Hello, my name is Binyam Afewerk Demena. I'm originally from Eritrea, but now working and living with my family in the Netherlands. I want to welcome you to this course on International Trade and Investment Policies for Sustainable Development. In this session, the lectures introduce this course on globalization, competitiveness, and development. But first, we will shortly discuss what the course is about. In the course, we will be dealing with an important topic, the 2030 Agenda for Sustainable Development recognizes international trade as an engine for inclusive economic growth and poverty reduction. Indeed, trade and investment are important means to achieve the Sustainable Development Goals, also known as the SDGs. This course deals with a context that is especially relevant for developing countries and emerging markets. Upon completion, you will have a good understanding of international trade and investment theories and learn from our up-to-date knowledge about topical developments in the world economy. We will identify consequences on issues related to developing countries and SDGs. You'll be able to analyze the determinants and impact of trade and investment. Evaluate the impact of trade and investment on sustainable development, and to provide evidence-based policy advice that fits in development strategies. This course, works with concrete cases from developing countries on which we are doing research ourselves and we look forward to sharing our experience with you. Let me first introduce the other instructors of this course, Professor Peter Van Bergeijk and Ksenia Anisimova. Hello, I'm Ksenia Anisimova. I'm from Russia and working on my PhD in Netherlands. People call mixed Ksusha. Hello, I'm Peter Van Bergeijk from the Netherlands. A difficult name so people call me Professor Peter. Professor Peter, you yourself have been a policymaker in the ministries in international organizations. From your experience, do you think that evidence based policy, it's any value or is it on the politics that matters? That's a really good question. Of course, politics have an important bearing on how advice has been received. However, a policy that is not based on facts that will not be effective in the end. Can you give an example? Well, the clearest example is probably Brexit. Brexit is politics, it doesn't make sense economically. Do you really think that numbers is the only thing that matters? No, I don't think that numbers are the only thing that matters. Qualitative evidence, history, also are very important, incidentally, that is something that the Brexiteers also ignored. I see. Thank you. Let's take a look at some evidence about the openness of the economy. Also, to see recent trends. The dotted line reports world trade in percent of global production. This is often used as a measure for openness or the extent of globalization of the world economy. In the corresponding reading, you will read more about this measure. Up until the financial crisis of 2008, 2009, the trend is upward. But from then on, there is first a steep drop during the World Trade Collapse and then a stabilization during the period of the world trade slowdown. I stopped the graph in 2019 because I do not want the COVID-19 pandemic to distort the analysis. This is the global picture. Now, an important question is, what happened in the developing world? Let's add three additional lines for the middle-income countries, the lower-middle income countries and the least developed countries, the LDCs. As you can see, these lines currently are all below the world average. Take a close look at the graph and answer the following questions. Why is it so important to see that the lower and middle income countries have had the highest trade in percent of production? Because that sheds light on an important question. Does the slowdown of globalization and openness have an impact on development? In order to investigate that issue, we need to take a look at income per head or labor productivity, which determines the level of development. The second reading is about productivity, its measurement and its relationship to per capita income. We start with data for the world economy and that is illustrated in squares. What you see is the familiar story of globalization and its economic benefits. Since the 1970s, the world has both become more open and productivity has increased. Now, let's add the data for the low and middle-income countries. The circles tell a different story. All data are below the world level data. Some would argue that this is because these countries started at a low level of openness and will catch up with the world trends. I doubt that this is true. Let's take a more detailed look. We start with a trend. This seems to confirm the storyline. However, the explanatory power of the trend line is much lower for the low and middle-income countries, with an R-squared of 0.5, almost half the value for the world, and it is easy to see why. Look at the pattern. Both series show fluctuations, but for the world as a whole, we observe a steady increase over time. For the middle and low-income countries, the trend is backward bending. Openness has actually decreased over the last 15 years. The good news is that income per capita increased. Now, is this because decoupling is possible? Is this because economies grew even faster than their trade? These are important questions and we will take them up in this course. We have already learned quite some valuable lessons. First, you now know the trends in world trade and openness, including the World Trade Collapse in 2008-2009, during the Great Recession of the financial Crisis and the world Trade Slow- down during its aftermath. Second, this structural change in the international economic system has been much stronger in low and middle-income countries. There is a third important lesson in this. We always have to look beyond aggregate trend data. This was clearly explained by Peter, but we will need to look even further beyond the macroeconomics. Countries do not trade, firms and people trade. Therefore, we will also need microeconomic analysis. Hence, we will also look at firm-level data later on this course. We can only provide evidence-based policy advice for international trade investment policy, for sustainable development. If we have the full picture, we will learn a lot. I look forward to our journey in the next weeks.