Government, engineers and economists

Government, engineers and economists
Nikola Popovski

Some time ago, an interesting press conference was held by the Deputy Prime Minister, who’s in charge of economic issues and coordination with the economic departments. He discussed the budget of Macedonia for 2018. Out of the many stated things at that press conference, several, with their sharpness and inadequacy in the expression, attracted the attention and opened some eternal dilemmas about the management of the Macedonian economy.

Among other things, it was stated that this budget is the "most economical budget" proposed so far. These two words opened many dilemmas about the decades-old practice of the Macedonian prime ministers and governments, the positions of Deputy Prime Minister in charge of economic affairs to be awarded to successful business people, that is, businessmen who, as a rule, come from the technical professions. It’s perfectly clear that budgets are a prime economical category, and that no budget can be called uneconomical, semi-economical, economical, more economical, less economical or most economical. To be more precise, budgets are a typical and standard macro economical category and an instrument of the economy policy. The budget has one basic function – supply of public goods for the economy and society. The concept of public goods is known and explained in theory, and in practice it works from ancient times. The budget also has other functions such as social, stabilization, development, and others, whose vase and significance is sometimes greater and sometimes less dependent on the state of the economy or the dominant understanding of the role of the state in society. But those functions were never greater or more important than its basic function. Of course they cannot even be more important.

Since the beginning of the independence, up until now, by some unusual and strange, yet somehow standardized habit, the economic policy is handled by engineers. Sometimes even lawyers. In the first Macedonian government, the one I charge the famous Jovan Andonov, nicknamed Regan, an engineer. After him came lawyer Vasil Tupurkovski, followed by engineers Minco Jordanov, Vladimir Pesevski, and the present Koco Angjusev. Probably, they were excellent experts in their professions and capable business people and that is why they have reached high positions in the government, but the management of the economy of one country should be taken slightly different and much more professionally. The coordination of the departments responsible for economic activities is a complex task that requires knowledge and broad understanding of things. Especially on idealistic and conceptual level.

For the simulation of the problems with the idealistic level, it can be stated that a few years ago, the then Deputy Prime Minister for Economy, Mr. Peshevski in a statement to the media, spoke that he was convinced that the Gross National Income (GNP) of the country in the next year would grow faster. Speaking and referring to the GNP, he actually did not know that he was talking about the Gross Domestic Product (GDP) category. Otherwise, these two macroeconomic indicators and categories are conceptually and cost-effectively different, and when we talk about one, we usually do not mean the other. After all, in Macedonia BNP is officially not even calculated or published, although perhaps it should start.

But, misunderstanding of concepts pushes the authorities away from good and efficient solutions to economic policy. Another Deputy Prime Minister for economics in the past, however, could not understand and effectively differentiate the categories of able-bodied population and workforce, something that is an alphabet of the approach to studying employment problems and unemployment of the workforce.

Such examples with the deputies of the prime ministers of economic affairs are numerous. They usually come from an activity in the economy, usually the industry, from several industrial branches, often metallurgy, machine building or energy, and have no professional and scientific knowledge or practical knowledge about the functioning of the economy as a whole, yet they manage it.

The economic policy is a very serious and complicated subject around which there are ancient conceptual theoretic and practical disagreements, but basically there aren’t any categorical disagreements about its purpose. The economists, especially macro-economists, even when they disagree or have diametrically opposite opinions, you can easily and quickly understand what they are talking about. Sometimes, as is usually the case in other disciplines and sciences, it may be necessary. This makes it easier to understand and communicate more easily by looking for reasons or exits for some phenomena and problems. But involving unprofessional people may be the same as letting an economist construct a machine or a lawyer perform a surgery. However strange and wrong it seems, this is exactly like it.

Coordination of the sectors covering agriculture, industry, construction, trade, labor and social policy, financial services, education and health and other activities is awfully hard, and it needs to be daily and successfully combined with the appropriate models of economic policy, including fiscal, foreign trade, income policy with their primary and secondary allocation, and coordinated with the independent monetary policy, antitrust policy, regulatory policy in the various areas such as energy, telecommunications, and more. The icing on the cake is applying the development policy, especially those that are short-term to medium-term and long-term. Only the latter are burdened with a large array of options for choosing from which the best ones cannot easily make an appropriate mix. If you are not ready to do the highest possible level, it may be good to relinquish it to another. In such circumstances, it is not easy to distinguish the essential divergences between the development policies based on export expansion from that oriented to the substitution of imports. In such circumstances, it is not easy to distinguish the essential divergences between the development policies based on export expansion from that oriented to the substitution of imports. Neither one balanced by that of unbalanced economic growth. Neither the factor approach to the growth of the economy. They will constantly and improperly intertwine with no great prospect of success.

Perhaps that is why during all these almost three decades in our country the formal coordination and management of the economic policy has been given to one of the deputy prime ministers, and in fact it is left to the Minister of Finance, which is always with appropriate formal and professional education. Perhaps here with one exception of a person who is known to have acquired education on a completely random path. Hence, it should not be surprising that no government so far, I underline - none, gave up the essential right of veto by the Minister of Finance to the decisions of the government. This somewhat compensates for the built-in wrong gear, but also allows the operation of this extraordinary junction that produces potential dangers paved with the best intentions.

Share with your friends: