Vitsur agrees with Arumae's criticism of economic policymaking

Photo: Mihkel Maripuu

Commenting on an opinion article critical of Estonia's economic policymaking by Ruta Arumae, former adviser to the prime minister, LHV Pank expert Heido Vitsur said that while he agrees with Arumae that the Estonian state is being governed in a primitive manner, Arumae apparently was lacking an understanding of what was expected of her.

Vitsur said in his comments to BNS that both the people who criticize Arumae and Arumae herself were right.

«I've been writing for more than 20 years that in Estonian economy and public governance one proceeds from axioms and the approach is a relatively primitive one,» Vitsur said. «The biggest heritage that we have is panning that dates from the Soviet period, which proceeds from the base and then adjusting thereof in one direction or another for some logical reason,» he said.

A deep analysis involving different spheres is prevented by departmental barriers and the consequences of decisions are maybe taken cognizance of but not taken into account, according to Vitsur. «There are several hundred problems like this,» he said.

«The kind of things that would actually bring out synergy in the actions of the state and root out ineffectiveness in general, our government has not been up to that, even the problem itself is not seen,» the analyst said, naming the demographic situation as one such issue.

«There is no program for how to come out of this demographic situation, how to cope and what should be done in one, another or third area. This isn't even spoken about, one lives in a short-term world,» he said.

According to Vitsur, Arumae, who is known as an economist with a good ability for analysis and synthesis, believed that her help would be needed specifically in solving interdisciplinary problems, but these were not even discussed.

In Vitsur's opinion Arumae «got into the wrong boat» when she accepted the job of adviser to Prime Minister Taavi Roivas. «She didn't do what was expected of her and therefore she didn't fulfill her role. But at the same time, that the Estonian state is governed in a rather primitive manner, in that respect Ruta Arumae is right,» Vitsur said.

Silver Meikar, a former Reform Party politician who fell out with the party after revealing that the party accepted donations from individuals who wished their identities not be revealed, said that once again the party is trying to marginalize its critics instead to learning the lesson. Meikar said that already on Friday morning one could read in the media how members of the party were trying to marginalize Arumae instead of taking her criticism seriously.

An opinion article by Arumae alleging that Excel spreadsheets effectively do the job when it comes to shaping the economic policy of Estonia has attracted criticism from former colleagues, who say that the adviser herself never came up with an opinion of her own.

«In my imagination the office of adviser to the prime minister was one where you have to give advice to the prime minister. On that detail I was wrong, unfortunately. The prime minister did not wish to be given advice. Nor anybody else in the state sector more broadly. The state sector is full of dogmas which haven't changed since 2003 when I last worked in the state sector,» Arumae said in the opinion article published in the daily Postimees.

The former SEB economist said going out of the framework of dogmas and coming up with a different idea was a taboo in the state sector.

«I fully uphold the idea that a state reform has to be carried out in the state sector. One could start from abolishing the office of economic affairs adviser to the prime minister, for instance. First, nobody from the state sector showed any interest in the macroeconomic wellbeing of the state during the four months,» she said.

«Today's free economic policy advice is that putting all pre-election promises into one kettle and fulfilling them by raising the fuel excise duty is a very bad idea. This advice would have been more useful of course if I had had somewhere else to say it earlier,» Arumae said.

«The sad truth is that the country's economic policy is guided with Excel tables, only adding up revenues and expenditures. Nobody analyzes the broader impact of steps like this, not to mention the absence of a goal to move toward with the big picture. In principle, and exaggerating a bit, the main ideology of all of our economic policy is a balanced state budget. A bit simplistic, isn't it? With taxes a zero sum game is being played and not a lot is inquired about the consequences that hiking or lowering one tax or another will have for the structure of the economy,» the analyst said.