Saturday, April 20, 2024

Dialogue with the people is a must

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RECENT DEVELOPMENTS IN EUROPE show the importance of careful handling of a country’s economy. Conversely, they also highlight the dangers of politicization of the economic principles used for the proper management of a country’s fiscal and economic well-being.
With austerity on the horizon, the French people chose to relieve Mr Nicolas Sarkozy of the presidency and to elevate Mr François Hollande into what is clearly a hot seat, given the international economy and problems posed by the economic and political instability in Greece.
It is a sobering thought that but for  Mr Dominique Strauss-Khan’s legal troubles, the former IMF head might now be seised of the economic levers of the French state and would have been able to bring that considerable experience and insight to bear on managing what is turning out to be one of Europe’s major economic crises.
We speak of Europe’s economic crisis because of the complex political economy of the eurozone countries, of which Greece is one; but there can be little doubt that what affects Europe has implications for the remainder of the world; and that the fortunes of countries large and small are affected to one degree or another by what happens in the financial and economic districts of the larger countries.
As a small dependent and open economy, we need to carefully watch these developments and draw such lessons as we can from the outbreak of these events. There is a clear link between any given political system and the economy; and different systems of government will throw up different challenges for those entrusted with the powers of the state.
Political systems that breed a large collection of parties sharing the seats in a parliament will come under greater strain when the chips are down than those, like our system, where there tend to be strong governments with a majority of seats and the consequent ability to take tough decisions without pandering to every whim and fancy of a coalition arrangement.
That is the Greek problem now. Their economy has to be bailed out, and tough measures need to be taken to move towards greater stability. Yet it seems clear that the electorate is not keen on further austerity and we can all identify with that desire, but the problem did not start yesterday.
A continuing public opinion is an important check and balance in any political arrangement, and some of the most serious mistakes of leaders anywhere are aided, if not abetted, by the absence of continuing critical debate on aspects of the economic management of a country.
The day-to-day management of the economy may be in the hands of the politicians, but it is also the concern of corporate business, of the people, of the Press, of academia – in fact, everyone.
It is often said, perhaps a little maliciously, that people get the government they deserve, but whatever happens, the Greek people will bear the heavy costs of the political and economic problems.
By their actions, they are now speaking out, as danger looms, but a major lesson for any democracy is that continuing dialogue with the people on a government’s economic policies is a critical aspect of any country’s well-being.

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