What if the wealth we so generously distributed today were to disappear suddenly tomorrow?
Let us begin with a bit of history.
The history of our country was shaped by three phases of economic development. Luxembourg was an agrarian state until the 19th century. Due to the unforgiving climate and the low fertility of the land, most of its inhabitants were poor farmers whose activity brought them barely enough to allow them to be self-sufficient.
Emigration was the only solution for a large number of families. The discovery of iron ore deposits in the south changed everything. They allowed the country to engage in its own industrial revolution. Aided by foreign investment and a foreign workforce, the economy developed to become one of the most performing industrial centres in the world. The rise and development of the steel industry under Luxembourg control and management guaranteed jobs and prosperity to the population. In the space of a few decades, Luxembourg was transformed into a land of immigration, a tendency still valid today. Considering that a large majority of the population worked in the same sector, there was a common interest that was shared by all the actors. It was easy to establish the link between work, growth and prosperity because everyone contributed.
Things have changed a lot since. After the decline of the steel industry, the economy was oriented towards services. The Luxembourg financial centre became renowned around the world, bringing the country affluence and wealth never seen before. The prosperity we know today is based on the revenues coming from the financial sector. Luxembourg remains an interesting place to invest and has a lot going for it. Its population, multilingual and open to other cultures, makes the country interesting when viewed from abroad. The pragmatic attitude and the reliability of decision makers, coupled with the stability of the political system, make the country attractive to investors. These are precious assets and we must cherish them.
However, as opposed to our industrial era, we are no longer sole masters of our destiny and of our economic evolution. Our openness is our greatest strength, but also our greatest weakness. The capital invested in Luxembourg is foreign. Prices and market conditions are determined on international markets. Decision makers and business leaders are often foreigners and rarely residents. Decisions taken by international conglomerates are taken outside of our territory. In an increasingly globalised market, competition is fierce and the few advantages we have weigh very little in the balance. Our situation is alarming. The parameters which our prosperity is built upon are fragile and increasingly under threat. The wealth we distribute today could suddenly disappear tomorrow. However, this reality is not shared by everyone. A large part of the population no longer takes part in the creation of our wealth. They no longer understand how wealth is generated and how the economy functions, which has become very complex. This alienation explains the feeling of uncertainty omnipresent among the population which aliments its desire for security and protection of its achievements and prerogatives. A cleavage has appeared between these two separate worlds.
The political Luxembourg is the cause as well as the reflection of that reality. Its origin lies in the electoral system. In a population of over 500,000 we count 280,000 Luxembourg nationals, about 225,000 of whom are voters. Amongst them, around 60,000 are employed by the State, municipalities, other public sector structures or protected sectors. It is totally normal that the interest of these voters and their families is oriented towards a protection of their “acquis”. However, the situation becomes critical when the means necessary to finance them are generated by an economy to which they only contribute very little.
This situation is not a fatality and must change. In order to make the country progress, we must shut the cleavage between the political and the economic Luxembourg. We must merge these two realities into a common project. In order to achieve that, our country has to change. Luxembourg nationals must again be integrated into the economic realm and contribute to the wealth of the country. Our social model based on redistribution and security must change and adapt to more realistic and achievable growth prospects. The economic landscape of the country cannot remain static. In order to make it more attractive and stable, new activities have to be developed. Our redistribution policy must become more sustainable. We must think about the next generations and establish reserves for less prosperous times ahead.
These changes are essential, even vital if we want to guarantee the prosperity of our country in the future. In order to achieve them, we, citizens, need to change our mentality. With a population that is ready to call itself into question, to accept change, everything is possible.