Exploring Business Cycles
The ECU’nomist
Jakarta’s Transportation Challenge The Madrid Business Tour Zimbabwe and its Skyrocketing Inflation Media and Violence: Riots in Baltimore
June 2015, YEAR 24, ISSUE 4
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Letter from the Editor Dear fellow U.S.E. students, The time has finally come when we once again have to say goodbye to the academic year. It’s actually unbelievable that the past few months have gone by like a breeze! What do you have to say about the past year? Have the courses you’ve taken opened your eyes and made you fall in love more with the world of economics (or made you turn 180 degrees in the opposite direction)? Were you satisfied with the activities you chose or did not choose to get involved in? These questions certainly loom in my mind as I reflect on what we have all accomplished thus far within this faculty, whether academically or socially. Despite sailing through some stormy seas, I do have to bring your attention to the great team we have, albeit a highly dynamic one. The goal at the beginning of the year was to revamp the ECU’nomist and make it more visually appealing and for it to carry a more professional aura. Now that all four issues are out, we certainly hope that we were able to achieve this. Focusing on design is also not to say that we have neglected the quality of our writing. Compared to last year, most of the articles in the issues of this academic year have been written by our very own members and a lot of hours have been put in the making of the magazine. Let me present to you one last time what you can find within the pages of this fourth issue. In the current affairs section, Filippo Ricci writes about the recent riots that occurred in Baltimore, as a result of unwarranted use of force by American cops on a man who died due to the injuries he had sustained. Linda Kunertova also contributes on a lighter note with one man’s determination in creating a new nation of his own, which he intends on calling Liberland. On a more international outlook, Mithra Madhavan explores the legacy that past leaders have left in their footsteps. If you are still baffled by the notion of business cycles, be sure to turn to David Orțan’s article in explaining the story behind them. Marouschka Blahetek on the other hand investigates the business with bees and how their existence is of paramount importance to us. She also interviewed U.S.E. alumnus Jurriaan Kalf and gives some insight on what it’s like to work in Rabobank. In the past issues, we have incorporated the multidisciplinary subjects that U.S.E. offers within the confines of politics, social sciences, and history. In this issue, I explore the topics found in geography and economics in the capital city of Southeast Asia’s biggest economy – Jakarta. On to some ECU’92 activity reviews, Luuk Wagenaar writes about all the fun and experiences some U.S.E. students gained during the Madrid business tour that took place during the April break. Last but not least, Byung Hun Kim is once again our guest writer and he analyses the staggering inflation situation in Zimbabwe. Sadly, my time as Chairman of the Editorial Committee and Editor-in-Chief of the ECU’nomist has finally come to an end. While I will not be leaving U.S.E. yet, I will however, be participating in UU’s exchange programme to the University of California Los Angeles this autumn, which means that I will have to relinquish my power to a new successor. This is a great opportunity for any of you who have the ambition to take up this honourable position and continue the legacy of ECU’92’s very own ECU’nomist. I will be returning to Utrecht in 2016 to complete my bachelor and I will most certainly still contribute as a member of the Editorial Committee. For now, I wish all of you the success the world has to offer and it has been a great pleasure running the magazine this past year. Best wishes and have a splendid summer holiday. Yours sincerely,
Annette Aprilana Editor-in-Chief and Chairman of the Editorial Committee 2014-2015
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Letter from the Board
Dear Reader, We are already in the fourth and last period of this year. Time flies when you are having fun. It might sound so cheesy, but there is no better way to describe these past periods. The Board is happy when looking back at so many fun and interesting experiences. The Board hopes you feel the same way and that you have enjoyed this academic year just as much as we did. In the first ECU’nomist I wrote about all the new students and how the first period is always a period of so many new experiences. Now, almost one year later, all these students got to know Utrecht, our study and hopefully ECU’92 as well. A lot of these students became part of our association and the Board feels that together with the older students, we experienced one great year. The Board was happy to see that so many members visited the ECU’92 room in the Descartes building for some coffee, tea, cookies or for a nice chat and it feels like we have created some great and unforgettable memories in this room. Next year, the ECU’92 room will be back in the Spinoza building again and the current Board hopes that you and the new Board will create more great memories. In the first ECU’nomist I also gave a short introduction about each of the Board members. Now at the end of this year I hope you had lots of nice conversations and soccer games with Sam, got lots of cuddles from and played chess with Tobias (or Tobie as the Board likes to call him), shared some carrots with Willemijn (or Willie) and had some of her delicious coffee. As for me, just like what another Board member wrote about me in the first issue, I hope you “enjoyed Rian’s (sometimes confused with the guy name “Ryan”) calmness and wisdom, which kept the association in perfect harmony, but also appreciated her great and sometimes a bit corny humour”. In short: the Board had a great year with all of you as members and hopes to see you around in the last period for this year’s last chats, soccer games, games of chess, carrots, cups of coffee, advice and corny jokes. Best,
Rian van Groningen Chairman of the Board 2014-2015
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Table of Contents
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Explaining Business Cycles
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Looking Back on Our Leaders
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Geography and Economics
A Comparison
How Far Can We Extend Our Rationality Jakarta’s Transportation Challenge
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Media and Violence
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Live and Let Live
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Keeping Bees
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Working at Rabobank
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Zimbabwe’s Hyper Dilemma
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The Madrid Business Tour
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The Editorial Committee
Riots in Baltimore
Liberland: The Land of the Free A Struggle to Survival An Interview with Jurriaan Kalf The Country’s Serious Case of Inflation A trip by the Study Trip Committee “It’s been a fantastic year”
The ECU’nomist is published every quarter online, as well as printed in a circulation of 500 for members, patrons and external contacts of ECU’92 Annette Aprilana | David Orțan | Filippo Ricci | Mithra Madhavan | Marouschka Blahetek | Linda Kunertova Study Association ECU’92 Campusplein Utrecht T 030-2539680
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www.ecu92.nl editorial2@ecu92.nl Published by Issuu
Explaining Business Cycles: A comparison
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David Orțan
usiness cycles have always been a realty of economic life. Having different durations and causes, economists have had a tough time explaining them. Understanding them would maybe enable us to mitigate, at least to some extent, their effects. The roots of the preoccupation for business cycles lie in the wish to explain irregularity, the inclusion of institutions and the path towards more empiricism that economics has taken, especially since the beginning of the 20th century. Some of the first and most famous American economists tried to figure out the story behind them. In parallel with the development of the mathematical theories of the marginalist school of Alfred Marshall, the attention of some economists at the beginning of the 20th century was drawn to the fact that processes in the real world were not stable, long-run phenomena, but fluctuations that seemed hazardous. They tried to open the “black box” of the market in order to fully understand the processes taking place inside it. These economists not only formulated their theories, but also tried to support them with empirical data that was becoming increasingly available compared to the period of Marx or Jevons. I discuss here the contribution of three of them to the problem of business cycles, namely: Wesley C. Mitchell, Irving Fisher and Joseph Schumpeter. Wesley C. Mitchell (1874-1948) was one of the first American economists who made a significant contribution to economics. His work, Business Cycles and their Causes (1913), is seriously influenced by his institutional stance on the subject that was inherited from his professor Torstein Veblen. He thinks about business cycles as the results of institutions in a capitalist economy. He mentions three institutional factors: the market exchange, the production for profit and the use of money and credit as being indispensable to the capitalist business cycles. Moreover, he sees the business cycle as an endogenous process, i.e. the forces that are inherent to the capitalist system produce the cycle. He admits the
existence of exogenous forces, but these are seen as catalysts of the endogenous processes (Mitchell, 1913). One of the most important sources of business cycles is that prices for finished goods rise faster than the prices for labour due to the fact that adjustments in the labour market depend on the bargaining power of actors operating here (unions, employers etc.). Lack of unions is seen as a lack of information on the part of the workers which further deepens this difference. Interest rates move even faster than prices of finished products. Interest rates rise throughout the boom a bit into the recession, after which they fall and continue doing so during the beginning of the boom period. Hence, it takes a while until the profits increase again during the boom because of this lag in interest rates (Sherman, 2001). Another important issue that Mitchell is concerned with is whether consumption increases hand in hand with national income. He is unable to give an answer to this question in his initial work, although his later research confirms the fact that during booms, consumption lags behind
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national income (Mitchell, 1951). Thus it is this lagged move in these different elements of an economic system that causes the cycles. Mitchell sees these movements in the light of the institutional arrangements specific to capitalism. Unlike other scholars of the business cycles, Irving Fisher (1867-1947) is sceptical about the existence of what he calls “the” cycle. A mathematician by training, Fisher uses empirical evidence extensively to prove his claims. In some of his early papers, The Business Cycle Largely a Dance of the Dollar (1923) and Our Unstable Dollar and the So-Called Business Cycle (1925), he attributes the booms and recessions to the rapidity of changes in the price level. He also brings here some empirical evidence of the correlation between the fluctuations of the dollar and the volume of trade. The mechanism behind this is similar to that of Mitchell: prices and the volume of trade go up but wages and prices of raw materials stay fixed. Fisher does not believe that we can identify the sources of a business cycle due to the fact that it is impossible to isolate
the forces that affect an economic system. In his groundwork on the subject, Booms and Depressions (1932), he expresses through some very well founded analogies his criticism towards exogenously imposed crises and although supports the idea of some endogenous tendencies, sees them as dying out after a while. These tendencies according to him are just fluctuations around the mean. Fischer metaphorically compares the business cycle to a “rocking chair” on a ship at sea, where it would be impossible to isolate the source of oscillations. He admits the important role of institutions (like the Federal Reserve System) in ameliorating these trends that hurt the economy (Fisher, 1925). Joseph Schumpeter (1883-1950) has a view that is somehow different from the two presented above. In Business Cycles (1939), he sees innovation as the source of business cycles. For Schumpeter, profits stimulate entrepreneurs to innovate and this propels everything. Once an innovation is in place, there is a disruption (later named “creative destruction”) in the economy proportional to its degree of novelty that is resisted by the old and established technologies, products etc. This novelty determines a huge amount of investment in that respective field made by others who copy the innovation. This causes prices to fall. Hence, the equilibrium state of affairs is forever disturbed by these innovations. After the wave passes and the system adapts to the new situation, the economy returns to equilibrium. Hence, the source
of the business cycle is seen both as exogenous to the economic system, for example a definitive change in technology, and as endogenous: the system forces react to the distortions of the boom (Hansen, 1951). Besides the innovative entrepreneur, Schumpeter also looks at the institutional arrangements of capitalism, in this case the factory, the corporation and the financial system (McCraw, 2006) saying that factors like a credit scheme are essential for the above mentioned processes to take place. However, he takes a closer look at the institutional side in his later work: Capitalism, Socialism and Democracy (1942). Although his work on business cycles is not mathematical, it contains examples from several important industries: textiles, railroads, steel, automobiles and electric power. From the works of all three authors we can see that a great amount of attention is given to what is happening in the “real world”. However, this is easier said than done. Although Mitchell claims that empirical work is important in confirming theories (Mitchell, 1913) and tries to give evidence for his theories early on, some issues about the business cycle were to be confirmed only much later (Mitchell, 1951). Fisher already comes with statistical evidence in his papers, although he is
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confined to the relatively limited amount of data he possesses. Schumpeter makes his comparisons using examples from the outside world, however this is more in the style of Adam Smith than that of modern economists who use statistical data. In conclusion, it can be said that these three authors really set out the debate about business cycles. Even today, economic newspapers like The Economist mention Schumpeter and his innovative entrepreneur when they talk about business cycles in a special rubric that bears the name of this great economist. Although Fisher is mostly remembered for his work on quantity theory of money, his empirical work done very early on and in a very modern fashion is quite important in studying business cycles. Last but not least, Mitchell has a very complete theory on business cycles and he approaches some theoretical issues like the relationship between income and consumption. The latter topic is further discussed especially by Keynesians.
From left to right: Irving Fischer (1867-1947), Wesley C. Mitchell (1874-1948) and Joseph Schumpeter (1883-1950)
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looking back on our leaders how far can we extend our rationality?
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hat we know about life, its purpose, and its means is much debated. Frankly, it may even be beyond our understanding. However, if there is one universally accepted truth about life, it is that death comes with it too. Death of us, people we love, people we hate, people we are close to, people we are unaffected by, and so on. Regardless of one’s economic, social, and ethnic background, death is inevitable. However, despite nature’s warning and, in several cases, years of opportunity to prepare for such a day, death is still an emotional event. Whether that emotion is positive or negative depends on several complexities that are too individual-specific for us to generalise. Nevertheless, a look at our perception of political figures in the past may give us some insight to see what makes us grieve someone’s death versus rejoice in someone else’s. As individuals largely seen in a positive light, whose death was greeted with much grief and gratitude, consider Nelson Mandela and Lee Kuan Yew. The opposite could apply to those such as Adolf Hitler and Osama bin Laden.
By Mithra Madhavan
Nelson Mandela, crowned with the title of the ‘Father of Democracy’ passed away at the age of 94. Considering current life expectancies, this is not an age in which one can say he died too young, or that he had his whole life ahead of him. Yet, his death was greeted with much sadness world-over. No doubt, he stood up for democracy and its ideals, fought discrimination and showed extreme levels of resilience and perseverance when he was released from a 27year prison term. However, there is little mention of the violence that he, to a certain extent, endorsed. Being accused of creating a terrorist wing, then pleading guilty against his actions, and later going on to sanction a bomb attack in 1983 that killed 19 people, are not as widely reported as his positive contributions. The list of both, positives and negatives is longer, but what is it that makes one outweigh the other? Now consider Adolf Hitler. For obvious reasons, his actions can be characterized as monstrous and inhumane. However, we tend to forget about the fact that he was a great orator; persuasive like few the world has seen. Hitler, in a twisted
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way, helped restructure Germany’s economy after a period of immense economic struggle. A lesser-known fact is that the Nazi anti-tobacco movement ended with much success in Germany, whereas the counterparts in other areas of the world were largely unsuccessful. Also, for those races that passed the Nazi test, social welfare played a large role. The poor were provided with considerable amount of government support. Another largely positively-perceived impact of a leader is the case of Lee Kuan Yew, known as Singapore’s founding father. The challenges he overcame as a leader were tremendous, being accredited to building a nation out of the sole resource available: human capital. Prime Minister Lee stressed the importance of education and competition, contributing to Singapore’s frequently top ranking position as one of the world’s most competitive economies by the World Economic Forum. The People’s Action Party’s (PAP) relentless fight against corruption is commendable and its integration of immigrants into its economy noteworthy. However, critics argue that Lee Kuan Yew’s success can be largely attrib-
Review uted to the luck that Singapore has been granted in its geographical positioning. Moreover, it was not Prime Minister Lee himself who came up with the economic model for Singapore. Rather, it was Dutch economist Dr. Albert Winsemius, sent on behalf of the United Nations, who designed the model that was later carried out. Criticisms on Singapore’s strict regulations, noticeable in the daily life of any Singapore resident, with several crimes resulting in the death sentence are prevalent. Accusations of excessive media control are something the PAP is consistently faced with. However, post Lee’s death, these accusations have been pushed to the back of the room, at least temporarily. Lastly, consider Osama bin Laden, known primarily as the founder of the Al-Qaeda, a well-known terrorist organization that especially the “West” has been adversely affected by. Here is a terrorist figure who has openly announced and taken responsibility for, and proudly too, several attacks he has sanctioned. However, there are practically no sources, at least on the internet, acknowledging the slightest possible positive impact he might have had. Whether this is the power of the media or a genuine lack of positive effects is a difficult question to answer. Nevertheless, the pride that accompanies President Obama’s announcement of bin Laden’s death was, at least personally speaking, shocking. Sure there is justification for those affected by his attacks to feel angry and vengeful, but taking pride in causing someone else’s demise is nothing to be proud of. This is how vicious cycles are formed. These cases could shed some light on certain determining factors of our perception of leaders. One factor may be our perception of the leader’s character, morals and values more than their tangible achievements and successes. There seems to be an inherent appreciation for compassionate, just, progressive and equal leaders, who are also eloquent in their communication.
That could explain why Hitler and Osama bin Laden are perceived in such a negative light by a large section of the population, whereas those such as Lee Kuan Yew and Nelson Mandela are deemed remarkable in their contribution towards “humanity”, so to speak. However, I also realize that these “good” leaders will also have naysayers and critics, and the “bad” ones will also have their share of followers. This occurred to me while reading the book Growing Up bin Laden, written by bin Laden’s first wife and eldest son. It highlighted the fact that these people, too, had families that relied on them and their ideals. Therefore, where they are viewed as positive or negative leaders is also an important factor; their sphere of influence matters. Yet another deciding factor might be our acceptance or resistance to change. We do not want to see a world in which someone who is perceived to have spread positive change is taken away from us. Similarly, removing forces perceived as negative would “make the world a better place”. In economic terms, this would mean a world in which there is higher production, better allocation of resources, and more sustainable practices. Maybe this whole discussion boils down to the lack of perfect information that we assume exists for rational agents. This is where the media comes in. The saying goes “there are lies, damned lies and statistics”. How information is presented to us is of course an influence, but how does one figure out the extent to which it shapes our opinion? Maybe that is why hindsight is so valuable. As time passes we are able to gather more information and lose the initial sentimental outburst that comes with death. So, a rational perception of our leaders need not mean an emotionless one, and it is just a matter of time until we are able to process all the information provided and solidify our conclusions.
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Jakarta’s Traffic Challenge A Megacity with Many Hurdles to Jump By Annette Aprilana
A typical Jakarta resident can expect an average commuting time of two long hours in the mornings to cover only 30km. They spend 27.22% of their total travel time going nowhere. According to Castrol’s Magnatec stop-start index, Jakarta was recently named the number one city in the world with the worst traffic. Compared to an average of 6,240 stop-starts a year in Rotterdam, drivers in Jakarta experience 33,240 stop-starts per year. Indonesia’s capital is an important city that is the centre of economic activity. Traffic jams that paralyse Jakarta thus negatively affect the development and economic growth of the country. The four main issues that cause congestions include limited public transportation, a lack of proper infrastructure, an increasing middle-income group, and increasing population. Addressing these issues is the first step to solving the problem but what has the government done so far and why does the problem still persist until today? First of all, there aren’t many forms of transportation that can carry passengers rapidly and in masses. Buses exist, but that’s the best mode of public transport one can find in the streets of Jakarta. The government addressed this problem by first introducing the Transjakarta buses, which are buses that operate on designated lanes throughout the city. These bus lanes were created with a purpose to avoid traffic jams in order to encourage people to use public transport.
Although an improvement, it can still be made more effective if cars don’t enter these bus lanes when traffic is in standstill. Another solution the government has come up with is the construction of the Jakarta Monorail that started at about the same time as the first implementation of the Transjakarta buses. Unfortunately, the project is still not completed to this very day. The most recent obstacle to its completion was due to the inappropriateness of Jakarta’s urban planning to accommodate the route that the monorail would take. Early this year, talks to continue building the monorail have been circulating but financial requirements are making the bidding process last longer. The most promising solution is the current on-going development of the Mass Rapid Transport (MRT), which is a system of rapid transit, also known as metro, subway, or underground in other countries. The first phase of the project is said to be completed by 2018 and is estimated to have a capacity to carry 412,000 passengers per day compared to the 350,000 people catered by Transjakarta. The development of the MRT may create congestion that is worse than usual in the short run, but its benefits in the future will hopefully outweigh the costs. Secondly, lack of proper infrastructure
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is arguably the most serious impediment to solving the traffic problem. It not only limits the possibility to develop more advanced public transportation, but it also creates more problems on top of existing ones. Because of Jakarta’s limited land space, the government has turned to vertical infrastructure developments as a solution. The provincial government instructed for the construction of more roads, more specifically the construction of flyovers, which are two viaducts above current roads. Although at first this may sound promising because more road coverage can accommodate cars, it doesn’t solve the issue effectively. Flyovers will eventually meet a main road somewhere at some point and create dreadful bottleneck situations that essentially make traffic worse. Another infrastructure related issue that contributes to making congestions worse is the sewage system. Although an indirect problem, the trouble comes during the rainy season when the city is also more prone to flooding. During heavy rain, tens of thousands of motorcycles clog up roads as they find shelter under bridges. This naturally creates chaos just about everywhere. But the bigger trouble comes when the heavy rain causes flooding. Jakarta has had its fair share of flooding occurrences and is not unfamiliar with the incidents, but flooding in general paralyses the city whether small floods that are only ankle deep, or big floods that are waist deep. In order not to make traffic worse during the rainy season, a properly working sewage system can make the difference between total deadlock and manageable traffic flows.
Asia in other cities in Indonesia. What the government can start doing is to create more opportunities to attract businesses to set up in other cities. Although this solution is another matter altogether, it is worth noting that as far as Jakarta’s urban planning is concerned, the national government should consider decentralising activities from the capital city. One more underlying problem that hampers transportation projects, and any other projects for that matter, is the existence of corruption. Coupled with complicated bureaucratic processes, deals and agreements for projects don’t advance quickly. The obscurity of how the government budget is allocated needs to be carefully inspected, which prolongs the realisation of projects. The Transportation Ministry estimates Jakarta’s traffic congestion to cost the city Rp 28.1 trillion (US$3 billion) annually, with almost 40% of this cost relating to fuel costs. When underlying problems such as corruption is tackled, this cost can be greatly reduced to pay for the transportation projects instead.
Thirdly, more middle-income households are able to afford purchasing their own private vehicles due to income increases. It is inherent in the Indonesian culture that private vehicle ownership is regarded more highly than using public transportation. However, this is not to say that the lack of quality and provision of public transportation is the sole reason for Jakarta residents to purchase private vehicles. Nevertheless, the fact remains that congestion will naturally worsen when much more roads are not being built to accommodate the growing number of vehicles on the road. Jakarta Police report actual vehicle growth at a 12% rate annually, much faster than the rate of building roads. A measure currently being implemented to reduce this number is the 3-in-1 regulation, where a car must contain at least three passengers to pass through some busy roads during peak hours. Although
this can reduce a significant number of cars from the road, it is hard to enforce when patrolling policemen are few and most car windows are tinted. Other measures to reduce the number of cars on the road include increasing parking fees in buildings and shopping malls in the city centre area. Fees for toll roads have also been increasing steadily. With these measures in place, those with private vehicles start complaining and if the provincial government will continue increasing these fees, a drastic reduction of car use can be expected. Fourthly, another inevitable problem is the growth of the city in size and population. Apart from a natural increase in population, both foreigners and local migrants are attracted to the centre of economic activity in the country. It is difficult to address this problem because it ties with people’s lack of interest
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The five issues just discussed show that it takes many different measures from all different directions to solve the gridlock traffic problem that Jakarta has. The problems still persist today because the solutions are all interconnected with each other and require the collective success of each other in order for the problem to be solved. As long as the government can provide decent, good-quality public transportation, Jakartans will hopefully have an incentive to leave their cars and motorcycles at home. The trickiest aspect is the development of proper infrastructure. It will take some more time into the future to see results of all these solutions but the message is clear. Due to scarce resources, in this case land, it is not enough to solve the problem by building more roads. This is essentially prolonging the problem and making the illusion that having more private vehicles on the road is acceptable as opposed to relieving the already large amount. This new norm of gridlock traffic that Jakartans have sadly gotten used to will cripple the city if not resolved. It is therefore crucial for Jakarta to continue with the progress it is currently making by enforcing regulations and improving efficiency.
Baltimore and the migration towards a more violent society and the role of the Media
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By Filippo Ricci
ot long ago, on the 12th of April 2015, Freddie Gray, a 25-year-old American and resident of Baltimore was murdered. The man was critically injured during his arrest by local police forces which led to a coma and later his death. Sounds familiar? What about the ¨Ferguson unrest¨, also known as the aftermath of fatally shooting Michael Brown; the riots shook Ferguson until late November last year. What about Danny Rodriguez, Joseph Erin Hamley, Flint Farmer and perhaps hundreds of others, not to mention the thousands of negligent injuries and damages to innocent civilians. All of these are events of police brutality which occurred in the USA in the last five years. The public responded by doing what masses do best, chaos, whilst at the heart of the protests were the peaceful motives which inspired change in American society: equality, non-discrimination and fairness. Empirically the situation is completely different. Many ¨protesters¨ are savage looters that seize opportunities caused by chaos, equipped with the sense of entitlement, which arose from the police being too trigger happy. Entitled, because the majority of police brutality episodes were directed towards the African American population. There are several questions which come to mind: why are episodes of Police Brutality so frequent, and what changed in the American society to proliferate these strictly violent protests? It’s clear that these non-peaceful protests don’t help African American perception by the rest of the American society. It need not even be the majority of blacks causing trouble. A couple cameras pointed at these few are enough for the media to create a sense of reality which might be very far from the ‘real’ truth. But has the population simply turned more violent or is this due to the media effect? Peaceful protests are clearly possible; a good example was the Million Man March: an en masse gathering of African Americans in Washington, D.C. on the 16th of October, 1995. Louis Farrakhan brought a million people to walk with him for equal civil rights and the Advancement of Colored People. It was a highly organized event which brought
people together. By contrast, the recent riots had neither organization nor a sense of togetherness. A lot of people, not only Black people, need to understand the message behind protests. Next time we find ourselves stuck in our feelings: anger, rage, revenge, we should stop for a second and ask ourselves whether what we are about to do will improve the current situation. The figures stand as following:
15 officers hurt, 6 hospitalized; 144 vehicle fires; 15 structural fires; 250+ arrests. The question remains however: are people simply becoming more violent during protests or is this a fake sense of reality created by the media? Indeed, ‘The Daily Show’ host Jon Stewart noted that, rather than covering the peaceful protests in Baltimore, on April 25, CNN elected to cover the White House Correspondents’ Dinner. “CNN got shamed by Twitter… Shamed about their editorial priorities by the same folks who spent a week violently clashing over the blue/black-white/ gold question,” Stewart remarked. Is it true? Was the news paying attention to the Peaceful Baltimore protests or were they
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ignored until violence sparked? Luckily for us, there has been a study conducted by Alex T. Williams1 regarding news coverage since the beginning of the protests. The study covered cable news, newspaper stories and Twitter ¨Tweets¨ in the US during the time of the protests. Let’s first consider cable news in the graph below: ¨coverage on CNN, MSNBC and Fox News increased substantially on April 27, the night violence erupted in Baltimore. The following day, coverage on cable news peaked at 59 stories. During these two days of violent incidents, coverage increased by a substantial 162%, compared with the two days prior to that, April 25 and 26, when the protests were peaceful¨. Second, we consider newspaper coverage (23 of the top 25 newspapers; data from the Las Vegas review and the Wall Street Journal were not available). In this case, coverage increased during the violence but peaked on April 30th. This is probably due to the delay that newspapers experience in comparison to the more immediate, real-time televised news channels. ¨Coverage during the violence also spiked but to a lesser extent than cable news (a 58% increase over the two days prior).¨ ¨However, the peak on April 30th — when two men in the police van with Gray gave their accounts of what happened and the police investigation of Gray’s death was about to be given to the state’s attorney — suggests that newspapers may have been most focused on the legalities surrounding Gray’s death.¨ In the meantime, what was happening on Twitter? We will specifically look at tweets which mentioned Baltimore via some sort of a hashtag (e.g. #BaltimoreRiots). Similarly to cable news, the Twitter discussion peaked on the 28th of April.
Current Affairs hashtags were introduced, including BaltimoreUprising (the preferred hashtags of protest supporters), PrayForBaltimore, TCOT (a hashtag affiliated with political conservatives) and Chi2Baltimore¨. After both the violence and cable news started to wane, #BaltimoreRiots was overtaken by #BaltimoreUprising as this strengthens the relation between Twitter and the Media, as shown in a previous academic study2. ¨When the Media stopped focusing on the riots, so did Twitter.¨ ¨For the two days before the violence, there were 4,106 tweets about Baltimore; during the violence, there were 56,522 tweets, an increase of over 1200%.¨
popular hashtags before, during and after the state of emergency was declared. I compared the most popular hashtags before, during and after the violence erupted.
Twitter – as much of the online social networking – is partly dependent on media. There is clearly a link: ¨it is possible that increased media attention allowed the peaceful protesters to mobilize more people online. Or, increased media attention may have led to more sensationalist tweets¨. To further explore these possibilities, the table below compared the most
¨Before the violence, there was limited discussion on Twitter about the protests, although #FreddieGray and #Baltimore were still dominant hashtags.¨ During the violence, #BaltimoreRiots was the by far the most popular hashtag, whilst Baltimore and Freddie Gray were still prominent. In addition ¨several new
This brings us back to the initial question: are protests becoming increasingly more violent or is this simply an effect of the media showing us what gets most of our attention and most of their money? Both media attention and online attention increased dramatically as the protests turned violent. ¨However, it is noteworthy that coverage of the Baltimore protests on cable news increased much more than newspapers, whose coverage peaked a few days after the violence. Attention on Twitter was limited before the violence occurred — and it increased the most during the violence — mainly under the hashtag BalimoreRiots, which waned as the violence subsided.¨ It still remains difficult to conclude whether media ¨only¨ covered the violent protests. What we can say with certainty is that violence was definitely deemed newsworthy. While the media might or might not be to blame that’s another question; after all, if it does bring more viewers, then everyone’s happy, right? Turns out we are interested in violence. According to the Nielsen ratings, when the violence surged, ratings of the three big channels surged in the key demographic of adults 25-54. Compared to the Monday prior, ¨CNN experienced a 574% increase, Fox News a 121% increase and MSNBC a 77% increase. So at the end of the day, we might not have transitioned into a more violent society, but we are definitely more interested in seeing violence than peace”. The next obvious question is ‘why?’, but that’s something for another time. PhD student at the Annenberg School of Communication at the University of Pennsylvania. 2 Rising Tides or Rising Stars?: Dynamics of Shared Attention on Twitter during Media EventsYu-Ru Lin , Brian Keegan, Drew Margolin, David Lazer; Published: May 22, 2014; DOI: 10.1371/journal. pone.0094093http://journals.plos.org/plosone/ article?id=10.1371/journal.pone.0094093 1
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Live and Let Live
Liberland: the Land of the Free By Linda Kunertova
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ave you ever dreamed about a fairy land where miracles and unicorns exist? Well, you are not the only one. A couple of weeks ago, one man even decided to take a step ahead and make this dream happen. On the banks of the Danube River on the border of Croatia and Serbia, Vit Jedlicka founded an unclaimed piece of land that doesn’t officially belong to any country and declared this 7km2 of uninhabited territory a new country – the Free Republic of Liberland. It’s not difficult to guess what the name relates to. Altogether with a yellow flag that has been raised in the middle of this heavily forested tiny land, it is supposed to symbolize liberty and free Vit Jedlicka, founder and current president of Liberland trade, crucial concepts on which Jedlicka plans to base the country’s principles. ment interferes in individual affairs and try. He envisions Liberland as the counSounds like a joke to you? As ridiculous the extent of formalization in his home try where people can finally prosper and as this all may sound, self-proclaimed country. According to his proclamations, live up to the true meaning of democracy. president Jedlicka and a group of his sup- citizens of the Free Republic of Liberporters seem to take it seriously and so land won’t be oppressed by any regula- One cannot help himself (not) to consider does the world. The promising country tions and they will be able to work out Jedlicka’s vision rather implausible, if of Liberland that not utopian. Indeed pledges to impose today, in the era of no taxes whatsothe European Union, ever and a trade free distinguished by an from government immense number of interferences has regulations and exalready attracted tensive governance, more than 300,000 the idea of an unrepeople of miscellastricted self-regulatoneous nationalities ry trade sounds parto apply for cititicularly far-fetched. zenship. Required criteria for appliUnlike the majority cants are relatively of past utopian exloose. According to periments we know, the new country’s this time the ideolofficial website, to ogy lies on the very be eligible to beopposite side of the come Liberlander, political spectrum. one has to have no In contrast to the faextremist-related mous New Harmony, past or criminal rewhere the main idea cords; tolerance and Liberland’s location represented by the area coloured in red promoted by Robrespect for people of ert Owen was total all religions, ethnicities or orientations; the correct level of taxation, if any. A abolishment of private ownership, Liberand must honour private ownership. constitution (that has already been pub- land is a celebration of capitalism (freed lished on Liberland’s official webpage) from institutions). Needless to remind As stated by CNN, the impulse that led will allow the public to undertake refer- how all utopian experiments ended up. a Czech political activist, Jedlicka, to endum on any bill that passes through the such an extraordinary action was a deep Assembly of Representatives, the only Nonetheless, in terms of international law, dissatisfaction with the way govern- administration department of the coun- seizing nobody’s land, also called ‘terra
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Current Affairs
Liberland Flag
nullis’, is completely legal. At the present date there are only a handful of these unclaimed territories left in the world, counting the desert region between Sudan and Egypt, some areas in Antarctica, the strip of land at the Croatia-Slovenia border and international waters. Jedlicka is by no means the first person to take advantage of this loophole. In 1967, a British major, Paddy Roy Bates, took over an abandoned steel fortress located in the international waters of the North Sea, not far from the coast of Suffolk. He declared the half kilometer squared rusty artificial island the independent state of “Sealand”. This new country however, has never been formally recognized. According to constitutional law though, a country doesn’t necessarily have to be officially recognized by other states to remain legitimate. In order to make a new country, one has to have land, real populace inhabiting the land and a legal system. That all appears to be feasible in Liberland’s case. People have been forming countries on the grounds of some profound underlying phenomenon that connected them in some way, whether it was history, ethnicity or strong political ideals. Although Jedlicka believes that the ideas of prosperity and unlimited trade are sufficient
for establishing a new nation and social cohesion, reality might differ and we can only speculate if this concept is sustainable over a longer period of time or not. In fact, the notion of national unity might be the least important problem that Liberland will have to deal with. Other problems that could arise are more down-to-earth. First of all, neighboring countries are very unlikely to be as keen on Jedlicka’s vision of Balkan tax haven as he is. Although neither Croatia nor Serbia have officially commented on the birth of their new neighbor, it is reasonable to expect a strong disagreement. Both countries have blocked up their borders with Liberland and started punishing anyone who attempted to trespass the to-be tax haven from their side of the border. (Jedlicka however remains positive in his beliefs about future diplomatic relationships with his neighbors). Both Croatian and Serbian actions are crucial in the determination of
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Liberland’s future, as a country of such a microscopic size will never be able to defend itself in case of any hostile invasion. Another issue that the Free Republic of Liberland might have to face is, paradoxically, its ‘tax haven’ concept. Countries that are providing their citizens with substantial tax reliefs, such as the Caribbean islands or Monaco, are considered as parasites these days, as they eat away a sizeable part of the potential income of developed countries. Seen from this perspective, a success of tax-free Liberland could pose a threat to the rest of the European countries and could therefore serve as a reason for not formally recognizing Liberland as a sovereign country.
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International Pillow Fight Day Utrecht, 2015 Photo by Filippo Ricci
Keeping Bees A Struggle to Survive
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n springtime nature starts to stir with life. Trees blossom, birds build their nests and insects whir and buzz. Whilst you might not be happy about the latter, there is one insect you should be glad to see this year: the bee. Bees are mostly praised for their ability to make honey, but they are so much more than that. Bees pollinate roughly 80% of the world’s trees and flowers and thereby contribute to one-third of the fresh produce you find in your local supermarket. Bees are of vital importance to our animal (animal stock is also fed with bee-pollinated crops such as soybeans) and nonanimal food supply, but a disconcerting decline in honeybees has been noted recently in the US, UK and Europe1. This phenomenon, known as Colony Collapse Disorder, can cause disappearances of bees as high as 50% per year. CCD poses a threat to our food supply, but also creates a shift in the industry by creating financial distress for beekeepers, farmers who engage beekeeping services and others further down the chain. The cause of this problem has been attributed to a rapidly increasing combination of stressors such as beekeeping practices, the use of insecticides and natural diseases. In this article, we will look at these specific stressors and discuss what can be done to mitigate the problem.
By Marouschka Blahetek
Bees are big business. The global economic profit of pollination productivity amounts to an estimate of $265 billion dollars2. A large part of this productivity can be attributed to domesticated bees. Crop farmers hire hives of domesticated bees (managed hives) and engage beekeeping services to pollinate their fields. The managed hives are transported to these fields on the back of big trucks and beekeepers travel with them across the country. Although there seems to be nothing wrong with this practice, it is becoming increasingly problematic for bees. Firstly, crop fields are monocultures and bees have a need for a diversity of flowers. The lack of diversity makes bees go hungry and beekeepers have to feed their hives sugar water to help them survive. Secondly, the transport proves to be very stressful for bees and as a result whole colonies will die before they reach their destination. Another part of the agricultural industry plays an important role in the disappearance of bees. At this point in time, the agricultural industry uses more pesticides than has ever been recorded in history and some pesticides are known to deteriorate the health of honeybees3. The reason for this is that many insecticides will persist in the natural habitat of bees by being carried by wind and dust and may even be present in the pollen and nectar of treated crops and surrounding plant life4. Moreover, systemic insecticides infiltrate the plant system and can be found in the stem and leaves and in some cases even the guttation water (residue of plant
transpiration)5. Depending on the dosage, these insecticides can induce lethal or sub-lethal effects. Sub-lethal effects can be equally distressing in the long-term by altering behavior, affecting learning performance and creating physical deformities6. For example, a hive of bees may experience a higher rate of malformation and the neurotoxic nature of some insecticides may severely decrease spatial recognition. Bees also suffer from naturally occurring diseases. One of the biggest natural threats is the Varroa Destructor, a type of mite that feeds off the blood of honeybees and also spreads bacteria. The presence of these mites can be prevented by the use of antibiotics and beekeepers administer these by mixing them with sugar water. However, meddling with antibiotics can ultimately contribute to a decline in overall health. Antibiotics protect bees against natural diseases, but they also prevent the breaking down of insecticides at the same time. Furthermore, the over usage of antibiotics creates a co-dependency between mankind and bees. Antibiotics alter the gut bacteria of bees, which are suggested to decrease a bee’s ability to fight off pathogens naturally. Like humans, bees are becoming resistant to certain types of antibiotics, so the search for new antibiotics affects both of our futures7. Cutting out the middleman can solve most of these problems. In some parts of China, bees have fully vanished and humans are taking over pollination practices. Labourers pollinate each flower by hand with a paintbrush dipped in pollen8. However, bees remain the most efficient pollinators. A bee’s wings vibrate at a middle C, which is the frequency that allows pollen to detach easily9. Additionally, bees are cheaper labourers and replacing all bee-pollination by hand pollination is impossible. In the end, CCD might best be tackled by its roots. NGOs such as Greenpeace advocate for a movement of change in the agricultural and beekeeping industry. For example, Greenpeace urges decision makers to ban insecticides that deteriorate
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Current Affairs bee health. Three types of bee-harming pesticides have been banned for a twoyear period in 2013 by the European Union, but four other harmful types are still used10. Science can also lend a helping hand. To aid bees in their fight against natural diseases, scientists at the Bayer Group are busy developing a special beehive gate that helps bees fight off the Varroa destructor mite and at the same time prevents against re-infestation11. Besides technological advancements, a most simple solution remains that everybody can be a part of: plant flowers. Increasing the diversity of plants prevents bees from going hungry, and it will increase the likelihood of survival of both managed and unmanaged hives. However, the use of organically grown flowers is necessary since many conventional growers are still using bee-harming insecticides12. Bees face a variety of challenges, but they do not face these challenges alone. Our food system and many people’s livelihoods are on the line when bees get sick and disappear. Luckily, there is increased awareness of the current issues at hand in the beekeeping industry, agricultural industry as well as in the political arena. Banning bee-harming pesticides is a step in the right direction and the creation of
new inventions also helps with painting a brighter future. Increased awareness on an individual level can also help mitigate the problem, by incentivizing citizens to plant more plants and flowers to help out hungry bees. Although possibly falsely attributed to Einstein and many other great thinkers, it was once said that “if the bee disappears from the surface of the earth, man would have no more than four years to live”. The current level of knowledge indicates that there might be truth in this expression, but let us hope that with these measures we will never have to find out for certain. References 1 Aizen, M. A., & Harder, L. D. (2009). The global stock of domesticated honey bees is growing slower than agricultural demand for pollination. Current biology, 19(11), 915-918. Lautenbach, S., Seppelt, R., Liebscher, J., & Dormann, C. F. (2012). Spatial and temporal trends of global pollination benefit. PLoS one, 7(4), e35954. 2
Tilman, D., Fargione, J., Wolff, B., D’Antonio, C., Dobson, A., Howarth, R., ... & Swackhamer, D. (2001). Forecasting agriculturally driven global environmental change. Science, 292(5515), 281284. 3
Mullin, C. A., Frazier, M., Frazier, J. L., Ashcraft, S., Simonds, R., & Pettis, J. S. (2010). High levels of miticides and agrochemicals in North American apiaries: implications for honey bee health. PLoS one, 5(3), e9754. 4
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Girolami, V., Mazzon, L., Squartini, A., Mori, N., Marzaro, M., Bernardo, A. D., ... & Tapparo, A. (2009). Translocation of neonicotinoid insecticides from coated seeds to seedling guttation drops: a novel way of intoxication for bees. Journal of economic entomology, 102(5), 1808-1815. 5
Desneux, N., Decourtye, A., & Delpuech, J. M. (2007). The sublethal effects of pesticides on beneficial arthropods. Annu. Rev. Entomol., 52, 81106. 6
Tian, B., Fadhil, N. H., Powell, J. E., Kwong, W. K., & Moran, N. A. (2012). Long-term exposure to antibiotics has causedaccumulation of resistance determinants inthe gut microbiota of honeybees. MBio,3(6), e00377-12. 7
Adee, S. (2013, August 9). Is there hope for the bees?. New Scientist. Retrieved from http://www. newscientist.com/article/dn24017-is-there-hope-forthe-bees.html 8
Attenborough, D. (1995). The private life of plants: a natural history of plant behaviour. London, UK: BBC Books. 320 p. 9
Clark, P (2013, April 29). EU to ban ‘bee-harming’ pesticides. The Financial Times. Retrieved from http://www.ft.com/cms/s/0/cdbf0170b0da-11e2-80f9-00144feabdc0.html 10
The Bayer Scientific Magazine Research. (2014, December 2). A new way of protecting bees against varroa mites - The bee gate. Retrieved from http:// www.research.bayer.com/en/varroa-mite.aspx 11
Greenpeace. (2014, April 24). A Toxic Eden: Poisons in your Garden | The Bees in Decline. Retrieved from http://sos-bees.org/a-toxic-eden-poisons-inyour-garden 12
Working at Rabobank An interview with alumnus Jurriaan Kalf By Marouschka Blahetek
Rabobank is an international financial service provider with a main focus on the Netherlands. It is among the 30 largest financial institutions in the world. Jurriaan Kalf is currently working at the Rabobank headquarters in Utrecht as an economist. He holds a bachelor’s degree in Economics and Business Economics and a master’s degree in International Financial Economics, both from Utrecht University. During his studies he was active as a student member of the REBO Faculty Council. A couple of weeks ago he shared some of his thoughts about working for Rabobank and his experiences along the way. You are an economist who reports on macroeconomic developments with a primary focus on the UK and Spain. What does your day look like and is there a typical day? There is no typical day, but there are certainly some reoccurring events. I start my day at eight in the morning. I am allowed to set this time myself, since the macro-
economic research department is very much focused on results. I write country reports with accompanying risk policies and do thematic research of the countries I am in charge of. A senior will check and evaluate the reports in the end, but I conduct the research myself. In the near future, I will expand my focus to the US, Canada, Mexico and the Caribbean.
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How do you gather information for your analyses? We use paid services. There are companies that watch countries on a full-time basis. For data, we have a service that lets you browse through all statistical series of central banks and statistical offices at once. Real timesavers.
Interview What do you enjoy most about your current job? The freedom to sit and read about what is happening in the world. I always say that part of the work I do is what I would normally do on a Saturday morning with my newspaper.
Jurriaan Kalf, U.S.E. alumnus
Did you always envision yourself working at a bank? I have always found banks very interesting. Banks operate on a global scale, which makes for a very dynamic environment. I currently work in the country risk department, and there is always something happening, especially in emerging markets. In my master’s program there were also some courses that involved banking, which further shaped my impression of the banking world. How would you describe working at Rabobank in three words?
- Focus on content - Dynamic - Lots of freedom
Was there any important advice that you have received that has helped you along the way? I received some valuable advice from someone I met through my pension extracurriculars. He was like me but was already 20 years into his career and he told me the following: “You have two options in your career – you either become a manager or you become an expert. If you want to become a manager you should partake in a traineeship, since employers use traineeships to search for future managers. If you want to become an expert you should search for a job that is very much related to content and knowledge”. It is a stylised image but it is one that forces you to think about choices. You finished both your bachelor’s and master’s degree in Utrecht. Why did you choose Utrecht University? I find it very important to have the feeling that you can learn something. In Utrecht, the academic staff are very skilled and if you show that you are eager to learn and are willing to put in the effort, they are more than willing to assist you in your studies. Which subjects/courses from your studies are particularly relevant for your job? Microeconomics, macroeconomics and econometrics are definitely need-to-know subjects, although other courses are still helpful to know. With that said, what is really valuable is learning how to write decent papers because that really makes a difference. You have done quite a few extracurricular activities during your studies such as the Faculty Council. How important are they for finding a job? Essential, but you should only do it when you are interested and enjoy it. Future employers see it as a sign that you are willing to invest time and that you feel connected to a place. The Faculty Council shows that I feel a connection with Utrecht University and that I want to help
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Interior of Rabobank Headquarters in Utrecht
with improving their education. It does not necessarily have to be a university, it can also be a political party for example. Where do you see yourself in five years? It’s difficult to say but I can say that I really enjoy working in this sector, since it is very dynamic and that will not be different in five years. Do you have any tips for prospective job candidates? Something I underestimated at first was the importance of interpersonal skills. You might be very knowledgeable and talented, but at the end of the day, the most important question of the person interviewing is the question he asks himself: “Would I drink a beer with this guy?” So besides credentials, it is very important to be able to fit in a team and to share the same values as your co-workers. It is also a lesson that you shouldn’t take a rejection too personally.
Zimbabwe’s Hyper Dilemma: The Country’s Serious Case of Inflation
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imbabwe is a country known for its beautiful Victoria Falls National Park and its ugly history of hyperinflation. Back in 1980, Zimbabwe’s currency was stronger than the US dollar and this strength allowed the country to enjoy a fairly stable economy throughout the 1980s. However, during the 1990s to the early 2000s, Zimbabwean President, Robert Mugabe, executed some questionable land reform policies and monetary practices. Soon, corruption spread widely in the country with no restrictions in printing massive amounts of money. Now the supply of money delivered by the central bank is quite essential to the nation’s economy, as it directly influences the interest rate, which leads to the changes in inflation rates and exchange rates. However, if the supply is not regulated properly by the central bank, the results can be catastrophic. In the case of Zimbabwe, the central bank has supplied tons of money into the market to the point where interest rates could not decline anymore. But despite this problem, the central bank progressively supplied more cash into the market, which eventually increased inflation to an alarming rate. As the currency lost its value, the public lost faith in the Zim-
By Byung Hun Kim
babwean dollar, leading to a consistent increase of triple-digit inflation over the period of 2000-2005. However, inflation did not stop there. In 2006, inflation was recorded at 1,281.11% and at 66,212.3% in 2007. By August 2008, inflation recorded a staggering rate of 471billion%. If you still can’t grasp the seriousness of the inflation in Zimbabwe, here is an example. Let’s say in the beginning of July a pencil just costs 1 cent. However, by the end of the month, this pencil costs $10.7million due to the absurd inflation. Even though Zimbabwean inflation may seem amusing, what is happening is no laughing matter. A cup of tea, a bottle of water, and even a loaf of bread, which we take for granted as luxuries, Zimbabweans cannot afford so easily anymore. Public-school fees and government taxations have risen to the point where it matches the monthly income of standard households. To make matters even worse, most citizens are not capable of paying taxes. In 2012, unemployment was recorded at 95%, according to the CIA World Factbook (Data for unemployment rate is unreliable as the World Bank states 4%, while the Zimbabwe
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Congress of Trade Unions’ official document report states 80-90%), and does not seem likely to decline anytime soon. Although the future of Zimbabwe’s economy seems bleak, it is not the first nation to experience hyperinflation. In 1923, Germany suffered from severe quadrupling prices every month. The hyperinflation lasted 3 years, from June 1921 to January 1924. The currency became practically worthless that it was impossible for Germany to buy foreign exchange or gold. Thus, most transactions were carried out through trading goods. Even the reparation for the war was paid by goods produced in the Ruhr region, as the land was comprised of coalmines and numerous industrial districts were present in that period. So how did Germany overcome the hyperinflation and stabilize the economy? On November 1923, Germany introduced a new currency, the Rentenmark, replacing the worthless Reichsbank marks from the market. The new currency was indexed to the market price of gold bonds and was adapted to the monetary reform, establishing a new form of central bank. Furthermore, the old central bank, Reichsbank, which used the old
Guest Article
currency, was prohibited from discounting the treasury bills, which led to a refrainment of the issuance of marks. Thus, under careful coordination by the government, the currency soon recovered to initial levels to allow normal commercial and government activities again. Like Germany in 1923, Zimbabwe has recognized the urgency at hand and has put efforts to curb its inflation through revaluation. Now, Zimbabwe is focusing on revaluating rather than appreciating the nation’s currency, as the central bank’s intervention is deeply needed to restore the market. The difference between a revaluation and an appreciation is the flexibility
Robert Mugabe, President of Zimbabwe
of the exchange rate. When the increase in domestic exchange rate occurs in a fixed exchange rate system, meaning that the central bank is involved in adjusting the interest rate, the country’s currency is being reevaluated. When the increase in the domestic exchange rate, however, occurs under a flexible exchange rate system, the country’s currency is then perceived as an appreciation. In 2009, Zimbabwe has put an end to printing its own currency and converted into American dollars to stabilize the volatile exchange rate. At a glance this sounds promising. First, the prevention of printing the money would lead to less circulation of money in the economy, decreasing the rise of prices of goods and services in general. Furthermore, the convergence of the currency brings an additional effect to lowering the inflation. While the real value of the non-monetary items does not decrease, the value of the commodities, which are bought, decreases. Unfortunately, the market started to deteriorate, as numerous shopkeepers could not access the American coins. Thus, most of the transactions were carried out using pens, sweets and chewing gums. To solve the problem, on February 2015, the central bank has begun issuing “bond coins”, which is pegged to American cents. This solution has prevented inflation from increasing, fueled growth and brought economic stability in general. Once the economy has resumed, foreign investment once again increased due to a stabilized exchange rate and importers began to enjoy a reduction in transaction costs. However, the country’s inflation returned once more to its previous ludicrous escalation as a result of the
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mismanagement by the central bank and the lack of local currency in circulation. A currency that caused trouble due to its excessive amount now imposes a threat once again as the government gets rid of it. On top of that, the mining industry, which was the only business that has fueled the economy, has gone silent as most of the surface minerals and gems are exhausted. Furthermore, foreign investors who can support the mining industry turned their backs away, as the government strengthened the indigenization policy. As hyperinflation persists, the government and its citizens query the same question: could the dollarization be reversed? Despite the terrible performance of the current monetary policy, it is unlikely that Zimbabweans will demand the Zim dollar. Zimbabweans have not forgotten their miserable life with the Zim dollar, as shops were empty and petrol had to be rationed. With that being said, it seems the government needs more than just monetary practices to ease inflation at this point of time. What is needed from the government is to regain public trust and to remain transparent, as no government can attach value to currencies without the public’s faith.
The Studytrip Committee Presents
The Madrid Business Tour
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By Luuk Wagenaar
or eight days straight in the middle of April, 19 young students ranging from bachelor to master students terrorized Madrid. The purpose of the business tour is essentially to show the participants what business in the city of destination is about and most of all encourage everyone to have fun and enjoy themselves. With this year’s destination, I know it will turn out into a great week. Leaving sunny Holland and with the bad weather forecast for Madrid in the back of our minds, we kept our fingers crossed for the weatherman to be wrong. And how wrong he was! We arrived on the evening of the Champions League quarterfinal between Real Madrid and Atlético de Madrid on Tuesday. Even before we arrived at our hostel, we saw groups of people tensely watching the game, even though it ended in a goalless draw. It was 11pm when we arrived at the hostel and we shortly celebrated my birthday but the program
for the next morning called at 8am. On Wednesday morning we visited our first company: Bloomberg. We learned about the products they sell and about how they do business. The tone for the rest of the trip was set and each company we visited did their utmost best to present themselves and show us what it’s like to work in their respective companies. Every day but the weekend, we visited several different companies to have a guided tour, a presentation and sometimes even lunch (and they do know how to make lunch in Spain). In Vodafone for example, we had tapas, which included tortillas, paella, sausages and brownies! Besides Vodafone and Bloomberg, we visited Movistar, a Spanish mobile phone operator, and SAS, a developer of analytics software, where we learned about their businesses and their cultures as well as meet some of their employees. To give an example, for years SAS has been in the top three rankings of best
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companies to work for and they have had increasing revenues since the company was founded. It is not well known because it operates on a business-tobusiness level but it showed everyone that we should look beyond our scope. Already on Friday, we visited the Retiro park in shorts and skirts and we drank cold beers and refreshing wines. Even during the nighttime we didn’t need to wear coats to stay warm because there were also so many people in the streets. We went out and we chilled in parks while we enjoyed the sun and each other’s company. We had a tour through Estadio Bernabéu, we spent time in the Prado museum and of course spent plenty of time shopping. But the real great thing about the trip was the harmony in the group. The participants truly enjoyed themselves and later some of them told us, the study trip committee, that they very much appreciated the amount of free time they had to discover the city in their own way. Finding a balance between formal activities like the company visits and the informal activities like the cable cart ride and the nightclubs we visited, was a great achievement for the study trip committee and this essentially made the Business Tour 2015 a tour to remember!
Editorial Committee
“It’s Been a Fantastic Year” From left to right: Mithra Madhavan, Filippo Ricci, Annette Aprilana, Marouschka Blahetek, David Orțan, Linda Kunertova A great team really makes all the difference and I am very happy that I was able to work with these amazing people. I want to thank the Board for their support in all aspects of the making of the magazine because they certainly made life easier for us! I also want to thank the 2014-2015 Editorial Committee members for your commitment and enthusiasm this past year. This magazine would not exist if it were not for each of your contribuitions! Good job! – Annette Aprilana My time with the Editorial Committee is unfortunately coming to an end after three academic years. It has been an absolute pleasure to get to know these highly talented people who clearly thrive off their curiosity about different people and places, while maintaining their sense of humour. Staying close to their roots, while constantly exploring is an art each member I have gotten to know has mastered. With that being said, I look forward to what the ECU’nomist will have to offer in the up and coming years! – Mithra Madhavan
Hey everybody! Although I joined the Editorial Committee half way through the year, I sure had a blast. Writing articles isn’t easy, but luckily I had the opportunity to work with a great team. I am really proud of what we have accomplished together, and I hope that you have enjoyed reading the ECU’nomist as much as we have enjoyed making it. I want to thank my colleagues and our editor Annette in particular for their hard work, dedication and our fun brainstorming sessions. – Marouschka Blahetek
It’s been a pleasure It has never ever occurred to me that I could be writing for a magazine and hey, here I am, summarizing my past year contributing to the ECU’nomist. I must say that my beginnings wouldn’t be so smooth and easy without our golden Annette and brilliant David, who indeed have been the brains of the whole magazine this year. Hereby I want to say thank you guys for doing such an incredible job and being so supportive. – Linda Kunertova
How bad things can be good: my year in the Editorial Committee A piece on a positive note would not suit my character. I am known as a negativistic person, so my starting point would be on the side of denial. All the problems we encountered this year (e.g. being late with articles, having people leave our committee, bad writing etc.) made us, first, discover our powers to overcome these problems (whether we succeeded in that is for the reader to consider) and, second, collaborate in the most fruitful manner with the others. The fact that you will publish something that could be read by everyone in the department puts a lot pressure on you to be serious, but also makes the work that you do seem important to yourself. Thus, I tried and (hope) succeeded to prove how bad things can be good: they make you discover the good side of something. – David Orțan
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And so once more we’ve reached the end! This past year was a blast! I’ve joined the ECU’nomist and USKO (Utrechtse Studenten Koor en Orkest) and kept myself busy with other small hobbies. What I loved about this year was the fact that I was able to get some traveling done, namely Lisbon with Marouschka, my team and the ThoughForFood Challenge.Thanks to everyone in the ECU Board and the fantastic ECU’nomist team of which I am a part! – Filippo Ricci
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