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Revisiting the Greek Tragedy

About three years ago, I wrote an article entitled Neo-liberalism and the Greek tragedy.  I started by penning: the country that gave the world the three most important tragedians, Aeschylus, Sophocles and Euripides is facing a major economic tragedy.  While economists the world over have differing views on the root cause of Greece’s economic problem, as a non economist, I have been immensely concerned with anarcho-capitalism, (an economic system that destroys government regulation of the economy, and creates economic anarchy within the global economic system).

Sadly, Greek is another glaring example of the failure of neo-liberalism. Neo-liberalism is what Susan Strange calls “Casino Capitalism”. She is one of the first to have for seen the dangers of anarcho-capitalism.  She has linked “casino-capitalism”, in to a number of trends among which are: government’s deregulation of the economy, (based on the fallacy that, the market and the banks would regulate themselves), and commercial banks turning in to investment banks. Susan Strange’s work is an essential contribution in de bunking the dominant doctrine of neo-liberalism.

Focusing only on dollars and cents, what usually is left out is any discussion of the impact of neo-liberalism’s creation of political instabilities around the globe. The main crime of neo-liberalism is its unparalleled focus on greed some would say debauchery and social injustice.

I recently saw a comment by Jim Rogers whom some claim to be an investing legend. Rogers says,” economies built on debt inevitably fail with chaotic and often violent repercussions. The surprise isn’t that Greek Neo-Nazis captured 7% of the popular vote in last Sunday’s election, but rather that it took so long for extremism to get a foothold.

Avoiding short-term pain through activities like propping up “zombie” companies to avoid the pain of failure has one drawback: it has never worked in the history of economics. Japan has been doing it for decades, and the Nikkei remains 80% off highs made in the ’80s.

The situation in Europe is unraveling at a growing clip. For now Germany has the clout and money to coordinate such an effort. If you wait two years from now, five years from now, when no government has any credibility and nobody will give you any more money, then it’s finished… you better get yourself a rifle and a bunker and head to Asia.”

 How scary? I only hope, the misery in Greece would quickly recede before it destroys a country that is the root of European civilization.

Professor Mekonen Haddis.

Please read the following wonderful article, “ The Euro and the Parthenon” by Binoy Kampmark on Greece.

 

The Euro and the Parthenon

The atmosphere on the hills of the Acropolis after the Sunday elections has an immemorial flavour, scented with a certain resignation.  Grape vines cascade over the restaurants of Minissikleous street with tempting promise.  The bouzouki players gather with ease and lazy moves to strum a few tunes as the calamari fries and the octopi cook.  Cold white wine in carafes find their way to colorful tables, and silver haired restaurant owners with streaks of mischief gather customers with an almost pimp-like relish.  Stray cats purr and rest in the baking sun and are shooed off in the fear that they might infect the scene.

In the shadow of the sacred rock, where the Goddess Athena was given a sanctuary that would have made delighted any divinity (she did, after all, win that affection over Poseidon), Athenians are indifferent about the political quandary their country finds themselves.  Parties in the relaxed atmosphere of the rocky hill slopes continue to take place with a pleasantness that would resist revolution.

This might be the pleasure before the fall, the ecstasy before the demise – the parties drum into late night Athens with intense conviction; and the cafes remain full near midnight.  Unemployment is stratospherically high amongst the young, but the young are constantly at play.

Doom is elsewhere, and here, the family business is the only thing that matters.  Divorce rates are some of the lowest in Europe; family bonds are firm, though being affected by the economic crisis.  The cushion, however, is a strong one.

From the Acropolis itself, one can glance down to the site which houses the Temple of Olympian Zeus, peeking, as it were, through Hadrian’s Arch.  Had the temple attained the form as envisaged in the 6th century BC, it would have been one of the most astonishing holy sites of antiquity. But, as is the nature of big finance and big projects, in whatever century, that was not to be.  Its ruins were forged, as it were, in real time.  The bill for its construction was never paid, and it was left to the Roman emperor Hadrian to do some rescue work in the 2nd century AD.

Charting a pathway across the Acropolis and the residential site of Plaka, one is struck by both the other worldliness of the Parthenon as it gazes with its Periclean durability, and its astonishing adaptability.  Whatever happens in Brussels, Berlin or Washington, indeed, whatever happens amongst the scrapping politicians in Greece’s parliament, Greece will adapt.  History has given them no choice.

The story of the Parthenon itself might well be an excellent narrative for Greek survival, with or without the euro.  It has survived admiration of Rome, the invasion of the Goths, the crippling efforts of the Crusades and the Ottomans (having served as both a Church and a mosque), a Venetian shell that hit it in 1687 when it was a munitions site, earthquakes, acid rain and, remarkably, the efforts of the British.

Thomas Bruce, the 7th Earl of Elgin, remains the most distinguished plunderer of the Acropolis.  Populist Greek politicians will point their tiring fingers in the direction of German banksters who made hay while the financial sun was shining, but Greece’s culture vultures have one clear target in their sights: the Elgin marbles.

Lord Elgin seems to offer a fascinatingly contemporary template for the Greek crisis.  He did, after all, seduce the Ottoman authorities of the period who were only too happy for him to make off with a good percentage of the sculptures of the Parthenon.  Both the Erechtheion and Propylaea were also victims.  The looting was subsequently validated by British parliamentary action in 1816.  State-backed thieving has been a laudable act since Francis Drake’s savaging of the Spaniards, and Lord Elgin was filling rather capacious shoes.

The newly built Acropolis Museum eagerly awaits the return of Elgin’s vandalizing handiwork, a partially empty space that craves to be filled.  In the meantime, the Greek authorities have been happily endeavoring to vandalise the Athenian legacy by undertaking their own restoration projects that had led to the removal of the Temple of Athena Nike.  Culture, it seems, is all too often the pretext for managed destruction and theft.

As the music strumming continues like a faint heartbeat, the sense is that Greece, whose civilizational cradle may have been ransacked, filled and re-plundered at stages of its history, will plod along in the shadow of the grapes.  The soldiers of Syntagma Square will still march with strained ceremonial comedy in pompom shoes.

The euro, if it already has not moved into the stage of inevitable demise and dismantling, is now beyond the Greeks. But every day living, and the Parthenon’s own existence, is not.

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge.  He lectures at RMIT University, Melbourne and is currently in Athens. 

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Spanish Prime Minister Rajoy sent a text to his finance minister in the midst of negotiations on the terms of a bailout for Spain’s banks. Urging him to hold out for a good deal, it said: “We’re the number four power in Europe. Spain is not Uganda.”

Rajoy and his illiterate colonial mentality. Hey, Rajoy, you are in deep DOO DOO. Focus on your high unemployment and how Spain is going to pay the billions you are borrowing.

Neo liberalism will continue to destroy Spain’s economy. Rajoy is not part of the solution.

Professor Mekonen Haddis

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I wasn’t surprised that the World Bank Passed over the most qualified candidate for the post, Nigerian Finance Minister Ngozi Okonjo-Iweala. This most able African sister has made quiet an impact in her challenge of the status quo. The World Bank would have to change its ways if it wishes to remain relevant.

Professor Mekonen Haddis

Tuesday 17 April 2012

We asked a panel of experts what should be on Jim Yong Kim’s to-do list over the next 12 months

Nancy Birdsall: ‘The World Bank needs to shift from a culture that feels it must pretend it knows what to do to a culture of trying, failing, adjusting and trying again

The new World Bank president must overcome concerns about the legitimacy of the leadership selection process even as he tackles three key problems.

First, he must lead the Bank in creating new instruments to respond to common global problems, such as drug resistance, fisheries collapse and climate change. Country loans and grants – the Bank’s main product – are not well suited to these cross-border problems.

Second, he must reduce the hassle costs for middle-income countries that would welcome the Bank’s expertise but are discouraged from borrowing by long delays between loan requests and disbursements. This means streamlining procedures and treating borrowing countries more like clients taking on risks and responsibilities, and less like children.

Finally, the new president needs to lead the bank in finding better ways to help fragile and weak states, like Somalia, Afghanistan, the Democratic Republic of the Congo and Timor-Leste. The World Bank needs to shift from a culture that feels it must pretend it knows what to do to a culture of trying, failing, adjusting and trying again. To build a consensus around solutions to these problems, the new president could appoint high-level groups to study each problem and present proposed solutions to the World Bank board for discussion, modification, and eventual approval.

• Nancy Birdsall is president of the Centre for Global Development

Andrea Cornwall: ‘Step one should be a radical cull of those 9,000 economists. They’ve shown themselves to be part of the problem

The new World Bank president has a tough job on his hands. What he should focus on in the first year is getting his house in order. Step one should be a cull of those 9,000 economists. They’ve shown themselves to be part of the problem. Replacing the army of neoliberals with a more diverse crew who have some understanding of culture, context and complexity – and more of a concern about social justice – would be the wisest investment he could make.

Step two should be to lay the foundations for a more democratic, diverse and transparent Bank by a similar cull of the board. Open nominations for development visionaries from the global south to help the bank step up to the task of transformation, and let the new president take his pick and justify it to the watching world. Half should be women.

Step three would be to open the Bank’s headquarters to a carnival of ideas. Invite grassroots movements and visionary bureaucrats to come, share and inspire.

Step four would be to complement this with an ambitious new listening survey to help shape the Bank’s agenda. This time, rather than ventriloquising the “voices of the poor” to support neoliberal policies that cut away their security, the process should be genuinely deliberative, reaching out far and wide using a mixture of traditional forums and new digital technologies.

The next step would be the introduction of a new set of institutional incentives that measure success not by the size of disbursement but by positive contributions to social justice. If all of these steps are taken, my wish that the Bank would ditch empowerment-lite and invest instead in addressing the structural causes of gender inequality might just stand a chance of coming true …

• Andrea Cornwall is professor of anthropology and development in the department of global studies at the University of Sussex

Jayati Ghosh: ‘Most people in the developing world simply do not trust the World Bank

The Bank currently faces three major deficits: of relevance, credibility and trust. For many poor developing countries, its lending is too little and its approach too outdated to be relevant in a world where private flows have grown and some countries such as China have emerged as major donors. Its credibility has been dented by its continuing reliance on Washington-consensus arguments that should have been ditched long ago because of their poor results. Most people in the developing world simply do not trust the World Bank (or the IMF) to protect their interests – in fact, they are seen as working against such interests.

Symbolic fixes will not help. The new president has to make an honest and committed effort to change both the mindset and the functioning of this institution, to recognise and value heterodox economic approaches, and to transform the rigid and oppressive nature of its policy advice. The World Bank’s stated purpose is to promote economic and social progress in developing countries. Its track record in this has been less than impressive – and even negative – largely because its approach has been excessively market-oriented and investor-friendly, as well as swayed by fads in the development industry.

• Jayati Ghosh is professor of economics at Jawaharlal Nehru University in New Delhi, India

Jonathan Glennie: ‘Get the management right, stand up to vested interests, and the rest will follow’

Why has the World Bank so often ended up on the wrong side of the argument, promoting policies that harm rather than help poor communities and countries? It is certainly not for the lack of economic policy talent. On the contrary, it has always been home to some of the world’s most brilliant development thinkers.

The answer lies in the interests the Bank responds to via its funding and board management structure, and the incentives that flow from this all down the organisation. The classic case is that of Joseph Stiglitz, one of the foremost development economists of his generation, sacked from his position as the Bank’s chief economist for daring to speak out about failed IMF and World Bank policy in the late 1990s. The message was clear – step out of line and you’re out.

The most urgent thing the new president needs to do is radically reform the structure of incentives and decision-making at the Bank, ensuring that heterodox policy directions that might not be ideal for the short-term interests of major shareholders are encouraged and rewarded. Get the management right, stand up to vested interests, and the rest will follow.

This will be difficult, but is already happening: shifting power at a global level is complemented by a crop of modern World Bankers aware of where things went wrong in the past, and keen to be given a context in which their institution can emerge as a beacon of internationalism and progress. A brave president could make a historic contribution to the future of development co-operation.

• Jonathan Glennie is research fellow at the Overseas Development Institute

Lawrence Haddad: ‘The new World Bank president should focus on the quality of growth’

The new World Bank president should focus on the quality of growth. He should promote the view that growth is not necessarily good and not necessarily bad. The Bank should instead set goals for what growth must achieve. How can we get growth that reduces poverty, creates jobs, uses natural resources sustainably, and does not breed corruption?

That will mean more of an emphasis on the governance and politics of growth. In turn that will require a better balance of disciplines represented on the Bank’s professional staff. The president should also lead the charge to change the way future presidents are appointed. The current system makes mockery of meritocracy and is hypocritical in the extreme.

• Lawrence Haddad is director of the Institute of Development Studies, Sussex

Asif Saleh: ‘Rather than chasing the latest development fads, they can help scale up the homegrown, community-driven frugal innovations that are already happening all around the world’

The World Bank needs to be more humble, and this humility should make it listen more and prescribe less. If it listens, it will discover that there is a large group of ultra-poor who still need social and state protection; that market solutions can only work when the playing field becomes level for such groups, who have been left behind by the economic growth; and that rather than chasing the latest development fads, it can help scale-up the homegrown, community-driven frugal innovations that are already happening all around the world.

Failures are possible, but the Bank must be willing to take risks if it is to stay relevant to tackle today’s challenges in the “market” where it operates. In short, and ironically, the new president must aspire to be more responsive to the real demand of the emerging markets rather than being supply-driven like his predecessors.

• Asif Saleh is director, strategy and communication, of Brac

Antonio Tricarico: ‘Zoellick’s silent doctrine has transformed the World Bank into a global investment bank – forget about development’

Too many have focused on how new power dynamics with Brics countries might affect the World Bank once the new president steps into 1818 H Street in Washington. But too little has been said about what should stay at the door, and not be allowed in. Definitely, capital markets, and all those interested in subordinating development finance to the global economy.

Robert Zoellick’s silent doctrine has transformed the World Bank into a global investment bank – forget about development. That’s why lending to the private sector, and in particular the private financial sector, through the International Finance Corporation, boomed up to $19bn a year, including participation in dubious private equity funds pretending to help the poor from offshore.

Similarly, while facing food and climate crises, the Bank embarked on new programmes offering “pure financial” solutions, such as the promotion of weather derivatives among poor farmers, or support for speculative carbon markets to mitigate climate change. And now the Bank is ready to fly to Rio in June and teach UN delegates about how to measure ecosystem services through its new “waves” initiative, to possibly trade and financialise bits of nature. The new president should reverse this trend, and immediately affirm that financing development, rather than developing finance, is the Bank’s top priority.

• Antonio Tricarico is co-ordinator of the Campaign for the Reform of the World Bank, Italy

Guardian UK

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