Economics – Evrim Öztamur
For the first time in history, Germany’s biggest trading partner is China. With the increase in Chinese exports and an imports to 180 billion USD last year, China took the place of the US, which fell back behind France in the third place.
The German government is likely to appreciate this change, as it made clear that global free trade must be safeguarded. After the President of the US threatened to impose import tariffs, and his top trade advisor accused Germany of exploiting a weak euro to boost exports, it is unlikely that the US will take back the No. 1 position in Germany’s trade top-list.
German Vice Chancellor Sigmar Gabriel has also noted that the European Union should focus its economic back to Asia, in the case that the US takes protectionist approach in its international policy.
Also this month, UK has been shown to have a higher GDP growth than previously expected; by 0.7%, up from 0.6%. According to the latest official estimate, the growth in the final three months of 2016 was higher than previously recorded. However, the Office for National Statistics cut down their expectations of 2016 as a whole from 2% to 1.8%. This revision puts UK right below Germany, who were predicting their growth at 1.9%.
Although there has been a slowdown in business investment, the dominant services sector kept growing steadily. It is expected that the momentum gained at the end of 2016 will slow down, and be lost as we head towards the second quarter. Also worryingly, real household expenditure has increased by 0.7%, in comparison to a 0.1% increase in wages, which is clearly not sustainable.
Mongolia’s IMF bailout – Hải Đăng Vũ
The national government has recently agreed to initiate a US$5.5 billion rescue program from IMF institutions to alleviate its enduring debt problems over the last couple of years. Aside from the assistance from the IMF, the promised expansion of credits for Mongolia also include other offers from public financial organizations from within Asia, including support from major economies such as China, Japan and South Korea.
Mongolia, having been once considered one of the fastest-growing economies of the world, has been faced with immense pressure of debt obligations of overseas investors. The contraction of domestic economy, most notably during the last three years, is a direct consequence of depressing performance of the mining industry, which is directly affected by abysmal commodity prices. Other industries of Mongolia are largely undeveloped.
Although there is no information available on the allocation of these rescue packages, IMF had already initiated its campaign by the immediate provision of US$440 million last week. Further supply of money will be carried out, on the condition that Mongolia is required to adhere to stringent demands from the IMF. The economy is expected to receive more foreign investments whilst quickly escape from recession.
As of the end of 2016, domestic GDP growth modestly reached 0.1%, with excessive inflation (6%) and high unemployment (8.6%).
Kraft Heinz drops Unilever takeover bid – Tsz-Tian Lu
Kraft Heinz withdrew its offer to take over Unilever on the 19th of February, less than three days after it publicly confirmed its interest. It would have been the largest food conglomerate merger in the history, with combined sales revenue just behind Nestlé. The offer, in which Kraft Heinz wanted to acquire Unilever for $143bn, had been publicised in an extremely early stage and therefore left relatively little room for deals negotiation between the two firms. Unilever rebuffed the offer with hostility, stating that “Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever’s shareholders. Unilever does not see the basis for any further discussions.”.
There are several key factors that blocked the deal. Besides the fact that Unilever considered the offer fundamentally undervalued its business, political influences play an important role here as well. One of Kraft Heinz’s main shareholders, 3G capitals, is known to be strategically aggressive and has conducted hostile takeovers several times, including the takeover of Cadbury back in 2010 where Kraft reneged the commitment to retain factories and jobs in Britain. And because Unilever is an Anglo-Dutch company, the U.K. government was sceptical about the deal, since it worried that the deal would eliminate job opportunity in the U.K., which is a huge concern for the British government – especially after the Brexit – and that it was contradicting to the British industrial policy.
Business Recap – Nando Slijkerman
The potential $143 billion takeover of Unilever by Kraft Heinz was the talk of the town last week. Well-placed sources said Kraft Heinz’s key investors – investment guru Warren Buffett and private equity tycoon Jorge Lemann – were forced into a chastening retreat after Unilever made clear the company stood no chance of sealing the second-largest corporate deal in history. Unilever’s stock price was booming, but later returned to its old price when Unilever foiled Kraft Heinz’s takeover bid.
AEX exceeded finally the 500 index points, but after a few hours, it dropped below the 500 again. Due to upcoming elections in France and the Netherlands, the market will be a little more volatile these months. Not very profitable for the long-term investor, but the more for our High-Frequency Trading (HFT) friends. Monitor your market and let’s get it in!
Let’s have a look at the numbers. AEX rose with 2,23% this month. S&P rose 3,41% and the Dow Jones increased by an impressive 4,26%. Our German neighbors (DAX) finished last by increasing 1,61%.
Let’s monitor the developments with respect to the elections closely, and see you on the markets next month!
UvA Inside – Leonie Ernst
Although the second month of the year has been very successful for the university as a whole, the most important happening according to the students must have been the IT disturbance that hit both Blackboard and the website of the UvA itself. The disturbance was caused by a malfunction of the hardware, and had already occurred before. Due to maintenance, the websites were still inaccessible for another full day (February 23th), but by now the IT-problems should have been solved.
As to the success of the university: the UvA was ranked the most international university of the Netherlands and Amsterdam was ranked the best student city in the country as well. The UvA has internationalisation as one of their strategic priorities since 2011, and the ranking shows that this strategy is definitely paying off. In the ranking of best student cities, Amsterdam is placed 36th out of 100. The top 3 consist of Montréal, Paris and London.
Furthermore, four researchers from the UvA were awarded the prestigious Vici grant worth 1.5 million euros for their extraordinarily researches.
On February 17th the rectors of the Dutch universities published a joint letter in the Dutch paper NRC Handelsblad. In their letter they stress their concerns regarding the recent developments in the United States and other parts of the world where the freedom of academia seems to be in danger. They call on EU governments to oppose attacks on academic freedom, because academic freedom is of great importance to us all.
High potential programs – Daphne Sweers
As students, we can count ourselves to the top layer that are fortunate enough to receive an education at university level. A high degree is likely to be paired with a dose of ambition and aspiration. Didn’t we all once wonder how it would be to be the CEO of the Apple of 2040? Not only students are eager to strive for the stars, companies are also keen to discover the most suitable employees among them, initiating several measures for that purpose. But how effective are those measures? An article by Zenger and Folkman provides an interesting read on the matter, stating that ‘companies are bad at identifying high-potential employees’. According to their research, approximately 40% of people in high potential programs (HIPO programs), should not have been placed in such a program. Specifically, there were four traits that have determined their spot in the HIPO programs: technical and professional expertise, taking initiative and delivering results, consistent commitment and a fit with the organizational culture. Moreover, the underperforming individuals fall short in two essential skills: strategic vision and the ability to motivate others. Such misplacement is disadvantageous for both parties involved, not only because organizations might end up with individuals in leadership positions where they will not thrive. The article serves as a good reminder that the goal and the path to it should serve the same purpose. Something to keep in the back of your mind when you enter your career path full of aspiration. The full article can be read here.
Politics – Ioana Nicolau
Last week, a number of EU states, including Germany, Italy, and France, have expressed their support for the European Commission’s plan to make the UK pay a substantial compensation bill before the Brexit talks will even start. Meanwhile, attempts to force the government to give all EU citizens in the UK permanent residency after Britain leaves the bloc have been defeated.
Suicide attacks on two security bases in Syria from last Saturday killed over 32 people, including a senior intelligence officer, and threatened to overshadow peace talks in Geneva. Jonathan Paris, a Middle East analyst, explained that the Geneva talks encountered huge challenges even prior to the attacks, since they aim to decide on Syria’s political future following the war.
Iran launched naval drills at the mouth of the Gulf and the Indian Ocean, as tensions with the US escalated after US President Donald Trump put Teheran “on notice” for firing a ballistic missile test. He stated that Iran was playing with fire and that all US options were on the table.
China announced that it will suspend all imports of coal from North Korea in an effort to enact UN Security Council sanctions aimed at blocking the country’s nuclear weapons and ballistic-missile program.
Dutch Politics Recap – Michael van Rhee
Tension is rising as we get ever closer to the big day of the general election on March 15, with a few minor debates already taking place here and there, but without any serious fireworks so far. At the same time, other debates were almost called off, and generally speaking it seems that taking part in broadcast debates isn’t self-evident anymore. Geert Wilders shows that you can do just as well by being active on social media, bypassing journalists altogether — a trend that continues to be seen virtually everywhere.
In spite of his absence, Wilders continues to dominate the news headlines, this time because of one of his bodyguards allegedly leaking sensitive information to third parties, thus possibly compromising Wilders’ safety. Wilders had only just started campaigning when the news came in, and he hasn’t been seen ever since. The only question is whether it’ll affect him at all. Meanwhile, most political parties have hit the road in order to start winning over floating voters.
For those of you who speak Dutch: you can follow all the latest news surrounding the election in daily campaign blogs hosted by the NOS. As for us, we’ll get back to you soon with more articles!
The Death of Kim Jong Un’s Brother – Raffaele Di Carlo
On February 13th 2017, Kim Jong-nam, half-brother of North Korean dictator Kim Jong-un, was assassinated at Kuala Lumpur International Airport, Malaysia. The airport’s security footage shows Mr. Jong-nam being approached by two women at the baggage collection belt. After this brief encounter, the man approaches security officers indicating his face, and later he is carried to the hospital, where he eventually died. The most logical conclusion would be that in that short time frame of contact, the two women somehow managed to contaminate him with some toxic substance that finally led to his death. Following that logic, the two women, one Indonesian and one Vietnamese, were arrested by the Malaysian police.
The general opinion is that the North Korean dictator might have decided to get rid of a potential pretender to his own title, although Kim Jong-nam seemed to have renounced that claim and preferred to be on the run. North Korean authorities, on the other hand, claim this was an assassination orchestrated by Malaysian nationals to appease the United States and South Korea. Reality might be in favor of the first hypothesis.
There had been already one assassination attempt against Kim Jong-nam, in 2012, when he traveled from Singapore to China. In that circumstance, only a delay in his flight saved his life, and later the man sent his half-brother a letter in which he asked to be left in peace. It seems like he didn’t accept.
Developments on the Fight against Islamic State – Omar Osman
On February 23rd, Iraqi military forces took over Mosul airport. This is considered a milestone in the fight against the Islamic state. Mosul is the second largest city of Iraq with approximately 2 million inhabitants, and it is the main strong hold of IS. The operation took four hours. IS continued to fire mortars at the airport from further inside the city after losing the ground to the army.
This advance brings the Iraqi army within less than a mile of western Mosul, which is under the control of IS, after the Eastern part was taken over by Iraqi army in last January. Also IS is expected to face an attack on Raqqa, its capital. Turkey has presented two proposals on how to carry out a joint military operation to drive IS from its stronghold in the Syrian city of Raqqa.
If IS is expelled from Raqqa and Mosul, it will seize to be a “state” as how it is now, and its status will be demoted to a militant group of scattered forces. Maybe then it should come up with a different name.
Trump’s Press Conference – Brunno Fontanetti
‘Look at what is happening is Sweden right now’, said President Donald Trump, institutionalizing what we knew was true, but feared the most: the president has absolute no clue about what he is talking about. In fact, after such a tremendous mistake during one of his ‘greatest rallies in the world’, research was made, and it was found that the day before Trump’s speech, Fox News aired a story correlating the intake of the refugees program ran by Sweden, with the increase in the rape rate of a specific city. If you think this news was complete bogus, you are as right as Trump’s supporters.
Indeed, that wasn’t the only opportunity Trump disseminated fake news to the public: on his first press conference, or as I like to call it, the season premiere of Breaking a Country, Trump said he was the Republican president with the most votes ever in history. Of course, that wasn’t the case, and when questioned about the problem, he answered, as the good spoiled kid he is: `But I won, didn’t I?
The problem with Trump appears to be greater than imaginable: we can’t really understand if what he is saying is actually a fact or not. He goes around the country making advertisement and saying one different thing at a time, one controversy after another. Some argue that this is his purpose: copying his great comrade, Vladimir Putin, Trump is making fake news to mask his real intentions, which are still unknown.
As a person, I believe this is the most intense moments in international politics I have ever seen. However, as a person who loves comedy, I must say, politics is getting kind of funny.
Munich Security Conference – Yana Chernysh
This month a 53rd Munich security conference took place. Around 500 leaders debated about the crises and challenges that international security is facing.
The most crucial issues that had been discussed were the war conflicts in Syria, Afghanistan, and Eastern Ukraine. Angela Merkel pointed out the role of Germany in the solvency of such conflicts and the US as an important ally of the EU.
A lot of speakers touched the topic of the Russian-Ukrainian conflict. Most of them exhorted Russia to stop the violent actions on the territory of Ukraine. Some of them also noticed that Russia is not following the arrangements that were made during the Minsk conference. The foreign minister of Russia Sergey Lavrov stated that he does not see any alternative to dialogue between Kiev, Donetsk, and Lugansk, as a method of solving the conflict. He also said that Russia is still in cooperation with NATO and is not willing to terminate it. However, Sergey Lavrov also claimed that NATO is an institution of the past that leads to certain tensions, supporting Trump’s position in this sense.
Another important topic discussed during the conference were the Europe’s concerns regarding Trump’s politics and the new US government. One of the concerns was the willingness of Washington to make a deal with Moscow. Representatives of Trump also said that there will be no changes on key issues of the political path the US chose, at least for now.