Master of austerity in charge of Europe’s social dialogue and social impact

Valdis Dombrovskis, who was Latvia’s Prime Minister from 2009 to 2014, has just been appointed as the European Commission’s Vice President for the Euro and Social dialogue. Among other things (according to his EC profile) he will be responsible for “Making decisions about support for struggling eurozone countries more democratically, legitimate and better taking into account the social impact they might have”  BUT:

…during the years of his leadership, from 2008 to 2013 the number of people living in poverty in Latvia increased by 75% which is the third largest increase in the EU after Romania and Greece. As a result of this in 2013 about 35% of Latvia’s population live at a risk of poverty.

poverty in europe

* link to the original source of data

With these facts on the table, what makes one think that this austerity master, who bailed out Latvia’s semi-Scandi-owned banking sector and implemented the ‘euro project’ at a massive social cost, will now be able to look after social impact on European level? Does this staggering outcome of his leadership years gives him in this position any credibility at all? If he could not care and do much about the social impact of his EU/IMF-praised austerity policies in a tiny Latvia with 2 million people, I just wonder how he will care better about 507 million EU citizens. I just wonder, what exactly made him the best candidate for this job?

I just wonder…

What GDP has to do with economic progress or wellbeing?

Nothing!

If there is one single lesson to be learned from the economic crisis culminating in 2008-2009, then it is – unsustainable economy is not viable and socially justifiable.The problem though is that as long as GDP (gross domestic product) will continue to be used as the dominant, key indicator to characterize success, growth, recovery, improvement of economy, we will not escape the good old in-sustainability circle. As long as political leaders will use GDP to measure success of their policies and wellbeing of their people, we will continue missing the point, and it is: it is not the size of the economy, but its content and distribution of resources which matters and affects people’s wellbeing and quality of life.

Back in 1968 it was perfectly clear to Robert F. Kennedy that GDP “measures everything, in short, except that which makes life worthwhile.” He understood the danger of GDP as the political/ economic goal which is useless in measuring things which politicians AND economists should be really worrying about, like human wellbeing, employment, decent living conditions, infrastructure, shelter, self-realization, human security, education, good health services and social relations.

I wish every single politician in every single country could watch this Kennedy’s speech and if even just 1% of all of them would understand the true essence (or actually lack of it) of GDP, it will be a huge achievement. Actually, you should watch this too. Everyone should.

 

Africa

i think, this map of Africa is one of the best i ever have seen. It shows so perfectly how big it is, how big potential it has, how important it is as a continent and society in a global context. It also makes one realize how wrong it is to make an opinion about Africa or Africans by visiting just few countries or meeting few African people. People way too often tend to think that all Africans, all African countries are the same; but there may be massive differences between one country from another just like France and England will never be the same.

africa

food crisis is a man-made constructed phenomenon

what’s been clear and has been re-empahasized by this recent World Disasters report by IFRC is that food crisis is man-made constructed crisis and a side-effect of this sick system we live in. How else one can interpret the fact that currently there are more obese people than starving people.

“The International Federation of Red Cross and Red Crescent Societies said hunger existed not because there was a lack of food globally but because of poor distribution, wastage and rising prices that made food unaffordable.” Access to food has been politicized to the extent that millions have been made dependent on receiving food from governments or international donors and been disabled to become self-sufficient in terms of production and buying/ selling of the food stuff. It may sound as a conspiracy, however in some food-crisis hit countries one can find a linkage between chronic shortage of food and election cycles which means access to food may often be just a tool of manipulation of masses to gain keep the political power.

In one part of the world the most powerful organizations and individuals function and enrich themselves by making people want to eat more than they need, whereas in the other part of the world the most powerful organizations and individuals benefit from keeping people in hunger thus maintaining the power and attracting external aid.

Political economy of economic reforms in Latvia: expectations, promises, implementation and consequences

Straight after returning from Africa I had my next trip to Sweden which from one side is nothing particular. I think i can easily call Sweden as my second home as i have been visiting it since 2000 at least once a year for different reasons. So, it was just normal that i am going there again. However, the challenge this time was 1) to switch off my very fresh impressions from my Africa trip and 2) to present my paper at the 9th conference on Baltic Studies in Europe – Transitions, Visions and Beyond at Sodertorn Hogskola, where i was actually studying as Erasmus exchange student back in 2000!

Though i have been working on my research since spring 2009 and even after completing it as my Master thesis in September 2009, i have never stopped working on this subject. In my paper I am challenging mainstream thinking about what, how and why has happened in Latvia after independence and offering a different approach to analyze processes. In a way i am looking at economic and political processes from social perspective, which is not common and typical. Obviously, not all would agree to my approach and my conclusions, but i received very encouraging feedback and will continue my work with an aim to prepare publication. So, watch this space. 🙂

For those who are interested in the topic more in detail and possibly in some sort of intellectual cooperation, here is the abstract and please feel free to contact me if you have anything to say:

“The central aim of this paper is to examine neoliberal policies being introduced after Latvia‘s independence and to assess their impact on a long-term development and people’s wellbeing. By reviewing expectations of the Latvian nation twenty years ago, promises of the neoliberal policies, actual implementation of these policies in four specific areas – privatisation, trade, FDI and taxes, and consequences, it is possible to argue that neoliberalism has not met the expectations and has not kept its promises.

While mainstream explanations regarding neoliberalism’s failure to fulfill its promises are focused on the problems related to implementation of neoliberalism, this paper will argue that by ignoring Latvia’s actual unpreparedness and by underestimating the pre-transitional social, cultural, economic, political, historic and geopolitical context, neoliberalism was a ‚wrong medicine in wrong time‘. By analyzing country’s political and economic (in)dependence, legacy of Soviet regime,  social costs and bargaining power, it can be argued that neoliberalism has reproduced Latvia‘s dependence, re-legalized the rule of the elite and marginalization of the poor, created serious governmental pathologies, parasitic wealth and degenerative social costs, discredited democratic values and sovereignty, and legalized concentration and internationalization of national capital.

Moreover, in the context of current financial crisis, it is argued that the causes of the dramatic face of this crisis in Latvia are hidden in the economic growth, which was based on the power of international capital rather than the real sustainable development of national economy. It will be concluded that neoliberalism has created  opportunities for local elite and international capital, but has neglected the expectations and needs of the society at large. Regarding society’s mood and reaction, it will be argued that the dominant approach of silent protest (cynism, apathy and emigration) is a clear expression of dissatisfaction, however it is too weak to challenge the current political and economic system.

Therefore despite the fact that the ‚third way‘ has never become a serious alternative to the neoliberal policies, current experience of financial crisis shows that neoliberalism is not appropriate development model for the ex-communist/ totalitarian countries and debate on alternative development models should be re-established.”