Catching fish

In an interview with the Belgian newspaper Le Soir, he said that the United Nations should pay more attention to the global economic crisis. "The state has to intervene in the economic and financial sectors," he added referring to the Nobel economic laureate Joseph Stiglitz’s ideas.

"Europe will have to increase its already existing policy of protectionism. Several European countries are increasing their capacity of competition to the detriment of others. Especially Germany in the Euro zone is increasing this tip of balance. Following Germany’s lead other European countries started to protect their own markets. "If this protectionism continues The World Trade Organization(WTO) will have a very hard time in lifting obstacles," the former German minister said. The rest of his analysis is as follows: On the other hand the IMF seems to have become ineffective in solving international monetary problems. The world’s major problem today seems to be a lack of strong institutions that have the capacity to think as a packet all trade, financial and monetary problems and find solutions to them.

To create more productivity all salaries should be handled again. If salaries are brought down countries will be able to increase their capacity of competitiveness by resorting to devaluations. Competition should not be among governments but among companies. The 1994 Bretton Woods’ is of a more Keynesian structure. Countries cannot continuously have foreign trade gaps. If countries compete with each other they won’t be able to pay back their debts.

Protectionism has started to turn into economic wars. Due to this situation the world economy has become mismanaged. As an example, if a country cannot protect its economy it starts protecting its national interests. States can only intervene in cases to draw out the necessary rules and have them correctly applied. For this the international monetary system has to have stability. The markets are unable to help us understand the economic systems. The important point is that governments should take the lead to understand the problems and the states should take the upper hand in the matter. Today all international markets which are unstable should be reformed through state intervention.

Starting with raw materials, no speculative manipulations should be made on the prices of products and services. To do this from north to south and from east to west everybody should start negotiating. It is clear that world politicians stil don’t understand the importance of the global crisis. That’s why it will be very difficult for the G-20 Group to find solutions to the problem. There are 192 countries in the world and their main issue is to balance their economies.

Instead of adopting protectionist policies, politicians prefer to act together, increasing interest rates is backfiring. The stabilizing of interest rates and money rates and taking control of the banks will be the main lesson to be taken from this crisis. Solutions should be found in the neo-liberal structure otherwise it is widely believed that the system will crash completely. It is clear that Flassbeck has no high hopes about the future. The ones who are administering the American economy and President Obama are aware that they have reached nowhere with the measures they have taken. I would like to draw your attention to the difference between providing fish and teaching how to catch fish. Today the United States continues with her policiy of providing fish. But when the all the fish is eaten and nothing has been left, what will happen? It is obvious that the existing economic theories are unable to solve the global economic crisis. New theories, new institutions and new structures are direly needed. Maybe Heiner Flassbeck’s idea to find solutions through joint meetings among 192 nations could be taken seriously. But it will not be easy. The solutions should be produced by locomotives who are dragging behing them the world economy. For our part, we have to choose our own place, remain straight and continue on our way.