Lizet Ochoa, from the Autonomous University of Tamaulipas - Mexico, and Begoha Prieto and Alicia Santidrian, from the University of Burgos - Spain, present the paper "Creating Value through the Application of Intellectual Capital Models". This research aims to link both the adoption level and the use of intellectual capital models with the creation of value in companies under a long-term perspective. Empirical work involved the selection of companies showing commitment towards the use of information systems on intellectual capital. Based on information from 79 Spanish companies a model was developed and then applied in order to relate the variables of growth in sales, productivity per employee and intellectual capital index, among others, to the adoption level and use of indicators on intellectual capital. Results show that companies with higher levels of intellectual capital models report better indexes related to aforementioned variables, which represent, in turn, greater creation of value.Additionally, independent researcher Giuseppe Vanoni and Professor Carlos Rodriguez from the National University of Colombia authored the paper "Growth Strategies Implemented by Economic Groups in Ecuador (2007-2016)", a study intended to identify growth strategies of 132 economic groups in Ecuador during the time frame previously stated. After a complete literature review and the introduction of the conceptual notions of "economic group" and "growth strategy", empirical work shows that a specialization-based concentration strategy prevails among the studied groups. Furthermore, this work allowed concluding that Ecuadorian economic groups belong to some specific families, and that the economic stability experienced by this country over the course of the period under study had a direct influence on the concentration strategy by specialization adopted by economic groups.Marketing section in this issue of INNOVAR introduces four papers.Brazilian researchers Celso Ximenes and Josemeire Alves, and Professors Gabriel Aguiar, from the Faculdade Mauricio de Nassau, and Danielle Miranda de Oliveira, from the Uni-versidade Estadual do Ceará in the city of Fortaleza - Brazil, take part in this issue with the work "You Solved my Problem, but I Won't Buy from You Anymore! Why Don't Consumers Want to Go Back Doing Business in Online Stores?". This study set as its main goal to understand the motives driving online consumers not to make new purchases when experiencing troubles with purchase processes, even when inconveniences were solved. Following a qualitative approach and based on a sample of 200 complaints over four e-commerce enterprises, a descriptive focus allowed classifying the possible problems and solutions deployed by companies. Results point that consumers manifest their wish of not making further purchases with the same company due to problems with logistics as well as delays with problemsolving and handling complaints.From the University of Seville in Spain, Professors Carlos Javier Rodríguez and Encarnación Ramos add to this current issue the paper "Influence of Religiosity and Spirituality on Consumer Ethical Behavior", whose objective is to analyze consumers' ethical behavior. For this reason, a model of structural equations relating the scales of religiosity and spirituality and contrasting the results of 286 surveys to Spanish citizens is developed. The study implied resizing the Consumer Ethics Scale based on the results found in the literature in order to fit the purposes of this work. The paper concludes by presenting evidence on the existence of a relationship between religiosity-spirituality and the ethical behavior shown by consumers.Professors Alejandro Tapia, associated to the University Loyola Andalucía, and Elena Martín Guerra, from the University of Valladolid, both institutions in Spain, are the authors of "Neuroscience and Advertising. An Experiment on Attention and Emotion in Television Advertising". This paper presents the results of a neuroscience experiment applied to advertising, whose purpose was to study how attention and the generation of emotional responses influence the recall of w spots. The experiment was carried out in a group of 30 students aged 18-22, who were exposed to advertising spots of the University of Valladolid. Results from this exercise show important aspects influencing attention and emotion towards the spots, both positively and negatively, among them: comic content, language, loudness or negative and sad contents, and some others.From the Center of Economic and Management Sciences at the University of Guadalajara - Mexico, Professors José Sánchez, Guillermo Vázquez and Juan Mejía sign the work "Marketing and Elements Influencing the Competitiveness of Commercial Micro, Small and Medium-Sized Enterprises in Guadalajara, Mexico". This study seeks to state the correlation between different key marketing elements that impact micro, small and medium-sized enterprises of clothing items in Guadalajara, Mexico. Based on structural equation modelling, strategies, knowledge and planning in marketing were identified as determinants for the competitiveness of this type of companies. Empirical work used a sample of 380 companies of the retail-clothing sector. The results confirm a positive and significant correlation between key marketing factors and competitiveness, where marketing factors are decisive for companies within the sector, which have been regarded as the weakest link in Mexican economy.Our Human Factor section gathers two studies derived from research processes.We include the paper titled "Subjectivity and Power in Business Organizations: A Case Study", authored by Adriana Valencia Espinosa, Professor at the University of Valle -Colombia. This work was praised as one of the best lectures presented during the First International Congress on Organizations Management that was venued at the National University of Colombia. The objective of this research was to understand the impact of business organizations on the subjectivity of employees, emphasizing the implications of labor breakdown (the termination of a contract). The case study is carried out at a renowned company in Valle del Cauca - Colombia, whose core business, among other lines, is mass printing and editorial processes. This paper addresses testimonies by key participants, that is, workers who experienced labor ruptures with the company. The article also identifies some mechanisms deployed by the organization in the process of sensemaking and the creation of meaning for subjectivity mobilization.Professors Matias Ginieis, María Victoria Sánchez and Fernando Campa from the Rovira i Virgili University, in Spain, present in this issue the paper "How much is the Staff According to the Type of Airline and its Geographical Location in Europe? A Comparative Analysis". This research study was aimed at determining the link between the costs per employee, the types of airlines (traditional or low cost) and the different geographical locations of the headquarters of the studied airlines (Western Europe, Eastern Europe, the United Kingdom and the Nordic countries). A total of 152 airlines were analyzed during the period 2008-2013. Based on statistical correlation tests it was possible to determine there is no relationship between the type of airline and staff-related costs.Last but not least, our Business Ethics section presents a research paper for this issue of INNOVAR.At the University of Zaragoza in Spain, Professors Francisco José López and Ana Bellosta contribute to this issue with the work titled "Corporate Social Responsibility and Good Corporate Governance practices in Spanish Ethical Mutual Funds: Analysis of Investee Companies". This paper studies the type of firms composing the portfolio of Spanish ethical mutual funds, characterizing such companies on the basis of the Corporate Governance model they follow, their organizational structure and some of their economic and financial variables. Different models of Corporate Governance by investee companies and their relationship with financial variables are presented and then evaluated. Results show that companies under the German corporate governance model are preferred by ethical mutual funds, followed by those companies with Anglo-Saxon corporate governance models, which means that, for allocating resources, ethical mutual funds take an interest in companies that involve different stakeholders in their governance processes.We are sure these contributions will be of great interest for the academic community of the Social and Management Sciences both in Colombia and abroad. ; La innovación es un tópico medular para las ciencias sociales y administrativas preocupadas por la gestión de las organizaciones. De allí el nombre de nuestra publicación: INNOVAR, expresado como acción y reflexión. Las concepciones sobre la innovación son diversas y van desde la importancia del cambio en las técnicas de producción, señalado por Marx, hasta la visión estructural de Schumpeter y de los neoschumpeterianos, según la cual la destrucción creativa es uno de los motores del desarrollo capitalista (Chang, 2016). En las últimas décadas, la innovación ha venido ganando un lugar cada vez más protagónico en los procesos económicos y organizacionales, por el surgimiento y consolidación de la llamada "sociedad del conocimiento" (Drucker, 1994; Castells, 1996; Dubina, Carayannis y Campbell, 2012).La innovación requiere la confluencia de múltiples factores y dimensiones, como la creatividad; la ciencia y la tecnología; las relaciones entre universidad, empresa y sociedad; la competencia; el papel del Estado, y la financiación de la innovación, entre otros. Precisamente, la intersección entre el papel del Estado y la financiación de la innovación ha sido uno de los temas de investigación de la economista italiana Mariana Mazzucato. En su libro El Estado emprendedor. Mitos del sector público frente al privado, Mazzucato (2016) aboga por un cambio en la comprensión del papel del Estado en los procesos de innovación. Con evidencia empírica de los sectores de tecnología de las comunicaciones (ejemplarizando con empresas como Apple), las energías renovables y del sector farmacéutico, Mazzucato señala que el Estado ha tenido un papel activo y determinante en la innovación contemporánea, debido a que ha sido inversor y ejecutor de proyectos que están en la base de innovaciones como la pantalla táctil, el CPS, Internet o Siri, que luego son aprovechadas por empresas privadas. Bien sea en el campo del sector defensa, el aeronáutico o el energético, las inversiones del Estado y los proyectos que ejecuta han sido vitales para la gestación y posterior difusión de las innovaciones. Las características de las inversiones de riesgo, que puede ejecutar el Estado, y la forma como congrega y articula múltiples capacidades e instituciones se constituyen realmente en cadenas de transmisión vitales para la innovación.La aportación de Mazzucato (2016) consiste en cuestionar una serie de mitos sobre la innovación, que plantean que tal proceso emerge solo en virtud del actuar de emprededores e inversores privados. Desde esa mirada, hoy dominante, se reclama un Estado mínimo, concentrado en incentivar las fuerzas privadas, para que la mano invisible y la competencia promuevan el surgimiento de nuevos conocimientos que desemboquen en innovaciones. El libro de Mazzucato (2016) abre un sinfín de oportunidades de investigación, puesto que no niega la relevancia de la empresa y los emprendedores innovadores, sino que nos convoca a reconocer, caracterizar y evaluar la importancia de las organizaciones y los proyectos públicos en la dinámica de la innovación. Todo ello alienta la investigación académica que interesa a INNOVAR, y a la que convocamos a la comunidad académica de las ciencias de la gestión en Iberoamérica.La presente edición está organizada en cuatro de nuestras tradicionales secciones: Estrategia y Organizaciones, Marketing, Factor Humano y Ética Empresarial, en las que publicamos diez artículos de nuestros colaboradores nacionales e internacionales.En la sección de Estrategia y Organizaciones, se publican tres trabajos, resultado de investigación.Fruto de una colaboración internacional, los profesores Julio César Acosta, de la Universidad Externado de Colombia; Mónica Longo-Somoza, de la Consejería de Educación de la Comunidad de Madrid, España, y María Belén Lozano, de la Universidad de Salamanca, España, aportan el trabajo titulado "Does family ownership affect innovation activity? A focus on the biotechnological industry". Este trabajo buscó identificar el perfil de las empresas innovadoras, para analizar si la propiedad familiar es una característica que se relaciona con las iniciativas y procesos de innovación. En la investigación se realiza un análisis clúster jerárquico con una muestra de 243 empresas españolas del sector de la biotecnología. Se concluye que las empresas españolas que innovan en este sector no son empresas de propiedad familiar. La relación negativa que se encuentra entre innovación y propiedad familiar, puede ser explicada porque las empresas familiares en tal industria son conservadoras y evitan tomar riesgos como los que la innovación reclama.Los profesores Valentín Azofra, de la Universidad de Valladolid, España; Magda Lizet Ochoa, de la Universidad Autónoma de Tamaulipas, México, y Begoña Prieto y Alicia Santidrián, de la Universidad de Burgos, España, aportan el artículo "Creando valor mediante la aplicación de modelos de capital intelectual". La investigación pretende vincular el nivel de implantación y uso de modelos de capital intelectual con la creación de valor en la empresa, desde una perspectiva de largo plazo. Para el trabajo empírico se seleccionaron empresas que muestran compromiso hacia la utilización de sistemas de información sobre el capital intelectual. Con base en información de 79 empresas españolas, se realizó y aplicó un modelo para relacionar las variables de crecimiento en ventas, productividad por empleado, índice de capital intelectual, entre otras, con el nivel de uso e implantación de indicadores sobre capital intelectual. Los resultados evidencian que las empresas con mayores niveles de implantación de modelos de capital intelectual presentan mejores índices de productividad, crecimiento en ventas y eficiencia del capital intelectual, es decir, mayor creación de valor.Por otra parte, en una colaboración interinstitucional, el investigador independiente Giuseppe Vanoni, y el profesor Carlos Rodríguez, de la Universidad Nacional de Colombia, suscriben el artículo titulado "Estrategias de crecimiento implementadas por los grupos económicos del Ecuador (2007-2016)", con la que se pretende identificar las estrategias de crecimiento de 132 grupos económicos en el Ecuador, durante el periodo señalado. Luego de una importante revisión de la literatura y de la definición conceptual de "grupo económico" y de "estrategia de crecimiento", el trabajo empírico muestra que prevalece una estrategia de concentración, basada en la especialización. Se concluye que los grupos económicos en Ecuador son pertenecientes a familias concretas. La estabilidad que vivió el país en los años del estudio influyó en la estrategia de concentración por especialización de los grupos económicos.La sección de Marketing del presente número de INNOVAR está conformada por cuatro artículos.Los investigadores brasileños Celso Ximenes y Josemeire Alves, y los profesores Gabriel Aguiar, Facultade Mauricio de Nassau, y Danielle Miranda de Oliveira, de la Universi-dade Estadual do Ceará, en Fortaleza-Brasil, participan con el trabajo "Resolveram meu problema, porém nao compro mais! Por que os consumidores nao desejam voltar a fazer negócios com Lojas Virtuais? El trabajo se planteó como objetivo comprender los motivos que llevan a los consumidores online a no realizar nuevas compras, cuando tuvieron problemas en el proceso, pese a que tales problemas hubiesen sido resueltos. Desde un enfoque cualitativo, con base en 200 quejas de cuatro empresas que venden sus productos en Internet, se realizó un trabajo descriptivo y cualitativo que permitió categorizar los posibles problemas y las soluciones desplegadas por las empresas. Los consumidores expresan su voluntad de no realizar otra compra con la misma empresa por problemas logísticos, demora en resolución del problema y demora en la atención de la queja.De la Universidad de Sevilla, España, los profesores Carlos Javier Rodríguez y Encarnación Ramos aportan a esta edición el artículo titulado "Influencia de la religiosidad y la espiritualidad en el comportamiento ético del consumidor". El objetivo de la investigación es analizar el comportamiento ético del consumidor, para lo que realiza un modelo de ecuaciones estructurales que relaciona las escalas de religiosidad y espiritualidad, y que contrasta los resultados de 286 encuestas realizadas a ciudadanos españoles. La investigación implicó redimensionar la Consumer Ethics Scale, con base en los resultados encontrados en la literatura y con el propósito de ajuste perseguido en el trabajo. Se concluye el artículo presentando evidencia de la existencia de una relación entre la religiosidad-espiritualidad y el comportamiento ético del consumidor.Los profesores Alejandro Tapia, vinculado a la Universidad Loyola de Andalucía, y Elena Martín Guerra, de la Universidad de Valladolid, ambas instituciones en España, son los autores de "Neurociencia y publicidad. Un experimento sobre atención y emoción en publicidad televisiva". El artículo presenta los resultados de un experimento en neuro-ciencia, aplicado a la publicidad. El propósito era estudiar cómo la atención y la generación de respuesta emocional influyen en el recuerdo de una cuña publicitaria (spot) en televisión. El experimento se desarrolló con un grupo de 30 estudiantes de entre 18 y 22 años, que fueron expuestos a cuñas publicitarias de la Universidad de Valladolid. Los resultados muestran que existen condiciones importantes que impactan en la atención y la emoción hacia los spots, tanto positiva como negativamente, entre ellos, el contenido cómico, el idioma, la fuerza del sonido, la presencia de contenidos negativos y tristes, entre otros.Desde el Centro Universitario de Ciencias Económico-Administrativas, de la Universidad de Guadalajara, México, los profesores José Sánchez, Guillermo Vázquez y Juan Me-jía suscriben el trabajo "La mercadotecnia y los elementos que influyen en la competitividad de las mipymes comerciales en Guadalajara, México". El artículo busca establecer la correlación que existe entre los diferentes factores clave de mercadotecnia que impactan en las micro, medianas y pequeñas empresas de prendas de vestir en Guadalajara, México. A partir de un modelo de ecuaciones estructurales, se establecieron como factores clave las estrategias, el conocimiento y la planeación, todos de mercadotecnia, como variables determinantes de la competitividad de la mipyme. Para el trabajo empírico, se usa una muestra de 380 empresas del sector de prendas de vestir al menudeo. Los resultados verifican que existe una correlación positiva y significativa entre los factores clave de marketing y la competitividad, por lo que resultan determinantes para estas empresas, consideradas por muchos como el eslabón más débil de la economía mexicana.La sección de Factor Humano recoge dos trabajos, resultado de procesos de investigación.Publicamos el artículo titulado "Subjetividad y poder en la organización empresarial: un estudio de caso", de la profesora de la Universidad del Valle, Colombia, Adriana Valencia Espinosa, y que fue una de las mejores ponencias presentadas en el Primer Congreso Internacional de Gestión de las Organizaciones, realizado en la Universidad Nacional de Colombia. El objetivo del trabajo de investigación fue comprender la incidencia de la organización empresarial en la subjetividad de los empleados, enfatizando en las implicaciones de la ruptura laboral (la finalización del contrato). El estudio de caso se realiza en una reconocida empresa del Valle del Cauca, dedicada, entre otros negocios, a la impresión masiva y los procesos editoriales. Se abordan relatos de participantes clave, trabajadores que vivieron rupturas laborales con la empresa. El artículo identifica algunos dispositivos desplegados por la organización en el proceso de creación de sentido y producción de significado que moviliza la subjetividad.De los profesores Matias Ginieis, María Victoria Sánchez y Fernando Campa, de la Universitat Rovira i Virgili, España, en esta edición se publica el artículo "¿Cuánto cuesta el personal según el tipo de aerolínea y su ubicación geográfica en Europa? Un análisis comparativo". La investigación se planteó establecer la relación existente entre los costos por empleado, los tipos de aerolíneas (tradicionales y de bajo costo) y las diferentes zonas geográficas de ubicación en Europa en que están domiciliadas las aerolíneas (Europa occidental, Europa del este, Reino Unido y países nórdicos). Se estudiaron 152 compañías áreas, en el periodo comprendido entre el 2008 y el 2013. A partir de pruebas estadísticas de correlación, se estableció que no hay una relación entre el tipo de aerolínea y el costo del personal.Finalmente, la sección de Ética Empresarial para este número de INNOVAR recoge un artículo de investigación.Desde la Universidad de Zaragoza, España, los profesores Francisco José López y Ana Bellosta aportan el trabajo "Corporate Social Responsibility and Good Corporate Governance Practices in Spanish Ethical Mutual Funds: Analysis of Investee Companies". El artículo analiza los tipos de compañías que conforman el portafolio de los fondos mutuos de inversión ética españoles, caracterizando tales empresas desde el modelo de Gobierno corporativo que siguen, su estructura organizacional y algunas de sus variables económicas y financieras. Se presentan y evalúan diferentes modelos de Gobierno corporativo de las empresas en que se invierte y su relación con variables financieras. Los resultados muestran que las empresas que siguen un modelo de gobierno corporativo alemán son las preferidas por los fondos mutuos de inversión ética, seguidas de las empresas con modelos de Gobierno corporativo anglosajones. Es decir, a los fondos mutuos de inversión ética les interesa que las empresas en que invierten incluyan diferentes grupos de interés en sus procesos de gobernanza.Confiamos en que estos trabajos resulten de interés para la comunidad académica en ciencias sociales y administrativas a nivel nacional e internacional.
This paper surveys empirically the broad features of trade policy in goods for 31 major economies that collectively represented 83 percent of the world's population and 91 percent of the world's GDP in 2013. It addresses the following five questions: Do some countries have more liberal trading regimes than others? Within countries, which industries receive the most import protection? How do trade policies change over time? Do countries discriminate among their trading partners when setting trade policy? Finally, how liberalized is world trade? The analysis documents the extent of cross-sectional heterogeneity in applied commercial policy across countries, their economic sectors, and their trading partners, over time. It concludes that substantial trade policy barriers remain as an important feature of the world economy.
Zambia faces its toughest economic challenges in at least a decade. The economy has come under strain in 2015 as external headwinds and domestic pressures have intensified. The main domestic risks are threefold. Firstly, that the power crisis will worsen. Secondly, a deterioration of confidence in the economy, leading to further weakening of the currency and increased levels of inflation. Lastly, a bad harvest that serves to increase food prices and reduce rural and agricultural incomes, with the greatest impact falling on the poorest households. Commodity-exporting countries' policy makers face increasing challenges across the globe. Zambia is no exception and must grapple with multiple challenges as the economy slows down. Strengthening the fiscal position and restoring fiscal buffers are necessary to increase confidence in the economy, reduce the need for costly borrowing, and build resilience against further exogenous shocks. Economic progress since 2000, driven by mining production and services, has substantially increased the demand for electricity in Zambia. Key to note is that an increase in tariffs to cost-reflective levels is necessary but not sufficient to increase private investment in electricity generation in Zambia. The new generation capacity and emergency measures for 2016 will help in mitigating the impact of the power crisis in the coming year, but global experience shows there is no substitute for effective planning. Particular efforts are needed to improve sector planning and the procurement processes for large power projects.
Kenya s economy has undergone a significant process of structural transformation over the last decade. Since 2002, the economy has shown an accelerating trend with GDP growth increasing steadily from below 1 percent in 2002 to 7 percent in 2007. After a slowdown in GDP growth to 1.5 percent and 2.7 percent in 2008 and 2009 respectively, economic growth started to rebound in 2010. Amidst this positive growth context, in October 2013, the Kenyan Government launched the Second Medium-Term Plan (MTP-2) of the Vision 2030. The aim of Kenya s Vision 2030 is to create a globally competitive and prosperous country with a high quality of life by 2030 and to shift the country s status to upper-middle income level.
This study presents the vision and implementation recommendations for the electronic identity based service delivery framework (EISDF) in Vietnam. It also delineates the roles to be played by the diverse stakeholders (private, public, development community, etc.) in the field. The study recommends various relevant and innovative electronic identity (eID) services that can be implemented to transform and enhance the accountability and efficiency of service delivery across sectors. These recommendations are based on the stocktaking of international experiences and identified possibilities based on the country assessment. Special emphasis is placed on eID systems that operate on mobile phones, and on those that have the potential of being scaled up by both the public and private sectors in Vietnam. The eID systems can help reduce identity fraud and enable individuals to avail of services more securely in a variety of contexts as in mobile banking and mobile applications for health care.
Honduras has experienced moderate economic growth in the past decade, in line with the rest of the region. Despite this growth track record, limited opportunities for decent jobs for the majority of workers have resulted in stagnant poverty and inequality rates that are still the highest in Central America (CA). In parallel, progress in human development indicators has also been mixed in the last decade. In education, while primary enrollment has significantly increased, low coverage at all other levels of education, inequalities in access and low quality persist. In health, Honduras is close to achieving the 2015 child mortality Millennium Development Goals (MDGs), but maternal mortality, noncommunicable diseases (NCDs), and violence pose additional challenges. And despite advances in setting up a social protection system, fiscal sustainability and lack of coordination among interventions prevail, undermining poverty reduction efforts. The ability of the Honduras government to expand safety nets, to increase the access and quality of public education and health services, to engage in active labor market policies, and to improve human development indicators in general, remains limited for a number of reasons. First, overall real social public spending has been on the decline in the last few years. Second, low revenues and fiscal deterioration pose challenges to adequately financing needed social sector improvements. Third, challenges in budget formulation and execution (mainly due to institutional factors) also diminish the impact of social spending. But more importantly, Honduras needs to significantly improve the effectiveness and efficiency of its social spending. This note argues that moving forward Honduras should prioritize three main aspects: a) to rationalize and increase the effectiveness of social public spending by enhancing the pro-poor features of targeting mechanisms; b) to significantly redress the imbalance between recurrent spending, especially the wage bill, and capital expenditure; and c) to continue strengthening information systems tools, legislation, and institutions in an effort to consolidate programs into fewer and higher impact interventions. Sector-specific challenges aligned with these broad objectives are addressed below.
This paper makes the case for why safety nets are an important tool for managing the risk of natural hazards. The use of safety nets is advocated both ex ante, to prevent and mitigate the impact of natural disaster and ex post, to cope with the impacts of natural shocks. Firstly, the paper explores the implications of contextual factors to be taken into account in the design of an effective safety net system to respond to the needs generated by natural disasters. Learning from the responses to a number of recent natural disasters, a typology of the different types of natural hazards which require different approaches to reduce their risk is introduced. Secondly, the paper considers some 'guidelines' for improving the design and implementation of safety nets either to prevent and/or to recover from natural disasters. Finally, some conclusions and recommendations for more effective safety net and suggestions for addressing key issues are outlined.
The main focus of the social protection and labor portfolio is on strengthening client's institutional capacity in the design and implementation of programs, but projects are not well equipped to track progress in this area. Correspondingly, there is a need to strengthen approaches to measuring and monitoring a 'missing middle' of service delivery, precisely those areas for which counterpart institutions are responsible during the course of a project. In particular, better measures of the primary functions of social protection and labor agencies are needed, such as identifying and enrolling beneficiaries, targeting, payment systems, fraud and error control, performance monitoring of service delivery providers, responsiveness to citizens, transparency, efficiency, management information systems and monitoring and evaluation systems. New World Bank initiatives particularly standard core indicators by sector and the introduction of results based investment lending call for substantial improvements in the use of monitoring and evaluation (M&E). Impact evaluations are included in about half of projects and should continue to be used selectively and strategically, particularly when the program is innovative, replicable and/ or scalable to reach a broader set of beneficiaries, addresses a knowledge gap and is likely to have a substantial policy impact. Structuring evaluations around core themes with common outcome measures is fundamental to building a global knowledge base on development effectiveness.
Recent academic research has questioned the role of economic policy as a determinant of long term growth rates. While there seems to be a correlation between several policy variables and growth rates, this correlation disappears when controlling for other factors. As an example, the significance of key economic policy variables such as inflation or government size disappears if we account for the quality of institutions. This paper looks at recent empirical research that questions the conclusion that macroeconomic policy does not matter for growth. By looking at the volatility of economic policy (whether it is fiscal policy or exchange rates), the authors find that policy is still a relevant and robust explanatory variable of cross country differences in economic growth. These results have strong policy implications. Improvements in the conduct of macroeconomic policy can have beneficial growth effects even if institutional reforms are not taking place. These results do not deny the importance of institutional reforms. By setting the right institutions one can ensure the proper conduct of macroeconomic policy without having to rely on the 'quality' of the decision maker.
This report is concerned with the development of the infrastructure which is required in order to support proposed mines in Southern Mongolia. In order for the mines to be developed, it will be necessary to provide towns for the new inhabitants, road and rail links to provide supplies and to transport the mines' products to markets, and electricity for the mines' operations. Water resources need to be investigated and supplied to the mines and towns. And as all of the development advances, consideration needs to be given to mitigating any negative environmental and social impacts. The geographic focus of the report varies according to the particular topic. The mines are all located in a region which this report defines as 'Southern Mongolia', and which includes the images of Omnogovi, Dornogovi, Govisumber and Dundgovi. The majority of the important new mines are located in Omnogovi, and the analysis of housing and social impacts is concentrated in areas close to these mines. In terms of time, the report concentrates on the most important priorities for government action up to 2015. Nevertheless, consideration is given to a longer time-horizon when considering the potential environmental and water resource demands likely to arise as a result of the region's development. The report is not concerned with the longer-term actions required for broader economic development of the region, including the development of value-added industries associated with the mining industry. To get to long-term objectives, it is necessary to start with the short term. This report assumes that the Government will permit development of the mines in the near future.
