EYE ON EUROPE STOCKHOLM NETWORK – LINKING EUROPE’S LEADING POLICYMAKERS AND THINKERS ISSUE SIX
AUTUMN 2005
DOES THE WEST KNOW BEST? Is the European social model doomed? If so, what action must be taken? Is Western Europe ready for the introduction of flat taxes? Could the introduction of market mechanisms in the provision of healthcare – successful in some parts of Eastern Europe – be a model for the debt-ridden healthcare systems of the West? Or is it the case that systems in Western Europe are so different that lessons from their neighbours wouldn’t apply? These are just some of the issues dealt with in the latest Stockholm Network publication Does the West Know Best? When ten new member states joined the European Union in May 2004, they not only turned the EU into the world’s biggest market – they ignited an explosive debate about the direction in which Europe was heading.The accession of Central and Eastern European (CEE) countries into the EU provided the necessary impetus for a fundamental re-evaluation of its economic and social model. In the 12 months since accession, the EU-15 have witnessed at closer hand the tremendous CONTINUED ON PAGE 3
CLIMATE OF DEBATE More than perhaps any other political issue, the environment is the polarising debate of our time. Certainly, few issues fire the passions of such a diverse range of participants. But while political debate is fed by fervour and conviction, policy-making obeys a more sober calculus. In environmentalist’s eyes, the recent media attention given to climate change because of its prominence on the G8 agenda has resulted in little tangible progress. Ironically, this may be partially the fault of the only agenda item that eclipsed even climate change in the public interest: development. Genuine questions exist about the ability of developing nations to increase their wealth without contributing significantly to world carbon emissions – China is a notable, and growing,
failure – and whether in an increasingly economically interdependent world, developed countries can make environmental concessions without harming their competitiveness. The Stockholm Network and The Economist decided to make this tension the central theme of their latest Westminster Fringe Debate, under the motion that ‘Prosperity, not environmentalism, is the best way to save the planet.’ The debate inevitably produced the same polarisation of opinion already prevalent in public discourse. For many, ‘environmentalism is the child of prosperity’ – individuals and societies will tend to environmental niceties once their pressing material needs are met. So argued Martin Livermore, a freelance consultant and commentator on science policy and communications issues, who began by CONTINUED ON PAGE 3
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EYE ON EUROPE
DIRECTOR’S REPORT
The Stockholm Network’s Environment Programme, overseen by Environment Director Dan Lewis, has now been running for just over a year. Our aim is to examine policy solutions to environmental problems which stimulate rather than hinder economic growth, while recognising that a well-managed environment is a public good which contributes to a better quality of life for all. This autumn we are organising a number of activities which concentrate on these questions. Our latest Westminster Fringe debate with The
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Economist, reviewed on page 1, asked expert panellists to debate the provocative motion “Prosperity, not environmentalism, is the best way to save the planet”. Later in the year, we will also be launching the findings of an indepth piece of opinion research which probes the British public’s attitudes towards these questions and asks them to rank environmental concerns alongside other global and national priorities such as fighting terrorism, relieving poverty and providing clean water to people in developing countries.The goal is to discover what degree of importance the electorate attaches to environmental problems in the round, rather than as a single issue viewed in isolation, which is often the way such debates are presented by the media, NGOs and others.
We will also be launching two new publications this winter on intellectual property issues, as well as a book looking at the failings of European welfare states, and asking whether the UK has anything to learn from the Swedish model of policy innovation. Last but not least, we welcome on board two additional part-time staff, Katie Perrior and Tim Evans, who will be working on media outreach and business development respectively. Their contribution will enhance our mission to improve European public policy and to inform the public and key opinion formers of what we regard as the most cutting-edge European policy ideas and debates.
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STOCKHOLM NETWORK
DOES THE WEST KNOW BEST? CONTINUED social and economic reforms that have taken place in the Eastern states. Will they finally have to sit up and take action? To stimulate a fruitful discussion of these issues, the Stockholm Network and the Centre for New Europe collaborated to bring together some of the leading experts from Eastern and Western Europe at a conference.The aim was to attempt to discern an answer to the question: Does the West know best when it comes to reform of economic and social systems?
approaches to social and economic reform. It questions the sustainability of the European economic and social model, while seeking solutions to its endemic problems. The West, it seems, does not know best. Indeed, it would appear that it has no choice but to reform. And it would do well to draw its inspiration from the success stories on its doorstep. Terence O’Dwyer N.B. See page 16 for information on how to order this publication.
This latest publication, based on the proceedings of the conference, aims to ascertain what, if anything, can be learned from eastern European reforms in the fields of health and social security; tax, competition and regulation; and the labour market. Our authors reached a unanimous and unequivocal conclusion: the West does not have a monopoly on success, and it would do well to learn from its neighbours in the East. Martin Bruncko, the Chief Economic adviser to Ivan Miklos, the Deputy Prime Minister of Slovakia, paints an overall picture of the successful reforms in Slovakia, and argues that the competition now coming from Slovakia provides an incentive for existing EU member states to examine their own regulatory and tax frameworks. On Health and Social Security, our experts agree that Eastern European reforms have addressed the impending crises of an aging population and unsustainable healthcare systems better than their Western counterparts through the introduction of market oriented reform. As Pavel Hrobon of the Czech think tank healthreform.cz argues, this reform demonstrates to the reticent West that bold reform of healthcare can be immensely successful. Flat taxation in Eastern and Central Europe is one of the more widely acclaimed reforms, and as Dan Mitchell of the Heritage Foundation argues, tax reform in Eastern Europe and the tax competition that has resulted are tools for Europe’s salvation. In the final section of the book, attention is focused on the labour market. Johnny Munkhammar of the Swedish think tank Timbro, makes a powerful case that the European model is doomed. Gabriel Calzada, professor of economics in Madrid, addresses the issue of enlargement and argues that a deregulated European labour market is the only option for successful integration. Does the West Know Best? assembles leading thinkers from both Eastern and Western Europe to examine whether the EU-15 can learn from some of the new member states’ more radical AUTUMN 2005
ENVIRONMENTAL DEBATE CONTINUED noting that nature is extraordinarily resilient and that the necessity of ‘saving the planet’ is greatly overstated. Earth is, after all, in a process of constant regeneration. Equally, Livermore argued that environmentalism is essentially a nostalgic plea for a supposed better past.To be sure, such a world – before factories, mechanisation, even widespread agriculture – is appealing from an aesthetic sense. But it was also a world in which mankind struggled daily to survive and, even if the rugged wilderness appeals to some, most would not sacrifice the dependable availability of their basic needs. Nostalgia, therefore, will get us nowhere. Better to increase individual wealth, which of itself will mitigate environmental damage. East Germany, for example, has dramatically improved its environmental protections since reunification and subsequent economic growth. Stephen Tindale, executive director of Greenpeace UK, demurred. Beginning with a rebuttal of the contention that all environmentalists hark back to some imagined rural idyll, he noted that most embrace modernity and are not anti-business, anti-growth or anti-profit. However, the untrammelled pursuit of profit can be dangerous because of
the other problems it creates – environmental degradation being the most serious. Interestingly, Tindale argued that environmentalism and prosperity are not necessarily mutually exclusive, and regulations, if designed properly, can indeed boost innovation and profit. However, on the issue of climate change, he was unequivocal. ‘It is occurring, and it is not reversible in any meaningful timeframe. Nor is it linear, and without environmentalism there would be no hope of mitigating its effects.’ Ultimately, therefore, it is environmentalism and not prosperity that constitutes the best means to save the planet. Yet we must not, according to Professor Keith Palmer, a leading energy finance expert, take heed of ‘environmentalist doom mongers who have prophesised collapse since time immemorial’. He went on to argue that there are plenty of examples of the achievement of both great prosperity and concurrently improved environmental conditions. If the goal is to ‘make poverty history’, then he concedes that there is a very important role for government regulation of the private sector, particularly to protect the environment. ‘But we must not kill the goose that laid the golden egg by giving in to extreme environmentalists’ demands’, which are, he argues, ‘indeed anti-growth and antibusiness’. Making poverty history means, says Palmer, that expensive renewable energies are not going to be an option for the millions in developing countries who would not be able to compete, and thereby grow, without access to cheap fossil fuels. With the key challenge being to bring prosperity to all humanity, rejection of extreme environmentalists is essential. By contrast, John Murlis,Visiting Professor of Environment Policy at UCL pointed out that there exists an enormous acceleration of change in the environment and that ‘prosperity’ will not, and cannot, deliver the environmental goods necessary for humanity to survive. Environmentalism is therefore necessary to deal with the challenges the world is facing. Furthermore, prosperity may not lead to improvements in quality of life. As an example, he points to evidence that inequality – a problem that has grown with prosperity – has led to a deterioration in standards of health in Western countries. He agrees with Tindale that climate change is a challenge that prosperity cannot solve, and contends that environmentalism, coupled with innovation, is a necessary force to ‘save the planet.’ For more information on up-coming Stockholm Network / Economist debates, see page 16. Terence O’Dwyer and Sacha Kumaria
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PROFILE: ROMANIA THINK TANK
THE ROMANIA THINK TANK is a free market think tank that was formally established in 2002. WHAT THEY DO The Romania Think Tank (RTT) works to improve the Romanian public’s understanding of the fundamental institutions of a free society, with particular reference to the role of the free market as well as a functioning and active civil society in solving the country’s economic and social problems.The Romania Think Tank works within its three major subject areas: the Free Markets Institute, Center for the Rule of Law, and the Communications and Media Institute when preparing papers or hosting conferences. RTT supports Romania’s full membership and integration within the European Union, and aims to encourage debate about traditional free market principles, limited government, individual liberty, and the rule of law.The Romania Think Tank attempts to provide practical reformist solutions to ensure Romania’s transition to a functioning free market economy and real democracy.The RTT directly and indirectly distributes its findings to members of Parliament, key Parliamentary staff members, policymakers in the executive branch, the Romanian and international media, as well as the academic and policy communities in Romania and abroad.The RTTs produces a range of publications and articles, and regularly hosts lectures, conferences and meetings.
WHAT THEY HAVE DONE The Romania Think Tank has hosted several successful conferences and has published a wide range of articles addressing many of the problems related to the reform process in Romania. Whether acting as a whistle blower or bringing partners to the table in an effort to tackle major transition topics such as justice reform, taxation, or liberty in the media, the Romania Think Tank has been committed to its engagement in Romania’s development course. Flat tax conference (May 2004): The Romania Think Tank strongly supported the introduction of a flat tax at a rate of between 15%-16% and a considerably simplified tax code.The conference (hosted with another leading think tank, the Romanian Academic Society) involved the participation of government officials, 4
diplomats, politicians, practitioners (accountants, attorneys) and journalists, and explained how the flat tax would increase budget revenues through the reduction of evasion (legal or otherwise) and make the system fairer and more transparent, so helping to attract substantially more foreign direct investment (FDI). Lessons from Russia, Estonia, Latvia and Slovakia were discussed which demonstrated that the flat tax works. Subsequently, at the end of December 2004, a 16% flat tax was implemented in Romania.
Judicial Reform Conference: The main objective was to promote a dialogue between members of the judiciary, the government, NGOs, legal practitioners, foreign investors and diplomats, as well as helping representatives of the EU and foreign governments to understand the problems of the Romanian judiciary and make appropriate recommendations to the Romanian authorities for reform.The conference was divided into three main sections.The first involved presentations from government, political parties, and a representative of the EU Delegation.The second examined legal issues as viewed by the foreign investor, involving presentations by companies specializing in company law.The third section considered the availability of impartial justice to the Romanian citizen, with speakers from NGOs.
FORTHCOMING PLANS AND PUBLICATIONS
www.rtt.ro Media Conference: The conference – which also involved the participation of government officials, diplomats, politicians, academics and journalists – gave important lessons about the state of the written and broadcast media in Romania, as well as an opportunity for discussion and debates between Romanian journalists and some of their foreign counterparts.The conference was particularly relevant in view of a number of highly critical reports on the state of the Romanian media by foreign and Romanian NGOs such as Freedom House, the Center for Independent Journalism and the Media Monitoring Agency.To a great extent, this conference built on the work of these NGOs.
Romania’s integration into the European Union requires vast efforts from all of its citizens. In this respect the Romania Think Tank has two conferences planned for autumn 2005. Firstly, in early October, Romania Think Tank will host a Bucharest urban planning conference that will bring together local and national government representatives, strategic investors, civil society, the media, and representatives of public utilities. The goal is to find the common ground for sustainable development in Bucharest and the surrounding region.The second conference, in late October, will address the issue of electoral reform.The conference will look at various voting systems to find the appropriate solution to the Romanian Dynamic, a transition away from the current party list system towards a uninominal (direct vote) electoral system.The Romania Think Tank is also working vigorously for the end of widespread corruption in Romanian Society. It is the root of poverty and underdevelopment. Romania is far more corrupt than other EU applicant countries, ranking 77th out of 102 countries in Transparency International’s 2002 survey. In April 2003, former US Ambassador to Romania, Michael Guest, made an unprecedented address, in which he set out just how damaging corruption is to the Romanian economy and society. Romania Think Tank urges the Romanian government to take measures to stamp out corruption.
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PROFILE: CENTER FOR ENTREPRENEURSHIP & ECONOMIC DEVELOPMENT (CEED) CEED (Center for Entrepreneurship and Economic Development ) is the first free-market think tank established in Montenegro – formally founded in 1993 by two University professors Veselin Vukotic and Petar Ivanovic.
has organized more than 230 one-day seminars that were attended by more than 5,120 participants over the past five years. More than 450 business plans were developed, resulting in the creation of more than 3,530 new jobs (including seasonal jobs, many of which were in the tourism industry).
WHAT THEY DO
Over the past 30 months, 12 public opinion polls surveys have been prepared, conducted, and analyzed with results printed and distributed; three of these have become tracking studies. Based on these surveys, CEED is preparing policy recommendations. CEED has also begun publishing a new quarterly publication, Montenegro Business Outlook, and Fruitful Edition, a series of nine leaflets that briefly explain business laws. Both publications, and twelve other recent reports, are aimed at the business sector representatives and entrepreneurs to whom these laws apply.Three conferences and 17 round-tables were also held to help the business community increase its influence on the major issues related to economic development.
CEED’s mission is to promote and practically implement the ideas of a free market, entrepreneurship, and private ownership in an open and democratic society within the rule of law. In Montenegro CEED is dedicated to promoting a free market economy based on personal freedom and individual responsibility, the rule of law, protection of property rights, limited government lowering the tax burden, reducing government bureaucracy, and advancing the principles of private enterprise that will benefit individual citizens.
Key results were achieved in the area of advocacy, economic research and analysis, policy recommendations for SME development and improving the business environment in Montenegro, attracting foreign investors, training of both entrepreneurs and economic journalists, and business consulting.
www.visit-ceed.org WHAT HAVE THEY DONE The key features of CEED’s work are the ‘Removing barriers to doing Business’ program, economic research and advocacy, business associations development, consulting services, and corporate governance initiatives. In cooperation with the Centre for International Private Enterprise (CIPE) in Washington, CEED AUTUMN 2005
CEED research from early 2000 showed that the registration process in Montenegro: is 1) complicated and expensive, 2) requires submission of many documents, and 3) creates discretionary rights for state officials. It took $5,000 of starting capital and 40 – 65 days to register, through a maze of institutions, all at the discretion of government bureaucrats. CEED was the first organization in Montenegro to initiate discussion on this topic. To start the process of removing such barriers to employer registration, CEED developed and implemented a survey as an instrument and monitoring tool to aid the achievement of the final goal: a business environment that will attract both domestic and foreign investors and create more, sustainable jobs in the private sector. Using the survey findings, CEED initiated public discussions on drafting a new Enterprise Law. In cooperation with domestic and international
legal experts, the new Law was drafted and passed by Parliament in January 2001.The new law allows for employer registration in 4 days, for 1 euro, compared with previous costs of up to 5,000 USD. Because the new law treats entrepreneurs as legal subjects, more than 12,500 entrepreneurs and 12,000 other legal subjects have now been registered (in total, an increase of 55% over previous figures). To implement the law successfully, CEED created 4 one-page registration forms and advocated that they be posted to the Commercial Court’s website. Greatly enhancing the law’s effect, CEED published 10,000 copies of the leaflet Fruitful Edition and distributed them to employers. In cooperation with the Montenegro Business Alliance, CEED organized 6 seminars explaining the law to employers so that they will not have to hire lawyers – who charge an average of 150-200 euros per registration, a major expense for an economically exhausted population. Approximately 2,000 people have reregistered at the CEED seminars. CEED is currently working to make possible employer registration via the Internet. In addition, CEED survey data showed that employers complain about taxes and levies as well as the corporate tax rate. CEED did a research paper showing possible scenarios – such as the number of employees and average wage – if taxes and levies on employees’ salaries are reduced. As a result of the pressure coming from the business community supported by CEED data, the Government of Montenegro recently agreed to reduce taxes on employees’ salaries by 10%, and reduce (down from the previous rates of 15 and 20%) the corporate income tax to 9%, which is currently, the lowest in Europe. In an international competition of 403 applications submitted by 316 institutes from more than 80 countries, this year, the Center for Entrepreneurship and Economic Development (CEED) from Podgorica, Montenegro, won a 2005 Templeton Freedom Award Grant for Institute Excellence and second place in the Free Market Solutions to Poverty for its “Removing the Barriers to Doing Business in Montenegro” programme.
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PROFILE: VENEZIE INSTITUTE
www.venezie.org To the casual observer, Italy may not appear to be a transitional country in desperate need of market reforms. However, perhaps because this nation did not formally lie behind the Iron Curtain, it is often forgotten that Italy had the largest and most active Communist Party in the western world – a party that at one time narrowly missed obtaining an absolute majority in free elections.
international point of view; proposed solutions will be based on in-depth research and analysis of successful foreign settings (mainly from the US and the UK), and projects teams will be, as far as possible, of international composition.
in public opinion, to be a ruthless exploiter of the working masses. It should not come as a surprise then that Italy, and the Venices in particular, have been the birthplace of the most violent anti-globalisation movements.
Although its free-market preferences automatically associate it with “conservative” thinking, the institute does not take a stand for, or against, any political party, and is willing to cooperate with any group interested in bringing about institutional, social and economic changes in the Venices based on the aforementioned principles. Moreover, the institute is officially independent of any political party, religious or economic interest group.This independence is ensured, on one hand, by a conscious diversification in financial support and, on the other hand, by the integrity and qualifications of the members of its Advisory Council.
Structural reforms, even if attained, would be short-lived and would fail to be effective unless there was, at the same time, a transformation of societal attitudes.The aim of the Venezie Institute is to generate this change in mentality by actively informing and educating the general public, opinion makers and politicians about the benefits of adopting reforms based on the principles of free enterprise, limited government, individual liberty and institutional integrity.
Despite the Institute’s focus on the economic and institutional issues of the Venices, it was decided that its headquarters should be in London in order that its personnel might gain first-hand experience of the working of a real free-market environment, and to increase its international learning and networking opportunities.
FORTHCOMING PUBLICATIONS AND FUTURE PLANS The Venezie Institute will soon publish the Italian translation of a book by a renowned international author.The presentation of the book will also serve as an official introduction to the Venices’ first pro-market think tank.
Italy is a country where corruption pervades society and institutions; where sympathy for Marxism among the intellectual elite and opinion makers still runs high, and where labour unions wield immense power and can easily bring the nation to a standstill.
WHAT THEY DO An independent, non-profit and explicitly conservative think-tank, the Venezie Institute was founded in February 2005 as the research and development unit of the Confederazione Veneziana movement. The mission of the institute is to assess the many challenges facing the Venices (the region of North-East Italy) and to formulate and promote possible solutions based on the core values of free enterprise, limited government, individual liberty and institutional integrity.The Venezie Institute aims to approach each institutional, social and economic issue from an 6
It is an uphill struggle, but the mission of the Venezie Institute is made much easier by the fact that free market principles and values have always been part of the institutional, social and economic heritage of the Venices. This area was part of the Venetian Republic – the birthplace of free enterprise, of privatisation and limited government, and of institutional integrity and above all, global trade.The Venetians have free enterprise encoded into their DNA, and Marxism has only temporarily clouded these values.
WHAT THEY BELIEVE Although the Italian Communist Party has donned a new coat and changed name, it is still working – though more subtly – towards the same objective. Its officials still hold key positions in state industries and government agencies and are blocking all attempts at reforms. Marxist ideas are still being skillfully ingrained into society; capitalism is still a swearword and a capitalist is still considered,
The institute will initially concentrate on translating various foreign publications (research papers, books, success case studies, pamphlets) into Italian. With the aim of creating a lasting desire for reform, it will then actively promote these publications through public debates, conferences, press releases, media appearances and direct mailing to journalists, academics, politicians and business people. In addition, the Venezie Institute is currently developing its own website, and examining the possibility of creating a monthly electronic newsletter.
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PROFILE: CONSERVATIVE INSTITUTE OF M.R. STEFANIK THE CONSERVATIVE INSTITUTE OF M. R. STEFÁNIK (CI) was founded in 1999 as the first, and to date the only, conservative think tank in Slovakia. It is organised as a non-profit non-governmental organisation. The CI’s raison d’être is the articulation, dissemination and defence of conservative attitudes and values in society and a freemarket approach to economy in Slovakia. M. R. Stefánik was one of the founders of Czechoslovakia in 1918, and the Conservative Institute is honoured and proud to hold his name and is committed to his ideals.
In 2003, they implemented the project To NATO with Our Head Up and Eyes Open targeted at initiation of a public discussion about new questions relating to the accession of Slovakia to NATO, international security issues and the position of NATO after 9/11. In 2003-2004, the CI organised several conferences in different regions of Slovakia and issued a publication within the project USA, Europe and Slovakia in 2004.The target was to help eliminate common false myths about the United States.
WHAT THEY DO Activities of the CI are targeted at the economy, social policy, interior and foreign policies, security, EU issues, agrarian and environmental policies, regional policy, educational policy, civic society, fight against corruption and support of culture and arts. The CI organises conferences, seminars and debate clubs, analyses events in society and economy, issues thematic brochures and publications.The experts of the CI publish their works in the media. All the releases are available to the public. Within the framework of all activities, the Conservative Institute – in close co-operation with the Jury of the Dominik Tatarka Award – grants the Dominik Tatarka Award for literature every year.This prize is considered to be the most prestigious Slovak award for literature and is an intellectual legacy of Dominik Tatarka, who was an important Slovak dissident and writer of the 20th century.
WHAT THEY HAVE DONE In 2002, the CI carried out a project on the Economic Effects of the Accession of Slovakia to the European Union. Several activities were performed including the issue of the analytical study on expected impacts of the accession of Slovakia to the EU and the conference, where the study was presented. At that time, the study was the first and the only one presenting the risks of Slovakia’s accession to the EU. AUTUMN 2005
The CI also recently held the first of its Conservative Economic Quaterly Lecture Series (CEQLS), examining the Impacts of Slovakia` s Accession to the Economic and Monetary Union (EMU). Marian L.Tupy of the CATO Institute and Peter Gonda, the CI’s Economic Analyst, presented the main risks of the Euro experiment, and the EMU on economic entities in Slovakia, and in the wider Eurozone.
FORTHCOMING PUBLICATIONS AND FUTURE PLANS The Conservative Institute is also a founder of the Initiative Against the European Constitution. The main goal of the Initiative is to prevent the passage of the Treaty in Slovakia, which parliament overwhelmingly approved earlier this year. In June, the Constitutional Court accepted a complaint by the Conservative Institute, which argued that there should be a referendum on the issue because signing the treaty constituted the end of Slovakia as an independent political entity.The Court has suspended the ratification of the European Union’s Constitution and issued a preliminary measure banning the President from signing the European Constitutional Treaty. A final verdict on the complaint will be issued this year, and the Institute will therefore continue with activities focussed on turning the tide of public opinion against the European Constitutional Treaty.
www.institute.sk In 2005, the CI organised a conference entitled Environmental Policy in the Slovak Republic.The objective was to discuss the possibilities of deregulation in the area of environmental policy and how to make the execution of environmental policy more transparent. Other events in 2005 include a lecture by Michael Novak, the world-famous American philosopher of Slovak-descent, who discussed Capitalism and Catholic Church – Concordate or Enemies? He clarified why the Catholic majority in Slovakia should trust the ‘invisible hand’ of capitalism and described the political, economic and moral order of free society. 7
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PROFILE: NEW ECONOMICS SCHOOL – GEORGIA After a period of informal existence,The NESGeorgia was given NGO status by a regional court in Tbilisi in April 2003. Prior to gaining a legal status, NES-Georgia organised a number of informal seminars, but attaining NGO status allowed the group to begin fundraising and expanding its network.Today, it is one of the most dynamic organisations in the Caucasus, with fifteen affiliated experts and a network of hundreds of students.
WHAT THEY DO
www.economics.ge THE SOCIETY FOR THE DISSEMINATION OF ECONOMIC KNOWLEDGE (the NES-Georgia’s full title), is Georgia’s first marketoriented think tank.The organising group for the NES-Georgia was created in Auburn,Alabama in August 2001, while the group’s founders, Paata Sheshelidze (now President) and Gia Jandieri (Vice President) were based at the Ludwig von Mises Institute. WHO THEY ARE Both organisers had experience in the field of economic education, having participated in the creation of the Association of the Young Economists of Georgia (AYEG) in April 1989 – prior to the Soviet Union’s collapse. The AYEG achieved a notable victory shortly after its inception, when in September 1990, it forced the abolishment of Marxist doctrine from formal academic programmes at Tbilisi State University. This event was not only unique to Georgia, but the whole of the Soviet Union. A new special educational program in Macroeconomics was created, and is still taught today at Tbilisi State University.
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Georgia has a number of serious economic problems, all of which are compounded by the lack of economic education amongst the political elite, academia and the populace at large. Unfortunately, this problem has been long ignored. NES-Georgia aims to significantly reduce this shortcoming, and disseminate free market ideas in order to equip individuals for a future of global markets and personal responsibility. The NES-Georgia has now hosted over 60 private seminars (two per month since 2003), with an average attendance of sixty students, and several teachers, journalists, politicians and specialists of various occupations. In addition to traditional market-liberal themes, the seminars aimed to look at issues of practical versus theoretical economics, and problems specific to Georgian and international economics (for example, energy supply, privatisation, banking, monetary policy, deregulation, taxation, international financial support.)
The Stiftung and the NES-Georgia, who began cooperating in 2003, are both firmly committed to free-market principles, and the reform of the welfare state. With their partnership, the NES-Georgia has hosted over 25 local and international seminars, featuring a host of internationally renowned speakers.The NES-Georgia has also formed productive partnerships with the Foundation for Economic Education in the United States. Indeed, in November, the NES-Georgia, in cooperation with the Friedrich Naumann Stiftung, will host an international conference on ‘Economic Education: Relaties and Alternatives’ in Tbilisi and Gudauri.The conference will feature participants from the Foundation for Economic Education, the OSGF, the CRRC, and the TBC Bank. And between October 2-9th, the NES-Georgia will be hosting Ruth Richardson, the former Finance Minister of New Zealand who pursued sweeping economic reforms in the early 1990s. Ms Richardson will give a series of lectures and seminars, and participate in a number of workshops in order to help disseminate positive, market-oriented ideas. She will also meet with a number of high-level state officials.
The main theme of early seminars was the introduction of the Austrian, Institutionalist and Public Choice economic schools into Georgian economic discourse.This was facilitated by the growing popularity of the NES-Georgia’s internet newsletters, which originally had a readership of only several hundred people but now reaches three thousand – roughly 5% of Georgia’s total internet users.The newsletter primarily focuses on issues specific to Georgia, but draws many comparisons to relevant overseas examples. In 2002, the NES-Georgia also established its website, www.economics.ge. The NES-Georgia has pursued a very fruitful partnership with the Friedrich Naumann Stiftung, the political think tank of the Free Democrats, Germany’s leading liberal party.
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