Bread and Circus
I write this column after finishing a family gathering at my close, dear friends with many guests, a company of people were everyone is related in one way or another… These are people I don’t see every day, but when we do see each other – we continue where we left off. In such ambiance, where the hostess made efforts to set a nice dinner table, and after a few glasses of alcohol, everyone shares information of their personal and familial achievements – one bought a new car, another talks about their work situations, then the conversation continues to our children and how much they are burdened with studying and whether it is necessary to know the alignment of the planets in the Solar system or the necessity of tests in the music education class…
In each conversation you can feel the burden of what is to follow, “significant” topics are pressuring, so it’s only minutes before someone moves to politics. This is followed by refractory rhetorical questions and immediately after – conclusions about what is not good. The arguments are not heard, each has an already built stand, everyone is an expert in everything and everyone is dissatisfied with something.
What is most dramatic is that criticism is still directed to the previous government, probably because they have no expectations from the current one, or they cannot recognize the current events and the fact that the consequences from them will be felt in the future. Probably is common for every Macedonian gathering.
By the end of the first century of the new era, the Roman poet Juvenal, in his collection of satirical poems, called for practice of the supply of free wheat for the citizens, as well as expensive circus performances and other forms of entertainment as a tool of gaining political power. “Panem et circenses” or “Bread and Circuses” has become the synonym of government power in whose basis is supplying entertainment to calm the public dissatisfaction.
The Macedonian equivalent of circus performances are the court trials, arrests, detentions and sensationalism associated with well-known figures, who should meet the thirst for entertainment for the broad masses. These are interesting topics for the dinner table. But the Roman formula for success of power includes bread.
If we take the GDP data into account (-0.4% for the first three quarters in 2017), we will end the past year with a recession or a possible stagnation, although the government promised 1.6% and 2.2% before.
Gross investment has seen a significant drop, as a result of the uncertain climate and confusing signals sent by the new government to existing and potential investors. This is partially the price of the performances for the popular masses, in which foreign investors and the procedures for getting those investors were demonized, but also the price of the unprofessional staff for attracting new investors. This is also due to the stopping of numerous infrastructure projects and the decrease of construction by about 12 percent in the first three quarters.
Private consumption is still resistant, and exports are growing, as a result, for the most part of those “undesirable” companies in the zones, but at a low pace to offset the decline in investment.
The growth of the Macedonian economy is expected to grow by 3.2 percent in 2018. Private consumption is projected to grow by 2.8% on realistic basis, and growth of 3.6% gross investments is expected, growth of exports of goods and services of 7.5%, with simultaneous increase in import by 6% and public consumption growth by 1.3 percent.
From the measures taken by the new government (primarily the administrative determination of the minimum wage to 12,000 denars and the increase in wages in some public sectors for which funds are foreseen with the 2018 budget), it is evident that the tendency is to provide an increase in disposable income of households, for instant pumping of GDP through private consumption, which is a short-term solution. The positive trends that are expected in the world but primarily in the European economy will affect the increase of export from Macedonia, primarily from the zones, but besides the announced “Measures for encouraging the investments and competitiveness of the Macedonian economy” by the Government, in the gross investments the effect in 2018 will be absent.
In economy there is a phenomenon of temporary delays, an interval between related events, that is, a time difference from the moment when a certain event occurred to the effects of it. Thus, the foreseen measures can theoretically give a result, but only after 3-4 years.
Therefore, if the Government really intends to raise investments in 2018, the first thing that must be done is stop creating a climate of suspicion towards existing foreign investors, support them in their intentions, but also look through their drawers for contacts of the administrators who worked on attracting them and immediately advocating for presence in Macedonia for every investor who showed interest and whose investment decision is in a more advanced phase.
Furthermore, the government must not increase taxes and needs to seriously work on improving the business conditions of existing companies, among other things, by putting into operation the passive administration in all institutions and acting on the requirements of the business sector in the foreseen deadlines by law. To know that capital investments are important and can be approached with the vigorous implementation of them.
In order to work on the previous one, it may be crucial for the Government to understand that the interest in the circus will end, and for tomorrow’s bread, it should be working today.
This is for the Government and for the creators of the economic policy, while for my friends and citizens of this country is the reminder that there is a new government in Macedonia, which has all the mechanisms to work on improving the life in each segment and expectations should be directed towards it.
And another thing for my friends. Yes, I think that all children should learn about the planetary alignment in the Solar system.