Wednesday, August 15, 2007

Its houshold stupid...?

Ancient Greece gave us name for economics, whilst combining names oikos (house) and nomos (custom or law), hence "rules of the house(hold)." Latvian name tautsaimniecība ethimologically derives from the Greek economia, but it is applied not to the household but to "the rules of the running the nation (tauta -nation in Latvian)". This is a direct influence of the 19th century romantic national movements. The name itself seems harmless, but if one should define the rules of running the nation then one stumbles on problem defining what the nation really is? Anyhow, the name tautsaimniecība is not used thus often anymore and instead the name ekonomika is widely used today, and Latvian economic situation is in dire straits, so even the Latvian TV weekly "Kas notiek Latvijā?" show devoted its season's opening emission to the problems of Latvia's spiralling inflation. Referring to the title of this blog entry I purposfully paraphrased a phrase first used by the 1992 Bill Clinton election campaign stretegist James Carville. The reason why I paraphrased the omenous phrase is the ironic present situation in Latvia, when regardless of the economy out of balance the government is working only with half measures and does not comprehend serioussness of the present situation.

The show did not reveal anything new except the good hint by Mr Alfs Vanags. The state secretary from the Ministry of Finance, Mrs Irēna Krūmane declared that the Latvian executive honestly wishes to finish this years budget without a deficit. While bringing out the example of the governmnt's anti inflationary measures she confessed that the Ministry of Finance has cut basic expenses by some meagre Ls 10 million, and asked other ministries to follow her example. In the meantime, the numbers presented are ridiculously small, and usually for ministries to cut their expenses political will is needed, and here we must speak about the role of the PM again, which is questionable at most to be least ironic. That was the major reason, why Mr Alf Vanags hinted that the privatization of Lattelecom 30% or smth. state shares was performed in hurry for probably covering gaping hole of the 2007 budget deficit (on of the reprimands of the EU ECOFIN Commissioner Joaquin Almunia). It means that there is still no cutting of red tape and as far Latvian public administration is concerned it still stays underpaid, unreformed and struggling with the shortage of qualified workforce, unfortunately.

In the meantime The Post of Latvia Plc. is struggling. The trade union is negotiating the demand for doubling postmen salaries, but the PM has said that the government would not subsidise the fledling company, smth. good at least. Aivars Ozoliņš (columnist of the daily Diena) described the whole affair in today's issue ( ) and correctly concludes, that the management style of Latvian Transport Supremo, Mr Šlesers is questionable. Spending hundreds of thousands on the Postal News newspaper prior elections served the First Christian party well, they were elected and are part of the governing coalition today. However, I do not even touch the issue of morals here:). In the meantime the very bad sign is that the Post of Latvia has the monopoly rights to deliver the postal services in Latvia, and therefore, while simply closing deliveries to the unprofitable rural post offices the Post of Latvia endangers basic freedom of the press.

Delivery brunch of the Post of Latvia is constantly in red and instead of liberalizing this branch the government gave a green light this week for creation of the Postal Bank. Bizzare the inside deals in Post of Latvia are, and unfortunately they are performed by the self-proclaimed only liberal party in Latvian - LC/LPP (Latvian Way and First Christian Party union).

Actually the post-Soviet transformation still carries on in Latvia. Instead of creating another bicycle the executive could simply emulate the best governance practices from number of small states in the European Union (just like Estonia does it for example). Now, the biggest problem of Latvian political elite is the childish feeling that they can offer a better way of running pubic affairs than their West European competitors. Unfortunately the Soviet and materialistic (instead of post-materialistic to use the expresion from Bob Putnam) mindset is very much to be blamed here. Public officials while living in their bubble truly believe that other members of society are like them or simply stupid, unfortunately. Thus, their logic follows that the public service is the place for enriching oneself, thus making anyone in the public office to reap his/her personal benefits as quick as possible, and so making the public administration in Latvia to run excluively for short term goals. It means that anyone who wants to question public officials abilities and skills, must be blamed as disruptive elements, because they are afraid that their incumbent status, or their very livelihood, is under fire. Therfore, the culture of mediocrity is continued, and also the Latvian political elite runs this country exclusively for the short term goals/projects, be they the "Trīs Brāļi" conglomerate to build national libarary, concert hall and museum of modern art, upgrading of the RIX airport terminals, new building for the Internal revenue service or "mini-reform" of the education sector, unfortunately. Repeating office minuteae or simply number crunch is the usual way of business for technocrats, and technocrats are very much needed to run modern state administrations. However, when the future of the state is at stake Latvia also needs visionaries who could distinguish peanuts from the goose that lays golden eggs.

At the present moment the National Development Plan is there as a vision with the major goose at its center - the human development. Unfortunately, there is NOONE among Latvian governing coalition who has political will to start offering policies that would kick start mechanisms in order to achieve goals set up in this plan, and enrich all Latvian inhabitants instead o oligarchic cliques. Thus, the legitimate question is for how long the traditional short term rule by technocrats shall continue, and when/or at all Latvian households would wake up from the oblivion of the comsumer and morgage credit generated welfare dream?

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