Are we BELL or GIIPS ?

BELL : Bulgaria, Estonia, Latvia and Lithuania.
GIIPS : Greece, Italy, Ireland, Portugal and Spain.
Anders Aslund – economist from the Peterson Institute for International Economics, Washington D.C. – compared the performance of these formerly communist states with South Europe, plus Ireland. Over 2008-2012 period, BELLs economy followed a V curve. Meanwhile, GIIPS looked less exciting for economists and political leaders!

Anders Aslund wanted to understand the reasons for BELLs’ revival, although they’re quite far away from Western radars! What a curious research… following Goldman Sachs successful BRIC invention (since 2001), redesigned BRICS despite all their contradictions and naïveté. Aslund tried to check what’s so special about BELLs’ diet versus GIIPS poor economic look.

Lesson nr.1: politicians should admit, not deny problems as soon as they occur. Differently, the USA leaders as well as GIIPS leaders would rather deny how profound problems were for their respective countries. Which cancelled any hope for quick and strong measures. People did let them do so, and just got used to such a comfortable status quo.

Lesson nr.2 : clearly explain what choices and options are for the country. Secure a rapid, though democratically achieved (oxymoron?), support from the base, before implementing the tough policies. Welcome to a dream come true… namely political courage.

Aslund continues with his revolutionary lesson nr.3: when facing a crisis, take on new leaders for new ideas. So much good sense, Anders! Such a gap with France’s preference for stand-by, refusal to change politics despite factual failures or too small progress. A country that prefers « usual losers » come-back(s) incorporating old-school ideas, refusing (or unable) to look further and think out of the box.

Last, lesson nr.4: a need for a clear and straightforward communication of decisions [to the people] that’d better focus on decreasing expenditures [do better with less, chasing waste] than increasing taxes.

On top of this, BELLs dared demanding a fair distribution of collective efforts, shared among generations and across all sectors, refusing corporatism. BELLs stand out in terms of human capital and educational investment. A winning trick in hard times of globalization?

Thank you for  the benchmark. Following a worldwide trend of educational, financial, economical ratings. However let’s end up with three remarks:

– Different country size (larger countries, stronger inertia) and different political cultures (inertia again) may justify different behaviors within EU countries.

– BELLs experience a reconstruction era politically, past years of desillusion underneath communism hard top. Economically, BELLs as their neighbors are living fast and furious times of growth, reminding a nostalgic relic of GIIPS and Western Europe adventures. BELLs do keep a positive look into the future. Their confidence is a dream for economists… and so many politicians!

– Aslund may have been short-sighted, not seeing details of local conditions. Central Europe, half-lost and half-excited further to the fall of Berlin’s Wall, may have looked like the perfect prey for FMI evangelists obsessed about Friedman’s mottos for quick fixes through less State spendings (or investments?) Sorry doc Aslund, but just checking short term data that’s as if a general practicioner, upon the last patient’s temperature check (without blood pressure, heart pulses or mental stress indications…), would diagnose a sustainable health recovery! Nonetheless, he made a great piece of advice about communication between the people and political leaders and teh absolute need for a consensus, in line with change management.

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