Dear Colleagues, dear all,

The economic crisis which today shakes the whole world is the greatest challenge facing the globe and each individual state. We are facing a global crisis - economic, energy, ecological, moral and psycho-social aggravated by climate change and demographic transition. No country - and in particular not our country can isolate itself from this global crisis. Moreover, the crisis in some countries probably started even earlier. Some countries are enormously indebted, their products and exports are significantly less than imports and consumption, most of their riches have been sold, the workforce is underemployed (Poland, Croatia and Serbia have very lo employment rate, about 50-58%) and the ratio between pensioners and workers is unsustainable (typically less than 1 vs. 2.5). The majority of socio-economic indicators classify many South East European countries near the bottom of European countries and sometimes even worse than that.

Present crises are interwoven and cannot be approached independently one from another, nor they can be approached only by «old methods» developed for the very slowly changing world, that was not interconnected and not interdependent. This crisis is so deep and so complex that active involvement of all is demanded. Different ideas and full information are required. President B. Obama's approach is an excellent role-model for the politics necessary for the contemporary world: leadership by ideas, by openness, without arrogance of power, constantly keeping in touch with all ideas, needs and wishes of all citizens. We will achieve progress only together by all of us being active. This is the essence of social cohesion. There is no magic, simple solution. Indeed, likely solutions will be different for different countries (to paraphrase Tolstoy's Ana Karenina that unhappy families are unhappy in their specific way).

Neither the world nor any individual country has prepared for these crises, and of course, it is unable to prevent them. Approach to these crises demands competent political action - without lies, without Potemkin's facades and without deceiving citizens by pleasing parochial interests. Approach to solutions requires vision, open-heartedness, intellect, authenticity, thoughts and heart. It requires the inclusion of scientists of all disciplines, entrepreneurs, businesspersons, consumers and producers and politicians, both in a personal capacity and institutionally. These crises are global and it is natural that on behalf of The World Academy of Art and Science and its South-East European Division (including fellows - scientists, artists, entrepreneurs and politicians from all countries from Italy and Austria to Greece and Turkey) I

INVITE YOU ALL

to participate in discussions/project that The World Academy together with you wants to organize under the title

FROM CRISIS TO ECONOMIC DEVELOPMENT AND SOCIAL COHESION

first using this web site and then in a sequence of round tables and an international conference.

We emphasize social cohesion. The European Union also stresses social cohesion within each member state and among them and channels its funding so as to strengthen social cohesion. Croatia, Bosnia & Herzegovina, Serbia, Montenegro, Macedonia, Albania and Turkey desire to become members of the European Union. Economic inequalities, particularly inequalities among salaries undermine social cohesion. Plato argued that harmonic society demands that the ratio between the highest and lowest income does not surpass 5:1 and even J.P. Morgan argued for 20:1. Today these ratios, even in South East European countries are larger than 100:1. Economic inequalities within countries increased since 1990, i.e. before this global crisis, so it is possible that these inequalities accelerated this crisis, since special privileges of CEO were not connected with the successful operation of their firms. From 1990 to 2005 two thirds of the countries showed increasing inequalities (Increasing GINI indices and increasing ratios among the wealthiest 10% and poorest 10% of the population of a given country). If it reflects innovation and hard and creative work the inequalities could be an engine of economic growth, of development and wealth creation, but if this is not so, and notably if the inequalities are extremely large, then the inequalities are dangerous for social stability and they suppress economic efficiency. Analyses showed that large inequalities result in increasing crime rate, in increasing corruption, increasing macro-economic instabilities and in lower life expectancy. Life expectancy in 10% of the countries with least inequalities is 77.4 year compared to only 60 years in 10% of the countries with largest inequalities. It is sometimes argued that large inequalities are caused by low productivity, but data show that the productivity increased from 1990 to 2006 more than workers salaries. Studies in 23 countries during 1989-2004 showed that inequalities are less and less accepted.

Unfortunately, facing complex crisis we might be tempted to try to solve it by fire-fighting approaches, which can themselves be contradictory one with another. Since we do not fully understand all the aspect of this crisis, we might decide, sometimes prompted by other reasons also, not to act. Not to act is a grave sin of omission! We must act! It seems to me that a good approach how to act can be facilitated if we all agree on some basic principles - postulates and assess all our proposals, initiatives and actions according to them. Here are three basic principles, which I hope are a coherent and sufficient set:

1) Any plan must satisfy short-term needs: avoiding an economic catastrophe, recession, deflation and inflation, maintaining and improving employment levels, securing stable energy supplies, and reducing the effects of climate change. At the same time it must be strategic and sustainable in order to ensure that the crisis is transformed into an opportunity. (This is identical to the Action plan of the European Commission of November 26, 008 and December 16, 2008 (COM(2008) 800 final) which emphasizes employment, R&D, innovation, education, need for clean technologies, energy interconnection and efficiency, fast internet and reduction of administrative burden to entrepreneurship. EU Plan is based on solidarity and social cohesion.)

2) „People are the true wealth of every state. The fundamental goal of development is to increase the freedom of every human being so that they can live successful and creative lives“ (The State of Human Development, Human development indicators, 2004, p 127, UNDP). Our objective is to ensure that everyone is active and happy, and that we live in a society based on social justice, social cohesion, and a healthy environment for sustainable development. In a knowledge-based society human beings are the generators and keeper of knowledge and therefore a true wealth of nations.

3) A global world is inter-related and inter-dependent. Nevertheless, each state must find its own solution, which must be based on its own contemporary specificities and therefore, the primary task should be your own country: However, in a global world no action, no matter how useful it may appears for a country, should be undertaken if it threatens others.

Many countries in South East Europe are small, but it should not be forgotten that almost half the member states of the United Nations have less than 5 million inhabitants. The model of a small boat in a turbulent sea threatened by large waves caused by large boats can be embellished with the fact that the great ecological catastrophe almost 100 million years ago destroyed the dinosaurs - „the great leaders of the world“ - and saved and strengthened mammals - relatively small creatures.

The Chinese 'crisis' is represented as a combination of two symbols, one meaning 'danger' and the other 'opportunity'. It is important that we understand this crisis as an opportunity, a chance! We have all faced many threats and dangers and we have overcome. We can do this again now.

Zagreb, March 11, 2009

Ivo Šlaus

Director, South East European Division

of The World Academy of Art and Science