WASHINGTON, D.C. — The Rome Building of the SAIS Washington, D.C. campus became the venue for a grand conference of world leaders between Feb. 26 and 28. The conference, however, was simulated and the participants were SAIS students who had assumed the roles of heads of states and journalists as

part of the 2016 Crisis Simulation. Sixty-seven students, spread across the eight floors of the Rome building, engaged in an exercise in crisis decisionmaking set in the future. October 2019, to be pre-cise.

An annual tradition dating back to the 1980s, the SAIS Crisis Sim involves students investigating contentious in-ternational relations issues through a simulation of world events. The event is

designed and organized by 10 students who take the Seminar in Crisis Simula-tion class, taught by Dr. Mara Karlin. Crisis Sim is an analytical tool exploring a research question. James “Jeb” Ben-kowski (MA 2016, Strategic Studies), one of the 10 students who organized the simulation, defines this year’s research question as “how gray-zone tactics such as hybrid warfare, cyber warfare, the use of civilian fishing fleets would affect col-

lective security systems.” The simulation involved crises in several regions includ-ing Europe, the Middle East, South Asia and East Asia. The simulation began on Feb. 26 with tensions flaring up over the arrival of 100 Chinese activists on the Senkaku/Diaoyutai Islands. As Japan raced to de-fend the islands and China attempted to

The student newspaper of the Johns Hopkins University School of Advanced International Studieswww.saisobserver.org

Vol. 18, Issue 8

Campus News // page 3Around Town // page 8 Finance Watch // page 5

SAIS PrimaryThis Issue: Beat the Smog Luxury GoodsThe SAIS Observer’s Bologna team reveals the results of campus primary

SAIS SpeakStudent Life

Campus NewsFinance Watch

Faculty ExpertsAround Town

Current trends in the global luxury goods market

234578

Logan Pauley offers advice on how to maintain a running regime in China

Monday, March 7, 2016

SAIS Europe Turns 61

BOLOGNA, Italy — SAIS Europe turned 61 in February, and the campus marked the occasion with a speech from Italy’s Minister for Constitutional Reform and Relations with Parliament Maria Elena Boschi on Feb. 19, when she lectured on the opportunities and challenges of her post to a standing-room-only crowd in the campus’ auditorium. The talk was open to the public and Boschi’s presence required heavy se-curity presence, including more than 50 Carabinieri and police as well as a police helicopter that circled above the campus. Students were also required to

wear their SAIS IDs on lanyards around their necks for the duration of the event. The decades-old tradition of welcom-ing Italian dignitaries to SAIS began during SAIS Europe’s inaugural year in 1955, when founder and then-U.S. Ambassador to Italy C. Grove Haines hosted the Rector of the University of Bologna at the SAIS Europe campus. In recent years, Italian elites including President of the European Central Bank Mario Draghi, Prime Minister Matteo Renzi (who visited SAIS while he was mayor of Florence) and Italian Minister of Economy and Finance Pier Carlo Pa-doan have spoken at the campus. Even though SAIS Europe is in its 61st year of continuous operation, it is in the nascent stages of many adjustments im-

plemented by SAIS Dean Vali Nasr. Of these changes, one of the most visible is the rebranding effort. “[The name] Bologna Center did not fully reflect that this was a European center of intellectual excellence,” Nasr told The Hub last year. “It’s a branch of SAIS that approaches global issues from a European perspective—not just an Italian one, as some people may have thought—in complement with the American/global perspective we do in SAIS Washington. That’s what makes this combined program so unique. And I think ‘SAIS Europe’ resonates better with audiences we are trying to attract in Asia, Latin America, and the Middle East.’” Along with the name change came a

logo change. The former logo – with the name “SAIS” encircled by the school’s three locations – still lingers on library bookmarks and other old paper docu-ments around SAIS Europe, but official markings on doors and windows now feature the SAIS shield. Substantive changes to the academics at SAIS Europe have recently been imple-mented as well. SAIS Europe diversified its faculty with the hiring of professors Raffaella Del Sarto and Masha Hed-berg at the beginning of the academic year, and, pending a hiring search, will welcome a new professor with funding from SAIS’s new Kissinger Center. SAIS Europe’s 61st year is also the first

By Patrick KelleySAIS Observer

Photo by Jianan YeItalian Minister for Constitutional Reform Maria Elena Boschi addresses SAIS Europe during the 61st anniversary celebration

The Fog of War: The 2016 Crisis SimulationBy Sid RavishankarSAIS Observer

See CRISIS SIM, page 4

See SAIS EUROPE, page 5

2 // SAIS Speak

SAIS Speak

Monday, March 7, 2016

This Week at SAISMonday

3/7 3/8 3/9 3/10 3/11WednesdayTuesday Thursday Friday

“Trilateralism: Mongolia’s Response to China’s ‘One Belt One Road’” Dr. Alicia Campi, Research Fellow, the Reischauer Center, 12:00 PM, Rome 806

Japanese Language Table 12:30 PM, Nitze 517

“Policy Interactions: How Power Sector Reforms Shape Renewable Energy Policy in Democracies and Autocracies” Johannes Urpelainen, Associate Professor of Political Science, Columbia University, 4:30 PM, BOB 736

“Recovering Diplomatic Agility” Ambassador Chas Freeman, Senior Fellow, Watson Institute for International and Public Affairs, Brown University, 6:00 PM, Rome 102

“Accessing Care in Crisis: Ensuring Women’s Health and Protection in Complex Emergencies” Francisca Vigaud-Walsh (B’04, ’05), 6:00 PM, Rome Auditorium

“NATO’s Future: Bigger and Better or Tired and Torn?” Discussion, 10:00 AM, Kenney-Herter Auditorium

“Development Roundtable - Dr. Sarah Gammage ‘Gender, Migration and the Commodification of Care’” 12:30 PM, BOB 500

“Asian Development Bank (ADB) Information Session” 4:30 PM, BOB LL7

“The Indian Economy: A Post 2016-2017 Budget Analysis” Arvind Panagariya, Vice Chairman, Niti Aayog of India, 4:30 PM, Rome 806

MIPP Happy Hour 4:30 PM, Rome 812

“International Criminal Court (ICC) Moot Dress Rehearsal” 5:30 PM, BOB 500

Cities Club Weekly Session 8:30 PM, BOB 714

“IQT Information Session” 12:30 PM, Nitze 517

“Britain and Europe: Is Brexit going to happen and what would it mean for the USA?” Panel Discussion, Moderated by Fiona Hill, Senior Fellow, Brookings Instituion & Director, Center on the United States and Europe, 1:30 PM, BOB 500

“A Conversation with Richard Plepler, Chairman and CEO of HBO” 4:30 PM, Kenney-Herter Auditorium

“Egypt: Sex, Rights, Politics and US Foreign Policy with Scott Long” 5:00 PM, BOB 500

“World Resources Institute (WRI) Information Session” 12:30 PM, Nitze 2nd Floor Career Services Conference Room

Chinese Language Table 12:30 PM, Nitze Cafeteria

“Authencity Panel” Panel Discussion, Moderated by Dr. James Calvin, Carey Business School, 3:30 PM, Rome Auditorium

“Tangential Economics Society” 4:30 PM, Nitze 501

LASP Club Happy Hour 4:30 PM, Nitze 508

Associate Editor (Europe):Photo Editor, Around Town:

Campus News: Student Life:

Careers:Alumni:

Faculty/Experts:CTD:

Opinion:

Associate Editor (China):Campus News:

Student Life:Alumni, Careers:Faculty/Experts:

CTD:Opinion:

Around Town:Finance:

Satire:Photo Editor:Staff Writers:

The SAIS Observer StaffBologna, Italy Bureau Nanjing, China Bureau Washington, DC Bureau

Patrick Kelley Fatima NanavatiAna VasudevanKady HammerGino GrilliKatherine HoseltonBerkin Safak SenerAndrew KovtunEvan Revak

Chase Stewart Logan PauleyLeowil VillanuevaDaniel BernhardJonathan Hall-EastmanLibba KingJohn GrahamJanae MartinMilka SantanaTheo RobieSusan WangPeter Loftus, Quinn Campbell

Editor-In-Chief:Managing Editor:

Copyeditor:

Photo Editor:Staff Writers:

Emily WalzKaj MaldenGayatri Chandrasek-aranShereen ShafiSid RavishankarShawn Doyle

All events listed are sourced from the weekly “Next Week at SAIS” email.

We’re still hiring! If you’re interested in applying for a staff position with The SAIS Observer, visit our recruiting page at saisobserver.org/joinus.

Monday, March 7, 2016

Student Life

SAIS Europe is Ready for Hillary

3 // Student Life

A Waltz to RememberBOLOGNA, Italy – Saturday, Feb. 13th marked the eve of Valentine’s Day but also marked the annual SAIS Europe Vienna Ball. So the myth goes, it’s typical for stu-dents to “marry off” and find love at the ball. Whether that happened this year will stay in Vienna, but the professors were eager to hear about the weekend’s events Monday morning after the attendees re-turned to campus. SAIS students dressed to the nines in ball gowns and tuxedos for the event. It is an annual tradition for Europe cam-pus students to attend the International Atomic Energy Association Ball held each year at the Hofburg Palace in Vienna, but SAISers haven’t always trekked to Austria for the annual ball. Only in the past de-cade have SAIS Europe students regularly attended the IAEA event. Prior to 2006, SAIS’s annual ball had traditionally been held in a villa in the outskirts of Bologna. As the SAIS Europe class grew in size, planning a ball in Bologna proved difficult as finding a venue large enough to host the growing class proved increasingly limiting. An Austrian student back in 2006 came up with the idea of moving the ball to Vienna, a city known for its waltz. The earliest of the ball traditions was limited to the royal family and guests, but Emperor Joseph II of the Holy Roman Em-pire made the traditional royal balls public for the common man – thus beginning the rich tradition of Viennese balls at the Hof-burg Palace in 1773. The typical ball calen-dar begins around November and ends in late February. “There’s a ball season, but it’s in our carnival season. All the composers of waltz and the Strauss family are from Austria. The entire notion of the ball and the waltz comes from Austria and that is why we’re still the capital of balls - because of where it comes from,” remarked SAIS student Mira Uebleis. When asked about how prevalent the waltz dance still is today,

Uebleis said, “It’s an Austrian tradition that at midnight on New Year’s Eve, we grab someone and waltz. The radio plays the Viennese waltz and everyone dances.” It is typical that every year the task of help-ing organize the annual ball is delegated to SAIS’s Austrian students.. Uebleis (Aus-trian) along with Lucas Perterer (Austrian) and Max Stadler were lead organizers for this year’s ball. They were responsible for contacting the ball organizers, purchas-ing tickets for the 175 SAIS students and faculty, coordinating transportation, and organizing a pre-ball speech at City Hall. On top of their prescribed responsibilities, the organizers also hosted extra events for attendees. Uebleis led the waltz dance tu-torial; Perterer provided an endless list of sights to see in Vienna; and Stadler co-or-ganized a one-day Energy, Resources, and Environment concentration career trek that took place the day before the ball. While much of the event was tradition-ally Austrian, the IAEA selects a different theme for each ball. 2016’s theme, reminis-cent of Japanese culture, was evident from the opening ceremony until the closing. The ball opened with the traditional Vi-enna pipes and drums, the UN flag cer-emony, and welcome address and quickly transitioned into a modern Japanese Taiko performance. Attendees were free to wan-der from room to room. Each corridor had its own theme ranging from silent disco to salsa. When asked to summarize the Vienna ball experience, Stadler said, “I think it’s a great tradition that needs to be continued in the coming years. It brings us all together and it all gives us a common memory that we will share in the years to come. If we meet in 5 or 10 years for our reunions, we will all say, ‘Do you remember that magical night in Vienna?’ That is something that nobody can take from us. That is special and we should continue that for all future classes.”

By Kady HammerSAIS Observer

Photos by Fatima Nanavati

BOLOGNA, Italy — In keeping with the spirit of Super Tuesday on March 1, the SAIS Europe Observer staff held a “closed primary” of its own to gauge the thoughts of students, faculty and staff on the current U.S. presidential candidates. With all the votes counted, SAIS Europe is clearly ready for Hillary.

With a pool of more than 220 possible voters, polling staff counted a total of 183 ballots. The ballot consisted of two parts that included indicating voter status as ei-ther an eligible American student voter or faculty member or an international student or faculty member; and choosing one per-son from the current candidate choices. The Democratic candidates on the ballot were Hillary Clinton and Bernie Sanders, and the five Republican candidates in-cluded Ben Carson, Ted Cruz, John Kasich, Marco Rubio and Donald Trump. There

were 171 valid votes and 13 invalid ones that either marked two candidates or did not indicate voter status. The omission of the invalid votes would not sway the over-all results.

Winning approximately 53 percent of the vote, Hillary Clinton emerged as the clear victor in the 2016 SAIS Europe Pri-mary with Bernie Sanders in second place winning 30.6 percent. Marco Rubio was third with 8.8 percent of the vote. John Kasich received seven votes, Cruz got one vote, and former Johns Hopkins neurosur-geon Ben Carson finished in last place with zero votes.

Current Republican frontrunner Don-ald Trump received two votes, at least one of which was declared by the voter as a joke. Additionally, among the responses in the poll were some “write-in” choices including former New York mayor and Johns Hopkins alum Michael Bloomberg,

By Patrick KelleySAIS Observer

See PRIMARY, page 6

4 // Campus News

Campus News

Monday, March 7, 2016

rescue its citizens, the United States and its allies debated how best to respond to a potential conflict in the East China Sea. Tension in East Asia escalated as Hez-bollah marched on Israel, a typhoon bar-reled towards Taiwan, and the Russian Federation attempted to prevent Finland from joining the North Atlantic Treaty Organization. After three days of global conflict in-side the Rome Building, NATO fell, a U.S.-Polish operation liberated Crimea, the world defused a nuclear standoff between Israel and Pakistan, and a U.S. nuclear bomb turned Kim Jong-Un into radioactive ash. Participants navigated through signifi-cant uncertainty, mirroring the difficulty policymakers face in real life during any crisis. Students were forced to take deci-sions based on imperfect and, often, false information. Conversations in one room would often be heard in rooms three floors up because of listening devices planted across the building by simulated intelligence agencies. Relying purely on

instinct and their knowledge of world af-fairs, students tried to deal with multiple crises at the same time. On participant behavior, Benkowski expressed his surprise at the tendency of students to forge new partnerships to solve issues and to prefer de-escalation over kinetic solutions. He also noted the willingness of states to use “non-conven-tional coercive measures” and grey-zone tactics to control escalation and achieve political objectives. Control, as the group of 10 students who managed the persistent world be-hind the simulation was called, faced their own challenges during the simu-lation. Meg Iacobacci (MA 2016, Stra-tegic Studies), referred to the difficulty in deciding the country composition of the simulation and spoke to Control’s need to keep up with the creativity of the participants with their unexpected decisions. Iacobacci credited many of the novel solutions developed during the simulation to the diverse backgrounds and concentrations of the participants. Over the course of the weekend, partic-

ipants learned the value (or lack thereof) of alliances, the difficulty in navigating the fog of war, and the frustration of lim-ited policy choices. The simulated world leaders also experienced the overpower-ing nature of cascading and compound-

ing crises and the importance of person-al relationships in diplomacy.

Sid Ravishankar represented the Chief of Army Staff of Pakistan during the 2016 Crisis Simulation.

Like to write, design or take photos? Join our editorial staff.From campus news and alumni, to student life and opinion, we capture the pulse of SAIS and offer a medium for commentary from students, faculty and policymakers. We are a global team with bureaus in Bologna, Nanjing and Washington, dedicated to quality journalism, and we’re looking to expand our team. If you are interested, visit our recruiting page at saisobserver.org/joinus, or send a resume, writing sample and statement of interest to SAIS.Observer@gmail.com.

BOLOGNA, Italy — On Feb. 4, SAIS Europe launched its chapter of the SAIS Women’s Leadership Initiative under Sara Golden, Chelsea Sommer, Natalie Thomure, Caitlin Erskine, and Elisa Bet-telli at the Bologna Campus. Around 30 students attended the inaugural event where participants were introduced to the initiative and its goals. The Wash-ington, D.C. campus launch event was live-streamed. The D.C. event included an inspiring keynote address by Am-bassador Barbara Barrett and opening speech by Dean Vali Nasr. The event concluded with a brainstorming session regarding future events and activities by the Women’s Leadership Initiative. The Initiative is the creation of the SAIS Global Women in Leadership ca-reer club and includes the career club, the SAIS Women’s Alumni Association and an academic practicum. Global Women in Leadership was founded in 2012 and continues to function as a stu-dent-run career club but the Women’s Leadership Initiative is meant to be per-

manently established in SAIS campuses. As ambitious and as successful as GWL has been, the impediment to the long-term goals of student clubs is that it is dependent on students’ initiative to restart the club every year. This issue is particularly problematic for the Europe Center as students typically only spend one year in Bologna, which makes keep-ing the momentum going a difficult feat with a new batch every year. This

is what makes the Women’s Leadership Initiative so important. “WLI is a school wide initiative, not just a student club, with the aim of being sustainable over the years, and that is very exciting. We are able to give our time to something that matters and will be here once we’re gone,” remarked Thomure. The launch

of this event was driven by the need to make a permanent space, whether it be an organization, a center or curriculum, to discuss the role of women in social, economic and political spheres. The success of the Initiative in Bo-logna would depend on its ability to overcome some barriers in the coming months. “In Bologna, our biggest chal-lenge is the time limitation. In D.C., not only would we have two years, but many

of us would also stay on to work there and could network and reach out to our contacts, Here (in Bologna) we only have a year and we started in the Spring so we have three months and there are so many things we want to do but we just don’t have the time,” Thomure said. SAIS Europe has clarity in the goals it

wants to achieve to ensure the success of WLI. “We are viewing this as something we are starting this year to pass on to future students and the administration, especially Kathryn Knowles and Jenni-fer Varney. They are our sponsors and will help in the transition. Chelsea will also be a part of this as a MAIA student next year and that is essential,” stated Caitlin Erskine. The Bologna Chapter of the Women’s Leadership Initiative held its first of-ficial meeting on Feb. 22 where it spelt out a list of goals it seeks to accomplish by the end of this term. Some of those objectives include starting “coffee talks” for students to interact with successful women in an informal setting; a men-torship program between students and successful women both in the SAIS Women’s Alumni Association network and others; and an annual scholarship for a deserving, female SAIS student. Continuing to build off the first official meeting, the Bologna Chapter will cel-ebrate International Women’s Day with the Bologna Feminist Talking Circle on March 4.

SAISWomen’s Leadership InitiativeBy Kady HammerSAIS Observer

CRISIS SIM, from page 1

“We are viewing this as something we are start-ing this year to pass on to future students and the

administration.”— SAIS Women’s Leadership Initiative Leader, Caitlin Erskine

Photo courtesy of Lisa Deis

Catherine Simon, MA 2016, Conflict Man-agement, wrote this as her job as a BBC reporter within the Crisis Simulation

PAKISTANI PM IN EXILE SPEAKS OUT AHEAD OF SECURITY SUMMITFebruary 28, 2016, BBC Speaking to the BBC from an unde-fined location, where he is currently in hiding, the Pakistani Prime Minister has revealed some of the tensions resulting in his exile.

"We made an agreement with India in which India made significant conces-sions on Kashmir. It was a good deal for Pakistan. But our military meanwhile were taking steps to actively undermine the agreement . They had covert forces in Kashmir that I had ordered to be with-drawn. But the Chief of Army Staff was planning military activities with them to undermine the agreement. Because his loyalties were suspect and in order to ensure Pakistan's integrity, I ordered him

to make a statement in support of the agreement, which he promptly refused." Sources close to the Chief of Army Staff have confirmed that Pakistani opera-tives had been attempting to undermine the agreement with India by undertak-ing covert, military activities in Kashmir, despite publicly stating that there were no Pakistani-sponsored forces in the region, and that there has been a long-term insurgency in Kashmir sponsored by Pakistan.

The PM spoke of his concern about the revelations that the Chief of Army Staff had been a mole for the IRGC and the agreement the Chief of Staff had made with officials in Iran to take military action to push out the Americans and to split up the region between them and Iran. "This raises the concern that Pakistan's nuclear assets may be shared with Iran", the PM said.

WASHINGTON — As we are steadily moving into 2016, there are three global macro trends that are of major impor-tance to the industry, and they have been evolving rapidly in the past couple of months. These are not style trends, but rather tectonic shifts that will undoubt-edly influence the way we view fashion and the luxury good industry in the coming months and years.

As a multi-billion dollar industry, luxury goods make up a significant por-tion of many countries’ gross domestic products and gross national products (according to some reports, luxury goods account for 3% of total European GDP). The effects of digital marketing and e-commerce are huge. Increasingly, more companies are investing in their social media presences and expanding or establishing product lines that cater to the online shopper. Secondly, creative designers are leaving their posts, with a never-before-seen series of firings and hirings in recent months. The companies that can establish long-lasting work-ing relationships will likely be able to increase their revenues amidst a global economic slowdown. Asian retail in par-ticular has been problematic, and the region is expected to experience slower economic growth compared to last year.

The luxury goods industry is not im-mune to global economic malaise, and especially Europe’s cyclical stagnation. However, on a more positive note, the changing global environment opens up possibilities for creative investment as well as opportunities to attract a new consumer, especially in Asia: the emerg-ing middle class.

The industry is experiencing a dra-matic shift towards digital media, high-lighting the importance of technologi-cal advancement. Even a couple of years ago, social media platforms such as Twit-ter, Instagram and Snapchat, were either non-existent or simply considered irrel-evant. Today, they have become prime portals for consumer engagement and celebrity advertisement. In the first half of 2015 alone, the luxury industry saw a 9 percent increase in online presence according to a report by Exane Paribas. The competition to stay ahead is fierce, with several brands upgrading their e-commerce platforms noticeably in the last year. Overall, Burberry, Fendi, Loro Piana and Dior have made the great-est improvements in terms of digital marketing and strategy. LVMH brands, with the exception of Céline, are slowly catching up with early adopters, while Kering’s brands have shown more con-sistency in performance, perhaps due to its e-commerce partnership with Yoox.

Certain brands are still offering a tra-

ditional customer experience — Louis Vuitton and Prada still don’t sell ready-to-wear via e-commerce, and Chanel has traditionally limited its e-commerce to fragrance and beauty. While Asia in general, and China in particular, are the new hotspots for luxury goods revenues, many traditional sellers have not yet ex-panded their e-commerce business into China, a move that is likely in the future. The issue is that a move into China is a huge leap, which cannot be done in any marginal manner. Overall, online geo-graphical coverage has grown 13 percent, but brands are on average reaching only 36 percent of their potential. Impor-

tant countries currently being ignored include South Korea, Russia, India, the United Arab Emirates and Brazil.

There is a discernible trend of de-signers leaving — either getting fired or voluntarily departing — their posts as the creative faces of highly regarded fashion brands, and it is affecting sales. Brands such as Versace are exceptions in the industry, as an international fashion powerhouse largely family-owned and operated. Founder Gianni Versace, who unveiled his first fashion collection in 1978, was murdered in 1997. His sister Donatella and brother Santo took over. Donatella’s daughter Allegra owns a 50

5 // Faculty Experts, Finance Watch Monday, March 7, 2016

Faculty Experts

BOLOGNA, Italy — Professor and prac-titioner Filippo Taddei shared his pro-fessional story with students in a brown bag lunch seminar on Jan. 28 at the SAIS Europe campus. Besides being a mem-ber of the department of economics at SAIS, teaching Macroeconomics and In-ternational Monetary Theory, Taddei has served as the chief economic consultant to the Partito Democratico since 2013. In this position, Taddei advises Italian Prime Minister Matteo Renzi on economic mat-ters. Some of Taddei’s more controversial advice to Renzi to date concerns the liber-alization of the Italian labor market. Prior to the Renzi government’s efforts, the Ital-ian labor market entailed employment protection, making it difficult to fire inef-fective employees. Taddei seeks to rectify this problem, but knows the political reali-ties of reform. Taddei describes his role as economic consultant as different from an adviser who puts forward a long-term vision in-dependent of political concerns. Instead, he acts as a consultant providing practi-cal economic advice that fits the political problems du jour. His consultancy advice is comprised of four pillars: have clar-ity about challenges and political context, fully understand and balance your objec-

tives with those of politicians, align pro-posals with challenges, and acknowledge victories as well as defeats in politics. In explaining his agenda, Professor Taddei offered insightful examples from contem-porary European politics. Over the last decade, deepening dis-parities across European countries in terms of unemployment and growth rates have raised serious questions about Euro-pean convergence. There are two schools of thought with respect to the dispar-ity between European periphery and core economies. Political economy analysts have been busy picturing the European dilemma as oscillating between counter-cyclical poli-cies – short-term fiscal and monetary re-active policies – and full-fledged structural reforms. According to Taddei, policymak-ers must invest political capital in a reform plan and bear the political costs. “In [Eu-ropean] politics, what is important is the distinction between Greece and Ireland,” says Taddei. Both countries have undertaken almost equally extensive measures to reverse the impacts of the sovereign debt crisis. So why is Greece still in trouble while Ireland has been dropped off of the emergency list? Professor Taddei’s answer is simple: politi-cal ownership of a reform determines the success of the reform itself. A controversial reform with high political ownership po-

tentially lasts longer than uncontroversial reforms with no political ownership, ac-cording to Taddei. Politicians must invest their political capital wisely and timely. Here Taddei’s distinction between a policymaker and a politician becomes significant: the former makes things happen whereas the latter makes things happen at the right time. Having invested political capital in under-taking reforms deemed necessary at the right time with the ultimate objective of survival in politics, a politician has to bear in mind that he or she will lose, sooner or

later, says Taddei. In the end, politics is not what you wish for but what you are willing to give up. A wise politician is the one who accepts defeats and leverages them for fu-ture successes, he concludes. The fate of widely-debated labor market reforms in Italy thus far seems to depend upon their political ownership by Italian politicians. Notwithstanding this, Italian politicians’ trust in their chief consultants has the potential to change the “bad fate” of European convergence.

Talking Economic Reforms with Filippo TaddeiBy Berkin Safak SenerSAIS Observer

year of SAIS’s Global Risk Master’s program. The degree program – a 13-month Master’s program based exclusively at SAIS Europe – will be-gin in the fall of 2016. While SAIS Europe has undergone many official changes in its history, the campus’ founding is still the sub-ject of numerous rumors. Earlier in the year, a 2009 story from The Daily Beast, in which SAIS Europe alum Tom Murray profiles his time learn-ing under Cuban Spy Walter Kendall Myers, was widely shared on Face-

book by SAIS Europe students. Murray wrote, “Students at the school’s Bologna Center, where I spent my first two semesters, ac-cepted as fact that our program had been founded in the mid-1950s as a front for CIA operatives keen for a le-gitimate perch at the capital of Italy’s ‘red’ movement.” To this day, no official acknowl-edgement has been made regard-ing this claim, adding to the lore of SAIS’s presence in Europe. Ana Vasudevan contributed to this article.

SAIS EUROPE, from page 1

Finance Watch

Luxury Goods: A Global Outlook for 2016By Tea Ivanovic

Photo courtesy of SAIS

6 // Student Life Monday, March 7, 2016

libertarian Gary Johnson, a vote of “no confidence” and even a vote for SAIS PhD candidate Brian Carlson.

The majority of votes cast came from American students with 105 valid votes. Of the American students, 58 voted for Clinton, 25 voted for Sanders and 13 voted for Rubio. There were a total of 56 valid international student votes, which were split evenly between Clinton and Sanders, though Clinton maintained a slight edge. Four American and six international fac-ulty members stopped by to vote, with one American vote going to Rubio, but the ma-jority to Clinton.

Additional voter identification infor-mation, such as name, age, gender and academic concentration was asked for only during voluntary exit interviews that were conducted after the polls closed. When asked to predict the overall winner of the SAIS election, three out of six exit inter-viewees correctly selected Clinton and the three others chose Sanders, but their predictions didn’t necessarily match their votes.

Almost consistently, exit interview-ees acknowledged Sanders’ appeal to the younger generation as well as his stance on civic and social rights. Leonidas Marcanto-

natos, an international student and Clinton supporter, predicted that Sanders might win the SAIS primary. He said, “SAIS is not a good sample [of voters] because we are more aware, as political science or in-ternational relations students, of the issues being put at stake... there is also a paradox: although [Sanders] is very old, he repre-sents something new.”

Speaking for the minority of voters at SAIS Europe, American student Christina Pushaw explained, “I voted for Marco Ru-bio because I perceive him as a represen-tative of the next generation of the GOP. With Trump in the forefront, the Repub-

lican party is in the midst of an identity crisis. Rather than a demagogue, we need a pragmatic leader with a broader appeal… The Republican candidate must not polar-ize his/her party or marginalize potential voters due to their backgrounds.”

Finally, Mary D’Amico, an American student who worked for the Ready for Hill-ary PAC in 2014, stated, “I voted for Hill-ary because I believe that not only is she the most qualified candidate, but also that she will be the best candidate to protect my in-terests both at home and abroad.”

BOLOGNA, Italy — Part of Bologna’s character comes from its street art: Mu-rals and messages of passion can be found on almost any stone wall or garage door around the city. Some would argue that while perhaps excessive, the graffiti con-veys the sentiments and attitudes of Bolo-gna’s youth, often reflecting the ideas and movements of the time. Recently, some graffiti tagged on Via Belmeloro, the same street on which SAIS Europe resides, has been aimed at SAIS Europe PhD student Bilal Erdogan, who is the son of Turkish President Recep Tayyip Erdogan, who cur-rently lives and studies in Bologna. The Erdogan-targeted graffiti first ap-peared in October 2015, right before the Nov. 1 elections in Turkey, which marked the end of the period of political uncer-tainty regarding which party would lead the country. When Recep Tayyip’s AKP party lost the majority in the June 7 elec-tions, for the first time in 14 years, a transi-tional government was put in place, and a period of protests and uncertainty ensued. Initially 10 percent short of the major-ity vote after the June 7 election, Erdo-gan managed to gain the votes needed to maintain office in time for the Nov. 1 polls. Since then, the anti-Erdogan graf-fiti near SAIS has continued to appear on walls and the sides of University of Bolo-gna buildings, despite efforts by the city to cover them up. Messages written include “Erdogan Assassino,” “Viva YPG,” “Bolo-gna Non Perdona le Stragi di Erdogan,”

(translation: Bologna does not forgive the massacres of Erdogan) and “Fuori I Figli di Erdogan da Bologna” (translation: Out with the children of Erdogan in Bologna). Bilal Erdogan is currently under investiga-tion by the Bologna public prosecutor for claims of money laundering, which has fueled the atmosphere of political tension and scrutiny. In addition to anti-Erdogan messages, there have also been tags of “PKK Libero,” and “Ocalan Libero,” conveying support for the PKK cause. The PKK, which is the Kurdish independence movement in Tur-key, appears to be alive and well in Bolo-gna: The group held a rally at the Neptune Fountain in Piazza Maggiore on Feb. 13, according to a poster seen at Piazza Al-

drovandi. While no other graffiti in Bologna appear to have been covered up, multiple tags re-garding Erdogan, the PKK and YPG have been visibly concealed multiple times only to be retagged shortly after. Speaking on condition of anonymity, a Turkish SAIS student commented that while he/she does not see these messages as a threat, he/she “understands the frus-tration” of seeing the name of a world lead-er defamed in public. This student holds firm that this is simply an act of “freedom of expression,” which is an important as-pect of Italian society. Initially surprised by the messages, this student does not believe that they pose a legitimate threat

and holds no negative perception against the tags. The student believes the graffiti is “not something that needs to be taken care of, just [a sign of] freedom.” Another SAIS student noted that while not bothered by the graffiti, it is troubling to see harsh mes-sages containing the specific name of a fel-low SAIS student so close to campus. A student at the University of Bologna Law School, which also has many build-ings situated on Via Belmeloro, notes that “graffiti is generally recognized as one of the ways through which a small minor-ity of the student community expresses its views on various issues.” This student does not feel that the graffiti concerning Erdogan is any different from all the other graffiti, but at the same time perceives it as “a rude and somehow unavoidable act by a bunch of extremists.” Another Univer-sity of Bologna law student reiterated these sentiments, noting that the Erdogan graf-fiti is no different from other graffiti that covers the walls and buildings of Bologna, but simply wishes that the writers of these messages would find another way to ex-press their views. SAIS Europe has increased its security of late, requiring all students to wear their ID badges on their body at all times, and requiring any non-SAIS guests to sign in at the front desk. Security at SAIS Europe was already high due to the presence of economics Professor Filippo Taddei, who is the lead economic adviser to the Italy’s Partito Democratico. However, security measures have only increased since the po-litical turmoil in Turkey manifested itself in Via Belmeloro this fall.

By Katherine HoseltonSAIS Observer

PRIMARY, page 3

Student Life

Turkish Tensions Manifest on Via Belmeloro

One of the examples of Erdogan-targeted graffiti.Photo by Fatima Nanavati

7 // Faculty Experts Monday, March 7, 2016

Faculty Experts

Got something to say? . . . Write us.Whether it’s about an article we’ve published or something happening on campus, we want to hear from you. Send us an email at SAIS.Observer@gmail.com, or visit our office.

Letter submissions may be published in the Letters to the Editor section. Please include your name, program, concentration and expected year of graduation.

Email: SAIS.Observer@gmail.comOffice: 8th Floor, Rome Building

Prof. Zamagni on European Convergence

BOLOGNA, Italy – Professor Vera Za-magni, currently teaching European Eco-nomic Integration at SAIS Europe, talks about ongoing crisis of European conver-gence, or the lack thereof. Prof. Zamagni underlines the unsustainable nature of financial volatility and calls for a federal Europe to stand up against the problems it faces.

What went wrong in the European project?

To answer this question, we need to go back in time when it was impossible to put in place a federal state in Europe after World War II. Those who were in favor of a federal state wanted to launch some in-tegration policies based on common in-terests and assumed the federation would follow. The idea was to start with economic steps, the European Coal and Steel Com-munity (ECSC) established in 1951 is an example. All the steps were sectorial. The target was to compress the sectors of the European economy: markets, agriculture, energy, nuclear, among others. The intro-duction of the euro currency, however, was a step which proved qualitatively different from previous ones. Policymakers thought that it was possible to face the challenges of a single currency with the given level of state sovereignty and weak governance by common European Union institutions. It can now be said that this proved to be a fallacious idea. Americans, for instance, rightly raised the following question: who will face the challenges in times of crisis?

On the other hand, if we did not take this step forward, European integration might have stagnated. The current stagna-tion though is an entirely different story. The recent crisis was not created by Eu-rope. It was externally produced, by the US, which lead to a major disruption of financial markets.

In the context of the EU’s response to this disruption, Prof. Taddei referred to a major dichotomy: countercyclical poli-cies versus structural adjustment policies. However, he finds this political discus-sion as politically irrelevant. He explains his stance by giving the example of the difference between Ireland and Greece. Although both countries implemented policies to stem the impacts of the crisis, Ireland managed to get out of the emer-gency list while Greece is still stagnating. What is the major dichotomy in Europe’s response to the crisis for you?

Today, we still have a fiscal instrument administered by single nations. We have tried to foster the so-called fiscal com-pact to have supervision at the European level. But this supervision was difficult to put in practice and there are leftovers from the past which made it very hard to cover quickly. The fiscal instruments still reside in the hands of nation-states. This evokes diverse reactions. We are in the middle of

a path that makes European agencies re-sponsible for all matters pertaining to fi-nance. Some steps forward have been made made but we are still in the middle. There is a proposal to have a common treasury ministry on top of the EU as a solution to problems. I wonder how this can be done.

Resisting pressure in the face of this in-ternational market crisis is becoming more and more difficult. Also the novelty of the financial systems we have now is that there is complete freedom of movement of capital around the world. The weakness in a single market affects the entire world in a minute. The real challenge today is whether we have enough time. If yes, we will go forward. If not, who knows? This is connected to my basic idea according to which superstructure finance that we face is unbearable and unsustainable for the en-tire world, not just Europe. In the past, we had a growing economy, parallel to finance at the world level. Financial superstructure used to exceed world wealth only one or two times. Now it is twelve times world wealth. Are we better off? I don’t think so.

Do you think global capitalism can cure itself?

It has happened in the past. After ma-jor challenges it has cured itself. The Great Depression of 1929 produced the New Deal. World War II produced General Agreement on Tariffs and Trade and the International Monetary Fund. Even oil crises lead to changes in the international economy. Is today’s challenge so strong that it allows people to propose reforms at the international level? Europe tries to go a step forward to recover the federal gov-ernance we did not start with initially. But, I think that is not enough. This volatility is unsustainable for the entire world. I am not pessimistic in general about the fact that capitalism can reform itself. But I do not see many working for this, despite cer-tain economists such as Nouriel Roubini, Joseph Stiglitz, Paul Krugman, Amartya Sen who are in favor of better stabilization. They are in minority. Overall, there is a threatening silence.

How do you evaluate the Italian re-sponse in particular to the European Sovereign Debt Crisis?

What happened to Italy was that we had very few instruments available to support domestic demand. There was no possibil-ity to foster aggregate demand with higher public spending because it could have in-creased budget deficit and public debt, that was already high to start with. France, Ger-many, Ireland did it, but Italy could not. Domestic demand fell unseen in any other advanced economy with the exception of Greece. Fortunately, international demand remained high enough to enable Italy to maintain exports, so that the economy did not collapse. But the risk endures. This is over now and the present government has learnt its lesson and wants to use all the possible available instruments that the EU

allows to increase domestic demand. Un-less we increase domestic demand, we can-not tackle the crisis.

Where do you see labor market re-forms in Italy?

We have two major problems: social contributions paid by employers are higher than the average in Europe. The idea be-hind labor market reforms was that the new labour legislation had to decrease partly this cleavage/difference. This is im-portant point because the number of job offerings has been restrained due to high labor cost. If the share of social contribu-tions in wages is decreased, then the aggre-gate cost of labor would be lower.

The second problem relates to sustaining business in the face of decreasing domestic demand. Temporary types of contracts al-lowed entrepreneurs to pay their workers less. This was in itself a sort of drug be-cause it allowed them to postpone invest-ments and was responsible for the decrease in labor productivity Italy has seen in the last 10 years. These workers were kept in the job but productivity did not increase. The new Bill has made clear that normal contracts should be tenured.

Structural adjustment reforms are being “imposed” by the European center on the periphery. Do you think policies advocat-ing more liberalization would help in get-ting the region out of the crisis or would it just exacerbate problems?

On one side, there is the problem of competitiveness. If you have a single cur-rency, you must be competitive. There are two ways of enhancing competitiveness: high-tech investment or being satisfied with small wages. Otherwise you cannot survive in a single currency system. One way to lower the wages is to cut the wel-fare provisions, including pensions. If you have free health services this is addition to wages. Sacrificing from social services is a solution for countries that do not show any capability to compete in the eurozone. Greece is an example. This can either be a direct cut from wages or cutting the welfare state services which entail additional social cost. There is no alternative. A radical al-ternative is exiting the common currency. The cost of Grexit can be quite high if it is the only country exiting the eurozone. But to persuade people to cut wages or to cut welfare provisions is equally difficult. Ger-many did this at the beginning of the 20th century. They were uncompetitive as well at that time, but they succeeded in intro-ducing effective reforms. This is the reason why today they are insistent on reforms.

Considering causalities in the crisis of European convergence can it be claimed that the project has already failed before the crisis? Is that the reason why Greece is now suffering, because technological patterns should have already been har-monized between the countries?

You are partly right. Economic conver-gence among eurozone states was all right

on track up until the crisis. However, not in all of the cases was this convergence solid. Under all statistical accounts there was convergence. Income per capita has converged significantly, including Greece in the periphery up until the crisis. Some of this convergence was actually supported by means of public spending that kept ag-gregate demand high. The driving force of convergence was not technological har-monization but public spending. The dif-ference between Ireland and Greece is pre-cisely this. Both countries faced the same financial crisis. But the crisis in Ireland was a bubble produced by finance. Basically the Irish economy was good enough. In the case of Greece it was not only a bubble. Finance was problematic in Greece due to high volume of loans but this was coupled with huge state budget deficit. So, it was impossible to deal with this financial prob-lem by just injecting a lot of money into Greek banks. Injection did not engender improvement in the economy because it was not a bank problem. It was a problem with the system. I explain in my classes that the balance of payments of Ireland was good enough before the crisis but that of Greece was disastrous. That is the best in-dicator of competitiveness. Balance of pay-ments in Germany shows a huge surplus and Italy’s is satisfactory.

One of the reasons why the situation was like that before the crisis is pretty simple: when Romano Prodi, President of the European Commission from 1999 to 2004, suggested to the heads of mem-ber states that it was important to put un-der control all the accounts of all member countries, his proposal was rejected. This was considered an issue of sovereignty. The case of Greece is illustrative in this context. National accounts should have been more transparent and supervised by EU execu-tives earlier.

What is your prescription for the cri-sis?

Europe is a huge economy. The present problems are not limited to economics but there is today also a major challenge from refugees. It is obvious that the way in which heads of states reacted to the refugee crisis has hardly been acceptable. Europe has countries that are 3,000 years old and therefore it is not to be expected that they will suddenly fade. For the short run I am actually optimistic, we will find solutions to the problems we face, I do not know if they will be the best solutions though as path dependence is very great everywhere. The worst path dependence in Europe is national sovereignty. The idea that free-dom can only be secured by sovereign na-tions is the largest impediment caused by path dependence in Europe. We have to take a step forward and admit that the Eu-ropean size of individual nations is no lon-ger capable of standing up against world challenges. We do need greater integration to cope with our present problems.

By Berkin Safak SenerSAIS Observer

NANJING, China - In 2014, a trend on the popular micro-blogging platform, Weibo, featured users posting the quip, “breathing together, we share the same fate.” This was a reference to China's worsening pollution problem. News sources report that China's pollu-tion is visible from space and the extent of the smog problem has induced a “nuclear winter.” Economists have speculated that pollution and carbon emissions will only worsen in the foreseeable future, peaking in 2030. This is a terrifying possibility, as China's head adviser on environmental policy, Li Junfeng, stated in February that Beijing in its current state is “barely suit-able” for living. As a runner, I feel the impact of China's environmental problems acutely. But I have found ways to work around the issue. I constantly check various websites to verify Nanjing's Air Quality Index and assess whether I should go outside on a given day. The World Health Organiza-tion advises that people should not spend prolonged or unnecessary periods of time outside when the PM2.5 level (the concen-tration of atmospheric particulate matter) is greater than 30. On Jan. 1, Nanjing's AQI was 179—a score that merits “unhealthy”

conditions. For the entire month, Nanjing stayed relatively close to this AQI level, but other cities (and at times even Nanjing) reach the 300 or 400 mark; on such days, I don’t step outside if I can avoid it. Such complications take a toll on my running routine. As an avid mid- to long-distance runner, it is often frustrating to experience a warm, sunny day, only to re-alize that the buildings off in the distance are nearly indiscernible due to the smog enveloping everything. When training for a race, most runners tend to have meticu-lously planned weekly mileages or train-ing schedules, but when Mother Nature throws China a polluted curveball, one needs to be flexible. Instead of designating Saturday as my endurance run for the week, or setting up a daily plan for specific distance runs, I now have to plan on-the-fly. If a certain day has an AQI reading below 100, then I have to go for a long run. If the AQI is a little higher but still below 150, my body can handle running for a moderate amount of time, but it is not advisable to push your legs (and lungs). When the air quality reaches less healthy levels, running outside is not an option; cross-training and high-intensity aerobic routines in a

gym with air filters then become the most optimal means to continue training. However, air filtration systems and sup-posed “clean gyms” are often not as clean as they seem. In much of China, it is com-monplace to leave the windows or doors of the building open, even if it is designed with the intent of serving as an unpolluted haven. The issue stems from the lack of an earnest acknowledgment of the rami-fications of environmental problems—as poor air quality and unsustainable living standards become the norm, it becomes difficult to implement and enforce poli-cies within gyms (or businesses, or any-where else) to help mitigate these issues. Although it may seem valiant that lion-hearted Chinese runners donned breath-ing masks to participate in the 2014 Bei-jing Marathon, the willingness to endure and quite literally run through existing problems is testament to the fact that these environmental issues are not sufficiently understood or addressed. It is difficult to foresee any rapid changes in China’s attitude towards its environ-mental welfare, as much of the country’s grand national strategy relies on robust economic growth (which, in turn, gener-ates pollution). If one comes to accept this reality, main-taining a running regimen becomes more doable: it simply requires coming to terms

with the fact that a schedule cannot be followed and that the decision to go for a long run cannot always be planned. Air quality concerns also drive more creative means for dynamic, indoor workouts; in order to sustain aerobic progress, runners have to tailor their workouts to the day's environmental status. While I have personally seen regression in my running abilities and overall level of fitness, it is not a totally unmanageable situation. Friends from running groups in Nanjing and Shanghai have claimed, “the air has never stopped me from getting in my weekly miles—I just put on a mask,” and “the air just forces me to work harder on the days I am actually able to run.” Environmental concerns and ways to promote a more sustainable future contin-ue to dominate public debate in the coun-try. Regarding President Xi Jinping's visit to Paris and the Chinese government's launch of a carbon cap and trade system, runners can look forward to the prospect of a greener tomorrow. It is important to remember, however, whether one is trying to maintain a run-ning schedule or to help mediate environ-mental issues, progress is a marathon, not a sprint.

8 //Around Town Monday, March 7, 2016

Around Town

LUXURY GOODS, from page 7Finance Watch

percent stake in the company. According to a news report in The Wall Street Jour-nal, revenues rose 17 percent to €548.7 million ($595.9 million), while net profit grew 27 percent to €26.3 million in 2014. Chief executive officer Gian Giacomo Ferraris, under whom profits have risen nearly 28%, has said that the secret of Versace’s growth model lies in the fact that “both in emerging and mature mar-kets, we are often under-penetrated.”

One of the reasons for Versace’s stable growth despite difficult macroeconom-ic conditions lies in the stability of its creative leadership. While the trend of changing creative directors has haunted

the fashion industry in recent times, Ver-sace remains true to its family roots. Else-where, in the last six months alone, head designers have departed from Balen-ciaga, Berluti, Dior, Lanvin and Zegna. The marriage of the creative end to the corporate headquarters is too important to underestimate. Under Hedi Slimane, Saint Laurent revenues grew more than 20% each year from 2012 to 2014, accord-ing to a report by Sanford C. Bernstein. Reports by the Business of Fashion have indicated that a true long-term collabora-tion between a designer and a house such as Phoebe Philo at Céline (eight years), Tomas Maier at Bottega Veneta (15 years)

and Riccardo Tisci at Givenchy (11 years), usually yields a much higher chance of creative and commercial impact.

A faltering economy has prompted several international retailers to rethink their strategies in Asia, even though many are staying put with their investments. However, not all reports seem gloomy. Goldman Sachs analysts have upgraded their recommendations on Louis Vuit-ton owner LVMH, and Kering, the group behind Gucci and Saint Laurent. LVMH went to “buy” from “neutral,, and Ker-ing has been upgraded to “neutral” from “sell.” Goldman is still expecting luxury sales growth to slow down in China, but

analysts are forecasting Chinese luxury spending to grow at 6 percent in 2016, despite being down from 10 percent in 2015. Even though the Asian market is becoming more difficult to penetrate, new strategies are likely to pay off. The emerging middle class in China has a strong desire for “status” luxury brands, even though their ability to spend is less than the country’s ultra rich. Therefore, companies will have to look at selling “af-fordable luxuries” to this class of consum-ers. The industry is rapidly changing, but change is not always a bad thing, espe-cially for those who are willing to adapt.

By Logan Pauley SAIS Observer

Beat the Smog: How to be a Runner in China

Smog in Beijing obscuring vision

Runners wearing masks during the 2014 Shanghai Marathon