Financial economics emphasizes financial capital and financial education importance in the process of growth and development. The significance of finance as an engine of economic growth and development has long been recognized in the financial and economic literature. Financial resources are assets and hence wealth of nations since times immemorial. Economies that have dearth of factor endowments in general and financial resources in particular cannot promote its economic growth and development prospects. Financial capital is the vital input in the production function exhibiting significant technical relation between input and output. The better the financial capital, better are production prospects and vice versa. Improved economic growth figures create conditions for financial take-off that in turn multiply or outgrowth financial growth and development of the country. Financial resource management concerns profits, finances, cash, and credit so that the concerned body (organization or the country as a whole as the case may be) is equipped with the necessary inputs to meet its goalmouths in a better and optimal manner. It is normally concerned with management of working capital (short-term in particular) and puts emphasis on current assets and liabilities. It very frequently takes the path of hedging for managing volatility in foreign exchanges. Financial corporations and companies use the method of Foreign Exchange Hedge (FOREX) to end their uncertainties and risks pertaining to foreign exchange as a result of trade or exchange in foreign currencies. In modern day globalized business world financial resource management is beyond what is seen and observed. It performs many thought-provoking and hence important functions. India is striving for digital India ensuring that services of the government are made available to its citizens through electronic platforms in a dual manner: growing internet connections and better online infrastructure. Accordingly, we have an age of digital progressions and technological innovations that attract those people who are technologically and financially sound. People surely answer the language of finances depending on how fast we are trained in money, finance, banking, taxation, and international finance.
In contemporary COVID-19 times, we have observed that nine countries at least in the world were very much successful in controlling coronavirus cases. The countries include New Zealand, Tanzania, Iceland, Fiji, Vatican City, Montenegro, Mauritius, Seychelles, and Papua New Guinea. The best part is that all these successful countries in coronavirus times are basically economically well-off with good financial resource management. In addition, most of these economies are free market economies based on the price signals created by the market forces of demand and supply. They follow a broad welfare system which is why they have been fighting COVID-19 successfully. The New Zealand economy is a highly developed free market economy which characterizes the presence of factor markets playing a dominant role in allocating factors of production, capital in particular. It is one of the most globalized economies depending greatly on international trade and international finance. It has a marvelous knowledge base on financial resource management which is reflected well through its Ist rank on the ease of doing business index. It is a classic example of human development as it has a very high score (0.9) in Human Development Index (HDI), a statistical index of indicators including life expectancy, education, and per capita income. This is a proof of higher HDI parameters for New Zealand and accordingly a success story in this pandemic which becomes footsteps for other countries that are worst hit by virus. The graph of financial awareness and statistics has had an increasing trend in the world in generic form and developing economies in precise form. Similarly, COVID-19 successful economies graph of financial awareness is increasing with every passing day and they are working very hard to make themselves healthy and wealthy by educating their people and investing in health and financial education. To survive and prosper in this corporate world and gain a special place in hierarchical society, it is very important to have a proper interface among the fundamentals of financial economics. At the same time it is equally important to have the correct kind of financial knowledge meeting the needs of all sectors of the economy and financial markets.
The financial shocks, instabilities and crunch we see today are a consequence of how we have chosen to manage the COVID-19 and its economic impact. Moreover, they depend upon how we manage our financial resources. There is a negative and significant relationship between financial resource management and shocks and pandemics. That is to say that properly the financial resources are managed, properly are the management of shocks and pandemics in the economy and vice versa. With the onset of coronavirus there has been more demand for modern financial and health resources which are becoming more and more multidimensional and therefore complex. For that matter COVID-19 demands the gridlock or tie-up of a groundbreaking and forward-looking health strategy in the first place and forward-looking financial strategy in the second place. There is a complementarity between health strategy and financial strategy. A better financial strategy will definitely lead towards a better health strategy the moment holistic and forward-looking approaches are adopted. Furthermore, both have a bi-way causal relationship thereby meaning that a better financial strategy and financial knowledge creates a better health strategy and health outcomes which in turn promotes economic welfare.
The bad characteristics of the economy especially during pandemic necessitate a big push or critical minimum investment in health and financial education in order to realize the importance of finances, financial resource management, and health in the process of economic development and welfare. At this point, the role of financial capital, human capital and social capital are very important because the trio will allocate the resources which will act as the safety net during emergencies and offer guiding principles for the growth and development programs of the country. Resource Management is a necessary condition to streamline and transform economic and financial outlooks in the economy. It improves efficiency levels of business units. It has been seen that financial and digital trends very quickly are changing the finances, expectations, preferences, and demands of consumers who are king of the market with loads of choices and freedom to choose out of their budget and commodity basket. Finance experts or Financial Resource Management guides nowadays have ample scope to play a dynamic role in restructuring and designing the outline or plan of business enterprises.
Binish Qadri is ICSSR Doctoral Fellow in the department of economics, Central University of Kashmir; Quarterly Franklin Member, London Journals Press.