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23 May 2006

Accountable government, part 1

We live in a globalised economy, characterised by the growing importance of information as the raw material for value creation and by the diminishing importance of distance as a barrier to market. The speed of change is increasing and the rules governing value creation and competitiveness are under challenge.

These challenges are especially great for small to medium economies outside powerful trading blocs, but similar levels of threat may arise for regional economies within larger economies or trading blocs.

Over the next twenty-five years, the internet (mark 1 and the incipient mark 2) and the accompanying communications revolution will aggregate economic and intellectual capital to levels of concentration that will surpass our already high concentrations.

Moreover, economic cycles and product (and services) lifecycles will continue to shorten, placing ever-greater demands on a country's capacity to innovate and to commercialise.

If a country or a region cannot compete, it will lose jobs, export markets and our best brains, to the point that it may become a consumer market supported by primary industries and tourism - and no more - prey to transnational interests and at risk of destroying its environment by over-exploitation.

The corresponding and equally great threat is that, if country or a region is unable to compete, then its people may want to again withdraw into an isolationist, protectionist shell, within which a long lingering decline would surely ensue.

The example of Argentina is there for us as a salutary lesson. At the dawn of the 20th century, Argentina was one of the wealthiest countries on the planet; at the end of the 20th century, it was a stagnant economy, with a continuing risk of losing its grip on democratic, civilian government.

However, there is a way forward for small to medium economies, to a prosperous, fair, sustainable and exciting century of achievement, realising the potential inherent to economies that are participating in a globalised information-based economy.

This is fundamental to the issue of government accountability. The first accountability of government is to enable the creation of the future the people want and expect - and to be seen to be doing so. That means that government must establish, explain and act on explicit strategic objectives.

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