Ten Simple yet Powerful & Practical Solutions for Economic Transformation of a Nation

Prof. Javier Rivero
Instituto de Empresa and Politecnica,University of Madrid

Author of the bestseller FinancialGymnastics.org: 7 habits to improve your economy in 7 days

Many observations are discussed about any economy´s difficulties & its failures, but very little is actually done that really helps people. What you are about to find in this article are real, practical and useful solutions that are going to help to improve any country´s economy. One of the biggest assets that citizens or any economy can have is its sure trust – trust in themselves, trust in others and trust in the people who are entrusted with power to run their country. But unfortunately trust is now one of the most endangered resources available. Many governments have lost it and their economy is a direct a reflection of that fall out.

There is no game in existence, which only some can play and win. Nowadays it is a game where everybody plays. George S. Clason said “our prosperity as a nation depends upon the personal financial prosperity of each of us as individuals.”

My recommendations, the ten principles for financial transformation, can be applied to any government who wants to improve their economy – when applied will improve countries and citizens financial situation.

1. Loyalty to public´s pocket
There are people in the government who steal, demand bribes or take undue advantage of trust bestowed by the citizens, manipulate their privileged positions to access power, to gain benefits that they are not entitled to receive. These officials have lost a key perspective: they are not in the government to fill their pockets and interests. They were elected or nominated to serve the best interests of their citizens and their country.

In these cases this is what needs to happen:
1. The elected official must be fired immediately
2. The elected official ought to pay back any amount that he had aggrandized or received as a kickback
3. The right of this elected official to be a public servant should be revoked, until otherwise overturned by law

2. Restoring Common Sense
Sometimes government decisions are made that lack common sense and embarrassing actions have been taken. For any countries economy to thrive, there are sacred principles – when they are broken, it leads to a dysfunctional economy. There are governments that expend what they do not have on a regular basis and go into a snowball that has a negative impact for that country.

I have seen how governments expend huge amounts of money in projects that are not needed and are not backed up financially by any budget. So they pay with money that they do not have, get in big trouble and lose even more possibly „any remaining trust‟ that few citizens might have kept on them, until that point.

Let´s go back to the basic common sense principle; governments must have more income surplus than expenditures, and operate their activities inside of these budgets, with no exceptions.

3. Transparency will keep you clean
One of the reasons why people do not trust their government‟s is because, there is no transparency – citizens do‟ not know what the government officials do with their money, or how they have used public funds, towards personal goals or activities. This frequently appears in the media as to how government has stolen from the public pockets and that this news has a very negative impact on the community.

One key principle that will improve any governments´ economy, is to be transparent with the use of every penny they have been given authority. When “citizens know where their money is being invested wisely”, they feel more confident in the work that their public officials are delivering. This will be a step forward towards recovering the lost trust.

4. Leading by example, even when you do not want
In recent years, as part of austerity efforts there are governments that have cut public employee salaries or have frozen them. When a radical step like this one happens, everybody expects that this exercise should also be applied to the ones who have been chosen to represent them. The problem arises when the elected officials start holding themselves high above others & actually does not apply the rules to them. This sense of unfairness has had a very negative impact in the community.

Injustice, is one of the most deeply moving feelings that citizens have and can use it as a weapon to lead to a movement – a revolution, in which the entire nation/communities come together to do something against their elected officials – the politicians.

My recommendation here for governments is to lead by example and go even further. If you have impacted in some ways your employees´ economy, the least you can do is show impartiality to your own. For e.g. if people´s salaries have been reduced 2%, the top people at the government should reduce their own pay starting at 2%.

Leading by example is one of the most powerful ways to create justice and community. Words sound good but, examples move people.

5. Empowering different sources of income
Having just one source of income makes the same sense, as putting just a tomato plant in the kitchen garden. It is necessary to have several vegetables in that garden to be able of make a living of it. If the tomato plant gets rotted, you can have cucumbers, or lettuce or any other vegetable that you planted in that garden to eat from. This is not different money wise. Having just one source of income is really dangerous because people can lose their jobs in any second, and then they find themselves not being able to pay their rent, mortgages or food.

Unfortunately there are governments that do not empower people in having different sources of income. They increase taxes rates that demotivate people from having other incomes. In some cases they even do not allow to have that, so that makes people get the money anyway i.e. “under the table”. When the governments lose income and people get accustomed to an illegal way of living, it has negative impacts on both the nation and those people who have taken on manipulating the government system. This adds on to the stress and unhealthy lifestyle to the economy, because now they are afraid of being found out, etc.

I recommend that governments become more willing and empowering in having their citizens create different sources of income to take care of their families and their future.

6. Educating citizens how to fish
Schools teach a lot of things. Most people actually spend 20 years of their lives studying things. Around 40 years of their lives working day in & day out. That‟s around 60 years studying and working to make a living, to make money to be able of sustain themselves and their families. But most of them have difficulties managing their money because in 20 years studying, their schools never thought them how to save or balance money.

This is why the book Financial Gymnastics: 7 habits to improve your economy in 7 days has become quickly a bestseller and its being recommended in schools, colleges, universities. This is because it recommends that young people and ofcourse adult citizens, participate in educating themselves and others how to manage and improve their economies. When the citizen’s economies are healthy, the countries´ economies will be healthy.

My recommendation is that the educational systems start teaching practical classes that are useful for students to take control of their finances. So instead of having them lose, broke or asking for fish, we teach them how to fish.

7. Elimination of Parasites
We all know people take excessive advantage of public services or resources. This maybe someone who is using a disability parking permit from some else, or somebody who is receiving a pension that should not be receiving or an over charged bill to the government and so on.

When this is not addressed appropriately & in timely manner, people who know of these cases, see that as an example – that they can get away free by misappropriation of government funds and also take advantage of resources that are bestowed upon the vulnerable citizens of a nation e.g. veterans, soilders, senior citizens, and disabled. Allowing this kind of parasitic behavior to proliferate has had a toll on thriving economies – the primary cause being abuse of public services and rampant, unchecked corruption in the government.

Putting end to these cases – one step at a time, is what it will take to start showing respect and appreciation to the hard working citizens and restoring trust in the government(s) machinery. A classic example connects to how Mayor Bloomberg of City of New York, transformed N.Y. from being a dangerous to being the most amazing city in the world, that it is today. It started cleaning subway trains and repairing windows. Humans live by imitation. “They see clean, they do clean”. They see respect, they are more likely to respect. As cleaning trains was crucial for a healthy and safe New York, cleaning parasites from the system is crucial for a healthy and safe country.

My recommendation is to start taking this seriously, and get it done promoting behaviors, rather than abusing and taking undue advantage of public resources. It has been studied by researchers, that ‘an attitude of gratitude’ brings respect and appreciation for the fair use of government resources.

8. Pay fast
Companies, who are vendors of the governments, often experience prolonged delays in their payments. There are cases where the vendors go bankrupt because they were not paid on time by a government client. Such acts against vendors have never been a corner stone for any economy and will boomerang at some point.

Around the world millions of vendors lost trust in their governments because they were being paid too
late. This lack of respect is the core of the problem & needs to end. The best practice is to pay vendors on time.

It is necessary to pay vendors at least within the month‟s time of the work´s completion so they can pay to their employees, and their employees can eat, live and pay taxes. All this is connected, so it is crucial to keep the flow running.

9. Empowerment and Trust recovery
The people who are mostly feeding the world are the entrepreneurs, the small and medium size companies. Creating a company takes something, and unfortunately it is taken for granted. I could not find so far any government who send a communication to congratulate the people who create a company when they do that. But it is very easy to find when the communication is about a fine for doing something late or incomplete.

This creates a sense of fear and injustice so many entrepreneurs – who are sustaining their countries – see their governments as their enemies. This implies to avoid paying taxes as much a possible or not at all, using the under the table system, what leads to billions of dollars of lost money for the governments.

The actions that need to be taken about that are:
1. When someone creates a company, send then a communication congratulating them and thanking them for their courage.
2. Let them know that the government is there to support them; not only to take the taxes from them.
3. This will transform the relationship of the business owners with the governments and instead of fear and distrust, will be created a closer collaboration in making their countries a better place.

Many citizens do not believe in their leaders at the government because many of them did not lead or manage a company first. Running a local, state or a federal government it is one of the most complex activities than one can work on. Before running a government, citizens appreciate that those leaders had previous experience running companies, so they really know how things need to work to keep a country sustainable.

From now on, we are going to see how the leaders that are elected in governments are the ones with the most reputation and experience in running companies successfully.

All these principles will bring the trust back within the community and this will have incredible benefits for everybody. The moment of truth is: “When people trust their government everything works better”. Officials running the country will experience an unknown fulfillment because of the population´s recognition. A true sense of leaving a legacy for any Government official is “a healthy economy for the government and their citizens.”

‘Trust is one of the most important things that anybody can achieve. Now is the time to use it well, as a treasure.’

10. Crowd´s power
When you have the citizen‟s trusting in your government, unthinkable things will happen. When they know that you – as a government – is using/investing well their money, your government becomes a hero. You, as a government – can now accomplish things that you could never have accomplished before.

In old days, when communication failed or was avoided, citizens used to look into ways to avoid paying taxes because of the bad examples set by the government. But now things are different, if one of these days you want to create a project that is going to be good for the citizens & for the economy, you will have thousands of people happily donating money/contributing to make that happen. They will see you, the government, as a great ship in which they are happily navigating with you and looking forward to row for the benefit of everybody else.

These 10 practical principles will improve the economy of any country and therefore, the world´s economy. In the era of globalization, the balancing act between capitalism and good governance has become pivotal for an effective government. These ten principles are easy and simple to practice. It just takes one person that is committed in a government to implement these principles, and in return their country is better, than they found it.

My deepest respect, admiration and gratitude to all of you who are going to make that happen. You can count my support and empowerment towards this venture.

Professor Javier Rivero (www.JavierRivero.com) teaches at the Instituto de Empresa and Master in Business Entrepreneurship at the University of Madrid. In 20 years, Rivero-Diaz has trained thousands of people in 30 countries and is a creator of highly effective programs. He is the bestseller author of FinancialGymnastics.org: 7 habits to improve your economy in 7 days.

His twitter handle is www.javierrivero.com/twitter & can be contacted at info@javier.be

Prof. Javier Diaz article on Economic Transformation of a Nation