Hausmann & Soros

 My relationship with George Soros

Great evils are not done by people who believe they do evil, but by people who act on the world with a wrong conception of it. In his book “On Tyranny,” Yale University professor Timothy Snyder describes the role the “Big Lies” play in this. The rise of Nazism in Germany was based on the Big Lie of what was called “The Stab in the Back,” the idea that Germany had not lost World War I on the battlefield but had been betrayed by some political leaders at the service of an international conspiracy in which the Jews played a central role. To believe this great lie, you had to stop believing in a great set of real and verifiable facts that contradicted that Great Lie. For this, it was necessary to deny objective reality, deny what the free press said, and deny the right of those who disagree. And from there came the justification for the anti-Semitism that ended in the Holocaust.

We have just seen the logic of the Big Lie in the recent elections in the United States. The idea that President Trump won the election by a landslide but was robbed of victory by a conspiracy is another of these Big Lies. To believe in it, it is necessary to stop believing in the governors and legislatures controlled by the Republican Party that certified the election, in the Department of Justice and the Department of Homeland Security that found no evidence of fraud, in the more than 50 judges who decided against Trump’s demands, including the Supreme Court, and in the media which supposedly, as the president has repeated for 4 years, are the enemies of the people. But given their belief in a massive conspiracy to steal the vote, his followers committed crimes with what they believed to be their best intentions, such as, for example, taking the Capitol in Washington, DC. on January 6. They were simply back in 1776.

Right now, an equivalent lie is circulating that has to do with an alleged evil worldwide conspiracy led by George Soros, through his Open Society Foundations (OSF). As the research team that I founded in 2006 and that I still lead – the Harvard Growth Lab – has received grants from OSF, I am supposed to be part of this false conspiracy.

This alleged conspiracy is one of those Big Lies. Anyone who wants to find out about what OSF does can start by checking their website. The name of the organization comes from the title of one of Karl Popper’s books – The Open Society and Its Enemies. Popper was Soros’s professor in the 1950s at the London School of Economics. His book argues that truth is something that emerges from the confrontation of ideas in society and that, therefore, it is important that societies be open and have the ability to debate different points of view. OSF made its debut in South Africa helping groups organizing against Apartheid and later focused on Eastern Europe, helping civil society organizations trying to organize against totalitarianism. Currently, the organization awards $ 1.2 billion a year in grants, primarily to civil society organizations around the world. Throughout its history, it has awarded more than 50,000 grants.

The relationship between OSF and the Growth Lab dates back to 2013. In July of that year, Edi Rama won the parliamentary elections and was appointed Prime Minister of Albania, in a campaign in which he associated incumbent prime minister Sali Berisha with the authoritarianism of Hugo Chávez. Rama, a visual artist and leader of the student movement who suffered an assassination attempt that left him with a broken skull, had later become famous as mayor of Tirana, the capital of Albania, for his artistic way of re-imagining and transforming the city. Because of his success, Rama was invited to present his vision to the prestigious TED conferences. His management of the city led him to become the leader of the opposition and to defeat Berisha in 2013.

A few days after the election, Christopher Stone – then president of the Open Society Foundations (OSF) – went to speak with Rama to ask how they could help him. In the meeting with Stone, Edi Rama asked him to get me involved in helping his government in its economic recovery. I did not know Rama, but some of his collaborators had seen me give a lecture in Athens in 2010 and thought that I could help his country.

Driving to the airport after the meeting with Rama in which they evaluated how Open Society could help him, Stone called me to ask me to go to Albania to explore the options.

Stone knew me well, not only because we were both colleagues at Harvard Kennedy School for many years, but also because we worked together on two Growth Lab projects. The first was in South Africa, where I led a project between 2004 and 2009 and I asked Stone to work on crime and security. The second was a small project in Venezuela to help the new governments of the Capital District and Miranda State and the Caracas municipal governments of Sucre, Baruta and El Hatillo, elected in 2010. Therefore, Stone knew well how the Growth Lab works.

Together with a team from the Growth Lab, I visited Albania in August 2013 for a couple of weeks in which we made a diagnosis of the situation. The country faced 3 potential crises: first, a macro / fiscal crisis given that the government had a large and growing deficit that was being financed with arrears. Second, the country faced a potential banking crisis with a very high and growing non-performing loan portfolio in banks. Third, the country was facing an energy crisis, given the catastrophic operational and financial performance of the electricity distribution company. With my team, we designed a technical assistance program to be financed by OSF. I am very proud of the achievements of this widely documented project. We managed to solve those three problems and put the economy on a growth path, despite the difficulties that Europe was going through at that time.

In 2015, the feeling at OSF was that the Albania project was being very successful. Surprisingly and in parallel, Ranil Wickremesinghe was elected Prime Minister of Sri Lanka, after the defeat suffered by Mahinda Rajapaksa, the Sinhalese nationalist leader, with strong authoritarian tendencies and with great intolerance towards the Tamil minority. OSF contacted us again and asked the Growth Lab for a project for the new government of Sri Lanka similar to that of Albania. It was the end of 2015 and parliamentary elections were coming in Venezuela, which the opposition could win, as it effectively did. I told the Foundation that the Growth Lab would do the Sri Lanka project if they financed a similar project for Venezuela. OSF accepted this condition. Thus began the Harvard project on Venezuela.

OSF financing for Venezuela allowed the Growth Lab to create a team that started working in early 2016 in analyzing the Venezuelan economy and design a recovery strategy. It also allowed us to contract a group of studies with the best Venezuelan economists in Venezuela and the world. We organized several seminars at Harvard, including a 4-day conference at the end of September 2018, which gave rise to Plan País, the plan eventually accepted by the National Assembly and President Juan Guaidó in 2019.

While we were running these projects in 2017, the civil war in Syria had caused a major refugee crisis that had destabilized politics in Europe. OSF was helping the Government of Jordan to develop the capacity to absorb the Syrian refugees. Within this effort, OSF asked me to do another “Albania-type” project but for the Government of Jordan. In return, I asked him for financial support to institutionally strengthen the Growth Lab so that it could strengthen its more academic research projects. They accepted. The Growth Lab project in Jordan helped that country redefine its development strategy and present it to the international community, which the government believes was successful. For this reason, the Growth Lab’s relationship with Jordan continues, but it has been funded since 2020 by the US government through its Agency for International Development (USAID).

Although the support of OSF has been important in the growth and development process of the Growth Lab, in recent years our portfolio of sponsors has expanded significantly, directly including national and regional governments that support our research, multilateral and international aid organizations, and philanthropic foundations that seek to promote development in harmony with environmental balance. As a consequence, OSF’s participation within the pool of sponsors that fund our team of more than 50 people has become marginal.

I am extremely grateful to George Soros and OSF for the opportunity to work in Albania, Sri Lanka and Jordan, for the support received for our efforts in Venezuela and for what we have been able to do in basic research. I believe that we not only contributed good ideas to the governments of these countries. Codifying these learnings in publications has extended these benefits to the academic world and to students and practitioners of policy makers interested in solving growth challenges in developing countries.

All projects were supervised by Harvard University. I also want to clarify the following: the funding of OSF went directly to the University. My salary is paid by the Harvard Kennedy School and my position does not depend on the relationship with OSF at all. These resources have allowed the Growth Lab to hire the work teams that executed these projects. These people have developed intellectually thanks to these experiences, which today makes them better professionals. At no time did OSF interfere in any way with the substance of the Growth Lab’s work. It did not attempt to influence in any way the policies we help design and implement. Nor did they ask us to share confidential information with them that governments had entrusted to us. After more than 7 years of relationship, I have the best opinion of OSF and I believe that it is dedicated to being useful to civil society, with special emphasis on helping those who fight for freedom in countries trying to recover from totalitarian regimes of left and right.

The most absurd thing accusation against Soros made by Venezuelans who support Trump, is to suppose that, if Soros opposes Trump, he must be in favor of Maduro. Nothing is further from reality. Maduro represents the opposite of an open society. For this reason, OSF has supported and continues to strongly support Venezuelan civil society organizations that defend human rights, that try to inform, to fight against corruption and abuse, that are dedicated to attacking hunger and poverty and that work to turn Venezuela into a free society. That is reality, a reality like all realities: absolutely incompatible with the Big Lie.

Miami 16 de diciembre de 2023