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The economy needs bypass

Liberal values, as the main part of our economy are very valuable to be lost in the panic that has begun to come increasing to the recent social and economic upheavals. The lack of basic components of parliament, which fails to maintain a high level of monitoring and balancing power, as well as the missed opportunity to influence the government to recover from the lack of liberalism, is a signal that that we need to get out from the state of amok.

In the case, that the pandemic invaded our lives more than three months ago, Parliament had to set limits on emergency measures to ensure that they do not go further and last no longer than necessary. They should include in government decision-making respect for fundamental rights, the rule of law and democracy norms, and ensure a return to the highest standards once the state of emergency has passed.

The Albanian Parliament has the chance to do so in the coming weeks when it considers that this whole situation is part of a debate that should be oriented towards monitoring the 2020 budget law and discussions on the 2021 budget.

What happened to the budget?

How much has it been affected by pandemics but also by government management?

How and what are the predictions that should be revisited after the forcible introduction of pandemics into our lives and economy for this year?

The budget that is subject to parliamentary scrutiny should be sought as soon as possible to undergo a thorough analysis, to see how it will affect our lives through taxes, but also how it will affect our lives through spending and redistribution of income.

As soon as possible there should be a broad debate in the program of parliamentary life, which includes large budget commitments and how much they will change.

No questions have been raised about the constitutionality of all this by journalists and analysts, but also to look for its details and expected scenarios, precisely because information is the main obligation for the government in normal situations and no longer in wartime.

Instinctively the government, according to official bulletins, has passed all the legislation enabling it to restrict individual freedom and curb the rule of law and move forward with some reform processes. It will certainly impose drastic new financial and economic measures, which will support people with basic living incomes and in the service of food security.

However, for the next year, the entire budget program will most likely be the launch of survival and recovery programs. The elections, meanwhile, coincide next year.

But has the budget been re-evaluated based on financial loans taken by financial organizations to build infrastructure?

In this case will there be an overlap of programs?

Such moments that are dominated by panic, insecurity and social perversion are very dear to redeemed governance and to do as they please. But in constitutional democracies, the power that grows in times of emergency is usually limited by the constitution and must be relied upon by parliament to ensure that measures are not strictly drastic in time and allowed to be implemented no more than is necessary.

A more balanced approach should include going out with a budget revised for this year, as the current budget is largely redundant to say it does not coincide with the current socio-economic situation.

Just like coexistence between people, also the economy and finances need to make a difference. Society needs to rediscover itself by carrying out positive values ​​and replacing those negatives with new ones that have been borrowed from the experience gained. This operation takes time to recover and extends to a long-term plan. This operation takes time to complete the recovery and extends to a long-term plan.

Meanwhile, a different approach to governance should outline the government's plans and priorities in terms of revenue and expenditure, as well as a clear plan for financing the deficit, including market borrowing and making money.

This operation has a short recovery period and for this purpose it is worth more the topic that has a current interest in treatment.

Domestic and foreign financial institutions[1] and largest businesses should be the main lenders to the government.

They can do this by buying bonds[2] from the government. So, those bonds that the government tries to sell in foreign financial markets should be committed to mobilize for sale to the local private sector, but sometimes to the public. This market is already in the moment to explode. Moreover, the legalization of money must take place now, to harmonize the demand and supply of money[3] in the financial market.

However, this policy is related to the answer to the question of whether our economy has entered a recession or continues to grow positively?

If the economy is in recession or is entering that zone (due to pandemics, but also the consequences of the earthquake) financial institutions and most of largest companies are waiting to suffer for themselves. It is likely that they do not have excess money to invest in large sums for the purchase of government-provided bonds. As a result, the government have to pay high interest rates on additional borrowing after exiting the COVID-19 situation to attract investors.

As long as investors are willing to buy government bonds, then the same way as with the Eurobond, etc. new bonds can be issued to repay old bonds. If the economy, perhaps, will grow faster than the deficit, then the debt-to-GDP ratio will decline, as has happened in some countries in the last decade.

But Albanians will not have to suffer twice for the hatred of coronavirus pandemic.

Once suffering from the blockade of the economy and the freezing of money circulation, and then likely also suffering fiscal burden by paying more taxes, or experiencing cuts in government spending programs. We hope that these are not the most expected approaches for the second half of 2020, but also for the 2021 budget.

Assuming that government spending and the economy will return to a kind of normalcy when the pandemic is expected not to continue, then the government will simply be able to push its debt into the future. Most likely, it will not pay any high costs currently, as the money lost due to the insolvency of the public and private sector will be replaced by funds borrowed from abroad, but also from within.

Our experience of nearly two decades clearly shows that open budget practices are linked to values ​​that convey greater equality and efficiency.

The government is now able to take immediate steps to open the budget for public scrutiny, in addition to parliamentary scrutiny.

However, this is a long way to go to provide significant opportunities for the public to contribute to budgeting processes with the aim of ensuring better results, but also widely accepted by most people.

Civic organizations are vital sources of information with deeply analysis. The CSO network, which can be involved in this process, also increases the impact on the effectiveness of government services by building accountability and public trust.

Now, more than ever, the government needs to think creatively about how to invite and facilitate public participation and take advantage of this innovative approach to the outdated budget tradition.

 

[1] banks, international financial institutions, insurance companies, other investment funds

[2] essentially contracts where the borrower pays lenders or investors a fixed rate of return for a certain period of time

[3] Demand and supply determine the interest rates that the government will pay to investors for these bonds. If there is a lot of demand for government bonds in relation to their supply, then interest rates will be low. If demand is low, then interest rates will be high.