EDITORIAL
WHEN TRADE IS JUST A GAME
Dear Reader, A few weeks ago, the Americans established a new trade route with China and exchanged key scientific discoveries, enabling both to economically advance in a mutually- beneficial way. The French and Japanese, not wanting to be left out, worked to establish their own trade connections with the two superpowers in order to better their respective economic futures. This wasn’t something that happened in the real world of course, but a scenario this editor was playing out in a video game: Civilization . Earlier this year, the seventh version of the long-running video game series was released, commonly known as Civ 7 . Debuting in 1991, Civilization is a strategy game which functions much the same way as a complex board game: each player represents a civilization, embodied by a historical figure who acts as advisor and in-game avatar. Players take turns moving their pieces to harvest resources, build cities, battle opponents and discover new technologies. All of which with the goal of advancing from the Stone Age to the Space Age. Yet what makes the Civilization series unique is the different pathways to “winning” the game. Besides the military-style victory found in many strategy games, one can win the game by achieving a cultural, scientific or an economic victory. It’s that last one that seems most relevant at the moment. The global economy is the biggest story of the year and the one that affects everyone on the planet. Yet winning Civ 7 in an economic way is often the hardest to accomplish (not unlike in the real world). By the
end, the victor must be the first to establish a World Bank office in each capital city. Getting there requires a long process of resource management, cooperation, conflict de-escalation and technological development. The Civilization series has a lot to teach us about the current moment, especially as it relates to international trade. Everyone will be familiar with the strain that comes from a price increase to a commodity such as gasoline or a product such as an iPhone, but not everyone will be familiar with the macroeconomic impacts of what can happen during a trade war. In the real world, we are all just “along for the ride” when it comes to the decisions world leaders make. But video games like Civilization offer the player a chance to enact their own “what-if” scenarios when it comes to trade policies (trust me that this is more fun than it sounds). Want your civilization to get rich quick? Open up merchant-friendly road and sea routes. Don’t like the neighboring player and want to flex your might? Invade, don’t trade! Want to see what happens, as I did, if the USA and China cooperate more? Each of the various scenarios offers a lesson for today’s world. Playing the game in a way that promotes free trade boosts the economy for everyone, which sometimes creates economic rivals but helps guard against conflict, since no one wants to bite the hand that feeds them. Positioning yourself as a hermit kingdom on the other hand may dampen your opponent’s economic prospects but often at the expense of your own too, plus every other player will be mad at you.
In this issue, we take a look at what will likely be the 2025 Word of the Year: tariffs. The T-word doesn’t feature prominently in Civ 7 , though it was a mechanic in an earlier version of the game, where applying a trade tariff rewarded your civilization with more gold, but penalized you with reduced production. In this latest issue of the OPEC Fund Quarterly we look into how increased tariffs will impact low- and middle-income countries, as well as what it would look like if those tariffs were cut (p. 8). The World Trade Organization evolved from the idea that trade generates global prosperity. As the world seems to be moving away from the long-established multilateral trading system, find out if the international organization is able to meet the moment (p. 11). It’s not all doom and gloom though. “Climate technologies can only get better and cheaper over time,” writes Columbia University Climate Economist Gernot Wagner (p. 18) in an op-ed for our magazine. “The task for MDBs and climate finance more broadly is to speed up the all-but-inevitable.” On page 20 we travel to Côte d’Ivoire to look at a success story in action: how the country’s cocoa supply chain is delivering its goods around the world.
International trade might be a difficult game in the world of
Civilization , but in our civilization it is one that can easily be won, if only the players can play together. We wish you a profitable – and tariff- free – read.
Nicholas K. Smith, Editor
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