The Classification of Cultures Essay Example For Students

The Classification of Cultures Essay Sam Vaknins Psychology, Philosophy, Economics and Foreign Affairs Web SitesCulture is a hot topic. Scholars (Fukoyama, Huntington, to mention but two) disagree about whether this is the end of history or the beginning of a particularly nasty chapter of it. What makes cultures tick and why some of them tick discernibly better than others is the main bone of contention. We can view cultures through the prism of their attitude towards their constituents : the individuals they are comprised of. More so, we can classify them in accordance with their approach towards humanness, the experience of being human. We will write a custom essay on The Classification of Cultures specifically for you for only $16.38 $13.9/page Order now Some cultures are evidently anthropocentric others are anthropo-transcendental. These two lingual coins need elaboration to be fully comprehended. A culture which cherishes the human potential and strives to create the conditions needed for its fullest materialization and manifestation is an anthropocentric culture. Such striving is the top priority, the crowning achievement, the measuring rod of such a culture, its attainment its criterion of success or failure. On the other pole of the dichotomy we find cultures which look beyond humanity. This transcendental look has multiple purposes. Some cultures want to transcend human limitations, others to derive meaning, yet others to maintain social equilibrium. But what is common to all of them regardless of purpose is the subjugation of human endeavour, of human experience, human potential, all things human to this transcendence. Granted : cultures resemble living organisms. They evolve, they develop, they procreate. None of them was created the way it is today. Cultures go through Differential Phases wherein they re-define and re-invent themselves using varied parameters. Once these phases are over the results are enshrined during the Inertial Phases. The Differential Phases are period of social dislocation and upheaval, of critical, even revolutionary thinking, of new technologies, new methods of achieving set social goals, identity crises, imitation and differentiation. They are followed by phases of a diametrically opposed character :Preservation, even stagnation, ritualism, repetition, rigidity, emphasis on structures rather than contents. Anthropocentric cultures have differential phases which are longer than the inertial ones. Anthropotranscendental ones tend to display a reverse pattern. This still does not solve two basic enigmas :What causes the transition between differential and inertial phases ?Why is it that anthropocentricity coincides with differentiation and progress / evolution while other types of cultures with an inertial framework ?A culture can be described by using a few axes :Distinguishing versus Consuming culturesSome cultures give weight and presence (though not necessarily equal) to each of their constituent elements (the individual and social structures). Each such element is idiosyncratic and unique. Such cultures would accentuate attention to details, private enterprise, initiative, innovation, entrepreneurship, inventiveness, youth, status symbols, consumption, money, creativity, art, science and technology. These are the things that distinguish one individual from another. Other cultures engulf their constituents, assimilate them to the point of consumption. They are deemed, a priori, to be redundant, their worth a function of their actual contribution to the whole. Such cultures emphasize generalizations, stereotypes, conformity, consensus, belonging, social structures, procedures, forms, undertakings involving the labour or other input of human masses. Future versus Past Oriented CulturesSome cultures look to the past real or imaginary for inspiration, motivation, sustenance, hope, guidance and direction. These cultures tend to direct their efforts and resources and invest them in what IS. They are, therefore, bound to be materialistic, figurative, substantive, earthly. They are likely to prefer old age to youth, old habits to new, old buildings to modern architecture, etc. This preference of the Elders (a term of veneration) over the Youngsters (a denigrating term) typifies them strongly. These cultures are likely to be risk averse. .u17cc3dcb9aa4351f7f22be7f58c2fdef , .u17cc3dcb9aa4351f7f22be7f58c2fdef .postImageUrl , .u17cc3dcb9aa4351f7f22be7f58c2fdef .centered-text-area { min-height: 80px; position: relative; } .u17cc3dcb9aa4351f7f22be7f58c2fdef , .u17cc3dcb9aa4351f7f22be7f58c2fdef:hover , .u17cc3dcb9aa4351f7f22be7f58c2fdef:visited , .u17cc3dcb9aa4351f7f22be7f58c2fdef:active { border:0!important; } .u17cc3dcb9aa4351f7f22be7f58c2fdef .clearfix:after { content: ""; display: table; clear: both; } .u17cc3dcb9aa4351f7f22be7f58c2fdef { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u17cc3dcb9aa4351f7f22be7f58c2fdef:active , .u17cc3dcb9aa4351f7f22be7f58c2fdef:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u17cc3dcb9aa4351f7f22be7f58c2fdef .centered-text-area { width: 100%; position: relative ; } .u17cc3dcb9aa4351f7f22be7f58c2fdef .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u17cc3dcb9aa4351f7f22be7f58c2fdef .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u17cc3dcb9aa4351f7f22be7f58c2fdef .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u17cc3dcb9aa4351f7f22be7f58c2fdef:hover .ctaButton { background-color: #34495E!important; } .u17cc3dcb9aa4351f7f22be7f58c2fdef .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u17cc3dcb9aa4351f7f22be7f58c2fdef .u17cc3dcb9aa4351f7f22be7f58c2fdef-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u17cc3dcb9aa4351f7f22be7f58c2fdef:after { content: ""; display: block; clear: both; } READ: The Breakfast Club EssayOther cultures look to the future always projected for the same reasons. These cultures invest their efforts and resources in an ephemeral future (upon the nature or image of which there is no agreement or certainty). These cultures are, inevitably, more abstract (living in an eternal Gedankenexperiment), more imaginative, more creative (having to design multiple scenarios just to survive). They are also more likely to have a youth cult : to prefer the young, the new, the revolutionary, the fresh to the old, the habitual, the predictable. They are be risk-centered and risk-assuming cultures. Static Versus Dynamic (Emergent) CulturesConsensus versus Conflictual CulturesSome cultures are more cohesive, coherent, rigid and well-bounded and constrained. As a result, they will maintain an unchanging nature and be static. They discourage anything which could unbalance them or perturb their equilibrium and homeostasis. These cultures encourage consensus-building, teamwork, togetherness and we-ness, mass experiences, social sanctions and social regulation, structured socialization, peer loyalty, belonging, homogeneity, identity formation through allegiance to a group. These cultures employ numerous self-preservation mechanisms and strict hierarchy, obedience, discipline, discrimination (by sex, by race, above all, by age and familial affiliation). Other cultures seem more ruffled, arbitrary, or disturbed. They are pluralistic, heterogeneous and torn. These are the dynamic (or, fashionably, the emergent) cultures. They encourage conflict as the main arbiter in the social and economic spheres (the invisible hand of the market or the American checks and balances), contractual and transactional relationships, partisanship, utilitarianism, heterogeneity, self fulfilment, fluidity of the social structures, democracy. Exogenic-extrinsic Meaning CulturesVersus Endogenic-intrinsic Meaning CulturesSome cultures derive their sense of meaning, of direction and of the resulting wish-fulfillment by referring to frameworks which are outside them or bigger than them. They derive meaning only through incorporation or reference. The encompassing framework could be God, History, the Nation, a Calling or a Mission, a larger Social Structure, a Doctrine, an Ideology, or a Value or Belief System, an Enemy, a Friend, the Future anything qualifies which is bigger and outside the meaning-seeking culture. Other cultures derive their sense of meaning, of direction and of the resulting wish fulfilment by referring to themselves and to themselves only. It is not that these cultures ignore the past they just do not re-live it. It is not that they do not possess a Values or a Belief System or even an ideology it is that they are open to the possibility of altering it. While in the first type of cultures, Man is meaningless were it not for the outside systems which endow him with meaning In the latter the outside systems are meaningless were it not for Man who endows them with meaning. Virtually Revolutionary Culturesversus Structurally-Paradigmatically Revolutionary CulturesAll cultures no matter how inert and conservative evolve through the differential phases. These phases are transitory and, therefore, revolutionary in nature. Still, there are two types of revolution :The Virtual Revolution is a change (sometimes, radical) of the structure while the content is mostly preserved. It is very much like changing the hardware without changing any of the software in a computer. The other kind of revolution is more profound. It usually involves the transformation or metamorphosis of both structure and content. In other cases, the structures remain intact but they are hollowed out, their previous content replaced by new one. This is a change of paradigm (superbly described by the late Thomas Kuhn in his masterpiece: The Structure of Scientific Revolutions). The Post Traumatic Stress Syndrome Differentiating FactorAs a result of all the above, cultures react with shock either to change or to its absence. A taxonomy of cultures can be established along these lines:Those cultures which regard change as a trauma and those who traumatically react to the absence of change, to paralysis and stagnation. .u959ff9f13dacf0c9619ebe1ec60f4fab , .u959ff9f13dacf0c9619ebe1ec60f4fab .postImageUrl , .u959ff9f13dacf0c9619ebe1ec60f4fab .centered-text-area { min-height: 80px; position: relative; } .u959ff9f13dacf0c9619ebe1ec60f4fab , .u959ff9f13dacf0c9619ebe1ec60f4fab:hover , .u959ff9f13dacf0c9619ebe1ec60f4fab:visited , .u959ff9f13dacf0c9619ebe1ec60f4fab:active { border:0!important; } .u959ff9f13dacf0c9619ebe1ec60f4fab .clearfix:after { content: ""; display: table; clear: both; } .u959ff9f13dacf0c9619ebe1ec60f4fab { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u959ff9f13dacf0c9619ebe1ec60f4fab:active , .u959ff9f13dacf0c9619ebe1ec60f4fab:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u959ff9f13dacf0c9619ebe1ec60f4fab .centered-text-area { width: 100%; position: relative ; } .u959ff9f13dacf0c9619ebe1ec60f4fab .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u959ff9f13dacf0c9619ebe1ec60f4fab .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u959ff9f13dacf0c9619ebe1ec60f4fab .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u959ff9f13dacf0c9619ebe1ec60f4fab:hover .ctaButton { background-color: #34495E!important; } .u959ff9f13dacf0c9619ebe1ec60f4fab .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u959ff9f13dacf0c9619ebe1ec60f4fab .u959ff9f13dacf0c9619ebe1ec60f4fab-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u959ff9f13dacf0c9619ebe1ec60f4fab:after { content: ""; display: block; clear: both; } READ: The Game Of Sports Marketing EssayThis is true in every sphere of life : the economic, the social, in the arts, the sciences. Neurotic Adaptive versus Normally Adaptive CulturesThis is the dividing line:Some cultures feed off fear and trauma. To adapt, they developed neuroses. Other cultures feed off hope and love they have adapted normally. Neurotic Cultures Normal CulturesConsuming DistinguishingPast Oriented Future OrientedStatic Dynamic (Emergent)Consensual ConflictiveExogenic-Extrinsic Endogenic-IntrinsicVirtual Revolutionary Structurally-Paradigmatically RevolutionaryPTSS reaction to change PTSS reaction to stagnation So, are these types of cultures doomed to clash, as the current fad goes or can they cohabitate ?It seems that the Neurotic cultures are less adapted to win the battle to survive. The fittest are those cultures flexible enough to respond to an ever changing world and at an ever increasing pace, at that. The neurotic cultures are slow to respond, rigid and convulsive. Being past-orientated means that they emulate and imitate the normal cultures but only when they have become part of the past. Alternatively, they assimilate and adopt some of the attributes of the past of normal cultures. This is why a traveller who visits a neurotic culture (and is coming from a normal one) often has the feeling that he has been thrust to the past, that he is experiencing a time travel. A War of Cultures is, therefore, not very plausible. The neurotic cultures need the normal cultures. The latter are the generators of the formers future. A normal cultures past is a neurotic cultures future. Deep inside, the neurotic cultures know that something is wrong with them, that they are ill-adapted. That is why members of these cultural spheres entertain overt emotions of envy, hostility even hatred coupled with explicit sensations of inferiority, inadequacy, disappointment, disillusionment and despair. The eruptive nature (the neurotic rage) of these cultures is exactly the result of these inner turmoils. On the other hand, soliloquy is not action, often it is a substitute to it. Very few neurotic cultures are suicidal and then for very brief periods of time. To forgo the benefits of learning from the experience of normal cultures how to survive would be suicidal, indeed. This is why I think that the transition to a different cultural model, replete with different morals, will be completed with success. But it will not eliminate all pervious models I foresee cohabitation.

Business Cadence

Business Cadence Business Cadence Business Cadence By Maeve Maddox The meanings of cadence with which I’m most familiar have to do with poetry and music. In poetry, cadence refers to rhythmical construction. For example, â€Å"Iambic pentameter has a cadence similar to that of common English speech.† In music and movement, cadence is the measure of rhythm. For example, â€Å"The importance of the delayed cadence in Wagner is most easily observed by looking at his use of rests.† In speaking, cadence is the rise and fall of the voice. For example, â€Å"What can be done to improve the cadence of a student [whose speech] sounds very choppy?† Because rhythm is important to bodily movement, the word cadence has a clear application to sports. In horseback riding, cadence is â€Å"is the equal measure or proportion which a horse observes in all his motions when he is thoroughly managed.† In cycling, cadence refers to the speed with which the rider turns the pedals. Now for a look at the use of the word in the context of business: Cadence is what gives a team a feeling of demarcation, progression, resolution or flow. A pattern which allows the team to know what they are doing and when it will be done. The purpose of a cadence is to establish a reliable and dependable capability which demonstrates a predictable capacity. Cadence gives some confidence in the upcoming work when we are triggering rather than scheduling work [A certain business consultant] worked with our team to ensure a weekly cadence of accountability was established and effectively in place. As this new use of cadence has not yet made its way into either OED or M-W, I can only guess what it means in these examples. I think it has something to do with making a timetable or a checklist to keep a project or service on track. Perhaps it’s a synonym for organization or routine. Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Vocabulary category, check our popular posts, or choose a related post below:When to Capitalize Animal and Plant Names5 Brainstorming Strategies for WritersWhile vs. Whilst

Operational Decision Making Research Paper Example | Topics and Well Written Essays - 1000 words

Operational Decision Making - Research Paper Example This is expected to be achieved through the company, mission, vision and values. The values at DP world involve its quest to create a sustainable value through global growth, excellence and service. It is accompanied by the company mission of a global approach towards the local business environment that is made up of excellence, profitability and innovation in the effort to drive their core industry philosophy of providing exceptional customer service. Description of Operations The operations at DP are influenced by the company’s vision and mission to develop a reputation of efficiency and expertise. As such, efficient service delivery and competency are the most significant input specifications of the company. Constantly, the company invests in terminal infrastructure, people and facilities to provide quality services in the present and future in order to meet the needs of their customers. Majorly, it deals in a wide range of cargo handling services with its main focus being on the container terminal operations. In addition to containers, most of the DP World terminals also handle general cargo, bulk cargo, passenger and Ro-Ro vessel terminals. Thus, the main operations of this company include imports and exports. The company additionally possesses a leadership in innovation and an unyielding commitment to all their customers across the world. It is because of this that DP world is currently considered a leader in the operations of marine terminals, as well as developments, logistics in addition to other related services. In this relation, t can be sad to be the force that is applied to make changes in the industry (DP World 1). Supply Chain Decisions DP World involves an integral responsibility to the supply chain of the customers. One of the key strategies towards achieving this is the development of solutions for both customers and partners. It involves the integration of responsible business activities within their daily strategies and activities. I t is in the effort to secure a sustainable future. Because of this, the DP World has secured a partnership with the London Gateway team. With the guidance from their corporate values, DP world works with the customers, suppliers and the entire community to recognize sustainable risks and challenges as well as develop a high number of partnership opportunities so as to bring about a sustainable future. As a partner, it has also been certified at the Customs-Trade Partnership Against Terrorism (C?TPAT) and is the only port operator with this recognition. In addition, the company is involved in a number of supply chain securities with most of its terminals being involved in anti terrorism Container Security initiatives. These decisions affect the strategic operations of the company in the sense that they enable the company to roll out its standards across all its terminals. The company is also focused n the provision of responsible business services. It is associated with the provision and availability of efficient infrastructure as well as the sharing of best practice and innovation. They also include full container Load through Dubai that involves a number of fully completed input processes that are shown in the figure below. Operational Decisions At DP World, the operations team focuses on how cargo can be moved into the international logistic way in an efficient and safe way. Decisions are made

Social Problems Essay Example | Topics and Well Written Essays - 750 words

Social Problems - Essay Example The Films The Hellcats of the Navy shown in 1957 is about a submarine commander whose mission is to retrieve revolutionary Japanese mine to be able to be studied. The main conflict of the story is related to the sacrifice made by one man to be able to achieve the safety of the whole group. It is justifying the action of the main character to leave one member as the proper thing to do. Thus the main character Abbott struggles against the outcome of his decision. Although this is the case, there is another conflict with regards to the romantic interest of the fallen and sacrificed man towards the leading female character. The story is set in the time of the World War II starring Ronald Reagan and his wife Nancy Davies. There is significant level of violence shown in the movie but it was not censored due to reasons on the role of violence in films. Basically it can be considered that in any movies in the action genre which is related to military and war, the depiction and use of violenc e is inevitable. Saving Private Ryan is another movie known for the violent scenes. It is about the invasion of Normandy during the World War II. The film was directed by Steven Spielberg and was released in 1998. The film had been noted due to the first 20 minutes which is full of intensity and violence. It depicted the Omaha event but focused on finding a paratrooper named Private Ryan who is the last surviving brother of 3 servicemen. Based on analysis of the movie it was noted that Saving Private Ryan was a well made film which used violence as a tool to gain and to stress the message it wants to convey specifically in relation to the aspects of aesthetics and moral design. The director employed innovative techniques in cinematography that highlighted the importance of violence in the story to depict the level of sacrifice of the heroes in Omaha Beach (Prince, 2003, p.287). In this movie then it can be considered that the war scenes were realistically presented without excuses a nd concerns on the audience based on the fact that war is really violent (Hantke, 2010, p.707). Analysis The two movies are representations of different points in history in cinema. Based on the subject of violence they also represented different levels of depiction and purpose of violent scenes. Based on a reference, violence in films in Hollywood for example had been first noted around 1930s thus the Production Code Administration which approves scripts prior to filming and production. Prior to 1930s violence has already been an issue. For example in 1909, the period of silent films, violence became a way of expressing emotions in films since the manners of depicting stories were limited. During that time, the New York Board of Censorship made a move to establish a policy to hinder violent and gruesome scenes which will not help the message of the story in any way. Also, the actions that may lead to committing crimes such as ‘picking a lock or holding up a person’ wer e also prohibited (Prince, 2003, p.11). Although this is the case, violence still continued. With the advent of the sound technology in films, the effects of violent scenes became more realistic. Violence in movies had been very evident in the period represented by the two films. Between 1960s to 1970s the period when the Hellcats of the Navy was produced the

Development of the Caspian Oil and Gas Sector

Development of the Caspian Oil and Gas Sector Caspian Oil Gas Role of FDI in Economic Development of Azerbaijan, Kazakhstan and Turkmenistan Abstract This paper underlines the foreign direct investment strategy formulation process in the three energy-rich countries of the Caspian Region: Azerbaijan, Kazakhstan and Turkmenistan. The study comparatively analysis the investment climate in three selected countries and more specifically it examines the foreign direct investment in oil and gas industry and its role in economic development of each country. The research examines the investment climate in Azerbaijan, Kazakhstan and Turkmenistan and factors influencing the foreign investor’s decision-making in oil and gas sector. The first part of this paper overviews the Caspian region and its oil and gas reserves. More specifically this part summarises the role of foreign direct investment in oil and gas industry and how it promotes economic development of Caspian basin countries, namely Azerbaijan, Kazakhstan and Turkmenistan. The second part presents the theoretical framework of foreign direct investment. This part also reviews the previous empirical findings on types, determinants and motives of foreign direct investment. The part 3 comparatively analysis foreign direct investment performance in selected countries and factors which may influence the ability of a country to attract foreign investment. This part also overviews the investment climates in Azerbaijan, Kazakhstan and Turkmenistan. Part 4 concludes. Key Words: FDI, Caspian Sea region, Oil and Gas, Azerbaijan, Kazakhstan, Turkmenistan. 1 Introduction The Overview of the Caspian Sea Region It is wide recognized that foreign direct investment (FDI) can play an important role in the development process of many countries and it is much required. Economies in transition, such as those in Central Asia and the Caucasus, are no exception as they realize the important role of FDI in strengthening their transition process. While some of them have sizable deposits of oil, gas and minerals which are major attractions to foreign investors, others, being less endowed, have more difficulty to attract FDI to their fledgling industrial and service sectors. But in even those countries which are well endowed with natural resources, there is a thrust to diversify their economies away from over-dependence on those resources and to develop viable value-added manufacturing industries and services. FDI can play a major catalytic role in this process. Just a decade years ago the areas on each side of the Caspian Sea – Central Asia to its east side and the Transcaucasia to its west were largely unknown. These regions were provinces of the Soviet Empire important to the outside world neither politically nor economically. Now its is well known that the Caspian Sea is largest land-locked body of water on Earth, bordered by Azerbaijan, Russia, Kazakhstan, Turkmenistan and Iran – the Caspian basin countries (see Map 1). Amongst the five countries only Iran is a member of the Organization of Petroleum Exporting Countries. Kazakhstan, Azerbaijan and Turkmenistan became independent after collapse of Soviet Union in 1991. Once a centre of global commerce, the Caspian Sea region has languished in obscurity ever since the rise of the sailing ship rendered the Silk Road obsolete a half millennium ago (Olcott, 1998). After discovery of oil and gas resources in the Caspian offshore and shore areas, this region became very important oil and gas sector in global context. Moreover, owing to energy security and geopolitical reasons, the Caspian region became very attractive for the West. Azerbaijan became one of the world’s first oil sectors after crude oil production started in Baku in the middle of 19th century. The oil production in Central Asia started in the beginning of the 20th century. Azerbaijan recorded about 70% of Soviet oil production by end of 1940. The former Soviet Union controlled almost all natural resources in Soviet Republics. At the time of their independence, Soviet republics were quasi-states (Olcott, 1998). Each republic has its own president and prime minister, local and national legislatures. The political and economic liberalisation of the Soviet Union in the mid-1980s attracted foreign investors and oil and gas companies interested in exploration and production prospects. The collapse of the Soviet Union gave further opportunities for the liberalisation of investment regulations. By the late 1990s the Caspian region was comparatively politically stable region, and a number of countries significantly improved investment regimes to their oil and gas sectors. Historically, energy industry in Azerbaijan, Russia, Kazakhstan, Turkmenistan and Uzbekistan is very important sector for the economy growth of these countries. However, poor management of natural resources and poor investment climate in these countries lead to disparities emergent between the countries in socio-economic terms. Nowadays, it is well recognized that foreign investment plays a vital role in the development of the oil and gas sector for such countries as Azerbaijan, Kazakhstan and Turkmenistan and significantly stimulates social and economic development of each of these countries. 1.2 Research Questions The presence of potentially vast oil and gas reserves is a part of the foreign investment attraction into the Caspian Sea region. On the other hand, it is important to note that while the quantity of proven reserves undoubtedly plays a significant role in estimating a region’s production and export potential, the other decisive factors for attraction foreign direct investment into this region are undeveloped market, cheap labour and cheap inputs and weak competition. This paper focuses on foreign direct investment strategy formulation process in the three energy-rich countries of the Caspian Region: Azerbaijan, Kazakhstan and Turkmenistan; and on what foreign direct investment strategy in each country are based. The study comparatively analysis the investment climate in three selected countries and more specifically it examines the foreign direct investment in oil and gas industry and performance by each country. The significant number of researches in regard to foreign direct investment mostly explains the investment strategy in the developed countries, when limited study has done on investment in less-developed countries or emerging countries. The selected countries Azerbaijan, Kazakhstan and Turkmenistan are transition countries and to a certain extent new participants in the competition to attract foreign investment. These countries can offer many potential advantages to foreign investor, especially in oil and gas sector of business. The research examines the investment climate in Azerbaijan, Kazakhstan and Turkmenistan and factors influencing the foreign investor’s decision-making in oil and gas sector. There is no much research which explores the determinants of investment in Azerbaijan, Kazakhstan and Turkmenistan, the stereotypes and perceptions that foreign investors have about these countries and what could be done to increase the foreign direct investment flow into these countries. This paper surveys these parts by investigating the multinational oil companies operating in Azerbaijan, Kazakhstan and Turkmenistan. The data from different energy agencies were gathered for comparative analysis of oil and gas data as well as foreign direct investment in different countries. This would not only let one to have a picture of various state strategies related to foreign investment, but could also provide the valuable outlook of the most advantageous approach for transition countries in doing business with foreign investors. 1.3 The Legal Status of Caspian Sea A large share of oil and gas reserves in Central Asia and Caucasus are thought to lie under he Caspian Sea. The question of the ownership of those resources, including the right to license and tax their development, is being argued by the Caspian littoral countries. The legal debate over the Caspian Sea can be tracked back to the 1921 Treaty to Moscow, reaffirmed in 1935, which declared that the inland Caspian Sea belonged to Russia (Kemp, 2000). Later Russia sent a note to the United Nations dated from 5th October 1994, where Russian Ministry of Foreign Affairs stated that the Caspian Sea should not be subject to the provisions of international maritime law (International Energy Agency, 1998). The importance of the application of international law is that a â€Å"sea† under the 1982 Law of the Sea Convention would be subject to separation into national zones for the development of its mineral resources. Russia stated that until all five of the Caspian littoral states (Azerbaijan, Russia, Kazakhstan, Turkmenistan, and Iran) came to a common decision on some other arrangement, the legal status of the Caspian Sea was subject only to the provisions of the more general (Treaty of Friendship between Iran and the USSR of 26 February 1921 and Treaty between Iran and the USSR on Trade and Maritime Navigation of 26 March 1940). Nevertheless, the ongoing legal uncertainty does not seem considerably decreased foreign investment in the Caspian Sea region. Advantageous geological prospects, with potential of a major oil and gas resource base, show significant motivations for companies to invest in this important producing region, preferably from the beginning of its development. 1.4 Current Production and Proven Reserves in Caspian Region Caspian oil presents a lot of opportunities for world oil markets and for the region itself (Energy Charter Secretariat, 2008): The appearance of new production sources would expand world oil supplies. Major quantities of Caspian oil would ease the pressure on the Persian Gulf production capacity and provide an additional hedge against oil supply disruptions Profits from oil exports could stimulate economic growth and improve the standard of living in the Caspian energy-rich counties. The availability of Caspian energy supplies in world markets will likewise improve the prospects for economic growth and political stability in the Caspian basin countries. Nowadays the Caspian Sea region is important, but not major supplier of crude oil to world markets, based upon estimates by British Petroleum (BP) and the Energy Information Administration (EIA). In 2005 the Caspian region produced 2.1 million barrels per day, or 2 per cent of total world production (see Table 1). Kazakhstan’s production rapidly increased since the late 1990s, accounted for 67 per cent and Azerbaijan for 22 per cent of regional crude oil production in 2005. The Caspian Sea region’s comparative contribution to world natural gas supplies is larger than that for oil. Gas production of 3.0 trillion cubic feet per year in 2005 was 3 percent of world production (Energy Information Administration, 2006). Turkmenistan is the largest producer; with production of 2.0 trillion cubic feet per year, it accounts for almost two-thirds of the region’s gas production. (see Figure 1). Unlike oil, the region’s proven reserves of natural gas are a higher proportion of the world total than is its natural gas production. The estimate of proven reserves of natural gas in the Caspian Sea region for the end of 2006 published by Energy Information Administration is 232 trillion cubic feet per year, which represents 4 per cent of the world total (see Table 2). Table 1Oil Production in the Caspian Sea Region 1. Proven reserves are defined by the EIA 2. Possible reserves 3. Other estimates (EIA/IEO 2006) 3.45 million barrels per day, (World Oil, 10 March 2004) 3 million ^Only Caspian area oil and gas production Source: Energy Information Administration (EIA): Caspian Sea Region: Survey of Key Oil and Gas Statistics and Forecasts, July 2006. Table 2Gas Production in the Caspian Sea Region ^Only Caspian area gas production Source: Energy Information Administration (EIA): Caspian Sea Region: Survey of Key Oil and Gas Statistics and Forecasts, July 2006. Figure 1 Gas Production in Caspian Sea region (1992-2004) Source: Energy Information Administration (EIA): Caspian Sea Region: Survey of Key Oil and Gas Statistics and Forecasts, July 2006. 1.5 Role of Oil and Gas in the Economic Development of Caspian Region The development of oil and gas resources in the Caspian region is mostly important for the development of economies in the Central Asian and Transcaucasia. In 1995 the energy sector’s share of gross domestic product (GDP) was an estimated 14.6 percent in Azerbaijan, 10.1 percent in Kazakhstan, 10.2 percent in Turkmenistan (International Energy Agency, 1998). Foreign investment attracted to the oil and gas sector in Caspian region could offer significant profits for the region’s governments and stimulate investment in other economic sectors. The attract foreign investment the host Governments should take discreet measures to ensure the development of an sufficient legal and administrative infrastructure, including institution building and personnel training, to handle the inflow of oil related revenues and to help ensure the countries’ efficient and equitable development. International Monetary Fund (2003) expressed concerns that unless regional governments introduce further administrative reforms, they risk being overwhelmed by new oil wealth. Particularly, corruption is a peril. Economic development motivated by foreign investment in the oil and gas industry helps to guarantee the financial independence of the Central Asian and Transcaucasian states. The transition to the market economy and the economic dislocations originated by collapse of Soviet Union left Azerbaijan, Kazakhstan and Turkmenistan without adequate funds to develop oil and gas resources. Governments of these countries are looking for private investment (mainly from foreign companies) that would play significant role in the development of oil and gas industry. Besides financial capital, a foreign investor brings a modern technology to local industry, including environmentally sound production techniques and modern management approaches. The Caspian Sea region countries are competing with each other for foreign investment. Oil and gas companies have a wide choice of where to make investment. The foreign investor considers the opportunities that offer the best financial returns. However, the investment climate is vital for company’s decision on where to invest. As a result, Kazakhstan and Azerbaijan took considerable steps in creating attractive investment climates. Kazakhstan concentrated on building a body of law applicable to all projects, while Azerbaijan focused primarily on modified production sharing agreements (International Monetary Fund, 2003). By the beginning of 1998, cumulative foreign direct investment in the oil and gas sectors of Central Asia and Transcaucasia had reached an estimated 3 billion of American dollars, nearly one third of which was placed in 1997. Future investment commitments in the region from contracts already signed total over 40 billion of America dollars (International Energy Agency, 1998). So far most foreign investment has been in Kazakhstan and Azerbaijan. Gas-endowed Turkmenistan started to attract foreign investment later than the others due to Government dictatorship and poor investment climate. Caspian oil development has gained a great deal of political and commercial momentum since the first foreign companies came there at the end of 1980s (Ruseckas, 2000). Since then the most important external factor influencing Caspian oil development is the price of oil. Principally if oil prices remain at present high level it is possible the more optimistic projects will be started. The Caspian Sea region could possibly produce approximately 4 million barrels per day by 2010. In any case, the Caspian Sea states require a stable legal regime to develop, produce, transport and market its natural resources. 1.5.1 Summary data on Azerbaijan Owing to extensive oil reserves, Azerbaijan is a major oil producer since the middle of the last century. Between 1990 and 1995 Azerbaijan’s gross domestic product dropped 58 percent (International Energy Agency, 1998). Oil production fell by only 25 percent mainly because of continuing oil product exports to neighbouring countries and an increasing use of heavy fuel oil in domestic power stations to alternative for imported gas. Due to the tightening of monetary and budgetary policies, the fiscal deficit dropped from 11.4 percent of gross domestic product in 1995 to less than 2 percent in 1996. In 2006 Azerbaijans real gross domestic product grew by 31 percent when the oil production in this region significantly increased. Azerbaijans anticipate for sustained economic growth is in its managing of large oil and natural gas resources in the Caspian Sea region, through effective management of the resulting revenue stream, and non-oil sector diversification (Energy Information Administration, 2006). During the beginning of transition most Azerbaijan onshore oil fields were in decline and required momentous new investment to develop large-scale offshore projects and to reconstruct existing fields. Since independence Azerbaijan signed several agreements with foreign oil companies. While maintaining full state ownership over energy companies, Azerbaijan was quick to invite foreign investors to assume a direct role in the development of its hydrocarbon reserves (Thompson, 2004). In 1992 most of the Azerbaijan oil sector assets were merged in two state oil companies – Azerineft and Azneftkimiya. The new merger was called the State Oil Company of the Azerbaijan Republic or SOCAR. While Government organizations handle production and exploration agreements with foreign companies, SOCAR is body to all international companies developing new oil and gas projects in Azerbaijan. After the first commercial oil flows through the Baku-Tbilisi-Ceyhan pipeline during summer 2006 and the increasing oil production from the Azeri-Chirag-Guneshli project, oil revenues are expected to contribute to a doubling of Azerbaijan’s gross domestic product by 2008 (Thompson, 2004). Energy Information Administration (2007) reports that though the oil sector represented around 10 percent of Azerbaijan’s gross domestic product in 2005, it is already projected to double to almost 20 percent of gross domestic product in 2007 (see Table 3). To manage the revenues, former President of Azerbaijan Heydar Aliyev formed a State Oil Fund in 1999, which is designed to use money obtained from oil-related foreign investment for poverty reduction, education and raising rural living standards. As of the end of 2006, the State Oil Fund reported assets of almost 2 billion US dollars, but the fund’s assets are expected to increase to 36 billion US dollars by 2010 (Energy Information Administration, 2006). Table 3Azerbaijan: Economy and Energy (in millions US dollars) 2003 2004 2005 2006 2007 2010 Oil Production (thousand barrels per day) 320 319 441 648 860 1,300 Oil Exports (thousand barrels per day) 215 204 314 521 721 N/A Foreign Direct Investment 3,285 3,556 1,680 -219 -4,750 476 FDI in Oil Sector 3,246 3,461 1,459 -573 -5,198 366 Oil Sector Revenue 886 946 1,337 2,921 5,272 19,417 As share of total rev (%) 42% 38% 39% 51% 59% N/A As share of total GDP (%) N/A N/A 9.8% 15% 19.7% 43.3% Oil Fund Assets 816 972 1,394 1,936 3,093 36,387 Source: Energy Information Administration: Short Term Energy Outlook, 2007; International Monetary Fund (IMF), Article IV Consultation, Staff Report, No 07/191, June 2007 1.5.2 Summary Data on Kazakhstan As it was the case in most other former Soviet Union countries, Kazakhstan’s first attempts at economic reform were effectively taken in response to Russias one-sided price reforms in 1992. After Kazak oil production had suddenly declined for two years in the end of 1993, inflation had out of control. The efforts to create an economic union with Russia and other former Soviet Union countries didn’t meet expectations of the Kazakh Government. Looking at the dynamic Asian economies as a model, the Kazakh Government turned to market style policies. However, the government increased hard budget constraints and restrictive monetary policies due to attempts to solve non-payment problem through state financing. The remained net debts after netting out inter-industry arrears were financed from Government budget and the central bank. In 1993 International Monetary Fund (IMF) granted Kazakhstan a one-year standby package. To maintain IMF collaboration and to stop the decline in gross domestic product, the Kazakh government implemented a second stabilisation program in 1995. But this time hard budget constraints and monetary policy were strengthened by excluding of government financing of net positions in inter-enterprise debts and retreating government guarantees for loans granted by foreign and domestic banks. In the middle of 1996, the International Monetary Fund approved an Extended Fund Facility (EFF) of 446 million US dollars for three years (IMF, 2003). According to International Monetary Fund (2003) the decision was made in light of a wide-ranging three-year reform programme submitted by the government, as well as the positive longer term prospects for production and exports of energy and non-ferrous metals. In 1996, Kazakhstan experienced its first positive economic growth since 1989. 1.5.3 Summary Data on Turkmenistan Preceding the collapse of the Soviet Union approximately 8 percent Turkmenistan’s gross domestic product was generated by gas exports to the rest of the USSR mostly to Belarus, Ukraine and the Caucasus. Another 5 percent of gross domestic product was earned from cotton exports. Gas and cotton exports continue to be used to cover the import of considerable amounts of grain and capital equipment from other former Soviet Republics. While estimates for the fall of gross domestic product between 1990 and 1995 vary depending on how adjustments to official gross domestic product are made, International Monetary Fund and European Bank of Reconstruction and Development agree on about -35 percent (IMF, 2003). This is much less than the 58 percent drop in Turkmen gas production. The rest of the economy is basically agricultural. The cotton industry has been less affected by the downfall of the Soviet Union. The government gradually liberalised some prices beginning in 1992. A presidential decree of 1995 removed price controls on all products except for about 50 items, including energy. The government introduced the manat as the national currency in 1993. In 1995 it unified the previously separate official and commercial exchange rates, which subsequently became determined by inter-bank auctions for foreign exchange. Between 1992 and 1995 the government compensated for the shortfall in revenue from taxes on gas production and exports by cutting expenditures and replacing subsidies to the economy with additional allocations of credit at largely negative interest rates. Controlled prices were adjusted repeatedly but declined in real terms for natural gas and for oil products through 1994. The share of gas related revenues in the central budget declined from 60 percent in 1992 to under 20 percent in 1995, which lowered the share of total budgetary revenue in GDP from 40 percent to 10 percent during this period. Due to drastic expenditure cuts in government wages and investment, including maintenance, the central budget deficit remained fairly stable over this period. It also helped that new excise taxes were introduced in 1995 on petrol (55 percent) and diesel (60 percent). This resulted in some recovery of government capital spending. The easy money policy was changed slowly in 1995 and 1996. During this time foreign exchange surrender requirements of state-owned enterprises to the Foreign Exchange Reserve Fund (FERF) were increased to 50 percent for gas and oil exports, and the money allocated directly to the central budget. Prior to that, this fund had been used to award credits to the economy, contributing to monetary expansion. In 1995 and 1996, bank credit allocation was reduced, real interest rates rose (due to credit auctions with deregulated interest rates), and reserve requirements for banks were increased. However, the pursuit of these policies was not smooth, in part due to the limited political autonomy of the Central Bank. Nevertheless, inflation decelerated by 50 percent towards the end of 1995 and is estimated to have been 445 percent in 1996, and 21 percent in 1997. Despite plummeting gas exports in recent years, Turkmenistan’s current account was slightly positive in 1994 and 1995, as long as arrears owed to the country are not taken into account. If such arrears are counted the 1995 balance swings from an estimated surplus of 54 million US Dollars to a deficit of 289 million US Dollars. The situation has probably continued to deteriorate due to weak gas exports. 2 Theoretical Frameworks 2.1 Overview of Foreign Direct Investment Theories There is variety of empirical studies on theoretical models explaining foreign direct investment (FDI) and its determinants. The various approaches from different disciplines such as economics, international business, organisation and management explain numerous characteristics of this phenomenon. The following dissimilar methods, explaining foreign direct investment as the location decision of multinational enterprises are mostly acknowledged in empirical literature on FDI: Ownership advantages as determinants of foreign direct investment (including monopolistic advantage and internalisation theory) based on imperfect competition models and the view that multinational enterprises (MNEs) are firms with market power (Hymer, 1960; Buckley and Casson, 1979; Kindleberger, 1969; Caves, 1971 for ownership advantages) Determinants according to the Neoclassical Trade Theory and the Heckscher-Ohlin model, where capital moves across countries due to differences in capital returns (for example Markusen et al, 1995,pp. 98-128; Aliber, 1970); Determinants of foreign direct investment in Dunning’s ownership-location-internalization (OLI) framework, which brought together traditional trade economics, ownership advantages and internalisation theory (Dunning, 1977; 1979); Determinants of foreign direct investment according to the horizontal FDI model or Proximity- Concentration Hypothesis (Krugman, 1983; Markusen, 1984; Ethier, 1986; Horstmann and Markusen, 1992; Brainard, 1993); Determinants of foreign direct investment according to the vertical FDI model, Factor-Proportions Hypothesis or the theory Development of the Caspian Oil and Gas Sector Development of the Caspian Oil and Gas Sector Caspian Oil Gas Role of FDI in Economic Development of Azerbaijan, Kazakhstan and Turkmenistan Abstract This paper underlines the foreign direct investment strategy formulation process in the three energy-rich countries of the Caspian Region: Azerbaijan, Kazakhstan and Turkmenistan. The study comparatively analysis the investment climate in three selected countries and more specifically it examines the foreign direct investment in oil and gas industry and its role in economic development of each country. The research examines the investment climate in Azerbaijan, Kazakhstan and Turkmenistan and factors influencing the foreign investor’s decision-making in oil and gas sector. The first part of this paper overviews the Caspian region and its oil and gas reserves. More specifically this part summarises the role of foreign direct investment in oil and gas industry and how it promotes economic development of Caspian basin countries, namely Azerbaijan, Kazakhstan and Turkmenistan. The second part presents the theoretical framework of foreign direct investment. This part also reviews the previous empirical findings on types, determinants and motives of foreign direct investment. The part 3 comparatively analysis foreign direct investment performance in selected countries and factors which may influence the ability of a country to attract foreign investment. This part also overviews the investment climates in Azerbaijan, Kazakhstan and Turkmenistan. Part 4 concludes. Key Words: FDI, Caspian Sea region, Oil and Gas, Azerbaijan, Kazakhstan, Turkmenistan. 1 Introduction The Overview of the Caspian Sea Region It is wide recognized that foreign direct investment (FDI) can play an important role in the development process of many countries and it is much required. Economies in transition, such as those in Central Asia and the Caucasus, are no exception as they realize the important role of FDI in strengthening their transition process. While some of them have sizable deposits of oil, gas and minerals which are major attractions to foreign investors, others, being less endowed, have more difficulty to attract FDI to their fledgling industrial and service sectors. But in even those countries which are well endowed with natural resources, there is a thrust to diversify their economies away from over-dependence on those resources and to develop viable value-added manufacturing industries and services. FDI can play a major catalytic role in this process. Just a decade years ago the areas on each side of the Caspian Sea – Central Asia to its east side and the Transcaucasia to its west were largely unknown. These regions were provinces of the Soviet Empire important to the outside world neither politically nor economically. Now its is well known that the Caspian Sea is largest land-locked body of water on Earth, bordered by Azerbaijan, Russia, Kazakhstan, Turkmenistan and Iran – the Caspian basin countries (see Map 1). Amongst the five countries only Iran is a member of the Organization of Petroleum Exporting Countries. Kazakhstan, Azerbaijan and Turkmenistan became independent after collapse of Soviet Union in 1991. Once a centre of global commerce, the Caspian Sea region has languished in obscurity ever since the rise of the sailing ship rendered the Silk Road obsolete a half millennium ago (Olcott, 1998). After discovery of oil and gas resources in the Caspian offshore and shore areas, this region became very important oil and gas sector in global context. Moreover, owing to energy security and geopolitical reasons, the Caspian region became very attractive for the West. Azerbaijan became one of the world’s first oil sectors after crude oil production started in Baku in the middle of 19th century. The oil production in Central Asia started in the beginning of the 20th century. Azerbaijan recorded about 70% of Soviet oil production by end of 1940. The former Soviet Union controlled almost all natural resources in Soviet Republics. At the time of their independence, Soviet republics were quasi-states (Olcott, 1998). Each republic has its own president and prime minister, local and national legislatures. The political and economic liberalisation of the Soviet Union in the mid-1980s attracted foreign investors and oil and gas companies interested in exploration and production prospects. The collapse of the Soviet Union gave further opportunities for the liberalisation of investment regulations. By the late 1990s the Caspian region was comparatively politically stable region, and a number of countries significantly improved investment regimes to their oil and gas sectors. Historically, energy industry in Azerbaijan, Russia, Kazakhstan, Turkmenistan and Uzbekistan is very important sector for the economy growth of these countries. However, poor management of natural resources and poor investment climate in these countries lead to disparities emergent between the countries in socio-economic terms. Nowadays, it is well recognized that foreign investment plays a vital role in the development of the oil and gas sector for such countries as Azerbaijan, Kazakhstan and Turkmenistan and significantly stimulates social and economic development of each of these countries. 1.2 Research Questions The presence of potentially vast oil and gas reserves is a part of the foreign investment attraction into the Caspian Sea region. On the other hand, it is important to note that while the quantity of proven reserves undoubtedly plays a significant role in estimating a region’s production and export potential, the other decisive factors for attraction foreign direct investment into this region are undeveloped market, cheap labour and cheap inputs and weak competition. This paper focuses on foreign direct investment strategy formulation process in the three energy-rich countries of the Caspian Region: Azerbaijan, Kazakhstan and Turkmenistan; and on what foreign direct investment strategy in each country are based. The study comparatively analysis the investment climate in three selected countries and more specifically it examines the foreign direct investment in oil and gas industry and performance by each country. The significant number of researches in regard to foreign direct investment mostly explains the investment strategy in the developed countries, when limited study has done on investment in less-developed countries or emerging countries. The selected countries Azerbaijan, Kazakhstan and Turkmenistan are transition countries and to a certain extent new participants in the competition to attract foreign investment. These countries can offer many potential advantages to foreign investor, especially in oil and gas sector of business. The research examines the investment climate in Azerbaijan, Kazakhstan and Turkmenistan and factors influencing the foreign investor’s decision-making in oil and gas sector. There is no much research which explores the determinants of investment in Azerbaijan, Kazakhstan and Turkmenistan, the stereotypes and perceptions that foreign investors have about these countries and what could be done to increase the foreign direct investment flow into these countries. This paper surveys these parts by investigating the multinational oil companies operating in Azerbaijan, Kazakhstan and Turkmenistan. The data from different energy agencies were gathered for comparative analysis of oil and gas data as well as foreign direct investment in different countries. This would not only let one to have a picture of various state strategies related to foreign investment, but could also provide the valuable outlook of the most advantageous approach for transition countries in doing business with foreign investors. 1.3 The Legal Status of Caspian Sea A large share of oil and gas reserves in Central Asia and Caucasus are thought to lie under he Caspian Sea. The question of the ownership of those resources, including the right to license and tax their development, is being argued by the Caspian littoral countries. The legal debate over the Caspian Sea can be tracked back to the 1921 Treaty to Moscow, reaffirmed in 1935, which declared that the inland Caspian Sea belonged to Russia (Kemp, 2000). Later Russia sent a note to the United Nations dated from 5th October 1994, where Russian Ministry of Foreign Affairs stated that the Caspian Sea should not be subject to the provisions of international maritime law (International Energy Agency, 1998). The importance of the application of international law is that a â€Å"sea† under the 1982 Law of the Sea Convention would be subject to separation into national zones for the development of its mineral resources. Russia stated that until all five of the Caspian littoral states (Azerbaijan, Russia, Kazakhstan, Turkmenistan, and Iran) came to a common decision on some other arrangement, the legal status of the Caspian Sea was subject only to the provisions of the more general (Treaty of Friendship between Iran and the USSR of 26 February 1921 and Treaty between Iran and the USSR on Trade and Maritime Navigation of 26 March 1940). Nevertheless, the ongoing legal uncertainty does not seem considerably decreased foreign investment in the Caspian Sea region. Advantageous geological prospects, with potential of a major oil and gas resource base, show significant motivations for companies to invest in this important producing region, preferably from the beginning of its development. 1.4 Current Production and Proven Reserves in Caspian Region Caspian oil presents a lot of opportunities for world oil markets and for the region itself (Energy Charter Secretariat, 2008): The appearance of new production sources would expand world oil supplies. Major quantities of Caspian oil would ease the pressure on the Persian Gulf production capacity and provide an additional hedge against oil supply disruptions Profits from oil exports could stimulate economic growth and improve the standard of living in the Caspian energy-rich counties. The availability of Caspian energy supplies in world markets will likewise improve the prospects for economic growth and political stability in the Caspian basin countries. Nowadays the Caspian Sea region is important, but not major supplier of crude oil to world markets, based upon estimates by British Petroleum (BP) and the Energy Information Administration (EIA). In 2005 the Caspian region produced 2.1 million barrels per day, or 2 per cent of total world production (see Table 1). Kazakhstan’s production rapidly increased since the late 1990s, accounted for 67 per cent and Azerbaijan for 22 per cent of regional crude oil production in 2005. The Caspian Sea region’s comparative contribution to world natural gas supplies is larger than that for oil. Gas production of 3.0 trillion cubic feet per year in 2005 was 3 percent of world production (Energy Information Administration, 2006). Turkmenistan is the largest producer; with production of 2.0 trillion cubic feet per year, it accounts for almost two-thirds of the region’s gas production. (see Figure 1). Unlike oil, the region’s proven reserves of natural gas are a higher proportion of the world total than is its natural gas production. The estimate of proven reserves of natural gas in the Caspian Sea region for the end of 2006 published by Energy Information Administration is 232 trillion cubic feet per year, which represents 4 per cent of the world total (see Table 2). Table 1Oil Production in the Caspian Sea Region 1. Proven reserves are defined by the EIA 2. Possible reserves 3. Other estimates (EIA/IEO 2006) 3.45 million barrels per day, (World Oil, 10 March 2004) 3 million ^Only Caspian area oil and gas production Source: Energy Information Administration (EIA): Caspian Sea Region: Survey of Key Oil and Gas Statistics and Forecasts, July 2006. Table 2Gas Production in the Caspian Sea Region ^Only Caspian area gas production Source: Energy Information Administration (EIA): Caspian Sea Region: Survey of Key Oil and Gas Statistics and Forecasts, July 2006. Figure 1 Gas Production in Caspian Sea region (1992-2004) Source: Energy Information Administration (EIA): Caspian Sea Region: Survey of Key Oil and Gas Statistics and Forecasts, July 2006. 1.5 Role of Oil and Gas in the Economic Development of Caspian Region The development of oil and gas resources in the Caspian region is mostly important for the development of economies in the Central Asian and Transcaucasia. In 1995 the energy sector’s share of gross domestic product (GDP) was an estimated 14.6 percent in Azerbaijan, 10.1 percent in Kazakhstan, 10.2 percent in Turkmenistan (International Energy Agency, 1998). Foreign investment attracted to the oil and gas sector in Caspian region could offer significant profits for the region’s governments and stimulate investment in other economic sectors. The attract foreign investment the host Governments should take discreet measures to ensure the development of an sufficient legal and administrative infrastructure, including institution building and personnel training, to handle the inflow of oil related revenues and to help ensure the countries’ efficient and equitable development. International Monetary Fund (2003) expressed concerns that unless regional governments introduce further administrative reforms, they risk being overwhelmed by new oil wealth. Particularly, corruption is a peril. Economic development motivated by foreign investment in the oil and gas industry helps to guarantee the financial independence of the Central Asian and Transcaucasian states. The transition to the market economy and the economic dislocations originated by collapse of Soviet Union left Azerbaijan, Kazakhstan and Turkmenistan without adequate funds to develop oil and gas resources. Governments of these countries are looking for private investment (mainly from foreign companies) that would play significant role in the development of oil and gas industry. Besides financial capital, a foreign investor brings a modern technology to local industry, including environmentally sound production techniques and modern management approaches. The Caspian Sea region countries are competing with each other for foreign investment. Oil and gas companies have a wide choice of where to make investment. The foreign investor considers the opportunities that offer the best financial returns. However, the investment climate is vital for company’s decision on where to invest. As a result, Kazakhstan and Azerbaijan took considerable steps in creating attractive investment climates. Kazakhstan concentrated on building a body of law applicable to all projects, while Azerbaijan focused primarily on modified production sharing agreements (International Monetary Fund, 2003). By the beginning of 1998, cumulative foreign direct investment in the oil and gas sectors of Central Asia and Transcaucasia had reached an estimated 3 billion of American dollars, nearly one third of which was placed in 1997. Future investment commitments in the region from contracts already signed total over 40 billion of America dollars (International Energy Agency, 1998). So far most foreign investment has been in Kazakhstan and Azerbaijan. Gas-endowed Turkmenistan started to attract foreign investment later than the others due to Government dictatorship and poor investment climate. Caspian oil development has gained a great deal of political and commercial momentum since the first foreign companies came there at the end of 1980s (Ruseckas, 2000). Since then the most important external factor influencing Caspian oil development is the price of oil. Principally if oil prices remain at present high level it is possible the more optimistic projects will be started. The Caspian Sea region could possibly produce approximately 4 million barrels per day by 2010. In any case, the Caspian Sea states require a stable legal regime to develop, produce, transport and market its natural resources. 1.5.1 Summary data on Azerbaijan Owing to extensive oil reserves, Azerbaijan is a major oil producer since the middle of the last century. Between 1990 and 1995 Azerbaijan’s gross domestic product dropped 58 percent (International Energy Agency, 1998). Oil production fell by only 25 percent mainly because of continuing oil product exports to neighbouring countries and an increasing use of heavy fuel oil in domestic power stations to alternative for imported gas. Due to the tightening of monetary and budgetary policies, the fiscal deficit dropped from 11.4 percent of gross domestic product in 1995 to less than 2 percent in 1996. In 2006 Azerbaijans real gross domestic product grew by 31 percent when the oil production in this region significantly increased. Azerbaijans anticipate for sustained economic growth is in its managing of large oil and natural gas resources in the Caspian Sea region, through effective management of the resulting revenue stream, and non-oil sector diversification (Energy Information Administration, 2006). During the beginning of transition most Azerbaijan onshore oil fields were in decline and required momentous new investment to develop large-scale offshore projects and to reconstruct existing fields. Since independence Azerbaijan signed several agreements with foreign oil companies. While maintaining full state ownership over energy companies, Azerbaijan was quick to invite foreign investors to assume a direct role in the development of its hydrocarbon reserves (Thompson, 2004). In 1992 most of the Azerbaijan oil sector assets were merged in two state oil companies – Azerineft and Azneftkimiya. The new merger was called the State Oil Company of the Azerbaijan Republic or SOCAR. While Government organizations handle production and exploration agreements with foreign companies, SOCAR is body to all international companies developing new oil and gas projects in Azerbaijan. After the first commercial oil flows through the Baku-Tbilisi-Ceyhan pipeline during summer 2006 and the increasing oil production from the Azeri-Chirag-Guneshli project, oil revenues are expected to contribute to a doubling of Azerbaijan’s gross domestic product by 2008 (Thompson, 2004). Energy Information Administration (2007) reports that though the oil sector represented around 10 percent of Azerbaijan’s gross domestic product in 2005, it is already projected to double to almost 20 percent of gross domestic product in 2007 (see Table 3). To manage the revenues, former President of Azerbaijan Heydar Aliyev formed a State Oil Fund in 1999, which is designed to use money obtained from oil-related foreign investment for poverty reduction, education and raising rural living standards. As of the end of 2006, the State Oil Fund reported assets of almost 2 billion US dollars, but the fund’s assets are expected to increase to 36 billion US dollars by 2010 (Energy Information Administration, 2006). Table 3Azerbaijan: Economy and Energy (in millions US dollars) 2003 2004 2005 2006 2007 2010 Oil Production (thousand barrels per day) 320 319 441 648 860 1,300 Oil Exports (thousand barrels per day) 215 204 314 521 721 N/A Foreign Direct Investment 3,285 3,556 1,680 -219 -4,750 476 FDI in Oil Sector 3,246 3,461 1,459 -573 -5,198 366 Oil Sector Revenue 886 946 1,337 2,921 5,272 19,417 As share of total rev (%) 42% 38% 39% 51% 59% N/A As share of total GDP (%) N/A N/A 9.8% 15% 19.7% 43.3% Oil Fund Assets 816 972 1,394 1,936 3,093 36,387 Source: Energy Information Administration: Short Term Energy Outlook, 2007; International Monetary Fund (IMF), Article IV Consultation, Staff Report, No 07/191, June 2007 1.5.2 Summary Data on Kazakhstan As it was the case in most other former Soviet Union countries, Kazakhstan’s first attempts at economic reform were effectively taken in response to Russias one-sided price reforms in 1992. After Kazak oil production had suddenly declined for two years in the end of 1993, inflation had out of control. The efforts to create an economic union with Russia and other former Soviet Union countries didn’t meet expectations of the Kazakh Government. Looking at the dynamic Asian economies as a model, the Kazakh Government turned to market style policies. However, the government increased hard budget constraints and restrictive monetary policies due to attempts to solve non-payment problem through state financing. The remained net debts after netting out inter-industry arrears were financed from Government budget and the central bank. In 1993 International Monetary Fund (IMF) granted Kazakhstan a one-year standby package. To maintain IMF collaboration and to stop the decline in gross domestic product, the Kazakh government implemented a second stabilisation program in 1995. But this time hard budget constraints and monetary policy were strengthened by excluding of government financing of net positions in inter-enterprise debts and retreating government guarantees for loans granted by foreign and domestic banks. In the middle of 1996, the International Monetary Fund approved an Extended Fund Facility (EFF) of 446 million US dollars for three years (IMF, 2003). According to International Monetary Fund (2003) the decision was made in light of a wide-ranging three-year reform programme submitted by the government, as well as the positive longer term prospects for production and exports of energy and non-ferrous metals. In 1996, Kazakhstan experienced its first positive economic growth since 1989. 1.5.3 Summary Data on Turkmenistan Preceding the collapse of the Soviet Union approximately 8 percent Turkmenistan’s gross domestic product was generated by gas exports to the rest of the USSR mostly to Belarus, Ukraine and the Caucasus. Another 5 percent of gross domestic product was earned from cotton exports. Gas and cotton exports continue to be used to cover the import of considerable amounts of grain and capital equipment from other former Soviet Republics. While estimates for the fall of gross domestic product between 1990 and 1995 vary depending on how adjustments to official gross domestic product are made, International Monetary Fund and European Bank of Reconstruction and Development agree on about -35 percent (IMF, 2003). This is much less than the 58 percent drop in Turkmen gas production. The rest of the economy is basically agricultural. The cotton industry has been less affected by the downfall of the Soviet Union. The government gradually liberalised some prices beginning in 1992. A presidential decree of 1995 removed price controls on all products except for about 50 items, including energy. The government introduced the manat as the national currency in 1993. In 1995 it unified the previously separate official and commercial exchange rates, which subsequently became determined by inter-bank auctions for foreign exchange. Between 1992 and 1995 the government compensated for the shortfall in revenue from taxes on gas production and exports by cutting expenditures and replacing subsidies to the economy with additional allocations of credit at largely negative interest rates. Controlled prices were adjusted repeatedly but declined in real terms for natural gas and for oil products through 1994. The share of gas related revenues in the central budget declined from 60 percent in 1992 to under 20 percent in 1995, which lowered the share of total budgetary revenue in GDP from 40 percent to 10 percent during this period. Due to drastic expenditure cuts in government wages and investment, including maintenance, the central budget deficit remained fairly stable over this period. It also helped that new excise taxes were introduced in 1995 on petrol (55 percent) and diesel (60 percent). This resulted in some recovery of government capital spending. The easy money policy was changed slowly in 1995 and 1996. During this time foreign exchange surrender requirements of state-owned enterprises to the Foreign Exchange Reserve Fund (FERF) were increased to 50 percent for gas and oil exports, and the money allocated directly to the central budget. Prior to that, this fund had been used to award credits to the economy, contributing to monetary expansion. In 1995 and 1996, bank credit allocation was reduced, real interest rates rose (due to credit auctions with deregulated interest rates), and reserve requirements for banks were increased. However, the pursuit of these policies was not smooth, in part due to the limited political autonomy of the Central Bank. Nevertheless, inflation decelerated by 50 percent towards the end of 1995 and is estimated to have been 445 percent in 1996, and 21 percent in 1997. Despite plummeting gas exports in recent years, Turkmenistan’s current account was slightly positive in 1994 and 1995, as long as arrears owed to the country are not taken into account. If such arrears are counted the 1995 balance swings from an estimated surplus of 54 million US Dollars to a deficit of 289 million US Dollars. The situation has probably continued to deteriorate due to weak gas exports. 2 Theoretical Frameworks 2.1 Overview of Foreign Direct Investment Theories There is variety of empirical studies on theoretical models explaining foreign direct investment (FDI) and its determinants. The various approaches from different disciplines such as economics, international business, organisation and management explain numerous characteristics of this phenomenon. The following dissimilar methods, explaining foreign direct investment as the location decision of multinational enterprises are mostly acknowledged in empirical literature on FDI: Ownership advantages as determinants of foreign direct investment (including monopolistic advantage and internalisation theory) based on imperfect competition models and the view that multinational enterprises (MNEs) are firms with market power (Hymer, 1960; Buckley and Casson, 1979; Kindleberger, 1969; Caves, 1971 for ownership advantages) Determinants according to the Neoclassical Trade Theory and the Heckscher-Ohlin model, where capital moves across countries due to differences in capital returns (for example Markusen et al, 1995,pp. 98-128; Aliber, 1970); Determinants of foreign direct investment in Dunning’s ownership-location-internalization (OLI) framework, which brought together traditional trade economics, ownership advantages and internalisation theory (Dunning, 1977; 1979); Determinants of foreign direct investment according to the horizontal FDI model or Proximity- Concentration Hypothesis (Krugman, 1983; Markusen, 1984; Ethier, 1986; Horstmann and Markusen, 1992; Brainard, 1993); Determinants of foreign direct investment according to the vertical FDI model, Factor-Proportions Hypothesis or the theory

Advantages and Disadvantages of the Materialism Essay

Greek Philosophy: materislistic approach of the presocratics advantages and disadvantages The advantages and disadvantages of the materialistic approach of the pre Socratic philosophers. Please support your points by referring to the texts in Kirk and Raven, and discuss at least three philosophers . The pre Socratic philosophers marked an epoch in human ideas. Although it might seem stupid to suggest that everything is made of water or that the earth floats on a cushion of air, these ideas came from the people who are responsible for the way we see the world today. The advances that the materialistic approach of the pre Socratic philosophers made to humanities understanding of nature was considerable to say the least. This essay will discuss the advantages and disadvantages of the materialistic approach of the pre Socratic philosophers. It will start by dealing with Thales who Aristotle called the first philosopher. He can be seen as the catalyst of philosophy in ancient Greece. The essay will also deal with Thales’s friend and student Anaximander time and finally it will discuss Heraclitus. But first a look at something at the cutting edge of modern science that the pre Socratics paved the way for. At a place known as Cern in Geneva there is a machine called a large hydron collider. A machine that is expected to detect the Higgs Boson or God Particle as it is often called. This is the only standard model particle not yet to be observed and one believed to explain the origin of mass in the universe. You might wonder how this ties in with philosophy in 624 B.C., but it was here that people began their search for the Higgs Boson, although we did not know it by that name at the time. It was the pre Socratics who suggested that there was a basic substance from which all things are made and they who tried to explain what this basic substance was. Considering the lack of facility in around 500 B.C. to experiment and find what this material is made of, it is nothing short of astounding to see how close to the truth some of these philosophers got by using reason and their intellect. The idea that there is a single substance out of which everything is sourced known as material monism. It claims that the source of nature is something  physical and that there is only one such thing. It was in Ionia that material monism began. The Ionians â€Å"Within the space of a century Miletus produced Thales, Anaximander, and Anaximenes, each dominated by the assumption of a single primary material, the isolation of which was the most important step in any systematic account of reality†[1] The first of the Ionians was Thales of Miletus. The advantages of Thales’s materialistic approach were as follows: He revolutionised the way the ancient Greeks thought. He got them to recognize rational argument over all other sorts of authority and separated the natural world from the supernatural world.[2] Before Thales explanations of natural events were merited on aesthetic sensibility. The authorities for knowledge were poets like Homer who explained natural events with mythology. They claimed that divine muses inspired them and people believed that divine humanoid creatures known as the gods controlled nature[3]. Thales however understood that there were laws and routines that nature abided by and that events in the natural world could be predicted by observing the nature and using the information you receive understand it. Thales’s famous prediction of a solar eclipse convinced people to believe that there were patterns in nature which came about from natural events that could be rationalised. One of Thales main philosophical concerns was to find out what the basic substance of the world was. He believed it to be water. Why he believed this can only be speculated. We might see this as naà ¯ve but â€Å"From Thales onward, all inquiry into the nature of phenomena tended towards one end: The answer to the question, what is the nature of the whole? That is, what is the nature of the reality behind the phenomena? For Aristotle and therefore for us also, science and metaphysics begin together with Thales, the first man to have attempted to answer this question, and attempt an answer to this question, and therefore the first man known to have posed it†[4] To begin the search for a rational behind the natural world as Thales did was a giant leap for man kind. His ideas were refined by another Ionian who was probably a student of Thales. A man called Anaximander. Anaximander took the basic frame of Thales’s thought and put his own ideas into it. By this I mean he also believed that there was a source substance. However Anaximander’s materialistic approach had an advantage over Thales’s by â€Å"separating his explanatory entity from the entities that need explaining†[5]. Anaximander’s physis did not face some of the problems that Thales’s did, such as how is fire explained if everything is water? His explanatory entity was the focal point of his thought. He called it the unbound or apeiron. We cannot observe the Unbound but its existence Anaximander infers because of its explanatory role. This idea of the Unbound had solutions to two problems faced by Thales’s physis: 1) How does the basic substance give rise to the plurality of objects we observe around us? and 2)How does the world maintain itself?. His solution to problem 2) was: â€Å"the natural manifestation of physical law, imposing a lawfulness upon continually struggling opposites, and thereby maintaining equilibrium within the cosmos†[6]. And 1) â€Å"In Anaximander’s system the apeiron is both the source out of which everything derives and also the unifier within nature†[7]. I would like to also note startling evidence of Anaximander’s genius is his work in zoogony. â€Å"His intelligent observation that man (with nine months gestation and many years helplessness) could not have survived the primitive conditions without protection of some kind†[8] Shows for sight to Darwin’s theory of evolution. Heraclitus This essay will now deal with Heraclitus as his approach to answering what the nature of the universe was slightly different. The advantage of his philosophy was that it shed light on ideas that hadn’t been considered before. Heraclitus theory was that there was a law by which all things abided which he called the logos. He believed that everything was in opposition the strife between these opposites was what kept balance making all things one. He also claimed that everything was in a constant state of change, like a river is constantly flowing or in constant flux it is always the same river but always completely different. â€Å"Heraclitus’ thought possessed a comprehensive unity which seems completely new. Practically all  aspects of the world are explained systematically, in relation to a central discovery that natural changes of all kinds are regular and balanced, and that the cause of this balance is fire, the common constituent of things that was also termed th eir Logos.†[9] It is this idea of fire being that is the main disadvantage of Heraclitus’s approach. It is like taking a step forward with the logos and then going to steps back to the idea that one of the elements is the basis of all things. Although the idea of an all consuming fire does describe his Logos well it works better as a metaphor to describe the Logos than fire being the Logos itself. Conclusion To conclude the materialistic approach of the pre Socratics had many advantages. It was the catalyst for modern thought and it can be seen as the beginning of philosophy and science as we know it today. The use of rational argument over super-natural forms of authority showed that people’s thoughts could be progressed and altered by people to come after them. It is true that philosophy is a continuous dialogue that continues through the generations which has created a subject that can be said to define humanities search truth. The progression of thought because of this approach has lead to how we think today. The essay has outlined how Thales, Heraclitus and Anaximander made observations about the world that showed rational approaches to describe what the temporal world is. We still use this approach to find the Higgs Boson however we have the equipment to test our theories. It was a disadvantage of the pre Socratics that their theories were often far beyond their means of tes ting. But in conclusion the materialistic approach of the pre Socratic philosophers was a step in the right direction for philosophy. Bibliography: †¢ Kirk and Ravin, The Presocratic Philosophers A Critical History With A Selection of Texts (Cambridge University Press, 1957SparkNotes Editors. â€Å"SparkNote on Presocratics.† SparkNotes LLC. n.d.. http://www.sparknotes.com/philosophy/presocratics/ (accessed October 23, 2009) †¢ Kathleen Freeman The Pre-Socratic Philosophers A Companion to Diels, â€Å"Fragmante der Vorsackratiker† (Oxford Basil Blackwell 1946) †¢ Jonathan Barnes, The Presocratic Philosophers Vol. 1 Thales to Zeno (Routledge and Kegan Ltd 1979) ———————– [1] Kirk and Ravin, The Presocratic Philosophers A Critical History With A Selection of Texts (Cambridge University Press, 1957) .p.73 [2] SparkNotes Editors. â€Å"SparkNote on Presocratics.† SparkNotes LLC. n.d.. http://www.sparknotes.com/philosophy/presocratics/ (accessed October 23, 2009). [3] SparkNotes Editors. â€Å"SparkNote on Presocratics.† SparkNotes LLC. n.d.. http://www.sparknotes.com/philosophy/presocratics/ (accessed October 23, 2009). [4] Kathleen Freeman The Pre-Socratic Philosophers A Companion to Diels, â€Å"Fragmante der Vorsackratiker† (Oxford Basil Blackwell 1946) [5] SparkNotes Editors. â€Å"SparkNote on Presocratics.† SparkNotes LLC. n.d.. http://www.sparknotes.com/philosophy/presocratics/ (accessed October 23, 2009). [6] SparkNotes Editors. â€Å"SparkNote on Presocratics.† SparkNotes LLC. n.d.. http://www.sparknotes.com/philosophy/presocratics/ (accessed October 23, 2009). [7] SparkNotes Editors. â€Å"SparkNote on Preso cratics.† SparkNotes LLC. n.d.. http://www.sparknotes.com/philosophy/presocratics/ (accessed October 23, 2009). [8] Kirk and Ravin, The Presocratic Philosophers A Critical History With A Selection of Texts (Cambridge University Press, 1957) .p.142 [9] Kirk and Ravin, The Presocratic Philosophers A Critical History With A Selection of Texts (Cambridge University Press, 1957).p.212

The edocrine system

The endocrine system The endocrine system is a collection of ductless glands which are positioned through the whole body. The endocrine glands pass their secretions of hormones directly into the blood stream so that they are always adjacent to blood vessels. Hormones are chemicals in the body produced and secreted in the body that regulate the function of a particular tissue or organ (Bing dictionary). These chemical messengers transfer information from one set of cells to another.Despite many chemicals being transmitted and circulated around the body via the bloodstream, each one only acts n the cells that are genetically programmed to receive and respond to its message. Hormone levels can be influenced by many factors including stress, infection and changes in the balance of fluids within the body. A gland is a group of cells that produce and secrete chemicals (http://kidshealth. org/parent/general/body_basics/ endocrine. html). A gland will select and eliminate waste materials fro m the blood, then process it and secrete the end product for use at another location in the body.Endocrine glands release more than 20 major hormones straight into the loodstream and from here they can be transported to the cells in other parts of the body. There are many major glands that make up the endocrine system and these include the: hypothalamus, pituitary, thyroid, parathyroid, adrenals, pineal body and the reproductive glands (testes for males and ovaries for females). The pancreas is also involved in secreting hormones which are involved with the maintaining of blood sugar levels within the body.The pancreas is also associated with the digestive system as it produced hydrolytic enzymes which aid with digestion. Neuro- endocrine system The nervous and endocrine systems control all the biological processes within the body and they can almost control one another. The nervous system can stimulate or inhibit the release of certain hormones while the endocrine system can promot e of inhibit nerve impulses. Hypothalamus The hypothalamus is found in the lower part of the brain and is a collection of particular cells.It has key links with the nervous system and the endocrine system and has an important role in secreting hormones. The nerve cells in the hypothalamus control the pituitary gland by producing certain chemicals that can timulate or supress hormone secretions from the pituitary gland. The pituitary gland is moderately small and is located at the base of the brain beneath the produced hormones that control other endocrine glands within the body. The hypothalamus can convey information sensed by the brain to the pituitary gland to make any changes that could be influenced by factors like emotions and seasonal changes.The pituitary Gland The pituitary gland is divided into 2 sections: Anterior lobe This regulates the activity of the thyroid, adrenals, and reproductive glands. It also roduces growth hormone which stimulates the growth of bone and other body tissues. It also produces prolactin which stimulates mammary gland growth and activates milk production in females. Thyrotropin is another hormone produced and this stimulates the thyroid gland to produce thyroid hormones. Corticotrophin is produced which causes the adrenal glands to produce certain hormones.Follicle- stimulating hormone (FSH) is also produced and affects ovaries in females and stimulates the development of oocytes. It also affects the testes of males and stimulates the production of sperm. Luteinizing hormone (LH) affects the ovaries in females and stimulates ovulation, the formation of the corpus luteum and results in secretion of oestrogen and progesterone. It affects the testes of males and stimulates the production of testosterone. The pituitary gland also secretes endorphins. These are chemicals that act on the nervous system and allow us to reduce our sensitivity to pain.It also triggers the reproductive organs to release sex hormones such as testostero ne in males, and estradiol and progesterone in females which play a part in the menstruation cycle. Posterior lobe This releases antidiuretic hormone and this encourages reabsorption of water by the kidneys. The posterior lobe also produces the hormone called oxytocin and this helps induce labour and produces milk in the mammary glands of females. Another hormone produced in the posterior lobe is Melanocyte-stimulating hormone (MSH) and this helps with the darkening of the skin. Hull. R, Anatomy & Physiology for Beauty and Complementary Therapies, the Write Idea Ltd, 2009) Thyroid The thyroid is positioned in the lower region of the neck at the front and it produces a hormone called thyroxine. This is an amino acid derivative and increases the metabolic rate and heart rate. It also promotes growth within the body. Another development also, and helps with body temperature and plays a role in metabolism. Calcitonin is another hormone formed which targets bones and lowers the level of calcium in the blood.The production and release of these thyroid hormones is controlled by Thyrotropin and this is secreted by the pituitary gland. If a person has more thyroid hormones circulating in the blood stream, the chemical reactions within the body will occur much quicker. Parathyroids There are 4 small glands that are attached to the thyroid called the parathyroids. These release a hormone called parathyroid hormone and this adjusts the level of calcium in the blood with the help of calcitonin, which is also formed in the thyroid. (http://kidshealth. rg/teen/your_body/body_basics/endocrine. html). It also decreases the level of phosphate in the blood and promotes the formation of calcitriol by the kidneys. Thymus The thymus gland plays an important role in the immune system and secretes numerous hormones. One of these is thymosin and this promotes the growth of T- Cells which are a type of white blood cell. (Hull. R, Anatomy & Physiology for Beauty and Complementary Therap ies, the Write Idea Ltd, 2009). Adrenal Glands The adrenal glands are situated above each kidney and release many hormones that are important in the body.The adrenal glands are divided into 2 sections and each one has a particular function: Adrenal cortex The adrenal cortex produces steroid hormones that are essential in the body. These hormones are grouped into mineralcorticoids, glucocorticoids and sex hormones. This produces corticosteroids that regulate water and salt balance in the body. They also play a role in the bodys response to stress and help maintain metabolism. The adrenal glands also produce mineralcorticoids (mainly aldosterone) and this acts on the kidneys.It regulates the mineral content of the blood by increasing blood levels of sodium and water, it also decreases blood levels of potassium. Sex hormones called androgens and oestrogens are also produced in the adrenal cortex and these have a small contribution to sex drive and libido. The adrenal medulla in innerva ted by neurones of the sympathetic branch of the ANS and can quickly release hormones called catecholamines. One example of this is epinephrine (also known as adrenaline) and this produces many effects which are related to short-term stress response.It is also responsible for the â€Å"fght or flight† response which is triggered during times of stress. This increases blood pressure and heart rate (from own personal notes). Another hormone called norepinephrine (also known as noradrenaline) plays a role in the body's response to stress. It decreases the rate of digestion and stimulates cellular metabolism. Pineal Gland The pineal gland is located in the middle of the brain and it secretes a hormone alled melatonin and this regulates sleep patterns in the body.Reproductive glands In males the reproductive gland is the testes. It produces a hormone called testosterone which regulates the development and maintenance of secondary sex characteristics. In females the reproductive gl and is the ovaries. A hormone produces is estradiol which regulates the development and maintenance of secondary sex characteristics. Another hormone produced is progesterone and this prepares the uterus for pregnancy and is involved in the regulation of the menstrual cycle in females. PancreasThe pancreas is also involved in secreting hormones around the body and also links with the digestive system as it secretes digestive and hydrolytic enzymes. The pancreas produces 3 hormones. Insulin: this is secreted from the beta-cells of the islets of Langerhans in the pancreas and is secreted in reply to a raised blood glucose concentration. The effect of insulin is that is lowers blood glucose concentration to normal levels. The modes of action for this are that it stimulates the absorption of glucose from the blood by the muscle fibres, liver cells and adipose cells.