Poor governance cause of global crisis, says top economist
Published 06/10/2011 | 08:00
A Northern Ireland economist has issued a stinging attack on politicians, blaming them for the lion's share of the economic crises around the world.
Mike Smyth, head of the School of Economics at the University of Ulster, said that governments should bring in experts to help advise on monetary matters rather than relying on "ill-prepared, inexperienced" ministers.
Mr Smyth was addressing the Retail NI conference at the Stormont Hotel on Wednesday.
"In what other walk of life would so many put their futures and the futures of their children in the hands of so few people who are so under-qualified?" he said.
"We are putting our fate in the hands of ill-prepared, inexperienced politicians.
"The sovereign debt crisis is manifestly due to bad government tax and spending practices.
"Because of Northern Ireland's proximity to the UK and to the Republic, we have suffered a double-whammy in terms of successive governments lightening regulation on the banks. The failure of the Irish Financial Regulator was truly epic. In the US, where a lot of the financial problems originated, a lot of the issues were caused by bad politics. In Greece, the previous government lied and concealed its public debt in the 1990s to qualify for membership of the euro.
"Spain and Portugal have also been hit hard by governmental spending and borrowing policies.
"We can blame the banks for some of the crises, but the fundamental cause is bad politics."
Mr Smyth said that Germany and France have some difficult choices to make ahead of elections and said that if Greece enters a second debt crisis, the eurozone effects will be "catastrophic".
"These crises should help us to learn important political lessons. We need a reform to the democratic system to appoint specialist experts to manage complex portfolios. A return to political 'business as usual' when we finally have a recovery will not suffice," he said.