The Worst Solution

The Malta Independent

The Worst Solution

Recent pronouncement about the imminent privatisation of the Public Lotto, Freeport, MIA and others offers prospect of` the worst solution to our economic problems.

Not that I have anything against` the principle of privatisation. I am against the adoption of privatisation for the generation of extraordinary funds to plug the budgetary hole for a temporary period until privatisation revenues run off.

Such announcement becomes particularly painful when it co-incides with news from the money destruction machine on the expenditure side of public finances.

Malta Drydocks and Malta Shipbuilding we are told are nowhere near being turned round. Without entering into the merits of the discharge of the CEO our shipyards` problem takes much more than one dismissal to address. Certainly the supposed merger between these two loss-makers is no solution either.` A big problem is best addressed by being broken down into a number of smaller manageable problems rather than being merged with a bigger one to form a problem of titanic proportions.

The only sensible argument I ever got from our shipyards as to why they expect to continue being favoured by subsidies from hard earned tax money is that they work harder and in much worse conditions than public sector employees. So if there is money for the latter there should be money for them.

Can`t fault such reasoning especially when we are regaled with a week long bash explaining how effective and efficient our public sector has become. Little matter that a court notice filed on the 18th May was delivered on the 8th of June demanding that I appear in court on the 9th of June! Quality charter my foot!

So we keep sending hard earned money down this big black hole and because we have to bring down our deficit to Brussels liking and` we can`t keep on borrowing we go for the next most easy solution. Sell all the assets, keep everybody happy for some more time and God helps whoever follows.

Privatisation makes sense when it adds value. It should therefore be applied primarily as an important tool in re-structuring our inefficient sectors by turning them round and inducing new rules of the game.

Where privatisation just brings a change of ownership without any value-added then it is just a wasteful financing exercise. We have had enough of this in the Mid-Med case now that by HSBC`s own admission the supposed value added of attracting international business is a mere pie in the sky.

Alfred Mifsud