The new academic year has begun and everyone must have noticed how busy Roeterseiland, Science Park or any other location of the UvA is. It seems as if the amount of new students becomes larger every year. Indeed, this is the case: the number of students starting a bachelor’s at the university level has increased massively. What causes this increase and what will be the effects of it? When the old student-financing system, in which students received a gift as funding, was replaced by the new system in which these gifts were replaced by loans, a lot of people were afraid that university applications would drop massively. This was indeed the case the first year this system was introduced, but now there seems to be a shift. Whereas the number of applications decreased by 6.8 per cent in 2015, there is now an increase of 5.2 per cent. The main reason for the decrease in 2015 is that most students who would have taken a gap year in 2014 and intended to start in 2015 decided not to take a gap year because of the removal of the study gifts. Now, it does not matter if you take a gap year or not, the system remains the same. Furthermore, more Dutch students attend higher high school education, namely vwo, the only level within the Dutch school system which allows students to go directly to university. So the more students attend this level at high school, the more students go to university. The biggest increase took place in the level of international students. This year, there was an increase of 27.3 per cent. You can especially see the increase in the group of German and Chinese students. What are the reasons for international students to choose Dutch universities? Of course the first one is that the universities in the Netherlands are all considered great universities with a high quality of education. This results in high rankings in international rankings of universities. The majority of Dutch universities provide high quality education. Secondly are the costs of study. In the Netherlands education is relatively cheap in comparison to other countries. Even though most Dutch students still complain about their college fee, many international students know that it could be a lot worse. Furthermore, many international students say that the way Dutch universities teach is different than in other countries. In the Netherlands, discussions in class are highly promoted, and even though every student ought to have respect for their professor it is allowed to go into discussion with the professor if you do not agree with the viewpoints made by the professor. These are all reasons why international students choose for the Netherlands, but what causes the massive increases from the past years? There is a simple explanation: more study programmes become available for international students. More and more universities offer their studies both in Dutch and English, and in some cases even only in English. This is because there is a high demand for these studies due to internationalization and globalization. An example for this are the University Colleges. These University Colleges are relatively new in the Netherlands. The oldest University College is situated in Utrecht and was founded in 1997. The rest were founded much later, mostly between 2009 and 2014. They are based on the American model of liberal arts and sciences. Students get a lot of freedom to choose their own courses, whereas most Dutch studies are studies in which students are educated for a particular profession. Because this study programme is based on an American model, many international students find it attractive and more recognizable. This can be seen in the increase of 30,5 per cent of international students, whereas most other studies only had an increase of 2 to 10 per cent. Furthermore, most people in the Netherlands are able to speak English, so that there is almost no need to learn the Dutch language, which makes it a lot easier for international students in comparison to other countries like France or Italy where not as many people speak English. It is a good thing that more people go to university, but can all the universities deal with this increase of students? Universities get paid for each student that graduates, so more students would result in more money to invest in education or expansion. Unfortunately, the amount of money universities receive for each students has dropped over the past few years, so the universities have to deal with a relatively low budget in comparison to the amount of students. Due to this, universities cannot expand or increase their capacity, so a lot of studies do selections because there is place for only a limited amount of students. Another effect is that the workload of the staff of the university increases due to the increases in lectures they need to provide. Furthermore, more lectures and not enough buildings will result in more evening lectures. Or lectures in very unique settings, like Carré and Cinemas. Which is not a bad place to go to for a lecture, better than a tent I must say, as is the case at Roeterseiland. These are all effects in the short run, because the Dutch government expects that these budget problems will disappear. The expectation is that universities will receive 256 million extra each year, starting in the near future, due to the replacement of the old funding system by the new funding system with the study loans. But it will take a while before this will fix the capacity problems universities endure now. On the long term the increase in students will have an effect on the Netherlands as a whole. Firstly, the increase in the amount of international students is very good for the Dutch economy. A quarter of the international students stays in the Netherlands after university. Most of the students who stay are from Belgium, Germany, China, Indonesia and Poland. They work mostly in the field of technology and health. This is a good thing because there is a labour deficit in these sectors. Another positive aspect of international students for the Dutch economy is that international students, on average, finish their studies quicker and with higher grades. In total, international students are good for 1.57 billion euros for the Dutch government. Secondly, the overall increase in students will have a positive effect on society. Students are well-educated and able to fulfill more complex jobs and tasks. The only problem will be, are there that many jobs that require a degree? Might there be a limited number of jobs that require a degree, are there too many lawyers and economists? Probably not. A degree does educate a student for a particular job, but also shows a lot more. It shows that a person can think on an academic level and is able to solve complex problems and may even do a research. University is always an investment in your own future, so the increase in students is a very positive and obvious thing. All in all, it is very crowded now at the UvA. This is probably temporary and in the long-term this problem will be solved. But at this moment most universities have to deal with budget constraints, which make it hard for them to expand. So more limits will be put on the amount of students who can enroll a certain study programme. Hopefully it will not take too long before these budget constraints will be solved, because an increase in students has its advantages and is good for the economy. So let’s make room for more students!

When we think of macroeconomic indicators that can give us an indication of the well-being in a society, we employ measures that we deem apposite to factors we care for, such as wealth, equality, and development, just to name a few. We can try to measure them by observing GDP, the Gini coefficient and the HDI, or, respectively, any equivalents. Irrespective of which we apply, we will notice the same countries contending for the top spots. Not rarely will we then see one particularly strong candidate: Norway, a leading nation in factors like wealth, equality, human development, but also happiness, democracy, and freedom of press. Last week, Norway’s sovereign wealth fund (Government Pension Fund Global) hit the headlines as it surpassed the striking mark of one trillion dollars in assets by market value. Remarkable indeed, considering the fact that its equities, which constitute about two thirds of its total assets, hold more than one percent of global stock market shares. To see how a country as small as Norway, with a population of just above five million people, has come to be a global player in financial investments, we need to comprehend the foundation of Norway’s riches: Natural resources, and in particular crude oil and natural gas. Oil platform “Ekofisk” The composition of Norway’s economy is rather unusual in the European context as it is largely dependent on the exports of crude oil and natural gas. Put in numbers, these two commodities account for about 40% of the value of all Norwegian exports and about 20% of the country’s gross domestic product, which places Norway among the top ten petroleum exporters in the world. Nonetheless, in keeping with the economic models of its Scandinavian neighbors, it has a mixed economy with strong government intervention and a comprehensive and generous welfare state that is largely funded by its oil revenues. Since the first drills off its shores in 1969, Norway has experienced strong economic growth and is now considered one of the very wealthiest countries in the world. The government plays a significant role in the petroleum sector. By controlling the market leader Statoil, oil and gas account for just less than 30% of the state revenue. As the country’s wealth is largely based on the exploitation of natural resources, this raises the concern about a lack of diversification in the economy. The economic complexity index (ECI), which analyzes countries for the diversity of their exports, attests Norway a score that lies behind other European and developed nations, with Sweden, Norway’s less wealthy neighbor, standing out in particular. Nevertheless, productivity levels are surprisingly high (even when corrected for the petroleum sector) despite a low level of innovation, which is often called the Norwegian paradox by scholars. Oil as a natural resource commodity is commonly very much coveted, promising high revenues since demand is high due to the good’s relevance in virtually all parts of modern industrial production. A downside to the international market of oil, however, is the volatility that accompanies it. Dependency of a country on proceeds from oil can be fatal for state revenue when global oil prices fall, as seen in the recent dip of prices since 2014 that made many oil-exporting countries feel the economic burden of their dependency. Aware of this, the Norwegian government instituted a sovereign wealth fund in 1990, that is, an investment fund owned by the state, to invest excess revenues originating from the petroleum industry by means of taxation, licenses, and dividends, in order to counter the above mentioned potential disruption effects that a sudden decline in the oil price can entail (stabilization fund). Another element of this reasoning is the realization that the oil and gas fields from which these high revenues come must inevitably deplete in the future. So, the Oljefondet (Oil Fund) is designed as a savings fund, too, and as a repository for future pension payments. It is worth mentioning that it is not only the sheer size of the fund that has a hand in its prominence. Since 2004, every investment by the state fund is subject to the tight scrutiny of an ethical council, prohibiting certain investments related to human rights violations, health hazards, and such. As a result, many companies across the globe have been excluded from investments from the fund. It seems Norway has been very successful in handling its abundance of natural resources. This becomes evident as the Oil Fund is the biggest sovereign wealth fund in the world and has now surpassed a value of a trillion dollars. As stated early in this article, the country is doing well. Corruption is one of the lowest in the world despite high profits from natural resources, which implies a strong rule of law and social cohesion. Norway’s success with dealing with its oil becomes apparent when we look at countries that face similar abundance in resources. Ten years before the first oil drill in Norway the largest natural gas field in Europe was found in Groningen province in the Netherlands. The subsequent exploitation and the large increase in Dutch exports provide the object lesson that would give occasion for what is called the Dutch disease in economics. In the 1960s, the increase in exports led to an appreciation of the Dutch guilder, making other economic sectors such as manufacturing less competitive. Now that gas extraction is declining, there is no such fund that the Dutch could fall back on. Reality is even grimmer when looking at the Nigerian paradox: Nigeria, a country immensely rich in oil, has an economy almost entirely based on the exploitation and export of the resource. However, due to a lack of strong and well-functioning institutions (e.g. corruption), the oil revenues hinder the rest of the economy to develop rather than actually contribute to reducing poverty. Nigeria is also one of many oil-based economies that suffer greatly from the sustained decrease in global oil prices, besides countries like Russia or Venezuela. In the latter, oil had been an easy source of income for the government to finance welfare. With oil prices down, the country is on the verge of collapse. Norway has come a long way making every effort to deal with its natural endowments in a sensible manner. To prevent negative effects such as those arising from the Dutch disease, it has successfully established a fund for the future. There is no occasion, however, for neglecting the challenges the country is facing as well. With oil prices low and declining oil reserves (Norway is believed to have passed the peak of its oil production), the country will need to realign and diversify its economy at a high pace. In addition to that, a country that places such great importance on values such as equity and sustainability (Norway generates 98% of its electricity through renewable energy) while being one of the largest producers of fossil fuels at the same time will need to consider in which direction it will want to lead its economy in the future. Nonetheless, Norway’s success shows that it can lead the way for other countries in reasonable dealings with natural resources.

I enter the CREA Theatre, find a spot in the middle of the second row, face the well-known red TEDx sign, and I wait there with bated breath for the commencement. I was both excited and intrigued. Last Thursday was meant to be inspirational and transformative. And I am not just talking about the 2,5-hour conference itself, but more-so about the sparkling eyes of the audience who stayed behind after the talks to share their thoughts and elaborate on the topics with the speakers. But let me just take a step back and give you a short background on the first TEDxUniversiteitVanAmsterdam edition that took place on the 21st of September. I believe I am not the only one who wished to be among the live audience of TED (technology, entertainment, design) conferences, and this year UvA together with 6 members of the TEDxUniversiteitVanAmsterdam Committee made it happen for 120 people like me. Once I joined the TEDx team and got involved in bringing the first UvA TEDx to fruition, it seemed to me as if almost everyone at university was either trying to get a ticket for the event or was talking about it. I can only imagine how much effort and time the committee members put into organizing this, beginning from setting up the theme to inviting the selected speakers, and kudos to that, it was a resounding success. How often do you think about the future? Not in terms of your future career, life goals, marriage or a number of bedrooms in your house. I mean, how often do you picture our planet in 20, 30 years? Personally, I don’t think I do it as often as I should. The theme of the TEDxUniversiteitVanAmsterdam was “THINK BIG”. Think outside of the box, beyond your own boundaries and comfort zone. All 7 speakers shared their vision on the future with regard to their field of specialization. And these were totally ideas worth spreading. New generation of network, hyperloop transportation, textile that improves human performance, machine ethics, food that grows on Mars, and even restoration of health at an old age – ideas that have potential to change mindsets, lifes and, ultimately, the world. The committee member themselves admit that the biggest challenge they faced was to make sure that the speakers reflected what the committee wanted the event to be. They comment: “We believe we did a good job with that, although we were never absolutely in control of the content of the talks. We did help them to figure out how to structure it, but not what to say exactly, and I think this made our conference much more authentic”. “Enhance change!”, advices us Edouard Schneiders, the Team Leader of Delft Hyperloop, the follow-up to the winning team in the SpaceX Hyperloop Pod competition. Change is inevitable, and we should accept it with grace. You may not believe you are ready for it, but the only way to move forward and get the most out of it is to embrace the positivity, however it shows up. Future is not a noun, it’s a verb, it needs action!  Edouard sets a great example for us. His Delft Hyperloop Team is now working hard to design the best possible travel capsule in order to create fast, reliable, and, what’s more important – affordable vehicle, which will take you from London to Paris in only 30 minutes with no emission. The next speaker steps on stage, starting with asking one simple question: “What do you use the most in your everyday life?” As obvious as the answer is, it doesn’t come straight to mind. Fortunately, or unfortunately, societal norms dictate us not to walk naked in the street. Yes, suprisingly enough, we use our clothes more than we use our smartphones. There’s an on-going discussion about artificual intelligence and threat of rise of robots, however, the future takes on a greater scale than just technological progress. Borre Akkersdijk, a fashion designer (and not only) who focuses on developing fabrics of the future. He is a conceptual designer who investigates the boundaries of textile. Borre believes that textile will soon become the next arena where the boundaries between humans and technology will be removed. He says: “Nowadays everyone is preoccupied with their looks. However, the moment you realise that clothes can do more for you – you will not mind having the same outfit. Textile of the future can improve human performance. For instance, it can measure your temperature or heart rate. Our fashion is not just a look and it can impact how people experience clothes.” No matter how incredibly inspiring the talks were on the future of health, transportation and technology, nothing can beat the fascination of the unknown. I am talking about space, in particular, the possibility of life on Mars. While we are daydreaming of space travels, Dr. Wiegel Wamelink, a Mars One advisor, a senior ecologist at Wageningen Environmental Science at Wageningen University & Research, who has dedicated more than 5 years experimenting with growing plants on Mars and Moon soil simulants. He tested the growth of 14 plant varieties, and received surprising results. Plants grew and most of them even yield. They even managed to prepare a dinner for staff from these vegetables. However, through experiments they have also discovered that Mars soil contains more nutrients than expected. Dr. Wamelink describes space as dangerous, nevertheless, he avows that it still interests him enormously and he has no doubt that there is much more to discover. The TED Talk Conference is meant to be influential. It is meant to make you think wider. However, it is also about networking, it is about meeting people who share the same view or who want to add to your ideas. Thinking outside of a box means to think creatively, free of any constraints of “accepted” norms. We need to trigger our brain to make connections that normally would not come to mind. Whether it is new methods of transportation, health restoration at old age, space farming and colonizing Mars or a new way of powering wireless devices – we need to look a few steps ahead. Find inspiration that seems entirely unrelated to a problem.  The end message that each of the speakers sent across to the audience throughout the conference is “WE NEED YOU!”.  And the world does need you. It needs your fresh ideas stemming from innovative minds. This is how we embrace the future. This is how we embrace change. #TEDxUniversiteitVanAmsterdam #ThinkBig

I remember how excited I was back in the days whenever a science-fiction movie was played on the dusty TV box set at home. Battles between intergalactic universes with illuminating swords, fancy wings of a flying car traveling through time: those images are the indispensable part of my childhood. You might have recalled the video-call technology similar to that of Skype in Star Wars, or some deviants of the current hoverboard that was previously created in the Back to the Future franchise. Conversely, there are some instances of technology being described as dangerous and damaging, and sometimes are portrayed as the culprit to the human existence. On this account, Skynet, the fictional neural net-based program of the Terminator, might be the most famous victim of them all. The lively scene of the doomsday in the movie has, more or less, inflicted upon us a questionable and doubtful stance on the technology that it is based on. Artificial Intelligence (AI) is treated with extreme caution, as the reaction to the development of AI is vastly contrast to that of what we usually take on other innovations. As a response to the widespread public concern about AI, some experts have already proposed on developing a regulatory framework for it. Elon Musk, the founder of Tesla, has been extremely vocal in expressing his view on the preemptive measures in the dealing with artificial minds, while the Facebook CEO Mark Zuckerberg shows that he is less worried or concerned about the exponential growth of the industry. Still yet, no side has taken the absolute victory. Could it be too early to address this problem now? So, what might you have missed? One of the first astounding achievements of AI might have been founded on the chessboard. The first of its kind dated way back in 1998, when Deep Blue, an IBM development won a standard chess game with a World Chess Champion. In 2015, a machine called Komodo won a series of handicap matches against 7 of the most prominent chess players of the world. In addition, with the highly complicated board game of Go, the Google’s project Alpha GO challenged a human professional player to a five-game series, in which it won four in 2016. It swiftly sealed the victory against the best GO player a year later. The chains of achievements did not stop there, as it quickly stepped into (competitive) gaming. After a year of continuous “practice”, from a complete neophyte, OpenAI easily dominated one of the most proficient players in the game of DotA (only a one-on-one contest) in front of millions of viewers spectating worldwide. What is AI actually capable of doing, now? Artificial Intelligence, is the virtue of machines in expressing its “intelligence” by the process of learning and problem-solving of in a repetitive manner. Their superiority to human in this aspect is that as a machine, they work tirelessly. As much as our intelligence is used to find the most favorable way to deal with our own paradoxes in our everyday life, the objective of an AI machine is to optimize their own outcome in that matter which is specifically defined in the environment to which they are exposed. From these achievements, we could get easily deceived that artificial intelligence had been making tremendous progress as we previously experienced with the Internet. As a matter of fact, the scope of its development has proven to be much less impactful to our everyday lives than many may claim to be. To understand how much of an impact that is, let’s take a look at some of the famous achievements of AI. When you send your postal mails, with the help of AI, a machine can now sort in which “box” a certain mail should go to by looking at the handwritten postcodes on the envelopes. A similar function can be seen on your electronic mailbox as well, as it will try to sort out spam or emails with promotional content into other sections of your mailbox, rather than going directly straight to your inbox as it was 10 years ago. Some websites, such as Amazon will show relevant recommendations that you might be interested in after you have finished the purchase for one item. And oh, who could have missed out on the face recognition feature of the newly-released iPhone X just last week, which is also constructed based on a function of AI! If you are looking a single entity that focuses on developing artificial intelligence, look no further than Facebook. In retrospect, Facebook is actually a large condominium of various AI technologies. From friend recommendations, face recognition in pictures where you could tag your friends, to just simply how adverts on Facebook can cater to your own preferences, these minor features could support you to make better decisions, but they cannot directly replace you in making your choice. It could influence your decision though, as some might have speculated that the result of the 2016 US Presidential Election was swayed by the involvement of artificial intelligence – however, it has to have the external influence from the humans themselves who create the algorithms. The quantitative impact of AI Much of the growth in AI that is discussed nowadays probably would only end up in speculation, since it is extremely difficult to directly quantify because of such uncertainty in the growth of the industry as a whole. We could actually divert this by calculating the impact of AI on some other intermediate factors which can be translated somewhat to the overall impact on the economy. For example, Accenture estimated that the growth of AI could potentially double the global economic growth by 2035 (to 4.6 percent from a 2.6 percent baseline projection) if the existence of AI technology could increase labor productivity by 40 percent. The boost in labor productivity, as is mentioned in the article, can be helped by the fact that AI helps workers to find more efficiency in their use of time and instead focus on developing and innovating other products rather than devoting their effort to complete less meaningful tasks. The other economic indicator that attracts attention from the public is on how the impact of AI could impact their employment. Usually, the development of one certain technology could an adverse effect on a certain industry, but at the same time the existence of “new” jobs will take over. Take the classic example: with the existence of the car, it reduces the demand for horses, but it opens many more job opportunities in other areas such as car manufacturing, car maintenance and so forth. So when the impact is neutral in terms of employment, the overall matter could only be simply a reallocation of jobs from one sector to another. It could be inferred that the net positive effect can be more visible as a technology evolves in the long run. For example, with the upcoming existence of automated cars, it is likely that taxi drivers could lose their job, but on the other hand, high-end technical experts for developing and maintaining the system will get it. Fikey and Osborne (2013) believe that about approximately just under half of the working population would be affected by the increasing adoption of AI on an occupational basis, but luckily, there is only 9 percent of job tasks that can be automated (Arntz, Gregory, & Zierahn, 2016). That is true since the machine could only tackle a problem based on the number of instances that they are exposed to and requires a massive database, so the job occupation that is characterized by novelty and creativity could not be replicated by machines. For example, for marketing jobs, the machines will not be able to outperform humans since doing a marketing campaign requires originality, in order for it to stand out of the crowd. There will be some jobs that are more vulnerable to it, but some will not. So, actually, the fear that job replacement is not actually that daunting as many have described, or imagined. Of course, we have not yet understood the comprehensive picture of the development of AI since there are many ways that they could place an impact on our economy, and we are only in the initial stages of understanding the technology. As it starts to unveil themselves in the near future and discussions are facilitated between involved parties, we would definitely get better predictions on the economic impact.

When talking about BRICS, what will you think of? The material that is used for building walls? In fact, BRICS stands for five countries, i.e. Brazil, Russia, India, China and South Africa. These countries bring together five major emerging economies, comprising 43% of the world population, having 30% of the world’s GDP and a 17% share in the world trade. The idea of BRICS originated from an investment bank which had conjectured a theoretical possibility of five countries in the developing world. Globally, the influence of the BRICS countries is rapidly increasing. They have been engaged in official and non-official development cooperation for decades. The concept of BRICS only gained more relevance after the financial crisis in which it was believed that the emerging markets were decoupled from the developed ones and were driving the world economy. Holding in September 2017 in China, the initiatives of the ninth summit of the member nations of BRICS is to set up a new financial architecture. On the summit of last year held in India, new institutions set up by the BRICS were expected to provide a much-needed change in the global financial architecture. These institutions include the New Development Bank (NDB), the BRICS-led Contingency Reserve Fund (CRF), and the Asian Infrastructure Investment Bank (AIIB). The primary purpose of all the institutions is to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies. By furthering economic development in the region, they can help stimulate growth and improve access to basic services. The establishment of more and more institutions of the BRICS reveals their rising global influence. The Summit this year is significant as it comes probably at a very crucial time. The world economy is in a state of introspection. In the past, it has been observed that globalization has led to an increase in the volume of trade and investment. That has been regarded as a win-win situation for all nations for a long time. However, with countries more worried about the employment fallouts of the process of globalization, there has been a tendency to look more inwards, such as the US and UK. Therefore, it is not hard to say that these five nations will collaborate more closely in the future. In more detail, they may enhance their ties in the following three areas. The first one is trade. The idea is to create ‘global value chains’ for various products and services which can help these nations to integrate faster. Given the size of the economies of the BRICS nations and their geographical spread, the potential of expanding the frontiers is high, and the others could benefit from sharing the comparative advantage of each nation. However, the challenge is the physical distance of BRICS nations. Unlike NAFTA where the nations are contiguous, BRICS nations are situated far apart which might bring some obstacle in actual trading activities. The second economic tie-up would be through investment. Presently, the major flow of investment is from the developed to developing countries. This can change now if surpluses in these nations are invested in each other’s countries. The external balances of these nations vary from surpluses to deficits and by having such flows of funds through more liberalised entry policies there are mutual benefits to be gained. This can set in a secondary chain of foreign investment circles, which will bring about a more symbiotic growth process. The third area which is already being worked on extensively is finance through the New Development Bank. The whole idea is to create a financial institution analogous to the World Bank which can raise funds and lend in the member countries for infrastructure development. As it matures, the same can be used also for the development of private sector industry. This is a very important initiative taken as funding is a major problem for developing economies which have major lacunae in infrastructure. Cheap funds are required to grow these structures and presently the funds which come from the western multilateral agencies come with conditions which come in the way of independent policies being pursued by the respective governments. By having this bank without any inbuilt prejudice, there can be a freer flow of funds to the member nations. Another thing that needs to be mentioned is that besides these five nations, there are also some observer nations present in the summit. These are Thailand, Mexico, Egypt, Tajikistan and Guinea, which spread across the continents from where the original BRICS nations are located. Hence, it is highly possible that at a later stage these nations would also get subsumed in this group which will help to foster the process of economic integration. Although, as we mentioned before, the BRICS is the ‘third giant’ after the EU and the US, BRICS member nations are too different, and have too few synergies to represent a solid economic and political power. First, the dominance of the Chinese economy and its role in trade relations makes the BRICS much more a China-with-partners group than a union of equal members. Second, BRICS nations are too similar in some key areas. All members, except Russia, hold huge foreign reserves and have low external debt. Apart from Russia, they are heavily integrated into consumer goods production with the western world. Besides, in many areas, from clothing, through economic influence in Africa to international aircraft and military equipment markets, BRICS nations compete with one another. All of them are able to re-engineer and copy technologies, which means sharing R&D results and innovations and the development of cross-country scientific cooperation has limited potential. Next, cultural differences mean BRICS nations lack common understandings on business activities. Last but not least, the successes of BRICS need to be tempered by the tensions between the BRICS nations, for instance, the tension between India and China and Brazil’s recent political turmoil. Hence, though a union of BRICS is undoubtedly positive, its role should not be overestimated. For most BRICS nations, the union represents a means to discuss opinions, and perhaps take a joint position on any areas of mutual interest. The BRICS will reinforce its position of leadership among emerging economies in the future.

There is a known story about the famous American economist Irving Fisher that professors and their students like to tell jokingly whenever they gather in groups of three or more: It was in early October 1929, when Fisher claimed publicly that the stock market had reached a “permanently high plateau”; he did so in the pages of the New York Times, and justified his enthusiasm with theories on growth and investment. His reputation was somewhat damaged only a few days later, when Black Thursday hit the stock market in what soon came to be known as the most devastating stock market crash in the history of the United States. Since then, Fisher’s claim is remembered as one of the wrongest predictions in economic history. But Fisher was an optimist who lived through a decade of magnificent growth, and still insisted days after Black Thursday that it was just a mere bump on the road. After he lost a considerable portion of his fortune, and while witnessing the Great Depression hitting America, Fisher developed a new theory on what could have caused the crash, and ways to handle it. But people refused to listen; his reputation was so thoroughly damaged that his theories started to regain their deserved attention only in the 1950s, after he himself died in 1947. As we know, Fisher was neither the first nor the last economist to make wrong predictions. American growth in the 1990s was overestimated, Chinese growth was underestimated, and no recession was expected in the mid-2000s – all of these are predictions made in the past by economists. People like asking how economists can make the wrong predictions so often. Especially when it comes to macroeconomic predictions, economists seem to be more off than on target. This sentiment intensified amongst the public and economists alike after the 2008 crash, which cast even more doubt on the discipline’s predictive capabilities. In 2009, Nobel Prize-winning economist Paul Krugman wrote an article in the New York Times called “How Did Economists Get It So Wrong?”, where he pondered on the predictive failures of economics. He claimed that since the memory of the Great Depression had faded, economists fell in love with the idealised version of the capitalist system — one that consists of many rational agents interacting perfectly. Many economists strive to make their discipline as accurate as possible, often emphasising the role of mathematics in the “physics of the social sciences”. But economics is not physics; there are simply too many historical, cultural, and psychological factors to consider when making a prediction. And yet, it is (often) evidence-based, ambitious in its attempt to describe human interactions — both an aspiring positive (what is) and a normative (what ought to be) science at the same time. It is difficult to address economics as a “hard science” also because it is presumably intertwined with ideology. We see liberals and conservatives, Saltwater and Freshwater economists, socialists and libertarians — all of which argue ferociously over issues. A main difference between ideology and scientific theory lies in the treatment of facts; scientists are required to view new empirical evidence with an open mind and the intention to reach an objective truth, whereas ideologists often have their free choice of facts, ignoring what is inconvenient and adopting whatever supports their view of the world. As they encounter empirical facts daily, economists should have some form of flexibility, or at least the ability to adapt their mindsets to the prevailing facts. How often do economists change their minds? More often than you think, apparently. Krugman himself changed his mind on home market effect in international trade, on the ineffectiveness of monetary policy, and on the effect of minimum wages on employment — all of which are be politically charged issues. Another economist who was known for the ability to change his mind was John Maynard Keynes. Even though it is argued that the British giant did not actually say “When the facts change, I change my mind” (and you must admit that it is somewhat ironic when the lack of empirical evidence is stopping us from attributing this quote to Keynes), he was known for his intellectual integrity and for his ability to review and re-evaluate his former conclusions. An article published in Life magazine in 1945 reported that “Keynes is always ready to contradict not only his colleagues but also himself whenever circumstances make this seem appropriate”. He was critically described as “consistently inconsistent”, although preserving a little inconsistency seems almost essential for an economist. He supported deflationary policies and then inflationary ones; he supported free trade and later advocated tariffs. After the Second World War, Keynes considered writing another book following his magnum opus “The General Theory” from 1936, with corrections and additions to his previous ideas. A scientific theory should be supported by reality, or to be more accurate: hypotheses should be validated by available empirical evidence. An important principle in the construction of scientific theories is falsifiability: the possibility of proving a theory false. Ideology, by its nature, is unfalsifiable. But as we said earlier, economics deals with both what is and with what should be. Accepting what is can very well clash with what one thinks ought to be; stripping economic decisions from any normative or social judgments is naive at best, and mostly dangerous. Decisions regarding issues such as minimum wage are always political, but if economics aspires to be the physics of the social sciences, then how can it be politically charged? When the American economist Amy Finkelstein studied healthcare in the US, her conclusions were somewhat contradictory to what was predicted by standard economic thought. Her conclusions showed that people used less healthcare when moving to areas where people spend less on healthcare. Her careful combination of analytical work and empirical evidence had shifted her viewpoint that healthcare costs do not affect behaviour. For years, the American economist Narayana Kocherlakota criticised the Federal Reserve’s monetary stimulus, after which he changed his mind and urged for further stimulation and stronger action. Changing your mind, abandoning previous research conclusions in light of new evidence, takes guts. But it is also essential, since the scientific discipline and methodology require an unbiased approach to theory and facts. Neither should we ignore the predictions of economists; they know what they are talking about, and they spend their lives studying vigorously both facts and theory. Perhaps it would be much more efficient to adopt a new set of assumptions — one that does not assume a perfect world, but instead a dynamic, ever-changing world in which we accept the idea that human behaviour cannot be fully predicted.

In the past few months the “bikes subject” has become a more mundane one, specifically because of the new bike-sharing companies that arrived in the city earlier this year. OBike, Flickbike and Donkey Republic are a few of the companies conducting the station-less bike sharing train wagon and the road hasn’t been that easy so far. Complaints regarding the deployment of the bikes and how they overheat the parking system, which was already saturated, became so frequent that the municipalities decided to take a closer look at these companies. Since there are no regulations on companies like this (all hail the free market!), the government decided to meet with them to better understand their operations and to decide whether they would be allowed to keep operating in the city or not. While it is a fact that Amsterdam suffers from a parking problem, it is also a fact that this problem existed long before bike sharing companies were around. In a document which analysed the statistics of the city regarding bike use, published by the Gemeente Amsterdam (municipality) itself, it is stated that at least 3% of all bikes parked around the city is somehow idle – either broken or abandoned. Moreover, 12% of the bikes is in rideable state, but is used less than or only once a month. Another interesting fact is the percentage of bikes that is retrieved from the ones which were already picked up by the municipality: in 2014, 27,000 bikes were retrieved and an impressive number of 25 were collected from the deposit. If you project those percentages to the actual number of bikes we have in the city right now, you will see that we have around 26,000 bikes in the city that are abandoned, of which only 24 actually have owners, and more than 105,000 bikes that are parked and used merely used once a month. The mathematics is simple: if these companies deployed, say, 5,000 bikes around the city, only 3.8% of the unused bikes would have to be collected so that the bikes could be deployed without changing the parking situation in the city. Bike sharing actually appears as one of the possible solutions for the parking problem in Amsterdam in the AMSTERDAM LONG-TERM BICYCLE PLAN 2017 – 2022, also published by the government. There, in a section called, “The new way of bicycle parking”, they set the specific goal of increasing the trips per bike ratio, which could only be done with the bike sharing system. And the avant-garde system could not only help the government tackle problems like this: amongst other improvements and changes, increasing the use of bikes in specific areas is one of the main set objectives. Why not cooperate with bike sharing companies, and ask them to distribute more bikes in these areas, or provide discounts to increase the bike use? Besides all the technicalities, which appear to be leaning towards the contrary of the common sense, the government will take into consideration the public opinion to make their final decision. Of course, right now most of the population just wishes all these bikes were thrown away, some of whom have taken matters into their own hands: bikes were actually thrown in canals in the past few weeks, bikes were torn apart and stolen. Which came as a surprise: out of all the cities in the world, I would say Amsterdam is the least change-averse one. And even if my assumption was wrong, this behaviour would still not make sense, after all, Amsterdam is, surprise, the birthplace of the bike sharing system. In the 1970’s, right in the turning point of biking history in the Netherlands, Luud Schimmelpennink decided to protest against the strongly car-driven city urban planning in a different way. He and a couple of friends had this idea of painting their unused bikes in white and leave them on the city centre without a lock. They made flyers explaining that, any white bike found in the city could be used freely. You could use it and park it anywhere, just like the next user, and the user after that. A sharing system that decreases the amounts of bikes per trip and, at the time the main reasons, protests against the capitalistic cars and the social norm. The same Luud who created this system, later became a city councillor in Amsterdam. He tirelessly tried to implement his bike sharing plan without any success. It was only in 2004, when approached by JC Decaux that Luud had the opportunity to implement his plan. The result of an Amsterdammer vouching for a bike sharing system outside his city can be seen nowadays in the streets of Paris: the city has the biggest and most efficient bike sharing system in the world. In all fairness, it’s completely understandable why there has been so much fuss about these companies. They are new, they present a new, or at least refurbished, concept which is different to most people. Not to sound like every university student, but all paradox change must come from revolution. That revolution is not Che Guevara like, but more you realizing you ‘gotta eat your vegetables’ like. It’s something that can only happen through discussions and adjustments. Stopping these companies from operating won’t have any results, and even if they come back after regulations are set, that will be 1-2 years from now. Reducing the amount of bikes in the city seems like the most viable solution so far, but let’s wait until government officials make their final decision to see if any new options came up. Until then, take advantage of the service while you can, try it out, experience and see for yourself if you like it or not.

While ordering a fresh orange juice for lunch or flushing toilet paper through the loo, most of us do not really think of the destination of the waste we are creating by doing so. The same holds for more bulky products, such as electronic devices and plastics. What happens to these orange peels, fibres, batteries, and plastic packaging appears to be none of our concern, or simply said: we do not really care about the waste that we produce. Currently we are living in a linear economy in which we ‘take, make, and dispose’. Especially the last phase of this linear economy is problematic. We dispose a lot, and it must be no surprise to you that this leads to huge amounts of waste. By now, we are all aware of the fact that our oceans are turning into a ‘plastic soup’ that will expectedly contain more plastic than fish by 2050. And by just doing our daily business, we are thus damaging the environment. That is also why many entrepreneurs, foundations, NGOs and even governments are now trying to change our economy from a linear to a circular one. But what is this circular economy, and is it reasonable to think that such a transition will be made in the following decades if big companies are still producing plastics instead of reusing what has already been made? In a circular economy resources are kept in the production cycle by reusing materials rather than sending them to the dump after first use. It is a regenerative system in which waste, emissions and energy leakages are minimized by recycling, maintenance, and long-lasting design. Products are being made, used, and returned. By returning products to their producers, a lot of materials can be reused. This is not only a matter of recycling, but also of ownership. It is proposed that certain products are not the property of its users, but of its producers. After the use of a product, all materials are thus taken care of. If the companies feel responsible for the products they sell, even after their use, the resources will not be dumped, but used again. Producers of electronic devices in this way do not have to buy new resources to generate new products, but can reuse the materials from previous sold products instead. A good example of a company that is already trying to do this is Philips Lighting. The company states that it is not selling products that provide light, but that it is selling light. Consumers buy light, and the lightbulbs that provide this light belong to the company. If any of these lightbulbs breaks, it is up to Philips to repair and replace it. By taking back the physical product, Philips Lighting can make sure to keep the materials that are still usable, and so prevent the lightbulbs from becoming waste. In fact, in a circular economy, people are only paying for what they actually use. This leads to an incentive for the producers to deliver high-quality products. This incentive will in turn lead to smarter and long-lasting designs, because the maintenance of the product is part of the product that the producers are selling. According to Philips Lighting, it’s a win-win-win: consumers are better off, since they pay for the use of a service, and not so much for the physical product; the environment is ‘better off’, since there is less waste; and producers are better off, because their production depends less on the natural resources that becoming scarcer and more expensive. Besides changing the entire way of business, finding new ways to use our waste is also a very good way to make the transition. Two interesting examples are the use of cellulose from used loo roll for bike lanes (by the Dutch Cirtec), and the use of orange peels for soap and energy (by the cooperation of PeelPioneers and Bee Blue). What is so nice about these two initiatives, is that the resources that are used would otherwise have been burnt (resulting in lots of unnecessary produced CO2). More and more companies, entrepreneurs and governments are taking the transition to a circular economy seriously. For example the Dutch government selected five economic sectors that will be the first to switch to a circular economy (biomass and food; plastics; manufacturing industry; construction sector; consumer goods). Together with the European Union, the Dutch government is aiming to encourage companies to focus on sustainability, and change the production process. An example of an action that has already been taken is the ban on giving away plastic bags. Retailers may not give away any plastic bags to their customers, but have to charge them instead. Since this ban has been introduced, there has been a severe decrease in the use of plastic bags. According to the Ministry of Economic Affairs, a circular economy will be achieved by 2050. Despite many initiatives, the transition from a linear to a circular economy is not easy. As mentioned before, the whole production cycle has to change and especially producers have to take the lead in this. If this is not happening fast enough, government intervention is desirable. This is already happening in some countries within the European Union, so hopefully other countries are to follow. We are running out of natural resources, so we have to make sure that we use what we already have in the products that we want to create. We can make bike lanes and bottles from used toilet paper, soap from orange peels, and new electronic devices by using the old ones: our waste is not as useless as we think. We know how to do it, the only thing that has to happen is that we use our knowledge to make the change. Check out this video by the Ellen McArthur Foundation for a clear overview of the circular economy.

It’s hard not to see the wall of cigarettes at the service counters in supermarkets in the Netherlands. When I first came to Amsterdam, I was pretty surprised at the ‘Duty Free’-styled labelling on the cigarettes: Plain black text on a white box. I hadn’t paid so much attention to these labels in the past, but that just seemed low effort. The next year when I came back from vacation, however, all the packages had the shock images that ended up covering most of the face and back of the packages. Apparently a new EU directive took effect in May 2016, and the stocks had been replaced by the end of summer… We all know that cigarettes are bad; with public service announcements, TV spots, and warning labels, smokers and non-smokers alike are very well aware of the dangers of smoking. However, interestingly enough, the constant increase in tobacco prices with taxes and increasingly gruesome warning labels, the amount of smokers is not going down fast enough. Addictive goods such as cigarettes (which are sometimes called ‘bads’ because of their harmful nature) have inelastic demand, meaning that equal price changes yield smaller changes in the quantity consumed than they would for elastic goods like meat or yoghurt. Salt and mobile data plans are also inelastic, even though they are not necessarily addictive. So, no matter how much you are willing to increase prices to cut down the amount of smokers, its effect will be diminishing, and maybe even have adverse side-effects. Accounting for 4% of all new cancer cases annually, alcohol is now argued to be dangerous even in moderation. Being an inelastic good, has not faced the same fate as cigarettes. The reason for that may be the history of alcohol, which has essentially become one with the history of mankind. Alcoholic beverages has been around for much longer than tobacco, which only happened to pop up in Europe and enter mainstream consumption only in the 17th century. Archaeological evidence of fermented drinks goes far as 10,000 years ago, and since then alcohol has not lost its popularity or societal acceptance. In fact, that popularity has come to such levels that attempts to ban alcoholic drinks has lead to cases such as the American Prohibition era. Campaigns against alcohol lead by the Protestants at the time succeeded at bringing legislation to limit the use of alcohol to only private consumption. Unfortunately, although the ban succeeded in cutting down alcohol consumption, it enabled a criminal black market of alcoholic drinks to be formed, and also resulted in tax revenues taking a heavy blow. Thirteen years after the enactment of the initial restrictions, in 1933, a constitutional amendment repealed the Prohibition. It’s not so easy to compare the Prohibition to tax hikes on cigarettes; but the high prices did indeed result in demand for cheaper cigarettes that could only be supplied by smugglers. In Europe, the European Anti-Fraud Office has determined tobacco smuggling to be a major source of revenue for organised crime, which puts the level of demand to scale. Adverse effects such as these are significant concerns for governments who attempt to stop smokers. The alternative, again, is warning labels and raising public awareness. It is possible that such warnings can even be extended even further to junk food and soft drinks, as some politicians have already proposed. We know that certain foodstuffs that are easy to consume and contain a lot of carcinogens and calories are simply detrimental to your health too. Essentially, it seems that when the negative effects are more immediately apparent and direct, as is in the case of cigarettes, the ethical complexity is easier to navigate. Obesity and cirrhosis are both life-threatening outcomes of excessive consumption of food and alcohol, and yet we are not able to treat them at the class of cigarettes. Several studies show that obese people and smokers incur similar health care costs, but the ongoing trend towards orthorexia, the obsession with eating food that is deemed to be healthy, and unsustainable healthy-living routines also is dangerous to the well-being of people. Cigarettes are easy to attack because we know that they are definitively bad for you, but our perception of food and alcohol makes it difficult to find a solve-it-all way. Although, I have to say, after finding out that eggs are linked to several kinds of cancer, I really wonder how far we can go with warnings on consumables. Maybe educating future generations better about balanced nutrition and mindful consumption is the best step to take next, as opposed to simplifying the information and calling things outright bad – I think I can take responsibility for the omelette I ate this morning.

I would like to start this series of columns with a brutal display of intellectual honesty: despite my PhD in Economics, I do not understand many fundamental features of the economy and the way economic science tends to handle it. First up: I do not understand how economics gets away with ignoring marketing and advertising. We are taught that preferences are given and stable, so that prices and income are the only variables we need to take into account in order to understand changes in a person’s consumptive choices. But if this is so, marketeers are wasting huge sums of money (the USA average being 2.27% of GDP annually during the period between 1984 and 2005) in a doomed quest to change our consumptive choices without changing prices. So either consumers are not as rational as the theory purports them to be, or the marketeers and companies hiring them are a particularly dumb brand of stupid and it would only take one enlightened entrepreneur in each sector to wipe out the wasteful competition. The best mainstream response to this apparent disconnect between theory and reality I have heard of, is that although advertising does not change our preferences, it changes the information we act upon. So, if certain individuals have a preference for – say  – fat-free foods, the ad informing them that a particular brand of lollipops is indeed fat-free, will entice them to make different choices (assumed the consumer is unaware that all lollipops are in fact fat-free), without however changing the individual’s underlying preferences. This argument however fails to explain the particularly low information-density of much advertising and does not explain the millions spend by many companies on things like celebrity endorsements. Moreover, when we see changes in consumptive choices occurring that cannot be explained by changing income or prices, it is empirically impossible to distinguish between these two possible causes. The consumer’s information may have changed or his or her preferences. There is no way to tell. So this escape route is not very illuminating to say the least. Secondly, Sonnenschein (1972), Mantel (1974) and Debreu (1974) have all proven mathematically that even if individual preferences are indeed stable over time, this in itself is insufficient for the models to generate (predict) a unique market outcome (equilibrium) in terms of traded volume and price. Such models could only do so if two additional conditions (known as the SMD conditions) hold: (1) all individuals have the same tastes (i.e. identical preferences), that, (2), do not change with income (Keen, 2011, p. 57; cf. Sonnenschein, 1972). Thus, in contrast to what you may have been told, stable market equilibria can only be attained when a brutal Orwellian thought police sees to it that our desires are fully equalized. This implies that stability in market economies is theoretically incompatible with individual freedom. So now you know why the term representative consumer is so often invoked. But I have yet to find a technique that allows heterogeneous preferences to be summarised into a single consumer representing us all or, alternatively, a comprehensive rebuttal of Sonnenschein (1972), Mantel (1974) and Debreu (1974)’s argument. But if neither this technique nor the required rebuttal exists, how can we still defend teaching and developing theories invoking individual rationality? Thirdly, our continued usage of the theories underpinning the rising shape of the supply curve is no less puzzling. A survey conducted in 1982 among ‘200 medium-to-large US firms, which collectively accounted for 7,6 percent of America’s GDP’ (Keen, 2011), found that ‘only 11 percent of GDP is produced under conditions of rising marginal cost’ (Blinder 1998) and there is no reason to believe that this number will be substantially higher today. In fact, there is evidence to the contrary as companies have only increased in size, which would be untenable if their marginal costs are rising, but would be totally understandable if marginal costs generally keep falling indefinitely. But if this is true, markets tend towards oligopoly, as Robinson has already argued a long time ago (1969). The upshot of all this is that markets that are left unchecked are unlikely in theory to be stable or welfare-enhancing. Or have I misunderstood the theory? I am open to rebuttals. In fact, I would welcome them. Finally, the macro-economic policies that seem defendable if seen through the prism of supply and demand models, more often than not fail to deliver the expected results. Ever since the 80’s the world has started to resemble our model ideal much more closely, but world economic growth has fallen from an average of a little more than 3% in the 1960’s and 70’s to a measly 1,4% between 1980 and 2002 (World Bank; cf. Chang 2012). The countries escaping this faith, such as China, South Korea and Taiwan, have generally refused to follow economists’ advice of limited government intervention, lowering inflation and reducing trade restrictions (Chang 2012). All in all then, much economic theory seems to be theoretically unjustifiable and empirically falsified. Of course a theory can never be comprehensively dismissed by a falsifying instance as it is always possible to blame extraneous factors. But if we blame extraneous factors for much of our economic experience since the early 80’s, the theory, if not wrong, in the very least has proven to be a very poor guide to understanding practical affairs and shaping economic policies. But perhaps all the people I referenced, as well as yours truly, have misunderstood the data, the theory or both. Please enlighten us if we did. I feel that all the questions above are important and must be asked and if possible, answered. But I do not feel that exposing my ignorance on them disqualifies me as an economic scientist. On the contrary, there is almost universal agreement within the scientific community that any scientific investigation must start with asking the right questions, that all answers are fallible and that their weaknesses must be ruthlessly exposed. So ignoring those questions in both research and education, is much less scientific than the brutal honesty displayed here. I sure hope the comment section will be flooded with arguments showing the questions above have actually been answered a long time ago. I’d much rather be publicly crucified as an economic ignoramus than live with the nagging feeling that I am wasting my life (and the lives of the students I teach) peddling mathematized nonsense.

The term fintech, shorthand for financial technology, is a dynamic description difficult to definitively pin down. It is perhaps best understood as encompassing technologies that ‘disrupt’ existing financial products and services or parts of the financial services sector. Here, the oft-used term disruption refers to innovations which provide new or more efficient services and products to new or existing customers. Globally, the fintech sector is already a multibillion dollar industry and is predicted to continue growing. Despite some analysts believing that traditional institutions using big data may end being more important than fintech startups in changing the face of the financial services industry, fintech startups are currently at the forefront of the most important innovations in the industry. TransferWise provides a great example of the potential of financial technology startups to shake things up. Launced in 2011, the international money transfer startup is currently valued at more than $1 billion and announced earlier this year that it had started making profit. Easy to use via app or on a laptop/desktop and with significantly discounted forex rates for international transfers, the company is now looking to expand into other areas of the fintech industry. With remittances, valued at more than $30 billion in 2016, a major source of foreign investment into Africa, the potential of fintech startups such as TransferWise is immense. Optimists argue that fintech could have a revolutionary impact in many African countries especially as fintech applications in Africa are arguably more needs driven than their more desire driven applications in Western Europe and North America. Practically, fintech startups in Africa are building new infrastructure and creating new customers previously unreached by traditional financial services. These innovations mean that in many African countries the card stage of the financial transaction process is likely to be skipped, with many Africans moving directly from cash to digital transaction methods. With at least two thirds of Africa’s adult population unbanked according to most estimates, fintech companies are also improving financial inclusion and thus positively contributing to sustainable economic growth. With the region easily becoming the world leader in mobile (money) wallet usage (11% of Africans have a mobile banking account as compared to the global average of 2%), fintech solutions are only likely to improve. It must be noted that cash is still indisputably the main method of carrying out transactions in most African countries. This leaves ample room for growth for fintech startups, especially in the payment and transfer arena. According to Disrupt Africa’s Finnovating for Africa Report, there has been a boom in fintech startups since 2015. It found 301 fintech startups on the continent, most of which were set up in the last two years and which have collectively received just under $93 million since 2015. The report also found that fintech startups were the most likely startups to be funded and amongst fintech startups, blockchain startups were the most likely to get (external) funding. According to the report, payment/transfer and remittances startups dominate the fintech landscape on the continent, accounting for 41.5% of all startups. Indeed according to the co-founder of Disrupt Africa, Tom Jackson, there is need for consolidation in this category as it is becoming saturated. Though it has only the third most fintech startups after the other ‘Big Three’ African fintech hubs of South Africa and Nigeria, most analysts describe Kenya as the ‘best’ fintech hub on the continent. The well chronicled story of M-Pesa, is obviously a major reason for this title but so are the multiple apps and services built upon the original mobile money wallet service. M-Shwari for example, a paperless banking service which allows M-Pesa customers to save and access loans dispersed millions of loans in 2016 and disperses tens of thousands of loans each day. BitPesa, the online bitcoin payments company is another example of a Kenyan fintech company making waves on the continent and is also present in Nigeria, Uganda and Tanzania. Nigeria’s Flutterwave, an integrated payments startup that provides the digital infrastructure for businesses to make and accept payments from and to anywhere on the continent, earlier this year raised $10 million in a funding round and has processed $1.2 billion and 10 million transactions since its 2016 launch. That Kenya, South Africa and Nigeria receive more fintech investment than the rest of the continent put together illustrates the need for much more investment in the fintech industries of the continent’s other countries. With fintech conferences like the Dot Finance Summit and the Finnovation Africa series and accelerators and clubs like BitHub Africa and the Co-Creation Hub, the hope is that the meetings of minds and transfers of knowledge will help the rest of the continent’s fintech scene take off. Despite fintech solutions often being specific to economic, financial and cultural settings precluding a copy and paste methodology even between different African countries, some features are quite similar across the continent. With Africinvest predicting 350 million new financial services customers in Africa in the next ten years, the roles of traditional banks, mobile network operators, interoperability and regulation will be key to the success or otherwise of financial technology companies. Partly to stave off potential competition and prevent the loss of customers, traditional banks and financial institutions are buying and entering into partnerships with fintech startups which usually offer consumers faster, more efficient and cheaper processes and systems. A number of competitions and fellowships sponsored by financial institutions including Ecobank, SWIFT, the MasterCard Foundation and RMI Holdings have sprung up in the last few years offering financial and technical support to selected fintech startups. With a substantial number of fintech companies basing their products and services on mobile applications or services, mobile network operators are crucial to the development of the fintech sector. These mobile network operators often own a substantial amount of the telecommunications infrastructure that many fintech companies rely on. Many mobile operators on the continent have indeed developed their own fintech products in-house. Competition and technical challenges mean that interoperability (between borders and platforms) is currently below the requisite levels for fintech solutions to begin to be continentally transformative. Some fintech companies, like the aforementioned Flutterwave, are attempting to address this through their service offerings but more generally, improving interoperability on a macro scale through teleco agreements or regulation may be more impactful to the industry in the long run. Regulation is indeed a major influencer of the direction of fintech development. Many experts believe M-Pesa’s success in Kenya was partly due to the relative lack of regulation of its products and services faced upon their introduction to the market. Amongst other reasons, stronger regulatory hurdles are often cited as a reason why M-Pesa failed to match its Kenyan success in South Africa. Regulators, particularly central bank officials, have to balance the need to provide a framework in which fintech startups can grow whilst also protecting consumers. For example, necessitating fintech companies have a banking licence before beginning operations could be a hurdle too high to overcome for many nascent firms. At the same time, allowing any company to set up as a digital financial services firm without some prerequisites may lead to citizens being taken advantage of by various fraudulent and/or exploitative schemes. In summary, the outlook for the financial technology sector in Africa is ‘good but can improve’.

The world is a tumultuous place, and currently in a distressing state. 22,000 children die every day of poverty. 805 million people go hungry every day. Climate change causes rising sea levels, droughts, biodiversity loss, and overall damage to the ecosystem. However, there is a growing community of organisations, institutions, scientists, politicians and entrepreneurs that not only realise that the current path we take as a society is a destructive one, but actively participate in the positive and sustainable reversal of it. For me however, as a student in economics, developmental issues used to be a distant issue. I was mainly involved with topics about the Dutch economy, the state of affairs in Europe and international relations between countries in the industrialized world. Economics as a science is unfortunately seen as the development of applied mathematics, the attempt to creation of infallible models. Comparing the prices of Big Macs and such. The discussion about social issues was unfortunately limited to a bare minimum. I was always very sceptical about how this mind-set could actually support to make the world even a slightly better place. And to be honest, I can’t deny that in my mind I used to associate developmental aid merely with corrupt dictators and digging waterholes. It wasn’t until 2015 that I became interested in development economics. I read books by Banarjee & Duflo [1] about bottom-up solutions to global poverty, and Moyo [2], a former Goldman Sachs consultant, about the reason why the current model of international aid is failing. Reading those books made me realize that international development should not be seen as a bank account where one periodically donates money to, but something that we should be actively involved in. During the same year I was lucky enough that my study association offered an opportunity to set up a development project. It was here where I met Mayra Werges, Linde Crijns, Anniek Schepers and Vincent Altorffer. They were like-minded individuals, who had the same hopes and aspirations. We had the same education in economics, and we had the same urge to do something more with that knowledge than to crunch numbers in an office all day, gulping down gallons of coffee. In a year time we managed to find a partner NGO which perfectly fitted our shared ideology; that development work should be seen as a holistic process, carefully emphasizing the economics of poverty and regional development. Their mission was to improve the livelihood of the native inhabitants of West-Papua, based on the UN Sustainability Goals for 2030. In order to do this, they created task groups that focus on each sector in the West-Papuan economy. After our initial desk research, we decided to focus on investigating social investment opportunities in the cocoa sector. Now West-Papua is a relatively safe place to be, but let’s say it isn’t the most tourist-friendly area in the World. It’s only been open to outsiders since a few years, and even now foreigners are carefully tracked by the secret police. The political situation is very complex, crowded with human rights abuses, and is too long to elaborate on. But there is a good reason you probably never heard of it: the province of West-Papua has been closed to the outside world for a very long time. I remember that we were sitting in a meeting with the political advisor at the Dutch embassy in Jakarta, just before our trip to the area. The political advisor warned us about the risks in West-Papua. The authorities in that province had a bad reputation of imprisoning Western journalists. These warnings were not entirely unfounded. We were woken up twice by the secret police and the military. One time in Manokwari, the capital city, and the other time in Sausapor, a smaller village in the north. Although we had some hiccups with the authorities, we were able to freely do our research in several areas under the pretence of being tourists. Everything about West-Papua was mesmerizing. The province is host for unique fauna like birds of paradise and tree kangaroos, and contains miles of unscathed coral reefs along the coast. But the people and their communities added the most to the experience. Our mission was relatively simple: get out there, speak with cocoa farmers, cocoa traders, and exporters, and identify what is needed for a stable social, ecological and economic development. What we heard was that many large development initiatives were completely useless. Many state initiatives invested in completely wrong areas. Foreign entrepreneurs were driven out of the land on nationalistic grounds, local governments invested in seeds for the wrong crops, and funds were allocated to often the wrong—corrupts—parties. All this could have been prevented by just listening to the needs of the people. Although we had limited amount of time, knowledge, money, experience, and any other relevant resource that you could think of, I’m convinced that we made the first step. We listened to the people, and wrote it down. We identified the problems in the rural areas by first-hand experience. And we created a plan that could potentially benefit the whole province of West-Papua. The plan is a call for cooperation between national governments, local and foreign entrepreneurs, and NGOs. Whether it will work, time will tell, but if there is something that I learned from our research, it is that development projects should not only be traditional state-run enterprises, but that bottom-up initiatives work much better because they actually engage with the people. The best thing is to get your hands and feet dirty, and get out in the field. But above all, engage in a dialogue with the people that you are trying to help. Listening to the people is the first step to a successful programme, that is often forgotten by the large development molochs. If anything, I discovered that this step is most accessible for us as students. Therefore, I would like you, dear reader, to think about how you can put your knowledge and vigour into practice to make the world a slightly better place. Don’t hesitate, but take the first step. [1]A. Banarjee and E. Duflo, Poor Economics: A Radical Rethinking of the Way To Fight Global Poverty, 2011.[2]D. Moyo, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa, 2009.