Ecunomist 2015-2016 Issue 1 by Economie Combinatie Utrecht 1992

The ECU’nomist November 2015, YEAR 24, ISSUE 1

Wave of Refugees: Threat or Opportunity? Paradox of Choice What if Christmas didn’t exist? World and the Media The man who beats China all the time

Letter from the Editor

The ECU’nomist, November 2015

Dear readers, COMES THE TIME for a new age in media and by consequence the Ecunomist. As the world shifts towards increasingly digitalized media the internet is becoming an ever important part of our lives. It’s a truly amazing time to live in where information is just a click or “touch” away which leads us to servers teeming with information to help us optimize our lives, preview far away places, peoples, and have a laugh or two. However, while digital media accomplishes a lot which print media cannot accomplish, I think the reverse is also true. Print media holds some strong virtues, amongst these is its inherent tangibility or physicality. Print media delivers a constant message, unlike a television broadcast which is repeated only a handful of times. Or an internet fad which fades after a couple months; print media remains in your keep for as long as you want it to be. Tradition is certainly another part of it. Libraries were the archives of empires, sanctuaries of ancient script, and depositories of literature and chronicles. The danger of such easy access to non-print in my opinion, is our consequent ability to neglect the texts which have formed the world we know today. Every year, fewer and fewer people use print media, even in academia. While the ECU’nomist doesn’t hold such great expectations as a source for the future of humankind, what we hope to accomplish is modest in contrast--a testament to print for it not to be forgotten. This year there are several big changes we are bringing to the magazine. You might have already noticed the design change; direct, simple and efficient. On the backhand however, we’ve decided to be more flexible with the range of topics we cover; they will not always be strictly related to economics or politics--as was the case in the past. The reason for this is because we seek to create a better connection with you: we are all students and we need keep this bond strong and bold. We seek to reinforce this connection by providing you with more relevant information regarding our university bubble with ECU’92 events as well as giving you a more detailed introduction to the committees in each issue. In each issue we’ll include high resolution photos which can be ripped out of the middle pages. If you really dislike the photos I suppose you could probably use them as kindler for the barbeques next year. Jokes aside, we’re working hard as the Editorial committee and we hope to provide you the best of what our caffeine driven minds can produce under stress of other deadlines. Finally, as a callback to my original point on print media, I’d like to add that when most communication occurs electronically, each and every piece of paper tends to appreciate in value. As a little anecdote, I used to greet new e-mails with a smile and post with a frown; today I greet post with a smile and I don’t even read my emails.

Sincerely,

Filippo Ricci

Editor in Chief

Letter from the Board

The ECU’nomist, November 2015

Dear readers, PERIOD 1 IS OVER, exams are done: do you need any other reason to party? While you are busy celebrating, we are working hard to provide you with the nicest activities. You have probably heard about the career day on the 19th of November, the BuitEx trip to Gent and the American College party in the UCSA Bar on the 25th of November at the UCU Campus. Every day, we are trying our very best to provide you with unforgettable social and instructive content related activities. Some of our readers will know us, the 25th Board of ECU’92, very well. But for the ones who don’t, I will give a short individual introduction about each of us. Generally, we like to party, we socialize a lot, we work hard for our members and we have a great sense of humor (objectively). Individually, we add to the Board in our own ways. First of all there is the secretary, Martijn, who works hard to make everything in order. With his jokes he always manages to lighten up your day and he’s never too tired to have a chat with our members. Then we have Erik, our treasurer, which, as we economists all know, is a very important position within an organization. Luckily, he can be very serious while doing ECU’92’s financials but generally he’s fooling around and he has a very contagious laugh. Thirdly, our coordinator of internal affairs who’s taking care of our members is Joris. Talking about a laugh, his cannot be mistaken. You can be sure that he does whatever is best for our most important stakeholder: you! Next is Chris, coordinator of external affairs. When you’re in for a prank call or you’re a fan of very dark humor, come to our room on Friday afternoons and enjoy his show. Fortunately, he can also be very charming and successful in the talks with ECU’92’s partners. The fifth board member is Inge, who’s making sure that you get your books on time and at competitive rates. Also, Inge makes sure that our room won’t turn into a man cave by keep-

ing us men under control. Lastly there is me, Luuk. My task is to represent the association to all our stakeholders and to keep the goals of the association in the back of our minds. Drop by for a chat, a cup of coffee or just to relax. We’re always happy to socialize with anyone who’s in for that. I hope to see you soon! On behalf of the XXVth Board of ECU’92,

Luuk Wagenaar Chairman ECU’92

Contents

The ECU’nomist, November 2015

Guest Writers

Food for Thought

10 11 12

8 On the cover: bird’s eye of a boat carrying refugees across the Mediterranean. While this is not reflective of the situation, the cover serves more as a symbol for the status quo.

The grinch was doing us a favour

The World

Becoming a Key Account Manager China Market Crash! Marijuana Legalization

The choice paradox What if Christmas didn’t Exist?

Current Affairs

United States

The World and the Media

Politics

Donald Trump beats China all the time

Europe and the World

Refugee Crisis

University Life

Presenting the Editorial Committee Exchange Story:

Rome: LUISS Guido Carli

22 Committee Introductions: Editorial

Freshmen Prom Ski Trip StIB

Past Events

ECU’92 photo page

Cem helps us understand what it takes to be a Key Account Manager.

Sander gives us a close up view of the market crash in China.

www.ecu92.nl ecunomist@ecu92.nl Published by Issuu

Presenting: the Editorial Committee 2015-2016

The ECU’nomist, November 2015

Howdy, I'm Filippo and I'm thrilled to be here again this year. Outside of school I play cello in USKO (Utrechtse Student Koor en Orkest) and tend to get involved in all sorts of shenanigans. I love to travel and I can rarely get enough of it; to explore cultures and meet people so different and yet the same really drives my inner Bilbo Baggins. If you had to order me a drink I'd very gladly take a Lynchburg Lemonade; shaken, not stirred.

Hi everyone! My name is Marouschka Blahetek and I’m a third-year bachelor student. To answer the question about what drink to offer me in a club or café; the most expensive cocktail of course! Nothing compares to a fancy drink with a bright-colored umbrella to increase the selling price. However, as a student I won’t reject a free glass of beer either.

Greetings from sunny LA! I’m Annette Aprilana, now a third year U.S.E. student and also a long-time member of the Editorial Committee. I am originally from Indonesia but grew up in several different countries. Right now I am doing my semester abroad in UCLA and it has been one of the most enriching and exciting experiences of my university years thus far. I’ll be back in Utrecht in January ready to resume my activities for the ECU’nomist, so until then, see you soon!

Hi Everyone, my name is Martijn and I am the coordinator of the ECU’92 Board for the Editorial committee this year. Beside my tasks as Secretary of the Board, I keep myself busy with playing volleyball and hanging out with my friends and of course some drinking. If you wanted to order me a drink I would say a whiskey. A nice smoky Scotch whiskey, a fruity Irish whisky or an soft American whiskey is always nice to share with your friends. 4

The ECU’nomist, November 2015

Presenting: the Editorial Committee 2015-2016

Hey everyone, My name is Linda and I’m a second year student coming from the Czech Republic. I’m a cat person, in love with love, Woody Allen movies and the smell of old books. If you had to order me a drink I wouldn’t want anything too complicated, keep it simple, low key is the key. Just get me a glass of red wine and I will be happy. Or a bottle.

I am Sjoerd and happy to be a new member of the Editorial commitee. I am a second year student at U.S.E. In my spare time I like to play the guitar, watch movies and hang-out with friends. I am looking forward to provide you all with interesting stories and insights from the world of economics this year! If you want to buy me a drink you can buy me a Leffe Royale. I’m Aleksander Tase and I’m a second year student of Economics and Business at UU. I love swimming and all things related to the sea, cooking/tasting good food and winemaking, making beautiful photos and constantly embarking on new hobbies. I dislike the Dutch weather sometimes, and writing bios for myself. If someone wanted to order a drink for me, I’d go with a glass of Bordeaux.

Are you also looking to pose with a Pink flamingo? If yes be sure to apply next academic year for the Editorial

Europe and the World

The ECU’nomist, November 2015

Current Affairs

Wave of refugees coming to Europe: Economic threat or opportunity?

Sjoerd van Alten

T THE MOMENT OF WRITING THIS ARTICLE, an estimated 60 million people are on the move somewhere in the world in search of asylum; the highest number since World War II. As the number of worldwide refugees increased this year, so did the proportion of them trying to reach Europe. At the end of 2015, the total number of refugees applying for asylum in Europe might very well have doubled compared to the year before. Current predictions estimate that, at the end of 2015, a total of 800,000 immigrants will have found their way into Germany, which is 1% of the total German population. In comparison: Sweden, the European champion of taking in refugees at the end of 2014, only took in 0.32% of their population that year. According to the Guardian1, roughly 70% of the refugees that have applied in Europe are likely to be granted asylum permanently. These are mostly Syrian, Eritrean and Afghan immigrants. Because peace and political stability in these countries appears to be a long time away, it is very likely that the majority of the immigrants that Germany and the rest of Europe is granting asylum is here to stay. Many Europeans do not like this idea, claiming that a continent that seems only slowly recovering from economic peril will get hurt by taking in high numbers of unskilled workers who furthermore do not know the language and cultural norms and values of the host society. People are afraid of high numbers of immigrants driving unemployment up and wages down, resulting in a less favourable labour market for the native population, as

well as increased tax money spent on unemployment benefits. However, much economic research on the effects of refugees on the labour market of the domestic points into another direction. This gives reason to doubt the idea that the increasing stream of refugees would have a negative net effect on Europe’s economy. Refugee Immigration – Historical lessons from Post-war Germany Contrary to the textbook model of the labour market, research on earlier large streams of refugees does not generally find an increase in unemployment in the host country. Usually, the effect of an increase in immigrants on employment and wages is around zero2. In a study of the effects on the labour market after massive immigration of German Expellees from East to West Germany after world war II, Braun and Mahmoud conclude that refugee inflows only had a strong effect on the unemployment rate of the West-German population in those sectors of the labour market where their inflows were higher than 15 percent, a much higher percentage than Germany’s current one percent. Therefore, a huge crowding out of native European workers by Non-European immigrants is not to be expected in the near future. Of course, the situation nowadays differs a lot from the one in Post-war Germany. Therefore the two cases cannot easily be compared. The 15 per cent level can however be used as a benchmark in evaluating if an inflow of immigrants will lead to a crowding out effect of the native popula-

Europe and the World

The ECU’nomist, November 2015 tion of the host country. Besides the lower number of immigrants, there are two other reasons why a deterioration of the native inhabitants’ position in the labour market nowadays is even more unlikely than in post-war Germany. First of all, in the case of PostWar Germany, East German refugees were easily substitutable for West German workers. Refugees coming to Europe nowadays however, often have a significant worse position on the European labour market, because of the big language and/or other cultural barriers. Secondly, the economies in European countries are much more service-based economies than Germany was seventy years ago. As a result, adequate communication skills and other specific knowledge have become much more important to find a job, making it harder for immigrants to integrate into the labour market.

“Asylum needs borders!” - German protesters campaigning against the coming of refugees in Berlin.

The Turkish Case A refined empirical study on the impact of Syrian refugees from 2011 and onwards on the Turkish job market by Del Carpio and Wagner3, can provide more insight into the effects that a large inflow of refugees can have on an economy. Since war broke out in Syria in 2011, Turkey has provided 1.8 million Syrians refuge. Syrian refugees therefore compose 2.3% of the current Turkish population. 85% of these Syrians have left refugee camps and have entered the labour market, either with, but usually without a working permit. Many Syrian workers therefore entered the informal sector, which led to a crowding out effect of the Turkish population in this sector: econometric regressions show a 4.8% decrease in native employment for every 1% increase in the ratio of refugees to working-age population (the ref/pop ratio). Many a Turkish worker would see this as evidence that Syrian immigrants have been ‘stealing their jobs’. On average however, the labour market position for Turkish workers has not been worsened. Del Carpio and Wagner even conclude that, taking all effects into account, the net effect of the Syrian refugees on the Turkish population is positive! Average wages increased as Turkish workers got crowded out of the informal sector, but found new work in formal employment, work that was partly created because of the presence of the refugees. Furthermore, there was an increase in school attendance, which gives reason to believe that Turkish workers either went back to school in order to learn for a more specialized, higher paid job, or that people decided to stay in school longer because labour at the lower, informal part of the labour market is oversupplied. A study of low skilled immigrants in Denmark during the period 1991-2008 shows similar conclusions: “an increase in the supply of refugee-country immigrants pushed less educated native workers (...) to pursue less manualintensive occupations. As a result immigration had positive effects on native unskilled wages, employment and occupational mobility.”4 This gives reason to believe that, also in Western-European economies, the coming of refugees will lead to an improvement, not a deterioration, of the native’s labour market position.

even a low-paid job usually requires adequate knowledge of the language. Also, refugees will have to overcome cultural barriers in order to find a job in the Western-European labour market. Therefore, in most Western-European countries, the refugee population suffers from very low employment rates. For example: Out of the refugees that found asylum in Sweden, only 25% found a job after two years of living there.5 However, as refugees live in their host country for a longer period of time, they usually learn the skills that are needed to become a better fit to the labour market, and employment rates improve. In the same Swedish study, an average employment rate of 56.5% was found for refugees ten years after their immigration, which still means that there is a 10% gap between the employment of refugees and the native population. For the Netherlands, the employment rate of refugees after ten years is even slightly worse: 44% compared to 64% for the native population.6 Only after having lived for thirty years in their host country, the employment rate for refugees stabilizes in Sweden, although even then, refugees have a 4% lower change of being employed than native Swedes. To conclude, refugees will, on average, always have a worse position on the labour market. Reasons can be that, even after thirty years, refugees are often still lower skilled than the native population. Also, discrimination against applicants with Arabic names by employees could be an explanation. The low employment rate of refugees found in different studies should leave one worried, since it implies that many refugees will live on benefits for a long time. At the end of this year, Germany is expected to have taken a total of 800,000 refugees in 2015. The total cost of providing these refugees with food, healthcare and housing is an estimated 10 billion euro in 2016. These costs will only reduce if these refugees enter the German labour market in order to contribute to the economy. Even in the worst case scenario where none of the 800,000 refugees find a job however, these costs are not likely to be a problem for Europe’s largest economy, whose government closed the year 2014 with a budget surplus of 13 billion. All in all, it can be concluded that Europe’s economic strength and the number of refugees that Europe will grant asylum do not necessarily contradict each other. Instead of refugees crowding the native population out of the labour market, refugees are more likely to initiate a ‘crowding up’ effect that benefits the native population. In order for this effect to take place however, refugees first need to enter the labour market. To achieve this in a western European economy, refugees need to learn the language of the host country, as well as getting achieved with its cultural norms and values. This process takes much time, therefore low employment rates can be expected throughout whole Europe for recently displaced refugees for the next decades. Governments of Euro-

Entering the labour market – The refugee’s challenge Thus, on average, providing refuge to asylum-seekers will not lead to a crowding out effect in the labour market, but rather to a ‘crowding up’ effect: native workers tend to find more specialized, higher-paid jobs as refugees enter the low-skilled part of the labour market. But what about the widespread fear that refugees will not be able to work, resulting in an increase in welfare benefits to be paid by the host country? Finding a job is crucial for letting refugees integrate in their new society and to contribute to its economy. This will prove hard for Non-European refugees entering the European labour market however, since, in a Western-European economy,

The ECU’nomist, November 2015 pean member states can speed up the time it costs for refugees to become employed by providing the refugee with the needed education. Finally, accompanied programs in which refugees can gain working experience could help improve their position. [1] Kingsley, Patrick . 10 truths about Europe’s migrant crisis. Guardian. 10-08-2015. http://www. theguardian.com/uk-news/2015/aug/10/10-truthsabout-europes-refugee-crisis [2] Braun, Sebastian and Omar Mahmoud, Toman . The employment effects of immigration: Evidence from the mass arrival of german expellees in postwar Germany. Kiel working papers, No. 1725 (2011). http://hdl.handle.net/10419/49384 [3] Del Carpio, Ximena and Wagner, Mathis . The impact of Syrians refugees on the Turkish labor market. Policy working papers. No 7402 (August 2015). [4] Foged, Mette and Peri, Giovanni . Immigrants’ effect on native workers: new analysis on longitudinal data. IZA discussion paper series. No. 8961 (March 2015) http://ftp.iza.org/dp8961.pdf . Quotation from page 3. [5] Lundborg, Per . Regugees’ employment integration in Sweden: cultural distance and labor market performance. Review of International economics, 21(2), 219-232, (2013). DOI:10.1111/roie.12032 [6] Bottelberghs, Ineke and Sterk, Marion . Integratiebarometer Vluchtelingenwerk: Update arbeidsmarkstituatie 2009 en 2010 (2011). |Retrieved from http://www.nu.nl/werk-en-prive/2416434/ toename-werkloze-vluchtelingen.html

To infinity and beyond!

Food for Thought

The paradox of choice Marouschka Blahetek

F YOU WALK into any modern day supermarket, you might be overwhelmed by the amount of products available. Whilst your parents and grandparents only had two options of soap to choose from, you’ve been standing in front of the shelves for a couple of minutes, trying to determine what your girlfriend means by “just a regular shampoo”. From both a human and economical perspective, we tend to think that having more options increases our general satisfaction, but the contrary might be true. Are all these choices really making us happy? The average American makes about 70 decisions every day. Many of these decisions may be of short term consequence, such as determining what to have for dinner, but some can have a long term perspective, such as decisions about life partners. This ever increasing amount of choices is proving to be more and more

of a problem; a choice overload problem. As we’ve heard from our microeconomics classes, we are supposed to be rational beings who try to optimize our payoffs. With this in mind, it doesn’t seem farfetched that optimal decision making with a multitude of options can become very difficult and moreover time consuming. However, in economics an ever increasing freedom of choice is still understood to be positive concept. To quote Friedrich Hayek’s 1943’s The Road to Serfdom: “Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his absolute mercy.” I believe that many will wholeheartedly agree that having choices is better than being

at the mercy of a monopolist, but maybe we should take a closer look at this statement from our modern day perspective. In a time in which the average supermarket stocks 50.000 products, making the right choice can become a tiresome task. Overchoice can result in indecisiveness, regret (from feeling one hasn’t made an optimal choice) and ultimately in people refraining from choosing at all or letting someone else decide for them. American writer and futurist Alvan Toffler goes as far to conclude that “freedom of choice” in the face of overchoice becomes “unfreedom”. As a result, both humans and companies will suffer the consequences of overchoice, but in a different way. Whilst humans will feel the psychological strains,

“Facebook CEO Mark Zuckerberg puts on an identical outfit every day thus avoiding to make a decision at all.”

The ECU’nomist, November 2015 which can induce paralysis by analysis. Overchoice can decrease our happiness and the profitability of companies, since customers can become regretful for not being able to make an optimal decision and may even refrain from making choices, which results in decreased profitably for companies. However, overchoice is a problem that can be actively tackled by individuals and producers. Producers can decide to limit their variety in products and individuals can decide to limit their decision moments as much as possible. And if all else fails, happiness is just a coin toss away!

companies will feel the consequences financially. Customers who feel overwhelmed by too many options will refrain from a purchase and companies will feel this in their wallets. Columbia University professor Sheena Iyengar has years of experience in the field of choice, and she concludes that downsizing the amount of options available can increase a company’s profits drastically. As an example, she names the product line Head & Shoulders from Proctor & Gamble. Their product line was downsized from 26 different shampoos to 15, resulting in a 10 percent sales increase. Why did this happen? A typical customer makes a two-fold purchasing decision. Firstly, a customer decides on the assortment, and secondly a decision is made about an item in the assortment. Research suggests that customer seek variety in the first decision, but prefer less of it when they have to decide on a specific product. Decreasing variety and thus decision complexity is a must, as was discovered by many producers. Now we know that companies can solve their problems by downsizing available options, but how can we apply this

to our own lives? To put it in a more economical perspective, we should ensure that the opportunity cost of decision making does not exceed the payoff of acting upon a choice opportunity straight away. In short, make sure that you do not become paralyzed by analysis. For example, Facebook CEO Mark Zuckerberg puts on an identical outfit every day thus avoiding to make a decision at all. Zuckerberg is one of many successful individuals who try to tackle overchoice by limiting decision moments. Another clever way to make a decision quickly is flipping a coin and letting chance decide for you (American psychologist Barry Schwartz has shown that in some cases, satisfaction can be increased if someone else makes a decision, even if the decision is supposedly worse). Flipping a coin is also an easy method to show your true preferences. If you flip a coin it usually crosses your mind which side you prefer to face up. In this case, the coin flipping itself doesn’t offer an outcome, but the process does. To conclude, in modern day’s society making decisions has become increasingly difficult due to an information overload

World Guest Article

Becoming a successful Key Account Manager Cem Perdar

Y STORY begins in August 2009. I had just turned 21 and was working a summer job at French holiday village called Club Med. One day while visiting with customers at the beach bar, I met a Turkish man who was on vacation with his family. After speaking with him for 10 minutes, he offered me a job in his company once I completed my university degree. After graduating, the I position I was offered was called Key Account Manager (KAM). I didn’t know what the responsibilities and duties were for the position. The only thing I knew about the company was that it produced official plastic parts for VW, Audi, Porsche, and Mercedes. So what did I do? I jumped in and learned how to swim. What are the main responsibilities of a Key Account Manager? While on the surface the position you may think that the position is very sales oriented but in my case that wasn’t true.

As KAM I had to develop the following qualities to be successful: • Problem solving • Price maker • Project management skills • Good communication skills • Firm and fair negotiator • Understanding of who your customers are • Time management skills • Understanding cultural business differences A KAM must know that he/she has 2 types of clients. 1. External Customers (Accounts that purchase goods and items) 2. Internal Customers (Staff in his company who is always complaining about the tight deadlines, external clients requirements, etc.)

If you are able to manage both of them smoothly, that means you’ll become a real Key Account Manager. Time management is one of the most important skills for a successful sales account manager. Let’s imagine a case. It is Monday morning. You arrive at the office at 08:00 and you have no unread emails and you have a meeting scheduled for all day.

The ECU’nomist, November 2015 At 17:00 you check your mails one more time, and now you have 89 unread mails in your mailbox from customers from all around the world. (Europe, Middle East and Far East) But wait! There is no need to stress out over these 89 new emails. At 17:00, the Far East clients has already finished working for the day so you gain an evening to reply to them. Customers from Europe expect you to reply within 1-2 days after each mail with answers. You know that clients from Middle East are expecting the responses just 1-2 hours after mailing you. So you need to prioritize our time by handling the Middle Eastern clients first then the Far Easterners finally the Europeans. You need divide your customers according to their time zones and expectations. But of course if there are some cases that are more important and urgent, this answer sequence can be changed. Personal attitudes and demeanor hold a very important place in sales management. Your behaviors could be a decisive point between you and your customers. While meeting with a customer, a Key Account Manager’s clothes must be clean and elegant. Behaviors must definitely be humble and soft. A very important point which we should not forget is that a KAM does not only sell its products with its price and quality, s/he also sells them with his/ her personal attitudes and approaches. You should give confidence to your customers by your style of talk and behaviors. They should feel safe when buying products from you and your company. That’s why these actions are very important to help convince your customer to finalize a purchase order. Having the same point of view with the customer has a vital importance in sales management. A KAM needs to understand the customer’s needs and must build rapport with his client whilst tending to his/her demands. For example, if I have a meeting in Düsseldorf with my client and the meeting starts at 09:00, ends at 10:00. So I must be there latest at 08:59 and I should directly concentrate on my business talks to close all open points with my customer. After 10:01, I’m pretty sure that there is no chance to close up my deals with my customer. Limited time should push me to be more focused during this meeting. I would like to share another meeting case. I have a meeting in Tehran / Iran and I know that my customer has no time limit. From 09:00 until 19:00, he will have more free-time in the beginning of the meeting so we can talk about life, politics, economics, sports etc., then we can go for business talks afterwards. Below you can see the differences between

Meeting in Germany:

Discipline Limited Time Only Business

Meeting in Iran:

More Relaxed No time pressure About everythiing

two types of business cultures. If both of the meetings result with positive sales, you are on your way to becoming a good a Key Account Manager. Surprise your customer! While going to visit your customer, you can buy him/ her some presents from your country. Some small local gifts will always make positive impacts. This could be a chocolate, a dessert, a cravat or a pen but it should not be something very expensive. Also it is important to remember the special days of your customers. For example, a good Key Account Manager should mail his French client on 14 July (French Republic Day) or call his client from Bahrain on the earliest first day of the Ramadan. Those small tricks make a KAM unforgettable in the eyes of him/her customers and creates a sustainable relation between the KAM and them. Always answer their phone calls! Your customer is calling you and you are not available. Please call him back as soon as possible. A KAM should give a definite confidence to his/her customer. Giving prompt feedback is important in sales management. In summary here are the 5 milestones to be a good Key Account Manager: 1. Give fast feedback to customer 2. Create confidence in the eye of customer 3. Use your time efficiently 4. Set your approaches according to each customer 5. Always be honest To be successful in sales business at KAM is to give the person what they want when they need it. If you meet their expectations at the right time you will be successful. Born in Istambul, Cem Perdar has been working as a Key Account Manager since 2010. He came to Utrecht University as a visiting student for Entrepeneurship and Finance classes. He completed two masters, one in Finance and one in Business Administration in Rome and Marmara respectively. See guest contact list for more information and photos: cperdar@gmail.com

World

The ECU’nomist, November 2015

Renminbi

Guest Article

The China Market Crash Sander ten Hoedt

EARLY 4 Trillion US$ worth of chinese stocks on the Shanghai Stock Exchange (SSE) evaporated into thin air between the 10th of June and the 10th of July. Price went up about 150% in the previous year and the crash devalued the index by 32%; foreign investors are to blame. Such is, at least, the official stance of the Chinese government. Mr. Lin ZuoMing, a high-ranking party official and alternate member of the CPC’s illustrious central committee said it was no coincidence that short selling by foreign investment companies was perfectly timed with the stock market crash. He went on to compare the incident to George Soros’ alleged currency speculation, which set off the Asian currency crisis in 1997. In this case accounts belonging to the Chicago based Citadel hedge-fund have been seized pending an investigation regarding the undermining of China’s stock market and algorithm trading. The latter of which has increasingly come under fire in the west as well. Analysts are presenting a different version of events. One where Chinese investors, who are predominantly (~80%) individuals and whose investments are highly leveraged, faced margin calls on their accounts which because of their leveraged nature required the selling of stocks to pay off. This in turn triggered more margin calls as the stocks used as collateral lost value, requiring more stocks to be sold in a spiral

to the bottom. In other words, it is partly due to a structural problem with the way Chinese saving and investment patterns interact with a modern stock exchange. As a reaction to the stock market’s collapse the government intervened, allowing over 1400 companies to cease trading their stocks immediately, as well as endorsing a 30 billion US$ buying program heralded by the country’s largest brokers. It also stopped all IPO’s as well as spreading propaganda to its citizens to hold on to their stocks. Unbridled growth of the Chinese stock market the past year comes in stark contrast with the slowing of the general Chinese economy. Some say much of the SSE’s gains are thanks to the encouragement of the party, both in getting its citizens involved and direct influence. Whether China reaches its 7% growth target this year remains to be seen. As the government looks for different ways to fuel growth than government investment, stocks are becoming a way for companies to gather capital from avenues other than the traditional party sanctioned ones. Encouraged by the government, the burgeoning Chinese middle class is financing corporate growth, despite the average Chinese still having more than 75% of their savings sunk in bank accounts as opposed to only half in western countries. Savings at a rate over the optimum for steady state growth result in less consumption. Assuming Chinese steady state growth is similar to western nations and that western nations are indeed growing at their steady state, accessing China’s apparent savings glut would do wonders to boost consumption, and with it the growth of a strong Chinese middle class. Blaming domestic problems on foreign influence is nothing new. It comes however, at a time when China is not

only increasingly opening its borders, but more importantly has set a goal of making the Renminbi (RMB) a strong reserve currency akin to the USdollar or Euro. Xi Jinping, the current Chinese president, has said as recently as March this year that he and China remain “committed to its openness and welcoming foreign investment”. Making the Renminbi a world player in the capital market is an astute strategy for China, not in the least after witnessing the advantages the USA reaped having a worldwide reserve currency during the financial crisis of 2008. A large RMB zone would allow China to run current account deficits much like the US can. Are the two positions reconcilable? On the one hand president Xi and the CPC see a necessity to allow foreign investment in China to stimulate growth. They also want to create an RMB area much like the dollar has its zone. On the other hand China is falling back on its centuries old tradition to find a foreign scapegoat as a solution to their problems, as well as influencing the same market they are trying to make more open and free. Whether this is a blow to foreign investments in China and therefore president Xi’s plan for a RMB area remains to be seen. In September the CCP tightened capital controls in an effort to counteract the flight of capital from the country after the devaluation of the RMB following the summer’s stock market crash. This despite the earlier assurances by president Xi that China would remain committed to openness. China’s central bank has been forced to spend up to $200bn in foreign exchange reserves to prop up the ailing currency. As the Chinese economy grows in global importance and stature, and with it the ubiquitousness of the RMB, capital controls are an untenable situation when thinking of a global currency. Wao Tang, expert on Chinese economics at UBS has corroborated; “[capital controls] will not be viable over the long term and hence is unlikely to be pursued by China’s central bank for long”. Sander ten Hoedt is a student at USE and a guest writer for the Ecunomist. Sander’s Dutch but he lived in several countries, namely in South America. He enjoys travelling and writing and analyzing the world around him. For more information about Sander please check out the guest contact list.

World Guest Article

The ECU’nomist, November 2015

Legalization of Marijuana: Why now? Byung Hun Kim

F YOU have visited the Netherlands for the first time, you might have thought of trying cannabis. Also, you may have gone to a coffee shop by “mistake” to order some coffee and ended up getting high. Marijuana has been taking false accusations for the last century as a gateway to harder drugs and drug addictions. Furthermore, using marijuana was believed to cause crimes and delinquencies and cause a degenerate disease. However, after the legalization of practice of marijuana in Washington State in 2011, people started to question the actual effect rather than what has been circulated throughout the media. Recent scientific research, also, has proven that marijuana is actually less harmful than alcohol or tobacco. Furthermore, many states in US are considering decriminalization of cannabis. So what is marijuana and why are countries slowly legalizing it now? Marijuana, also known as cannabis--or known by many other names--is a bud of a hemp plant. The bud contains a concentrated chemical substance of THC, which provides the effects such as relaxation, euphoria and increase in appetite. There are several ways to consume marijuana. The most common way is to roll a joint. Another way to consume the substance is through a bong, which is the icon of marijuana paraphernalia. Sometimes marijuana is used as an ingredient for cooking. The plant is supplied by the licensed growers who also process and dry the bud as they are packed in a small bag. The dried buds are, then, transported by the licensed distributor in the market and sold out to the consumers. It seems like that marijuana is not dangerous after all. Then why did the countries ban marijuana in the first place? Well, for the most part of the human history, marijuana has been completely legal. In fact, it was not only legal but also happens to be the largest agriculture crops in the world. It was not until early 1900s, where countries started banning the practice of marijuana due to racist reasons. For instance, marijuana was banned in South Africa in 1910 to prevent tribe people from practicing the ancient Dagga cults and religions. In US the story is not much different. Again, racism was part of the charge against marijuana, as the newspapers in 1934 stated, “Marijuana influences Negroes to look at white people in the eye, step on white men’s shadows

Source of 28,750,970 crimes in the US as of 1996 to present and look at a white woman twice.” However, the prohibition of the practice was mainly driven by the industries, which participated in related markets as hemp plant industry. As cannabis hemp plant was one of the most robust, durable, natural fibers on the planet, the plant was used to produce thousands of products. The majority included, lighting oil, fabrics, medicines, paper, and fiber. Up until the late 1800s most of the textile was made from hemps and 50% of the medicine was produced from cannabis. Thus, industries such as the suppliers of paper industry, fiber industry, and etc. drew upon themes of racism and violence related to cannabis practice. Due to the active support from other industries to prevent cannabis, in 1937 the practice of recreational marijuana became illegal at the federal level. Medical and industrial uses were excluded from the law, however were under heavy excise tax on all sales of hemp. Annual fees were $24, $637 if adjusted for inflation, for importers, manufacturers, and cultivators of cannabis, and $3, $82 if adjusted for inflation, for industrial users. So why legalize the practice of marijuana again? Recent, surveys have displayed that more than half of the population in US have encountered using marijuana at least once in their lifetime. The survey clearly proves that the prohibition against marijuana is not effective enough relative to the cost incurred in court and law enforcement of marijuana every year. Thus, the government in every state is considering legalizing the practice in order to monitor and control the amount of marijuana supplied into the market. Furthermore, despite the prohibition of marijuana high demand for weed

has always been existed. Thus, instead of smuggling in from other parts of the world, by domestically growing the plant would reduce unemployment and create more jobs such as packaging industry, industrial hemp, opening coffee shops. Moreover, by legalizing the practice of marijuana the countries may gain tax benefits. To give you an insight of how much tax benefits the government can earn, here is a comparison of the costs for a gram of legal marijuana and a similarly priced bottle of wine currently being sold in Washington. More than 50% of the price of marijuana is from the tax. This is 3 times higher than what has been taxed for a 750ml wine, which is only 15% of the price. Actually, the states where marijuana is legal, the price sold by licensed retail store is twice as higher than the ones sold on the street. Now you might be complaining about the high taxation, but let’s look towards to the economic point of view. In Colorado, about $70 million of revenue is generated from marijuana taxation every year. The tax generated from marijuana is then used to fund school constructions and regulations. So by consuming weed we are actually developing the country into a better place. Now, let’s flip to the other side of the coin and look at the social cost of the marijuana. Recently, some economists have stated that the social costs of marijuana are miniscule compared to the benefits the plant would bring to the country. According to these economists, marijuana acts as a substitute towards alcohol, which would reduce the consumption of alcohol. Furthermore, although driving under the effect of marijuana is not recommended, the traffic collision is more likely to occur by 10 times under the influence of alcohol. Moreover,

World

The ECU’nomist, November 2015 according from FBI, one marijuana-related arrests are made every 42 seconds and it is up to the tax-payers who has to pay for them to go to the jail. By legalizing the practice of marijuana, the resources spent to arrest pot users can be spread to other sectors. Of course the legalization of marijuana means that the industries, which actively supported in preventing hemp plant will suffer again. Furthermore, it would take some time for everyone, as a society to embrace the practice of marijuana. However, the legalization delivers both the desired efficiency and effectiveness at the same time as the government can control the practice of weed and collect quite a sum of money from the taxation. In addition, it helps in reducing the unemployment rate, which is currently a huge problem around the world. So why not light one up and appreciate this magical beauty.

Food for Thought

What if Christmas didn’t exist? Aleksander Tase

HAT JOLLY TIME OF YEAR is slowly creeping around the corner, and as we finally recover from “exam mode”, we have even more reason to celebrate and rejoice. As the end of December nears, we get ready spiritually for a time of family warmness, carefree days, and at least for a while, financial bliss. With the oncoming holidays, we seem to exchange our necessary student virtues of prudence and moderation, for gluttony and hedonistic spending. That merry man seems to infect everybody, young or old, with an ongoing feeling of warmth, generosity and self-indulgence. Now imagine for a moment, a Grinchlike, dystopian parallel reality where this heavenly period doesn’t exist. No more indulging in senseless, although satisfying, shopping. No more first-class train tickets to travel back home, altruistic present giving, kissing under mistletoe and no more Christmas tree. An Ebenezer Scrooge paradise. As any economist might suggest, these Christmas-fueled changes in the way people spend and prioritize utility might affect the way the economy works as a whole, at least temporarily. The social, psychological and economic effects of the holiday season might be larger and more global than they might seem at first glance. Firstly, how much does the world’s

most generous anonymous benefactor actually spend on his yearly splurge of generosity? In accordance with good economic practice we’ll first make ludicrous assumptions to come to hypothetical, yet amusing results on Santa’s many tasks and challenges. There are 1.85bn children in the world between the ages of zero and 14, as well as another 1.2bn aged 15 to 24, but let’s (reasonably from experience) assume that these teens and university students are firmly on the naughty list. If the generous Santa gives two presents to each child, he has to wrap 3.7bn presents before Christmas Eve. Luckily, he has a crew of elves to help. If these skilled “employees” can wrap a gift in just eight seconds, which adds up to roughly 1,000 years of work, Santa needs to employ 3,000 elves to work eight hours a day for a year in order to be ready on time. There are no weekends and paychecks in the North Pole (sorry unions). With the increasing consumerism of the current generation, we predict the average gift to be 66 euros per child. Putting all these together, Saint Nick is set back an astonishing 1.22 trillion euros per year. That’s quite a sum considering the fact that the global GDP (GWP) is only 72 trillion a year. I don’t know the prices in the North

Pole, but that must be enough cash for a jet powered sleigh and a new suit. It seems like in our parallel universe the world would have its first trillionaire! Let’s take a more realistic view of holiday spending, assuming, (not wanting to shatter any dreams or beliefs) that Santa doesn’t exist. The holiday season has become a worldwide phenomenon with families from west to east at least slightly spending a bit more during the time, and at most risking bankruptcy for some holiday cheer. We will focus on European countries, which not surprisingly vary greatly in tradition. With Christmas being celebrated in many different countries, it’s no doubt that there are differing opinions on what one should spend on gifts. Generally speaking, the greater the GDP per person the higher the amount of money is spent at Christmas time per person. The United States was projected to have a GDP of just below 50,000 per person. It was estimated that each person in the United States spends around $700 on Christmas gifts. Conversely, Ukraine has a GDP of just below $10,000 per person and only spends about $250 on gifts at Christmas. However, the norm doesn’t always hold true. One notable exception is the Netherlands. The Dutch GDP per person is just above

“What if Christmas, doesn’t come from a store. What if Christmas...perhaps... means a little bit more!

The Grinch was doing us a favour all along...

The ECUâ&#x20AC;&#x2122;nomist, November 2015

United States $40,000. However, they spend significantly less than their economic equivalents the Swiss. On average, the Swiss, who have a similar GDP, spend $650 per person. The Dutch remain frugal, spending less than $200 per person on Christmas gifts. The Dutch don’t seem to place a high importance on the value of “things.” Back in our parallel universe such spending would be evenly distributed during the year, maybe with a bit more egoism in the process. The result would be a more stable and uniform spending plan and less fluctuations in seasonal prices, although it seems that here in the Netherlands we already have that covered. In line with the dismal view of economics, let’s remove the colorful bits of emotion and look at gift giving. In America, retailers make 25% of their yearly sales and 60% of their profits between Thanksgiving and Christmas, so they would probably dread the thought of our Grinch universe. Much of the holiday spending is on gifts for others. At the simplest level, giving gifts involves the giver thinking of something that the recipient would like— he tries to guess her preferences, as economists say—and then buying the gift and delivering it. Yet this guessing of preferences is no mean feat, as many (ex) boyfriends know, indeed it is often done badly. Every year, shirts go unworn and books unread. And even if a gift is enjoyed, it may not be what the recipient would have bought had she spent the money herself. Joel Waldfogel, an economist at Yale University, sought to estimate the disparity in dollar terms. He asked students two questions at the end of a holiday season: first, estimate the total amount paid (by the givers) for all the holiday gifts you received; second, apart from the sentimental value of the items, if you did not have them, how much would you be willing to pay to get them? His results were gloomy: on average, a gift was valued by the recipient well below the price paid by the giver. The difference in valuation is known as a deadweight cost. Needless to say, nobody would like to buy a watch (inelastic) for someone who might as well throwugh it out. On the other hand, leaving a 50 euro bill (elastic) under the tree could get you labeled as the economist-robot who has no soul. This suggest that in the US alone, almost 4bn dollars spent for loved ones, might as well have been burned in the festive fireplace. Our parallel universe has an extra 4bn running through its veins, but I still enjoy the warm feeling of receiving a present from my mom, even if it’s not my favorite brand.

The ECU’nomist, November 2015

Mike Luckovich, Atlanta Journal-Constitution As we put together the pieces of our new Grinch world we can see a pretty clear picture. A world where prices are the same all year round, you won’t be broke in the spring, no shirts end up for charity on the 26 of December and couples everywhere are safe from holiday quarrels (until birthdays). There’s also a greedy trillionaire who looks like Anthony Hopkins buying Antarctica and all the reindeer he can find. On the other hand, there’s school all year round, no warm family dinners next to the fireplace and no excuse to buy something ridiculously expensive. In retrospect, our world may have had a point economically but would it be a world you would enjoy? “What if Christmas, doesn’t come from a store. What if Christmas...perhaps...means a little bit more!

Politics

The man who beats China all the time Linda Kunertova

RESIDENTIAL ELECTIONS in the United States are traditionally an event that comes under close scrutiny not only by the Americans, but by the entire world and there is no reason to believe that 2016 should be any different. This time though it is not the battle between Republicans and Democrats that draws all the attention. This time it seems like the whole election is a battle between Donald Trump versus everyone else. A self made man, a billionaire, real estate tycoon and most recently, a candidate for president. The man who according to his own words doesn’t need any introduction. Taking everyone by surprise in June earlier this year Donald John Trump announced his run for the president on the

The ECU’nomist, November 2015

Republican ticket, hereby starting off an endless parade/sequence of insultive, critical and distinctive speeches balancing on the verge of good manners. His political agenda and anti-politically-correct toned appearances might not earn him overall public recognition, however it seems to be useful for winning another important thing, and at this time of the year maybe even more valuable–votes. Trump takes advantage of a prevailing anti-immigration mood and populistically comes with patriotically oriented answers, promising people just what they want. There is one thing though that distincts Trump from an ordinary populist politician and that is his story. A story of building his own real estate empire and bringing his reputation to the level where everyone in the whole world knows which name follows after Donald. His key to success might be his success itself. No matter how extreme and far-fetched Trump´s statements and political beliefs will be, his own name together with radiating unshakeable confidence provide his words with unusual

Born in 1946 into a well-off American family in New York City Donald had the privilege of having a high quality education. As his father was a real estate developer and conducted his own company Elizabeth Trump and Son, Donald had a unique opportunity to watch and learn from his father´s business and acquire an industry valuable knowhow. In his twenties Donald was employed in the family business being navigated and mentored by his father and at that time he also started working on his first project. By investing half million dollars into revitalization of an apartment complex Swinton Village in Ohio, he turned former nearly unprofitable estate into a prospering investment. But it was after Donald had moved to Manhattan when things really started to evolve for him. Donald built an extensive network, involved in larger building projects and became publicly known for experimenting with controversial architectural design. The Trump Organization was founded and thus began the real estate boom. Trump would buy up and invest into huge luxurious hotels or complexes on the verge of bankruptcy and then restore their fame and pomp. Slowly building and expanding his empire Trump decided to leave a footprint on the iconic New

York City skyline and built Television City - a huge luxurious complex consisting of dozen of skyscrapers. Over the years, Trump has owned and sold many buildings in New York such as the Plaza Hotel (which he renovated and brought back to its original grandeur), the St. Moritz Hotel, now called the Ritz Carlton on Central Park South or the land under the Empire State Building). After dominating the Manhattan Island, Donald J Trump went to extend his empire and managed to acquire several casinohotels in Atlantic City. The first troubles emerged after expansion to southern parts of the United States and in 1991 Donald Trump filed for bankruptcy for the first time. A sudden twist was caused by declining real estate market prices and only massive loans saved the Trump Organization, Trump’s precious empire, from collapsing. However, it took six years and Trump brought the company back to the red numbers and its worth was reported to reach 2 billion dollars by 1997. After entering the world of entertainment and reality shows, Trump tried his luck with politics repetitively meeting with un-success until this year. Herewith Donald Trump started with attempts to acquire and win another huge project – restoration of America. We can only pray he will not succeed.

credibility which is difficult to question. Presidential elections in the United States are traditionally an event that comes under close scrutiny not only by the Americans, but by the entire world and there is no reason to believe that 2016 should be any different. This time though it is not the battle between republicans and democrats that draws all the attention. This time it seems like the whole election is a battle of Donald Trump versus everyone else. We can only speculate whether after the elections next year Trump will be celebrating his triumph in the Oval Office or drinking away the sorrows after a bitter loss at the top of the Trump Tower. What remains unarguable is the fact that he has had a long and fruitful career full of ups and downs that is worth a listen.

Do you want to be part of the next ECU’nomist? Are there pressing issues on hand that you want other people to think about? You can write about interesting literature, inspiring people, current and historical events, anything that the scope of economics encompasses or that you think economists will find interesting. If you are interested, then send your piece to: ecunomist@ecu92.nl Happy writing!

University Life Exchange Article

The ECU’nomist, November 2015

La Città Eterna Antoinette Zuidweg

BOUT exactly two years ago, in November 2013, I was struggling to write my letter of motivation to join the U.S.E.-LUISS exchange program. Combining Utrecht’s Economics program with the more business approach of LUISS while getting to study in the Eternal City sounded like a dream to me. Next to a year abroad, it would also offer me all the opportunities to explore my personal passions: art and history. I had it all written down, and a few weeks later I heard I was accepted. I was going to study for an entire year in Rome. The adventure started on the first of September 2014. Never having lived by myself, I entered an airplane to a city yet unknown to me. The first impression of Italy after landing at Rome Fiumicino was overwhelming and chaotic. I took a train to Termini station, and soon I would arrive at my home for the coming year. It was a horribly old flat I would share with an Italian guy and girl from Sicily and another girl from Utrecht. I loved the place. We have had amazing dinners there, long study nights and crazy parties. During the first weeks, I tried to find my way around Rome. Discovering the city together with my flatmates, some of the other students from Utrecht or even by myself, I started to fall in love with “la capitale”. Summer lasted so long! Some things were difficult to understand as well. Why do Italians start saying ‘Buonasera’ (good evening) from three o’clock onwards? And why did they give me weird looks when I ordered a cappuccino after one in the afternoon? Luckily I had a year to adapt to all Italian habits. Two weeks after arrival, the first lessons at LUISS would start. This was a complete difference compared to what I was used

to back in Utrecht. Professors arrived 15 minutes late with a coffee in their hands, and tutorials were non-existent. We had to spend long hours at university listening to lectures and to keep up you would have to read and practice all by yourself. Doing four courses simultaneously basically meant two weeks of self-detention at the end of the semester to fully master the material for the first exams in December. This process would repeat itself for the spring-semester. Besides lessons, the experience of the university itself was also a complete different thing. Out of the three campuses LUISS owns, the Economics department is situated on the most beautiful one, close to Rome’s largest park: Villa Ada. The campus holds three building blocks for education, an amazing coffee bar where you could meet friends after lectures and a church that is often used as a controversial study room. Especially in exam period people would pay a visit to church, but they would have different reasons to pray than the Sunday mass! A thing that I appreciated a lot about the university was the approachability of the professors. Whenever there was a problem, misunderstanding about the course or just a general question, they were always willing to offer help when needed. The fact that most classes were relatively small also contributed to professors knowing the students’ faces. All these things together created a good studying environment that motivated me to make most out of my time at university abroad. All the hard work was luckily contrasted by much more free time than I was used to. At the beginning of the first semester, I met plenty of international students who were on exchange as well via ESN Roma LUISS. Suddenly I would have friends in Turkey, New Zealand, and Ukraine and all over Europe. Also Italians make great and hospitable friends. The first semester I met most Italian friends through my flatmates, when having amazing dinners or when going to San Lorenzo to have a drink right outside on the crowded streets. All would laugh at my attempts to learn their language, but

LUISS Social Sciences in Viale Romania (left) and LUISS’ next supermodel (right) at Termini Station

University Life

The ECU’nomist, November 2015 they were most happy to help me though. The second semester I met some amazing people I can’t wait to visit whenever I will be going back, including someone who became most important to me. Great places around the city to go with friends also included Monti, full of vintage shops and jazzy cocktail bars, or Trastevere, an area popular among both students and of course tourists. After going out for drinks or an aperitivo, we would often end up in clubs like Vibe, Vicious or Shari Vari. Going out in Italy was completely different from going out in Utrecht. Girls, if you ever go, you can leave your jeans at home. Without heels and a nice dress it might be difficult to enter. Italian nightlife is much more about ‘to see and to be seen’ than the Dutch one. Whenever we would not feel like that, but wanted a night of sports, we would go with the international students to Scholars pub, to watch the Champions League and sing karaoke. Studying abroad for a year also meant that there was much more to discover than the city I was living in itself. Rome is beautiful, with all its history, art, churches and museums, but Italy has so much more to offer. Together with friends I would visit the Marino Wine Festival and the Perugia Chocolate Festival or go to the beach in October, join the Venetian carnival in February and visit Puglia for Easter. With family I made a spontaneous road trip to the beautiful Amalfi Coast. When my academic year was over, I couldn’t get myself to leave for several reasons, so I decided to do a summer course in Florence in July. Traveling the country really made me feel like I made most of my stay, but even more sad to leave. Among meeting new friends, discovering places, crazy nights and studying, some other unthinkable things became reality as well. In December, while studying for my History of Economics exam, there was some happening in the university corridors. A friend told me to join her there, and before I knew I had pictures taken for a casting. LUISS wanted models for the promotion of

the university. A few days later I received a phone call, telling me I was invited to join the shootings for the promotion. About a month later, I would find myself printed on the University’s shuttle bus, meet myself at bus stops while going for a run and look at myself smiling at me from the LUISS website. Even in October 2015, when I was long gone from the city, my picture was still hanging at Termini station. And I? I am looking forward to new adventures, knowing that ‘Roma mi ha rubato il cuore, per sempre.’

The W World edia

Current Affairs

a n d

Filippo Ricci What we know of the world is influenced by a biased source of information which cares mainly about the bottom line. How can we remain informed in a world where news outlets can’t always be trusted?

URN ON THE TV and you’ll get the classic staple news we’ve been fed for the past “I-can’t-remember-howlong-it’s-been”. The world is in shambles, we’ve got a refugee crisis in Europe, a lot of poor people and a lot of girls not attending school. It doesn’t matter where you look in the media, things just seem to be getting worse; but are they really? The world consists of roughly 200 countries, some are very rich and some are very poor, but in reality most of them lie somewhere in the middle. Most people in these countries go to school, get vaccinations and most families have two children. People tend to think that the world population is constantly growing, I have to admit, because of all the exposure to this fallacy, I have fallen for it as well. Truth is that the number of childbirths has stopped growing worldwide, we are approaching the peak of our population growth. Most people nowadays seem to be actually using contraceptives. Despite our best efforts, our world view is very distorted precisely because of the news. Media outlets care about the scoops, those are the stories which are most appealing, which create controversy and ultimately draw the bottom line for these outlets (a sort of principal-agent problem if you ask me). Vaccinations and school enrollment are all great and important factors that should be reported about, but they simply change too gradually or aren’t interesting enough for this media culture. Hans Rosling, Swedish professor at the Karolinska Institute has been specializing in this field which he calls “fact based world view.” The philosophy is that we can never completely rely or understand conflict or what’s happening in the world without first looking at the facts and not the rhetoric. But how can we access these facts? They’re all stored away in databanks controlled by the IMF, the UN, or the CIA, you catch the gist of it. The main problem is precisely that they’re stored away rather than made readily available to us like the mainstream news is. Our friend Hans is trying to fight exactly this and produced a website–the Gapminder, a platform that allows us to interact with data and present it in a much more friendly (lots of animations) way; sort of

World like taking the excel-ing out of the Excel. The United Nations just announced their boldest goal ever: To eradicate extreme poverty for all people everywhere, already by 2030. Has the UN gone mad or will 15 years really be enough to celebrate eradication of extreme poverty? The idea sounds absurd to most people because of the distorted view we have of the world; many of us still think population is rapidly growing and that income inequality is leading to a persistently more divided world. In truth, quite the opposite is happening. As mentioned before, the number of children being born has stopped growing, and now I will show you that extreme poverty has also made tremendous improvements. With the help of Hans’ website gapminder, I graphed data from World Bank comparing extreme poverty along with GDP/capita in the past 25 years. The trails represent the passage

The ECU’nomist, November 2015

Prof. Rosling showing us that the “camel” world we used to know, i.e. divided rich and poor, is no more. Today we have more of a “dromedarian” as most of the world population actually earns about the same. We are approaching what statisticians call a standard normal distribution.

Graph showing the estimates of the world population living under the poverty line against esimated GDP per capita in those countries. The sieze of the points reprent the country’s population size. Source: www.gapminder.org of time, and the size of the dots represent the size of the population in the country. For simplicity I picked only 6 countries from the major geographical areas. It’s quite remarkable to see that in just 25 years, most of the above countries went through a near-precise halving of extreme poverty: Bangladesh went from 70% of its population living on a $1 a day to about 40%. The Philippines take off from that 40% and reach a 20%; Ghana, one of the beefier sub saharan economies went from 50% to 30%. All these changes represent are average changes; within each geographical region there is a lot of variance and we mustn’t underestimate it. Notwithstanding,

these average economies go to show that a lot can happen in 25 years, and more so that eradicating poverty in 15 years suddenly doesn’t seem like such a ridiculous claim. Side note: It’s interesting to see how even after the fall of the USSR, Belarus maintained a constant level of poverty, granted, their level of income has increased but this might also show that the transitioning period wasn’t as bad as people made it to be. If you are still not convinced, I want to show you a broader picture of the world in the last 25 years. Starting in the ‘80s we can see that more than 50% of the world’s population was living with $1.25 or less. In 2008 we see a reduction to 20% and today

in 2015 the world stands at about 12% (not in graph). Some of you might have noticed that percentage might not be a good measure given that population growth since the 80s has changed quite drastically. We went from 4.5bl to 7bl, this means that in the ‘80s circa 2.7bl people were living in extreme poverty, whereas today 885.2mil; truly remarkable. Extreme poverty is very difficult to measure, of course we will see that actual values would have a significant amount of variance. However, the trend is clear, and the fact that we have met the UN’s last goal millennium goal to halve world poverty certainly means that the situation has improved and is improving. As it often is, the last stretch is the hardest. Let’s take a look at more facts.

18+

The ECU’nomist, November 2015

Jingle Ball ECU ‘92, Alcmaeon and sv Perikles present

It ‘s beginning to look a lot like Christmas

of december

On the 17th of December ECU ‘92, Alcmaeon and sv Perikles present Jingle Ball, the (Christmas)prom of the year! Jingle Ball will take place at “Het Vechthuis” and will start at 11pm (end at 3am). Tickets are for sale at the study associations and will cost €31,- All drinks like beer, wine, soft drinks and Dutch spirits are included. Dresscode: White Tie

University Life

The ECU’nomist, November 2015

EDITORIAL COMMITTEE

The Editorial committee publishes the ECU’nomist, the official ECU’92 magazine, four times a year. The members of the committee write the articles and design the magazine. Our magazine underwent several changes this year as it tries to appeal more to the student audience it was created for. The challenge is to create a complete experience for the reader who wants a personalized view on issues of economic, political, or cultural nature. Workload is particularly intense for the first issue, as the first period takes a lot of acclimatization for new members. Despite this however, we try hard to provide consistent content which includes you! Check out the middle and end pages for photo spreads from past ECU’92 events! If you’re keen to join this group of inspired writers you can do so starting next year and if you really can’t wait we’re always looking for guest articles, cartoonists, photographers et cetera! Warmest regards, Editor in Chief, Filippo Ricci

FRESHMEN COMMITTEE By Freshmen, For Freshmen. This is the committee that organizes all the activities that are strictly for first-year students. Various activities that have taken place include Ice Skating, the traditional Family day, and the epic Cocktail Workshop! Our goal is to help introduce you to your fellow classmates and give you a chance to bond with them. You never forget your first time, and this is the perfect committee for all you Freshies to start with! Chris de Zilva Chair 2014-2015 Filippo Martini Chair 2015-2016

University Life

The ECU’nomist, November 2015

SKI TRIP COMMITTEE

This will be the third time ECU’92 organizes a ski trip. For this committee enthusiastic ski and snowboard fanatics are needed to make sure this trip will be worthwile to continue in the following years. The committee is responsible for deciding the destination, arranging the transport, the daily program and of course the subscriptions. The workload might be high at the start of the year, so mind that! Chair of the SkiTrip Committee, Ramon Wever

PROM COMMITTEE

We, Daphne and Zeno second and third year students Economics & Business Economics, form the ECU’92 part of the prom committee. Together with two members of Alcmaeon and three of Perikles we are organizing this year’s most spectacular event, the winter Prom!! Before this year the Prom always took place in early spring but this year we will organize the first winter Prom. You don’t want to miss this special edition so mark the 17th of December in your agenda’s! The ticket sale start on the 17th of November and you can buy your tickets at your study association’s room!

StIB COMMITTEE StIB stands for Student Interest Body. The committee currently consists of 11 members, from a variety of backgrounds. We are here to represent your interests and our main purpose is to improve the quality of education you receive at U.S.E. If you think there is room for improvement do not hesitate to contact us by email or say hi to us in the hallways. We can address your issues with for example the dean of the department and the faculty council. Currently we are discussing course evaluations and prices in the cafeteria. You may have seen us at the StIB Awareness Day a couple of weeks ago where we were handing out typical Dutch Stroopwafels.

Chair of StIB, Gerben Hiemstra

The ECUâ&#x20AC;&#x2122;nomist, November 2015

University Life Past Events

The ECU’nomist, November 2015

CLUB ECU’92 PRESENTS: LAST TASTE OF SUMMER

On the 23rd of September it was time for the first big ECU’92 party of this year. With the new name Club ECU’92, the committee made a fresh start and we have seen that. Over 150 people attended the first party and danced all night long on the most awesome beats of our DJs. The next party will be Club ECU’92 presents: American College! and will take place in the UCSA bar on the Campus. Beer will cost you only 1 euro, so no reason not to be there. Keep an eye on the Facebook for more information!

INHOUSE BOOTCAMP AT THE DUTCH GOVERNMENT

25 Members of ECU’92 had the honour to have a whole day bootcamp at the ministries of Finance and Foreign Affairs as well as at the ACM. The central theme of the day was ‘gas’. At the ACM, members had to solve a case regarding the maximum price on gas in the Netherlands. During the visit at the Ministry of Foreign Affairs a lunch was served and we tried to make a solution on sanctions for Russia in a Model United Nations setting. At last we visited the Ministry of Finance, where a budget-case had to be solved. Should the government reduce, maintain or even extend the gas extraction? What are the effects of these decisions for the budget of the Netherlands? A few questions that popped up during this session. The day ended with networking drinks at the Ministry of Finance, where the other organisations were represented as well.

Would you like to visit our InHouse Days? Keep an eye on the Facebook, website and LinkedIn of ECU’92, because there are a few to come up soon!

University Life

The ECU’nomist, November 2015

CLUB ECU’92 PRESENTS: OKTOBERFEST BEERCANTUS

On the 15th of October Unitas SR was completely filled with tables, benches, beer and people for the first Beer Cantus of this year. Club ECU’92 organized a great Oktoberfest for all the members of ECU’92. It was a great evening where we have seen Tarzan and Jane, sang a lot of songs and drunk a lot of beer. The tables had to work as a team, which gave the bonding a nice extra dimension. The Activities Committee is already looking forward organizing the next Beer cantus, which will be during the DIES FESTIVAL. Do you want to see how a beer cantus looks like? Check out the pictures below and on our Facebook Page!

BUITEX TO GENT

The last weekend of the Education free week from the 13th of November ‘till the 15th of November, 36 crazy ECU’92 members went to the city of Ghent! The whole weekend we enjoyed the Belgian beer, food and culture in the old and cosy city. Besides the City Tour and the beer tasting in the city brewery, we had great nights as well. The weekend was a big success and we hope next year’s edition will also be unforgettable!

DLC LECTURE WITH HAROLD GODDIJN

At the 20th of October the Discussion and Lecture Committee organized its first lecture of the year: Navigating the Route to Success. Founder and CEO of TomTom Harold Goddijn told the do’s and don’ts in managing a starting a company and how to deal with stressful times to the 100 people attending.

The evening ended with a drink and lots of ‘gezelligheid’ in bar Walden. This event was a great beginning for the new Discussion and Lecture Committee and the bar is set high for the this year!

The ECUâ&#x20AC;&#x2122;nomist, November 2015

Jouw studievereniging wil het je zo voordelig en makkelijk mogelijk maken. Dus hebben ze een boekenleverancier die daarbij past.

Bezoek ons op studystore.nl