Memo to world leaders
Millions of jobs were lost in 2008. Thousands and thousands of jobs are being axed every day currently. People are in despair. A silent behavior metamorphosis is happening in the street. People don’t really know what to believe in anymore. They don’t believe in the value of once coveted dollar or the price of their property or the future of their investments in iconic companies. They also don’t know who can bring hope to their lives. They are not sure whether they can place their faith in elected leaders or the public institutions.
As the days go by, the governments around the world are pumping trillions of dollars into the world economy to prop up consumer and business spending. Being the lender of the last resort, Governments are ready to spend the money they don’t have and print additional currencies as they wish. But leaders need to exercise caution as they move further in that direction. It is not really a far-fetched imagination to say that people losing trust in Governments totally may push the currency economy to a barter economy where people exchange apples for French classes. While stimulus packages can prop up the supply side it would do little to improve the demand side which is completely dependent on people’s psych and confidence in future prospects. So the most critical job before the Government and business leaders is to reduce the uncertainty that has permeated into every sphere of economic activity – both public and private. So what is the solution that will rebuild the people’s faith in world economy? What will bring the populace again to the capital markets and banks? What will make people to invest in new ventures? The answer is
Complete and Absolute Transparency in every minutiae activities of public and private institutions.
For starters, Governments should publish how every penny of stimulus package is being spent to the public in easily available format. From now on this should expand to the spending of every state and federal institutions as well. Publicly listed companies should also follow suit. They should stop managing their earnings and open up their accounting systems to every willing stockholder in a transparent manner. Finally, the situation is so grave that if the leaders don’t practice and force absolute transparency in every action they do they may never be able to salvage the current economic crisis.