English Pages, 4. 10. 2010
It is a real pleasure to be here with all of you. I do believe in the importance and productiveness of a dialogue and hope this very special and high-ranking forum will make such a dialogue possible.
I will concentrate on one of the issues raised in the Chair Statement prepared by the organizers of the summit. Today’s majority viewpoint (or perhaps even conventional wisdom) is that the recent economic crisis was a failure of markets and can be “solved” and avoided in the future by using less of markets and more of governments. This view is usually connected with suggestion that due to globalization, which means internationalization of human activities, we need global governance, which is an implicit saying that the international cooperation is not a sufficient mechanism for dealing with international problems. I consider it necessary to challenge both views.
The increasing public debt in many countries as a result of an irresponsible fiscal policy, the manipulation of monetary policy in an attempt to artificially prolong the period of growth, the irrational subsidization of demand in the housing sector as well as the mistakes of financial market regulation at national level substantially contributed to the recent crisis. Let us not delude ourselves that business cycles and their consequences can be prevented by more extensive government regulation or by aiming at global governance of the world economy.
Government regulation is more a problem, than a solution. We should be more afraid of some of the recently implemented measures than of the crisis itself. In the declaration we are to adopt at this summit, the word “governance” is more prominent than the word “market”. This is worrisome because the belief in the government’s omnipotence is evidently outdated, mistaken, unavoidably undemocratic and discriminatory, and – above all – it is condemned to fail.
The title of this panel “More Effective Global Financial and Economic Governance” suggests that governance should be global. It comes from the presumption that the crisis was global, which is, however, not true. It occurred in many countries, but it was not global. It started in one part of the world, and was transferred to some other countries and regions. Also its consequences for many countries participating in this summit were quite different. It is therefore logical that ambitions to come up with a global solution to this crisis are conceptually wrong.
I know it has become politically correct and seemingly progressive to think in terms of global issues, global solutions and global governance. As a result of it, almost unnoticed, both the man as a free and dominant individual entity and the individual countries as the basic building blocs of the world structure, have been replaced as a relevant frame of reference by thinking in terms of the world, the earth and the planet. I do not think this is a correct and productive approach.
The undergoing and undoubtedly unstoppable internationalization of human activities doesn’t ask for centralistic solutions. Let’s accept as a reality that the countries represented at this forum are different, that they have different traditions and different scale of values, different levels of income and development. Let’s strive to remove trade barriers which still exist between European and Asian countries. Let’s make it easier for the developing countries to enter the markets of the developed countries. Let the individual countries concentrate on reducing their own public debt and on creating conditions for free trade. Let’s accept that regulation does not make the economies more open and more fair.
Václav Klaus, the speech at the 8th Asia-Europe Meeting, Brussels, 4 October 2010
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