“The West” Must Become Poorer – by Fransje Puts

When I read a quote of our minister of Finance, Jeroen Dijsselbloem, in the newspaper a couple of months ago, I was convinced something had to change in our spoilt little part of the world. He phrased that migration will endanger ‘our’ welfare. If he were a member of a certain right wing party, this statement wouldn’t surprise me that much. But he is representing PvdA, a Dutch left wing party, who should support more equality in the world.

Endanger our welfare? But aren’t we already too wealthy? With ‘we’ I mean most of the Western countries. Especially when you compare our welfare to the rest of the world. Most of the people agree how terrible the conditions of life in the warring countries are. But way less people are willing to give up part of their nice luxurious life, to help those who are living in danger. Instead, they share the thoughts of Mr. Dijselbloem.

So I think we should bring back the 60’s/70’s ideas in the upcoming year by diminishing our selfishness, and think about how we can share our welfare with the less fortunate in the world. In 2016 we should design a new worldwide income programme that will decrease the enormous current income differences, starting by giving the refugees a fair chance on the Western job market. For sure, it is not an easy task, but because of the ever-increasing globalised world, it should be possible. There is a great chance this more equal division of income will come at the expense of the Western welfare, but I think the new year is a great opportunity to put aside our self interests, and care about our fellow human beings. I would say: let the West become poorer!

 

New Year’s Resolution: Finance – by Michel Mijlof

2015 is almost over and it was a very hard and dynamic year for the finance world. The stock exchanges went up from the beginning of the year till August when the Chinese crisis came in and faded away almost all the profits that were made. An important question now is, how to invest your money safely in 2016?

There are a couple ways to invest your money.
One of the most traditional ways of investing is just saving money on a bank account. Unfortunately, the interest rates the banks are offering are historically low, around 1% or even lower. Obviously, saving money through a bank account is very safe but your return is very low and in some cases you are even losing money. For example, in the Netherlands, if you are saving a lot of money, you have to pay a capital gains tax of 1,2% which is more than the interest rate.

Another way to invest your money is trading in stocks, bonds and other derivatives. A downside of this way is the knowledge you need to have to invest appropriate so you not lose all your money. Fortunately, there are some companies called asset management companies who can invest for you. They have all the knowledge and expertise to make good investment decisions according to your wishes. Notice that these companies are different from mutual funds or hedge funds where you buy a part of the fund and you cannot reach your money for some time.

I think the best way to invest your money in 2016 is through an asset management company, they often give you a return of 5% or even higher. You will always make profit with this return, even when you have to pay capital gains tax in the Netherlands.

I wish you all the best for 2016 and a happy new year!

 

Decriminalise Drugs – by Antoine Steen

When we were tasked with coming up with New Year’s ‘resolutions’ – our advice for governments around the world – I recalled an article I wrote about an attempt by United Nations officials to urge member states to decriminalise the possession and use of all drugs. That attempt was foiled, reportedly after pressure from the United States, but the fact that the attempt was made suggests there might be some merit in the idea.

The criminalisation of drug use seems a sensible policy on the surface inasmuch as it deters people from using drugs. But criminalisation also drives harms associated with drug use; it creates a black market, which fuels organised crime and associated violence and it encourages stigma against drug users, whereby drug use is seen as a kind of moral failure, which drives users to the edge of society and impacts their health and welfare.

In 2001 Portugal decriminalised drugs, introducing a policy whereby anyone found in the possession of less than a 10-day supply of drugs is sent to a three-person commission, typically made up of a doctor, a lawyer and a social worker. The commission either recommends treatment, a minor fine, or, in the majority of cases, no penalty. Commentators predicted that in the absence of punishment drug use would skyrocket, however, adult drug use today is lower than it was in 2001. Furthermore, drug-induced deaths tumbled in the years after 2001, and newly diagnosed cases of HIV among people who use drugs have fallen every year since 2001.

At the very least, as Portugal’s experiment shows, decriminalisation would not be a disaster as some might predict. And it would also free up resources for more effective policies; according to Jeffrey Miron of Harvard University, decriminalisation could save governments as much as $41.3bn a year – as compelling an argument as any in this age of austerity.

 

We Have to Undertake Actions! – by Magdalena Wiśniewska

The refugee crisis has not arisen in the world lately. It has however reached Europe lately and therefore, as we have a habit to do in the Western culture, has reached our consciousness relatively not long time ago. It has grown to constitute one of the biggest issues of the passing year, dominated news media and initiated global dispute. Despite all the discussion and attempts made, by no means has it been solved by now.

The problem-solving should take into account long-term outcomes predicted. It should not be guided by political interest of governing party and it should be based on the humanitarian values. Prejudices ought to be fought and xenophobia should be treated as an obstacle for reasonable decisions.

We should remember that prevention is better than cure. Ignoring the problem and walling ourselves off, both literally and metaphorically, will not make the problem disappear. ‘Across the ocean’ is not so far away anymore nowadays. In this difficult circumstances, as the European Union, we should not abandon the motto that is supposed to guide us: ‘united in diversity’.

 

Resolution: Allowing for Equal Access to Medication – by Olga Kowalska

The undeniably high impact of medicine on people’s lives makes it one of the most important production sectors of the global economy. Not surprisingly, the pharmaceutical sector is the most profitable one, with global revenues of $1057.2bn (2014), and average net margins of 21%.

Even though between-countries trade in medical products is growing rapidly, majority of the trade takes place between wealthy countries, with developing countries accounting only for 17% of imports and 6% of exports. At the same time, the demand for medication in developing countries is even higher, due to the poor living conditions and hygiene, lack of prevention programs, basic vaccination, health education etc. One-third of the developing world’s population cannot afford to purchase essential medicines on a regular basis, because of too high prices. The cost of drug production is marginal but R&D of a new medicine is extremely expensive. Moreover, patent protection can be held for only 20 years after its invention, while it may take up to 10 years to receive a permission to sell it on the market. Therefore, companies ensure incomes with high mark-ups.

There should be change in the cooperation between subsidising governments, health insurance companies and pharmaceutical companies. Thomas Pogge introduced the idea of Health Impact Fund, which aims at rewarding only these medicines which have real and measurable impact on health improvement. The HIF would offer pharmaceutical innovators the option to register a drug or and the innovator would have to agree to make it available worldwide, during its first 10 years on the market, at no more than the lowest feasible cost of manufacture and distribution. In return, the registrant would receive, during that 10-year period, annual reward payments based on the product’s health impact. The reward payments would be part of large annual pools, of which each registered product would receive a share equal to its share of the assessed health impact of all HIF-registered products in the relevant year.  Both rich and developing countries would agree by treaty to contribute to these pools in proportion to their gross national incomes. Such a solution would both stimulate R&D and assure decrease in global burden of disease.

 

The World Economy in 2016 – by Daniel Koudijs

When a year ends, people look back, conclude and cast their gaze to the future. So do economist, but this year the verdict is remarkably divided.

Forecasts for 2016 range from “dawn of a new global recession” to “best year since the financial crisis”. Reason for these conflicting perspectives is that 2015 has been hard to pin down as either a bad or good year. There was good news: the US economy boomed, the EU showed further recovery and overall markets rallied. But there was bad news as well: the Chinese economy cooled down, many emerging economies entered recessions and trade slumped. In the end, 2015 was sunshine mixed with rain and left the world with a bittersweet aftertaste. It is this uncertainty that further complicates predictions for 2016. What is certain is that whatever will happen will largely depend on two major issues. Firstly, there is the slowdown of Chinese growth, a matter on which Rostra has reported before. Whether this growth in the next year will rapidly collapse or gradually deflate (a soft or a hard landing) will be vital to global demand and have repercussions across many countries. A second issue is Ms. Yellen’s future plan for the Federal Funds rate. The size and pace of further interest rate increases have in the past proved to be crucial. Central Banks have repeatedly failed with the timing of their actions following an initial increase and many fear the FED will go down the same road. 2016 from an economic perspective will be the swing year that will show if we are in need of sunscreen or an umbrella. Are we entering better times or must we prepare for a next recession? To be continued.

 

Don’t Make It Rain – by Raffaele Di Carlo

Sweden has kept people talking recently, this time about something that really happened, or rather is happening gradually, unlike the fabled reform for the six-hours work day: the Swedish society is slowly transitioning towards a cash-free system. As a matter of fact, currency now amounts for a mere 2.2% of the Swedish economy, while the general public privileges more aethereal means of payment, such as cards and banking apps. The Sveriges Riksbank, the national bank of Sweden, estimates that less than 20% of total transactions in the country took place by cash in 2015, mostly by elder citizens or refugees that depend on currency: a pretty impressive achievement, considering that the average in most of the Western world is still around 75%.

My wish for the coming year is that more and more countries follow Sweden’s example and start building a cash free-economy.

It is not the first time that the benefits of such a society are discussed, and as a matter of fact there were many in Sweden, where average sales increased by around 59% and the crime rate dropped to its 30-year low. The reasons for these improvements vary: in the first place, cards and mobile apps are far more convenient and safe than cash to carry around, and removing the inhibition represented by physical currency encourages spending and eliminates the risk of robberies; in the second place, taking currency out of circulation prevents illegal or under-the-counter transactions, which need cash to be untraceable, to the damage of the black market and organized crime, not to mention how much revenue for the government could be retrieved by countering tax evasion.

There have been fears of increasing bank account hacks and financial frauds, as well as the end of private transactions, but my belief is that anybody would gain from a cash-free society – apart from who has something to hide.

 

Climate Change – Where Do We Go Wrong? – by Ioana Nicolau

More and more people in the Netherlands – as well people from different parts of the world – often express their worries about the unusual temperatures that this year has brought. Before stepping into the New Year, we should reconsider the negative impacts that pollution might have yielded to climate and brainstorm about different ways through which we can protect the environment.

This year COP21 conference in Paris proposed some large scale ambitious targets in order to tackle down pollution issues. However, even if industrial pollution typically accounts for more than a half of the overall level of damage, we should maybe stop thinking big and also pay attention to a piece of the other part, which is brought by us, normal people. Scientists believe that the Green House effect is indeed intensified by humans. Begin by opting for biking or public transport, buying goods with recyclable packages, sorting the trash and trying to plant trees. You can find a more useful and complete list here. You will maybe consider incorporating it into your personal 2016 resolutions.

On the other side, it is very interesting to establish the extent to which we should recycle. It is often that too much of a good can create a bad and being environmental friendly does not seem to be an exception from that. Over the last decades, the price of recyclables went up creating an industry with costs that need to be borne by governments. However, a part of the benefits brought by recycling are lost in the process. And is it really wise to consume fuel in order to bring recyclables to specialized facilities where even more energy will be burnt for them? Some academics argue that if, hypothetically, we would recycle 80% of the goods that we are done with using, we would be better off by not recycling.

In the end, being eco-friendly should represent a controlled trend for the upcoming year. Scientists should further look into the optimal level of recycling and governments should start to take action with respect to it.

 

Rostra Astronomica – by Michael van Rhee

Economists like to think of the so-called ‘long run’ as a period of time that lasts no longer than a decade; some would be willing to consider a couple of decades, but surely no more than that. My advice for the world is to break out of that habit.

Have you ever dared to think about the future of our planet beyond this scope? A thousand years? What about a million? Believe it or not, but this is all rather ‘short run’ if you’d ask an astronomer. And despite the fact that we’re not called Rostra Astronomica (although, you have to admit: it does sound cool!), there’s lessons to be learned by giving economics the same treatment. Personally, at least, I think about this stuff all the time. How are we going to keep this planet habitable when the world population just keeps growing and growing? What about machines taking over our jobs? I don’t have the answers to these questions, but if we want to begin to formulate them at all, the first step would be to drop this silly idea of ‘the long run’, or to at least reconsider it dramatically. Unfortunately, we’re all terribly bad at this, because most of us struggle to stick to our planning for the rest of the week, if we even had one to begin with — let alone plan ahead to save the planet.

Actually, let’s face it: humanity will probably have long destroyed itself by then. As the great John Maynard Keynes once so famously spoke: “In the long run, we’re all dead.” And all the better for it. Happy New Year.

 

Liberty vs Security – by Artur Rymer

I always thought that the question of whether we should choose security over liberty was one that belonged to the past and today became more of a rhetorical figure. Year 2015 has shown to me how wrong I was. Although each year tragic and horrible things happen, this year seemed to be especially full of events that not only saddened but in fact terrified many. Refugee crisis, ongoing situation in Ukraine, Daesh (ISIS), Greek crisis, Paris attacks, Boko Haram, human rights violations all over the globe, to name only a few (only a fraction in fact). Crisis after crisis after crisis… With this amount of threats from all sides, it’s easy to let panic win and a feeling that our own safety is more important than anything else (even our freedom) prevail. This kind of thinking, however, is very short-sighted as in the end there can be no true security without liberty. Freedom that people enjoy in Europe and in many (not as many as one would wish) countries around the world should not be taken for granted. It is the result of hard work of millions of people who sacrificed and sacrifice a lot, even their lives, so that we can be free. So when I hear that governments should have more power to, invigilate, follow and detain their own citizens, that they should assume that people of certain religion, political view or skin colour are terrorists and treat them as such, I start to boil over with anger. I start to boil over with anger because we, as humans, have come such a long way and it seems that we haven’t learned anything, that instead of taking one step ahead we take a thousand steps backwards. Benjamin Franklin once said: “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety”. Therefore, I wish all of you in the upcoming year 2016 that you do not let fear govern your life and actions and that instead of choosing Safety over Liberty and ending up with neither, you choose Liberty first and then work hard to ensure that Safety follows.

 

Have an Intelligent year! – by Vlad Cristian Marin

Completely autonomous Artificial Intelligence is still far away from our present, but the recent years have seen incredible developments. And the future is made of sweet promises – Apple’s Siri, Microsoft’s Cortana, IPSoft’s Amelia (which has recently upgraded to its 2.0 version), Google’s deep learning program, innovations in quantum and cognitive computing, all have been and will be greatly influencing our day by day lives. “Give fish to a man and feed him for a day. Teach him how to fish and feed him for life” – this old adage could never be more actual, because, in fact, that is how artificial intelligence is growing. In that sense, we need to teach them, the AI machines, the best and in the best fashion: to act for the greater good.

In 2015, more and more machines have reached milestones closer to passing the Turing test and these amazing steps are just the beginning. A Turing test, firstly developed in 1950 by the British scientist Alan Turing, is a test of a machine’s ability to exhibit intelligent behavior equivalent to, or indistinguishable from, that of a human. It is in this light that, for 2016, my wishes for humanity comprise, beside a lot of prosperity, health and growth, new breakthroughs in terms of AI. The possibilities are endless, but so are the threats. This is the reason why, I hope that 2016 will bring people closer to using artificial intelligence for medical applications, for bettering our security, for making the right decisions, for better communication, for safer transportation and in general for making everyone’s lives better. I really believe in the power of AI and I hope 2016 will mark yet another successful year towards integrating the power of (safe) computing within our faster and faster everyday routines. Happy New Year!