APMacro: IES Trade Session Prep


IES_Summit
Improving living standards and the quality of life is your responsibility as an economic advisor. The trading session at the Summit is a great opportunity to achieve your country’s goals and demonstrate your superior trading ability. When you begin the Summit, you will receive an export coupon your export coupons (your country’s name will be on each coupon). During the trading session, you will trade (barter) your export coupons with other countries or you may buy and sell export coupons for cash.No coupons are to be exchanged prior to the trading session.

What is the Trading Session?
Your goal during the trading session is to exchange your export coupons for import coupons you will select as you generate your country’s strategic plan. You and your team will submit a list of import coupons you intend to obtain during the trading session at the Summit. The imports you select and submit for your strategic plan become the goals you must try to obtain during the trading session. You and your team can earn up to 20 points for meeting your import goals. At the end of the trading session, you may have some of your own coupons left over. No problem! Extra exports just mean you have a trade surplus. These coupons do not count toward your import goals.

Here is an example:
Let’s say the United Kingdom has 5 Consumer Goods coupons to export (these could represent clothes, washers and dryers, cars, or lawnmowers). In their strategic plan, the United Kingdom selected 3 Consumer Goods coupons to import (they wanted microwaves and coffee makers). At the end of the trading session, the United Kingdom has 3 Consumer Goods coupons, two coupons from Japan, and one of their own original Consumer Goods coupons. The Consumer Goods coupon with the United Kingdom label will not count toward meeting the import goals of their strategic plan.

Remember, you must trade, barter, or sell your export coupons for the import coupons you selected.

APMacro: IES Trade Alliances


Summit Team Scoreboard

On the day of the Summit, your team will receive 2 Trade Alliance Cards. An Alliance Card is proof of your membership in a Trade Alliance. Just a name on the Trade Alliance form is not enough to prove your team is in the Trade Alliance. The card represents your legitimate membership in the Trade Alliance.

Special note to Division 3 Countries: Be sure to join an alliance with at least one Division 1 Country and make sure they agree to buy your Foreign Aid Voucher. Remember, 1 Foreign Aid Voucher is worth 5 WELCOs.

In the world of the Summit, a universal trade tariff is in place that requires you to pay a 1 LESCO payment for each traded coupon. The only way to avoid the tariff is to join a Trade Alliance. A legal Trade Alliance has two to six members. You may join up to two Trade Alliances, and you must have one Division 3 Country in the alliance.

During the Trade Session at the Summit, you and your team will try to meet the import goals from your Strategic Plan. It is your responsibility to track your trades and pay a tariff for any exchanges that occur outside of your Trade Alliances. When you exchange coupons with countries on your alliance list, those trades are tariff free. For each trade with a country not on your alliance list, you must pay a 1 LESCO trade tariff. Tariffs are payable to the Summit Bank. The Summit Bank will verify your tariff payment by placing the official bank stamp pn your Strategic Plan form. You must have a bank stamp, verifying your payment for each coupon from a country outside of your alliance. Failure to pay tariffs is an automatic disqualification of your team from the Summit.

APMacro: IES Costume and Table Display


sudan
As economic advisors, you and your team can earn points for coming to the summit event in costume. A team costume identifies you as a group and makes it much easier for other economic advisors to find you and your team. A good team costume give your team a competitive advantage at the summit. Take advantage of the opportunity to be creative and earn points for your team.

There are three possible outcomes:
– No  evidence of costume, flag, or name tag.
– Two elements of a team costume are evident.
– Authentic or traditional country costumes or
..three or more elements of a team costume are evident.

Costume Elements

  • Costume t-shirt
  • Head gear
  • Map
  • Matching clothing styles
  • Name tags’Face paint
  • Flag
  • Matching color scheme

IES Table Exhibit Display
You and your team of economic advisors can earn points for coming to the summit event with a table display to give your team a competitive advantage at the summit. Take advantage of the opportunity to be creative and earn points for your team.

There are three possible outcomes:
– No evidence of flag, map, or country specific color scheme
– One to two elements of a table display are evident.
– Three or more elements of a table display are evident.

Table Display Elements

  • Country statistics
  • Flag displayed
  • Information creatively expressed
  • Food or artifacts displayed
  • Map(s) of country displayed
  • Country music or national anthem
  • Photos of country displayed
  • Matching color scheme

APMacro: IES Foreign Aid


foreign aid
Foreign aid in the context of the Summit, is a transfer of cash from a Division 1 Country to a Division 3 Country. Division 1 Countries have the obligation to provide foreign aid cash for the development of the less fortunate countries of the world. Hey, they can afford it. They’ve got the highest living standards in the world, and Division 3 Countries need a helping hand. Each Division 1 Country is given extra cash to provide foreign aid to the Division 3 Countries. Each Division 3 Country has foreign aid vouchers as evidence of their need for aid. The exchange takes place between a Division 1 Country with foreign aid cash and a Division 3 Country with a foreign aid voucher.

Division 1 Countries
The exchange rate between foreign aid cash and foreign aid vouchers is 5 WELCOs = 1 foreign aid voucher. For example, both Australia and Canada are Division 1 Countries. Australia has 10 WELCOs in foreign aid cash and Canada has 30 WELCOs in foreign aid cash. Based on the exchange rate above, Australia must use its 10 WELCOs to buy 2 foreign aid vouchers and Canada must buy 6 foreign aid vouchers with its 30 WELCOs. So, how do we know if both of these Division 1 Countries actually gave away the cash? At the end of the trading session, Australia must be able to show 2 foreign aid vouchers and Canada must be able to show 6 foreign aid vouchers from Division 3 Countries as proof that they met their foreign aid obligation. Without the foreign aid vouchers as proof, Australia and Canada would not have met their foreign aid obligations and will have 15 points deducted from their overall score.

Division 3 Countries
Now let’s look at two Division 3 Countries, Angola and Bangladesh. Angola has 3 foreign aid vouchers and Bangladesh has 4 foreign aid vouchers. Both Angola and Bangladesh will exchange each foreign aid voucher for 5 WELCOs with a Division 1 Country. Angola will receive a total  of 15 WELCOs and Bangladesh will receive 20 WELCOs. So, what would you do with the cash? Your goal as Economic Advisor is to improve living standards and the cash will help you gain your imports or buy Long Term Development Projects. Be sure to include the foreign aid cash in your strategic plan, outlining how the cash would be used to improve living standards.

Division 2 Countries
Typically, Division 2 Countries are not wealthy enough to give aid and not poor enough to receive aid. Some exceptions exist, so check your exports and cash endowments to determine whether your country will be involved in a foreign aid transfer.


haves-and-have-nots

Long Term Development Project (LTDP)

You may select from six types of Long Term Development Projects at a cost of 5 WELCOs each. Long Term Development Projects are an excellent way to improve the standard of living for your country. Utilize your research to select between Education, Health Care, Infrastructure,  Conservation and environment, Security and Defense, and Transparent and Accountable Governance.

Your team will be awarded 5 points for each Long Term Development Project purchased with a maximum of 20 points

APMacro: IES World Governance Indicator


World Governnce Indicators
The World Bank publishes a set of measures designed to evaluate the effectiveness of governance. Six dimensions are utilized in an effort to categorize and compare countries in Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption.

  • Voice and accountability captures perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media.
  • Political Stability and Absence of Violence/Terrorism measures perceptions of the likelihood of political instability and/or politically motivated violence, including terrorism.
  • Government effectiveness captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies.
  • Regulatory quality captures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.
  • Rule of law captures perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence.
  • Control of corruption captures perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as “capture” of the state by elites and private interests.

 

APMacro: IES Human Development Index

 


Summit HDI
The United Nations developed what is known as the Human Development Index, The HDI covers three areas: life expectancy, education, and GDP per capita and offers a broader measure of the standard of living than GDP per capita alone. The Human Development Index was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone. The Human Development Index is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of living. The HDI does not reflect on inequalities, poverty, human security, empowerment, etc.


INvestment Rates and GDP per Capita 05.23.2016
The term investment is often used in a variety of ways. Investment represents actual materials, research and development purchased and used today to produce goods and services in the future. For our purposes here, we are referring to the part of investment that is reflected in GDP, specifically the spending on new equipment, software, and structures that add to a country’s stock or amount of capital. Gross Domestic Product can be separated into four components that include consumer spending, business investment spending, government spending, and net exports. (GDP = C + I + G + X) The “I” represents the amount spent on new equipment and factories, which adds to the total amount of the capital factor of production. Investment is a key factor in growing GDP.

APMacro: IES Advisor Teams

 


ies-02
You and your team represent a group of economic advisors assigned to a country with the objective of improving the standard of living for the inhabitants of your country. You can impact your country’s standard of living through economic development and international trade. Your role as an economic advisor requires you to evaluate the strengths and weaknesses of your country and develop specific goals for improving the standard of living. Your team and the rest of the world’s economic advisors will meet in the international marketplace to trade the goods and services needed to achieve your goals. Global competition for scarce resources will complicate your efforts; but careful planning and trade negotiations will improve your chances of success.

Over the course of the next few days, you must become knowledgeable about economic, political, and social situations within your country. You must also develop skill in applying economic concepts to develop a strategic plan for improving the standard of living for the inhabitants of your country. You will be given a list of exports specific to your country. You must determine the type of imports best suited to meeting your strategic goals. In addition, you may also initiate long term development projects within your country.

Material-World-Peter Menzel
Each country at the Summit is classified into one of three categories: Division 1, Division 2, or Division 3 countries. The basis for this classification system is gross domestic product (GDP) per capita. Each category has its own set of characteristics in the areas of currency, export total, cash endowment, and foreign aid.

Division 1 Country
The Division 1 Countries category represents those countries that have the highest standards of living. In your research, you may have come across different names for this group of countries, such as industrialized or developed countries. The Division 1 Countries currency is called the WELCO. The WELCO is the basic unit of value and is the most valuable currency at the Summit. Division 1 Countries have the largest number of exports, cash endowments, and give foreign aid cash to Division 3 Countries.

Division 2 Country
The Division 2 Countries category contains those countries that have fairly decent living standards, but clearly are not as advanced as the Division 1 Countries. In your research, you may come across names such as developing or emerging market economies that describe this category. Division 2 Countries use a currency called the DEVCO. The DEVCO is worth half as much as the WELCO. Division 2 Countries have fewer exports and less cash than Division 1 Countries.

Division 3 Country
The Division 3 Countries category contains those countries that are very poor and have the lowest standard of living on the planet. In your research, you may have come across names such as less developed or underdeveloped to describe this category of countries. Division 3 Countries use a currency called the LESCO. The LESCO is worth half as much as the DEVCO. Division 2 Countries have the fewest exports and the least amount of cash of any of the three categories. Division 3 Countries have foreign aid vouchers that can be exchanged for cash.


Homework:
1) Fact Sheet page 7 #1-18