The Quest for True Statesmanship

“ …a man of uncommon grace and compassion, for whom abandoning bitterness and embracing adversaries was not just a political strategy but a way of life.”

——Bill Clinton on Nelson Mandela

Nelson Mandela

Once in a while, the world is blessed with the presence of human beings whose leadership inspires and lifts the spirit, changing the face of society for the better: a true statesman —or stateswoman.

One of the brightest of soul and heart, whose global influence and legacy will transpire for ages to come has just passed away, the unforgettable Nelson Mandela (1918-2013). His passing compelled us not only to analyze his life’s work, but also to put it in a larger context and  decant the core virtues that define the true statesman —regardless of time and space.

Most deservedly so, the world has consistently shown true respect, admiration, and even reverence to such sporadic and extraordinary human beings. Unfortunately, these unique people don’t come along that often; though, on the fortunate side, there have already been enough cases throughout history that allow a deeper analysis.

Thus, it is not difficult to decode what is behind the virtuosity of true statesmanship, that is, to analyze common traits, values, and practices that have made those people true icons of mankind.

Two characteristics made Nelson Mandela such an outstanding example of true statesmanship:

  • Far from being poisoned and consumed by bitterness, resentment, hatred, and thirst for vengeance towards white people, while unjustly incarcerated during 27 years —mainly for political reasons— basically uncommunicated from the rest of the world, Mandela developed the spiritual stature of true forgiveness towards the white and racist ruling minority of the time. He gained the wisdom to understand that hatred is self destructive, and instead transformed it into constructive energy and channeled it to uproot the primitive racist values of Apartheid. His efforts were directed toward the system, not toward specific people or groups.

  • Madiba, as he prefered to be called, acquired the wisdom to reinvent himself into a statesman, from his humble beginnings as a social activist that in earlier years when out of desperation and impotence, had even resorted to tactics of violence and sabotage. What a profound virtuous transformation did Mandela experience! His high spirit, extraordinary political perception, grit, and ability to learn from and adapt to new changing circumstances, and evolve with righteousness were truly remarkable.

True statesmanship is thus characterized by an extraordinary perception of the most adequate balance in the most important cost/benefit relationships, of the most crucial aspects of society’s leadership and management.

The essence of true statesmanship is not a rigid adherence to the past, but a prudent and probing concern for the future.

——Hubert H. Humphrey

Mandela also had an abundant supply of the fundamental and indispensable characteristics of superb statesmanship:

  • A very high dose of spirituality in day-to-day life, permanently placing the common good before personal benefit. That is, he had the vision, the courage, and wisdom to go against the prevailing conventionalism of his time in pursuit of the common good.

  • The ability to reconcile. The ability to pull together antagonizing forces. Madiba’s wit and great sense of humor were also a big plus.

  • As a corollary of the previous couple of points, Mandela had it crystal clear in his mind the great value of stepping out of office after only one term as president, even though there was a very strong popular demand for him to stay for a second term. He was way beyond the trappings of power and fame. Mandela learnt the superlative importance of setting the bar very high, of setting virtuous precedents. As the old Greek proverb says: A society grows great when old men plant trees whose shade they know they shall never sit in.

  • And, above all, he had a great sense of the high impact that society would attain by smartly leveraging his unparalleled moral authority, image and prestige in building and fortifying South African institutions in pursuit of the best practices the world had to offer.

quote-one-man-s-opportunism-is-another-man-s-statesmanship-milton-friedman

Nelson Mandela represents a before and after in many respects, particularly in regard to race discrimination and reconciliation. He dismantled the most grotesque faces of apartheid with firmness, great balance, and grace. Mandela had the unique opportunity to put into practice an entire credo of virtuosity.

There have been a handful of great statesman in the past three centuries; among others: George Washington, Benjamin Franklin, Martin Luther King, Mahatma Gandhi, Robert Schuman, Deng Xiaoping, Margaret Thatcher, Ronald Reagan, Bill Clinton, Lula da Silva, Pope Francis I, and of course, Nelson Mandela.

The fundamental traits of great statesmanship have already been outlined a few paragraphs back. Of utmost importance, there is a momentous distinction between great and superb statesmanship: the presence and relentless practice of the highest moral values, particularly the highest spiritual principles, distinguish the superb statesman. That was Mandela’s case.

There is no exaggeration to state that a superb statesman behaves with a very high level of virtue and, not surprisingly, no small measure of sainthood, in some specific aspects:

  • Mandela’s forgiveness onto others, after 27 years in jail —essentially ridding himself of bitterness, resentment, hatred, and thirst for vengeance—, in pursuit of a higher goal, the common good, is an impeccable example.

  • Mahatma Gandhi, with his legendary peaceful resistance, and the search for harmony among different ethnic and religious groups, along with his consistent refusal to occupy high office is another excellent example of true statesmanship. Gandhi, along with Mandela, were in a league of their own; the world hadn’t seen statesmen like these, whose legacy has rippled throughout the world.

  • Deng Xiaoping rose above and broke the chain of bloodshed, violence, and revenge that had characterized the Chinese Communist regime up to Mao, and his successor, Hua Guofeng. During Mao’s government, there had been several displays of violence toward Deng’s family —after a series of sketchy events, Deng’s imprisoned son was left paraplegic as a result of being tortured during Deng’s last purge prior to Mao’s death.  After Mao’s death, Deng destituted Hua, and gave testimony of greatness by forgiving him. In this regard, Deng Xiaoping’s case is not that different from Mandela’s, as far as essentially ridding themselves of bitterness, resentment, hatred, and thirst for vengeance; looking forward in a constructive way, in pursuit of the common good.

  • Pope Francis’s ascetic lifestyle began as a priest, and now, he’s trying to implement it church-wide as Pope; breaking with age-old papal practices.

quote-Walter-Lippmann-social-movements-are-at-once-the-symptoms

All previous cases are unquestionable examples of high virtue, of superb statesmanship.

True statesmanship must be an aspiration for the political class all around the world. The inherent virtues should be a source of inspiration for the global political system. Yes, most politicians are far from it, and that is why it is up to society (individual and institutional level) to have these superb and great examples of statesmanship in mind to permanently contribute and exert as much pressure as possible in governments’ actions, in the pursuit of the common good, and ultimately, raising the level of society’s consciousness.

Ukrainians Repudiate Government’s U-turn on Integration with the EU

iloveeu_0 It was truly heart moving and soul uplifting to learn about the rallies of over three hundred thousand Ukranians in the freezing streets of Kiev shouting “Down with the Gang” in November 30th and December 1st, and thousands more in other cities across the Ukraine, as a vigorous protest against the shameful U-turn on the process of integration with Europe made by  President Viktor Yanukovich a few days earlier.

The rally was reported as being by far the biggest seen in the Ukranian capital since the Orange Revolution in 2004-2005.

On late November Yanukovich backpedaled from signing a landmark deal at an upcoming summit in Vilnius on closer relations with the European Union. The great divide between Yanukovich’s personal decision and the Ukranian people could not be greater.

President Yanukovich’s refusal to sign the far-reaching political and trade accords with the European Union, opting instead for closer ties with Russia as a bizarre substitute for the EU deal, is a clear sign of a weak and incompetent president. This is another grotesque episode of extremely poor governance in a political system that still is highly contaminated with the poisonous political style of the former Soviet era.

Yuri V. Lutsenko, a former interior minister and a leader of Ukraine’s Orange Revolution in 2004, speaking to the huge crowd gathered in Independence Square in defiance of a court order stated: “I want the authorities to know that this is not a protest; this is a revolution!”. The crowd repeatedly roared back “Revolution!”

Ukraine EU

In the same place, Vitaly Klitschko, the heavyweight boxer-turned-opposition politician called for Yanukovich’s resignation: “They stole the dream. If this government does not want to fulfill the will of the people, then there will be no such government, there will be no such president. There will be a new government and a new president.”

There are abundant examples in recent decades, that uncontroversially provide the testimonial required to understand, once and for all, the major truth behind any developing nation’s social, political and economic progress —or its lack thereof. It’s a rather elementary cause/effect analysis, in a historical perspective. The results are overwhelming.

A transparent, law-abiding, accountable society, that rewards hard work, savings, and the entrepreneurial spirit, has consistently proved to be the best model to follow for a quick and swift development.

There are no exceptions to this. A clear evidence are the impressive success stories of  the four Asian Tigers, New Zealand, Israel, and more recently Chile and the Czech Republic, Slovakia, the Baltic Republics, and Slovenia, among others. All of them have showed the way to move from rags to riches (to different degrees) in just a few decades. The evidence is stunningly unequivocal.

The Ukrainian people seem to have it crystal clear.  Since gaining independence in the early 90’s, a good number of the Ukraine’s sister countries —former Soviet republics— have already achieved a GDP per capita larger than Russia’s —some of them substantially larger.  The resounding success of these countries is too obvious to be ignored. The table below shows it with unquestionable clarity (Source: CIA’s World Factbook). The lesson is unmistakable: true independence from Russia is a prerequisite for prosperity; submission to Russia has meant impoverishment. Given the geographical position of the Ukraine —Russia’s neighbor, and the natural bridge between Russia and Europe, along with its relatively large territorial extension and population— Russia has gone the extra mile to insure the Ukraine’s permanent submission.

The countries in boldface were part of Yugoslavia. Although, nominally for three years after WWII they were part of the Soviet republics, they were expelled from the Soviet system in 1948. Hence, these seven countries had a very different, and independent development from the Soviet republics. For that reason, their comparison to the rest of the former Soviet republics must be differentiated.

The countries in boldface were part of Yugoslavia. Although, nominally for three years after WWII they were part of the Soviet republics, they were expelled from the Soviet system in 1948. Hence, these seven countries had a very different, and independent development from the Soviet republics. For that reason, their comparison to the rest of the former Soviet republics must be differentiated.

Behind poor —and extremely poor— governance lies a golden opportunity of economic growth and well being for billions of people all over the world worth well over one trillion dollars a year of missed output. The connection between good, effective governance and prosperity is unequivocal. Governance is so important that a full section of my book GLOBALIZATION is devoted to it.The Ukranian society —and the whole world for that matter— are fed up with totalitarian, superlative corruption, and incompetent governments. It is utterly painful that after thousands of years of human evolution, we still have political systems that are so inept and unresponsive to the best interest of their people, that dare to govern against the majority’s will, perpetuating poverty and despair instead.

The most prosperous nations on earth are the best governed.

As simple as that; there is no major mystery behind that major truth. Hence, there is no socioeconomic project with a higher impact in the world than to improve governance across the globe. Granted, it is easier said than done. Nonetheless, that’s where the jackpot is.

It is relatively simple to conclude that the examples of nations and jurisdictions mentioned  three paragraphs before are an uncontroversial testimony of this truth.

It is extremely important to differentiate between society and their governments. Most of the time, the latter are a poor reflections of the needs and possibilities of the nations under their administration. The most extreme examples of poor governance are, naturally, among the most underdeveloped nations on the planet. The most developed nations, without exception, happen to be the best governed. There are gigantic opportunities for improvement, even in the most developed nations.

There is a great ray of hope when societies wake up to this reality. That is the beauty behind  the Ukranian’s case. Our best wishes for those efforts to be well guided, in a consistent manner, to achieve what they are after: a wealthier and equitable nation, with truly accountable governments, with high-employment rates and abundant harmony.

Still in Politics 1.0 After 237 Years? (Part Three)

“Whether a cat is black or white makes no difference.

As long as it catches mice, it is a good cat.”

——Deng Xioping

Copyright. All rights reserved by HitAndRun

Copyright. All rights reserved by HitAndRun

This was one of the major ideas behind Deng Xiaoping’s profound transformation to China. In other words, there is no substitute for good performance, far beyond any other consideration, including political ideologies.

Sadly, as 2013 draws to a close, the manifestations of Barack Obama’s incompetence are too conspicuous to ignore. The healthcare debacle seems to be the cherry on top of the proverbial cake. Obama’s administration has characterized itself by permanently overpromising and continuously underdelivering (OPUD).

There is no question about some strong assets Obama has. Probably heading the list is being a very able public speaker, coupled with a charismatic personality. Unfortunately, his shortcomings are too many, and in critical areas for the presidency. Chief among those shortcomings is his lack of  prior executive experience, paired with an apparent inability to learn from his inexperience with sufficient humbleness and lucidity. The multiple missteps and fumbles along his presidency are an uncontroversial evidence of it. His credibility abroad has also suffered ostensibly.

Even Bill Clinton, the Dean of the democrats, has recently turned against Obama, in connection with the healthcare fiasco. Clinton’s opinion carries a lot of weight given the extraordinary results that he delivered during his presidency, on the average. While in office, Clinton showed a very pragmatic way of doing things, far from the typical rigidity and dogmatism of most political parties —be it left, center, or right-wing. Clinton’s performance was indeed outstanding.

How did the most powerful, and debatably the most advanced nation on Earth get itself into this big mess?

If a careful analysis is made, this should not come as a total surprise. It is no exaggeration to state that this was an accident waiting to happen. The US, as most contemporary societies, operates under a highly dysfunctional political system, with very few, limited, and highly ineffective checks-and-balances practices in critical fronts.

Most corporations in the US —in fact, all over the world— have a pretty much refined methods  and practices for selecting their chair people, CEOs, and all management positions, including lower level jobs. Even so, given the inevitable complexities of selecting the most able individuals for top management, it is not uncommon at all to occasionally end up with deplorable results. Yet, on the average, due to the multiple checks and balances, and particularly to a well proven set of management practices, most of the time good results are obtained; moreover, when the result is unacceptable, most private organizations tend to react swiftly, firing the incompetent managers and replacing them with new ones.

Then, how come the US and world’s politics have evolved largely disconnected to the best practices on corporate management?

Quite easily! The world of politics, for practical purposes, is an island in the middle of society, but run in many ways very differently from the rest. The incentives system currently in place in the political world is a near perfect reflection of this painfully simple and humiliatingly obvious and sad reality.

In a nutshell, the major effort of most politicians, in any country, is devoted to trying to perpetuate their party’s position in power, preferably winning elections most of the time; simultaneously, politicians also try to personally remain in power as long as possible. It’s human nature in the raw. This leaves little room for true statesmanship, and for the genuine pursuit of the common good.

As clearly stated in Part Two of this series, contrary to popular perception, in politics there are neither absolute victories nor absolute defeats. Yes, for the losing candidate, sometimes his/hers political career could be over. For the defeating party, however, that’s seldom the case. Thus, the rules of the game are markedly tilted towards maintaining the status quo, since even when losing, the privileges and political power remaining most of the time are substantial.  Hence, nobody within the political system in his/hers right mind has any incentive to go beyond, more so when what is required is a profound restructuring of the incentives and the political system as a whole. According to current rules of the game, the risk/reward ratio makes it extremely unprofitable and risky to behave differently to what is already established. Hence, logical evolution and continuous improvement have mostly been negated in the political system.

Thus, it is safe to state that contemporary political systems have essentially been operating in a different reality than the rest of the business world and society in general. They have been doing so simply because that’s where their comfort zone is, the area of the minimum resistance path, where the maximum benefits and minimum risks lie, according to the primitive current rules of the game. Politicians try to maximize their performance according to the rules established, as they know them.

Regrettably up to now, society has been fairly complacent about how the system works, despite so many blatant shortcomings and limitations.

No one will contest the statement that governing is a very serious matter. The repercussions caused to society from the quality of leadership and management —or lack thereof— cannot be overestimated. Additional costs and foregone benefits of a highly inefficient and ineffective government, run in the hundreds of billions of dollars a year of missed output —in the US’ case—, not to mention the painful harm done to the unemployment front.

The ancient Greek sages very clearly advocated that top government positions should be occupied by the most able and wisest citizens.

The great classic Greek philosophers had it right, with a crystal clear concept of meritocracy. Contemporary political systems are miles away from that axiomatic ideal. Thus, contemporary political systems have a great deal of work ahead of them in order to truly advance, consistently and permanently in the meritocracy direction.

Greek treeManagement science has continually and considerably evolved and progressed in the past decades. Peter Drucker (1909-2005), the father of modern management, a naturalized US citizen, made tremendous contributions to the then nascent science, since the 1930s. Numerous contributions have been made from many more management experts ever since, most of them US citizens.

Let’s take an example. Job descriptions are one of the most basic concepts in any organization, including many in government. The same can be said about the screening processes to select the best and the brightest. However, these job descriptions and screening processes are conspicuously absent when it comes to selecting public officials —be it legislators, presidents or prime ministers. Granted, there is a relatively short and very elementary list of some very basic legal prerequisites for candidates to office: to be a national of the country, to be an adult, and so on. There is not, to my knowledge, any written criteria and requirements about competence and former experience, as well as about the selection process itself.

President Obama is an articulate, intelligent person, a Harvard graduate. Most unfortunately, he arrived to the presidency with very poor prior experience and credentials. Even as a legislator, he was an inexperienced junior senator. Furthermore, and most unfortunately, he has not shown any particular proclivity to learn from his mistakes.

The US’ political system is fairly representative of the rest of the world’s. The same shortcomings and limitations apply all around the world. If there is any doubt in this regard, let’s take a quick look to Italy, where Silvio Berlusconi, had an exaggerated political influence for around two decades, until recently. Berlusconi’s influence in Italy’s fate was disproportionately high, unfortunately the wrong type. Berlusconi’s ascension to power in Italy was achieved by navigating through the loopholes of an extremely primitive way of doing politics, quite often outside the law.

All over the world there is an abundance of examples of highly incompetent, and not too rarely also very corrupt elected officers that were able to arrive to top government positions due to the very lax rules of the game, as generally understood and practiced today. Some extreme examples are Venezuela and Argentina, among many others. Governing well is a tough command.

Substantial improvements in governance systems, procedures, and practices in no way guarantees excellent results. However, in many cases, the absence of them is an almost assured failure.

In other words, in the way politics are being played today there is a lot to lose, and virtually no substantial gain to attain. A deplorable cost/benefit relationship. In fact, a truly suboptimal situation. The world should not continue to operate under the Politics 1.0 umbrella. It is extremely costly, ineffective, and dysfunctional.

Despite the severe limitations of contemporary political systems, once in a while and very fortunately, when extraordinary statesmen appear in the scene, personal virtuosity tends to prevail. In varying degrees, there are some examples of gifted statesmen —and stateswoman— in the recent past and in the last quarter of the 20th century: Lula in Brazil, Reagan and Clinton in the US, Winston Churchill and Margaret Thatcher in Britain, Nelson Mandela in South Africa, Sir John Cowperthwaite in Hong Kong, Deng Xiaoping in China, Alvaro Uribe in Colombia, and Lee Kuan Yew in Singapore. Though this list is not in any way an exhaustive one, it is not that far from being it.

Nonetheless, It is utterly irresponsible and naive, to say the least, for any political system in the world to be dependent upon rather exceptional personal virtuosity.  A well conceived, modern political system that truly incorporates what the best practices have to offer should function so effectively that even with relatively mediocre top officers at the helm, things will tend to run smoothly. That should be the main aim in mind. Nothing else will do.

The logical response to this type of atrocious dysfunctionalities in modern political systems —like highly incompetent politicians at the helm— should be constructive change. The concept of the political world as an island where proven practices elsewhere do not apply cannot go on any further. It all boils down to effective management. The opportunity cost of keeping the status quo is unbearably high.

The Global Demographic Opportunity of Our Time

Aging workforce2The world’s changing demographics are presenting a formidable opportunity which, at first sight, might otherwise be visualized as an unsolvable developed nations’ conundrum.

The world’s labor force is rapidly aging. This is especially true among developed nations. In the US, for instance, the baby boom phenomena of post WWII is rapidly morphing into a baby bust. The demographics of Europe, Japan and most notably, China, are in an even worse situation than the US’.

Ironically, although quite understandably, most —if not all— of the poorest nations on earth are still experiencing vigorous rates of population growth. Granted, the poorest nations’ vigorous birth rates are coupled with horrible high levels of poverty, poor health and extremely deficient education, and so on.

To state the obvious, there is a minimum acceptable level to maintain a healthy balance  between the young population and the elderly. Most, if not all of the developed nations already have broken that extremely delicate balance. That’s a big threat. Fortunately, the other side of the coin is a monumental opportunity for growth and overall well being.

There are only three ways to reverse the aging demographic threat:

  1. Sustainable and sizable increase in the birth rate.
  2. Importing workforce from other countries.
  3. A combination of 1 and 2.

Option 1, however, presents its own set of challenges and realities. Probably the most important among them is the many years (between 18 and 22) it takes for the newborns to grow up and incorporate themselves into the workforce. Moreover, even if the correct incentives are implemented to promote new births, there are no guarantees of success, given that there are very powerful cultural and practical factors working against this effort. Hence, option 2 seems to be the only alternative with effective and almost immediate results.

The shrinking labor force of the developed world presents us

with the greatest arbitrage opportunity of our generation.

In order to compensate any surplus or deficit of any sort, countries export and import goods and services according to their needs; the workforce should not be the exception. Countries with an aging population problem should start importing young and able people into their workforce from countries with a surplus in young population.

Yes, it will be a monumental challenge to successfully assimilate droves of immigrants from the poor and poorest nations into the developed world. Nonetheless, the alternative to essentially maintain the status quo is too costly to even deserve consideration. More on the opportunity cost concept.

Is there any better long-term solution to the most menacing population shrinkage of the developed world than importing workforce from other countries?

Take Japan as an example. How in the world can anybody reasonably expect relatively robust economic growth rates in Japan with its overall population shrinking? It’s simply an utter impossibility. We all know of the great reticence that Japan has historically shown towards immigration. The choices, however are crystal clear: either Japan reinvigorates itself with an agile, solid and consistent long-term immigration policy to fulfill the severe demographic shortfall, or it will have to continue facing unnecessarily costly consequences in economic vitality.

Though far from being a developed nation, the case of China is also very illustrative. In most likelihood, one of the major reasons for the relatively recent deceleration in the economic growth rate from low double digits to the current 7% or so rate of growth, has to do with demographics. The Chinese workforce is also aging, without the corresponding counterbalance with new entrants. China, as well as Japan and so many more countries are extremely rigid in their immigration policies and practices. According to a document leaked from the Chinese Communist Party’s Third Plenum meeting last week, the government plans to relax its “one child” policy; a clear sign that the Chinese Politburo is also concerned about China’s demographic threat.

Aging workforceIf the current status quo —essentially inaction— prevails, the demographic challenge in the developed nations poses increasingly troublesome outcomes, with a catastrophic potential. One of the most relevant and terrifying is the unfunded pension liabilities quagmire. Without a proper replacement of young entrants into the labor force, as the population ages, a great deal of the pension liabilities end up being insufficiently funded. This becomes a highly explosive time bomb as the labor force reaches retirement age. Another related terrible reality is the escalating health costs, which tend to increase exponentially as the average age of the population rises.

Deteriorating demographics is essentially a developed nation’s problem. For completely different and opposite reasons it is also a big challenge for the world’s poorest nations still experiencing high birth rates.

Countries like the US, Canada, and Australia have consistently shown the world how to successfully assimilate massive immigration through globalization. Continuous immigration has been a consistent policy and practice in these nations since their inception. The melting pot concept is one of the most fundamental components behind the great success story of these thriving nations. That superlative success cannot be conceived otherwise. Thus, it can be done! Let us take advantage of what globalization has to offer.

If appropriately implemented, the solution discussed will generate healthy economic growth rates for years to come wherever set in motion.

Russia Just Shot Itself in the Foot

Governments are either doers or, at the very least, simulate to be doers. They shouldn’t  go around conceding defeat before even trying to do something about it.

dream vs realityLast Thursday we shockingly read the appalling statements made by Alexei Ulyukayev, Russia’s economy minister, slashing the long-term growth forecast to 2.5% through 2030, instead of the 4.3% published in April: “The drivers behind the brisk economic growth in the years before the 2008 economic crisis are exhausted.”

The economy ministry also stated that it expected the growth in salaries and corporate earnings to decelerate, and the wealth gap to widen further, with the share of the middle class falling from half to just one-third of society.

In over thirty years of closely following important developments in major countries of the world, I have never seen anything like this.

The straightforwardness of those statements is unprecedented. If anything, governments from all sorts of ideologies always, as a principle, try to bolster their performance, however mediocre —or even unacceptable— it could be.

Furthermore, those statements reflect some fundamental lack of coherence within the Russian government. Does Vladimir Putin agree with those statements?, or were they pronounced unilaterally by the economy minister without prior consultation?

For practical purposes, the answer is not that relevant, because in either case this is about a major inconsistency, an offense to the basic principles of good governance. Granted, Russia is not exactly a role model in this paramount area. Nonetheless, no senior government officer anywhere on Earth will dare to publicize the outrageous statements that Mr. Ulyukayev said last Thursday, regardless of how grim the future appears to be.

The basic reason of the existence of government is to serve society.

Yes, unfortunately that is usually more wishful thinking than a reality, even in the most developed economies in the world. Yet, at least in paper, most politicians and public servants in general go out of their way trying to persuade the society how competent and reliable they are. It is simply inconceivable and utterly unacceptable to throw the towel without even fighting. The economy minister’s statements are an open admission of incompetence and a lack of the most elementary spirit of problem-solving of the entire  Russian government.

slowdown

On what I completely agree with Mr. Ulyukayev is that the main drivers behind Russia’s vigorous economic growth during the past decade are exhausted. Alas, how about uncovering some equivalent drivers? That’s the major reason of existence of the Russian government —or any other in the world. Russia is far from being a developed nation, with an estimated GDP per capita of US $18,000 during 2012, slightly over 40% below Italy’s, one of the poorest nations of the developed group. As copiously explained in my book GLOBALIZATION, the major drivers of growth of any underdeveloped economy, like Russia’s, lie precisely in closing the huge gap that separates them from the developed world. Any developing nation has a great deal to learn from the the developed countries. Naturally, in order to effectively start closing the gap it is imperative to implement structural reforms in the political and economic system. There is no other way around it.

Something has to give. Either the Russian government does the improbable and begins a profound wave of badly needed structural reforms, or the bad times ahead will be tumultuous with a great deal of misery and unnecessary suffering.

Russia’s fate is of great importance for the rest of the world, being the country with the largest landmass on Earth, the tenth most populated nation, and the seventh biggest economy on the planet, with a 2012 GDP (ppp) of about US $2.5 trillion, right between Germany and Brazil.

The global economy has made us all more interconnected. It is really a great pity to see these horrible developments taking place, and much more so in a country of the prominence and influence of Russia’s.

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