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| Sunday, 27 June 2004 |
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Features |  |
| News Business Features Editorial
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by Wendell W. Solomons Tuesday, January 15, 2003 Every seat in the auditorium had been taken. Chairs were being placed in the aisles. The Governor of the Central Bank reached the podium ... He announced that he was introducing "probably the best economist in the world".
This person, Jeffrey Sachs, was well built but not tall. You saw in his appearance a disarming, well-meaning face with chestnut hair brushed on forehead. I was to discover that his friendliness comes not just from outward physical composure. His talk brought out a resilient, flexible quality reminiscent of the "Great Communicator", President Ronald Reagan. Jeffrey Sachs is a similar conceptualist. He competently mixes and matches ideas swiftly. This skill combines with an inner enthusiasm to provide an audience with impressions of balance, good humour and the confidence of friendly intentions. He could swing aside IMF policy that today falls under the heading "the Washington Consensus". He did not spout privatisation mania. Though his audience consisted of Central Bank staff, he did not summon up themes classical for Monetarist economists such as money supply and circulation. In fact the only salute provided by Sachs as strategy commander for IMF and World Bank drill sergeants and infantrymen was the title of his address: "Economic reforms in Emerging Countries". In his presentation Sachs was all for focus by a nation. Monetarist economists have been raw novices to the everyday concerns of business; here at last had popped up something that men of business know - focus. Though Sachs had clearly done his background study of Sri Lanka, to his audience he humorously described himself as an expert of eight hours in the island. (a) He suggested that the country look at port development in the manner of Singapore because important East-West sea-lanes run nearby. (b) He suggested making more use of Sri Lanka's optic fibre Internet gateway for IT development and software programming. (c) He gallantly mentioned tourism "in your beautiful country" (in "must do" fashion, de rigeur). My chancing to be a long-term protagonist of Sachs' (visible at www.geocities.com/worldcityessays/) at question time I might have had multiple questions to put. Urbane and polite However, Sri Lanka is urbane and polite to visitors. What I expressed was this. "I must congratulate the speaker on his choice of 'focus'. This is a historic address for Sri Lanka. In a larger venue Abraham Lincoln and Henry Carey chose a focus on communications systems too during the development of the United States. For them it was railways development'. "We don't however, go into this open eyed today'. "Former World Bank Chief Economist Joseph Stiglitz said that the reformers in Russia 'did not know the foundations of a market economy', Dr. Sachs was the main architect (he was USAid-despatched reformer in 1993 to the huge, now destabilised country). "World Bank Chief Economist Joseph Stiglitz had pointed to the economic advance of China, which had not asked Dr. Sachs for advice'. "The old policy being played on one side of the tennis court was debt inducement. Dr. Sachs is now playing on the other side and there he is correctly telling us to focus". In response Sachs said that Stiglitz was a fellow teacher ... and that China has chosen to go in for globalisation. Here was Sachs' remarkable familiarity with amalgamating two or more concepts and sailing on. His remark is one that disarms flat-worlders - those who attempt to stop globalisation. Governor of the Central Bank Dr. A. S. Jayewardena had pegged us down, as he said, to "three-sentence questions". So no further window was available for me to say to Sachs that I was no believer in a model of globalisation in which a match-stick sized nation was set to play against financier George Soros' "Quantum Fund" in finance capital's game field. I belong to those who believe in an inevitable, future, fair globalisation, familiar to every spectator of a balanced sports event, not the rigged competition for the carpet-bagger. This belief of mine was further sustained by Sachs himself in answer to a question from the audience as to whether total 'foreign currency liberalisation' should not be applied for development. Pro-liberalisation Though admitting that he was pro-liberalisation, Sachs advised that the liberalisation of large capital flows might not be an essential component in the case of a concrete country. Therefore you gather that Sachs supports game rules to safeguard a small nation from foreign speculators unexpectedly withdrawing funds in the manner heavily ostracised by Malaysia's Mahathir Mohamed (during the Asian currency meltdown, the economies of India and Sri Lanka were spared because of their traditional regulation of speculative large capital inflows and outflows.) In reply to a question from Dr. Tissa Vitharane, for many years the head of Sri Lanka's Medical Research Institute, Sachs said he believed that both public and private sectors have a role to play in health services. Here again was an endnote to the strategy of Monetarists, who incite the husband to attack the wife so that in essence, all the houses in the land end up at the offices of international lenders. All in all, the lesson that a well-intentioned listener could draw from Sachs' presentation was that it was a far cry from the Machiavellian and Hobbesian "War of Each against the Other". In Sri Lanka that had contributed since 1977 to the domestic brawl for personal grabbing of company and public assets induced under the reform headings of "Open Economy" and "Privatisation. As a result, an observer once commented that Sri Lanka had become a country at war with itself. For the World Bank and IMF, Sri Lanka had served as a box of pellets that was shaken up to intensive heat by internal friction. Among results within the shaken box were: i. The incineration of team cohesiveness and the erosion of standards of service in the private sector (say, in contrast to the pre-1977 period) and; ii. By no dint of miracle, a civil war provoked by troublemakers in the multi-ethnic social environment. World supremacy As Wall Street financier George Soros noted in 1997, the social environment "is not threatened from the outside, from some totalitarian ideology seeking world supremacy. The threat comes from the inside, from local tyrants seeking to establish internal dominance through external conflicts". In answer to a later question on bickering and politicisation in Sri Lanka, Jeffrey Sachs responded with the idea that one can't afford to be "settling old scores". Magnanimity! In that same spirit I made my way through aisle and the leaving audience to present him - with a copy of my small December book, which is anti-debt inducement and where I mention the devastation Sachs created in Russia. I mention focus for economic development in the book - as I have done for years. Sachs left with two gifts, one presented by the Central Bank Governor, the other presented by me. For his part, Sachs gave me his refined, simple Columbia University visiting card and a souvenir in the impressions I have set down of what for me seemed a historical encounter. |
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