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 Apex BusinessToday Muscat Daily Al Isboua Al Youm
The Economics of Human Interest
Rajarshi Aditya Chaudhuri, March 21, 2012 Email to a friend  | Print
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After his 1,700km journey around Oman, Grzegorz Kolodko sounded very optimistic about the future of this country. And that is saying a lot because the sultanate was the 151st country the former deputy prime minister and finance minister of Poland visited and studied.

He was recently in the country promoting the Arabic version of his book Truth, Errors and Lies: Politics and Economics in a Volatile World at the Muscat International Book Fair and, like a true globetrotter and economist, he took the time to look around to see how this country was getting along.

“I have been to most other Arab countries and Islamic nations around the world and I am quite impressed to see that, of late, countries like Oman, Jordan and Morocco have been following a policy of free market economics coupled with an active position to take care of public goods, human capital and social cohesion,” Kolodko said. “This is unlike in a lot of the developed world, where, when the going gets tough, people are simply left to their own devices.”

Although, on the whole, quite impressed with the quality of infrastructure in place and the improving quality of human capital in the country, he has his reservations about the future of the Omani economy.“Oman, like a lot of the other countries in the region, relies heavily on oil and gas to bring in revenue. Oil is currently abundant and so a lot of it is being pumped and the price of oil is quite low. As a result, the amount of reserve currency it is bringing in now is limited. And since oil is a natural resource, it will run out some day, and countries like Oman will have to quickly find other ways to earn their revenue in order to stay competitive,” he explained.

These were some of the issues that he wanted to tackle through his new book, which has already been published in ten languages. His idea is to get his work accessible to as many people as possible because he feels that one does not need to be an economist or a scholar to understand the basic economic principles of supply and demand, the need to live within one’s needs and not borrow without having a clear plan of how to pay it back. “All you need is a desire to understand and make smart decisions to fix the situation, and that’s why I wrote this book for the masses.”

And he definitely has the experience to back up his theories. He was deputy prime minister and finance minister of Poland several times between 1994 and 2003 and during that period, helped usher Poland first into the Organisation of Economic Co-operation and Dev-elopment (OECD) and negotiated his country’s entry into the European Union. More recently, apart from teaching economics and political economy at the Kozminski University in Warsaw, he has held various advisory positions at the International Monetary Fund, United Nations and the OECD.

Kolodko has been keenly following the current American and European economic crisis and thinks one of the main reasons for it is the tendency to blindly follow economic models of vastly different countries. “This desire to conform to Washington consensus or neo-liberal capitalistic orthodoxies and a ‘one-size-fits-all’ mentality has got us into this mess in the first place.” 

Despite the current mess the EU is in, he is a firm believer in regional economic blocs as the way of the future. “As the world moves towards a globalised, inter-dependent economy, this is but inevitable,” he said. In about four generations, he said, the world would be divided into such regional economic blocs.

“Only China is large enough to avoid any such bloc.” Kolodko feels economic blocs are also the only way smaller countries like Poland and Oman will have their voices heard on a global platform. “Economics at one point or another becomes politics and what is happening right now in the EU is more politics than economics and as a result, we are taking so long to come out of this mess. The GCC can learn from our mistakes.”

In case the GCC does go ahead with a common currency, like the Euro, Kolodko has a word of advice. “From the onset, they have to make sure to have proper synergy of monetary policy of the central bank (in charge of the common currency) and the fiscal policy of the individual governments (tax codes). Because if that is not the case, it is only a matter of time before the GCC also faces economic issues like Europe is currently suffering.”

So what does a man like him do to relax when he is not teaching or worrying about the global economy? “I love travelling, but one of my favourite things to do is run and to listen to music by Wagner.” Kolodko is a long distance runner and takes part in about four marathons in different parts of the world every year. “This way, I get to travel and run, two of my favourite things.”


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