Energy Efficiency: Directives and Legislation

Energy Efficiency: Directives and Legislation 2.1 Introduction The debate is ongoing, but there is now overwhelming scientific evidence that mans activities are causing significant climate change. Climate change has the potential to affect all aspects of life on earth and will have major detrimental social, economic and environmental impacts. The best response to these challenging issues is to change. Change the way we think. Change the way we act. (Get source) 2.2 Background to Directives for Climate Change The International climate change agenda containing the Directives and Legislation that drives for energy efficiency began in 1992 with the United Nations Framework Convention on Climate Change (UNFCCC). The objectives of the UNFCCC were to: stabilise the atmospheric greenhouse gases at a level that would prevent dangerous interference with the climatic system, to be achieved in a time frame to ensure food production is not threatened and to enable economic development proceeds in a sustainable manner. The UNFCCC is the parent treaty of the Kyoto Protocol (1997) which was developed to implement the UNFCCC effectively and properly. (www.euroace.org/reports) Irelands relation to the Kyoto Protocol is outlined in the subsequent sub-chapter. In December 2007, the latest climate change conference took place in Bali, Indonesia and it included representatives of over 180 countries. The two week period included the sessions of the Conference of the Parties to the UNFCCC, as well as the meeting of the Parties to the Kyoto Protocol. The ‘Bali Roadmap was adopted from the conference which charts the course for a new negotiating process to be concluded by 2009 that will lead to a post 2012 international agreement on climate change. The next meeting of the parties to the climate change convention is scheduled to take place on December 2008 in Poland. After the Kyoto Protocol was established, Europe needed to take action to succeed in cutting its greenhouse gas emissions to 8% below 1990 levels by 2008-2012, as required by the Kyoto Protocol. This action was taken by launching the European Climate Change Programme (ECCP) in June 2000 which was then ratified in October 2005. The main goal of the ECCP was to develop all of the necessary elements of an EU strategy to implement the Kyoto Protocol. From this European Climate Change Programme, the Energy Performance of Buildings Directive (EPBD 2003) was developed. This is explained in chapter 2.4 of this text. (www.euroace.org/reports) In order for Ireland to meet its Kyoto target of limiting the increase of greenhouse gas emissions to 13% above 1990 levels by 2008-2012, a National Climate Change Strategy was implemented. 2.3 Ireland and the Kyoto Protocol The Kyoto Protocol was adopted to tackle the threat of climate change. It contains legally binding greenhouse gas emission targets for developed countries for the post 2000 period. The Protocol promises to move the international community one step closer to achieving the Conventions (UNFCCC) ultimate objective of preventing man-made interference with the climate system. As a first step towards tackling the threat of climate change, the United Nations Framework Convention on Climate Change (UNFCCC) required developed countries to put in place policies and measures with objectives of returning emissions of greenhouse gases to 1990 levels by the end of the decade. However, in recognition of the need to take more substantial and urgent action, industrialised or developed countries committed to reduce their combined emissions of greenhouse gases by at least 5% compared to 1990 levels by the first commitment period 2008-2012. The protocol came into force on 16 February 2005. As of November 2007, 174 parties have ratified the protocol. Of these, 36 developed countries are required to reduce greenhouse gas emissions to the levels specified for each of them in the treaty. The EU has an overall reduction target of 8% below 1990 levels and has agreed a burden sharing agreement that recognises the different economic circumstances of each member state.   Irelands target is to limit the increase in its greenhouse gas emissions under the Kyoto Protocol to 13% above 1990 levels by 2008-2012. To date Ireland has struggled to get on target and at this stage looks unlikely to meet the 13% figure. With the help of the National Climate Change Strategy and the Protocol flexible mechanisms, this target may yet be achieved. The National Climate Change Strategy 2007- 2012 provides the national policy framework for addressing greenhouse gas emission reductions and ensuring that Ireland meets its target for the purpose of the Kyoto Protocol. Ireland may achieve their individual targets through domestic actions and use of flexible mechanisms provided for in the Protocol. The Government has decided that it will use the Kyoto Protocol flexible mechanisms to purchase up to 3.607 million Kyoto Units in each year of the 2008-2012 period. (www.environ.ie) 2.3.1 Kyoto Protocol Flexible Mechanisms / Emissions Trading An important part of the Kyoto Protocol was the introduction of three flexible mechanisms to reduce the costs of achieving emission reductions for the member states with emission reduction or limitation targets. The mechanisms enable Parties to purchase Kyoto Units from other Parties or to invest in cost-effective opportunities to reduce emissions. While the cost of reducing emissions varies considerably between projects and between countries, the effect for the atmosphere of limiting emissions is the same no matter where the action occurs. The three mechanisms are outlined below: Joint Implementation (JI) This is provided for under Article 6 of the Protocol, and enables Parties with reduction commitments to implement projects that reduce emissions in other member states with reduction commitments, in return for credits. The tradable unit under the JI mechanism is an Emissions Reductions Unit (ERU). Clean Development Mechanism (CDM) This is provided for under Article 12 of the protocol and enables Parties with targets to participate in projects that reduce emissions in those Parties that do not have targets under the protocol. This mechanism is aimed at developing countries. Credits generated using the CDM mechanism can be used by the investing Party for compliance purposes. The tradable unit under the CDM mechanism is a Certified Emissions Reduction (CER). International Emissions Trading This is provided under Article 17 of the Kyoto Protocol and enables Parties or member states that have a greenhouse gas emissions limitation or reduction target under the Protocol to acquire Kyoto Units from those Parties that have reduced their emissions beyond their target under the Protocol. The tradable unit under emissions trading is an Assigned Amount Unit (AAU). The National Treasury Management Agency is the designated purchasing agent for Ireland and will administer and manage purchases of Kyoto Units on behalf of the Government. A dedicated Carbon Fund has been established for this purpose. All purchases will be made in accordance with the following objectives: That they contribute to the ultimate objective of the United National Framework Convention on Climate Change That risk is minimised, particularly in relation to the timely delivery of credits That they represent good value for money The National Treasury Management Agency will use the following mechanisms to purchase Kyoto Units: Direct purchase of Kyoto Units from other Kyoto Protocol member states Direct investment in joint implementation and clean development project activities Direct market purchases of Kyoto Units Any surplus Kyoto Units held by the State at the end of the 2008-2012 commitment period can be banked and used in a subsequent commitment period of the Kyoto Protocol or any successor treaty. (National Climate Change Strategy 2007-2012, Department of Environment, Heritage and Local Government) Below is a graph illustrating the total greenhouse gas emissions for all sectors of all the member states up to 2005. As we can see, Ireland is somewhat off reaching its Kyoto target. 2.4 The Energy Performance of Buildings Directive (EPBD) 2.4.1 Introduction â€Å"Energy performance demands in the building sector within the EU range from rather demanding energy regulations and already established energy certification schemes in countries like Denmark and Germany, to the situation in countries like France and Spain with low regulation demands and without certification processes established at national level† (Casal, 2006). EU legislation and policies, implemented through the Energy Performance of Building Directive (EPBD), aim to provide a more uniform approach to implementing building energy saving measures and reaching Co2 emission goals. Each member state is required to translate and implement the policies and guidelines within the context of its legal and economic framework. The EPBD was enacted by the European Union in line with the Kyoto Protocol to: reduce European building energy consumption by 10 per cent by 2010 and 20 per cent by 2020; complete energy ratings of 2 million existing buildings by 2010; and cut Co2 emissions by 45 million tonnes by 2010 (Casal, 2006). The directive is the first move to target buildings specifically to reduce emissions and overall energy consumption in the construction sector. 2.4.2 Overview of the EPBD The EPBD is a legislative act of the European Union which requires member states to achieve particular results with respect to the energy performance of buildings. The directive 2002/91/EC (EPBD, 2003) of the European Parliament and Council on energy efficiency of buildings was adopted by member states and the European Parliament on 16th December 2002 and came into force on 4th January 2003. This directive is a very important legislative component of energy efficiency activities of the European Union designed to meet the Kyoto commitment. The directive concerns a large number of participants on all levels with different impacts and different motivations: designers, housing associations, architects, providers of building appliances, installation companies, building experts, owners, and tenants effectively all energy consumers in the European Union. It will greatly affect awareness of energy use in buildings, and is intended to lead to substantial increases in investments in energy efficiency measures within these buildings. The EPBD has created a great challenge for the transformation of the European building sector towards energy efficiency and the use of renewable energy resources. The 4th of January 2006 was the official deadline by which the 25 member states had to transpose the directive. 2.4.3 Objectives and Requirements of EPBD The objective of the EPBD is to improve the energy performance of buildings within the community, taking into account outdoor climate conditions as well as indoor climate requirements and cost effectiveness. The directive lays down requirements regarding: The framework for a methodology of calculation of the integrated energy performance of buildings The application of minimum requirements on the energy performance of new buildings The application of minimum requirements on the energy performance of large existing buildings that are subject to major renovation The energy performance certification of buildings The regular inspection of boilers, an assessment of the heating installation in which the boilers are more than 15 years old and an inspection of air conditioning systems in buildings The requirements for experts and inspectors for the certification of buildings, the drafting of the accompanying recommendations and the inspection of boilers and air conditioning systems. The requirements of each member state are set out in the EPBD under different articles. (EPBD, 2002) 2.4.4 Summary of Articles 2.4.4.1 Adoption of a methodology Each member state is required to have a method of calculating the energy performance of buildings. This calculation method can be set at a national or a regional level. This is an extract of the directive on article 3: ‘Member States shall apply a methodology, at national or regional level, of calculation of the energy performance of buildings on the basis of the general framework set out in the Annex. Parts 1 and 2 of this framework shall be adapted to technical progress in accordance with the procedure referred to in Article 14(2), taking into account standards or norms applied in member state legislation. This methodology shall be set at national or regional level. The energy performance of a building shall be expressed in a transparent manner and may include a CO2 emission indicator (EPBD, 2002) 2.4.4.2 Setting of energy performance requirements These minimum requirements shall be reviewed every five years. Some categories of buildings may be exempted from the requirements. These include: Protected buildings and monuments Buildings used as places of worship Temporary buildings Residential buildings intended to be used for less than 4 months of the year Stand alone buildings with a total useful floor area of less than 50m ² 2.4.4.3 Setting of energy performance requirements for new buildings Each member state will set minimum energy performance requirements for new buildings. For large new buildings with a floor area of over 1000m ² member states should consider alternative energy systems before construction starts. These include: Decentralised energy supply systems based on renewable energy CHP (combined heat and power) District or block heating or cooling, if available Heat pumps, under certain conditions The consideration of the alternative energy systems should take technical, environmental and economic feasibility into account. 2.4.4.4 Setting of energy performance requirements for existing buildings Each member state will ensure that when buildings over 1000m ² undergo major renovation that their energy performance is upgraded to meet minimum requirements. The minimum standards may be applied to the whole building or limited to the renovated part. 2.4.4.5 Energy performance certificate Each member state must ensure that when a building is constructed that an energy performance certificate is made available to the owner. When a building is sold or rented out an energy performance certificate must be made available to the prospective buyer or tenant. The certificate is valid for 10 years. For buildings over 1000m ² occupied by public authorities, an energy certificate must be placed in a prominent place clearly visible to the public. 2.4.4.6 Independent experts Member States shall ensure that the certificate of buildings, the drafting of the accompanying recommendations and the inspection of boilers and air-conditioning systems are carried out in an independent manner by qualified or accredited experts, whether operating as sole traders or employed by public or private enterprise bodies. (EPBD, 2002) Implementing EPBD in Ireland 2.5.1 Building Control Act 2007 The Building Control Act provides for the legal transposition of the EUs Energy Performance of Buildings Directive (EPBD) into Irish law. This will lead to energy efficiency becoming an important aspect of design concern for all buildings, both residential and non-residential. It is essential that the general public and companies involved in the industry understand the impact of the directive on residential and commercial property in Ireland. The Act requires that there will have to be mandatory building energy rating (BER) certificates for some buildings. This means that when a building is constructed, sold or rented out, the owner must provide a BER certificate to the prospective buyer or tenant. The BER will be accompanied by an advisory report setting out recommendations for cost-effective improvements to the energy performance of the building. This is further explained in chapter 3. ‘‘The successful implementation of the directive will require that systems are in place to guarantee the day-to-day delivery of assessment and inspection services by qualified people in a way that is consistent, practical and cost efficient, and with acceptable response times that maintain levels of service in the construction and property markets. (www.lkshields.ie/htmdocs/publications/newsletters) www.sei.ie www.epbd.ie http://www.euroace.org/reports/CIBSE_EUBD.pdf Casal, X.G. (2006), ‘‘Analysis of building energy regulation and certification in Europe: their role, limitations and differences, Energy and Buildings, Vol. 38 No.5, pp.381-92 Energy Performance of Buildings Directive 2002

Performance Evaluation of a Private Bank

[pic] [pic] [pic] [pic] [pic] An Assignment On Performance Evaluation of a Private Bank IFIC Bank as a private bank in the private sector of Bangladesh. Prepared For: Narzia Florin Lecturer, Dept. of Business Administration Prepared By: Saleh Ahmed BBA – 02406160 24th GI Dept. of Business Administration Stamford University Bangladesh. Submission Date: 15th May 2006 Letter of Transmittal Dated: May 15, 2006 Narzia Florin Lecturer, Dept. of Business Administration Subject: Submission of report on performance evaluation of a private commercial bank. Dear Madam, It has been a great pleasure to submit the report on performance evaluation of a private commercial bank. You are aware that I collected information on a private commercial bank. I choose IFIC Bank for the report purpose. I am fortunate enough that I got all those information necessary for the assignment purpose. I believe that this assignment has given me a great experience to me and it has enriched both my knowledge and experience. I tried my best to prove my skills while preparing this report. I cordially seek your kind advice or suggestion regarding my mistake which will help me in my practical and theoretical works in the days to come. Sincerely yours, Saleh Ahmed BBA – 02406160 24th GI Table of Contents ? Executive Summary. ? Profile of IFIC Bank. ? BANK'S MISSION: Quest for Excellence. ? The bank in a sketch. ? Ownership Structure. ? Financial Position. ? Product & Services. ? Human Resources Development. ? Rates of Deposit Schemes. ? Conclusion. Executive Summary: In this report on the Performance Evaluation of a private bank as IFIC bank, I collect the necessary information from its web site, catalog, bossier and personally by information collection. I found that these private companies are very competitive and want to capture the vast market of Bangladesh at any cost. So they provide various types of product and services. I also found that the companies counterattack their competitors by their offers. Some gives high or low interest rate, new facilities etc†¦ Every company has their own strategy to capture the market. In my report I tried to include most of IFIC bank’s product, services and facilities. Though I have some limitations I tried my best to show the Performance Evaluation of IFIC bank as a private bank. BANK'S MISSION: Quest for Excellence Our Mission is to provide service to our clients with the help of a skilled and dedicated workforce whose creative talents, innovative actions and competitive edge make our position unique in giving quality service to all institutions and individuals that we care for. We are committed to the welfare and economic prosperity of the people and the community, for we drive from them our inspiration and drive for onward progress to prosperity. We want to be the leader among banks in Bangladesh and make our indelible mark as an active partner in regional banking operating beyond the national boundary. In an intensely competitive and complex financial and business environment, we particularly focus on growth and profitability of all concerned. THE BANK IN A SKETCH: International Finance Investment and Commerce (IFIC) Bank Limited started banking operations on June 24, 1983. Prior to that it was set up in 1976 as a joint venture finance company at the instance of the Government of the People's Republic of Bangladesh. Government then held 49 percent shares while the sponsors and general public held the rest. The objectives of the finance company were to establish joint venture Banks Finance Companies and affiliates abroad and to carry out normal functions of a finance company at home. When the Government decided to open up banking in the private sector in 1983, the above finance company was converted into a full-fledged commercial Bank. Along with this, the Government also allowed four other commercial Banks in the private sector. Subsequently, the Government denationalized two Banks, which were then fully Government-owned. While in all these Banks Government held nominal 5 percent shares, an exception was made in the case of this Bank. It retained 40 percent shares of the Bank. The decision by the Government to retain 40 percent shares in IFIC Bank was in pursuance of the original objectives, namely, promotion of joint participation of Government and private sponsors to establish joint venture Banks, financial companies, branches and affiliates abroad. Ownership Structure BOARD OF DIRECTORS: Board of Directors of the Bank is a unique combination of both private and Government sector experience. Currently it consists of Ten Directors. Of them five represent the sponsors and general public and four senior officials in the rank and status of joint secretary/Additional Secretary represent the Government. Managing Director is the ex-officio Director of the Board. |Elected Directors | |Representing ‘A' Class Shareholders | |01 |Mr. Manzurul Islam |Chairman | |02 |Mr. Saiful Islam |Director | |03 |Mr. Abul Matin Khan |Director | |04 |Mr. Abdul Hamid Chowdhury |Director | |05 |Mr. A. R. Malik |Director | |   | |Nominated Directors | |Representing ‘B' Class Shareholders | |(Government of Bangladesh) | |06 |Mr. Mohammad Janibul Huq |Director | |07 |Mr. ATM Ataur Rahman |Director | |08 |Dr. Chowdhury Saleh Ahmed |Director | |09 |Mr. Md. Mokhles ur Rahman |Director | |   | |10 |Mr. Mashiur Rahman |Managing Director | Financial Position CAPITAL & RESERVES: The bank started with an authorized capital of Tk. 100. 00 million in 1983. Paid-up capital was then Tk. 71. 50 million only. Over the last Twenty One years, the authorized & paid-up capital has increased substantially. Authorized capital was Tk. 500. 00 million and the paid-up capital stood at Tk. 406. 39 million as on December 31, 2004. The Bank has built up a strong reserve base over the years. In last twenty one years its reserves and surplus have increased significantly. This consistent policy of building up reserves has enabled the bank to maintain a better capital adequacy ratio as compared to others. With the active support and guidance from the Government, the bank has been showing a steady and improved performance. In its twenty One years of operations, the bank has earned the status of a leading bank in terms of both business and goodwill. Starting with a modest deposit of only Tk. 863. 40 million in 1983 the bank has closed its business with Tk. 20, 774. 49 million of deposit as on December 31, 2004. The annual growth rate has mostly been higher compared to both banking sector growth and individual growth rates achieved by others. As against a profit of Tk. 21. 94 million in 1984, the bank earned a record profit of Tk. 700. 25 million for the year ended on December 31, 2004. PRODUCT & SERVICES Presently 5 (five) products/services have already been launched in the market: A. Pension Saving Scheme (PSS) B. Monthly Income Scheme (MIS) C. Tele Banking / Tele Link D. Death Risk Benefit Scheme (DRBS) E. Consumer Credit Scheme (CCS) A. Pension Saving Scheme (PSS): 1. Name of the Scheme: Pension Saving Scheme . Delivery Points: 62 Branches 3. Highlight of the product: Duration of the Account: 5 (five) Years & 10 (ten) Years Monthly Installments: Tk. 500 or Tk. 1000 or Tk. 2000 Payment after Maturity: | |PAYMENT AFTER MATURITY | | |5 YEARS |10 YEARS | |INSTALLMENT |WITHOUT BONUS |BONUS |WITH BONUS |WITHOUT BONUS |BONUS |WITH BONUS | |Tk. 00 |36265/- |1500/- |37765/- |93050/- |3000/- |96 050/- | |Tk. 1000 |72530/- |3000/- |75530/- |186100/- |6000/- |192100/- | |Tk. 2000 |145060/- |6000/- |151060/- |372200/- |12000/- |384200/- | Eligibility for PSS Account: A person of 18 years of age and above having a sound mind will be eligible to open an account in his/her own name. Bonus Payment: If the account holder, from commencement to maturity of term, pays all the monthly installments in time (i. e. within 10th day of each month) and never defaults in paying monthly installments, the account holder will receive extra bonus payment equivalent to 3 (three) times of monthly installment for 5 years term and 6 (Six) times of monthly installment for 10 years term. Income Tax Rebate: Under this Scheme, income tax rebate will be available on the total amount payable i. e. after maturity of deposited amount; such amount will also be income tax free. Monthly installments to PSS will also qualify for showing as investments (like provident fund) in yearly Income Tax Return. Payment of Pension: One can receive the entire deposited amount with interest at a time or receive a pension on monthly basis at a desirable amount of monthly installments. B . Monthly Income Scheme (MIS): 1. Name of the Scheme: Monthly Income Scheme. 2. Delivery Points: 62 Branches. 3. Highlight of the product: 4. Duration of the Account: 5 Years (Deposited principal amount will be returned on maturity). 6. Amount to be Deposited: Tk. 50000/- and it’s multiple. 7. Payment after Maturity:Tk. 450/- and it’s multiple. Procedures for paying monthly income: The payment of monthly income will start from the subsequent month after a clear minimum gap of 1 (one) month from the date of deposit. If an account is opened on 7th of any month, monthly income will be paid on 7th of the subsequent month. The account holder will receive monthly income in any SB/CD account of same name maintained with the branch. In case, the account holder does not have any SB/CD account with the Branch, he/she/they will have to open a SB/CD account for receiving the monthly income. The minimum balance requirement will be waived for these types of accounts for a new customer. However, a minimum initial deposit of Tk. 500/- will have to be deposited. This procedure will eliminate the hassle of coming to the Bank Branch for taking interest every month. Eligibility for Monthly Income Scheme: A person of 18 years of age and above having a sound mind will be eligible to open an account in his/her own name. A person can open more than one account in his/her/their name in the same Branch or any Branch of the Bank. C. Tele Link/Tele Banking: 1. Name of the Scheme: Tele Link or Tele Banking. . Delivery Points: Gulshan, Federation, Dhanmondi, Motijheel Branches. 3. Basic Features of the Product: Phone Banking is a fast convenient and easy to use service that will complement one's lifestyle and keep one in complete control of his banking. One can access all the Telelink services at any time, day or night, from anywhere. It is far more convenient than traditional banking. T elelink is really simple to use. One can just dial our phone number from anywhere and an automated computerized voice response will guide him step by steps through his transactions. Confidentiality: A customer is given a 6 digit Registration Number when he applies for Telelink that will ensure total confidentiality of his account information. When the customer chooses to obtain specific information about his account, he will have to use his Registration Number and the confidential Personal Identification Number (PIN) by pressing the number keys on his phone. Banking Services Supported by Telelink: A. Transactions Relating to Transfer of funds from one account to another B. Inquiries relating to †¢ account balances †¢ transaction details †¢ exchange rates †¢ interest rate information †¢ products and services †¢ remittances C. Requests for †¢ balance certificates †¢ account statement †¢ 7-days withdrawal notice on accounts †¢ cheque books/pay order/drafts †¢ renewing or opening of fixed deposits †¢ assistance for opening other accounts In addition, the service can also deal with lost cheque books and credit cards, change of address and stopping of payment. Fees: We are not charging any fees for this technical service but the facility has been offered to Saving Bank customers with a minimum balance of Tk. 50,000/-, to Current Deposit Account customers and STD customers with a minimum balance of Tk. 100, 000/-. D. Death Risk Benefit Scheme (DRBS) . Name of the Scheme: Death Risk Benefit Scheme. 2. Delivery Points: 62 Branches. 3. Basic Features of Scheme: IFIC Bank's Death Risk Benefit Scheme offers its Savings Bank Account holders' interest on savings, a lump sum amount and some peace of mind – three in one benefits at no extra cost! Benefits of Scheme: Death Risk ben efits in lump sum amount to nominee(s)/heir(s) on the death of an account holder. Eligibility Criteria: Account must be maintained for a period of minimum one-year before the death of the account holder. At the time of death, the customer must have been within the age group of 18 to 50 years. The account must have been opened with a minimum deposit of Tk. 5000 in case of new accounts. (Since 1-8-97). Average balance of Tk. 10,000/- minimum must be maintained within one-year period prior to the death of the Account Holder. Extent of Benefit 50% of the average balances of the account for one-year period prior to the death of the account holder or Tk. 100,000 whichever is lower. Account balance exceeding Tk. 10, 00,000/- will not be taken into consideration while calculating average balance for one year for the purpose of Death Risk Benefit. E. Consumer Credit Scheme (CCS): 1. Name of the Scheme: Consumer Credit Scheme. 2. Delivery Points: 62 Branches. 3. Highlight of the product: |Main Features |Particulars | |Selection Criteria / Who Can |A Self employed person of fixed income $ a confirmed or permanent service holder. | |apply | | |Products Eligible for Finance |Vehicles, Domestic Appliance, Office Equipment, Entertainment, Medical Expenses, Intangibles, etc. |Limit Range |Tk. 15,000 to Tk. 7,00,000 | |Repayment |By 12, 24, 36 or 48 equated monthly installments (EMI) depending on the loan amount. | |Interest Rate / Fees |Interest: | | |@ 16. 00% P. A. ithoutany tangible security and | | |@ 14. 50% P. A. where the loan is 100% secured with 20% margin against lien of FDR, MIS, PSS, Savings | | |Certificates issued from any Bank & Financial Institution. | | |Service Charge: | | |For 1 and 2 Years term – 2% of the Loan amount (minimum Tk. 00/-) | | |For 3 Years term – 3% of the Loan amount | | |For 4 Years term – 4% of the Loan amo unt. | |Down Payment / Equity |Minimum 20% of the invoice value of the Consumer Products. | |Contribution |For Vehicles: 30% to 40% in Cash / Financial instruments.. | Q-cash: Q-cash is a new service provided by the IFIC Bank. In this quick cash service system there consumer can withdraw money easily in any time in exchange of a little yearly fee. This kind of services is very helpful for their current consumers and for their new consumers of their services. This kind of services is raising the living standard of people. For implementing this kind of new service we are grateful to IFIC Bank. HUMAN RESOURCES DEVELOPMENT Human Resources Development (HRD) activities aim at fulfilling the bank's Mission. One of our four major missions is to: â€Å"Provide service to our clients with the help of a skilled and dedicated workforce whose creative talents, innovative actions and competitive edge make our position unique in iving quality service to all institutions and individuals that we care for. † Skilled and dedicated workforce with creative talents, innovative actions are not always readily available. Appreciating the scarcity of such manpower, the bank from the very beginning laid importance to HRD that conceptually includes activities like: pre-recruitment drill, recruitment, induction, training in the Academy, job rotatio n, placement & posting, reward and promotion. All these activities are planned by the bank in an integrated way aiming at manpower with required amount of technical, managerial, human and conceptual skills. Management of IFIC Bank not only appreciates the need of skills required for day to day banking but also realizes the need for skills to meet the global & national financial and economic environments that are changing fast. Meeting the needs of new skills arising out of Financial Sector Reforms Programme (FSRP) is also a major concern of the management. The bank, therefore, set up a Division namely HRD Division under a separate Group called Services Group-I. The Academy of the bank works under this group. The other Division, which works under the Services Group-I, is Planning, Research & Statistics Division. Current News IFIC BANK JOINED SHARED ATM NETWORK IFIC Bank Ltd. and ITC Ltd. have signed a shared ATM network participation accord. . The Signing ceremony was held in presence of Mr. Ataul Haq, Managing Director of IFIC Bank Limited and Mr. Kutubuddin Ahmed, Chairman of ITCL and President of BGMEA. Executives and senior officials of IFIC Bank were also present on the occasion. In the process, the bank has joined a group local bank for introduction of shared ATM network. Automated teller Machine (ATM) with electronic device located at the bank branches or other convenient public locations extends 24 hours access to cash and other banking facilities to the customers without requiring to enter the branch or to wait in queues for cash withdrawal. This will establish the banks commitment for valued customers to bring a new era in banking services. Under this new facility, IFIC Bank will install few ATMs at its branch premises in Dhaka city. Similarly, few more units of off site ATMs will also be installed in some prominent public places in the city by the syndicate partners. GROUP OPERATION-I: Operations-I, a group segment of Head Office operation of the Bank mainly handles General Advance/ Credit Portfolio, Project finance excluding Overseas Operations of the Bank and Lease Financing. The Group is headed by Senior Executives having commendable professional knowledge and experience supported by a talent pool of MBA's, Engineers, Economists, and Statisticians etc. with the blending of credit experience. GROUP STRUCTURE: A. Name of Group Executive/ In-Charge: Mr. Md. Ziaul Bari, Executive Vice President B. Functional Structure: The Group Comprises of 3 Divisions as under: i) General Credit Division ii) Project Finance Division iii) Lease Financing Division C. Area of Operation: i) General Credit Division a) Sanction Department: This department mainly handles Credit Portfolio of the Bank related to Working Capital and Trade Finance. Proposals of such nature are processed/appraised and disposed of by this department. The department is manned by a group of professionals from respective discipline with commendable banking experience as well as exposure in modern concept and technology. ) Credit Administration Department: The function of this department is to monitor credit portfolio of the Bank through physical inspection of various periodical returns, Audit/Inspection Report etc. with a view to maintaining a healthy asset base of the Bank. c) Credit Information & Returns Department: This department deals in preparation of different periodical returns related to credit portfolio of the Ban k for management information as well as for submission of information/data to Regulatory Body and various controlling agencies. The department also centrally handles all jobs relating to Loan Classification of the Bank. d) Ancillary Functions: The Group also handles various Loan Schemes for the employees of the Bank. ii) Project Finance Division: Project Finance Division is a shared resource center of the Bank which provides back office support to the branches – the marketing outlets of the Bank – in their endeavor to meet the credit needs of the corporate clients. The Division helps the corporate clients in their decision making for undertaking venture project or BMRE of the existing projects. It also assist them to structure their long term and short term finance and to raise fund from own source of the Bank or through syndication with other Banks. In case of difficult business situation and unexpected low turnover vis-a-vis poor performance of the clients, the Division offers customized solution through business and financial restructuring. The Division also provides counseling to the corporate clients for minimizing their business risks and optimizing growth in the context of rapid globalization. The Division so far financed 250 projects (New and BMRE) since 1996, major concentration being in textile sector – both export oriented and backward linkage units. Other mentionable sectors are Steel and Engineering, Cement, Real Estate, Consumer Products, Printing and Packaging, Hotels, Hospitals, Cold Storage etc. iii) Lease Finance Division: To assist bona-fide entrepreneurs acquire capital machinery and equipment increasing / up-grading productive capacity without trying up equity and to contribute to the industrial development of Bangladesh IFIC Bank Limited has introduced Lease Finance. For more please contact the Branches. RATES OF DEPOSIT SCHEMES |Deposit Schemes |Deposit Rates | |Savings (SB) |5. 0% | |Special Term Deposit (STD) |4. 00% | |Fixed Deposit |Rate of Interest | |Three Months |6. 75% – 7. 50% | |Six Months |7. 00% – 7. 5% | |One Year & above |7. 25% – 8. 00% | * Figure in LAC Taka Conclusion: To prepare this report on Performance Evaluation of a private bank I collect information of many banks and finally select The IFIC bank to prepare this Performance Evaluation Report. For collecting information regarding different bank, I found that these private companies are very competitive and want to capture the vast market of Bangladesh at any cost. So they provide various types of product and services. I also found that the companies counterattack their competitors by their offers. Some gives high or low interest rate, new facilities etc†¦ Every company has their own strategy to capture the market. In my report I tried to include most of IFIC bank’s product, services and facilities. I tried to focus all their branches. In my opinion the bank provide many attractive facility to their customer but it should provide more service and product to its customer and must easy on its customer on there services.

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The Impact Of Fdi On European Economic Development - Free Essay Example

Sample details Pages: 12 Words: 3564 Downloads: 8 Date added: 2017/06/26 Category Economics Essay Type Analytical essay Did you like this example? INTRODUCTION The functioning of a market economy under the conditions required by efficiency demands important financial resources, whose allocation must be directed to those areas which in their turn can generate value added and resume the active process of creating added value. If for a company the investment are realised mainly from classical sources, respectively the depreciation fund, profit or issuance of new shares, but with the risk of the dispersion of the proprietary right on business, to which we can add the financing of bank loans, a fairly expensive solution for a company in search of activity diversification. Based on these considerations, the need to review the role and function of investment funds and FDI in the economy, in the reorientation and begining of the investment process is one of utmost importance. Don’t waste time! Our writers will create an original "The Impact Of Fdi On European Economic Development" essay for you Create order Considering the last events that marked the world economy, from which the foreign investment funds, be they even FDI, to which we can add the stock innovation were among the main determinants of the process of translating the investment flows. Though investment funds in the conventional, manifesting as traditional investors, with a pronounced classical character, buying or selling financial instruments, stocks, bonds or other financial instruments or developing new production capacities, in their action they determine a significant impact on the economic activity outlining some features of the economic environment within which they occur. For countries like Romania, for example, or Serbia, this process is actual, but difficult to achieve because it needed more than financial resources. From this point of view à ¢Ã¢â€š ¬Ã…“Inadequate progress in second-generation reforms provides explanation in variation of FDI inflows. A number of empirical studies focusing on transition eco nomies have corroborated this finding. Garibaldi et al. (2002) have shown, that the quality of institutions explains the variation in FDI flows to transition economies. [1, p.11] The sustenable economic development requires the existence of a set of tools and specific mechanisms through which the financial resources necessary to achieve this goal must be mobilized but especially they must contribute to an efficient redistribution of financial resources in the process of social breeding. The only one able to achieve this requirements are the investments, which succeed through mobilizing the available capital to restart the complex process of production of plusvalue. Directing the financial resources, in the economic policy, to those economic objectives able to develop in their turn a growth of the rate of employment of labor requires a new governance in terms of investments, whose key source should be profit, fund depreciation or GDP, at the economic level. As known, sometimes financial resources available to the national economy are not sufficient to promote massive actions, attracting new finance being required, in addition to foreign capital markets. These completion investments, although they are not quite common in many of the emerging countries, they use them. On the other hand we are witnessing independent investment flows, directed either to initiating new production capacity or upgrading existing ones, promoted by global financial players that make up the foreign investment flows. As it is stated in one of the european documents The fact that the market has failed in the financial sector does not mean that it does not work at all, but points out the need to avoid, namely to correct the wrong market developments, through legislative measures and of targeted surveillance. Therefore, the new policy must be built on the foundation of a market economy, which stimulates and rewards their initiatives and risk taking. [10, pct.3.4]. So the financial r esources attracted through foreign investments should be targeted at those areas that present a high reproductive capacity, either by the recognized degree of generating profits or by the significant beneficial efects that they have on the workforce. FDI should ensure a high degree of efficiency, both for the investor who chooses to invest and must be rewarded by high rates of profit, and for the country within which is achieved by increasing the resources mobilized through tax mechanisms, the state budget, and the remuneration for labor involved in achieving the resulting business. Literature review The analysis of the role of FDI in the economy was made in a number of important studies. From these we mention (Serbu, 2006) which claims that promoting FDI is not always in favor of countries that receive these flows, analyzed at least in terms of qualification of employment and not contribute to economic growth, so the role of FDI is questioned. On the other hand ÃÆ'–ZTÃÆ'Å“RK, Ilhan (2007) argues the opposite, namely that the role of FDI in economic growth is major and decisive, which is achieved through multiple channels such as gross capital formation, technology transfer and effects on human capital. In another study[6], Ben Ferretti (2004) explores the relationship between FDI and productivity growth and concludes, after making a brief analysis of the theoretical models, in terms of game-theoretical models, that this is determined by the spatiality and the intensity of FDI flows on economy and economic agents in particular [4]. The same ideas has Damjan Joze et all (2003) which explores the role of accumulation of FDI and R D on technology transfer and their effect on economies in transition [3] or Hunya, Gabor (2002) which analyzes economic restructuring phenomena from FDI perspectives on manufacturing industry.[5] The analysis Market Integration from Foreign Direct Investment intensity perspective Foreign direct investments consist of significant vectors in achieving economic and social objectives, in the context of diversification of society needs in satisfying the goals promoted at the macroeconomic level. The need for financial resources is an ever growing from year to year and the financial resources attracted from the foreign capital market is a solution to achieve these goals. From this perspective each stateà ¢Ã¢â€š ¬Ã¢â€ž ¢s ability to attract these resources depends to a very high measure on the degree of integration of national markets in the total investment flows but also on the degree of atraction of each state. In this context the analysis of foreign direct investment in the community economy is of special importance. Referring to GDP make these data to show a high relevance through removing the national economiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ dimension outlined by each state. These data are presented in the table below. Table no.1 Market Integration Foreign Direct Investment (FDI) intensity Average value of inward and outward FDI flows divided by GDP %  2000 2001 2002 2003 2004 2005 2006 2007 2008 EU-27 NA NA NA NA 0,9 1,7 2,3 3,8 2,2 Belgium NA NA 5,6 11,5 10,7 8,9 13,7 24,5 22,1 Bulgaria 4 2,6 2 5,3 6,5 7,8 12,6 15,2 10,3 Czech Rep. 4,5 4,7 5,8 1,3 2,7 4,7 2,4 3,5 2,9 Denmark 20,1 6,9 3,2 -0,7 NA 5,6 2 5,2 2,4 Germany 6,7 1,7 1,8 0,8 0,2 2,2 3,2 3,5 2,4 Estonia 4 5,9 2,9 5,5 5,1 12,8 8,7 10,5 6,3 Ireland 16,1 6,6 15,3 9 2 -4,3 2,2 8,8 -1,2 Spain 8,4 5 5,2 3,1 4,1 3 5,5 7,2 4,7 France 8,2 5,5 3,4 2,7 2,2 4,7 4 5,3 5,2 Italy 1,2 1,6 1,3 0,8 1 1,7 2,2 3,1 1,3 Cyprus 5,5 6,2 7,5 5,5 5,6 5,1 7,4 7,9 15,6 Latvia 2,7 0,9 1,4 1,6 2,7 2,6 4,6 4,7 2,2 Lithuania 1,7 1,9 2,6 0,6 2,3 2,6 3,5 3,3 2,3 Hungary 2,3 4 2,4 2,3 2,7 4,5 5 3,4 1,7 Netherlands 18,1 12,8 6,5 6 2,8 14,1 5,4 9,2 0,7 Austria 3,8 2,4 1,5 2,8 2,1 3,8 3,4 9,5 5,2 Poland 2,7 1,5 1,1 1,2 2,7 2,3 4,2 3,4 1,6 Portugal 6,6 5,4 0,6 4,4 2,6 1,6 4,6 1,9 1,2 Romania 1,4 1,4 1,3 NA NA 3,3 4,8 3 3,5 Slovakia 5,3 3,7 7,8 3,6 3,6 2,7 4,6 2,8 1,9 Finland 13,5 4,8 5,7 0,3 0,5 2,3 3 4 -0,7 Sweden 13 4,1 4,5 4,2 3,4 5 6,5 7 7,2 U.K 11,9 3,8 2,3 2,1 3,3 5,6 5 9 4,7 Croatia 2,5 3,3 3 3,2 1,7 2,2 3,6 4,4 NA Turkey NA NA 0,3 0,4 0,5 1,2 2 1,9 NA Norway 4,7 0,7 1,2 1,8 1,5 3,8 3,8 2,2 NA Switzerland 12,8 5,3 2,6 4,9 3,7 6,7 13,6 11,4 NA USA 2,3 1,4 1 0,8 1,7 0,3 1,5 NA NA Japan 0,4 0,5 0,5 0,4 0,4 0,5 0,5 1,1 NA Source: author`s own selection based on Eurostat database, available at: https://epp.eurostat.ec.europa.eu/tgm/table, accessed on: 27.01.2010 As seen from the data presented above, there is a syncopated evolution of investment flows, both in integrated economies in the economic space, but also for those who want integration (Croatia and Turkey) and especially the most developed economies (USA and Japan). At the EU level we can see an increase in the intensity of FDI during 2004-2007, from 0.9 in 2004 to 3.8 in 2007, meaning an increase of 4.2 times. This growth rate was a syncopated one which means that the european economy has been trained in the massive wave of investment and capital flows with relatively high degree of risk, which resulted that since 2008 this indicator decreased by 1.7 times compared to last year. In the case of member countries we can see a different evolution. If in the case of the last two countries that joined the EU in 2007 we may find a slight improvement, as is the case of Romania, this indicator increased from 3% to 3.5%, a low level compared to 2006 when this indicator recorded 4.8% when the interest of foreign investors was much higher than the economy, or maybe they were just strengthening their investment positions by purchasing generators of economic value added or Bulgaria, which after membership is growing at 12.6% in 2006 to 15.2% in 2007, the next year it registers a 10.3 drop. This situation can result from the inability to pay on which is encumbered the whole bulgarian economy. For the european countries which were old members, this indicator presents a high volatility. After register significant levels of 6.7% as in the case of Germany in 2000 it reaches in 20 08 at a value of only 2.4%. Such is the case of France which in 2000 recorded 8.2% and eight years later only 5.2%. These developments are mainly due to the shaken european economic environment, where the investors are orienting and reorienting the capitals according to high profit rates than to business stability. For Serbia, a non-EU country assets owned by foreign entities in Serbia are growing in nominal values. But if we look at share of foreign owned assets in total financial institutions, we may observe that there has been a decrease of 0.2% from 84.3% to 84.1%, despite the entry of 13 new fully foreign owned institutions during the analyzed period. This confirms that financial institutions owned by domestic entities are operating even better than the foreign owned ones. Since we know that before the restructuring of the financial sector in Serbia most banks and insurance companies have operated with significant loss, we may conclude that that remaining domestic owned inst itution have significantly changed their business culture.[8] Regarding the U.S., the evolution of this indicator for 2000-2006, reflects the difficult moments that this countrys economy has passed. If in 2005 this indicator recorded the lowest level of the period analysed, of only 0.3% (more than up to 5 times compared to 2001), one year later to grow by 500%, due to the trust granted in the economic development through FDI. For the Japanese economy the evolution of this indicator is ranging at around 0.4-0.5%, which means the sustainability of investments supported through these instruments, especially the economy of this country design was based more on capital exports to third countries than absorption of this type of capital in its economy. But 2007 brings a doubling of the level of this indicator actually marking the shift towards exporting the capital investment to emerging economies, in particular. In one of the UNCTAD documents it is shown that The ISD explosion in so me developing economies in transition reflects the growing competitiveness of many firms in these economies. The evolution of ISD in some countries was partialy feed by the income from exports of manufactured goods and natural resources, which have increased the financial strength necessary to engage in investment from abroad. Perhaps most important is that the firms in these economies have been increasingly affected by global competition. They came to understand how important it is the entering on international markets and connect to global production systems and knowledge networks. Therefore, their view of the business was internationalized and ambitions and their concerns are more regional or global.à ¢Ã¢â€š ¬? à ¢Ã¢â€š ¬?.[9]. Over time many countries have became sources of financing through FDI as a solution generating of resources or partners to enhance or start some income-generating activities. The stock of FDI is an important element in the analysis of investment flows in the european economy against the background of increased interdependencies among these economies. In the table nr.2 is presented the FDI stock in some european countries but also for the two biggest economies of the world USA, respectively Japan. Table no.2 Direct investment stocks as % of GDP, Direct investment, in the reporting economy (% of GDP)  2000 2001 2002 2003 2004 2005 2006 2007 2008 EU-27 NA NA NA NA 15,2 16,6 17,3 19 19,4 Bulgaria 5,2 20,6 22,5 27,9 37,3 53,6 70,6 92,9 96,5 Czech Rep. 38,6 47,4 45 43,5 47,6 51,3 53,3 59,9 53,9 Denmark 41,3 42,5 38,1 37,3 43,4 47,6 46,4 48,4 45,9 Germany 24,5 22,8 23,9 25,1 24,2 24,2 26,1 26,1 27,3 Ireland 123,7 130,1 133,9 126,2 102,2 85,5 67,2 72,9 66,5 Greece NA 10,5 9,5 10,3 11,3 12,7 14,3 15,6 11,5 Spain 26,7 29,5 33,6 34,3 34,6 35,9 35,6 37,9 41,5 France 19,4 22,4 23,7 26,7 29,2 32,4 34,5 36 37,1 Italy 10,2 9,8 9,3 10,7 11,6 13,3 15,1 16 15,5 Latvia 26,1 28,6 26,9 26,4 30 32,3 35,8 35,7 34,8 Lithuania 20,3 21,9 25,4 24,1 25,8 33,2 34,9 36 28,4 Hungary NA 52,3 48,7 44,8 55,5 59 69,5 67 57,2 Austria 15,8 18,3 19 19,1 NA 24,2 32,9 40,8 NA Poland 19,8 22 21,8 24 31,1 31,4 35,1 38,8 32,1 Portugal 28,2 31,6 31,4 34,6 34,1 36 43,2 48 43,1 Romania NA NA NA 18,4 24,6 27,4 35,3 34,3 35,3 Slovenia NA 13,2 15,4 19,4 20,6 21,3 22 28,2 29,6 Slovakia 22,1 27,6 31,9 42,8 47,4 51,9 57,4 53 50,3 Finland 19,7 19,5 22,5 27,3 27,7 29,6 32,1 34,6 30,4 Sweden 38,1 41,8 43 45,6 50,4 49,4 55,1 60 59,6 U.K 29,4 34,9 29,2 29,3 29,1 38,8 44,4 41,4 38,8 Norway 17,9 19,3 20 19,5 27,6 26 26,4 NA NA Switzerland 34,4 35,2 40,3 44,8 49,6 48 64,5 72,4 NA S UA 12,5 13,3 11,2 11,2 11,7 13,3 12,7 NA NA Japan 1,1 1,3 1,8 1,9 2 2,3 2,3 2,9 NA Source: author`s own selection based on Eurostat database, available at: https://epp.eurostat.ec.europa.eu/tgm/table, accessed on: 27.01.2010 If we consider the definition of FDI stocks in the acceptance of UNCTAD these are presented at book value or historical cost, reflecting prices at the time when the investment was made. For a large number of economies, FDI stocks are estimated by either cumulating FDI flows over a period of time or adding flows to an FDI stock that has been obtained for a particular year from national official sources or the IMF data series on assets and liabilities of direct investment [8] From this perspective we can see an increase in direct investment stocks both at EU-27 level over the period 2004-2008, from 15.2% share in GDP from 19.4% share in GDP in 2008. This situation of growth can be observed in the case of Japan but with values much more reduced. If in 2000 in the case of Japan these represented only 1.1% in GDP, seven years later this share was 2.9% in GDP, an increase double to the reference year. This can not be saidin the case of the U.S., where direct investment stocks have a fluctuant evolution. Against this background is noted that The convergence of corporate governance models, combined with ICT development, with an increasing activism manifested by the institutional investors and their reference measure regarding the profitability, all these put the large companies in a position to maximize with any price the profitability (dividends and capital gains) of shares held by them. Considerations on the ability to generate future cash flows as well as the nature of partnership highlighted by the european social model were left on the second level. [11] In most developed economies of the EU-27, namely Germany, France and UK we see during the long analysed period signifi cant growth which means that investments made in this period were so well-consolidated that they increased their value through engaging in activities with value added to high. In the case of the last two states that joined EU in 2007 the situation is quite different. If for Bulgaria since 2007 we saw some increase from 92.9% share in GDP to 96.5% in GDP in 2008, to Romania it means a return to pre-integration values (2006) respectively 35 , 3% share in GDP. Analyzing the situation of direct investment stocks we observe, analysing economy as a whole, with few exceptions, an increase of this indicatorà ¢Ã¢â€š ¬Ã¢â€ž ¢s value. The causes may be diverse but reflect the economic situation conducive to the development for the period analyzed. In this context the situation intra-EU direct investment reported by EU member states provide an integrative picture on the amplitude of this phenomenon. Each economy is closely linked, interdependencies manifesting deeply both at macroeocnomi c level but especially at the micro level, where FDI contributes to strengthening the business relations and the transfer of knowledge and technology. The level of investments made in each national economy and the member states within the EU economic space reflects the importance of this type and level of investment for mobilizing financial resources for economic exploitation. In Serbia FDI in the previous decade has reached US$ 17 billion, which was sufficient to boost the economic activity. Highest investments were in the financial sector, accounting to over US$ 5 billion. This sector which was characterized by low capitalization and weak profitability in the past has due to foreign capital become sector with very high growth rate. The influence of foreign capital to Serbian financial sector was twofold.[8] Evolution is presented in Table 3 Intra-EU direct investment reported by EU Member States, Financial account, Direct investment, in there porting economy for the period 2 001-2008. Table no.3 Intra-EU direct investment reported by EU Member State ; Financial account, Direct investment, in there porting economy million ECU/EUR  2001 2002 2003 2004 2005 2006 2007 2008 EU-25 403192 360059 232872 179579 453514 483779 604802 350216 Bulgaria NA NA 1499 2284 2345 5197 7337 5639 Czech Rep. NA 8460 812 3231 8937 3896 5996 6311 Denmark 7169 4136 -599 NA 6546 3925 4639 3667 Germany 19359 46518 18971 -3372 33476 22013 30327 5454 Estonia 488 259 707 591 2252 1407 2001 1072 Ireland NA 14426 21455 NA -16769 -590 359 1263 Spain 26989 23444 15706 NA 18185 19882 47170 42088 France 53434 39899 27009 24590 54782 41121 59360 46166 Italy 13100 12155 13276 1337 14187 28404 27911 11178 Cyprus 463 452 590 579 526 487 1019 1185 Latvia 75 169 150 353 365 978 1477 682 Hungary 3159 203 4 2577 2067 5909 5015 2763 3739 Austria 5681 -264 4062 5574 7427 6895 19002 11151 Poland 5857 4236 3238 9661 6735 13637 14243 9676 Portugal 6716 1669 366 -643 4074 5959 2342 1107 Romania NA NA NA NA 5324 8454 6540 8502 Slovenia NA 595 321 473 629 499 1085 1091 Slovakia NA NA 1744 2532 1648 3255 2030 2503 Finland NA 7884 2165 2209 3690 5622 8176 -3839 Sweden NA NA 2078 -32 7334 13337 15100 28433 U.K 28155 25000 7945 NA 103878 69966 57498 27582 Source: author`s own selection based on Eurostat database, available at: https://epp.eurostat.ec.europa.eu/tgm/table, accessed on: 27.01.2010 Investment flows that occurred outside the community space have reflected the strength of economic ties with other states that benefit from t his transfer of resources. Knowing that they represent over 10% in the company capital or voting rights we see the interes in promoting and acquiring production capacity with significant economic impact. If in the period 2005-2007 we saw a growth of FDI flows within the community space, the year 2008 brings a reduction in these flows, below those of 2002. The investment relations generated by FDI at community level enhance the process of interdependence of community economies, especially that for the old member states like Germany, France, UK, the flows registered massive drops, especially as they represented exporters of financial resources for the transition and emerging economies. In terms of FDI flows, at least for Romania, as an example of an economy new entrant in the community economic space, in the year 2008, according to BNR data there were 9.496 billion euros, mostly oriented towards economic objectives that have been designed for the privatization process as well as fo r the initiation of new economic objectives like car production capacity at Pitesti or mobile phones in Cluj-Napoca. So in this context, Net participations of the direct foreign investors to the social capital of foreign direct investment enterprises in Romania amounting to 4.873 billion euros (51.3% of the net flow of ISD). These resulted from the reducing of the participations worth 5.265 billion euros with a net loss, amounting to 392 million euros. The net loss resulted from the decrease in net profit of foreign direct investment enterprises in 2008, worth 6.412 billion euros, with 2.696 billion euros in dividends distributed in 2008 and with foreign direct investment enterprises losses in 2008 amounting to 4.108 billion euros. [12] Opening economies and accepting a high degree of penetration of FDI flows made possible the development of economic sectors, which until yesterday were doomed to decay due to the rising need for capital. Revitalization of these sectors able to gen erate profits at the expense of FDI has contributed to diversification but generating added value and growth and diversification of portfolio risk. At the end, we may say that quality of operations of Serbian financial institutions is growing, that assets values are rapidly increasing, and that all companies, regardless weather it is domestic or foreign owned are equally profitable. It is certain that this sector is ready to become core of Serbian economy, and a boost for increased FDI in the second stage of transition.[] Regarding the other component, namely The net credit received by firms with foreign direct investment from the foreign direct investors included in the group, amounting to 4.623 billion euros, representing 48.7% of net flow of ISD.[12] This situation defines the degree of atractability for foreign investors that the economy shows, especially because of some factors that accentuate their competitivity degree like very cheap labor force and highly qualified but also the strategic position that this economy has in the community space. The following table gives an overview of direct investment flows as% of GDP, made by the member states of EU. Table no.4 Direct investment flows as % of GDP; Financial account, Direct investment, Abroad (% of GDP)  2000 2001 2002 2003 2004 2005 2006 2007 2008 EU-25 NA 3,2 1,4 1,4 1,4 2,2 2,8 4,4 2,9 Belgium NA NA 4,9 12,3 9,4 8,7 12,7 23,1 23,9 Bulgaria 0 0,1 0,2 0,1 -0,8 1,1 0,6 0,7 1,4 Czech Rep. 0,1 0,3 0,3 0,2 0,9 -0 1 0,9 0,9 Denmark 17,8 7,9 3,6 -0,3 NA 6,3 3 6,6 4,1 Germany 3 2,1 0,9 0,2 0,7 2,7 4,4 5,4 4,3 Estonia 1,1 3,2 1,8 1,6 2,2 5 6,7 8,1 4,5 Ireland 4,8 3,9 6,9 3,5 9,8 7,1 6,9 8,1 5,1 Spain 10 5,4 4,8 3,2 5,8 3,7 8,4 9,6 5 France 13,2 6,9 3,5 3 2,8 5,4 4,9 6,5 7 Italy 1,1 1,9 1,4 0,6 1,1 2,4 2,3 4,3 1,9 Latvia 0,1 0,2 0 0,4 0,8 0,8 0,9 1,3 0,7 Lithuania 0 0,1 0,1 0,2 1,2 1,3 1 1,5 0,7 Hungary 1,2 0,7 0,4 2 1,1 2 3,4 2,6 0,5 Austria 3 1,6 2,8 2,8 2,9 3,8 4,3 10,5 7,1 Poland 0 -0 0,1 0,1 0,4 1,1 2,6 1,3 0,5 Portugal 7,2 5,4 -0,1 4,2 4,2 1,1 3,7 2,5 0,9 Romania -0 -0 0 NA NA -0.2 0,3 0,2 0,1 Slovenia NA 1,3 0,8 1,8 1,4 1,9 2,4 4,1 2,5 Slovakia 0,1 0,3 0 0,7 -0,1 0,3 0,9 0,8 0,3 Finland 19,7 6,7 5,4 -1,4 -0,6 2,2 2,3 2,9 1,2 Sweden 13 2,8 NA 6,8 5,1 7,3 6 8,1 5,8 U.K 15,8 4 3,1 3,3 4,1 3,5 3,5 11,4 5,9 Turkey NA NA 0,1 0,2 0,2 0,2 0,2 0,3 NA Norway 5,1 0,1 2,3 2 1,8 7 5,5 3,2 NA Switzerland 17,9 7,2 2,9 4,8 7,2 13,7 19,4 11,4 NA U.S.A 1,4 1,2 1,3 1,2 2,2 -0,2 1,6 NA NA Japan 0,7 0,9 0,8 0,7 0,7 1 1,2 1,7 NA Source: author`s own selection based on Eurostat database, available at: https://epp.eurostat.ec.europa.eu/tgm/table, accessed on: 27.01.2010 In this context we can see that the community space was an important source of investment for emergent countries in particular. They have targeted primarily the purchase of economic objectives or develop new ones. FDI is an instrument to achieve economic potential. In this context, according to numerous research carried out, it is considered that à ¢Ã¢â€š ¬Ã… ¾A very large number of foreign firms combined with relatively business friendly environment may explain uniqueness of Romania in terms of the existence of very significant knowledge spillovers to domestic firms, as an econometric study of CEEC-8 (excluding Latvia and Lithuania) has shown. Finally yet importantly, the share of FDI in total capital formation together with the length o f a period offers some insights as to their relative weight in the economy. The average share of FDI in Gross Domestic Investment of around 20% in the 1997-01 period suggests a significant presence of foreign firms. With around one-fifth of domestic investment carried out by foreign firms, the associated influx of management skills and technology has already had a beneficial effect on the entire economy.à ¢Ã¢â€š ¬? [1, p.15] Conclusions As we have seen FDI is an essential component in the economic development, thus creating a proper environment to achieve this point is an object of profound significance for each economy separately. FDI directs the necessary financial funds to those areas that can generate high VAB, implicitly identifying those economic areas with high potential. We must accept however that the promotion of FDI absorption brings some risks, the investor can always choose to leave the country, giving away his investment. The analysis made at the level of the community space, reveals the fact that FDI represented fundamental economic levers to promote economic growth, especially for those countries that joined the EU in the second wave. Massive transformations that have taken place in the community economy had an impact on the flows of FDI. Through FDI, capital was aimed at those companies able to carry on business profit activities, often engaging with themselves a technological transfer contribu ting to sustenable development as a whole.