Revenue Leakages, Prevention and Internal Controls in MMDAs

Revenue Leakages, Prevention and Internal Controls in MMDAs APPLICATION OF THEORIES TO REAL LIFE SITUATION 3.0 Introduction This chapter is organized into four parts, with the first part dealing with explanation of the nature of problem in LEKMA, the second part is on the solutions provided by the researchers to the problem, the third part talks about the contributions of the students to LEKMA revenue mobilization and prevention with the last part drawing conclusion on the chapter. 3.1 Explanation of the Nature of Problem in Organization There had been an increasing demand for fiscal decentralization in both developed and developing countries due to the inherent benefits in terms of infrastructural development and quality service delivery. The pertinent question here is, has this been properly implemented at LEKMA? What are the challenges and the way forward with regards to fiscal decentralization in LEKMA? In view of the strategic location of the Assembly in the country, thus, its exact position between Tema an industrial hub of the country, and Accra, the capital city of Ghana, LEKMA is well placed to generate enough internal Revenue to meet its recurrent expenditure and local infrastructural development needs. However, the situation in the Municipal Assembly (LEKMA) regarding Internally Generated Funds (IGF) performance showed huge gaps between projected revenues and reported actuals. Initial projected figures had to be revised downwards through mid- year budget review process in order to meet Functional Organizational Assessment Tool (FOAT) benchmarks as a result of massive revenue leakages from the system. This reflection does not depict the full potentials of the Assembly and the analysis below give evidence to back the statements made above using 2014 and 2015 composite budgets of LEKMA. The 2014 composite budget of LEKMA projected GHÈÂ » 5,710, 975.00as initial revenue target to be collected internally (IGF). However, only 54.13% of the projected figure was realized representing GHÈÂ » 3,091, 081.06by the end of the fiscal year. The trend in 2015 fiscal year was not anything different from the previous years achievement. Out of the budgeted revenue of GHÈÂ » 6,889, 512.00t o be collected internally, only 62.51% was realized, representing GHÈÂ » 4,306, 966.40in nominal figures. The worse performance which threw the whole Municipal Assembly into disarray was recorded in 2013 fiscal year. The Municipal Assembly had in its Composite budget GHÈÂ » 4,907, 779.40 as the amount to be mobilized internally. Only 44.87% of the projected amount was achieved, representing GHÈÂ » 2,202, 178.08in absolute terms. The Internal auditors report (2013) of the Municipal Assembly revealed that, revenue collectors were indulging in under carboning. This is just one of the numerous revenue mobilization malpractices confronting LEKMA. Sixteen revenue officers of the Municipal Assembly were interdicted in connection with the above mention financial fraud. The report of the auditors also showed a lot of revenue leakages in the system due to weak internal controls and prevention mechanisms. The gravity of the situation also stems from the fact that, the units who are responsible for these internal controls are also handicap in terms of financial and non-financial resources. This prevented them from executing their constitutionally mandated duties and hence the massive leakages of IGF revenue. This worrying situation calls for an empirical researched that prescribes concrete solutions to the problems. To resolve this problem, a study design which gives the broad objective framework of the researchers enquiry (Brown, 2006) provided a basis for collecting and analyzing the data to inform policy direction. In order to put the nature of the problem in the right perspective and better analyze for solutions, a descriptive study was employed. The main purpose of the study was to describe the already existing strategies, challenges and the causes. In view of this, descriptive approach is best suited for the study. According to Miller and Brewer (2003), qualitative technique aids the investigator to explore further potentials and challenges to achieve the desire objectives of the study. The researchers wanted to explore other strategies that could be used to improve revenue mobilization and reduce leakages in the system. According to Neuman (2007), the subjects or concerns in the research design includes the purpose of the study, the type of investigation, the type of the sample which will be used, the methods by which the required data will be collected, as well as the process that will be followed for the analysis. The study used the exploratory and descriptive approach to evaluate revenue mobilization challenges in LEKMA. The research technique provided an opportunity for the researcher to interact with respondents in the field of study, which enabled the researcher to generate valid data and information using multiple sources of evidence. According to Stake (1995), interviews techniques enables the researcher to achieve reality by drawing closer and getting involve in the phenomenon under study in order to understand the environment and its participants. Robinson (2002, p.178) defines case study as a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence. The topic under study is a case study because it is impossible to study all MMDAs in Ghana c oncerning their revenue mobilization. The research also aim at putting the theory into empirical test and unearth the challenges confronting LEKMA in terms of their revenue and expenditure. 3.1.1 Data Sources Data used for analyses by the researchers came from both primary and secondary sources. The interview schedule was used to collect primary data. In using this instrument, the researcher considered all laid down ethical procedure in research (Stake, 1995). Primary data included interviews conducted by the researchers. Core management staff of the assembly as well revenue collectors and rate payers were interviewed to allow for more in-depth evaluation. The researchers conducted 34 interviews comprising key personnel in revenue mobilization across all the responsible departments of the Assembly, revenue collectors and rate payers. These are stakeholders play vital role in the efficient mobilization of revenue for the Assembly. In addition to this, key officers interviewed have the capacity to formulate and implement policies concerning IGF mobilization of the Assembly. The documentary analysis was done because documentary information is relevant in a case study research (Yin 2003). See king answers to the research questions required an examination of the organizations annual budgets and financial statements. 3.1.2 Target population and sampling technique The target population for the study was core management staff of the assembly, revenue collectors and rate payers. Purposive and convenient sampling technique was employed to select the respondents who could provide relevant required information and who were available to participate in the study. A small sample size was chosen because of the constraints; time and money. Furthermore, the small sample was used as the study did not set out to test hypotheses but to gather expert opinions necessary in answering the research questions. Interviews were conducted with these persons. Excerpts of interview have been replicated as evidence in this report. A level of measured but subjective interpretation, in line with the subjective view and interpretive position taken by the researcher, was applied in analyzing respondents responses. 3.2 Solution Provided for the Problem Upon our review and analysis of both primary and secondary data gathered, the following are the proposed solutions to the challenges. LEKMA should adopt and implement software that will generate and assign a Unique Tax Identification Number to every tax payer in the database. This becomes a permanent code that identifies the business and the rate payer in case of none payment. Rates should be collected electronically through mobile money and other banking system. LEKMA should partner with the Banks which will provide an opportunity for tax payers to use their Unique Tax Code to pay at the bank and obtain receipt. This will prevent fraud through physical cash handling as reported in the challenges. LEKMA should employ the use of Geographical Information System (GIS) to identify old and new business and properties within the municipality. Through this computerized system, a comprehensive database will be built which will then improve the revenue collection. LEKMA should adopt one community one stakeholder meeting project in addition to the town hall meetings for every fiscal year. This will promote awareness creation, transparency and accountability. Through this, rate payers and other stakeholders will get to know what their taxes are used for. Challenges such as lack of education, sensitization, transparency and accountability will be minimised. Refresher training for revenue collectors and contractors should be done on a regular basis in areas such as communications skills, customer relation ethics, revenue mobilization strategies, local governance Act, Assembly by-laws and other control mechanisms to ensure efficiency. LEKMA should advocate for the printing of General Counterfoil Receipt (GCR) with adequate security features so as to avoid duplication of the receipt by revenue collectors and contractors. Revenue targets should be set for collectors and contractors which should be closely monitored and supervised to ensure that the overall target of the Assembly is achieved. LEKMA should intensify the prosecution of rate defaulters in accordance with the bye laws of the Assembly to ensure that rate payers meet their civic obligations as well as serve as a deterrent for future defaulters. Regular field monitoring and supervision should be carried out by the superintendents to ensure that revenue collectors and contractors are deterred from engaging in fraudulent activities. All revenue collectors should be bond and stiffer punishment meted out to those found in financial fraud. 3.3 Contribution of Students to Organization The contributions of the students to Ledzorkuku Krowor Municipal Assembly in terms revenue mobilization, leakages and prevention techniques cannot be over emphasized. Students professional and personal skills, experiences and capability are being leverage on to augment the expertise of the Assembly staff handling revenue mobilization and expenditure portfolios. The students also contributed immensely to the organizations revenue and expenditure policy decisions by collecting detailed information on revenue mobilization leakages and prevention to enable top management design and implement strategies with high level of efficiency. This has become very crucial given that LEKMA hardly meet their IGF revenue projections. Students also contributed to the deepening of fiscal decentralization in Ghana, Africa and the world at large through the findings and the recommendation from this study. The prime objective of decentralization is to take governance closer to the people, improve on qualit y service and infrastructural provision and to promote transparency and accountability in the expenditure of public funds. Students prescribed solutions in this regard which will increase revenue of the Assembly and subsequently leads to quality service delivery. 3.4 Conclusion This chapter has discussed the application of theories to real life. The researchers discussed in detail the research design, approach, strategy, time horizon, methods and procedures employed in data analysis. The descriptive research design guided the researchers evaluation of revenue mobilization leakages, prevention and internal controls in Ledzorkuku Krowor Municipal Assembly. In order to collect more detailed and evidence based data, a multi-method data collection technique involving both qualitative and quantitative data collection techniques were employed. Students employed convenient and purposive sampling approaches to select respondents who could provide relevant required information and who were more available to participate in the study. CHAPTER FOUR LESSONS LEARNT AND CHALLENGES 4.0 Introduction This chapter discusses the lessons learnt from undertaking this project and challenges the researchers confronted and how they were resolved. Analyses and interpretations of data collected had also been covered in this chapter. Excerpts from the interviews are integrated as confirmation of respondents perspectives which is accepted in social research theory (Yin, 2009). To ensure ethical requirement in this kind of research namely; assuring anonymity of identity and confidentiality of respondents, generic terms like officer, rate payer, among others are used in place of personal names (Yin, 2009). 4.1 Lessons Learnt In both empirical and theoretical literature, designing and implementing policies, programmes and strategies aimed at ensuring effective and efficient revenue mobilization are not without limitations. In our interview with the officials of the Assembly, it came out evidently that the Municipal Assembly has some revenue mobilization strategies in place. This was what the Municipal Finance Officer (MFO) said with regards to revenue mobilization strategies of the assembly. We have revenue mobilization strategies in place and they include; Building the capacity of revenue collectors, frequent sensitization and education of rate payers, involvement of rate payers in the budgeting process, holding stakeholders meetings with rate payers to determine their ability to pay, involving revenue collectors in annual revenue projections, enforcement of revenue, establish a data base of all economic activities in the municipality, mobilization laws, using Assembly members in the hard to collect areas, etc. Upon further investigation and evaluation of the revenue mobilization challenges, we realized there were implementation issues. Revenue collectors were not involved in coming out with annual IGF targets, they were not frequently trained, no up to date data base on economic activities within the municipality and enforcement of revenue by-laws were poorly handled. Another key management staff has this to say on why they are not able to enforce the by-laws to the later as an assembly. The limitation we have in this area has to do with political interference. Especially when we are getting closer to an electioneering period, for fear of losing the election they do not allow to punish those who flout the laws to deter others. We are constrained but all cannot be attributed to politicians, we are also to be blamed for our inefficiencies. The researchers learned further that, logistics constraint, especially on the part of revenue collectors, contributed to the poor implementation of the strategies as well as the enforcement of the by-laws. The next objective of the study was to evaluate the existing internal controls in the Municipal Assembly. Selected officers were interviewed which included the internal auditor of the organization. In this section, the researchers wanted to know the exact internal controls the Assembly has and how they are implemented and the challenges faced. This is what the Municipal Internal Auditor had to say on internal control issues during our interview. This is a legal and a well-established institution and therefore have internal controls in place ranging from revenue mobilization to expenditure. The LI 1961 outlined the functions of each unit and department at the local level. However, ensuring effective internal controls is a shared responsibility. Let me give you internal controls we have as an Assembly; Daily checks of their general counterfoil receipt and verifying the daily banking of cash into the Assemblys account, Field audit and periodic inspection of value books, Regular monitoring of revenue activities, revenue collectors are to submit their returns daily for verification, Weekly auditing of revenue collectors cash books, we do periodic field audits, monitoring of reports by rate payers, Weekly performance of field audit, tracking of the value books to ensure that the value books used are from the Assemblys stock and duly registered in the stock register of the Assembly, that the revenue collected paid to the Assemblys account within the 24hrs. With regards to the challenges they faced by the Assembly in their implementation of revenue strategies, the following were the major concerns raised; revenue collectors attitudes towards revenue collection, rate payers connivance with collectors to under pay the required rate bill and logistic constraints. These three concerns surfaced in our interviews with the key management staffs as being the major causes of revenue leakages from the system. However, a lot of progress had been made in these areas to remove barriers and bad nuts from the system to improve IGF performance. This was evident via the interviews and our personal verification from the 2016 fiscal year revenue performance. Key revenue items such as business operating permit (BOP) and property rates showed an upward trend. Another key objective of the study was to identify the channels of revenue leakages from the system and what causes it. In view of this we had interviews with some rate payers and revenue collectors. It was very interesting during our interview with one of the rate payers and commenting on the channels, of leakages this is what she has to say; People who come for the taxes sometimes come at the wrong time when we does not have any money with huge bills, so they take bribe from us and go. Sometimes they come back to take again and others do not come again. We also realized they have their own receipts different from assemblys receipt which they issue sometimes when they take the bribe. Our taxes collected goes into individual pocket, so at the end the Assembly do not receive the supposed revenue and that is why we sometimes do not pay. I will not give my money to someone to spend. We did not limit our interviews to only individual rate payers, institutions were also added since they pay both BOP and property rates and more especially we needed varied opinions from different perspectives. During our interview with one of the executives of a bank, this was what he had to say concerning the causes of revenue leakages. They do not give us enough education on what the taxes are used for and moreover, they failed to use an electronic system to mobilize the revenue. Taxes paid in cash to revenue collectors or task force causes corruption and mistrust. For the purpose of obtaining a comprehensive view of the situation on the ground, the researchers had interviews with some key revenue collectors of the Assembly. Two major concerns runs throughout our interviews with them namely; inadequate motivation and lack of frequent trainings on the job. In summary the lessons leant through this project work include; Educating rate payers that it is their civic responsibility to pay taxes and also on the uses of their taxes are vital in local government revenue mobilization processes. Training revenue collectors on the new revenue mobilization tools, techniques and the revenue mobilization strategies of the Assembly is essential. Stakeholder consultative meetings which involve rate payers in fee-fixing and rate imposition of the Assembly is very important in facilitating effective and efficient revenue mobilization within the local government system. Another important lesson is the issue of transparency and accountability. Local authorities or duty bearers within the sub-national governments, ability to account to the citizens or local constituents builds trust between rate payers and the Assemblies. Proper accountability promotes effective revenue mobilization and increase the willingness to pay. Electronic technique of revenue mobilization cannot be disregarded. Automation of the tax collection system discourages corruption, temptation to steal and increase efficiency in the revenue mobilization drive. The responsibility to secure electronic equipment to migrate local authorities to this stage is a collective effort. 4.2 Challenges encountered Executing this project work was not all that smooth. We were confronted with a lot of challenges ranging from research design to its execution. The first challenge we faced had to do with the research instrument and the interviews thereafter. As mentioned earlier in this work, we wanted to explore a lot of areas within the local government revenue mobilization scheme so as to prescribe solutions which will greater impact on the revenue mobilization of the Assembly. There are laid down ethical considerations that must be adhered to in social science research namely; anonymity and confidentiality. Our major challenge was how to get interpretations for our respondents who were not literate in order to preserve anonymity and confidentiality. In view of this we have to make several trips to them which was a herculean task. Added to this, designing an instrument to cover a lot of areas on the topic was not that easy considering the complicated nature of fiscal decentralization and the various stakeholders involved. Furthermore, our analysis of the situation employed both secondary and primary data. Retrieving or getting access to annual composite budgets and financial statements of the previous years for the necessary reviews was a big challenge. Several calls and personal visits were made before those documents were made available. Reviewing and analyzing the data therein was also challenging and exciting. One key issue was the incorrect postings (2015 fiscal year) and some revenue items which had no unique codes. This inconsistency post a big challenge to us in the analysis and the Key Officers had to come in to rectify the situation. We were told that, this problem occurred on the field as revenue collectors were not able to describe the business well. CHAPTER FIVE CONCLUSION AND RECOMMENDATIONS 5.0 Introduction This last chapter of the study gives the conclusion and recommendations. In this chapter, the researchers give the conclusions and recommendations of the study. 5.1Â  Conclusion Findings from the project work supports both theoretical and empirical literature which says that, sensitization and education of rate payers on their tax obligation and the uses of their monies have a positive impact on revenue mobilization. Transparency and accountability as well as the provision of efficient service and developmental projects to the local residents increases their willingness to pay and decreases if the reverse is applied. This suggests that citizens are now more concern about accountability and cannot be taken for granted. Fiscal decentralization is very crucial in the decentralization process and demands central government commitment to ensure its success. Linking fiscal federalism theory to the findings from this study, revealed that some core components or elements in the theory has not been applied. Components such as effective revenue mobilization scheme, efficient service delivery, and efficient internal controls to prevent revenue leakages have not been fully executed. This was clearly shown when local constituents were demanding physical projects to showcase for the taxes they pay. Notwithstanding that, the findings also support theory from the public commodities with a different geographical pattern of consumption. The results showed that residents were asking for projects and services that suit their consumption pattern. 5.2 Recommendations The main objective of this study was to assess revenue leakages, internal controls and prevention in local authorities. The study did found that there exist revenue mobilization leakages and thus has few dynamic policy recommendations for LEKMA, policymakers, and stakeholders in local governance system. Transparency and accountability from local authorities or duty bearers must be enforced. LEKMA must therefore design and implement policies which gives enough punishment to corrupt local government official and those who fail to properly account to their local constituents. Furthermore, involving ratepayers in fee-fixing and rate imposition through stakeholders meeting is very crucial in revenue mobilization within the local government system. This calls for a policy direction to make their involvement mandatory. Assembly members at LEKMA should pass a resolution to this effect. Capacity building should not be limited to top management of Assembly but must be extended to lower ranks as well. Building the capacity of revenue collectors is vital in local government revenue mobilization and the promotion fiscal decentralization. Management of LEKMA should direct policy to make their training a priority. They are implementers of revenue mobilization strategies formulated by LEKMA and therefore need to be equipped with the latest techniques in revenue mobilization. Automation of revenue collection process is another important way of achieving efficient revenue mobilization and prevention of fraud. LEKMA should adopt and implement policies that mandates it to migrate onto automated system of rate paying REFERENCES Aryee, J.R.A. (2003). Towards Effective and Accountable Local Government in Ghana. Ghana Centre for Democratic Development (CDD), Accra. Arowolo, D. (2011). Fiscal Federalism in Nigeria: Theory and Dimensions. Afro Asian Journal of Social Science, 2 (2.2), 1-21. Badu, R., A. (2007) Mobilization of Internally Generated Funds in District Assemblies in Ghana: A Case Study of the Shama Ahanta East District Assembly. Unpublished Document Submitted to the Department of Planning, KNUST, Kumasi. Bird, R.M. (2009). Fiscal Federalism. University of Toronto, Canada. Ernest Adu-Gyamfi (2014) Effective Revenue Mobilization by District Assemblies: A Case Study of Upper Denkyira East Municipal Assembly of Ghana: Public Policy and Administration Review, American Research Institute for Policy Development. Joseph, K. N., John, P. T. and Job Asante (2013). The Relationship Between Financial Control Systems and Public Sector Efficiency in Ghana: International Journal of Advanced Research in Management and Social Sciences, Vol.2|No. 7 Korten, D. and Klaus R. (1984). People-Central Development, Connecticut: Kumarian Press. Kesner-Skreb, M. (2009). Fiscal Federalism: Financial Theory and Practice. 33 (2), 235-237 Oates, W.E. (1999). An Eassy on Fiscal Federalism. Journal of Economic Literature, 1120-1149 Oates, W.E (1972). Fiscal Federalism. New York, Harcourt Brace, Jovanovich, Olson, M. (1996). The Theory of Regulatory Federalism: The Case of Environmental Management. In The Economics of Environmental Regulation, pp319-31. Ozo-Eson (2005). Fiscal Federalism: Theory, Issues and Perspectives. Daily Intdependent. Musgrave, R. (1959). The Theory of Public Finance. New York, Mcgraw Hill Sharma, C.K. (2005). The Federal Approach to Fiscal Decentralization: Conceptual Contours for Sulley Gariba, (2009), Political Decentralization Ghana: Policy Issues, Legislation and the Way Forward. Presented at the first Annual Parliamentary Workshop on Local Government Reform and Decentralization organized by the Ghana Institute of Management and Public Administration (GIMPA) in Koforidua, November 6-8, 2009. James Edwin Kee (2003). Fiscal Decentralization: Theory as Reform, The George Washington University, Cheema, G.S, Dennis, A.R. (1983). Implementing Decentralization Policies: An Introduction. In G. Shabbir Cheema and Dennis A. Rondinelli (Eds.). Decentralization and Development: Policy Implementation In Developing Countries Beverly Hills; New Delhi: Sage Publications. Pp 9.37. Cleeve, E. (2008), How effective are fiscal incentives to attract FDI to Sub-Saharan Africa?, The Journal of Developing Areas, 42 (1), 135-153. Adenike A. Adedokun (undated). Local Government Tax Mobilization and Utilization in Nigeria: Problems and Prospects; The Polytechnique, Ibadan, Nigeria. Stake, R. (1995). The Art of Case Study Research. Thousand Oaks, London, New Delhi: Sage Publications Inc. Brewer, J. D., and Miller, R.L. (2003). The A-Z of Social Research: A dictionary of Key Social Science Research Concepts. Thousand Oaks, London: Sage. Neuman, L. (2007). Basics of Social Research: Qualitative and Quantitative Research Approaches, Second Edition. University of Wisconsin Whitewater Pearson Education Incorporated, USA

Closed Memo

JS6557 Professor Pratt  §16, Thursdays, 10:00 a. m. X Mailbox # 406 Final Draft Closed Memo September 5, 2012 Word Count: 2,975 On my honor, I submit this work in good faith and pledge that I have neither given nor received improper aid in its completion. /s/ JS6557 JS6557 Memorandum To: Managing Partner Salvo From: JS6557 Date: September 24, 2012 Re: McAnzen Case QUESTION PRESENTED DUIUnder Mississippi law, can McAnzen establish a defense of necessity for his DUI charge, when after realizing the severity of Hurricane Katrina and fleeing his home, he was arrested while driving under the influence even though that action was only done to prevent a significant evil and was his only adequate option to avoid the impending dangers of the storm? ESCAPE Under Mississippi common law, can McAnzen establish a necessity of defense to escape when he used no force or violence to flee custody, to avoid the mmediate threat of serious bodily harm, after he was pulled over and arrested during the o nset of the impending danger of Hurricane Katrina although he did not report himself immediately to proper authorities? BRIEF ANSWER DUI Probably yes. McAnzen will probably be able to survive a DUI charge because under Mississippi Law a defendant must meet three elements to establish a defense of necessity to DUI.He will likely meet all three elements because he drove under the influence only to prevent a significant evil, the harm he caused was disproportionate to the harm avoided, and driving was his last adequate option in hopes to avoid the impending dangers of Hurricane Katrina. ESCAPE Probably yes. McAnzen will probably be able to evade an escape charge because under Mississippi Law a prisoner must meet four elements to establish a defense of necessity to escape.Although he failed to meet all four of the elements undoubtedly, he will likely be able to establish his defense because he clearly met three of the four elements because the hurricane winds were an immediate threat of serious bodily harm, he did not have time to make a complaint to authorities, and he used no force or violence to make his escape to flee the impending dangers. STATEMENT OF FACTS After an argument with his wife, McAnzen wife left the home to recollect her thoughts while relaxed with a six-pack of beer while tuning into the local news station.The news graphically described the Hurricane that was predicted to hit but he didn’t give any warranty to it. Over the two-hour period, he consumed four of the six beers. A neighbor interrupted his television viewing to enlighten him of the actual severity of the storm and advise that McAnzen and his wife leave with him immediately. He declined the offered ride but began to worry about his wife’s absence. Although the weather began to worsen, he felt morally obligated to wait for his wife but could not find her. After waiting as long as he could he acknowledged that e had been drinking earlier in the night but if he did not leave he would have been endangered by the violent hurricane. He most likely wouldn’t survive the wrath of Hurricane Katrina. While driving he was being extremely careful but decided to put a CD in to assure he would stay awake and in doing so he crossed the centerline. He was then pulled over, in the middle of a detrimental hurricane, and eventually arrested for driving under the influence. After being pulled over for a traffic stop during the onset of Hurricane Katrina, McAnzen fled the scene as an â€Å"intention to avoid impending danger.After initially being pulled over and failing a field sobriety test, a huge gust of wind knocked over the arresting officer giving McAnzen time to escape the scene. He left the scene because he panicked after seeing the strong wind blow over the officer, which created a fear for his life. He fled to his sister’s home in Florida and when returning to Mississippi, he went immediately to his home, which indecently was completely destroyed by the destruction of the hurricane. He was then arrested. DISCUSSIONBoth of McAnzen’s decisions, driving under the influence and escaping from custody, are criminal actions but they were necessarily committed to ensure his personal safety during the onset of Hurricane Katrina. His actions are to be excused by the defense of necessity, which is when a person’s choices can be excused or justified even though they break a law because they were necessary. â€Å"Where a person reasonably believes that he is in danger of physical harm he may be excused for some conduct which ordinarily would be criminal. Knight v. State, 601 So. 2d 403 (Miss. 1992). Mississippi Courts generally find that for a defendant to establish a defense of necessity for a crime committed, he must prove that three elements were present: reasonable belief of fear, fear of physical harm, and no sufficient alternative. Id. In this situation he is charged with two separate crimes and both crimes are anal yzed differently according to specific elements that pertain to each of them.This is an affirmative defense because he has the burden of proof meaning he must prove that he met the elements of the defense to claim it. The following cases using the defense of necessity will help prove that McAnzen does establish his defense. The court in Stodghill v. State, 892 So. 2d 236 (Miss. 2005) found that the plaintiff George Stodghill’s attempt to use the defense of necessity in regards to his arrest for driving under the influence was not valid because he did completely satisfy all the elements of that defense.After a night of drinking at a remote cabin with family, his girlfriend became violently ill and exhibited symptoms of a seizure so he decided she needed immediate medical attention but felt like 911 would not come fast enough. Id. During the drive he committed two different offenses: speeding and crossing the centerline and subsequently he was pulled over and arrested. Id. He d id not fully comply with all of the elements because although he was trying to prevent a significant evil, there were alternative means for the transportation of his girlfriend that he chose not to rely on.Id. Willie Joe Knight, a black man, was driving along a road in a predominately white community in 1989 when after noticing a group of white children playing on the road side, he felt as if his vehicle had run over something. Knight v. State, 601 So. 2d 403 (Miss. 1992). After stopping to check for damages he concluded that he had probably run over something unimportant but was quickly startled by the screams of a witness claiming that he had run over a white child and that the child was trapped. Id.The angry crowd approached and he feared for his own safety because he, a black man, ran over a white child and with the rioting crowds pressure growing, he left the scene. Id. Knight openly stated he fled because he feared for the safety of his own life considering the racial aspect. Id. 406. The court concluded this was a case for a defense of necessity because he was motivated by fear and the present circumstances that induced that fear would be in a reasonable person in Knight's situation. Id. With this conclusion, his conviction was reversed and remanded. Id.In Corley v. State, 536 So. 2d 1314 (1988), the defendant escaped from the Carroll County Jail after he claimed to have been threatened by a jailer with a gun. After his escape he was consequently returned to the Carroll County Jail after being located at his home in Greenwood. Id. at 1317. He claimed a defense of necessity to escape because he had a fear for his life after the jailer’s threat but the Court held that his defense was not viable, therefore waived, because he chose intentionally to not return to custody after the danger was evaded. Their findings were ased on that Corley admittedly divulged that he planned on staying out of jail â€Å"as long as I could reckon. † Id. The Court found that failure to return to the authorities after reaching safety and failure to make a complaint about his danger demoted Corley’s reasoning and did not constitute his escape to be a defense of necessity because he did not meet all of the elements. Id. Since the elements were not met, the Court affirmed his conviction. Id. I. DUI McAnzen will most likely survive the DUI charge because can probably establish each element of the defense of necessity for that charge.Under Mississippi Law, to establish a necessity of defense, a defendant must prove: (1) the act charged was done to prevent a significant evil; (2) the harm caused was not disproportionate to the harm avoided; and (3) there was no adequate alternative. Stodghill v. State, 892 So. 2d 236 (Miss. 2005). 1. The act charged was done to prevent a significant evil; Courts have usually found that a defense of necessity was valid when the act charged was done to prevent a significant evil. This was established in Stodgh ill v. State, 892 So. 2d 236 (Miss. 2005).McAnzen chose to drive under the influence because it was the only way to ensure his safety from the hurricane. Like, McAnzen chose to drive under the influence because it was the only way to ensure his safety from the hurricane. His decision to drive under the influence was the only way to get him self to a safe environment although he had to break a law to do so. Like Stodghill, McAnzen drove under the influence because his only other option was not viable- to be physically harmed due to Hurricane Katrina. They both knowingly committed the same crime but only to ensure their own or other’s safety from their individual circumstances.It could be said that because hurricanes are common in this part of the country that he should have taken warnings of the storm more seriously. This cannot be entirely true because each hurricane has different levels of severity and when he realized the severity of Hurricane Katrina it was necessary that he leave his home immediately or risk being killed by the storm. 2. The harm caused was not disproportionate to the harm avoided; and Courts have previously found that a defense of necessity was valid when the harm caused was not disproportionate to the harm avoided. This was established in Stodghill v.State, 892 So. 2d 236 (Miss. 2005). McAnzen’s case easily proves this element because driving under the influence essentially saved his life because without making that decision he would have been likely killed by the effects of the storm. This is parallel to the situation in the Stoghill case because he had to make the decision to drive even though he had previously been drinking earlier in the night, in hopes to save his girlfriend who was suffering from a seizure. It could be said that McAnzen choosing to drive under the influence always has the chance to harm someone else in the process.This counter argument is not sufficient because who is to tell him that his life was not important just because he happened to drink earlier in the evening? Since the storm had rapidly gotten worse, most people had already reached safety making it a lesser chance that he would hit someone on the road. 3. There was no adequate alternative. Courts have formerly found that a defense of necessity was valid when the act is committed because there was no adequate alternative. This was not established in Stodghill v. State, 892 So. 2d 236 (Miss. 2005).The third element is established and provided by the moral obligation McAnzen felt for his wife. He declined the ride with a neighbor because he felt morally wrong leaving his wife, in the chance that she might return. When McAnzen could absolutely wait no longer for her return, he had no other adequate options but to drive to safety. His moral conscience was the reason that eventually he was stuck with no alternatives. Stodghill did not meet this. One could say that his moral obligation to wait on his wife was not an adequate r easoning to wait.He could have accepted the ride from his friend since his wife eventually never showed up and the acceptance was an adequate option. Because no one can define what a person’s certain moral obligations can or cannot be this counter argument cannot be found. He felt like he should wait on his wife, when she never returned his only option was to drive himself to safety. McAnzen frankly admits that he committed criminal acts when he operated a vehicle under the influence his argument provides that he had fitting reason to do so to ensure his own safety during the onset of Hurricane Katrina.In reference to the use of defense of necessity to his DUI charge, the court will find that it is his reasoning was appropriate and in accordance to all three elements. The Courts will likely find that a reasonable person would have made the same choices as he. I. Escape McAnzen will most likely survive the escape charge because can probably establish each element of the defens e of necessity for that charge. Courts have found that a prisoner’s escape can be permissible by law if the reason is the â€Å"intention to escape an impending danger† rather than the â€Å"intention to escape lawful imprisonment† which could not be justified.Under Mississippi Law, to establish a necessity of defense to escape, a defendant must prove: (1) immediate threat of serious bodily harm to prisoner; (2) prisoner has no time in which to make complaint to authorities about his danger (3) force or violence is not used in escape; and (4) a prisoner must intend to report immediately to proper authorities when he attains position of safety. Corley v. State, 536 So. 2d 1314 (1988). Although he does not undoubtedly meet all four elements it is likely the court will accept his defense because he clearly meets three; the fourth is very debatable. . Immediate threat of serious bodily harm to prisoner The first element is clearly met because there was an immediate threat of serious bodily harm to prisoner because McAnzen had a legitimate threat of serious bodily harm, the incoming Hurricane Katrina. His fear of impending danger was heightened when he saw the officer simply knocked over by the hurricane’s wind. Unlike McAnzen, in Corley the claim that an officer threatened him at gunpoint had not merit because it was never proven. It could be said that a gust of wind is not an immediate threat but that is not entirely true.The gust of wind was in fact an immediate threat of what was to come from the incoming hurricane. He knew that if a gust of wind was strong enough to knock down a grown man that the storm could easily kill him. 2. Prisoner has no time in which to make complaint to authorities about his danger; The second element, that the prisoner has no time to make a complaint about his danger, is easily met by the McAnzen case. Since he was arrested in the middle of existent hurricane weather he had no time to complain to authoriti es regarding his rationale for evading the danger.He was arrested without his viable reason even being considered. If the threat had been legitimate in Corley, Corley could have reported the incident to someone of authority instead of trying to handle the law himself. 3. Force or violence is not used in escape; and In the third element it states that force or violence is not used in escape. McAnzen used neither force nor violence because his escape was enabled after a natural occurrence of weather, the gust of wind, detained the officer.The argument cannot counter this because the gust of wind that knocked over the officer, allowing McAnzen to escape, was an act of nature not an act of force or violence. 4. A prisoner must intend to report immediately to proper authorities when he attains position of safety. The last element, that a prisoner must intend to report immediately to proper authorities when he attains position of safety, is the only element that is not clearly met by McAn zen but he is still likely to establish his defense.It is explicitly never met in Corley because he openly admits after the police collected him that he had no intentions of returning and would try to stay a free man as long as he could. McAnzen, on the hand doesn’t explicitly meet this element but has a completely different motive than the extreme one stated in Corley. He was forced leave the jurisdiction in which he was arrested to evade the danger of the approaching. He did not leave the jurisdiction to avoid his arrest; only to avoid the storm thus avoiding the impending danger.It will be countered that he should have immediately turned him self in. But neither who the proper authorities are nor when safety is obtained are explicitly defined. He could have believed the proper authorities were in the jurisdiction in which he was arrested. Thinking he should turn in himself in to Mississippi authorities would have given him no reason to do so when he arrived in Florida. It can be thought that he would turn himself in when returning home but his thought process was halted when he found his home had been completely destroyed.A reasonable person would have visited their home before reporting to authorities therefore this counterargument will not stand. CONCLUSION Both of McAnzen’s decisions, driving under the influence and escaping from custody, are criminal actions but they were necessarily committed to ensure his personal safety during the onset of Hurricane Katrina. He meets the individual elements of each charge that are required to establish the defense of necessity making his actions excusable. It is likely that the court will find that in his circumstances he made reasonable decisions.

Banking Sector Reform Essay

From the 1991 India economic crisis to its status of third largest economy in the world by 2011, India has grown significantly in terms of economic development. So has its banking sector. During this period, recognizing the evolving needs of the sector, the Finance Ministry of Government of India (GOI) set up various committees with the task of analyzing India’s banking sector and recommending legislation and regulations to make it more effective, competitive and efficient.[1] Two such expert Committees were set up under the chairmanship of M. Narasimham. They submitted their recommendations in the 1990s in reports widely known as the Narasimham Committee-I (1991) report and the Narasimham Committee-II (1998) Report. These recommendations not only helped unleash the potential of banking in India, they are also recognized as a factor towards minimizing the impact of global financial crisis starting in 2007. Unlike the socialist-democratic era of the 1960s to 1980s, India is no longer insulated from the global economy and yet its banks survived the 2008 financial crisis relatively unscathed, a feat due in part to theseNarasimham Committees.[2] Contents [hide] * 1 Background * 2 Recommendations of the Committee * 2.1 Autonomy in Banking * 2.2 Reform in the role of RBI * 2.3 Stronger banking system * 2.4 Non-performing assets * 2.5 Capital adequacy and tightening of provisioning norms * 2.6 Entry of Foreign Banks * 3 Implementation of recommendations * 4 Criticism Background During the decades of the 60s and the 70s, India nationalised most of its banks. This culminated with the balance of payments crisis of the Indian economy where India had to airlift gold toInternational Monetary Fund (IMF) to loan money to meet its financial obligations. This event called into question the previous banking policies of India and triggered the era of economic liberalisation in India in 1991. Given that rigidities and weaknesses had made serious inroads into the Indian banking system by the late 1980s, the Government of India (GOI), post-crisis, took several steps to remodel the country’s financial system. (Some claim that these reforms were influenced by the IMF and the World Bank as part of their loan conditionality to India in 1991).[3] The banking sector, handling 80% of the flow of money in the economy, needed serious reforms to make it internationally reputable, accelerate the pace of reforms and develop it into a constructive usher of an efficient, vibrant and competitive economy by adequately supporting the country’s financial needs.[4] In the light of these requirements, two expert Committees were set up in 1990s under the chairmanship of M. Narasimham (an ex-RBI (Reserve Bank of India) governor) which are widely credited for spearheading the financial sector reform in India.[3] The first Narasimhan Committee (Committee on the Financial System – CFS) was appointed by Manmohan Singh as India’s Finance Minister on 14 August 1991,[1][5] and the second one (Committee on Banking Sector Reforms)[6] was appointed by P.Chidambaram[7] as Finance Minister in December 1997.[8] Subsequently, the first one widely came to be known as the Narasimham Committee-I (1991)and the second one as Narasimham-II Committee(1998).[9][10] This article is about the recommendations of the Second Narasimham Committee, the Committee on Banking Sector Reforms. The purpose of the Narasimham-I Committee was to study all aspects relating to the structure, organization, functions and procedures of the financial systems and to recommend improvements in their efficiency and productivity. The Committee submitted its report to the Finance Minister in November 1991 which was tabled in Parliament on 17 December 1991.[6] The Narasimham-II Committee was tasked with the progress review of the implementation of the banking reforms since 1992 with the aim of further strengthening the financial institutions of India.[4]It focussed on issues like size of banks and capital adequacy ratio among other things.[9] M. Narasimham, Chairman, submitted the report of the Committee on Banking Sector Reforms (Committee-II) to the Finance Minister Yashwant Sinha in April 1998.[4][9] Recommendations of the Committee The 1998 report of the Committee to the GOI made the following major recommendations: Autonomy in Banking Greater autonomy was proposed for the public sector banks in order for them to function with equivalent professionalism as their international counterparts.[11] For this the panel recommended that recruitment procedures, training and remuneration policies of public sector banks be brought in line with the best-market-practices of professional bank management.[4][6] Secondly, the committee recommended GOI equity in nationalized banks be reduced to 33% for increased autonomy.[4][12][13] It also recommended the RBI relinquish its seats on the board of directors of these banks. The committee further added that given that the government nominees to the board of banks are often members of parliament, politicians, bureaucrats, etc., they often interfere in the day-to-day operations of the bank in the form of the behest-lending.[4] As such the committee recommended a review of functions of banks boards with a view to make them responsible for enhancing shareholder value through formulation of corporate strategy and reduction of government equity.[11] To implement this, criteria for autonomous status was identified by March 1999 (among other implementation measures) and 17 banks were considered eligible for autonomy.[14] But some recommendations like reduction in Government’s equity to 33%,[13][15] the issue of greater professionalism and independence of the board of directors of public sector banks is still awaiting Government follow-through and implementation.[16] Reform in the role of RBI First, the committee recommended that the RBI withdraw from the 91-day treasury bills market and that interbank call money and term money markets be restricted to banks and primary dealers.[6][14] Second, the Committee proposed a segregation of the roles of RBI as a regulator of banks and owner of bank.[17] It observed that â€Å"The Reserve Bank as a regulator of the monetary system should not be the owner of a bank in view of a possible conflict of interest†. As such, it highlighted that RBI’s role of effective supervision was not adequate and wanted it to divest its holdings in banks and financial institutions. Pursuant to the recommendations, the RBI introduced a Liquidity Adjustment Facility (LAF) operated through repo and reverse repos in order to set a corridor for money market interest rates. To begin with, in April 1999, an Interim Liquidity Adjustment Facility (ILAF) was introduced pending further upgradation in technology and legal/procedural changes to facilitate electronic transfer.[18]As for the second recommendation, the RBI decided to transfer its respective shareholdings of public banks like State Bank of India (SBI), National Housing Bank (NHB) and National Bank for Agriculture and Rural Development (NABARD) to GOI. Subsequently, in 2007-08, GOI decided to acquire entire stake of RBI in SBI, NHB and NABARD. Of these, the terms of sale for SBI were finalised in 2007-08 itself.[19] Stronger banking system The Committee recommended for merger of large Indian banks to make them strong enough for supporting international trade.[11] It recommended a three tier banking structure in India through establishment of three large banks with international presence, eight to ten national banks and a large number of regional and local banks.[4][9][11] This proposal had been severely criticized by the RBI employees union.[20] The Committee recommended the use of mergers to build the size and strength of operations for each bank.[12] However, it cautioned that large banks should merge only with banks of equivalent size and not with weaker banks, which should be closed down if unable to revitalize themselves.[6] Given the large percentage of non-performing assets for weaker banks, some as high as 20% of their total assets, the concept of â€Å"narrow banking† was proposed to assist in their rehabilitation.[11] There were a string of mergers in banks of India during the late 90s and early 2000s, encouraged strongly by the Government of India|GOI in line with the Committee’s recommendations.[21]However, the recommended degree of consolidation is still awaiting sufficient government impetus.[16] Non-performing assets Non-performing assets had been the single largest cause of irritation of the banking sector of India.[4] Earlier the Narasimham Committee-I had broadly concluded that the main reason for the reduced profitability of the commercial banks in India was the priority sector lending. The committee had highlighted that ‘priority sector lending’ was leading to the build up of non-performing assets of the banks and thus it recommended it to be phased out.[10] Subsequently, the Narasimham Committee-II also highlighted the need for ‘zero’ non-performing assets for all Indian banks with International presence.[10] The 1998 report further blamed poor credit decisions, behest-lending and cyclical economic factors among other reasons for the build up of the non-performing assets of these banks to uncomfortably high levels. The Committee recommended creation of Asset Reconstruction Funds or Asset Reconstruction Companies to take over the bad debts of banks, allowing them to start on a clean-slate.[4][22][23] The option of recapitalization through budgetary provisions was ruled out. Overall the committee wanted a proper system to identify and classify NPAs,[6] NPAs to be brought down to 3% by 2002[4] and for an independent loan review meachnism for improved management of loan portfolios.[6] The committee’s recommendations let to introduction of a new legislation which was subsequently implemented as the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and came into force with effect from 21 June 2002.[24][25][26] Capital adequacy and tightening of provisioning norms In order to improve the inherent strength of the Indian banking system the committee recommended that the Government should raise the prescribed capital adequacy norms.[9] This would also improve their risk taking ability.[11] The committee targeted raising the capital adequacy ratio to 9% by 2000 and 10% by 2002 and have penal provisions for banks that fail to meet these requirements.[4][6] For asset classification, the Committee recommended a mandatory 1% in case of standard assets and for the accrual of interest income to be done every 90 days instead of 180 days.[14] To implement these recommendations, the RBI in Oct 1998, initiated the second phase of financial sector reforms by raising the banks’ capital adequacy ratio by 1% and tightening the prudential norms for provisioning and asset classification in a phased manner on the lines of the Narasimham Committee-II report.[27] The RBI targeted to bring the capital adequacy ratio to 9% by March 2001.[28] The mid-term Review of the Monetary and Credit Policy of RBI announced another series of reforms, in line with the recommendations with the Committee, in October 1999.[14] Entry of Foreign Banks The committee suggested that the foreign banks seeking to set up business in India should have a minimum start-up capital of $25 million as against the existing requirement of $10 million. It said that foreign banks can be allowed to set up subsidiaries and joint ventures that should be treated on a par with private banks.[4] Implementation of recommendations In 1998, RBI Governor Bimal Jalan informed the banks that the RBI had a three to four year perspective on the implementation of the Committee’s recommendations.[27] Based on the other recommendations of the committee, the concept of a universal bank was discussed by the RBI and finally ICICI bank became the first universal bank of India.[18][29][30] The RBI published an â€Å"Actions Taken on the Recommendations† report on 31 October 2001 on its own website. Most of the recommendations of the Committee have been acted upon (as discussed above) although some major recommendations are still awaiting action from the Government of India.[31] Criticism There were protests by employee unions of banks in India against the report. The Union of RBI employees made a strong protest against the Narasimham II Report.[20] There were other plans by the United Forum of Bank Unions (UFBU), representing about 1.3 million bank employees in India, to meet in Delhi and to work out a plan of action in the wake of the Narasimham Committee report on banking reforms. The committee was also criticized in some quarters as â€Å"anti-poor†. According to some, the committees failed to recommend measures for faster alleviation of poverty in India by generating new employment.[3] This caused some suffering to small borrowers (both individuals and businesses in tiny, micro and small sectors). Reception Initially, the recommendations were well received in all quarters, including the Planning Commission of India leading to successful implementation of most of its recommendations.[32] Then it turned out that during the 2008 economic crisis of major economies worldwide, performance of Indian banking sector was far better than their international counterparts. This was also credited to the successful implementation of the recommendations of the Narasimham Committee-II with particular reference to the capital adequacy norms and the recapitalization of the public sector banks.[2] The impact of the two committees has been so significant that elite politicians and financial sectors professionals have been discussing these reports for more than a decade since their first submission applauding their positive contribution Prime Minister’s address at RBI Platinum Jubilee Celebrations| The Prime Minister, Dr. Manmohan Singh addressed the Platinum Jubilee celebrations of the Reserve Bank o f India in Mumbai today. Following is the text of the Prime Minister’s address on the occasion: â€Å"It is indeed a great pleasure to be here in Mumbai for the Platinum Jubilee celebrations of the Reserve Bank of India. For me, this is also a very special moment of nostalgia. I spent some very memorable years in this institution as its Governor. My wife and I cherish the memories of many new enduring friendships that we made during those memorable days. I also recall with deep appreciation the role played by the Reserve Bank in helping the Government of India in the implementation of the agenda for economic reforms when I was the Finance Minister of India at a very difficult time in our country’s economic history. To return as Prime Minister for the Platinum Jubilee of this great institution is indeed an emotionally moving experience for me. When I took over as Finance Minister in 1991, I was convinced that the economic liberalisation and reforms could only succeed if complemented by broad based reform in the banking and financial sectors. I turned to my old friend and former RBI Governor Shri M Narasimham to Chair a Committee to make recommendations on this very important issue. The Report of the Narasimham Committee outlined a comprehensive agenda of reform which served as a blue print of what we needed to do in subsequent years. It would have been difficult to implement those reforms had they not received enthusiastic support, as they did, from the Governor of the day, Shri S. Venkitaramanan and Dr. Rangrajan. Subsequently as Venitramanan’s successor Dr C. Rangarajan took the financial reform agenda further forward in many critical areas, including especially the ending of automatic monetisation of the government’s deficit. As with economic reforms in general, financial sector reforms in India were implemented at a gradual pace. We were often criticised for our incremental approach which critics often complained was far too slow. But few would deny that we have accomplished a great deal over the years and Reserve Bank has made important contribution towards this. We have successfully eliminated stifling controls on industry and investment. We have opened the economy to foreign trade, lowered tariffs and switched over to a market determined exchange rate. We have liberalised capital controls enabling the economy to absorb substantial inflows of capital in the form of both FDI and FII flows into the stock market. In recent years, foreign investment has also become a two way flow as many Indian companies have established a presence abroad through investment or acquisition. All of this has been achieved without experiencing a serious macro economic crisis or severe inflation over an extended period. Most importantly, the real economy has clearly prospered. The rate of growth of GDP has increased steadily over the past two decades, culminating in an unprecedented 9 percent growth per year in the four year period just before the global financial crisis. Poverty too, has declined steadily, though this is an area where much more remains to be done. The Reserve Bank of India has played a major role in this transformation. It has been a lead player in banking and financial sector reforms and has acted as a confidential adviser to the Government on many other issues relevant to the complex task of macro economic management in an increasingly open and liberalised economic environment. Indeed, it is one of our great institutions of which we can all be truly proud. The past two years have been difficult years for governments and central banks all over the world. Excessive credit expansion and asset price inflation both fuelled by so-called â€Å"financial innovations† of dubious value, and a lax regulatory environment led to an accumulation of risk that was not adequately understood and ultimately produced a severe crisis. India was relatively insulated from these developments because our financial system was much less integrated with the global system. However, the RBI deserves credit for having been prescient about the dangers posed by property bubbles. The action taken by Governor Reddy, who is present here, well before the crisis to tighten bank credit against real estate, limited bank exposure on this account. When the crisis exploded in September 2008, the RBI rapidly reversed its earlier tightening of credit to meet the new and changed circumstances. The CRR and the repo and reverse repo rates were rapidly lowered in a series of quick steps. Some initiatives were also taken to enhance access to bank credit by Non Banking Finance Companies. Signs of panic withdrawals from some private sector banks in the initial weeks of the crisis were met with strong reassurances by both the Government and the RBI that our banks were sound and would be fully supported. Ensuring that the Indian financial system remained stable in these very difficult times was a major achievement in financial and economic management. I would like to compliment Governor Subbarao and his team at the RBI for the role they played in this period.

A Timeline of the Suez Crisis

Learn what events lead to the Suez Crisis, which was an invasion of  Egypt  in late 1956. 1922 Feb 28:  Egypt is declared a sovereign state by Britain.Mar 15:  Sultan Faud appoints himself King of Egypt.Mar 16:  Egypt achieves  independence.May 7:  Britain is  angered over Egyptian claims to sovereignty over Sudan. 1936 Apr 28:  Ã‚  Faud dies and his 16-year-old son, Farouk, becomes King of Egypt.Aug 26:  Draft of Anglo-Egyptian Treaty is signed. Britain is allowed to maintain a garrison of 10,000 men in the  Suez Canal Zone and is given effective control of Sudan. 1939 May 2:  King Farouk is declared the spiritual leader, or Caliph, of Islam. 1945 Sept 23:  Egyptian government demands complete British withdrawal and the cession of Sudan. 1946 May 24:  British premier  Winston Churchill  says the Suez Canal will be in danger if Britain withdraws from Egypt. 1948 May 14:  Declaration of the Establishment of the State of Israel by David Ben-Gurion in Tel Aviv.May 15:  Start of the first Arab-Israeli War.Dec 28:  Egyptian premier Mahmoud Fatimy is assassinated by the  Muslim Brotherhood.Feb 12:  Hassan el Banna, leader of the Muslim Brotherhood is assassinated. 1950 Jan 3:  Wafd party regains power. 1951 Oct 8:  Egyptian government announces that it will eject Britain from the Suez Canal Zone and take control of Sudan.Oct 21:  British warships arrive at Port Said, more troops are on the way. 1952 Jan 26:  Egypt is placed under martial law in response to wide-spread riots against the British.Jan 27:  Prime Minister Mustafa Nahhas is removed by King Farouk for failing to keep the peace. He is replaced by Ali Mahir.Mar 1:  The Egyptian Parliament is suspended by King Farouk when Ali Mahir resigns.May 6:  King Farouk claims to be a direct descendant of the prophet Mohammed.July 1:  Hussein Sirry is new premier.July 23:  Free Officer Movement, fearing King Farouk is about to move against them, initiate a military coup.July 26:  Military coup is successful, General Naguib appoints Ali Mahir as prime minister.Sept 7:  Ali Mahir again resigns. General Naguib takes over the post of president, prime minister, minister of war and commander-in-chief of the army. 1953 Jan 16:  President Naguib disbands all opposition parties.Feb 12:  Britain and Egypt sign a new treaty. Sudan to have independence within three years.May 5:  Constitutional commission recommends 5,000-year-old monarchy be ended and Egypt become a republic.May 11:  Britain threatens  to use force against Egypt over the Suez Canal dispute.June 18:  Egypt becomes a republic.Sept 20:  Several of King Farouks aides are seized. 1954 Feb 28:  Nasser challenges President Naguib.Mar 9:  Naguib beats off Nassers challenge and retains the presidency.Mar 29:  General Naguib postpones plans to hold parliamentary elections.Apr 18:  For a second time, Nasser takes the presidency away from Naguib.Oct 19:  Britain cedes Suez Canal to Egypt in new treaty, two year period set for withdrawal.Oct 26:  Muslim Brotherhood attempt to assassinate General Nasser.Nov 13:  General Nasser in full control of Egypt. 1955 Apr 27:  Egypt announces plans to sell cotton to Communist ChinaMay 21:  USSR announces it will sell arms to Egypt.Aug 29:  Israeli and Egyptian jets in fire-fight over Gaza.Sept 27:  Egypt makes deal with Czechoslovakia -- arms for cotton.Oct 16:  Egyptian and Israeli forces skirmish in El Auja.Dec 3:  Britain and Egypt sign agreement granting Sudan independence. 1956 Jan 1:  Sudan achieves independence.Jan 16:  Islam is made state religion by act of Egyptian government.June 13:  Britain gives  up Suez Canal. Ends 72 years of British occupation.June 23:  General Nasser is elected president.July 19:  US withdraws financial aid for Aswan Dam project. The official reason is Egypts increased ties to USSR.July 26:  President Nasser announces a plan to nationalize Suez Canal.July 28:  Britain freezes Egyptian assets.July 30:  British Prime Minister Anthony Eden imposes an arms embargo on Egypt, and informs General Nasser that he can not have the Suez Canal.Aug 1:  Britain, France, and the US hold talks on escalating the Suez crisis.Aug 2:  Britain mobilizes armed forces.Aug 21:  Egypt says it will negotiate on Suez ownership if Britain pulls out of the Middle East.Aug 23:  USSR announces it will send troops if Egypt is attacked.Aug 26:  General Nasser agrees to five nation conference on Suez Canal.Aug 28:  Two British envoy s are expelled from Egypt accused of spying.Sept 5:  Israel condemns Egypt over Suez crisis.Sept 9:  Conference talks collapse when General Nasser refuses to allow international control of the Suez Canal.Sept 12:  US, Britain, and France announce their intention to impose a Canal Users Association on the management of the canal.Sept 14:  Egypt now in full control of the Suez Canal.Sept 15:  Soviet ship-pilots arrive to help Egypt run the canal.Oct 1:  A 15 nation Suez Canal Users Association is officially formed.Oct 7:  Israeli foreign minister Golda Meir says the UN failure to resolve the Suez Crisis means they must take military action.Oct 13:  Anglo-French proposal for the control of the Suez Canal is vetoed by the USSR during the UN session.Oct 29:  Israel invades  the Sinai Peninsula.Oct 30:  Britain and France veto USSR demand for Israel-Egypt cease-fire.Nov 2:  UN Assembly finally approves a cease-fire plan for Suez.Nov 5:  British and French forcesà ‚  involved in the airborne invasion of Egypt.Nov 7:  UN  Assembly votes 65 to 1 that invading powers should quit Egyptian territory.Nov 25:  Egypt begins to expel British, French, and Zionist residents.Nov 29:  Tripartite Invasion  is officially ended under pressure from UN.Dec 20:  Israel refuses to return Gaza to Egypt.Dec 24:  British and French troops depart Egypt.Dec 27: 5,580 Egyptian POWs exchanged for four Israelis.Dec 28:  Operation to clear sunken ship in Suez Canal starts. 1957 Jan 15:  British and French banks in Egypt are nationalized.Mar 7:  UN  takes over the administration of the Gaza Strip.Mar 15:  General Nasser bars Israeli shipping from Suez Canal.Apr 19:  First British ship pays Egyptian toll for use of the Suez Canal.