Eroding bases of power

THIS is not how it works. The biggest folly that any wielder of power can fall prey to is to take their own power for granted. It does not work that way. The world is not made of Lego blocks that it can be made, disassembled and remade into whatever shape one fancies. Trying to treat it as such undermines the very roots from which one’s power grows. The government has some cause to celebrate the fact that it has stabilised the economy, to take one example. This is the fifth time I am seeing a government celebrate the return of stability since 2001, so quite aside from how each of these episodes worked out, it is worth considering the enormous cost that each such cycle of stabilisation brings. For starters, consider how the cost of each balance-of-payments crisis gets larger each time we go through it. In 2008, for instance, the total foreign exchange reserves plummeted by $7 billion from peak to trough before an IMF programme was initiated and another round of stabilisation launched. The next such fall began in 2011 and by 2013 reserves had fallen by $10bn — and another Fund programme.