The Deputy Prime Minister of Poland (1989–1991) Leszek Balcerowicz gave a lecture in RANEPA
On October 14 the Deputy Prime Minister of Poland in 1989-1991, the author of a well-known economic reform "Shock therapy" Leszek Balcerowicz gave a lecture in the Presidential Academy. The expert told students about the market economy and answered their questions.
Representing the famous politician and the economist, the vice rector of RANEPA Ivan Fedotov reminded that it was the guest who came up with the "Balcerowicz Plan" due to which Poland became the place where "the economic miracle of transition from socialism to capitalism" occurred. Ivan Fedotov greeted Leszek Balcerowicz and noted that it is already his second visit to the Academy.
Then Leszek Balcerowicz spoke about the features of a functioning economy and factors influencing its development. At the beginning of the speech he noted that in different countries there are different ideas how the economy develops. With regard to the above mentioned the institutes of development are of great importance. For example, one of the largest reformers is New Zealand.
The expert considered two types of forces which generate the economy growth: systematic forces and crisis. In his opinion, innovations development is the only constant. «The main conclusion is as follows: currently it is impossible to initiate top-down changes in the existing states. That is why, it is necessary to rely on the free market forces, and this is the major lesson from the history of the modern world", – Leszek Balcerowicz emphasized.
The majority of crises happens due to poor politics. According to the speaker’s opinion, the state possession is the most destructive as it can give orders, and the level of protection of the property rights starts decreasing. Also protectionism has a negative impact. Besides, the public sector can allocate resources in a wrong way. "All this leads to a gradual fall of the economy that is very dangerous as it occurs imperceptibly", – Mr. Baltserovich specified. He added that the concentration of big forces in one hands can cause danger, and the most correct form of the economy is the market one.
Later the subject of crisis of market systems in OECD countries was mentioned. Greek financial crisis, crises caused by the socialism movement support in the economy (for example, politized banks in the territories of Spain) are among such examples. "The state possession carries the threat, as with quick politicization crisis comes, – the expert said. – Even in case of the market economy crisis it is impossible to say that the market is to blame, and it is necessary to introduce deregulation".
Leszek Balcerowicz emphasized the value of the economic policy: politics comes after economy and politicizing should be avoided. "There is a certain likelihood that reforms will occur due to crisis, and it should be used to its advantage. It is important how we interpret the reasons which led to crisis", – the guest summed up and answered the questions from the audience. The hall was crowded.
Moreover, there were questions about the sanctions imposed by the WTO countries which contradict the organization rules and Mr. Baltserovich answered that it is necessary to strive for international global liberalization. Also, Mr. Baltserovich expressed his opinion on the Russian development over the last 20 years. "Russia tried to increase the level of deregulation, and it is good, but the reformers had many hereditable problems", – the expert said. He expressed deep respect to the team of reformers led by Egor Gaidar. "Politics should go hand in hand with economy", – Mr. Baltserovich summarized.