Sale of a Country

Governments suck at running pretty much everything. On some fronts though, we have no real choices but to let the government continue to be in charge: like the military and police. On everything else, a choice does exist: privatize things and let (hope?) the market forces improve things.

But if you’re Greece, the choice to privatize is no longer an option: it becomes a necessity. Worse, that choice is imposed by foreigners. And so Greece has its Hellenic Republic Asset Development Fund (TAIPED) to sell off assets to foreigners. Something similar was done with East Germany at time of German unification; and that worked out decently enough.

Another reason for such a privatization drive is that, well, Greece owes money. Lots of it. The creditors feel the Greeks haven’t been able to set things in order for years; so it’s high time another approach is tried.

$50 billion worth of Greek assets are up for sale, says Nick Dearden, in his article titled “Greece is for Sale”. So what’s up for sale? 14 regional airports have gone to German companies; Athens airport is on the table; 2 ports are on the block; so are a gas transmission system, a power and electricity company, the postal service, the main telecom company, stretches of highways, and a stake in the largest oil refinery. There are many other smaller items scattered across the country which are also on the list.

Dearden’s protest against all this makes no sense:
“Those industries could generate revenues to help the Greek government rebuild the economy. In fact, the vast majority of the funds raised will go back to the creditors in debt repayments, and to the recapitalisation of Greek banks.”
Really? If so, why didn’t Greece generate revenues on its own and repay the loans already? The simple answers: corruption and inefficiency. This transfer of ownership ensures the money generated from all such entities goes to Greece’s creditors and to Greece’s banks.

But why is pumping money into the Greek banks so important? If the banks fail, who would lend money? And without loans, the economy would grind to a halt. And make an already bad situation much worse. It’s why the US government bailed out its financial sector in 2008; and why we’d better pray that the Chinese government does something similar to ensure China doesn’t slow down too much (A Chinese recession or significant slowdown would take down large parts of the world with it).

There have to be consequences for irresponsible and reckless burning of money. Except if you are the US or China. But hey, who said the world is a fair place? Like I said before, Greece is not “too big to fail”.

Comments

  1. KumarAugust 25, 2015 at 12:11 PM

    Mankind's sections are weaving their nets so extensively, so intricately and so unwittingly that the net is trapping mankind itself on the whole.

    There is a term called "butterfly effect". The term has its origin of mocking at the principle that some people would like to believe: 'everything is connected to everything else'. The mockery in the "butterfly effect" is like this: A butterfly moves from a branch of a tree to settle down on a flower of a plant in Japan. This is linked to, hence an indication of, an earthquake the next day in San Francisco!

    Butterflies may never become mighty enough to cause earthquakes at nearby places, let-alone at far away places. But humankind is known for its ability to wreck havoc, both knowingly and inadvertently! World's monetary ways lead to this inexorable law: "There is no telling when a section of humanity will be in soup!" Like the second law of thermodynamics can be stated in two different ways, both not understandable to the graduate physics student (!), our law of monetary butterfly effect can also be stated in another way: "One section of humanity keeps taking another section for a ride!"

    Good luck humankind!

    ReplyDelete

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