Wednesday, 28 October 2009

Gaining “Independence”: An Alternative Reality


“Come in! Gentlemen, come in!” said Mr. Dawit as he looked distractedly from his rather engrossed conversation with a very official looking gentlemen. “Please have a seat. Make yourself comfortable. Just give me a minute and I will be with you. Unfortunately this message from the president is very important and has to be dealt with immediately.”

With that, he went back to his conversation with the very official looking gentleman seated next to him. The tone of the conversation was much too low for the three rather timid looking gentlemen who had been invited into the very spacious and well-appointed suite of the finest hotel of the time in Philadelphia. The atmosphere was very imposing for our three colonial gentlemen who rarely entered such opulent surroundings.

The two gentlemen huddled in that very official conversation were also of a superior air and manner, obviously used to greater wealth and privilege than their three visitors. The latter huddled together on one small sofa leaving the armchair vacant for the very important Mr. Dawit of the Global Financing Agency (GFA). The GFA was the most important financial agency in the world. For a country to not be in its good books virtually meant committing suicide, if one could think of such a thing for a country. The world looked toward the GFA to grade the economic performance of countries especially the newly emerging ones such as the United States which had just gained independence.

Soon the serious and official conversation was over and Mr. Dawit accompanied the official looking gentlemen out of the room presumably in deference to his importance accompanied him down to the lobby. The words that the trailed the two officials out of the room, “tomorrow in the meeting with the president.....” remained with the three silent furtive gentlemen.

***

Dawit returned a few minutes later and with the aplomb of an aristocrat said “gentlemen I do apologize for keeping you waiting but this was indeed very urgent state business that could not be put off.” Then pointing to another gentlemen who had returned with him, “let me also introduce you to, Mr. Jack Taminer, the newly appointed GFA resident representative, to the US. He will be responsible for looking after all areas fo program implementation here. He is somebody that you should get to know. Each of the three shook hands with the beaming Mr. Thaminer who exuded the cosmopolitan air and the boyish arrogance of power.

“Shall we begin?” said Dawit. To which the three colonial gentlemen merely nodded not knowing what to expect.

“As you know, your country in its initial years must put in place much of the infrastructure that a modern state needs to conduct its business,” Dawit began the meeting. “Like in many other countries the GFA will one of the key advisory and financial agencies in this process. Our extensive experience and research in this area will obviously facilitate this process enormously. We have seen that in order for us to lead this process we need domestic help. In this regard we have found that participation by all stakeholders is necessary for us to succeed. It is for this reason that I am inviting people like yourselves, prominent citizens and leading intellectuals to see how we can collaborate to bring about this required change. So I thought that perhaps we could begin by my telling you of the reform program that we have designed for your country. You can then give me your comments and determine how you think you could be useful.”

The tall, intense, striking looking colonial gentleman, Thomas Jefferson, interrupted, “but Mr. Dawit, you tell us that you have already developed a reform program for the country. I do not know how it was prepared and where we fit in? Who was it from the US who participated in the process of formulating the program?”

“You need not be concerned about the design of the program, we engaged the best brains in the world. I might add that some US people were also hired as consultants. And of course we drew upon the very large amount of cross country information that we have within GFA,” Dawit said somewhat piqued. “Moreover, the new government has been fully in step in this process. After all it is their program. We are merely providing the technical expertise. I know that some criticize us for being intrusive and overbearing when it comes to designing country policies. Believe me that that is not correct. We only provide the expertise and draw upon people like yourself to provide us with key inputs.”

“But we were not a part of the thinking that went into such a program” said the short and pale Mr. Hamilton spontaneously. And then as if to make amends “well let us hear your plan and see how we can help you if at all.”

“Gentlemen, Gentlemen, please” Dawit came back again in an imperial patronizing tone. “I said that we had consulted many of your countrymen. Not all of them. You will understand if we could not reach you at an early enough stage. But we are doing so now. So please bear with me and let us me tell you what we think should be done.”

“In our view, the first order of business is developing the instruments of economic control.” Dawit began to explain. “We are therefore going to help you create a treasury and a central bank. For this purpose, we are sending several advisors as well as several missions who will help develop these things. Of course fiscal discipline is going to be very important so we will have to keep a tight lid on wages and salaries and other items of expenditure.” He stopped, though somewhat impatiently, to acknowledge Jefferson’s furtive gesture requesting the floor.

Mr. Dawit, I do not know if you are aware that we are currently working on a possible constitution including a bill of rights,” Jefferson said. “To us the adoption of a bill of rights as well as a stable constitution is an absolute prerequisite for any kind of political or even economic stability. I would personally request that any program that you are putting forward must include these items as a priority. Should you wish we are all prepared to discuss these matters with you.”

Tom, may I call you Tom,” Dawit asked and did not wait for a reply. “In our experience, which is supported by cross country econometric investigation, democracy or the enforcement of rights is not a prerequisite for economic development. In fact our advice is that these matters are best left until after some development has taken place,” and then added with an expansive gesture, “after all freedom and rights are luxury goods.” With that he laughed aloud and looked around the table for applause. It was obvious from their stony expressions that the three colonial gentlemen obviously did not concur with him.

“Don’t get me wrong my friends as an international agency we are committed to liberty, equality and fraternity, but given our limited resources we must be prudent and prioritize our expenditures,” said Dawit. “We are also helping your government to work in areas of you interest. After all, our experts have put together constitutions is several countries. However, to us the first task is the generation of investment for longer-term growth. The government can play a leading role in this both through its own public investment program for the development of physical and social infrastructure and through creating an environment for the growth of private sector investment. Consequently, we are urging the government to use funds that are available to it internationally wisely so that money will flow into these activities.”

“Regarding social development, I have been working on a education reform idea as well as ont eh design of a major university in my home state,” noted Jefferson, wishing to promote another one of his pet topics.

Tom, I am sorry to disagree again,” said Dawit, “but once again your thinking runs somewhat contrary to evidence. In our experience, education should be developed sequentially. Given the level of illiteracy in the country, the first order of business is primary education. University education is a luxury good that you can ill afford.” He tried his favorite joke again with the same success.

“Given the low level of human development in this country, we are recommending a social action program that will attempt to sequentially develop education from the lowest level up,” he went on to explain. “Consequently, we do expect that grandiose projects like Harvard and Princeton will never be competitive and should be left for a later stage. Moreover the notion of a publicly subsidized university such as a land grant college or a state university such as your University of Virginia, is certainly not likely to work. But please not worry. Our experts will take care of it all. Talk to them at the next sensitizing session that they hold here.”

“In any case, the first order of business is to put the fiscal house in order. The new republic has accumulated a large stock of debt and is displaying the ususal symptoms of macroeconomic instability,” he wanted to quickly return to the comfort of fiscal accounting which did not require much location specific knowledge.

Hamilton very confidently interjected, “ Ah, Mr. Dawit, I have done a lot of thinking in that area. I worked out an entire schedule of tariffs on incoming goods as well as a set of taxes on domestic items of luxury-good consumption such as carriages. I would appreciate it if you could support these ideas since it is your agency that will eventually determine policy.”

Mr. Hamilton, once again, I appreciate your enthusiasm to run your own country but clearly you people have no idea of what is happening in the international arena,” noted Dawit with growing impatience. “ Nowadays, we do not use tariffs or tax luxury goods. Instead our experts will put in a system of tax collection at source from all producers and consumers. Once again I urge you people to not worry about it but to cooperate with our work. Our teams will be working in all the areas that you are interested in and proposing solutions and reform ideas. We will have technical assistance experts and advisors here for many years to midwife this process.”

At this point, Thaminer, who obviously was silent in deference to his superior, whispered something to Dawit. “Ah yes,” Dawit in his most charming voice. “I am impressed by your creativity and desire to help develop your country. Mr. Thaminer has just reminded me that there are several junior positions in the resident mission here and perhaps you would like to work for him. That would be very good for you as well as us. It would place you right in the middle of where it is happening. You will be able to interact with our missions and advisors and pick up on a lot of our experience. And we could certainly use your help. I might also add that the pay is very good. Certainly the best in your country although of course I cannot give you international grades!”

Fired by patriotism, the three colonial gentlemen refused. They indicated how insulted they were by the offer and how they felt that they would fight for their independence and their right to run their own affairs. They even noted how they knew more about their own country than the GFA. Knowing full well that they held all the cards, Dawit and Thaminer were very charming and defended the GFA very well. The meeting ended with the three colonial gentlemen shuffling away very frustrated. They walked in the cold while Dawit and Thaminer went in a limousine, escorted by officialdom to a state banquet in their honor.

***

Two years later, Jefferson joined the resident mission as a case officer and reports to Thaminer’s deputy and often arranges the carriage for Dawit’s visit. Hamilton is a consultant reporting to Jefferson and wishes to work at the headquarters of GFA because the salary and job prospects are better there.