A PROGRESSIVE GOVERNANCE VIEWPOINT

I’m on the Board of one of the more interesting global groups that brings together centre left political leaders, and personalities, past and present, to discuss and study the great issues of today and tomorrow. We sail under the splendid flag of the “Progressive Governance Policy Network”. We recently met in the rainbow nation, South Africa. President Mbeki presided over the gathering, President Lula from Brazil, Prime Minister Blair from the U.K., Helen Clark of New Zealand, Sweden’s Prime Minister, Ethiopia’s President, and ghosts of the past like my good self and former leaders made for an interesting group. Of immediate substance was the state of the Doha Development round which is at a tipping point. Negotiators are still holding their cards close to their chests not wanting to place their final bets until they can see how far the others will go and if there is enough in it for them to compromise and give the other side enough to cut a deal. This is always dangerous, if cards are over-played, there can be better short term politics to say “no” and appear to be the political saviour of grateful sectors under competitive pressure. In the words of that great trade negotiator and country & western singer, Kenny Rogers, there’s a time to hold and there’s a time to fold. Bluffing too long can break the house. The Director-General of the World Trade Organisation, Pascal Lamy, was present, hopefully the major players will show their cards to him so he can advise on what will float and what will not. Agriculture is a deal-maker or breaker, but this can not just be an agricultural trade round. Unfortunately there is still a mercantile attitude that if you open your economy, it’s bad and you should be paid by openings elsewhere. Politics makes it so, but economics and good governance makes it nonsense. You open to help yourself, to reallocate resources to more efficient areas, enjoy cheaper inputs, transfer technology, adopt best practices, help the consumer and provide competition. There are few economic problems that cannot be improved with more competition.

Competition is a cleansing agent, the disinfectant that drives out the inefficiencies, even corruption that exists in so many places when well-meaning and not-so-well-meaning protectionist policies guarantee profits to crony, often phoney, capitalists who use their privileges to extort consumers, distort investment and pervert and prolong market inefficiencies. I could never work out why it was so left wing to make food, footwear, clothing or telephone calls more expensive to families and businesses. Inefficiency through protection is the most destructive of taxes. It taxes the past to postpone the future. Only the state can provide fair, firm and predictable rules that make a market economy function. As former Canadian liberal Prime Minister Paul Martin said at the meeting, “Governments can no longer pick winners, but losers can still pick Governments.” Progressive Governments must manage domestically and collectively, internationally the initial costs of adjustments.

A solemn duty of Governments is to manage, in a collective sense, risk. Risk is reduced if you can trust the law, enjoy the predictability and safety of property rights, and together reduce the risks and fear of accident, illness and old age.

Globalisation is on every agenda. Some claim globalisation means Governments are powerless and irrelevant, if so, explain why the outcomes in Chile are so much better than the Argentine, compare Burma and Thailand, South Africa and Zimbabwe, North and South Korea, Czech Republic and Moldova. Actually, Governments matter more; more globalised trade and markets seek out good and predictable rules to do business. The quality of Government, transparent law, competent public servants, non-porous tax systems, skilled workers, honest politicians, are competitive advantages. Some environmentalists talk of capitalist greed, there’s also communist greed, the worst environmental outcomes were in the communist economies, still are. The blowtorch of democracy and competition always seeks out more effective, acceptable results. This new fatalistic attitude that globalisation means the death of politics, is absurd. Sure, the political space has narrowed between democratic left and right, and banal slogans and TV ‘grabs’ often substitute for substance, but while the language is bland, I cannot believe we have exhausted the possibilities of progress.

Progressive politics, since the enlightenment, has been about defeating fate. It is not an act of God that some are poor, a few are rich. Man discovered that a certain fate need not be certain and harnessed his abilities, expanded by education, empowered by democracy, defended by the rule of law, to change the world for the better, still can.