Page 1

The ECU’nomist

Year 22 Issue 1

Mayan Mayham - Should we live like we are going to die? Make your granny proud!

April 2013, YEAR 22 ISSUE 2

Sin pays. page 21

Student Life Hacks: Cheaper coffee at University Utrecht Easy and fast referencing Tip to get lost keys back



4 From the Editor 6 From the Board

8 12-13


7 Agenda 8 Economics & the World 8 10 12 16 17

Mayan Mayhem Water, the blue gold (Money-) Hungry Oil Rush Transport Woes


Business & Career

19 Ratan Tata 21 Sin Pays 23

Student Life

23 Au Revoir: OV-Chipcard 25 Lifehacks for students 26 Make your granny proud!

15-16 Several times a year, The Ecunomist is published in a circulation of 2,000 for the members, patrons, Ecunomist and external contacts of ECU’92. Kai Strohmeyer | Thomas Huigen | Leila Maria Scott | Dea Tusha | Mithra Madhavan | Natalia Neustroeva Julia Bolk | Sander Bouw | Sofia Monshouwer | Javid Allahverdiyev | Marco Engler

Study Association ECU’92 Kriekenpitplein 18, Room 1.21 3584EC Utrecht T 030-2539680 Printed by flyeralarm BV 3

From the Editor

Dear reader,

first of all, I’m glad about the feedback I heard, I would like to thank you for that. Some “nice article” here, some ”Is that The Economist?” there. We take the latter comment as a compliment for our layout team’s marketing skills, but it also led to the decision to highlight the ECU in our name, otherwise we would be stuck in a costly legal dispute with our mediocre look-a-like. So far for the friendly first paragraph, now for some frank talk. We want to remind you again of our facebook group. If you can’t get enough of our magazine, please join us, and not only this; please participate, interact. We are convinced that a very close consumer-producer relationship is the way to boost quality. Furthermore, please note that we welcome every, comment, criticism, or idea: Speak out! What has happened in the world since our last issue in December? As you read this, you have survived Armageddon 2012. It hasn’t been that bad, I think. I have barely noticed it. Snap—and over it was. (Find more on doomsday and other superstitions on page …). After relief end elation, you must have felt energetic, like hugging the world—what a wonderful place! By now, everyday life has surely caught up, and your view on the world has sobered up. In Germany, we often say: Life is no pony farm. True words. I think we can relate this to the world in general. The joy about the world’s continued existence is marred by the continued existence of bad news; Eastern Australia floods, tensions in Southeast Asia—how does this not create a new apocalyptic mood? Ironically, it doesn’t, it’s too far away. We may or may not read about it, maybe skim through it, maybe pick up a headline. Whereas a superstition rose to a topic of conversation and running gag in December, bad news usually doesn’t—unless we experience it ourselves or through friends or family or it’s presented as a crisis, or a global threat. Instead, we go on with our lives, a life consisting of the normal, which distracts us from all the bad out there as soon as we close a news site. In the face of a seemingly ever-increasing amount of available information, in the age of information overload, we have to choose. The news we like to keep in mind –or should I say, that we remember the best? –is that which we can make fun of, which generate one ‘like’ after another on facebook. What is better than news about people whose picture you can google, add a punchline and upload it, and harvest the thumbs-up of your work. In this way, which will stay in our minds for sure are two resignations which took our breath away. We all paused when we heard that Beatrix decided to pass on the crown after about 33 years of a reign characterized by stature and a constant hairstyle. This is a considerable amount of time and most will agree that retirement at the age of 75 is more than deserved—especially taking into consideration the common retirement age throughout Europe. Still, some people decide to kick-start their career just when age-mates already keep themselves busy with orchids, canary birds, or regular coach trips to nearby towns and villages. So did Joseph Ratzinger, when he took on the identity of Pope Benedict XVI in 2005, at the age of 78. Resigning around the same time as the Queen, he only brought it to some 8 years as a pope, being 85 at the time of retirement. Although he was older when he resigned, it is viewed much more


uncommon for a pope to resign than for a Dutch Queen, paving the way for speculations –was it really his progressed age, or rather intrigues in Vatican that drove him to this decision? Or did the Pope take a fancy to the queen, so by both quitting they could finally stop being responsible idols and start having some fun? (Again the hint: If you happen to know more, join us on facebook and share, or send us an e-mail: Whichever truths lie behind these resignations, they have a certain symbolic character. Two personalities, who transmit some kind of composure and experience, retire. What’s the matter with the older generations? Is this a sign? Will we young people be left alone? Who will be next? Will we have to take over responsibility? Responsibility? Don’t fret about it: There is still some hope. Silvio Berlusconi, who at the age of 77, made his political comeback instead of chilling at the pool. Or think of Queen Elizabeth II, who just celebrated her coronation anniversary last year –she really seems to take her duty pontifically. On the other hand, do we really want retirement ages as high as this; is this a societal model we strive for? It is admirable if at a high age, you still contribute to society, if you want to make a change –if you really do. Maybe, however, it’s time to stop or reduce time spent on making and consuming memes and other facebook jokes, and gradually retrieve some more serious resources from the vast pool of information. As sad as it is to say goodbye to some familiar faces, there always comes a point for the new generation to take over responsibility. For you, this can wait until you have finished this issue of the ECUnomist, of course. You might want to start participating in the public discourse by joining us on facebook or send us an e-mail about your views and constructive criticism: Have a nice Read! Yours,

Kai Strohmeyer Editor-In-Chief


From the Board

Dear all,

The first months of 2013 are flying by. With the exams of the third period behind you, it is time to prepare for the final courses before the summer holiday. But before looking ahead, let us look back at some past activities and developments. The year started off with a delicious New Year’s Dinner for our active members. These members have also received an active member’s gift because ECU’92 has celebrated its Dies in March. February was also an exciting month in which the prom, buitex and conference took place. So you might have noticed that our committees have not been sitting still. Besides all the positive news, the Board is also sad to announce that the Ecunomist you are about to read, is the last printed edition that will be send to your home. Instead, the Ecunomist will be available on our website and it will be spread around the campus. But no worries, we will make sure that the third edition of the Ecunomist cannot be missed! In the upcoming months, the Business Class to Dubai, the Project Six party, and a series of lectures will take place where various CEO’s will share their experience. Next to this, the Board will be looking for succession. Candidates can send their motivation letter and CV until the 26th of April. In other words, the academic year is far from over! Best,

Anne van Breen Chairman of the ECU’92 Board 2012-2013





Project Six

Date: 8th of May Location: Central Studios More info:

DLC Lecture - Nico de Vries Date: 13th of May Location: Academic Building

More info:

REBO Bedrijvendag

Date: 24th of May Location: USBO, Bijlhouwerstraat 6


More Info:

Utrecht Le Guess Who May Day 2013

Music festival day Date: 18th of May Locations: Tivoli Oudegracht, Tivoli de Helling, EKKO, ACU and Galerie Jaap Sleper More info:

SPRING Performing Arts Festival

Theater, dance, performance Date: 16th to 25th May Locations: Festivalhart & Stadsschouwburg, Theater Kikker, Akademietheater, Nicolaikerk, Het Huis More info:


Economics & the World


By Dea Tusha

An account of the lives of people torn between the rational and the absurd...


nother year has gone and with it, a highly publicized, highly misunderstood prophecy of Armageddon was debunked. While some gave thankful sighs of relief upon waking up alive on December 22nd, others shook their heads in disbelief at the attention that the phenomenon received in the first place. Amazing what one expiring calendar, a well-promoted film and endless internet information exchange, building up on human fear and imagination can do. What was generally called “The Mayan prophecy about the end of the world” and was supposed to take place on December 21st 2012, generated much discussion and controversy and was discredited by most people. But for the more superstitious among us, it helped to bring back mankind’s age-old fears of witnessing its own doomsday. A poll conducted among 16,262 adults in 21 countries by Ipsos 8

showed that 10% of them somewhat or strongly believed that the end of the Mayan calendar really would mark the end of the world, with figures as high as 20% for interviewees in China. Theories But how worrisome is it really, that one in ten people believes that the world will end based on theories that have been discredited as highly implausible by scientific proof? It depends. It could have devastating results if that one person commits suicide due to the fear and anxiety caused by the supposedly impending chaos, as did 16-year-old Isabel Taylor from the UK. However, this was the only official suicide connected with the phenomenon and may be regarded as a painful exception. Others took less drastic measures, which nonetheless beg the question “Is it really necessary?”

Events We allow such events to determine our decisions and impact our lives, and sometimes other people exploit our vulnerabilities for profit. In 2010 reports were made of an underground shelter network offering protection from any kind of natural or manmade disaster touching the surface of Earth. These “doomsday shelters”, very popular during the Cold War era, started making a comeback in the last half decade with sales doubling every year. And despite the company’s claims that they do not help to promote fear, but simply offer a solution to those cautious enough to insure themselves against such occurrences, the fact that they kept a countdown clock to December 21st on their website spoke clearly of their marketing strategies. Fears While some decide to play on people’s

Economics & the World

fears, others decide to play them down by making consumers feel as part of an inside joke. Several companies, including the American gelatin desserts brand Jell-o and the producers of Chevrolet vehicles ran advertisement campaigns about apocalypse survivors or bargaining with Mayan Gods (the whole exploiting-thesituation argument apart, the ads were pretty funny). But surely there is nothing to blame them for, after all that is what businesses are expected to do. However, hearing that governments would use such events to promote tourism could be a bit more mind-boggling. According to a BBC article, in countries with population of Mayan descent such as Mexico and Guatemala, projects of doomsday campaigns involving excursions, parties, and theme parks related to the Mayans were expected to increase tourism in 2012 by almost 10%, compared to the previous year. Predators This is not a case for pointing fingers and labeling businesses as the scurrilous predators of the story. If anything, they should be congratulated for turning a paranoid situation into light-hearted, harmless (profit-making) fun. The emphasis should rely on what enables them to successfully use these events to their advantage. All the ads, projects and campaigns would be worthless if they did not trigger some sort of reaction from the consumers. And if none of us correlated these external stimuli to our inner feelings of insecurity, consciously or subconsciously, we would laugh it all off and leave that trip to Mexico for another time, when finances allow. As it is, not all of us can do that.

among the most dangerous. By their very nature superstitions act as inhibitors of certain actions and catalysts for others without the need to provide a satisfactory logical reason in either case. While they may be trivial and harmless, they can impact our personal lives and more. Economic agents such as investors are not immune to such superstitious behaviours either. A study in the American Journal of Science showed that in times of great stress, the mind retrieves to superstitions and illusory correlations to regain the reassuring feeling of control and comfort, and investment decisions are made on that basis. Reflections Individual superstitions playing a part in fuelling global economic crises is quite an unsettling thought. Should we allow the feeling of relief from taking the burden of responsibility off our shoulders onto something else to determine our lives by rules of thumb? Perhaps next time you decide to go round a ladder instead of under it, you need to stop and think about why you are doing that. Will it really prevent something terrible from happening, or is it actually just a convenient shortcut? I know I might have to consider one or two habits I now do quite inadvertently. Having said that, I will probably keep wearing my lucky necklace, just in case. â–

Superstitions Time and again economics students are thrown out of their comfort zone and made to face the harsh facts of real life: pure theoretical rationality is hard to find in practice. Of all the behavioural aberrations human beings are prone to, the inexplicable fear of phenomena we do not fully understand may well be 9

Economics & the World



n December 2012, the European Commission decided to define water as an ordinary good and, hence, make it oblige to invite tenders. Two years earlier in 2010, the United Nations declared the access of clean drinking water as a human right. Privatization is a neoliberal idea and requires free markets. However, there are some goods and institutions which have to belong to the public sector because of its responsibility to ensure the access of the citizens to these basic human needs. They comprise education, water, electricity, patient care, garbage disposal and housing. Still, some of these sections were partly or completely privatized within the last decades at many places. Yet, the mission of many private companies is profit maximization, which creates a good deal of conflict potential with the public interest in these sectors. Between 1994 and 1997, the British government privatized British Rail 10

and thousands of companies and subcontractors have flooded the market. Some years later, however, the system could not work without any regulation. The ticket prices had increased, workers had been laid off due to cost minimization and the railroad property had gone to rack because of too expensive maintenance investments. Moreover, no one could stay on top of it anymore which led to miscommunication between the entanglement of enterprises and subcontractors. The huge amount of companies had made it impossible to open or close new routes or change schedules. Moreover, the government paid more subsidies within three years than it had acquired with the sell-off. The whole chaos resulted in legion victims. The biggest tragedy was the Potter Bar tragedy in May 2002: seven fatalities and over 70 injured due to poor maintenance. In 2002, Network Rail, a non-profit oriented company, took over the whole infrastructure.

Despite all these negative aspects to privatization processes, Junkers proposed in March 2011, that “this successful model might as well be a model for Greece�. During the financial crisis, the International Monetary Fund gave the European Union support but set them simultaneously under pressure to initialise the privatising of the weakening state’s property. The fiscal pact, a guideline for states which need money from the ESM, relates to privatisation of public sector property. In Greece, the three biggest parties own the Asset Development Fond (ADF),. This institution is obliged to sell public property, even arts, by the condition to keep everything at the place. Of course, a power plant or the Acropolis is hard to relocate anyway but the ADF has to sell everything owned by the country. All of these models, regardless whether in the UK, Greece or Russia, follow the rule: Costs are covered by the tax payers, revenue goes to creditors. The

Economics & the World

press communicates that privatisation is a need. Companies, as long as they are managed by the public sector, cannot work efficiently and are too expensive. Another lie is that these companies cannot fit their tasks. In fact, the task of a railroad company is to deliver people safely in clean trains and, if possible in time. The company’s form is never ever related to the quality of one of these. Consequently, privatisation has no social benefit. Furthermore, private companies mostly aim to maximize profits and this goal can solely be attained by cost reduction or increasing prices – or both. There is no economical reason for privatisation; in fact, public losses are always overthrowing. The private sector was never more efficient than the public sector in providing basic goods. What about water supply? Greece is obliged to sell off the water sector completely. The privatising of water follows a worldwide used model: PPP: Private Public Partnerships. The Private Public Partnership model has been developed by Suez and Veolia for years. Both companies have taken over the public water sector of Paris for 25 years. They try to argue that the property is still owned by the public sector but prosecuted by the firms. However, the public sector has no influence in what is going on. In fact, the one who takes all rights of something away and operates it, is technically also the owner. If it is waddling like a duck, quacking like a duck, looking like a duck, it has to be a damn duck! Jacques Chirac had offered both companies, Suez and Veolia, the water supply in 1985. The price increased by 260 % over these 25 years, the supply, however, fell. In 2001, the new elected city council decided not to extend the contract and reduced the water price by merely 8%. Furthermore, they invested in the racked network to maintain the business. In Italy, right before the intervention of the IMF, a referendum was staged and 57 % decided to leave the water supply of Italy in the private sector. Berlusconi said he could break out of it. However, after the enthronisation by banker Monti he said that he feels not bound to that. Of course, this might be honest. Papandreou, on the contrary, said at the

International Fair Thessaloniki, that he would not privatise the water supply in Greece if he was elected. Literally: “I am against privatising”. However, Greece started privatisation of the water supply already before the takeover by the IMF and EU has staged. Athena and Thessaloniki were privatised before and the price had risen by more than 200% within 10 years. Unfortunately, the companies did not invest in network maintenance. Therefore, the costs of defects and attrition had to be paid by citizens.

Jean-Luc Touly, a former manager of Veolia said in his book Europe Ecologie that “if you work in such a mafialike, corrupt system you have to share the money, credits and generous gifts to ensure the social harmony. And even the environmental organization, which I even really highly prize, gets generous finances (… ) like France Nature Environment through Veolia or Red Cross, La Solidarité or Secours Catholique”. ­■

The system is always the same: Companies take over the public sectors, pay the amount of money and get it back as subsidies, the maintaining costs are paid by taxes and after years the cities try to get out of the contracts. Some of these stories ended really horribly. The government of Nairobi guaranteed Veolia a profit of 15 %. To ensure the profit, Veolia increased the prices by 40 % every year, many citizens could not afford the prices, were disconnected from the water network and Veolia fired 3,500 local workers to engage 45 “experts” from France. This 45 professionals, however, were more expensive for the government than the 3,500 Kenyans. In 2001, the city Nairobi paid an unknown amount to cancel the contract. In Uruguay, Suez required an increase by 700% in contrast to the public sector prices. The politicians decided for a poll (64% were agree) and established a paragraph in the contribution that water needs to be a public good. A privatisation in the water supply in a town in Portugal led to the situation that people preferred to get water from the city fountain for free. However, after a certain time, the city was obliged to announce a statement that drinking water from the fountain is forbidden: “The water is not healthy anymore”. It might be obvious that these takeovers of public sectors are not only enforced by promises. Suez and Veolia bribed politicians and business men as well. The mayor of Grenoble was bribed with 2 million euros and sentenced as well as three operating managers of Suez. Veolia and Suez bought professorships among others in Toulouse, Nancy, Berlin, and Strasbourg. Managers and politicians.


Economics & the World


By Kai Strohmeyer

While the oversupply of food in the filled shelves in our supermarkets facilitates oblivion, world hunger remains a significant problem for mankind. What is its cause? Do we eat too much? Do we eat the wrong things? Do we chew knowingly and yet not undertake any effort to make a change?


unger for most of us is a word mistakenly used to describe appetite. More appropriately, we refer to it when our stomach rumbles right before the next meal, when the last one has been a couple of hours. It seems tasteless, however, that we co-use one and the same word to describe our very short-term unoccupied stomach to the situation that millions of people face in poorer regions of the world. In this context, as defined by the World Food Programme, hunger describes a situation in which people take in significantly less than 2,100 calories per day over a period of weeks or even months (where the number stands for the average calories requirement for a healthy life). Hunger causes a slowdown of physical and mental activity; for adults, this means a reduced ability to work, whereas children focus and study worse. Apart from that, hunger constitutes a risk to health. It weakens the immune system, thereby increasing the severity of normally harmless infections or diseases, such as

measles. According to the UN World Food Programme (WFP), hunger and malnutrition are the number one risk to health, greater than AIDS, malaria and tuberculosis combined. What does the situation look like precisely? 870 million people do not have enough food, 98% of whom live in developing countries, and 60% of whom are women. Undernourishment causes five million deaths of children under five each year in developing countries (60% of all child-deaths under five there).

grain) for its own metabolism, leaving one-tenth for human meat consumption. A switch of all mankind to a vegan diet would make it possible to feed the world, to eradicate world hunger, so they say.

Knowing about its consequences and its enormous dimension, an obvious question arises, whose answer is needed to make a change: What causes hunger? Believing animal liberationists such as PETA to be right, those who are to blame are the numerous non-vegetarians/ non-vegans. To support their argument, they like to refer to the inefficiency of the livestock sector, where a cow, for instance, will use about ninetenths of the calories absorbed from its plant-based diet (corn, soybeans and

Following a report by the World Health Organization (WHO), based on analyses of food balance sheets by the FAO (Food and Agricultural Organization of the United Nations), the following trends emerge: From the 1960s to the end of the 1990s, world average calorie intake increased from 2358 to 2803 kcal per day per person, while also annual meat consumption per person rose from about 24 to over 36 kg. Differences between world regions are shown in detail by the diagrams.

It appears plausible: Instead of burning calories for an unnecessary luxury good, we should show solidarity and nourish people with it. Is it indeed as simple as that? After all, plausibility is not proof, and this is often misused for populist or deceptive argumentation.

Transition countries Industrialized countries South Asia East Asia

1997 - 1999

Latin America and the Caribbean

1974 - 1976 1984 - 1986

Sub-Saharan Africaa

1964 - 1966

Near East and North Africa Developing countries World 0








Diagram 1: Average calorie intake (kcal/day) (Source: WHO, 2013)



Economics & the World Transition countries Industrialized countries South Asia East Asia Latin America and the…

1964 - 1966

Sub-Saharan Africaa

1997 - 1999

Near East and North Africa Developing countries World 0






Diagram 2: Average annual per capita meat consumption (kg) (Source: WHO, 2013 )

Nearly all average values have risen, which makes the above line of reasoning a feeble argument, an attempt to call on those who do not care about animals to show at least solidarity with their fellow earthlings. The case might become an issue for hunger in the near future; the world population is still increasing and available arable land might have to be used more thoughtfully. Growth in yields per acre cannot be expected to improve substantially due to improvements in technology any more, while potentially useful land is covered by forest or infrastructurally unconnected. Moreover, as economic growth and urbanization occur, it is typical for newly rich citizens to adapt a diet richer of animal products; for whatever reason, this is what simply happens. For now though, the numbers speak for themselves: The energy available per person even exceeds the recommended calorie intake. What goes wrong? Averages have one drawback: they do not reflect inequalities. Whilst somewhere, bolting, sweating contestants are chipmunking the remainders of their two kilogrammes steak into their cheek pouches, elsewhere on the planet, undernourished, weakened children search animal manure for seeds that they then wash and eat. Overall supply might be sufficient, but its equal distribution is not. One main reason are income inequalities; who earns money can afford food.

Coming back to the thought I question above, one might want to argue that the consumption of fewer animal products might lead to a higher supply of for instance grain, making it cheaper on the world market and more affordable for the hungry. Yet, to think outside the short-run, the higher supply would lead to more competitive markets, which would drive down profit margins and at some point, grain producers would rather switch to a more promising product in terms of profits. Supply would simply decrease as a result of lower demand. Did I just write about ‘lower demand’, while there are more than one in seven people suffering from hunger? How is this not demand? The main determinant of hunger is poverty, and indeed, market demand is about what people are willing to pay for a certain quantity of products. As a food supplier, those who have no or little money are simply non-existent on the demand curve or at a point, where incurred costs are not covered; their reservation price is low, just as their income. Thus, they are not interesting in terms of profit generation. As with other products, also in the food industry, capitalist principles apply. Who cannot pay for food, has to starve. Is the capitalist system maybe not the right one for the food market, in which the aim should be to provide for everyone properly? Would a planned, socialist economy be the remedy? It is common for all complex questions, neither ex-

treme provides the right answer. On the one hand, it seems paradoxical that even during famines, some countries continue to export food to those who can pay its price. On the other hand, in North Korea, gluttony is rather reserved for particular social classes, while hunger is the more general case. Diving deeper into the topic for the research of this article, its intricacy kept posing questions to me instead of answering the ones I had. The food sector features its own peculiarities that have to be kept in mind when one wants to find solutions to the massive scale of world hunger. Besides eating habits, the environment and requirements to different crops, also the societal context of a globalized world that leads to food dependencies especially in lower-income, food-importing countries, is an important aspect that needs to be considered. Especially because proper nourishment is the cornerstone of human well-being, the most effective regulations need to be found to combat market inefficiencies, but also to take harm away from the poorest. Speculation on food prices, for example, is recognized as a serious problem by the FAO, since price volatility mostly harms producers and consumers on the poor side, where more than 75% of income is spent on food. At the same time, inequality and poverty need to be tackled, since after all improvements that one can make to the current situation, one thing will not change: Money buys food. ■




Economics & the World

OIL RUSH By Javid Allahverdiyev in order to diversify into Azerbaijan’s other industries and decrease one-sided development of the economy. As the industry developed, new methods of drilling, storage and transportation emerged. The first successful oil tanker in the world — a refurbished metal ship called “Zoroastr” — was built in 1877 in Sweden by Nobels. By 1890, 345 tankers, including 133 steam vessels and 212 sailing vessels, were sailing on the Caspian Sea.

Azerbaijan, the land of fire, a

country located at the border of Europe and Asia, combines traditions of the East and modernity of the Western world. Azerbaijan has a long tradition of oil extraction dating back to the 9th century, but real industrial scale extraction only began in the mid 19th century, during the oil boom that mostly took place in the Absheron peninsula (where most oil fields were located). Azerbaijan was part of the Russian empire in the 19th century and the first capital that entered the oil industry was Russian. The main factor that prevented the oil industry from sustainable growth during that period was the “Otkupschina’’ system. This system meant that oil production was monopolized by a set of individuals who saw no incentive to increase production or improve drilling methods. As a result, a lot of oil was simply lost during the extraction process. In 1846, under the supervision of state advisor V.N. Semyonov, engineer Alekseev drilled a 21 m deep well using a primitive percussion drilling mechanism, to explore oil, with positive results. More than a decade later, on August 27, 1859, Colonel Edwin L. Drake struck oil on American soil for the first time. The abolishment of ‘Otkupschina’ in 1870 16

spawned a growth in the oil industry and the first oil boom. During the first boom a number of capitalists form Azerbaijan and foreign countries started investing in the oil industry in Absheron. As a result, there was a flurry of financial activity and various banks and organizations were created. In 1884, the oil barons in Baku established their own organization, the Oil Extractors Congress Council for the discussion of oil business. The increase in oil extraction led to the establishment of petroleum, kerosene and paraffin industries. By 1901, Baku produced more than half of the world’s oil. Foreign capital entering oil industry was introduced by Branobel Operating Company (Nobel Brothers), De Rothschild Frères, Royal Dutch Shell , James Vishau and Anglo-Russian Oil Company. Azerbaijan, part of Russia’s empire, served as an oil appendage for growing appetites of Russia’s growing domestic appetite. The Russian aristocracy wasn’t interested in developing other industries, except the oil industry, which caused Azerbaijan’s economy to develop in a lopsided fashion. Zeynalabdin Taghiyev, the national industrial magnate and philanthropist, was the first to change the situation. Taghiyev sold his oil companies

The 19th century was a memorable time for the oil industry in Azerbaijan. The oil industry greatly influenced the architectural appearance of Baku as a modern city. Administrative, social and municipal institutions were established which, in turn, made decisions about the city’s lighting, roads, streets, buildings, telephone stations, and horse-drawn trolleys. Gardens and parks were laid out and hotels, casinos and beautiful stores were built. Baku and the Absheron peninsula became the world’s most prominent region. ■

Economics & the World

TRANSPORT WOES By Natalia Neustroeva

Public transportation is almost a universal cause of debate and daily complaints. Remarks such as “Oh, my train was late again! Public transport is terrible here..” can be commonly heard from passing strangers at least once a day. Funnily enough, these remarks are prone to always being negative. What is the cause of such unpopularity of public transport amongst its users? And more importantly, is this dissatisfaction deserved or a simple case of “The grass is greener on the other side”? While trying to solve this mystery, I will focus on the two more commonly used modes of public transport: trains and buses.

In the Netherlands, relying on

trains and buses in order to travel to and from universities and places of work is a daily fact of life for many students and workers. Both modes of transport follow a very similar payment system. Although one can buy a ticket to their desired destination, the majority of public transport users acquire an OV-chipcard, which enables to pay the fare swiftly and efficiently. One can put money on it at a service desk in most train stations, or with the help of an OV-chipcard vending machine. The latter, however, is aimed at the residents of the Netherlands since they do not accept foreign bank cards (an exception to this are vending machines at airports). According to the official NS website, minimum amounts of €20 and €5 are required on the chip-

card to be able to travel by train and bus, respectively. Dutch university students are granted free transportation for the duration of their studies, while discounts are given to seniors and international students under certain circumstances. The rest pay the full fare, which can range anywhere from 50 cent to 20 euro, depending on the distance one wants to travel. The fine for no payment of the train fee is a surprisingly low €35 plus the price of the unpaid ticket. Punctuality is where things begin to get tricky. The opinion of most Dutch students I asked is that Dutch public transport needs to undergo much improvement in this sector. Trains not coming on time is one of the main reasons why many students are late for their lectures and tutorials. Although I

have often found it quite humorous to observe Dutch people get nervous and agitated when the train does not arrive on second, I admit that they have a right to complain during the winter months. My personal experience of punctuality of trains was very positive up until November. As soon as the wind became stronger, leaves began to fall and frost to form on the railways, I almost counted myself lucky if the train was simply late, as opposed to cancelled altogether. As this problem seems to arise every year and the cause is the same, it is disappointing to see such a lack of preparation and improvement. As for buses, my experience has been overall very positive both in summer and winter. I will not deny that there are times when you can be found waiting for a bus that was expected to come 20 minutes ago, much 17

Economics & the World

to the disapproval of the collected crowd. However, this only results in minor (if any) annoyance to me, in comparison to the pubic transportation I had to suffer in Ireland. Unlike in the Netherlands, the usage of public transport in Ireland is reserved mostly for long distances, as opposed to also travelling within cities and towns. One of the reasons for this is that it is expensive and inconvenient. Ireland has not adopted a swipe card system, meaning that tickets need to be bought every time. This implies that one always needs to carry around some change in their pocket, which is becoming less and less common due to the existence of bank cards. In contrast to the Netherlands, where the price of the fare changes depending on the distance one travels, Ireland has a fixed short distance (within the city or town) bus fare of €1.80, even if one needs to get off on the next stop. It


would be expected that long distance bus fares and train fares would also be fixed as they are in the Netherlands, but this is not the case. Each train and long distance bus company offers its own prices and discounts. An exception to this are people aged 66 and over, who may travel for free. Thus the fare to travel from one side of the country to the other and back can range anywhere from €10 to €20 both by bus and train. The fine for not having bought a train ticket is exceedingly larger that in the Netherlands; €100 plus the unpaid fare. There is a saying in Ireland that many of its people tend to follow: “When God created time, he created enough of it.” This “There’s no rush, we’ll get there!” mindset extends to public transport. Trains and short distance buses are expected to be late regardless of the weath-

er. If the weather is especially windy or rainy, one can be counted as lucky if a bus comes at all. To top it off, Ireland does not have bus arrival screens at its bus stops, so there is no way of knowing if a bus has been cancelled. Long distance buses are less susceptible to being late, but there are still many cases in which something happens on the way, such as “unexpected” traffic, forgotten to be taken into account. It is quite evident that compared to that of Ireland, the Dutch public transport system is not so bad after all. It may have its faults, but they are largely overshadowed by easy payment methods, relatively fair prices, and consistency of arrival. So the next time your bus comes 5 minutes late, instead of glaring at the bus driver as you swipe your handy OV-chipcard, be thankful that the bus arrived at all. ■

Business & Career

RATAN TATA: Struggling Between Good and Evil

By Julia Bolk

“I look down on CEO’s who are always in the media, it gets boring.”


Business & Career


Tata - India’s most powerful businessman according to the Economist, ranked 61st in the World’s Most Powerful People list by Forbes, and multibillionaire - paid a visit to the Netherlands in the second week of 2013 where, he was awarded a honourary doctorate from the University of Amsterdam, “for the significant contribution he has made to the global expansion of the Tata Group, in which he has combined economic growth with a comprehensive corporate social responsibility programme.” Not everyone agreed with this statement of the University of Amsterdam and protested against the award. What did Ratan Tata do wrong in the eyes of these protesters, while many advocates praised the 75-year old entrepreneur? Who is Ratan Tata, known to be a shy businessman? Tata appeared as a guest in the weekly ‘Room for Discussion’ at the economics campus of the University of Amsterdam and discussed these subjects, in front of a mixed audience.

“He was knighted as a Knight Commander of the Order of the British Empire” Career Ratan Tata was the 5th Chairman of the Tata Group, an Indian multinational company located in Mumbai. The company owns over a hundred operating companies, of which the most well known are Tata Steel and Tata Motors (owning Jaguar Land Rover). It also owns companies in other business sectors, such as chemicals, consultancy, energy, food and beverages, and communication. Ratan Tata completed his bachelor degree in architecture from Cornell University in 1962, and the Advanced Management Program from Harvard University in 1975. These extensive periods in the United States increased Tata’s understanding of the Western economy, which helped him to introduce the Tata Group internationally. Before Ratan Tata, the Tata Group had only focused on India; but he wanted more. The company relied too much on one – while fast growing, still sensitive – economy and Tata desired to create more balance. Yet, the company still faces the most difficult challenges in India. “The challenges are not related to the European downfall. Infrastructure is a main problem. We lack airports, roads, and ports. Constructing these kinds of infrastructure will increase employment, but it needs to be done by the government,” Tata answers when asked which challenges the company currently faces. Personality One of Ratan Tata’s main characteristics is his ‘shyness.’ He prefers to be in the background, which is why this interview in Amsterdam was a rare one. On the other hand, who declines a honourary doctorate? When Tata is asked why he is media shy, he answers: “I look down on CEOs who are always in the media, it gets boring. If you do not have anything to say, you better say nothing. I do not have problems addressing people in Tata Group’s plants, but I do have problems addressing the media”. This way of working has been very successful for Ratan Tata so far; he was even knighted as a Knight Commander of the Order of the British Empire. It is difficult to find any personal criticism on Ratan Tata’s personality on the Internet, in 20

contrast to his company, which received some negative publicity. Tata Group When Ratan Tata became the chairman of Tata Group in 1991, this raised substantial disapproval. Critics believed he only received the position because of his surname. Nearly 20 years later, Tata Group’s revenue is 40 times the 1991 level, while net profit has gone up four times. In the same year Tata became chairman, India finally opened up to the world economy. According to Tata, this liberalisation was both an opportunity and a threat. It was an opportunity because it freed Tata Group (less regulation and less rules), but it was a threat because the company was vulnerable; it now had to compete with international companies. Luckily, Ratan Tata knew how to and made the company into a multinational. Today the company earns 60 percent of its revenues abroad, it employs more British workers than any other manufacturer, and two of its companies are listed on the New York Stock Exchange. Tata Group is even more diverse than it seems. It owns the Indian Institute of Science, the Tata Memorial Hospital, and in the hometown of Tata Steel, Jamshedpur, the company owns a zoo, a sports stadium, sport academies, and a local utility company. Prabhat Sharma, head of corporate affairs for Tata Steel jokes: “They provide you with a house and car, the only thing you need to bring is a wife.” Tata Group dominates a large share of the Indian market in every way, which is why critics used this diversity as a reason to label the company as a monopolist.

“Tata group is more diverse than it seems” While it has not been an easy ride for Ratan Tata, he can definitely be proud of what he has accomplished. He transformed the Tata Group from an Indian company to a multinational and has been a very successful chairman. From a company only focusing on the Indian market to one of the big players in the world, Ratan Tata did his best and succeeded, professionally and personally. ■

Criticism of the University of Amsterdam While the UvA proudly announced the coming of Ratan Tata and his honourary doctorate, this event received plenty of criticism, mainly from faculty members and the media. The main question that arose was why a university awards a honourary doctorate to a CEO of a capitalistic, neoliberal company; one that has received many criticisms on its growing monopolistic position. By doing so, the university harms its own independence and credibility, according to an article in the Volkskrant, which assumes that the UvA has received a great gift for this. Another point is that honourary doctorates are awarded for scientific research, not for leading a successful business. It seems out of context to give CEOs this kind of reward. But then again, the UvA has definitely not been the first university to do this. Ratan Tata has received many prizes before from universities (e.g. University of Cambridge and Yale University), which no doubt had good intentions in doing so.

Business & Career


By Thomas Huigen

“The decision to invest in sin stock or not comes down to your own choice: whether to walk the holy narrow road, or to invest in those who walk the corrupt wide one.”

If your tongue is forked, you

dream that Eric Cartman is a Republican presidential candidate and you lack a conscience, sin stocks could be a good investment option for you. Regarded as sinful, they help finance companies operating in unethical and immoral industries. The term is relative, as some people might see stocks in coal and nuclear electricity companies, meat production and low-wage manufacturing as sinful. So I will be using the term in its more commonly held sense, namely to refer to stocks in tobacco and alcohol manufacturing, the casino industry and the adult entertainment sector. Why invest in sin? With their negative stigma, sinful companies have depressed stock prices and are therefore an attractive investment. Another advantage is that these products or services are almost always in demand because of their addictive nature, meaning that they are a safe stock for recessions. Moreover, during recessions people lose their jobs, become depressed and either turn to the bottle and cigarette to de-stress, gamble

to pay back their debts, or perhaps lose their partners and turn to the adult entertainment sector for comfort. Clearly a recession provides higher returns for sin stocks (that is if the unemployed aren’t stingy by stopping the consumption of the above). Or even better, the recession turns occasional drinkers, smokers, gamblers and porn-site visitors into fully fledged addicts. Studies on sin stocks show that they significantly outperform the market. And if you would like someone to do the investing for you, let the Vice Fund do it, a mutual fund which strictly invests in these wicked stocks. The above sin stocks are fairly well known, so I would like to turn to the more exotic and sinister stocks with a higher risk, but naturally a larger opportunity for mega profits. Because let’s face it, Homo economicus functions rationally, and what is more rational than rolling in guaranteed cash? Who cares if it’s because of the misery of others. Kalashnikov Inc. So invest in weapons and defence

manufacturers. This will give a whole new dimension to war since you actually want it to happen. However there are only two stock exchange listed American gun manufacturers, so the choice is limited. If only you could invest in the most popular rifle manufacturer of all time, the Kalashnikov. This rifle series is currently used by over 50 armies worldwide (the website proudly boasts) and there are approximately 70 million currently in use with the AK-47 being the most popular. Alas, it is not a listed company. An initial public offering of Kalashnikov Inc. would probably be record breaking. Reliable, automatic and unrivaled in making people do things for you, it is certainly a quality sin investment. Fear producing news channels like Fox could be a good support investment as the perpetual paranoia and fear they create of external and internal threats will guarantee a steady sale of guns in the US. If investing in small-scale for always invest listed defence

automatic rifles is too your liking, you could in multi-billion dollar companies like BAE


Business & Career

Systems, Lockheed Martin or Dassault. These companies build bombs, fighter jets, missiles and a host of other gadgets designed to annihilate enemies of the free world. They are, however, often embroiled in corruption allegations due to the intense competition for government contracts, with bribes usually making up a substantial percentage of the final sale. According to Transparency International, 50% of all bribery allegations in the US stem from the defence industry. Money for bribes means that there is money for dividends. Sounds good right? Unfortunately the Obama administration’s decision to cut the US military budget by $450 billion and the disastrous wars in Afghanistan and Iraq mean war isn’t the West’s favourite hobby anymore. However, world peace is not going to happen anytime soon, so a stock option in a large defence company could always pay off later under the rule of the next belligerent Tea-party commander-in-chief.


Corleone Tree Huggers Perhaps investing in weapons is too brutal for your liking, so you could always look at the highly lucrative narcotics sector, seeing as its direct goal is to make people happy. According to the United Nations Office on Drugs and Crime, some 230 million people worldwide have used illicit drugs in the past year, and 27 million are habitual users, meaning there are guaranteed long-term sales in an industry worth roughly $320 billion per year. Direct investments are a little more difficult because the narcotics industry (with the exception of medicinal Marijuana) is not officially listed on the stock exchange. However, there is still a possibility that you can find some front companies (i.e. illicit enterprises disguised as legitimate businesses) like Soprano Charities or Corleone Tree Huggers to invest in. They can funnel your well intentioned cash into buying small submarines, drug mules and hiring chemical experts who specialise in producing odourless compounds, all to transport certain

packages from one Latin American country to the West undetected. The decision to invest in sin stock or not comes down to your own choice: whether to walk the holy narrow road, or to invest in those who walk the corrupt wide one. The meaning of “sin” is in any case subjective, so don’t take notice of those criticising your so-called “evil investment”, they’re just taking the moral high ground and are probably hippies anyway. Furthermore, the golden rule of investing is a diversified portfolio, so it seems natural to include as many different kinds of stocks as possible, however destructive and devilish they may be. As a columnist of the American ABC News


Student Life

By Sofia Monshouwer

As we all know everything comes to an

end. 2013 seems to be a not so lucky year for students when it comes to financial matters. The government will introduce new cuts in financial aid, health and public transportation. Are these cuts going to affect our opinion about Dutch public transportation? 2012 may have not been the end for human beings, but it definitely meant the end for our free trips with the OV-chipcard. The Dutch government decided that from 2015 the OV-chipcard will no longer be a season ticket, but just a discount card. Students will have to pay 40% of their travel costs. Within this

austerity measure, there is also the cutoff of the basic grants for students and the elimination of health care benefits. The grant will be substituted by a loan program in which the graduates will have to return the money borrowed once they start working. This means that the cost for students will increase until 5000 a year. It would have been nice if the Mayans had warned us about this.

The Netherlands has been the home for many international students for decades. They all bring different points of views and experiences that might be a culture-shock for public transportation. Therefore, I decided to inquire into the opinions the internationals have about the Dutch public transportation in comparison with the one in their country. ■

The introduction of these cuts, especially on public transportation, will obviously cause some complaints. Public transport: one of the greatest inventions for those who don’t own a car or those who don’t wish to get wet in the rain. However, as everything in this world it is not perfect.

Pros Cons Knowledge Costs Using a smartphone people can know before the train employees if It is quite expensive and it is only getting worse. (Dutch stuthere’s going to be a delay or change in track. ( Dutch student) dent) Safety Speed Busses here have closed doors. In some Asian countries they don’t. Busses are a bit slow, but it is faster than walking. (Dutch (Indian student) student) Speed Punctuality It is safe to be standing on the bus with the cruise speed they use. In There are train delays in winter because of the snow, in spring Spain if there’s a football match you better hold on yourself well or because of the rain and in autumn because of the leaves. you will be flying around the bus. (Spanish student) (Dutch students) Kindness Bus drivers if they see you running next to the bus because you missed it, they actually stop. (Greek student) Cheating It is easy to travel by bus without paying. They don’t check. (All nationalities) 23




lifehack (lΛıfhak) noun any procedure or action that solves a problem, simplifies a task, etc, in one’s everyday life (Definition by the Oxford Dictionary)

Cheaper coffee at University Utrecht Did you know that if you re-use your cup at the coffeemachine you automatically get € 0.11 discount on your drink! Well, technically you just don’t pay for the cup being supplied in the first place, so the discount also works when using your own mug (except for glass). Of course the coffee at the ECU’92 room is still free of fee for its members. So start your cheapskate Dutch life now!

Easy Referencing Never really got the hang of the APA referencing style? Finished your paper two hours before the deadine, but didn’t pay attention to your bibliography? No worries, with Refworks you can quickly get this done. Less headaches and worries about applying the rules. Just fill in the details and you can quickly insert them in your bibliography and paper. For more information about Refworks and how it works visit http:// and click on RefWorks. Lost keys Probably the most valued grocery attribute: the AH bonuskaart. Also available as a handy keychain. When picking up the discount card, you can supply AH with some contact details. In the case that you lose your keys with your keychain attached and somebody drops them off at an AH. AH can contact you using the contact information supplied.

Have you encountered lifehacks yourself and you want to share them with your fellow economists? Send them to and they might be published the next ECU’nomist! 25

Student Life

Make your Granny proud! By Sander Bouw

“ Hey dude on the second floor of UBB, near the history books. I really like your brown jacket, you look good in it! I’m sitting at the table next to you! ”

My grandparents would be so

ashamed. First of all, they wouldn’t even know how to do it. They would either end up playing Scrabble or they would fall asleep during the process. I could try explaining it to them, but it would take ages. When they were my age, people still had some guts and they would need to show this in order to succeed. They weren’t afraid of being ridiculed, they just gave it a shot. Besides, back in the day the wheel was barely invented, so they didn’t really have other options. Today we have the internet; they only had one place where they could all meet up at the same time and that place was called church. I believe it all started halfway December, probably when some student was looking at an attractive young lady in the UU library. I hear you saying, shouldn’t that student be doing some kind of studying and I say to you: yes, yes he should. However, studying and being a student are


two very different concepts and I could present a lot of arguments which make you think they are completely unrelated, but let me keep to the point. I presume this student was too shy to tell this girl that she was beautiful, so he thought of a way to tell her anonymously. ‘Gespot: UB UU’ was born and a month later the Facebook page has been liked by 12,203 people. Still counting. The concept is very easy: you see someone in the library whom you want to tell something. However, you do not have the balls to do this personally, so you send a message to the Facebook page which will then post this message on your behalf. No one will ever know who posted it and the intended recipient might read the message. A game in which you cannot lose, one would say. Because when the person the message is meant for does not read it, other people will. They will like it, which will then results in happiness. This is basically the essence of Facebook. However, think of all the unlimited scenarios that can occur when this hotty does read it. This is extremely likely to happen, because sooner or later she will be using Facebook some time during her ‘study session’. All students do so –believe me. The girl will be flattered. Never in her life has she been described in such a delicate way and these words can only come from one who truly, truly loves her. She will be flattered and she will blush. Then, inevitably, the two soul mates will make eye contact, both knowing that they are destined for one other. Next to the coffee machine is the place where

they will first kiss and after their fairytale wedding they will both hop on their unicorns for a journey along the rainbow. Cut the crap, this is never going to happen. I dare say this has resulted in one or two dates, at most. Very awkward ones. Regrettably, besides the University Library you can now also ‘spot’ each other on all other University places, on the bus and even on the train. Lijn 12 might just be the place where you are finally going to fall in love. At all times you need to be dressed adequately, since anytime you can be spotted by your future husband or wife. No longer is there any place where you are safe. This makes me very sad. No love is going to be created, just false hopes. If you are really into someone and you think it is love at first sight, I advise you to do it like my grandfather did, when he was my age. Just have some courage and step up to someone. Make them grandparents proud! ■

Popular ‘Gespot’ Facebook Pages: Hartstocht in de trein: 38,471 likes Gespot: UB UU: 12,203 likes Gespot lijn 11 & 12: 749 likes


Colofon The ecunomist is an edition published by the Editorial Committee, on behalf of Study Association ECU’92 Redactieadres Study Assocation ECU’92 Kriekenpitplein 18 3584 EC, Utrecht Telefoon: 030 253 96 80 E-mail adreswijzigingen: E-mail redactie: Editor-in-chief Kai Strohmeyer

Master’s in Economics Programmes 2013/2014

• Economics of Public Policy Management • Multidisciplinary Economics (Research Master) • International Economics and Business (4 Tracks) Deadline for application 1st of June for students who obtained their BSc in the Netherlands

More information:

For more specific questions e-mail:

Editors Thomas Huigen Leila Maria Scott Ecunomist Online Sander Bouw Design & Lay-out Mithra Madhavan, Cyriel Nysten Writers Javid Allahverdiyev Marco Engler Sofia Monshouwer Natalia Neustrova Dea Tusha Distribution Partly directed via postal address and partly via distribution available at Spinoza Hall and Adam Smith Building.


The Ecunomist will be published predominantly online in the future. You can already check the current and past editions on In case you still prefer a hardcopy edition, a limited number of prints will be made available at Spinoza Hall and Adam Smith Hall.


Jouw studievereniging wil het je zo voordelig en makkelijk mogelijk maken. Dus hebben ze een boekenleverancier die daarbij past.

Jouw studievereniging werkt nauw samen met studystore. En dat heeft zo z’n voordelen. Doordat we snugger te werk gaan, kunnen we jouw complete boekenpakket snel aanbieden tegen een scherpe prijs.


ECU'nomist 2012-2013, Year 22, Issue 2  

The ECU'nomist is an edition published by the Editorial Commitee, on behalf of Study Association ECU'92. Study Association ECU'92 represen...