Editorial: Getting the house in order requires everyone on board

Tirana Times
By Tirana Times March 8, 2020 12:52

Editorial: Getting the house in order requires everyone on board

It is the simplest example in every household or even dorm room or that unless everyone is on board one can never succeed to clean up the mess and make it look nice and proper. When one is looking at public finances and comprehensive measures to put things in order the metaphor expands accordingly.

The leader of the majority chose the Socialist Party Congress to announce the biggest economic intuitive ever taken recently, that of granting fiscal and penal amnesty to all those who want to formalize their capital. These range from migrants who have kept their savings under the mattress to legitimate businesses who have skirted some of their obligations in the past. In exchange for a convenient fee, yet to be set between 3 and 5 percent of the declared sum, they will be able to enjoy all the benefits and flexibility that comes from having clean resources properly registered with the state. The Prime Minister was vocal in listing the exceptions to this policy: politicians, criminals and people who are subject of wealth declaration by law.

Albania has not succeeded to have such a measure in the last three decades and not for lack of attempts. In the thirty years of transition, there have been lengthy stretches of time where the private banking system was entirely absent or poorly functional. Many categories of people especially after the pyramid scheme disaster of 1997 were skeptical about where to put their money. Migrants, businesses, displaced people, many of them had tough choices to make about their finances at one point or the other conditioned by the deficiencies of a system often in chaos.

Amnesty has the potential to free capital and revive the economy. It liberates many economic actors, whether just at theindividual level or at the entrepreneurial one to contribute better to the entire economy. It can and it might kick up both consumption and investment. However this is a major policy that requires coordination and full acceptance. Sometimes it has been international financial institutions that have been against it.

Given its complexity and even its vulnerability the measure requires the broadest type of consensus to have both legitimacy and most importantly sustainability. Therefore if this measure is done for narrow political purposes the dangers become accentuated.

There are a couple of reasons who one could be suspicious. The measure comes in the commencement of the electoral year since it is obvious that all political sides are marking their start of preparations for 2012. It is announced as an agreement between the ruling party and the people. It requires 84 votes to be ratified in the parliament and even though the majority is able to whip up the numbers, the consensus it will get from the dispersed MPs of the fake illegitimate opposition will not grant it any inclusiveness or long term sustainability. Such a measure should be adopted by bipartisan consensus as it impact on public finances is overreaching and transformative.

Getting a house in order is good for everyone. Just like individuals are happier and more productive in a clutter-free clean home, economies function better where the capital is legal and flows through institutional channels. However when a house belongs to all of us, everyone needs to be on board.

Tirana Times
By Tirana Times March 8, 2020 12:52