Wednesday, September 30, 2009

Time to Grow Up

Moldovan society, and the individuals within it, need to grow up.

The country has a market economy, albeit a highly dysfunctional one due to the monopolies and oligopolies set up by the Communists over the last year.  It is clear (to me anyway!) that command economics do not work and that market economics are really the only way to secure the long term growth and development.  It is also clear to me that there needs to be safety nets for the poorest and weakest, and that governments should strive to secure equality of opportunity (but not of outcome).

In Moldova and much of Eastern Europe, many vestiges of the communist past remain, however.  One is in the mentality of citizens, who still believe that the government 'owes' them a living, or that the government should provide for their retirement, health care etc..  Accepting that this was the expectation under communism, there is a case to be made for attempting to meet these promises in respect of older generations.

The young, however, need to be encouraged to plan ahead and provide for themselves by saving, buying insurance etc..  Besides the moral argument, there is the reality that the Government is simply not going to be able to provide adequate retirement and health benefits to this group given the short-term fiscal and long-term demographic squeezes on resources.

The most visible expression of the communist legacy are the many and various freebies that exist for certain sectors of society - benefits such as free transport, free heating, free entry to theatres etc.  Sometimes these benefits are accorded to the truly needy - those receiving small old-age pensions, the cronically ill, large families etc.  Sometimes they are given in recognition for some meritorious activity (e.g. war veterans).  Sometimes they are given on the basis of politics, e.g. to government functionaries and other groups close to the regime.

The bottom-line with respect to the freebies is not only that they create and maintain a 'cargo-cult' mentality, but also that they put an unnecessary strain on government funds and restrict resources that could be made available to the truly needy.

These facts are recognised by the Chisinau Municipal Council and Mayor Chirtoaca.  Unfortunately however,  the pensioners protesting outside the mayoralty yesterday and today have been led to believe something else by another group of people who have little interest in seeing Moldova mature and develop either a strong market economy or sensible & targeted social protection mechanisms.

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