The unexpected negative spillovers of the oil glut

Transcription

PB- PP BELGIE(N) - BELGIQUE
Quarterly - March/June 2016
The unexpected negative
spillovers of the oil glut
Que vaut l’extrême-droite en Europe ? Page 7
RICS: Hold on Brazil Page 16
Inequality, Institutions and Globalisation 2.0 Page 25
Entretien avec Bahram Vossoughi: Le réveil de l’Iran Page 27
The Solvay Business Game edition 2016 Page 33
Editeur responsable: SBS Student Economics Club Asbl
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05
SPLENDEUR ET MISÈRE DU MODÈLE
ALLEMAND
07
QUE VAUT L’EXTRÊME-DROITE EN
EUROPE ?
10
CARS AND CARS
12
IS THIS THE END OF INFINITE MONETARY
05
EASING?
10
19
23
29
14
THE UNEXPECTED NEGATIVE
SPILLOVERS OF THE OIL GLUT
16
RICS: HOLD ON BRAZIL
19
IMPLICATIONS OF A SMART CITY
21
BIODIVERSITY BANKING: ABJECTION OR
LAST CHANCE TO SAVE THE PLANET?
23
THE NEW ENERGY REVOLUTION
25
INEQUALITY, INSTITUTIONS AND
GLOBALISATION 2.0
27
ENTRETIEN AVEC BAHRAM VOSSOUGHI:
LE RÉVEIL DE L’IRAN
29
BEWARE THE FORECASTERS!
33
THE SOLVAY BUSINESS GAME EDITION
2016
3
SOLVAY STUDENT REVIEW
Edito
« The 21st century will be spiritual or will not be »
Fifty years ago, André Malraux (1901 – 1976), a French writer and statesman, made this mysterious prophecy about the century we are living
in today: « The 21st century will be spiritual or will not be ». Through this
enigmatic quote, Malraux highlighted the lack of spirituality in which modern, European-like, societies were evolving. After having killed God and
freed themselves from superstition, modern European societies were left
with no spiritual foundations and with the fragile idea of being “free” and
master of their own destiny. A situation unseen in mankind’s history. In
2016, Malraux’s quote seems to be more vivid than ever as societies
are looking for new divinities to worship. One of these is “the market”, a
divinity which governments and central banks seem to abide by. When
the Federal Reserve decides to lift up interest rates (article by T.B. Graulich, Finance), the main questions are “How will the market react?”, “Did
the market anticipated the Fed’s decision?”, “Is the market right?” as the
mood of the market seems to determine all the rest.
It looks as if our modern societies are going through an identity crisis that
is not only philosophical. The raise of extremist political movements throughout Europe (article by C-A Bareth, Europe) is a sign that the identity
crisis is also political. At a deeper level, we can see today that ecological
disasters or unethical business behaviors (Vokswagen in 2015, Lehman
Brothers in 2008, just to name a few) have real financial impacts on the
economy and on the “market”.
In this number, an “Ethics & Sustainability” section has come to life because we think that some things have to change in order to save our 21st
century. For want of providing answers, this section will try to ask the right
questions in order to deal with the most relevant problems of this century.
In this number, we are happy to introduce, in the “Ethics & Sustainability”
section, an article from L. Slezakova about the new energy revolution,
an article from M. Gomez about biodiversity banking and an article about
inequalities by W. Eden.
Thank you for your trust and support and enjoy reading
this issue!
Take care
The Team of the Solvay Student Review
PRESIDENT
Ardias Mavraj
EDITOR-IN-CHIEF
Tram Bach Graulich
VICE PRESIDENTS
Communications: Naoual Zeriouh
IT: Mick Heegemann
Treasury: Lukasz Przesniak
Human: Anna Korakovounis
International Relations: Avnije Aliji
Strategy: Louis Masset
General Secretary
Albana Bekteshi
PRODUCTION, PUBLISHING AND MARKETING
Alexandre Mahfoudh
Tram Bach Graulich
Charles Albert Bareth
Mick Heegemann
Tri Lê
Lenka Slezakova
Moustafa El Melkaoui Daniel Azbel
Liou He
Najib Doublali
Riyad Manseri
Mourad El Rougy
Mohamed Ochchane
Yasmina Legsai
Imane Bensliman
Arzu Karadag
Bruno Monteiro Filho
Sara Tabone
William Eden
Rafael de Heredia
Xiaohan Wu
Maëlle Gomez
THANKS TO
The SBS-EM, Eric De Keuleneer, Nicholas Pringle, Bruno Van Pottelsberghe,
Pierre-Guillaume Méon, Hugues Pirotte, Andrea Colombo, Jan Van Hove,
Marie Montigny, Anne Drumaux, Raphaël Mahfoudh, Bruno Sergi, Claire
Warmels, Nina Van Cutsem, Larry Haverkamp, Christiane Dautzenberg
HOW TO CONTACT US
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Issue 6, March - June 2016.
4
Edito
Photo credit: Sascha Kohlmann; http://bit.ly/1T3S4uc
EUROPE
R. Manseri
Splendeur et misère du modèle allemand
L’Allemagne est aujourd’hui incontestablement une puissance économique majeure. Elle est la
première puissance économique de la zone euro, ce qui lui permet d’avoir un impact important
dans les négociations et les prises de décision au niveau européen. Le récent exemple grec l’a
encore prouvé : Angela Merkel, chancelière allemande, était un des principaux interlocuteurs
d’Alexis Tsipras.
Une réussite économique indéniable
La bonne santé économique de l’Allemagne est en grande
partie basée sur son industrie exportatrice : l’Allemagne est
le troisième pays exportateur dans le monde et affichait
un excédent commercial de 19,4 milliards d’euros en
septembre 2015. Les bonnes performances économiques
du pays se traduisent aussi par un faible taux de chômage
: il était de 6,4% en octobre 2015, son plus bas niveau
depuis la réunification allemande en 1990. Ces chiffres
contrastent fortement avec ceux des autres pays de la zone
euro. En France, par exemple, le taux de chômage avoisine
les 10%, tandis qu’en Espagne ou en Grèce, la situation
est particulièrement alarmante puisque plus de 20% de la
population est sans emploi.
Un modèle qui présente pourtant des défauts
Il est dès lors aisé de comprendre que le système
germanique est érigé en modèle par certains politiciens,
économistes ou journalistes dans les autres pays de la zone
euro, notamment en France, où la comparaison entre les
performances économiques allemandes et françaises est
récurrente.
Cependant, comme certains analystes tentent de le mettre
en évidence, le modèle allemand n’est pas exempt de
défaut et il semble comporter des aspects nettement moins
positifs.
Pauvreté, insécurité du travail, protection
sociale rognée
Ainsi, alors que l’Allemagne est un pays extrêmement riche,
le nombre de personnes vivant sous le seuil de pauvreté
est très élevé. Un rapport publié en février 2015 par la
Paritätische Gesamtverband, fédération regroupant 10.000
associations du domaine social et de la santé, indique que
12,5 millions d’Allemands vivaient sous le seuil de pauvreté
en 2013, ce seuil étant fixé à 892 euros par mois. Il s’agit
du niveau le plus élevé depuis la réunification allemande
en 1990. Ulrich Schneider, président de cette fédération
précisait aussi qu’il existe d’importantes disparités
régionales. Ainsi, la situation a empiré dans 13 des 16
Länder (Etats fédérés d’Allemagne) entre 2006 et 2013.
Les mères célibataires, les chômeurs, et de nombreux
mineurs (un enfant sur cinq vit sous le seuil de pauvreté)
sont les plus touchés par la pauvreté. C’est aussi le cas des
retraités, qui se tournent de plus en plus vers la pratique
de « minijobs », et ce « pour des raisons financières et non
pour passer le temps », estime Sabine Zimmermann, une
parlementaire du parti de gauche Die Linke, qui est dès lors
en faveur de l’augmentation des allocations de retraite.
L’existence des minijobs, emplois à durée déterminée
et au salaire plafonné à 450 euros par mois, fort prisés
puisqu’ils permettent aux employeurs de payer moins de
charges sociales que dans le cadre d’un emploi classique,
est révélatrice d’un autre défaut du modèle germanique :
les bonnes performances économiques allemandes se font
au prix d’une insécurité du travail importante. En effet, bien
que le nombre de ces contrats semble avoir diminué avec
l’introduction du salaire minimum, la précarité des minijobs
contraint certains travailleurs à en cumuler plusieurs,
ou à cumuler un minijob et un travail à temps plein. De
plus, ces emplois, censés réinsérer les chômeurs sur le
marché du travail, mènent rarement à un contrat de travail
classique, et ne donnent droit qu’à de faibles retraites pour
ceux qui auraient longtemps travaillé sous ce régime, les
précipitant ainsi dans la précarité au moment de prendre
leur retraite. Enfin, l’existence des minijobs est un artifice
pour les statistiques du chômage, dans la mesure où un
Allemand qui a un emploi de ce type n’est pas considéré
comme chômeur, alors qu’il n’est pas pour autant sorti de
la précarité.
L’adoption tardive de règles en matière de salaire minimum
est aussi un indice du retard qui existe en Allemagne en
termes de protection du travailleur d’autant plus que, selon
la Paritätische Gesamtverband, l’introduction du salaire
minimum ne permettra pas d’endiguer la pauvreté.
5
Photo credit: Christian Hoppe, http://bit.ly/1Uv9NvJ
au défi écologique
auquel nous sommes
confrontés, il paraît
vraisemblable que
l’industrie polluante
de fabrication des
grosses
berlines
allemandes
est
difficilement conciliable avec les objectifs de réduction
des émissions des gaz à effet de serre, et ce alors, que
l’industrie automobile allemande est un fer de lance
de l’économie du pays et plus particulièrement de ses
exportations.
"12,5 millions d’Allemands vivaient sous le seuil de
pauvreté en 2013, ce seuil étant fixé à 892 euros
par mois. Il s’agit du niveau le plus élevé depuis la
réunification allemande en 1990”
La protection sociale a également été rognée par de
multiples mesures prises par le chancelier Schröder
et Peter Hartz, ancien directeur du personnel chez
Volkswagen, à qui a été confié la tâche de réformer le
marché du travail. Par exemple, du fait de la réforme
du système de chômage allemand, qui vise à favoriser
l’emploi, la durée durant laquelle un chômeur reçoit
une indemnité de chômage est passée de 32 à 12
mois. Après cette période, il reçoit une sorte de revenu
minimum d’insertion qui s’élève seulement à quelques
370€. Le chômeur est aussi soumis à des règles strictes :
il lui est interdit de manquer un des rendez-vous de travail
fixé par l’Agence Fédérale de l’emploi (Bundesagentur
für Arbeit) ou de refuser un emploi proposé (et ce, peu
importe le type d’emploi proposé ou l’éloignement du lieu
de travail) sous peine de voir ses indemnités rabotées,
voire totalement supprimées.
La question écologique
La question écologique doit, elle aussi, être soulevée.
Elle est d’autant plus pertinente après le scandale des
tests truqués sur les voitures Volkswagen. Pour rappeler
les faits, Volkswagen, grande industrie automobile
allemande, s’est livrée au truquage des tests d’émission
de gaz à effet de serre de ses voitures, faisant ainsi
passer des véhicules Volkswagen, Audi, Seat, Skoda, etc.
(toutes ces marques sont détenues par la société mère
Volkswagen) pour des véhicules moins polluants qu’ils ne
le sont vraiment. Alors que le concept même de croissance
peut être remis en question lorsqu’il s’agit de répondre
6
Réussite économique versus misère sociale ?
S’il est indéniable que le système allemand est une
réussite du point de vue économique et qu’il a permis
à l’Allemagne de devenir une puissance économique
majeure, sa réussite du point de vue social est nettement
plus mitigée au vu de la précarité et de l’insécurité du
travail qui ont été institutionnalisées par un ensemble
de réformes du marché de l’emploi et du système de
chômage.
En définitive, s’il paraît performant, le modèle germanique
n’est pas parfait et il est important d’en être conscient afin
de ne pas exporter ses défauts ailleurs en Europe.
Riyad Manseri
Master 2 Advanced Management,
Solvay Brussels School of Economics and
Management
To join the debate visit
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EUROPE
Photo credit: Alberto G.
C-A. Bareth
Que vaut l’extrême-droite en Europe ?
Lors de toute récession économique qui se respecte, se mettent souvent à fleurir dans les
économies bouleversées des extrémismes de tout poil. Les fameuses crises financières de 2008
et de 2010-2011 ne semblent pas avoir échappé à cette tendance, et l’on voit croître ces dernières
années en Europe des partis que l’on désigne généralement comme étant d’extrême-gauche ou
d’extrême-droite.
l’anti-individualisme ;
l’apologie des sociétés élitaires ;
la nostalgie du sacré, religieux ou moral ;
la peur du métissage génétique et de
l’effondrement démographique ;
►► la censure des mœurs, notamment la liberté
sexuelle et l’homosexualité ;
►► et finalement l’anti-intellectualisme.
►►
►►
►►
►►
De ces deux mouvements, l’extrême-droite donne
l’impression de s’imposer plus particulièrement et redessine
avec force le paysage politique européen. Au-delà du frisson
agréable qu’il procure à ceux qu’Halloween n’impressionne
plus, ce phénomène est en droit de soulever deux questions:
1) Quels sont les programmes économiques
de l’extrême-droite ?
2) Ces programmes sont-ils réalistes ?
Avant d’initier un léger tour d’horizon de l’extrême-droite
européenne, il importe de définir ce qu’est justement
l’extrême-droite.
L’extrême-droite est un mouvement antiprogressiste et réactionnaire cultivant une
vision idéalisée du passé et d’une certaine
forme d’ordre.
D’après le dictionnaire Larousse, l’extrême-droite se
définit comme l’ensemble des mouvements se rattachant
à l’idéologie contre-révolutionnaire et récusant aussi bien
le libéralisme que le marxisme. De plus, ces mouvements
considèrent comme légitime l’emploi de la violence et
réclament un régime fort.
L’historien Michel Winock dénombre quant à lui 9 conditions
pour qu’une idéologie soit considérée comme étant
d’extrême-droite :
►► la haine du présent ;
►► la nostalgie d’un âge d’or ;
►► l’éloge de l’immobilité ;
En bref, l’extrême-droite est un mouvement anti-progressiste
et réactionnaire qui craint l’avenir et le changement en
général tout en cultivant une vision idéalisée du passé
et d’une certaine forme d’ordre. Ainsi, l’on ne verra
probablement pas un militant d’extrême-droite camper dans
la rue avec son thermos et sa tente Quechua la veille de la
sortie de l’Iphone 7. Encore que…
N’étant a priori ni favorable au communisme ni au
capitalisme, quel est donc le programme économique d’un
mouvement d’extrême-droite ? Cette question, bien que
compliquée au niveau théorique, se révèle heureusement
grâce aux programmes desdits mouvements.
Dans l’analyse qui va suivre, les partis ont été sélectionnés
par leur appartenance à l’extrême-droite et l’importance de
leur pouvoir politique au niveau national.
Commençons par le nord de l’Europe et la Finlande qui,
bien que célèbre pour sa tolérance et son ouverture d’esprit,
a vu la monté en puissance du parti des « Vrais Finlandais
» ou « Perussuomalaiset » en finnois. Lors des élections
législatives de 2015, les « Vrais Finlandais » ont obtenu 38
sièges sur 200 à la Diète nationale ce qui leur a permis de
faire parti de l’actuel gouvernement de coalition.
Lorsque l’on consulte leur programme économique, plusieurs
choses sautent aux yeux. Au niveau fiscal, la redistribution
semble être le but principal avec une augmentation de la
taxation sur les hautes fortunes finançant un revenu de
base pour les plus démunis. Ce plan se caractérise aussi
par une opposition aux subventions et aux exemptions
fiscales, jugées excessives. Bien que vague, cette critique
laisse poindre un soupçon de démagogie qui se confirme
par le projet de révocation de la taxe automobile. Celle-ci
aurait pour but de « respecter le droit à la possession d’une
voiture et de favoriser la repopulation de la Finlande » (on
retrouve la peur de l’effondrement démographique décrite
par Winock).
7
Photo credit: Gustave Deghilage
Finalement, les « Vrais Finlandais » proposent
une réduction des régulations et des complexités
administratives, une proposition que l’on retrouve assez
souvent dans les discours d’extrême-droite. Malgré
quelques aspects démagogiques, ce programme
économique ne s’écarte pas fondamentalement de la
ligne des partis dits ‘traditionnels’ et reste parfaitement
réaliste.
Le FPÖ nous apprend qu’il est possible de
construire un succès politique sans véritable
programme économique.
Si l’on s’aventure plus au sud de l’Europe, du côté de
l’Autriche, il est difficile d’ignorer le Freiheitliche Partei
Österreichs ou Parti de la Liberté d’Autriche (on relèvera
la poésie, ainsi que le sens de l’humour) qui s’est rendu
célèbre en septembre dernier par une victoire manquée
de justesse aux municipales de Vienne. En dépit de ce
revers, le FPÖ a obtenu plus de 20% des suffrages aux
dernières législatives autrichiennes, probablement le
plus haut score récent d’un parti d’extrême-droite au sein
de l’Union Européenne.
Avec un pouvoir politique aussi important, il aurait été
raisonnable de s’attendre à un programme économique
solide et détaillé. Malheureusement, le programme
économique de ce parti est aussi vide qu’imprécis. Tout
au plus peut on y apprendre que ce mouvement « prône
une réduction des impôts (lesquels?), compensée par
une baisse des subsides et des redistributions ». Une
utilisation efficace des fonds publics est sensée venir
compléter le budget nécessaire. Là encore, à chacun
le plaisir de s’imaginer comment le FPÖ compte mettre
l’administration au pas. Le programme propose tout de
même « des aides directes, ainsi que des allégements
fiscaux pour les jeunes entrepreneurs autrichiens ».
Enfin, « l’infrastructure nationale devra s’adapter aux
besoins des nouvelles technologies ».
L’électeur a ainsi tout le loisir de laisser son imagination
vagabonder quant aux possibles politiques économiques
d’un FPÖ au pouvoir. Grâce à sa vacuité, le FPÖ se
révèle moins démagogique que les ‘Vrais Finlandais’ et
nous apprend qu’il est possible de construire un succès
politique sans véritable programme économique.
Si l’on reste dans le massif des Alpes, il ne faut pas
continuer le voyage longtemps pour retomber sur une
extrême-droite puissante. La Suisse abrite parmi ses
partis l’Union Démocratique du Centre (du centre, vous
avez bien lu), parti le mieux représenté au Conseil
national. Cette formation a gagné en visibilité ses
dernières années grâce à son populisme et notamment
son opposition radicale à l’immigration laquelle s’est
conclue par l’initiative populaire « Contre l’immigration
de masse », accessoirement cause de tensions avec
l’Union Européenne. Le programme économique de
l’UDC a le mérite d’être assez complet et clair. En un mot
comme en cent, il est proposé aux Suisses une« baisse
des impôts pour les entreprises, une baisse de la TVA
pour l’hôtellerie et la restauration et une diminution des
amendes et des obligations administratives ». Le tout
financé par une « limitation des dépenses sociales, une
baisse des aides à l’étranger et au développement, des
privatisations d’entreprises publiques et une réduction de
l’effectif du personnel fédéral, ainsi que des dépenses de
ce même personnel ».
À l’instar des « Vrais Finlandais », cette politique
économique est assez cohérente et nous éloigne surtout
de la définition du Larousse qui caractérise l’extrêmedroite comme étant opposé au libéralisme. Par le reste de
son programme, l’UDC rejoint pourtant bien des critères
de Winock, ce qui nous montre qu’un parti est rarement
une entité aux contours bien définis.
Ainsi, l’UDC se démarque par un programme économique
libéral qu’Hayek aurait applaudi des deux mains, mais
s’oppose violemment à l’immigration laquelle réjouit
pourtant tout patron soucieux du poids excessif des
salaires…
Du côté de la Hongrie, c’est le ‘Jobbik’ qui fait office
de figure de proue de l’extrême-droite. Littéralement, l’
« Alliance des Jeunes de Droite-Mouvement pour une
meilleure Hongrie », ce parti s’est renforcé ces dernières
années, passant de 16 à 20% des voix entre les élections
législatives de 2010 et de 2014. Si la classification de
certains partis au sein de l’extrême-droite peut se révéler
délicate, il n’en va pas de même pour ce mouvement
qui prône entre autre le rétablissement de la peine de
mort, l’instauration d’une milice paramilitaire d’inspiration
nazie, le doublement des effectifs de l’armée ou encore
l’exclusion des communistes de la sphère politique…
Au niveau économique, on trouve surtout un
protectionnisme bien énervé avec la « préférence pour
les entreprises hongroises dans l’attribution de marchés
publics et la limitation à 20% (sic) de produits importés
Electoral posters in Switzerland
8
EUROPE
dans l’alimentaire ». De plus, le Jobbik promet « de soutenir
les PME hongroises, de réduire la TVA sur les produits
de base et d’augmenter les salaires du secteur public ».
Côté revenu, c’est entre autre la réduction de l’économie
souterraine qui est sensée augmenter le revenu fiscal.
Heureusement ça n’est pas tout. Les taxes sectorielles
pourront elles aussi augmenter, mais sans que les
entreprises puissent « transférer le poids des taxes
sur les consommateurs ». Petit conseil aux étudiants,
n’écrivez pas ce genre de choses en examen d’économie
publique… Dans la même veine, le Jobbik nous propose
une combinaison inédite de protectionnisme et d’irrationnel,
les multinationales étant « obligées de payer les employés
hongrois au minimum 80% des salaires d’Europe
occidentale ».
La « troisième voie » économique souhaitée
par une partie de l’extrême-droite est très loin
d’être au point.
Parmi les célébrités de l’extrême-droite européenne, il est
un nom qui doit être prononcé tôt ou tard et sans lequel
notre tour d’Europe serait incomplet. Si le journal télévisé
français nous informe qu’il neige en hiver et qu’il fait chaud
en été, il nous maintient bien éveillé le reste de l’année avec
la montée du Front National. Battu de justesse aux dernières
élections régionales, le FN est toutefois arrivé premier aux
législatives européennes de 2014. Lors du premier tour de
l’élection présidentielle de 2012, Marine Le Pen a obtenu
17,9% des voix et parmi les analystes politiques aucun ne
peut rejeter la possibilité d’une victoire de cette dernière lors
de la présidentielle de 2017.
Et le sac à main Hermès de la militante FN, y-a-t on
seulement pensé ?
On peut également supposer une recette venue du départ
de l’UE (la France est un contributeur net), mais cela ne
saurait en rien couvrir le gouffre abyssal des dépenses
proposées. Mention spéciale à la « baisse de 20% de la
taxe sur le carburant financée par une taxation des grandes
entreprises pétrolières et gazières ». Les dites entreprises
étant priées, on l’imagine, de ne pas répercuter cette
deuxième taxation sur les prix ce qui rendrait l’abaissement
initial parfaitement inutile…
Difficile de savoir qui de la démagogie ou de l’irréalisme
l’emporte dans ce programme du FN. Une chose est
certaine, il s’oppose fondamentalement, comme le Jobbik,
à l’idéologie libérale.
Cette description est certes loin d’être exhaustive,
mais permet tout de même de ranger les programmes
économiques dans 3 catégories. Tout d’abord, ceux qui se
démarquent par leur soutien au libéralisme et par le réalisme
de leurs propositions, typiquement l’UDC et les « Vrais
Finlandais ». Ensuite, les partis qui s’opposent directement
au libéralisme économique, mais dont le programme
semble très difficilement applicable, c’est-à-dire le Jobbik et
le FN. Finalement, les partis qui ne s’embarrassent pas de
propositions claires, et c’est le FPÖ.
Cette conclusion ne signifie pas bien sûr que seuls les
programmes libéraux sont valables, mais plutôt que la «
troisième voie » économique souhaitée par une partie de
l’extrême-droite est très loin d’être au point.
Dans la catégorie ‘Noël avant l’heure’, le FN nous propose
« une augmentation de 200 euros pour les salaires jusqu’à
1500 euros nets, le tout financé par une taxe de 3% sur les
biens importés ». À destination des maisons de retraite, les
pensions passeront « de 18.720 à 30.000 euros par an ».
Les tarifs du gaz, de l’électricité et du train baisseront quant
à eux de 5%. Niveau financement, on trouve tout de même
une TVA majorée pour les produits de luxe, ce qui ne fait
pas bien lourd.
Charles-Albert Bareth
Master 2 in Business Economics,
Management
https://benjago.be
9
Image credit: http://bit.ly/1M7oy1N
S. Tabone
Cars and Cars:
Pros and Cons of a potential merger between Fiat-Chrysler and GM
The automotive industry is not easy to grasp at first sight. Profitability is also likely to shrink in
the future as growth prospects decreased in emerging markets such as China, Russia, India
or Brazil, all countries that used to be key growth drivers for European and US manufacturers.
Sergio Marchionne, the CEO of Fiat-Chrysler Automobile (FCA), seems pretty convinced that a
merger between FCA and General Motors would be the next strategic step to cope with such a
challenging industry environment. Under his management, Fiat and Chrysler already merged in
2014 and Mr. Marchionne seems determined to go further in the M&A path by considering the
acquisition of the US giant, General Motors.
A question of size
In 2008, Thomas LaSorda, former CEO of Chrysler, already
tried to approach GM for an acquisition, without success.
However, the car company did not totally abandon the idea.
By the beginning of September 2015, FCA’s CEO Sergio
Marchionne indicated that a merger with General Motors
Company was a “high priority” for the company, describing
General Motors as “the ideal partner” for FCA and FCA as
“a not easily replaceable alternative” for GM.
In the automotive industry, the advantage of a merger lies
in the fact that it decreases the number of players in the
market, improving the market share of the companies that
merge. Additionally, a merger allows spreading the huge
costs of research and development for eco-friendly and
intelligent cars. This is the reason why Mr. Marchionne
seems determined in pursuing his approaches to GM,
despite the US company’s rejection of the proposal in
March (year?). According to GM, going on its own way
without opting for the merger path would be the best way
to deliver sustainable value to its shareholders. As stated
by GM’s CEO, Ms Mary Barra, the company already has
scale and can leverage it if needed. In other words, GM
is still in the process of „merging with itself”, even though
Mr Marchionne repeatedly declared that potential costs
savings were impossible to ignore by GM’s Board of
Directors.
Key insights on the automotive industry
The automotive industry has been experiencing a
downward trend in profitability since the years 1960s as
global competition consistently intensified. The existence
of a lot of different players in the market combined with a
sluggish demand generated a problem of excess capacity.
This industry is also extremely capital intensive, which
means that fixed costs account for a larger proportion of
total costs than variable costs. As a result, the automotive
industry benefits from significant economies of scales,
leading it to produce a lot of cars in order to cover its fixed
costs and make a profit. This combination of facts feeds
further on this problem of excess capacity. The automotive
sector is also much more fragmented than other
comparable industries such as aircraft and motorcycles,
putting additional pressure on each individual player.
For many years, experts have been saying that a merger
wave within the automotive industry would be the only
solution for individual
car
companies
to
grow.
Nevertheless,
in the aftermath of the
financial crisis of 2008,
this “M&A wave” did
not occur yet. Because
"For many years, experts have been saying that
a merger wave within the automotive industry
would be the only solution for individual car
companies to grow. ”
10
Cars and Cars
BUSINESS AND FINANCE
"From a strategic point of view, Fiat-Chrysler has
a better exposure to markets in South America
and Europe. In case of a merger, GM could
theoretically benefit from that exposure. ”
of the macroeconomic
importance
of
the
automotive industry in
terms of job creation
and
employment,
governments
were
reluctant to let their
national automotive companies be acquired by foreign
competitors. This political interference led to governmental
aids to avoid plants closure, resulting in many companies
being held artificially able to survive in an environment
which would have otherwise forced them to exit the market
or be acquired by a competitor.
On the other hand, a consolidation of the automotive
industry would have dampened the problem of excess
capacity stated here-above. Merged companies have it
easier to achieve economies of scale while sharing their
capital investment.
To merge or not to merge: Cons
Given the advantages that we pointed out here-above, one
could therefore question why would GM oppose a merger
with Fiat-Chrysler. A quick look at financial ratios tells us
that GM is overall more profitable than FCA. In the second
quarter of 2015, FCA’s net profit margin was only 0.93% in
comparison to 3.61% for GM. In the same period, FCA had
a lower credit rating and a higher gearing ratio than GM. As
a result, a merger with FCA would potentially lower GM’s
credit rating.
From a strategic point of view, Fiat-Chrysler has a better
exposure to markets in South America and Europe. In
case of a merger, GM could theoretically benefit from that
exposure. However, Brazil is currently in a phase of technical
recession and Europe (where GM is also somehow present
through its Opel brand) is a mature market with very low
growth opportunities. GM and FCA both experienced stable
or even declining sales in their European segment for the
last couple of years.
A merger of this size also poses problems from a legal
point of view due to the existing regulations regarding antitrusts. Moreover, as a merger usually comes with increased
efficiency, it could lead to significant job cuts and plant
closures. For this reason, local governments can step in to
stop the merger. Many analysts also object that a merger
would result in too many brands and that it would be
necessary to eliminate at least some. However, eliminating
brands is a lengthy process from a legal point of view and
is even likely to take years. To these critics, Mr. Marchionne
firmly replied that a merger itself “has nothing to do with
implant shutdowns and brand structure”.
According to Mr LaSorda, the merger would be profitable but
still unlikely to happen. One of the main problems that arises
in the case of a merger is the question of “who is going to be
running” the firm in the end. On top of the strategic issues
we pointed out previously, managerial issues are also at
hand.
To merge or not to merge: Pros
The major advantage of a merger between FCA and GM
would certainly come from the synergies between the two
firms in terms of distribution channels and investments in
R&D and capital equipment. The alliance between Nissan
and Renault in 1999 proved to be a successful example
of such synergies. After the merger, the Nissan-Renault
alliance generated profit after tax of approximately $30 Bn
per year.
GM is a far larger company than FCA (about $54 Bn
market capitalisation for GM against only $17 Bn market
capitalisation for FCA). GM also has its own weaknesses.
Among others, the company went through a tough time
because of serious safety issues and quality crisis that
eroded GM’s brand name.
According to many observers, General Motors cannot
exclusively rely on areas such as South America (and Brazil
in particular) or Europe in order to achieve sustainable
growth. On the other hand, Fiat-Chrysler has a better
exposure to these regions. A merger with FCA could also be
beneficial for GM as it could dampen the effects of shrinking
car sales in now struggling Chinese markets.
Mergers within the automotive industry seem to be a sine
qua non condition for car companies to survive given the
tough business and economic environment they navigate
in. Producing cars also require a tremendous amount of
capital investments and these investments are likely to
increase even further as companies continue developing
new technologies and green solutions that meet the ever
stricter European and global regulations. In such a context,
we will make the hypothesis that the merger between FCA
and GM will only be a matter of time.
Sara Tabone
Msc Science Financial markets and Instruments
SKEMA Business School
Cars and Cars
11
Photo credit: José Luis Sánchez Mesa; http://bit.ly/1VuiBl4
T.B. Graulich
Is this the end of infinite monetary easing?
Since the financial crisis of 2007-2008, central banks in the developed world have played a major
role in piloting economies through uncertain times. After having relied on traditional monetary
instruments to decrease short-term interest rates near zero, central banks have rapidly pushed
the use of more unconventional techniques such as Quantitative Easing (QE) in order to boost
their respective economies. These unconventional techniques have, in turn, induced major
market distortions and a discrepancy between the course of the “real” economy and the course
of financial markets. The decision of Ms Janet Yellen, head of the US Federal reserve, to lift up
interest rates at the end of 2015 and the announcement of further interest rates increase are
signs that this era of monetary easing might be over but at what price?
The role of central banks since the financial
crisis of 2008
Our generation remembers well the financial crisis of 2008
that led to a major economic recession whose effects
can still be felt today. However, the Great Depression of
the 1930s that followed the financial crash of 1929 was
far more destructive by its magnitude. At that time, the
US Federal Reserve decided to maintain a restrictive
monetary policy in the middle of the financial crisis, instead
of providing more liquidity to the economy. By doing so,
the central bank created an environment of severe credit
tightening that led many banks to bankruptcy. According to
economist Milton Friedman, this was the root cause of the
economic depression of the 1930s.
Some eighty years after, in 2008, central banks and
the US Federal Reserve in particular seemed to have
remembered the painful experience from the 1930s. Soon
after the collapse of Lehman Brothers, central banks in the
developed world took strong initiatives in order to boost
their ailing economies. Interest rates dropped near zero
and the financial system was literally flooded with liquidities.
Whereas central banks should, in theory, be independent
from political cycles, central banks and governments
started working hand in hand in the US and Europe in order
to make their way through these difficult times.
Very quickly though, given the seriousness of the situation,
central banks felt short of traditional instruments to sustain
their economies. Consequently, they had to resort to
more unconventional ways such as intervening directly in
specific markets by buying assets in large scale in order
to restore confidence. In the US, for instance, the Federal
Reserve started buying mortgage-backed securities as
from March 2009 for about $2 trillion in total, inaugurating
three rounds of “Quantitative easing”. In Europe, the reader
will maybe remember January 2015 when Mario Draghi,
head of the European Central Bank (ECB), announced an
“expanded asset purchase programme” that would total
about $1 trillion in September 2016. The rationale behind
these unconventional policies is easy to understand: When
a market is ailing and lacks liquidity and confidence, the
central bank will intervene by buying large amounts of
assets, adding liquidity in
these markets and, thus,
restoring
confidence.
The main issue with QE,
though, is that it leads
to significant market
distortions and that
markets get addicted to
it. Once markets have
"Soon after the collapse of Lehman Brothers,
central banks in the developed world took
strong initiatives in order to boost their ailing
economies.”
12
BUSINESS & FINANCE
Photo credit: IMF Staff Photograph/Stephen Jaffe; http://bit.ly/22rLK5V
got accustomed to QE,
it is very difficult to stop
it without triggering a
financial downturn.
"In the absence of long-term political reforms
or fiscal stimulus, central banks have no choice
but doing more QE and more monetary easing in
order to keep the economy moving further. ”
Why QE creates a vicious cycle
Mr Alberto Gallo, head of macro credit research at Royal
Bank of Scotland (RBS), described very well the vicious
cycle induced by “infinite” monetary policy and QE. By
resorting to QE, central banks distort the price in existing
markets as assets that are worth quasi nothing according
to market standards are suddenly bought by central banks
at unrealistic prices. In a market economy where prices
should be “naturally” determined by the law of supply and
demand, this unconventional policy creates asset bubbles
(since assets are worth more than what they would be worth
in the absence of QE), arbitrary wealth redistribution and
resource misallocations. All these factors, in turn, lead to
a higher level of inequality since the liquidities injected by
central banks do not find their way in the “real” economy,
most of the time, but end up feeding banks and financial
institutions. Also, resource misallocation leads to a lower
level of productivity. Finally, asset bubbles ultimately lead
to financial booms and busts. As a result, a discrepancy
emerges between the state of the financial markets and
the state of the real economy, one even contradicting the
other. In the absence of long-term political reforms or fiscal
stimulus, central banks have no choice but doing more QE
and more monetary easing in order to keep the economy
moving further in an artificial way. The vicious cycle goes
on and on.
Why QE has become an addiction
Actually, monetary easing has become an addiction for
developed economies for the reasons already cited above.
By injecting billions of liquidities and by intervening directly
in specific markets to restore confidence, central banks
have improved the performance of financial markets but
only superficially. Also, the problem is that the market
price of goods and services got completely distorted by
the intervention of central banks, making any fundamental
or technical analysis irrelevant for investors. In a nutshell,
infinite QE and infinite monetary policy make the state of an
economy appear better than what it actually is, which can
also explain why financial markets can grow whereas real
macroeconomic data such as unemployment rate and wage
growth might be struggling.
Towards the end of infinite QE
By definition, a vicious cycle only gets worse and worse
until it becomes unsustainable and explodes. In the case of
infinite QE, central banks in developed economies and the
Federal Reserve in particular eroded their credibility during
these last couple of years by regularly promising the end of
monetary stimulus and doing actually exactly the opposite,
which is even more monetary stimulus. At a certain time,
financial markets would stop believing the announcements
Janet Yellen,
current head of
the US Federal
reserve
of central banks, making any monetary policy useless as
it would only have a moderate or non-existent impact on
the markets. In such a situation, central banks would lose
control of the economies they should regulate, investors and
other market participants would realize that most market
prices are actually overestimated and will massively adjust
their expectations accordingly, leading to a major “market
readjustment”, i.e. falling prices, economic recession and…
central banks doing more QE.
In order to impede a “doom and gloom” scenario and to put
the markets back on their own feet, central banks have no
choice today but to move away from the easing monetary
policy they introduced as from 2008. Readjustments can be
tough in the short run as financial markets will have to stop
being addicted to QE and prices will automatically adapt in
order to better reflect the assets’ real “fair” value, which will
also induce more market volatility. This is however the price
to pay. According to us, central banks and the US Federal
Reserve in particular took a lot of positive initiatives that
allowed avoiding a remake of the Great Depression but they
now have to step back, which is easier said than done.
Tram Bach Graulich
Management
13
Photo credit: John McSporran; http://bit.ly/1Rw5nOT
D. Azbel
The unexpected negative spillovers of the oil glut
Between mid-2014 and the beginning of 2016 oil went from 105 USD per barrel to barely 30 USD.
This dramatic fall provoked a lot of turmoil and even panic selloffs on the markets as concerns
regarding the global growth started to spark due to the fact that oil supply could not reach
sufficient demand. In this article I am going to try to explain this dramatic evolution and the
extremely counterintuitive point regarding the fact that low oil prices might not be as good as
expected for the global economy. At least on the short run…
According to the common sense, in the Western
economies, based on private consumption, cheap oil is
supposed to be a highly positive sign for the economy.
Households are supposed to have more means for their
private consumption and thus stimulate the demand.
Furthermore, companies are assumed to have lower costs
as their input expenses decrease. Unfortunately, this is
what was supposed to happen on the mid-term and until
now we still fail to see the positive spillovers of cheap oil. In
fact, we actually see the opposite.
Multinational corporations used to rely on developing
countries, as growth drivers of their sales. However most
of the developing countries were extremely dependent
on oil exports and thus, on oil prices. The fact that these
countries lost a substantial part of their revenue leads to
higher income taxes for their population. Therefore, the
consumption will be highly impacted and thus, this source
of growth seems to be halted for the moment. On the
other hand, Western markets do not seem having profited
enough of lower oil prices to increase their consumption
and becoming growth drivers for large corporations.
Furthermore, the oil boom in the United States seems to be
halted as well. Recent American oil extraction techniques
are only profitable at significantly higher oil prices in the
range of 70 to 80 USD per barrel. Some oil companies
are even less cost efficient and require higher process to
operate. When fracking techniques began to expand in the
United States, many small oil companies started to develop
themselves, which brought an important amount of new
investments and working places. Oil companies attracted
employees from all over the United States by offering them
wages that were above the market averages. Unfortunately,
today American oil industry is in a cost saving perspective
and turned to a survival mode. Investments, tax revenue
and employment will be strongly impacted by the fall in oil
prices.
What is perhaps a little bit less intuitive is that there is also
a huge exposure on behalf of banks to lower oil prices.
Oil industry requires massive fixed costs and continuous
investments. Therefore the industry operates with a
relatively high level of leverage. Leverage is not an issue
when oil prices are high and when even badly operated oil
companies are profitable. However it becomes a serious
issue when oil prices go down, especially if markets are in
a fast and continuous downtrend.
When oil prices fall, companies try to hedge their business
operations with derivatives such as futures, forwards and
swaps. However, as time goes by, companies have steadily
less tools to remain
profitable,
as
hedging becomes
more expensive.
Without sufficient
operating profit,
companies
still
"Oil industry requires massive fixed costs and
continuous investments. Therefore the industry
operates with a relatively high level of leverage. ”
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Oil glut
BUSINESS & FINANCE
"There is a tradeoff for banks between going on
lending even more funds, hoping that oil prices
would recover in the near future, or letting oil
companies down at this stage and being almost
sure that they would go bankrupt. ”
need funds in order to repay their interests on debt.
Therefore, even if companies must sell at a price that is
below their operating costs, they are still obliged to continue
the output. Companies would face an even bigger loss than
the loss that they would have from selling bellow their costs,
due to important fixed costs and leverage. Selling at a loss
is a necessity to extend their life expectancy and not to fill
immediately for a bankruptcy. In such cases we clearly see
the importance of an efficient cost management during the
favorable business periods, which allows making a moat in
case if things go bad. Unfortunately, with the majority of
analysts shouting that there is no ceiling in oil prices and
they can only go higher, there were very few incentives to
spare for the future.
So where do the banks stand in this gloomy
picture?
Banks operate as underwriters and loaners. As mentioned
before, oil companies required additional funds to take
advantage of the oil boom and stay in the race against
their competitors. Therefore, banks played a major role in
the liquidity provision. As oil was still in the range of 100
USD per barrel, lending to oil companies seemed as the
safest operation for banks. Unfortunately, today banks are
stuck with these credits and even worth, they contractually
committed to additional extensive credit lines to oil
companies.
There is a tradeoff for banks between going on lending even
more funds, hoping that oil prices would recover in the near
future, or letting oil companies down at this stage and being
almost sure that they would go bankrupt. By cutting the
funding, banks will be quiet sure that they will never recover
all the funds that they lent. On the other hand, banks might
limit their losses in case if there is absolutely no hope for a
recovery on a short run.
Meanwhile, banks increase their provision to the loss of
credits and provisions amount to hundreds of millions,
depending on the bank’s exposure. Since 2015, 42 oil
companies filled for bankruptcy. To put things into a
perspective, as of today, Citigroup has a $58 billion oil and
gas exposure, Bank Of America $43.8 billion, JP Morgan
and Chase $42 billion and Wells Fargo $42 billion (including
committed credit lines). Therefore, low oil prices seem
to signal a serious threat of a huge financial distress not
only for the oil industry, but also for the whole banking and
financial sector.
So where are we heading right now?
we reached the bottom.
Others think that the worst
is still to come and that we
might even go as low as
10 USD per barrel before
markets would finally
realize that they went too
far. Considering the fact
that most of the American oil industry is not profitable at
these price levels, we can easily assume that there are going
to be a lot of mergers, takeovers and bankruptcies in the
very near future. On the other hand, the recent agreements
between Saudi Arabia and Russia to curb the output seem
too fragile from the historical and political perspectives,
especially in the wake of the Iranian refusal to cooperate
with the OPEC.
It is also important to emphasize that since the beginning
of the downtrend of the oil prices, oil suddenly started to be
considered as an accurate proxy for worldwide economic
growth and, thus, financial markets started to be highly
correlated to oil prices. When oil prices went higher, markets
went higher and vice versa. Numerous analysts argued
that if oil reserves grew and if the supply was not reaching
demand, the issue came from the demand side and thus,
from a coming recession. However, in reality, oil demand
actually rose by 3.1 million barrels a day in two years till the
end of 2015, while supply rose even faster by 5 millions a
day during the same period. Obviously, in this configuration,
this decrease in oil prices does not reflect a lagging behind
worldwide economy, but instead, simply reflects the
technological breakthrough that has been realized in the
output.
Finally it is also worth mentioning that oil still remains our
main source of energy. No one actually knows when a
sustainable and cost efficient alternative source of energy
would be discovered or developed. Therefore, for the near
foreseeable future worldwide economies will still highly rely
on oil. For the moment, there are no reasons to think that oil
should be valued that low and that something fundamentally
changed. Furthermore, despite the fact that a lot of analysts
think that the development of alternative green energies
will not be impacted by their immediate substitute, oil, it is
still worth considering that with such low-priced oil, there
are no real incentives to migrate towards less cost efficient
alternatives. The financial argument of developing alternative
sources of energy is currently at a standby, whereas the
financial point of view is perhaps the main driver of green
funding. Nevertheless, hope still remains that the savings
that will be realized through lower energy costs will not be
wasted but instead, will be reinvested in cleaner energies.
Daniel Azbel
Master Business Economics,
Management
Analysts are quiet mixed regarding the future evolution of
the oil prices. Some argue that the worst is over and that
Oil glut
15
Photo credit: Júlio Boaro; http://bit.ly/1RfCLKz
B. Monteiro Filho
RICS: Hold on Brazil
The BRICS, an economic bloc composed by the fastest-growing economies of the 21st Century,
have always dealt with high expectations from the international community, despite its inertia on
building real and solid institutions. Later on, although still low, the interaction inside the bloc has
surely been enhanced by recent political moves and economic agreements among the members.
July’s New Development Bank and recurrent international meetings are clues for the possible
development of a de facto counterweight to both G8 and G20. Still, the BRICS is not that simple.
Made out of very politically different countries with very different geographies and pasts, a success
or failure of the bloc does not necessarily means the same for all individual parts. Here, I try to trace
some expectations Brazil should have concerning its performance inside such a diversified group
– independently on the bloc’s performance in a whole. I find that, due to a GDP stagnation summed
with politico-cultural differences, and a growing isolation on important inter-state projects from
inside the bloc, Brazil should not be so institutionally eager to join the BRICS.
Brazil’s Economic Crisis and its Effects
When Jim O’Neill brought together four emerging
countries to build such a group as the BRICs, his goal
was clear: to determine where much of the world’s growth
would come from in the near future. Hence, there was no
criteria as political similarities, cultural resemblance
or historical affinity taken into account - it was totally
based on GDP growth and economic projections. Later
on, when this almost theoretical group turned into a realworld bloc, critics are often warning about the huge lack
of harmony among the members. This situation, in fact,
brought some academics to describe the BRICS as an
“artificial bloc” or even a “GDP Club” . Although important,
discussions about the de facto legitimacy of the bloc are
not where I want to get; rather, it is about how GDP sizes
and economic numbers can transcend the importance of
all the other factors in the present international context.
This solely economic nature of the BRICS is well illustrated
when Jim O’Neill, the creator of the acronym, analyzed
the entrance of South Africa in the group. He said: “South
16
Africa has too small an economy. There are not many
similarities with the other four countries in terms of the
numbers” . Therefore, it is laid the first variable that can
alter Brazil’s future inside the BRICS: a GDP-led nature
of the bloc.
One may be asking: in what way would a GDP-led
mentality interfere in the Brazilian importance inside
the BRICS? Well, Brazil is passing through an intense
economic crisis - the hardest one since the beginning
of the 1990’s, when the country experienced a period
of hyperinflation . It all started with the huge corruption
schemes that have been uncovered recently. Both the
Mensalão and the Petrolão were huge nets of corruption
and money washing among politicians, officials and big
CEOs. The n-digit values of uncovered illegal money
inside the Brazilian public apparatus brought a profound
drop in national trust and hence in FDI rates. Besides all
of this, however, there are still other factors that have built
such a dangerous domestic situation: (1) a too vast state
scope, which brings high administrative costs to an already
deteriorated economy and spurs public dissatisfaction with
REST OF THE WORLD
the rise of tax rates; (2) a
profound lack of political
harmony between the
government and the
Congress,
making
harder the development
of economic plans for
national restauration; and
(3) high expenditures on
big but unprofitable international events, like FIFA World
Cup and the coming Rio 2016 Olympics. The result of all the
factors? Minimal or even negative GDP growth rates since
January 2014, the last contraction being the worst since the
introduction of the Real, in 1996 . The projections for 2016,
by the way, seem even more pessimistic. By this far, we
should all know what happens to a country under economic
recession that is inside a “GDP Club”: it surely is put aside
from the core decisions and agreements.
There is still one more question: both Russia and, to some
extent, China are also passing through a reasonably big
economic crisis; should not China’s stock market crash or
Russia’s Ruble Crisis foster inter-state interactions as much
as the current Brazilian crisis?
The answer lays on the variables Jim O’Neill did not consider
when creating the BRICS. Yes, those that were shadowed by
the importance of the GDP projections: political similarities,
and cultural resemblance.
First, political similarities come as a big factor that can
compensate the economic instability of Russia and
China. Both regimes are authoritarian - China a one-party
autocracy, Russia an explicit managed democracy. These
illiberal characteristics allow both countries to have a more
stable political scenario, since autocratic governments often
have vast propaganda agencies, charismatic leaders, and
censorship programs. Putin, for example, still holds the
majority of the Russian population (89,9% recently) backing
up all kinds of actions he chooses to implement, even in
the midst of a profound ruble crisis and polemic atrocities
involving the government (see Boris Berezovsky’s case).
China also has the majority of the population supporting
the CCP, usually by the justification of economic prosperity,
even though the Chinese’s’ liberal rights are disrespected.
In short, authoritarian regimes are long held to be more
stable than democracies, even if their agencies are not
the most correct ones. Brazil, on the other hand, even
though experiencing several corruption scandals that put its
democracy’s legitimacy at stake, still holds solid democratic
institutions - and they bring political instability willy-nilly.
Therefore, Brazil’s case is more dangerous because its
economic crisis is exposed to political unpredictability.
Cultural resemblance is also a factor that goes against
isolation in the BRICS. Both Asian countries have a great
similarity: they do not strictly follow a human rights agenda.
For being authoritarian regimes, they do not guarantee
basic rights like freedom of communication or freedom of
protest. Moreover, both nations - and this time also India
and South Africa - disrespect the calls for environmental
causes. According to the Environmental Performance Index,
which measures how environmental-friendly a country is,
Brazil ranks 30th out of 132 countries, while Russia, China,
India and South Africa rank 106th, 116th, 125th and 128th,
respectively . These cultural similarities have the potential
to open several doors to business affairs - advantage that
Brazil does not have.
Brazil’s Geographic Isolation
The second reason why Brazil should not expect great
prospects inside the BRICS lays on its geographic position.
Russia, India and China are undoubtedly the richest and
most influential countries in the bloc. China, for instance,
has huge reserve polls for FDI and holds 46% of the voting
weights inside BRICS’ New Development Bank; Russia has
the mightiest military services, which still creates a vast radius
of influence; and India has the fastest-growing economy
and population in the world, with great projections for future
R&D trade. Surely, the most important decisions from
the bloc will be made in the Eastern territory, among
the Asian trio. Brazil, in turn, does not share enough
geographic features in order to be included in eventual
infrastructural projects and economic agreements.
Some of the most important BRICS’ projects are listed
below.
Currently, the most relevant infrastructural project in Asia
is China’s New Silk Road plan. It is essentially a new net
of infrastructural constructions in the best Chinese style roads, ports, and high-speed trains - that cuts all throughout
Asia and the Indian Ocean . While Central Asia countries
are the most benefited by the land part of the project, India
reveals itself as a crucial part of the maritime section. The
port infrastructure on the city of Kolkata will be the essential
connection between Asia and Africa in the Chinese project.
Therefore, it is very reasonable to assume that, due to
the importance of India
inside this extremely
expensive Chinese plan,
Sino-Indian economic
relations tend to increase
in the near future.
China is also innovating
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when it comes to new economic agreements on energy
supply. In May 2015, 32 bilateral contracts between Russia
and China were signed, establishing increased economic
relations and energetic trade between both countries .
The deal was made in a period when the West-Russian
relationships were very troubled, since the Crimean
incident. While Russia gives a major step on its energetic
supply – there are already Chinese gas pipelines in Putin’s
territory – it will be also flooded by Chinese manufactured
goods. Therefore, Sino-Russian economic relations tend
to skyrocket.
Finally, there is another rise on economic ties in the Asian
context - this time, unexpectedly, between Russia and
India. Both countries have never been great friends, both
in diplomatic and in ideological terms. However, at least
for the global political-economic scenario, there is no such
a thing as eternal enemies. The proof is the signature
of a framework agreement for free trade negotiations
between India and the Eurasian Economic Union (EEU)
- group that is largely headed by Russia . Through this
agreement, signed at the International Economic Forum
in St. Petersburg this June, economic exchange between
India and Russia will surely increase.
Of course, all situations presented here are possibilities,
prospects. However, they all constitute reasonable points
about why the economic ties between the BRICS trio
should rise in all directions. Alternatively, Brazil does not
have such optimistic economic prospects with any of
its Asian counterparts. And, since capital is limited and
scarce, Brazil should become increasingly alone while the
Eastern part of the BRICS connect itself constantly more,
at least economically.
An Ambiguous Future
Although the BRICS have recently achieved phases they
had never passed before, such a partial success does not
translate into Brazil’s case. The country’s relevance in the
18
bloc tends to decrease, due to:
1. Bad economic performance summed up with seldom
political, historical, and cultural similarities with the
other countries. Such a mix of factors can build a less
promising Brazil, which does not offer any advantage
or even justification for enhanced diplomatic and
economic ties.
2. A mere geographic difference that seems irrelevant in
our rapid and connected era, but corresponds to huge
logistic difficulties when it comes to infrastructural
projects and economic trade nets. Therefore, Brazil
might be dangerously excluded from the coming
important plans involving BRICS members.
Suddenly, the Brazilian dream to become an important
pole of a new world order, spurred by its importance inside
the promising BRICS, does not seem that close to happen.
Will Brazil persist on trying to build a real political bloc,
even if the institutional costs are higher than its economic
return? Only time can answer.
Bruno Monteiro Filho
Student at Marista São Luis School
Photo credit: MomentsForZen; http://bit.ly/1Zl617N
REST OF THE WORLD
X. Wu
Implications of a smart city
The notion of smart city has begun to overwhelm our cities thanks to the ubiquity of digital
technologies. From the government’s perspective, the use of information and communication
technologies (ICTs) is crucial in order to gather sufficient data, which would, in return, create
efficient infrastructures and a comfortable urban environment.
The Use of ICT in smart cities: The Most Visible
Urban Change
Apart from the pervasive use of ICT in traffic control,
lighting control or energy saving, another benefit – maybe
unexpected – of smart cities is its effectiveness in forecasting
police allocation through the analysis of previous crime data
in Santa Cruz, California.
Some experimental studies were also generated in order
to improve energy saving. A recent project from the
Massachusetts Institute of Technology (MIT), called “Trash
Track”, reveals how garbage flows through a city’s wastemanagement system, from trash cans on streets to the
garbage disposal plants . By presenting to people how their
daily garbage travels thousands miles to be disposed, the
system intends to promote behavioral changes, such as
discretion on excessive packaging and reduction of wastes.
Inspiring as it seems, one can be astonished by the amount
of data that needs to be processed as well as the amount of
energy required when every piece of trash has a series of
information tagged on it.
¨The Second Order of Visibility¨
In his article “Profit Uber Alles”, Adam Greenfield categorized
smart cities into what he calls three orders of visibility . The
first order is, according to him, “populated by exotica like
adaptive sunshades, fully automated supply and removal
chains, and personal rapid transit systems”. Instances
described above such as police allocation forecasts or
city waste management systems can be easily part of this
category. Highly visible and perceptible, they often serve as
the symbol of a bright urban future and are thus frequently
labeled in the smart city agendas.
The second order of visibility is the underlying “Big data”
analytics, namely the data centers and servers through
which huge amount of data are processed. Data centers, as
a new building type, emerged in the twenty-first century and
can be distinguished both regarding their site and context:
they are built in the middle of the countryside in order to
manage the immaterial connections between humans
everywhere in the world. Big data centers are the mutant
hybrid of the material and immaterial world.
In his article “Farm/ Cloud”, Mason White, Assistant
Professor at the University of Toronto, believes that data
centers have introduced “supermodernity” into “nonplaces”, i.e. ambiguous spaces that tend to be crossed over
or consumed rather than owned and occupied . However,
in most islands, data centers are very specific about their
locations and site conditions.
When Google picked its thirty-acre site in The Dalles,
Oregon, it was the inexpensive electricity and proximity to
fiber-optic cable that justified the $600 million investment
in this site. The specific consideration of energy and
infrastructure renders data centers to be almost like
machines for memory.
A hundred miles away in Oregon, stands the similarly
monstrous 300,000 square feet Facebook data center,
where all Facebook profiles and messages are kept. They
consume gigantic amounts of energy for operating, cooling
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and backing up power. With 30 megawatts of electricity on
tap, this facility never sleeps.
This new type of architecture, or rather, machine building,
forced us to look back at our countryside with a different
and fresh viewpoint. One can just imagine the impact
of the construction of a huge data center in a remote
area of barely a few thousand residents. The impact is
subversive. With urbanization pushed to the extreme, the
emerging possibilities of ruralization seem intriguing. The
countryside has huge potential in our exploration of a new
world and should thus be examined carefully whenever a
fancy notion comes up. It is important that we know what
it means to the world when we click on buttons and tap on
screens.
Invisible Impacts on Urban Environment:
“The third order of visibility”
According to Adam Greenfield’s category, the third order
of visibility on which a smart city is built is the “artifacts and
services woven into the fabric of urban experience that
fade beneath the threshold of our ordinary perception”,
such as the smartphone. For instance, Greenfield talked
about how Uber, through the convenience of smartphones,
spatializes a business-centric generic city together with
VIP lounges, luxury hotels, and high-end restaurants.
Rem Koolhaas first coined this term in his article of the
same name . He projected an unidentified, liberated,
sedated generic city, where public realm is evacuated to
leave only the necessary infrastructure for unadulterated
speed. Mark Wigley also talked about the idea of ville
verte, which, as a refinement of tower types, brings up a
romantic imagination of how ambient is created through
the combination of ideal lifestyle and efficiency of space
using.
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Photo credit: morebyless ; http://bit.ly/1RdDaPM
The popularization of digital devices is even striking
in India, where “34% in slums have no toilet, but 63%
own mobile phone”. Based on the pervasive use of
digital devices, Carlo Ratti proposed an open city where
everybody can use the same vernacular to participate in
the designing of an urban environment. This open source
design process is taken as a democratized improvisation
of the city. In these rhapsodies of future city, our desires
are maximized and materialized in the overwhelming
digitalization process.
Conclusion
Under this irresistible smart city trend, we are confronted
with the quantification and digitalization of every aspect
of our lives. Before either embracing or rejecting it, we
should probably at least examine the deep influences
smart cities may impose under the cover of social justice,
comforts and efficiency. Our urban environment may
have fallen into the grip of the ICTs, and we may have
given ourselves up to smart intruders. But with long-term
territorial consideration and knowledgeable scrutiny, we
are at least able to free our cities from illusions and protect
ourselves from immediate comforts.
Xiaohan Wu
MAUD Candidate 17’, Harvard University
Graduate School of Design
ETHICS AND SUBSTAINABILITY
Photo credit: Michael Yuen; http://bit.ly/1LDY4Zh
M. Gomez
Biodiversity banking:
Abjection or last chance to save the planet?
The Amazon rainforest is beautiful, mysterious
and above all ... very profitable. Indeed, this
wild space could be valued at around $240
million by the biodiversity banking. The main
idea behind Biodiversity banking is to assign a
monetary value on ecosystem services, such
as for example land protection. More than
just emphasizing the valorization of Nature in
general, it is also possible to go deeper and to
put a value on animals themselves because,
after all, the Desert turtle, the Bagicorne beetle
or the Sand fly, to name a few, also have an
intrinsic value. Nevertheless, as this value is
not well-defined, they are a bit left out of the
negotiations and most of the time killed or
hunted. By setting a value to the biodiversity,
biobanks consider Nature in terms of profits and
losses such as in a classical accounting method,
an approach that could bolster investments in
nature’s protection by “working through the
laws of the market”. Through this short article,
we will have a glimpse at the functioning and
at the main issues and controversies faced by
these institutions.
Settlement of the Biobanks
1997 is the signing year of the famous Kyoto
Protocol which initiates the principle of
compensation of CO2 emissions through the
financing of environmentally friendly projects.
Nonetheless, the hint that financial markets could
solve the extinction of species and the depletion
of natural resources already emerged fifty years
ago. In the United States, the deregulation of
conservation laws started under the governments
of Reagan and Bush Senior .
At this time, industrial and financial lobbies literally
“jumped “on the opportunities and find themselves
today balancing their ecological footprint by buying
biodiversitycertificates.
This is, in short, the story of how biobanks, a new
design of institutions specialized in living and
natural assets, came to light. In a nutshell, biobanks
(most of them being multinationals and subsidiaries
of big banks) issue certificates in order to rescue
jeopardized species. However, despite this highly
altruistic goal, these institutions are controversial
and their benevolence or legitimacy have been put
in question many times. For example, Pablo Solon,
former Bolivian Ambassador to the UN, strongly
disagrees with these practices that he sees as „a
license to kill nature.”
Biodiversity banking
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"Put simply, Biobanks design ad hoc financial
products in order to protect the natural
ecosystems and their animal species. ”
and farmers resort to
companies that lease
these precious bees
in order to pollinate
their fields.
According to Pavan
Sukhdev, „Pollination by bees is invisible to the
economy, but if we calculated its value, this would
represent approximately $ 200 billion, says economist
Sukhdev, or 8% of agricultural production in the world.”
However, how do you assess the value of a shark or a
forest?
A « sand fly » share in your portfolio
Put simply, Biobanks design ad hoc financial products
(as for instance « orangutan » or « cactus » shares) in
order to protect the natural ecosystems and their animal
species. From 1991, just before the Earth Summit in
Rio, these institutions offered their customers to invest
in stocks generating value while preserving a specy in
Known Causes of Animal
Extinctions
Other
Hunting
Habitat destruction
Introduction of new
species
Source: Bio.mani
danger of extinction, such as the sand fly in California.
The mechanism can be explained as followed: Suppose
a company wants to set up a factory in a natural area
of California which is already owned by a biobank
protecting the “sand” fly. The biobank will sell the
company a couple of “fly” shares in order to compensate
the company’s environmental impact by investing in
the protection of the insect. These incentives can make
sense at some points if you consider the diagram below
and the fact that about 40% of the Habitat Destruction
is one of the main causes of Animal Extinctions.
Of course, the lands where the species live are all listed
on the biobank’s website and sold at very high prices to
the firms. If these investments are quite controversial,
this movement is supported by different NGO initiatives
such as the ones from the WWF that decided to set up
a partnership with Coca-Cola in order to support some
highly costly funding campaigns. But is it a win-win
deal? The debate still remains wide open.
Monetize to recognize
According to the environmental economist Pagan
Sukhdev, the best way to protect endangered species
and ecosystems is to
assign a value to them
in order to recognize
and to protect them
more efficiently.
For
instance, in the US,
bees are disappearing
This can be tricky because there is no benchmark,
potential volatility and one may be tempted to choose
to protect or to invest in the most valuable species.
Besides, some projects are dubious as a provocative
documentary realized by Sandrine Feydel and
Denis Delestrac, called “Banking nature”, showed.
For example, Vale, one of the largest Brazilian
mining companies, makes a living through highly
polluting activities, while being listed on sustainable
development indices as it mitigates its polluting impact
by reforesting tens of thousands of hectares in the
Amazon. In reality, according to several associations as
Greenpeace, this green economy is an hoax because
trees that are replanted are eucalyptus which deplete
soil and transform the forest in a green desert while the
company generates profit through the sale of its trees
to produce biofuel…
Ethical issues
What is the main risk of green banking? According to
Markus Henn , economist and lawyer member of the
World Economy, Ecology and Finance association,
the main risk of green banking is the undervaluation
of nature. By consciously undervaluing nature,
“companies could destroy [it] cheaply” whereas nature
is priceless just as human lives. Companies might just
seek to find a low-cost and superficially acceptable
solution to compensate for their damages on the
environment, whereas the original vision of a green
bank should be the preservation of nature and animal
species per se.
On the other hand, though, people such as the
environmental economist Pavan Sukhev support the
direct monetization of nature as it would rapidly save
some endangered locations such as The Borneo Island
which already lost 2/3 of its area.
In this context, the role of biobanks should clearly
be analysed. Sustainability and the environment are
paramount issue for the world in general. Is it relevant
"Vale, one of the largest Brazilian mining
companies, makes a living through highly
polluting activities, while being listed on
sustainable development indices...”
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Biodiversity banking:
to give the protection of nature to banks and financial
markets? According to some, this should rather be a
responsibility of the United Nations . Can a carnivorous
plant become vegetarian? Well, being veggie is trendy.
Maëlle Gomez
Msc Double Degree Student Solvay/
Sciences Po Strasbourg
Minor Regulation
L. Slezakova
Photo credit: Gord McKenna; http://bit.ly/1MzOHVh
The new energy revolution:
Almost two and a half centuries ago, the world was experiencing what is now known as the
Industrial Revolution. The switch to coal as primary input for the production of power led to a
significant rise in the total output of the economy. Today, the economically workable coal deposits
are expected to be exhausted by 2158 and experts are speaking about another revolution – The
Energy Revolution.
2015 has been an important milestone in the transition
to a cleaner energy economy. In 2015, not only was
there a greater recognition of global climate change but
the US finally committed itself to seriously cleaning up
its power supply. The newly released rules will force
states to curb carbon emissions from their power plants
over the next 15 years. These regulations constitute a
vital step for America, as it has fought curbing carbon
ever since 1997, when it refused to sign the Kyoto
aprotocol. Nowadays, after years of climate change
denial, the United States have initiated the construction
of its first biggest off-shore wind farm in Rhode Island.
Raising the havoc with the energy market
Greenpeace has given even more momentum to the recent
developments. Its 2015 Energy Revolution report estimates
that, between 2004 and 2015, 496,000 MW of solar and
wind plants have been created worldwide, an amount
equivalent to the total coal and gas power plants in Europe.
These trends show that more and more companies and
households are going to generate their own power. This
represents a radical change for the current energy model in
most of the world’s economies.
Among others, the Environmental Protection Agency of
the United States (EPA) also established the notion of a
Renewable Energy Certificate (REC). RECs can be defined
as tradable property rights to the environmental and overall
qualities of renewable electricity generation. The objective of
these rights is to provide an incentive for private companies
to undertake investments in green power plants. Internet
cloud companies were among the first ones to embrace
that model. Initially, these corporations shifted thousands of
businesses to the online model. This shift alone contributed
to the realization of sufficient energy savings. As time
elapsed and the Internet and Cloud computing industry
The new energy revolution
23
Photo credit: Adrian S Jones; http://bit.ly/1SDBJOc
"In 2015, not only was there a greater
recognition of global climate change but
the US finally committed itself to seriously
cleaning up its power supply. ”
grew, datacenters quickly felt the need for increasing
amounts of energy supplies. To satisfy this demand, while
committing to green policies, big technology companies
such as Google, Apple, Facebook and Amazon have
undertaken a series of investments worldwide in order to
build and generate their own clean power.
Google and Amazon making a stir in renewables
Google, the world’s “personal assistant”, has already
invested in more than twenty solar, wind and photovoltaic
plants in the US and overseas. These investments have
accounted for more than $2.5 billion, which makes Google
one of the largest corporate investors in renewable energy
in the world. More than sponsoring new plants directly,
Google also committed itself to purchasing clean energy
from energy farms nearby. So far, these purchases have
amounted to 2 gigawatts of renewable energy – once
again making Google the largest corporate “purchaser” of
renewable energy worldwide.
Amazon and the Amazon web services in particular, a
player that features one of the world’s largest datacenters,
is also committed to 100 percent renewable energy and
zero carbon footprints. On top of generating 84 percent
reduction in power consumption by switching individual
on-premise datacenters to
the cloud, Amazon’s power
mix currently sources 25%
of clean energy. These two
factors combined represent
an incredible 88% reduction in
carbon emissions compared
to a typical on-premise data
center.
However,
the
GAFAs
(Google, Facebook and
Amazone) are not the only
companies that follow the
“green line”. 400,000 US households are already relying
on solar power in 2014 and experts expect this number
to rise up to an incredible 3.8 million homes by 2020.
These statistics, together with the rising moral and social
awareness on climate change, show that the US is serious
about its large-scale renewable energy. The black coal
world, as we have known it for centuries, will soon have to
change colors. The economy will dress up in green from
now on.
Lenka Slezakova
Master in Management Sciences
Management
"These trends show that more and more
companies and households are going to
generate their own power. This represents a
radical change for the current energy model
in most of the world’s economies. ”
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The new energy revolution
W. Eden
Photo credit: noname; http://bit.ly/1q03Jz5
Inequality, Institutions and Globalisation 2.0
We are only at the beginning of this year, yet the signs of how 2016 will be remembered are
already surfacing: inequality, political unrest and market volatility.The fallout of the financial crisis
has developed into a unique concoction of political and economic uncertainties within western
economies. The US lacks an amicable Presidential candidate; Britons are in favour of a ‘Brexit’;
Germany has succumbed to deflation; and Europe’s free movement of labour is in jeopardy due to
“the gravest humanitarian crisis…since World War II”.
Inequalities and growth
As global pressures have mounted, society is splitting at the
seams, catalysed by the distribution of income going the wrong
way. Inequality is a large deterrent of growth, especially within
developed economies that are already producing close to capacity.
As Nobel Laureate Joseph Stiglitz puts it when considering the
US, “The lack of aggregate demand that has resulted from this
inequality is a key factor hindering return to growth.”
Thomas Piketty outlined the fundamental issues with capitalism
in his 2014 bestselling book ‘Capital in the 21st Century’, showing
how inequality can be expected from such a system that harbours
a faster rate of return on capital than the rate of economic growth.
Tony Atkinson’s 2015 book, ‘Inequality: What Can Be Done?’ follows
in the same vein as Piketty, documenting a number of policies that
could be implemented to correct such natural divergence. One of
Atkinson’s suggestions, the ‘National Living Wage’, is about to be
implemented in the UK, although the government has overlooked
the second part to his two-pronged approach: a varying executive
salary cap. What both of these economists are advocating is the
need for government intervention, to create convergence within a
capitalist society in order to achieve sustainable economic growth.
The role of governments
The current level of inequality has been voiced by a number of
prominent artists in the entertainment industry, particularly in the
US regarding civil rights and the ‘Black Lives Matter’ movement.
As compelling as it is to see celebrities in the public eye using
their influence for such a cause, what is alarming is the media’s
coverage of such events. Rather than continuing the discussion,
they prioritise the celebrity’s morality instead of focusing on the
call for institutional reform, a viewpoint that quickly transfers
to the consumer. If anything, this highlights another concern
within society and displays how institutions have played a part
in developing such a culture, but any further comment would be
reliant on conspiracy.
Institutions are the cornerstones of any society; even the most
indigenous ones have informal constraints such as tradition and
social norms. In the modern world, formal institutions that establish
and enforce law, property rights, taxation and market regulation
govern much of society, in turn influencing the informal constraints
that determine the decisions made by individuals. This cycle is, in
one way or another, how consumer behaviour can be predicted.
Daron Acemoglu and James Robinson are the pioneering
institutional economists, having spent over 15 years deconstructing
the role of institutions, culminating in the book ‘Why Nations Fail’
in which they built a conclusive picture that institutions are the
main factor in determining the prosperity of an economy. A prime
example is the differences between North and South Korea, two
almost identical economies when divided in the 1940s, but after
differing decisions on how they wanted to evolve their institutions,
South Korea now has living standards 10 times higher than its
counterpart. In short: where political rights are more broadly
distributed and the state incentivises citizens to invest and
innovate, by providing them with the education and infrastructure
to do so, the economy will have more capacity to grow. When
looking at countries around the world this thesis holds true. So,
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Photo credit: Sue Gardner; http://bit.ly/25iZyi4
Economist
Thomas Piketty,
at a conference
in Cambridge
why then, are western economies seeing low growth rates and
an increase in inequality, when their institutions are supposedly
more geared up for the job?
It is not said explicitly, but the conditions we are witnessing may
imply an equilibrium point between institutional quality and the
output of an economy. Since the 1980s, financial institutions have
made it possible for capitalists to outpace the rate of economic
growth, leading to a shift in this equilibrium. As a result, this step
back in inequality can be seen as a market correction; we are
currently at a level of equality that has overstepped the degree
to which the elite members of society are willing to share with
us, and they are powerful enough to resist change that will bring
in institutional reform to ignite sustained economic growth.
That being said, the institutional difficulties in doing so are
evident, especially for the developed nations of the EU, and the
US, when considering the current climate of western economies.
Nathan Gardels of the NPQ is concerned that a “failure to find
an institutional response to this double challenge will result in
a crisis of legitimacy for any governing system” – those being
inequality and marginalisation. The way states adapt their
institutions to meet these demands will depend on how they are
currently structured. According to Mr Gardels, China requires
more transparency, accountability and democratic feedback
mechanisms; US-like systems require consensus-building
institutions strong enough to offset their short-term political
culture; and Europe needs to further legitimise its democratic
structure.
Globalisation 2.0
Looking through the crystal ball
Although the short run prospects for internal social change
within western economies appear bleak (populists sieging
governments; segmentation spurred by political elite) there
are a number of externalities that can bring prosperity to these
states. Globalisation 2.0 is a concept focusing around the
interdependence of several identities and cultures characterised
by non-Western modern doctrines. This is a multilateral approach
in stark contrast to the previous phase of globalisation, one that
was defined by cultural imperialism in the image of the west
creating a market following democratic values.
In Globalisation 2.0, Asia (China in particular) will play a
prominent role. Currently in the midst of their largest ever shift
in the distribution of wealth, the institutional reforms various
states have achieved will empower their societies and boost
aggregate demand on a global scale. To meet this demand, a
greater understanding of cultural and political differences across
the world is required in order for individual nations to prosper,
and the nations that reform to embed this development into their
institutional structures will be the ones that reap the rewards.
There is much ambiguity on how the global economy will
develop in the next five years, Britain may have divorced the
EU and Donald Trump could be in his second term of office, if
2016 is anything to go by there is an abundance of uncertainty
ahead. Questions still remain unanswered as to when Western
economies will start boosting output without sacrificing
productivity and how greater equality be achieved. However,
what is evident is China’s impact on the global economy and
how its own institutional reforms will be felt around the world.
Western economies must also seek institutional development
to encourage the informal constraints at all levels of society
in order to form a breeding ground that can foster sustained
economic growth.
William Eden
Final year BA in Economics
Nottingham Business School, UK
"where political rights are more broadly
distributed and the state incentivises citizens
to invest and innovate, by providing them
with the education and infrastructure to do
so, the economy will have more capacity to
grow.”
26
Photo credit: Arash Razzagh Karim; http://bit.ly/21G4iJW
ENTREPRENEURSHIP
A. Mahfoudh
Entretien avec Bahram Vossoughi:
Le réveil de l’Iran
La récente levée des sanctions contre l’Iran a propulsé le pays au devant de la scène
médiatique et diplomatique. Beaucoup en parlent comme du nouvel eldorado pour les
entreprises étrangères. En particulier, les entreprises occidentales s’intéressent à ce
marché intérieur de 80 millions d’habitants. Reste que les différences culturelles, juridiques,
économiques et politiques constituent autant de barrières d’entrée non négligeables, au
même titre que les craintes - fondées ou non - d’une instabilité à plus long terme. C’est dans
ce contexte que Bahram Vossoughi, en bachelier à Solvay, a vu une opportunité de business
il y a maintenant deux ans, jonglant entre commerce international et syllabus d’économie.
►► Tu es l’exemple parfait de l’étudiant
entrepreneur. Comment ont démarré ses
deux parcours parallèles?
Je devais faire des études, de toute façon ! J’ai choisi Solvay,
pas pour le nom, mais pour le contenu du cursus: l’économie
et le monde de l’entreprise m’ont toujours fasciné. Pour ce qui
est de l’entrepreneuriat, c’est une histoire de famille comme
souvent. Mon père était entrepreneur et j’ai donc toujours baigné
dans cet environnement.
J’ai d’abord voulu lancé une application comme beaucoup. On
avait réussi à trouver des investisseurs qui nous fournissaient les
fonds nécessaires pour commencer, mais nous avons préféré
arrêter parce que nous avions peur de nous lancer sur cette voie.
►► Sur quoi portait cette application et
pourquoi avoir eu peur ?
C’était une plateforme de réseau sociaux. On n’avait pas
suffisamment confiance, car on voyait que c’était une vague et
on sentait que cette vague allait tôt ou tard disparaître, un peu à
l’image des Vines, qui ont eu leur heure de gloire mais semblent
passés de mode aujourd’hui. On ne sait pas si on a eu raison de
ne pas se lancer.
►► Vous regrettez après coup ?
On se dit que si on a pu faire un business plan assez bon que
pour convaincre des investisseurs, c’est que ça tenait la route.
Mais on s’est demandé si ces investisseurs s’y connaissaient
vraiment en réseaux sociaux. Bref, c’était il y a quatre ans, et je
suis passé à autre chose.
►► Et alors commencent en même temps
Solvay et cette nouvelle aventure
Oui. Pour situer le contexte, mon père avait déjà sa petite
entreprise familiale d’import-export avec l’Iran, mais pour de
petites quantités. C’était surtout spécialisé dans les pièces
détachées de camion entre l’Iran et l’Europe. Un jour, un client
demande une plus grande quantité, et mon père nous confie, à
mon frère et moi, la mission de gérer cette commande. On s’est
27
Picture: Bahram Vossoughi (left) and Behnam Vossoughi (right)
une part de plus en plus grande de notre temps, au
détriment des études.
On est actifs dans la pétrochimie, le secteur pétrolier,
et ces secteurs sont les plus difficiles à comprendre.
Notre chance a été d’avoir pu construire un réseau
solide avant la levée des sanctions, qui nous a fait
confiance pour trouver des clients dans différents
pays.
J’ai imaginé que j’aurais pu gèrer de temps en temps
les clients et que pendant mes blocus et sessions,
mon frère prendrait le relais. Mais quand on voit
l’évolution de l’Iran sur les dernières années, on a
assisté à une ouverture historique, avec l’explosion
de l’activité du commerce international.
chargé de trouver le vendeur et on a perçu une commission pour
ce travail. C’est comme ça qu’on a fait notre premier courtage
sans même savoir que ça s’appelait comme ça.
C’est là qu’on s’est rendu compte de l’opportunité que c’était, car
nous pouvions ouvrir de nouveaux marchés pour certains et faciliter
l’achat pour d’autres. On s’est dit alors qu’il sera simple de trouver
des acheteurs pour les exportateurs iraniens et inversement.
Après deux ans de travail, on a déchanté. C’est un travail très,
très difficile et qui prend beaucoup de temps: ça demande des
analyses des marchès etc. On agit en tant que service de vente/
achat externe pour nos clients. Il a fallu apprendre les procédures
de vente dans le commerce international, les différents modes
de paiement, les conflits liés en cas de différences dans les
modalités de paiement et de livraison, etc. Le premier contrat
nous a paru simple parce que ça s’est fait un peu par hasard,
mais il a quand même pris près de deux ans. Parfois, il faut faire
appel à un consultant pour obtenir l’information recherchée, car il
n’y a pas de cours pour apprendre cette pratique.
J’ai du m’adapter. Par exemple, en blocus je devais
expliquer à un client par téléphone ce qu’il devait faire et les
démarches que nous entreprenions dans son dossier, et dès
que je raccrochais je devais me replonger dans les exercices de
microéconomie ! Le problème est que même en essayant de se
concentrer sur ses cours, on a toujours les affaires en tête. Le plus
difficile est de distinguer le travail des études. J’ai encore du mal
mais je m’améliore.
►► Quelle est votre stratégie pour 2016 ?
Le trading fonctionne, la consultance aussi. On est actuellement
en train de mettre en place un service de promotion des projets
d’investissement en Iran. On a également des clients implantés
en France qui nous appellent pour entrer en Iran, Azerbaijan, au
Turkménistan, etc.
Pour résumer, notre but est de maintenir la partie trading et de
développer les deux autres. Si on y parvient, on va devoir nous
agrandir !
Petit à petit, on a acquis une certaine expertise. On finissait par
détecter les cas de fraude quand on nous soumettait une offre, et
où des problèmes apparaîtraient.
►► Ca doit commencer à faire beaucoup pour
deux personnes
►► Pourquoi l’Iran ?
Oui, ça devient beaucoup! On doit en effet penser à agrandir
l’équipe. Pour le moment, on collabore déjà avec des partenaires
pour la consultance, que ce soit au Canada ou en Inde. Quand on
est un peu dépassés, on sous-traite.
Il y avait une opportunité en particulier avec l’Iran, en raison
de toutes les procédures à maîtriser, des sanctions, etc. Les
importations étaient par exemple très difficiles pour les entreprises
iraniennes, car elles vivent depuis près de vingt ans sous des
sanctions économiques et aujourd’hui elles sont un peu perdues
avec les procédures. Elles ne savent pas vraiment comment
travailler avec des lettres de crédit, etc. Elles ont accès à des
informations sur internet, mais ce n’est pas assez clair. On a donc
vu l’opportunité d’ajouter à nos services une partie de consultance.
►► Et tout ceci pendant tes études.
Heureusement je ne suis pas seul ! Je m’occupe principalement
du front office, de parler avec les clients, etc. Mon frère gère plus
le back office mais je peux compter sur lui quand ça devient tendu
au niveau des études. Toutefois c’est très difficile de gèrer les
deux. On ne s’attendait pas à un tel succès pour nos affaires,
surtout dans les deux premières années. On a du y consacrer
28
L’expansion géographique, au-delà de la relation Europe-Iran,
suit aussi son cours. Il s’agit d’une question de rencontre plus que
d’une stratégie d’expansion ex ante ?
Oui, on s’étend dans d’autres pays en fonction des contrats et
des contacts qu’on se créent. Par exemple, on n’a pas cherché
à travailler en Afrique. Mais un de nos clients a des activités en
Afrique. C’est donc un contrat qui nous a amené à discuter avec
des gens au Mozambique, et maintenant on travaille sur des
échanges avec la RDC.
Les gens considèrent souvent les marchés dans leur intégralité
(ciment, pétrole, etc.). Nous on a voulu voir le marché dans
son intégralité et les échanges entre les zones dans le monde
auxquelles on a accès. On a considéré la dimension géographique
en plus de la dimension sectorielle.
ENTREPRENEURSHIP
►► Quelle est ton sentiment personnel par
rapport à l’ouverture récente de l’Iran?
L’Iran est un marché de 80 millions de personnes, donc très
important. C’est un pays très riche en ressources minières et
pétrolières. Il y a également les infrastructures au delà de
l’extraction, que ce soit pour la pétrochimie, le secteur pétrolier,
la sidérurgie, etc.
C’est encore plus intéressant parce qu’il y a eu une stagnation
pendant les sanctions, il y a donc beaucoup à rattraper et les
ambitions sont grandes. On veut récupérer le temps perdu et
même exporter certains produits. C’est pour ça qu’on parle
d’eldorado. Je ne suis pas sûr qu’on puisse encore développer
le secteur du ciment en Europe alors qu’en Iran c’est possible.
►► Tout ce développement demandera des
investissements énormes.
méticuleux et pragmatique avec chaque dossier. Si vous dites
que vous pouvez faire quelque chose, il faut être sûr de pouvoir
le faire. C’est pour ça qu’on nous fait confiance aujourd’hui. On
a aussi osé aller là où personne ne voulait aller, à cause de la
réputation de l’Iran en Europe.
►► Pour terminer, tu conseilles aux étudiants
de se lancer dès leurs études ou de d’abord
travailler quelques années?
Mon cas est un peu particulier. Si j’avais du attendre encore
trois ans pour lancer mon entreprise, je n’aurais pas pu créer
mon réseau de contacts et saisir les opportunités que j’ai eu ces
deux dernières années. Il fallait foncer au bon moment, et c’est
très important dans les affaires. Les études aident à développer
ses capacités d’analyse, alors que l’expérience entrepreneuriale
apporte plus l’instinct.
C’est la raison pour laquelle l’Iran se tourne vers les FDI. Les
investissements en interne sont nettement insuffisants pour les
besoins. Ils ont notamment d’immenses besoins en infrastructure.
Il y a des opportunités mais la concurrence est rude, car il y a
l’Inde, la Russie et la Chine qui n’ont pas lâché l’Iran pendant
les sanctions. C’est pour ça que c’est toujours difficile pour les
Européens et les Améraicains de revenir.
Alexandre Mahfoudh
Management
►► Comment gérez-vous la concurrence?
La réputation est cruciale dans cette activité. Il faut être très
R. de Heredia
Photo credit: Dennis Jarvis; http://bit.ly/1Q9uWEb
Beware the Forecasters!
How likely is it that, someday, we will look back and pity the economists from today? Are we
going to empathize with those social scientists who were trying to grasp their way into the
dark or are we more going to resent the evil that was done? As was the case with medicine in
the Middle Ages, it is about time that we face a tough question: is our presumed knowledge
bringing societies more harm than good?
29
Photo credit: Todd Mecklem; http://bit.ly/1ShCf4p
First, let us define the nature of our problem: the modern
economic machines are notoriously complex. Full of
uncertainties, feedback loops and dynamic changes that
renders futile most attempts to find any definitive or predictive
knowledge. In contrast with the realm of physics, economists
have to deal with decentralized, frequently “irrational” and
self-reinforcing phenomena. Precisely because of the lack
of fixed natural laws, our attempts to describe normatively in
models the way economic agents will behave is generally a
big leap of faith... Most of us acknowledge the limitations of
such modelling and understand that they can, at best, yield
us only some general intuition of where things should go,
but almost never precise, predictive results.
Despite the huge computing difficulties of our subject, it is
still extremely common to watch a very diverse crowd of
economists and pundits that pretend that they have what
it takes to tame uncertainty and tell us the truth about the
future. They frequently give us one, five or even ten year
forecasts on the price of oil, on the USD/EUR exchange
rate, GDP, inflation and even minute predictions of the price
of that trendy stock. Vanity of vanities, they often do not even
make explicit the probabilistic nature of their expectations,
but instead prefer to use apparently objective wordings such
as “fair price”, “our call” or “valuation”!
Alchemists of the Modern Times?
During the Middle Ages, it is now commonly accepted that
the discipline of Medicine lacked the basic knowledge and
scientific background to provide consistent results or even
not to cause harm. Superstition abounded and a dangerous
mix ofreligion, astrology and anecdotal believes only yielded
ambiguous results at best. It was usual to mention that many
illnesses were attributed to an excess of blood in the body,
and the very common treatment for most diseases was
blood letting (the cut of a major or minor artery depended
upon the amount of blood believed to be in excess). In such
cases, it is a certainty that those who were supposed to
intervene for cure ended up causing more harm than good.
Could it be possible that some fields of a so-called “science”
such as Modern Economics might be as imprecise and even
harmful as alchemists were in the Middle Ages? You do not
have to believe my word – actually, you should not, as it
would be purely anecdotal or inductive « knowledge », the
very basis of some of the problems we face, as economists.
For the answer we can look to more robust, methodological
results.
Philip Tetlock is an American-Canadian political scientist
with more than 200 peer-reviewed articles published on the
subject of forecasting in social sciences. In his earlier work,
Tetlock did small forecasting tournaments that involved more
than 200 experts (ranging from
chief-economists to government
officials and professors) in order
to assess the accuracy and
consistency of their guesses.
"In contrast with the realm of physics,
economists have to deal with decentralized,
frequently “irrational” and self-reinforcing
phenomena.”
30
After Tetlock eliminated some
ENTREPRENEURSHIP
Philip Tetlock
of the common imprecisions that make most “forecasts”
unaccountable such as not attributing a deadline to
predictions or being imprecise about the exact nature
of the expected outcome and which included more than
28.000 guesses in total, his conclusions were staggering.
According to the latter, it turned out that, such as the now
famous and somewhat unjust metaphor he once used, the
average expert is not significantly more accurate than a
dart-throwing chimpanzee. In other words, the average
expert does only slightly better than pure luck, which is
much worse than what a simple extrapolation algorithm
could accomplish.
These dim results were notably true for the most famous
and renowned forecasters. The more media coverage a
particular expert has, the more likely he or she is to be off
the mark. But why would that be so?
Foxes and Hedgehogs
In his 2015 book “Superforecasters”, Philip Tetlock draws
a much more optimistic, although cautious, outlook on
our predictive abilities and on our capacity to improve
good judgement and accuracy. Surprisingly to some, the
most famous experts fell on average prey to at least two
basic mistakes that “superforecasters” avoid altogether: 1.
They updated their predictions far too infrequently (maybe
because of a bigger confirmation bias and social cost of
admitting being somewhat “wrong” in the first place?) and
2. They tended to exhibit more of a “hedgehog” behaviour,
as opposed to those who act more like “foxes”, according
to Isaiah Berlin’s dichotomy in his classic essay “The
Hedgehog and The Fox”.
In this now classic essay, Berlin draws inspiration from a
quote by Greek poet Archilocus: “a fox knows many things,
a hedgehog knows one important thing”. In parallel, two
types of public intellectuals can be distinguished: the
hedgehogs such as Plato, Nietzsche or Hegel, who tend to
read the world through one defining idea or paradigm, and
the foxes such as Aristotle, Goethe or Shakespeare who
tend to see the world through a multifaceted lens, drawing
on varied and complex experience to try to make sense of
the world around them.
In what is of interest for us here, it is very plausible that
most famous experts refrain from changing their minds
and predictions not only because of the fact that they
have their “public image” at stake but also because they
might acquire fame and public exposure in the first place
precisely due to the extreme nature of their “analysis”. The
(financial) media is not so much a business of accurate
forecasting as a business of portraying opinions that seem
to eliminate the inextricable uncertainties of the world.
Think for a minute about your emotions when you hear
that “there is a 71% probability that Apple won’t be able
to repeat in 2016 its revenue growth of the last year”. How
to make sense of that 71%? How different would it be to
hear that there is only a 70% chance? Also, what does this
ultimately mean to the stock price, given that revenues
might fall but profits might rise due to cost decreases and
many other elements? There is indeed a lot of uncertainty
to bake into the cake even if this prediction is right.
Now, think for a second about a different statement, by
a different famous pundit, Mr. Confident, who states that
“Apple stock is going to fall significantly because they
simply can’t repeat these growth numbers forever”. Wow.
Apparently it is a very powerful and precise statement. But,
really, what does even the word “significantly” means? A
10% fall is significant, but he might mean 20 to 40%. And
when speaking about growth, does he mean revenue,
profits or even volume growth? Finally, he clearly said
that the company cannot grow these numbers forever, but
eternity can be a pretty long time. What is the intended
deadline of this forecast? Maybe none.
In the media, all this imprecision and hedgehog behaviour
work pretty much in favour of Mr. Confident’s fame. It is
also an almost sure recipe for forecast inaccuracy and
inconsistency. It makes of Mr. Confident a “king without
clothes”, but who cares? Most people do not even
remember the forecasts after they are made. Besides,
the media outlets never ask for these pundits’ records of
accomplishment.
Towards consistent improvement
If the domain of economics is to escape the fate of doing
more harm than good, it is clear that we need to better
understand our forecasting abilities and limitations. If
we are honest in analysing data, we would be surprised
that economists still have difficulties even to “predict” the
present. So, what to say about the future?
Even the world’s policymakers such as central bankers
do have a hard time issuing an opinion about the state of
an economy, despite their access to extensive privileged
information. There is an emerging field in econometrics
called “nowcasting”, developed, among others, by Mr
Domenico Gianonne, former Professor at the SBS-EM,
which dedicates intricate statistical methods exclusively to
make sense of the present state of the economy. Such is
the complexity of economics in the real world. Very different
indeed from a weather forecast, for which one can simply
look outside of the window in
order to check its accuracy.
"The average expert does only slightly better
than pure luck, which is much worse than
what a simple extrapolation algorithm could
accomplish.”
Sources
L’Arménie, sur le chemin du renouveau
31
"The (financial) media is not so much a
business of accurate forecasting as a business
of portraying opinions that seem to eliminate
the inextricable uncertainties of the world.”
Now that we can grasp the true challenges of forecasting
and even, more modestly, of “predicting the present”, we
might be wondering how to avoid the despiteful fate of being
a knowledgeable economist that knows a lot about many
things, but is only good at predicting the past (or falling to
the “narrative fallacy”, as Nassim Taleb would put it). After
all, if we are not economic historians, we need to be able to
say something about the future.
Some of the training routines for good judgement and
forecasting are almost obvious (although frequently ignored)
and even already known to those familiar with Bayesian
Methods. I will mention some conclusions (and leave some
to be discovered by the curious reader) that emerge from
Tetlock’s work and tournaments (all of them can be found in
his 2015 book called “Superforecasting”):
1. Triage: focus on questions in which hard work can pay
off.
2. Break seemingly intractable problems into tractable,
smaller, sub-problems;
3. Understand and accept uncertainty: no complex, multiactor phenomenon has 100% chance of turning out this or
that way. If you believe so, try to get the “outside view” and
find ways in which things could unfold differently.
4. Always try to falsify your beliefs: since Karl Popper, it
is standard good scientific attitude to understand what kind
of evidence would disprove your main working hypothesis.
5. Be humble where evidence does not allow for even
a small confidence level: such is the case with long term
(i.e., more than 3 years down the road) forecasting. Knowing
that you don’t know is better than operating on false beliefs.
32
6. Update frequently: good, old
Bayesian updating of your beliefs
and attributed probabilities is to
good forecasting as brushing
your teeth is to proper hygiene.
There is nothing shameful in
changing beliefs and positions. As John Maynard Keynes
supposedly said once “When facts change, I change my
mind. What do you do, sir?”.
7. Finally, keep record of your forecasts: our memories
are terrible in… memorizing our old beliefs and positions.
Keeping track and understanding the reasoning behind our
mistakes or accurate guesses is of paramount importance
and the surest path towards improvement.
Putting all these habits into place might be hard and even
unnatural to most of us, but apparently it is the only way to
avoid the so very common pitfalls of our need to forecast
and make sense of an uncertain world. On top of that, it
could be good to add a drop of humility to our forecasts and
university degrees, as advocated by the public intellectual
and theologian Reinhold Niebuhr in some of his lines:
“I ask for the courage to change the things
that can be changed
Serenity to accept what can’t be changed
And wisdom to know the difference”.
Rafael de Heredia
Master in Business Economics
Management
SOLVAY BUSINESS GAME
A. Bekteshi & Avnije
The Solvay Business Game edition 2016
Founded in 2008, the Solvay Business Game (SBG) is
today one of the biggest business students competition in
Europe.
Each year, more than one thousand students from all over
the continent (and sometimes, the world) apply for this
event in order to be part of this wonderful experience. Not
only is the SBG an opportunity to discover great companies
and employers, it also allows students to meet peers with
different backgrounds and from different universities.
The main partner of the SBG is McKinsey & Company, a
leading management consulting firm that helps corporations
and organizations to improve their businesses. On top
of BDO and Unilever, which are partners of the SBG for
the third year in a row now, the 9th edition of the Solvay
Business Game has the chance to welcome two new
partners: Lidl and the Bank Degroof Petercam.
2016 also was a record year in terms of registrations. Due
to its increasing popularity, the SBG attracted not less than
1312 registrations.
Due to the success of this event, all participants who
wanted to attend this game had to take on an online test per
groups of 2 and then. As a result, from the 1312 students
initially registrated, 400 of them got invited to participate
in the SBG that took place at the Brussels Sheraton Hotel
during two days.
The Solvay Business Game 2016 started on the 4th of
March with an opening speech by the Dean of the Solvay
Business School of Economics and Management (SBSEM), Mr. Bruno Van Pottelsberghe, and McKinsey &
Company.
This year 6 challenges were presented. Each challenge
has its own winner and the last challenge is made of the 2
teams that had the highest score, all challenges included.
The first one was the Lidl Online Challenge, which was
axed around strategic decision skills. This challenge took
place 2 weeks before the event. Participants had to solve
the problem in pairs with the aim of helping Lidl to improve
their e-commerce and online retailing.
The Marketing challenge, organized by Unilever, asked
from students to set up a complete marketing campaign
for compressed deodorants. The goal of this challenge
was to make these deodorants more appealing than its
competitors. Indeed, even if these new deodorants are
smaller, they still last as long as the “normal” ones, with
only less packaging, which means they are also more
environmental friendly. The winners of this challenge were
awarded for the new idea they brought with presenting a
cubic design of deodorant that they named with the slogan
« From tube to cube ».
The Strategy challenge, hosted by Degroof Petercam,
tested strategic decision-making skills based on real facts
and figures. The topic was the importance of digitalization
in wealth management and the possible impact on private
banks. Students had to present solutions, ideas and
creativity according to this subject.
The Negotiation challenge, organized by BDO, asked from
students to get the best deal possible in a “fight” between
two parties over a piece of land. In this situation, one party
had to sell the property, whereas the other party wanted
to buy it. The goal was to correctly evaluate the property
and determine the most interesting price. Students also
had to negotiate in order to find a common ground with a
right price. The challenge proved to be more difficult than
many expected because both parties had different private
information, on top of different valuation methods.
33
During the penultimate challenge, the
Pitch Challenge, students had to present
to a panel of judges the solutions they
found for some questions they received
the day before.
Finally, the Eloquence Challenge, hosted
by McKinsey & Company itself, required
from the two best scoring teams to go on
stage for the big final in order to debate
on a business subject.
Exclusively for you, dear Readers
of the Solvay Student Review,
we had the chance to meet and
interview one of the winners of this
edition of the SBG, Mr. Sebastian
Metselaar:
Sébastian Metselaar
Business Engineering,
Ghent University.
►► Hi Sebastian. First of all, congratulations for winning
the SBG and thank you for taking your time to answer
to our questions. Can you briefly introduce yourself
to us and to our readers?
« I’m Sebastian, currently 20 years old and studying business engineering
at Ghent University. I’m a basketball fanatic, love tennis and enjoy reading
- a bit of my « nerdy » side, I guess »
►► Nice to meet you Sebastian! Could you please tell us
more about your experience and your feelings while
attending this huge business game?
« The SBG experience is one of a kind. It’s incredible how much you
learn in those two intense days. The SBG tests and challenges you in
34
every possible way - to work effectively in teams, to
perform under pressure and to pitch your ideas in a
concise manner. I’d recommend anybody to participate
at least once. The skills you learn are invaluable, and
are never taught in classes. The experience truly
pushes you higher and will help your future career. After
all 5 challenges, we (William Florin & I) were blessed
and honored to win the 2016 SBG and to take home the
Eloquence trophy, hosted by McKinsey »
►► Thank you for these precious
information. But let us ask you which
challenge did you fear the most or which
one was the most challenging?
« The most challenging case was the negotiation
challenge, organized by BDO. Not only did you
need to use your analytical and technical skills to
assess the problem, but you also needed to use your
communication and interpersonal skills in order to
cooperate with the other team, and make the best deal
possible. In the last 10 min we ended up making a deal
- you could definitely say it was stressful! »
SOLVAY BUSINESS GAME
As rightly pointed out By Sebastian Metselaar, the SBG is
certainly a hard working place but it also has a huge fun, a lot
of different partners, activities and new meetings that one can
make during the breaks or the challenges themselves.
The event ended with the awards, walking dinner and
champagne bar which were more than deserved after 2
intensive days of hard work.
Such as in every year, the event was very successful, also
thanks to the great team that prepared the event during the
whole year. A first panel of students has to take care of all
the administrative and organization tasks involved by this
event whereas a second team has to promote the event itself
in different universities across Europe. As members of this
second team, we have to confess that it was a pleasure for us
to promote this game across different universities and meet
people who either have already heard about this fantastic
game or are discovering the game through us. To conclude,
we wanted to thank the whole team and especially the 60
volunteers who worked with us during those 2 days intensively
in order to make this event unforgettable and so it was! As
Sebastian said « I strongly recommend you to be part of the
Solvay Business Game experience ».
See you there maybe next year!
Albana Bekteshi
Bachelor in Economics
Management
Avnije
Bachelor in Economics
Management
If you want to participate in the biggest Business competition for students in Europe
or be part of the organizational team, do not hesitate to register for the 2017 edition!
35

The unexpected negative spillovers of the oil glut

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