Arrogance for argument

The Malta Independent on Sunday

Arrogance for argument

When politicians run out of arguments to defend their position they tend to replace it with arrogance.` As this administration cruises with fatigue towards its mid-point it is showing abundance of arrogance and scarcity of argument.

These are the` characteristics of the first part of this :

q











EU accession process q











Increased impact of taxation through new measures and enforcement of existing ones. q











Privatisation programme and its effects on the capital markets q











Economic stagnation.

Under each and every aspect government`s position is supported by arrogance rather than argument.

EU Accession

The main thesis underpinning government`s policy for EU membership is not that it is the best solution but that it is the only solution.` So rather than explain the overall net merits of EU membership, such an important subject with consequences far beyond the limits of government`s electoral mandate, is sustained by denigrating the Opposition`s policy of special Swiss style contractual relationship with the EU.

Government`s sole argument for EU membership is TINA (There Is No Alternative).` What Switzerland, Norway and Iceland have chosen to be their model for their relationship with the EU is not even worth considering.` For the government, Switzerland, Norway and Iceland are much less European than Ireland and Sweden.

My request for MIC funding to Super One TV to present factual information about the choices made by Switzerland Norway and Iceland gets` refused for reason that it does not form part of the terms of reference which are strictly within the parameters of EU membership.

Arrogance dictates that Malta should be all for EU membership not because it is a smart choice but because it is a no choice. Other options are` conveniently brushed aside.` Old age wisdom, repeated in Dr Tabone`s biography, of keeping options open is unfashionable for those who see EU membership as a personable objective rather than a national choice.

Taxation

Taxation has certainly been the hallmark of the first half of this administration.` Taxation has a dual purpose. It is necessary to finance the functioning of government. It is also an important element of fiscal policy as one of the most effective macro-economic tools.

Government is using taxation merely as a funding exercise. The role of taxation as a macro-economic tool has been totally forgotten.`

A fiscal deficit of horrendous proportions architectured by those who denied its existence a mere 30 months ago is constraining our economic managers to slap ill-thought fiscal discipline on a fragile economy.

But rather than admit that their own past mistakes of the `money no problem` culture are rendering current hard measures unavoidable, arrogance stimulates government to sing praises to fiscal discipline without making any serious attempt to address the expenditure side of the budget equation.

Privatisation and Capital Markets

The only privatisation item handled so far was that of the fire-sale of Mid-Med Bank. This has been a model of how not to privatise.` It was widely criticised for the method chosen, for the price obtained and for the strategic implication of making Malta the only sovereign country where half of its banking industry is controlled by a single foreign institution.

This privatisation did however help to expose the true value of Maltese equities which were seriously undervalued on the Stock Exchange` due to the illiquidity of the capital markets.` `Rather than` rejoice for this indirect benefit, the capital market explosion increased government blushes as it helped to quantify in clear numeric terms the opportunity cost of the Mid-Med firesale.

As if for spite administrative measures ( sale of Middle Sea shares at much below market price)` and fiscal measures ( tax on collective investment schemes) are devised with the aim of puncturing the Stock Market values which were well on their way to an orderly price correction and needed no external help to achieve a crisis driven value destruction.

Hereagain rather than admit mistakes, mis-judgements and imprudent behaviour the administration continues to ferment its arrogance depicting itself above all criticism and labelling critics as stupid morons.

Economic Stagnation

Yet the chickens finally come home to roost though economic leads and lags may obscure the correlation between cause and effect. But enough economic indicators are emerging which point to clear economic stagnation. Sharp deterioration in the balance of payments, loss of foreign exchange reserves by the Central Bank, meltdown on the capital markets,` contraction of the tourism sector, uncertainty in the domestically oriented industry, lack of any significant direct foreign investment, all these indicators point to one direction.

Arrogance can never be a substitute for argument. Much less can it underpin the national effort across political frontiers which is needed to overcome the structural economic problems which nationalist administrations running this country for the last 168 months, bar 22, must take clear responsibility for.

Arrogance for argument

The Malta Independent on Sunday

Arrogance for argument

When politicians run out of arguments to defend their position they tend to replace it with arrogance.` As this administration cruises with fatigue towards its mid-point it is showing abundance of arrogance and scarcity of argument.

These are the` characteristics of the first part of this :

q











EU accession process q











Increased impact of taxation through new measures and enforcement of existing ones. q











Privatisation programme and its effects on the capital markets q











Economic stagnation.

Under each and every aspect government`s position is supported by arrogance rather than argument.

EU Accession

The main thesis underpinning government`s policy for EU membership is not that it is the best solution but that it is the only solution.` So rather than explain the overall net merits of EU membership, such an important subject with consequences far beyond the limits of government`s electoral mandate, is sustained by denigrating the Opposition`s policy of special Swiss style contractual relationship with the EU.

Government`s sole argument for EU membership is TINA (There Is No Alternative).` What Switzerland, Norway and Iceland have chosen to be their model for their relationship with the EU is not even worth considering.` For the government, Switzerland, Norway and Iceland are much less European than Ireland and Sweden.

My request for MIC funding to Super One TV to present factual information about the choices made by Switzerland Norway and Iceland gets` refused for reason that it does not form part of the terms of reference which are strictly within the parameters of EU membership.

Arrogance dictates that Malta should be all for EU membership not because it is a smart choice but because it is a no choice. Other options are` conveniently brushed aside.` Old age wisdom, repeated in Dr Tabone`s biography, of keeping options open is unfashionable for those who see EU membership as a personable objective rather than a national choice.

Taxation

Taxation has certainly been the hallmark of the first half of this administration.` Taxation has a dual purpose. It is necessary to finance the functioning of government. It is also an important element of fiscal policy as one of the most effective macro-economic tools.

Government is using taxation merely as a funding exercise. The role of taxation as a macro-economic tool has been totally forgotten.`

A fiscal deficit of horrendous proportions architectured by those who denied its existence a mere 30 months ago is constraining our economic managers to slap ill-thought fiscal discipline on a fragile economy.

But rather than admit that their own past mistakes of the `money no problem` culture are rendering current hard measures unavoidable, arrogance stimulates government to sing praises to fiscal discipline without making any serious attempt to address the expenditure side of the budget equation.

Privatisation and Capital Markets

The only privatisation item handled so far was that of the fire-sale of Mid-Med Bank. This has been a model of how not to privatise.` It was widely criticised for the method chosen, for the price obtained and for the strategic implication of making Malta the only sovereign country where half of its banking industry is controlled by a single foreign institution.

This privatisation did however help to expose the true value of Maltese equities which were seriously undervalued on the Stock Exchange` due to the illiquidity of the capital markets.` `Rather than` rejoice for this indirect benefit, the capital market explosion increased government blushes as it helped to quantify in clear numeric terms the opportunity cost of the Mid-Med firesale.

As if for spite administrative measures ( sale of Middle Sea shares at much below market price)` and fiscal measures ( tax on collective investment schemes) are devised with the aim of puncturing the Stock Market values which were well on their way to an orderly price correction and needed no external help to achieve a crisis driven value destruction.

Hereagain rather than admit mistakes, mis-judgements and imprudent behaviour the administration continues to ferment its arrogance depicting itself above all criticism and labelling critics as stupid morons.

Economic Stagnation

Yet the chickens finally come home to roost though economic leads and lags may obscure the correlation between cause and effect. But enough economic indicators are emerging which point to clear economic stagnation. Sharp deterioration in the balance of payments, loss of foreign exchange reserves by the Central Bank, meltdown on the capital markets,` contraction of the tourism sector, uncertainty in the domestically oriented industry, lack of any significant direct foreign investment, all these indicators point to one direction.

Arrogance can never be a substitute for argument. Much less can it underpin the national effort across political frontiers which is needed to overcome the structural economic problems which nationalist administrations running this country for the last 168 months, bar 22, must take clear responsibility for.

Inizjattiva u Wens

Il-Kullhadd Inazjattiva u Wens

Din hija t-tema tal-Konferenza Generali tal-partit Laburista li tigi fi tmiema llum bid-diskors tal-Leader.` Tema li fis-semplicita` taghha turi ghala il-politika laburista ghal pajjizna hija differenti minn ta` haddiehor u hija ahjar minn ta` haddiehor.

Inazjattivi tfisser li l-partit laburista miexi fit-triq tal-progress ta` partiti socjal- demokratici ewropej. Dawn` ma ghandhomx jaghrfu` li l-istat irid ikunu huwa li jiehu l-inizjattiva ekonomika dominanti` izda li l-objettiv principali ta` l-istat huwa li johloq l-ahjar ambjent biex jinkoragixxi lis-settur privat jiehu dawn l-injattivi ta` investiment.

Din hija xi haga li fiha in-nazzjonalisti qed jizgarraw bl-ilkrah. Flok qed joholqu ambjent tajjeb biex jinkoragixxu l-investiment qedin bit-taxxi bla hsieb li qed idahhlu johonqu l-attivita` ekonomika, jiskoraggixxu l-investiment f`pajjizna u minflok jinkoraggixxu il-harba tal-kapital minn pajjizna. Bizzejjed tharsu lejn x`qed jigri fil-Borza ta` Malta biex` taraw kemm hu minnu dan.

Il-partit laburista irid li johloq ambjent fejn jinkoraggixxi lis-settur privat jinvesti f`pajjizna halli jkun huwa il-mutur ta` l-ekonomija u jgib tkabbir ekonomiku gholi u sostenibbli ibbazat fuq il-produzzjoni u l-esportazzjoni aktar milli fuq il-konsum.

Dan isir billi l-gvern jaghraf il-vantaggi u l-izvantaggi ta` pajjizna u jzomm flessibilita li mhix` permessa taht ir-regoli ta` l-UE.` Flessibilita li tippermettilna` noffru proposta ahjar minn ta` pajjizi ohra kemm fis-settur tal-manifattura kif ukoll fis-settur tat-turizmu u s-servizzi finanzjarji.

Isir billi jimbarka fuq programm car u serju ta` privatizzazzjoni halli johloq kemm jista jkun spazju ghall-inizjattiva privata bla ma jinholqu monopolji privati li jkunu ta` dannu ghal konsumatur.

Isir billi jinvesti fi skemi estensivi ta` tahrig kontinwu anke lil min ga mpjegat halli jkattar il-mobilita` fl-impjiegi,` specjalment mis-settur pubbliku fejn hemm nies zejda ghas-settur privat li qed jitlob nies mharrga li ma jinstabux fil-livell mehtieg. B`hekk flok ninkwetaw li ghandna ST Thomson kbira wisq u niddependu hafna fuqha ikollna tnejn tlieta jew erbgha fabbriki bhal ST Thomson halli joholqu aktar xoghol u jnaqqsu id-dipendenza fuq isem wiehed.

Izda l-inizjattiva wehdiha mhux bizzejjed. Wahediha l-inizjattiva iggib gungla socjali. U hawn tidhol il-parti l-ohra tal-wens.` Gvern laburista irid jizgura li l-gid li jinholoq bl-inizjattiva jigi mqassam b`sens socjali li jaghti wens li min verament ghandu bzonnu fis-socjeta`, lil min ma jistax jithalla jaqdef ghal rasu.

Il-wens ikun ippernjat fuq il-bzonnijiet bazici tal-bniedem, it-taghlim, is-sahha, ix-xoghol, u s-servizzi socjali.

Il-wens ma ghandux ihalli lok ghal abbuz ta` min irid jiehu dak li mhux tieghu jew irid jighazzen. Il-wens irid mhux biss jghin finanzjarjament izda jwassal ghal soluzzjoni permanenti, kull fejn huwa possibbli, biex il-bniedem jigi mghejjun u mghallem jghin lilu nnifsu. Ghalhekk l-istat irid jizgura li l-iskejjel tieghu ikun fost l-aqwa fil-pajjiz.` Li l-universita tibqa` miftuha anke ghal min ma jistax ihallas. Li min jitelf ix-xoghol mhux biss jinghata ghajnuna finanzjarja izda jinghata tahrig ha jghinu jsib ix-xoghol. Li jinholqu day care centers ghat tfal halli jitkattar il-partecipazzjoni tan-nisa fis-suq tax-xoghol anke ta` dawk li huma single parent.` Li l-isptarijiet tal-gvern jaghtu kura bazici dicenti, effittiva u efficjenti lil min ma jistax ihallas.` Li min ma ghandux fejn joqghod jinghata akkomodazzjoni socjali li tirrispetta n-necessitajiet bazici tal-bniedem.` U min huwa zvantaggat fis-socjeta ghax emarginat jew ghandu bzonnijiet socjali l-istat ikun hanin mieghu u jghinu biex itaffi t-tbatija, kemm jista` jkun id f`id mal-moviment tal-volontarjat u mal-knisja.

Dan il-bilanc delikat bejn inizjattiva u wens huwa r-ricetta li tghamilna socjal demokratici addattati ghas-seklu wiehed u ghoxrin. Nuru li ghandna soluzzjonijiet ghal-problemi tas-socjeta` li haddiehor qed johloq jew ikattar. Nuru li ahna nkunu gevrn hanin tal-maltin u l-ghadwin kollha u li maghna hemm spazju ghal kullhadd.` Izda li f`gieh il-haqq u s-sewwa qabel ma nkunu gvern ta` kullhadd irridu naghtu lill-laburisti dak li gie michud lilhom b`abbuz u b`diskrimazzjoni ghax inkella il-laburisti jibqghu dejjem minn taht.` L-ewwel ingibu il-laburisti ndaqs u mbaghad inkunu gvern hanin ghal-maltin u l-ghawdxin kollha waqt li noffru spazju ghall-aktar inizjattiva popssibbli lis-settur privat u wens lil min verament jehtiegu.

Operation self-destruct

The Malta Independent

Operation self-destruct

Destruction seems to be the name of the game. A lethargic administration that keeps shooting new measures from the hip without proper forward thinking regarding the consequences of its decisions,` is succeeding well to destroy business confidence, investor confidence and the personal confidence regarding the future.

The source of these problems is the chronic public fiscal deficit; a deficit of monstrous proportions, the existence of which was` negated by this administration when it was in Opposition a short 30 months ago. The inevitability of addressing` the deficit is forcing the government to slap onto the economy measures totally out of sync with its tempo. If` the fiscal position was not as acute as it is,` the economy would merit` stimuli not tax reining in. But the need to address the deficit is forcing government into the economic displeasure of imposing taxes on a fragile economy.

Measures meticulously planned whilst launching the 1994 financial services legislation with the rare agreement of the whole House of Representatives get unilaterally dismantled without as much as a pseudo consultation. Fiscal incentives to channel funds into Collective Investment Schemes locally regulated and listed which helped in no small way to repatriate exported capital get dismantled with worrying consequences. The investment flows have turned sharply negative and Maltese capital markets, already sombre under a needed but orderly market correction, slide into a value melt-down.

The destruction mode the administration finds itself in gives it enough cheek` to smile at this confusion mistaking a totally avoidable melt-down for a healthy market correction. How can anyone mistake a torrential` October storm for an April shower` Has the administration become so engulfed with its EU obsession and with the need to raise taxes faster than its insatiable appetite for more spending, that it is so insensitive to what is happening around us`

I have to` suspect so, seeing this administration determined to hold an EU referendum which I equate to` embarkation on a one-way train speeding towards self-destruction.` A referendum on this side of the election regarding EU membership is likely to lead to a negative vote probably for the wrong reasons influenced as the electorate is by the sombre` economic environment.

A no-vote for whatever reason is likely to destroy not only this government but also Malta`s chances of making` a smart choice after the next election.` This important choice needs distinct separation from our economic problems and should be taken with the benefit of an election result which ought to bring more congruence of thought on this issue between our main political schools.` This decision cannot be taken with the country divided right down the middle.

Must we continue on` operation self-destruct`

Meltdown

The Times of Malta



What has happened to the value of local equity securities since the beginning of the year is nothing but a value meltdown. The question which everybody is asking but few have the courage to answer,` is why is this happening, why is it happening now and could it have been avoided at all.

I seek to answer these questions in a non technical straightforward manner which I can corroborate with more detailed technical workings as necessary.

The most obvious question is, why is this happening` Some people who ought to know better have termed this as an unavoidable and overdue market correction.` I challenge this assertion most emphatically. Some background to this is necessary. The market had exploded in 1999 and a lot of hidden value which had accumulated over several years was exposed in the calendar year 1999 sparked firstly by the buy-back proposal of Mid-Med Bank and eventually by the takeover of Mid-Med by HSBC.

As often happens in such matters the price explosion was overdone and many people who entered the market in the year 2000 were disappointed by the end of last year that they suffered a loss rather than the growth they hoped for.` This was indeed a healthy and much needed market correction taking place in an orderly manner and teaching a salutary lesson to novice investors that share investment is not a guaranteed one `way road to riches.

So why has an orderly price correction taking place throughout most of the year 2000 suddenly turned into a meltdown in the first weeks of 2001` Why is this happening now`

I can trace two main reasons for this sudden melt-down and they both originate from our Ministry of Finance with the tacit collaboration of the Council of the Malta Stock Exchange.

The first relates to an offer which the Gvovernment made to shareholders of Mid-Med Bank on the register on 5thApril 1999 to buy some 860,000 shares of Middle Sea Insurance which the government bought from Mid-Med Bank in June 1999 prior to its take-over by HSBC.` These shares were offered at Lm2.28 when the traded market price of` shares on the Exchange was at the time of announcement Lm4.06 having come down in an orderly market correction from a high price of Lm5.

The inevitable here happened. No equity can be sold in the market at two different prices. The Malta Stock Exchange should never have allowed this no matter how much the government would turn red in the face by not honouring a pledge made in June 1999. Timing is essential and if the government wanted to offer these shares it should have done so immediately upon acquisition in June 1999 in order to avoid these monstrous market distortions.

The result was all too obvious to forsee. Middle Sea shares have stumbled some 36% from Lm4.06 it was trading at on announcement day and will stabilise at a price not far above the Lm2.28 with which the government has distorted the market.

In a small and unsophisticated market like ours confusion in one equity is contagious and quickly rubs onto other equities even without a valid reason.` But if there is a valid reason it rubs on far quicker. And there is certainly a valid reason.

Without much explanation the government announced in the Budget that it will extend the withholding tax concept applicable on bank deposits onto investment funds. Now this question of withholding tax on investment funds is still being considered by the EU for implementation in 2003. It is much more complicated that the fairly easy to administer tax at source on interest on bank deposits and its complication is compounded when the declared intention is to maintain capital gains exemption of equities and funds dealing in equities.

The problem is that many collective investment schemes do not deal only in equities. They invest in a mixture of debt and equity securities and applying the withholding tax concept on such fund is quite complicated. The confusion created by the Middle Sea saga was compounded by this uncertainty at a time when exchange control limit for foreign investment was increased on 1st January 2001 to Lm30,000.` As soon as a new annual quota for foreign investment came due on the first day of the real new millenium the melt-down began and` has seemingly become unstoppable.

Investors rushed out of funds for fear of being hit with the withholding tax and forced fund managers to dump equities on a dull illiquid market. The result is there for all to see.

Could it have been avoided` Most definitely.` Indeed it should have never happened.` The Middle Sea affair is a disgusting case of mismanagement by the Ministry of Finance and inertia by the Malta Stock Exchange. It would not have happened on any other seriously regulated market. The withholding tax extension to investment funds is a half-baked measure which has been announced without much fore-thought and which has created uncertainty and confusion. Attempts to clarify have only complicated matters further.

How is normality to be restored to the market` Normality is necessary and fastly so if the private sector is to be given a fair chance to tap the capital markets and government`s own privatisation plans are to proceed without hitches. If confusion has caused this problem lifting of the confusion is the cure to this mess. The Middle Sea saga will soon unwind itself as the motivation to make a quick buck by takers of government low price offer is nullified by the falling equity price.` But the withholding tax decision needs either full and total explanation or postponement in line with tempos being considered by the EU. The EU has delayed implementation until 2003 as they want Switzerland and other small European tax havens to participate with equivalent measures in order to avoid flight of capital from the EU. How we expect to be able to do it unilaterally whilst lifting restriction on capital exports is simply muddled thinking of confused minds.

What is the net profit & loss to government of all this. From the Middle Sea saga it has lost a potential one and half million liri if all potential offers have been taken. From the melt down I estimate that since the budget day government`s holding in Maltacom, Bank of Valletta, and Middle Sea have suffered a loss in market value of` about Lm52 million and still falling as I write. And this for an expected return of Lm3 million per annum from the new Withholding Tax on Collective Investment Schemes.

What a complete mess of managing the nation`s finances! The only good thing about this is that equity values have now fallen enough to enter again the bargain territory. Prime candidate among these is Bank of Valletta`s equity which with a PE ratio of 13 has clearly fallen much more than it deserves. May this help to restore order on the market.

Alfred Mifsud

Ghandi tama

Il-Kullhadd Ghandi tama

Qatt ma niftakar li kien hawn konfuzjoni fil-pajjiz daqs dak li hawn bhalissa. Dan ma nghidux ghax qalbi thabbat in-naha tal-Partit Laburista u allura mil-Oppozizzjoni forsi nara kollox imcajpar.` Nghidu ghax il-konfuzjoni taraha b`ghajnejk u tmissha b`idejk.` U meta niltaqgha man-nies ilkoll kelma wahda. Kultant pjuttost ikolli nghidilhom li qed jezageraw u li l-affarijiet m`humiex hziena daqs kemm qed ipenguhom.

X`wassal ghal din is-sitwazzjoni` Kif gvern f`nofs il-legizlatura ma jista juri xejn t`ghemilu hlief in-numru ta` kapitli miftuha u maghluqa ma l-Unjoni Ewropeja u l-konfuzjoni li qed tirrenja fil-pajjiz.

Din il-konfuzjoni ghandha l-gheruq taghha mil-fatt li dan il-gvern ghandu mandat elettorali difettuz. Dan huwa gvern li meta kien fl-oppozizzjoni fit-22 xahar bejn is-96 u 98 cahad bl-aktar qawwa is-sewwa maghruf u nnega li l-pajjiz kellu problemi finanzjarji mahluqa minnhom stess matul disa snin ta` amminstrazzjoni bil-kultura ta` money no problem.

Telghu fil-gvern b`mandat ibbazat fuq 230 weghda li huma ppernjati fuq il-premessa li l-pajjiz ma ghandux problemi finanzjarji u li bin-nazzjonalisti fil-gvern jehfief il-piz tat-taxxi fuq il-poplu l-aktar ghax in-nazzjonalisti kapaci jikkonvincu lil Unjoni Ewropeja jibghatulna madwar mitt miljun lira shan shan kull sena.

Ir-rejalta ladarba fil-gvern hija differenti. Mhux talli il-problemi finanzjarji jezistu izda komplew jikkargaw.` Mhux biss ma gewx il-mitt miljun lira izda tlifna l-ghaxar miljuni li konna niehdu mil-protokol ma l-Italja u qed nonfqu ghaxar miljini ohra biex nirrangaw il-pajjiz ha jigi jaqbel mar-regoli ta` l-UE.

U allura il-poplu mhux biss qed ibati taht il-piz tat-taxxi li l-gvern qed ikollu jimponi kontra kull weghda fil-programm elettorali izda jinsab irrabjat ghax ihossu li gie mqarraq. Ihoss li gie mghieghel jibdel taht pretensjonijiet foloz gvern li kien ghadu lanqas biss wasal f`nofs il-mandat elettorali tieghu.

U jirrabja ferm izjed il-poplu meta waqt li huwa mghaffeg taht it-taxxi hergin minn kull rokna u f`kull gimgha tas-sena, jiftakar fil-Prim Ministru tieghu li b`ragunar pervers u sfacctagni li ma titwemminx jiftahar li wara li l-Mid-Med Bank imbiegh bi prezz baxx, ghaxar miljuni `l hawn u ghaxar miljuni `l hemm ma jaghmlux differenza.

Il-poplu ma jistax jemmen kif Bank bhal ma kien il-Mid-Med Bank jinbiegh ghal prezz li ma jmurx lil hinn milli jkopri l-ispiza ta` imghax ta` sena wahda biss fuq id-dejn nazzjonali.` Kif min kien qed jghid sa ftit xhur qabel li mhux veru hemm problemi, tmien xhur wara li dahal fil-gevrn kiesah u biered ibiegh il-Mid-Med Bank ghal prezz haqq l-imghax ta` sena.

U meta l-poplu jitkaza b`dan u jesprimi opinjoni li hemm xi haga hazina` u li bilfors jahseb hazin f`min mexxa dawn in-negozjati f`kulturra ta` ambjent ta` Lm10 miljuni `l hemm u `l hawn ma jaghmlux differenza flok naghmlu apologija pubblika lil poplu Malti tal-miljuni kbar li tellfulu` minflok ifaqqghu il-libelli.

Jiena bl-ebda mod ma nista` nipprova jew imqar nahseb li kien hemm xi tixhim jew tbaghbis f`dan il-kaz. Izda la nesjkludi dan allura bilfors u b`mod awtomatiku nikkonkludi li minn mexxa dawn in-negozjati kien negligenti b`mod tant ohxon li bla tlaqliq insejjah irresponsabbli.

Kif bank bhal dan jinbiegh f`negozjati li ghalihom il-gevrn malti ma jfittex pariri ta` hadd u ma johrogx offerti izda jinnegozja biss ma bank wiehed waqt li jintrabat li ma jinnegozja ma hadd izjed, m`hu xejn hlief irresponsabbli. Tlabt kemm il-darba lil min kien responsabbli jispjega ghala` fil-kalkoli tal-wahx li qal li ghamel u li pogga fuq il-mejda tal-parlament dahhal risk premium ta` 6% fid-discount factor ta` fuq 12% li intuzat biex inbiegh il-Mid-Med bir-rebass. Ghala rsik premium daqstant gholi flok niftharu u l-Mid-med Bank huwa bank mill-aqwa li ghandu jigbed press bla risk premium jew b`risk premium baxx hafna.

Ghal din il-mistoqsija li ghamilt ripetutament qatt ma waslet risposta. Ghandi tama li tasal din ir-risposta waqt il-kors tal-libell li l-Ministru John Dalli fetah kontra Gino Cauchi, il-Kap ta` l-ahbarijiet ta` Super One.` Ghandi tama.

How to lose millions without really trying

The Malta Independent

Losing millions without really trying

The destruction of value on Malta`s capital market which has occurred since the last budget is a cause for serious concern to Maltese investors. This loss of value has occurred very widely across the board and` it is fairly easy to conclude that this is not a fault in the underlying value of the investment but a consequence` of the sombre outlook which has befallen Maltese investors since last November.

In the two months since budget day the most popular banking shares are off 8%, Maltacom shares are down 13% and Middles Sea` shares are down 23%. On these four quoted companies alone the market has shed off a value of nearly Lm85 million in just 2 months.

One cannot but compare this sad result to the value which was added to the markets during 1999. I consider it one of my major achievements having helped to add so much value to the market during 1999.

During my 2 year tenure as Chairman of Mid-Med Bank I saw the share price climb from Lm1.40 to Lm2.00, an increase of 40% which cannot be bad by any standard. I did however realise that even at` the increased level the share price was showing a minimal premium over the net asset value of the shares and this cannot be justified for an organisation which was producing over 20% return on capital.` The hidden value of the shares was evident for whoever wanted to see it but apparently investors were` put off by the illiquidity of the local market.` That the prospected` capital gain would also be tax free was the cherry on the cake but the lethargy in the market was so big that not even this fiscal` incentive strong enough to bring life to the market.

I did what any management that seriously considers it its business to add value to` shareholders would do. The bank proposed to buy-back part of its own shares. This was meant as a signal to the market of the severe under-valuation of the shares. The market re-acted immediately making the buy-back unnecessary even if it were approved by the Bank`s General meeting, which it was not.

By the time the shares were suspended in relations with the HSBC deal the market price increased from Lm2 to Lm2.71 in the space of less than 4 months eventually proceeding to touch a high of Lm7.62 in the ensuing months.` I always maintained that` a realistic price for these shares would have been around Lm5.50 so there is no doubt that the superior valuation carries with it the brand premium of the new majority shareholders.

The HSBC deal pulled the whole market ahead and brought new investors to the market thinking that making money by the bucketful in share trading` was simple and easy. Consequently the correction which happened on the market during the year 2000 was healthy and appropriate in teaching the market that it is not a one way road to riches.

But the acceleration of this trend in the first two weeks of 2001 is not a market correction.` It is` destruction of market value by a badly thought out and confusedly explained withholding tax on investment funds which was the vehicle preferred mostly by small investors to access the market. These investors are now pulling out of these funds forcing their managers to dump shares on an illiquid market and bringing a totally avoidable meltdown on the Maltese capital markets.

Add to these the farcical affair of sale of Middle Sea shares being sold at prices different from the market price and you have a perfect recipe for destruction of value. The Withholding Tax on investment funds needs urgent revision. Its` implementation needs to be linked with EU plans in this area. This would lift the current uncertainty and bring back life to a dull market.

Tripod Solutions

The Malta Independent on Sunday

Tripod solutions

The opening new year` headlines of the print media of the two political camps could hardly have encapsulated better the source of the economic problems which have been plaguing us these last five years.

In-Nazzjon proudly announced that thirty thousand public sector employees will as of 1st January this year enjoy an average wage increase of some 20%. The` tone of this announcement called for wine and champagne to flow and celebrate this happening.

Il-KullHadd on the hand other headlined that as of January 1st a wide segment of the productive sector has to carry a substantial burden of new taxes or enforcement of dormant ones.

Both views are tragically true and give rise to the logical question ` Does it make economic sense to continue draining resources from the productive sector to feed the unproductive sector` Is this the real way to address our deficit problems`

The separation` of private sector being` productive whilst the` public sector being unproductive is probably too bland. Surely there are pockets of strong productivity in the public sector and patches of inefficiencies in the private sector.` However by and large the environment in the public sector is much more tolerant for inefficiencies and there is no question that our public sector is generally over-manned and under-utilised.

So the middle manager at the factory now has to pay tax on his company car, given to him in recognition of the many long hours he spends at his job without any overtime compensation. In the meantime` the middle manager in the public sector who enjoys his summer half days, rests peacefully at night comforted by the security of tenure of his post quite immaterial of his performance, enjoys his wage increase bonanza.

I have repeatedly maintained that those who have created the financial mess the country is in do not have what it takes to get us out of it. Clearly their creativity does not go beyond the logic of taxing faster than` they can spend without making any real effort to control the spending. Clearly one cannot control public expenditure on consumption if the first thing one does once` elected is sign away generous salary increases to the public sector without any serious attempt to improve productivity.

Productivity only increases if more work is done with less people. The very minimum that one would expect is for the government to make a serious attempt to retrain its idle resources in order to place them in posts` which become vacant through natural wastage. Instead public payroll headcount keeps increasing as not only retiring personnel is fully replaced but no effort is spared to invent new public sector posts.

I was astonished recently to learn that the ETC has found quite a few tens of thousand of liri to buy three new Alfa`s for its senior executives. When I was Chairman at Mid-Med Bank the Chairman`s car was a gas guzzler Rover beyond its economic life costing hell to maintain.` I am sure that no one should make an issue if the Chairman of a Bank making Lm15 million liri profit each year and quoted on the Stock Exchange` were to drive an Alfa if not a Mercedes.` But as it so happened tough measures to control expenditure issued by the OPM applicable to all government controlled institutions meant I had to settle for a KIA Clarus, a nice car loaded with much more value than you would expect from its nine thousand odd price including all extras.

Does one solve the deficit problem by buying Kia`s rather than Alfa`s. Certainly not. This was meant I am sure purely as a symbolic gesture to cascade a culture through the ranks that expenditure has to be economised.

But it is certainly s no solution to tax people, especially the productive sector,` to their bones` to ensure that enough revenue is generated to fund the expenditure largesse` whilst addressing the deficit. The solution has to be in the form of a tripod. It has to stand on three legs.

Certainly fiscal enforcement has to be one of those tripod legs. Revenue must not come from new taxes. There needs to be a moratorium on all new tax measures and focus on enforcement of existing ones. The habit of introducing new fees and taxes out of budget declarations` must be stopped.

The second tripod leg must be serious expenditure control. Not only there must be a freeze on public sector employment but resources should be invested not in rewarding the unproductive but in re-training them to get them ready for a productive job in the private sector. Retraining gives confidence which increases labour mobility making public sector employees believe that there is a job out there in the private sector which is more rewarding and more satisfying. Schemes to motivate public sector employees to go for this option needs to be urgently devised and implemented with the agreement of the unions who will be told in no uncertain terms that failure to move in this direction will inevitably result in more taxes.

The last and probably most important tripod leg is economic growth.` The country must embark on an economic rate of growth of a real 6% pa. based principally on production and not on consumption. This can only be achieved by introducing imaginative public / private sector partnership for undertaking infrastructure projects financed out of budget, and for attracting private direct investment on a massive scale related to export of new economy products. This rate of growth would increase demand for labour in the private sector making the shift of human resources from the public to the private sector easier to administer and giving a double bonanza to the deficit problem. Control expenditure through headcount reduction and increase tax revenues from economic growth.

So simple to say. So much leadership and dynamism needed to get the whole country focussed on such a clear and unavoidable objective. Leadership and dynamism are unfortunately in scarce supply.

Tripod Solutions

The Malta Independent on Sunday

Tripod solutions

The opening new year` headlines of the print media of the two political camps could hardly have encapsulated better the source of the economic problems which have been plaguing us these last five years.

In-Nazzjon proudly announced that thirty thousand public sector employees will as of 1st January this year enjoy an average wage increase of some 20%. The` tone of this announcement called for wine and champagne to flow and celebrate this happening.

Il-KullHadd on the hand other headlined that as of January 1st a wide segment of the productive sector has to carry a substantial burden of new taxes or enforcement of dormant ones.

Both views are tragically true and give rise to the logical question ` Does it make economic sense to continue draining resources from the productive sector to feed the unproductive sector` Is this the real way to address our deficit problems`

The separation` of private sector being` productive whilst the` public sector being unproductive is probably too bland. Surely there are pockets of strong productivity in the public sector and patches of inefficiencies in the private sector.` However by and large the environment in the public sector is much more tolerant for inefficiencies and there is no question that our public sector is generally over-manned and under-utilised.

So the middle manager at the factory now has to pay tax on his company car, given to him in recognition of the many long hours he spends at his job without any overtime compensation. In the meantime` the middle manager in the public sector who enjoys his summer half days, rests peacefully at night comforted by the security of tenure of his post quite immaterial of his performance, enjoys his wage increase bonanza.

I have repeatedly maintained that those who have created the financial mess the country is in do not have what it takes to get us out of it. Clearly their creativity does not go beyond the logic of taxing faster than` they can spend without making any real effort to control the spending. Clearly one cannot control public expenditure on consumption if the first thing one does once` elected is sign away generous salary increases to the public sector without any serious attempt to improve productivity.

Productivity only increases if more work is done with less people. The very minimum that one would expect is for the government to make a serious attempt to retrain its idle resources in order to place them in posts` which become vacant through natural wastage. Instead public payroll headcount keeps increasing as not only retiring personnel is fully replaced but no effort is spared to invent new public sector posts.

I was astonished recently to learn that the ETC has found quite a few tens of thousand of liri to buy three new Alfa`s for its senior executives. When I was Chairman at Mid-Med Bank the Chairman`s car was a gas guzzler Rover beyond its economic life costing hell to maintain.` I am sure that no one should make an issue if the Chairman of a Bank making Lm15 million liri profit each year and quoted on the Stock Exchange` were to drive an Alfa if not a Mercedes.` But as it so happened tough measures to control expenditure issued by the OPM applicable to all government controlled institutions meant I had to settle for a KIA Clarus, a nice car loaded with much more value than you would expect from its nine thousand odd price including all extras.

Does one solve the deficit problem by buying Kia`s rather than Alfa`s. Certainly not. This was meant I am sure purely as a symbolic gesture to cascade a culture through the ranks that expenditure has to be economised.

But it is certainly s no solution to tax people, especially the productive sector,` to their bones` to ensure that enough revenue is generated to fund the expenditure largesse` whilst addressing the deficit. The solution has to be in the form of a tripod. It has to stand on three legs.

Certainly fiscal enforcement has to be one of those tripod legs. Revenue must not come from new taxes. There needs to be a moratorium on all new tax measures and focus on enforcement of existing ones. The habit of introducing new fees and taxes out of budget declarations` must be stopped.

The second tripod leg must be serious expenditure control. Not only there must be a freeze on public sector employment but resources should be invested not in rewarding the unproductive but in re-training them to get them ready for a productive job in the private sector. Retraining gives confidence which increases labour mobility making public sector employees believe that there is a job out there in the private sector which is more rewarding and more satisfying. Schemes to motivate public sector employees to go for this option needs to be urgently devised and implemented with the agreement of the unions who will be told in no uncertain terms that failure to move in this direction will inevitably result in more taxes.

The last and probably most important tripod leg is economic growth.` The country must embark on an economic rate of growth of a real 6% pa. based principally on production and not on consumption. This can only be achieved by introducing imaginative public / private sector partnership for undertaking infrastructure projects financed out of budget, and for attracting private direct investment on a massive scale related to export of new economy products. This rate of growth would increase demand for labour in the private sector making the shift of human resources from the public to the private sector easier to administer and giving a double bonanza to the deficit problem. Control expenditure through headcount reduction and increase tax revenues from economic growth.

So simple to say. So much leadership and dynamism needed to get the whole country focussed on such a clear and unavoidable objective. Leadership and dynamism are unfortunately in scarce supply.

Inaccettabli

Il-Kullhadd Inacettabbli

Hija sfortuna li l-ossessjoni tal-Partit Nazzjonalista fil-gvern li jdahhal lil Malta fl-UE maljar kemm jista jkun akkost ta` kollox mhux qed thalli li jsir dibattitu serju fil-pajjiz dwar aspett tant importanti ghac-cittadini Maltin.

Bil-magna tal-gvern f`idejh, bil-gazzetti u l-media jibbakjaw lil gvern b`mod ikundizzjonat rigward il-politika ta` shubija fl-UE, u permezz ta` fondi pibblici mghoddija lill-MIC ( Malta EU Information Centre)` ghandna sinfonija shiha ta` tpacpic fil-vojt dwar li Malta ma ghandiex ghazla hlief li tidhol maljar kemm jista` jkun fl-UE bla ma toqghod tifttex jekk hemmx toroq ohra aktar addattati ghac-cirkostanzi ta` pajjizna.

Bhalissa f`Super One qed inhejju set ta` dokumentarji biex nispjegaw `l ghala l-Isvizzera, n-Norvegja u l-Islanda,` pajjizi zviluppati daqs jew aktar mill-membri ezistenti ta` l-UE, ghazlu li jkun ahjar ghalihom li ma jidhlux membri izda jzommhu relazzjoni mil-qrib.

Tlabt l-ghajnuna tal-MIC biex bhal ma jghamlu fuq TVM jghatuna l-fondi halli nwasslu quddiem il-poplu Malti in-naha l-ohra tal-munita. Dan biex il-poplu jkun infurmat mhux biss dwar l-ghazla ta` shubija` izda wkoll dwar l-alternattivi ohra li jezistu ghal shubija. Qbilt ma l-MIC li f`dawn id-dokumentarji nghatu biss il-fatti dwar il-pajjizi li hadu l-ghazla l-ohra u li d-dokumentarji jkunu objettivi b`mod li jkun hemm kontroll editorjali flimkien bejn il-MIC u s-Super One ghax l-ghan taghna huwa biex ninfurmaw u mhux biex ninfluwenzaw.

Minkejja dan kollu il-MIC irrifjutaw l-ghajnuna. Tafu ghaliex. Ghaliex il-MIC qieghed hemm biex jaghti l-informazzjoni biss dwar is-shubija fl-UE.` Il-MIC mhux qed hemm biex jinforma lil poplu Malti dwar l-ghazliet kollha. Le, il-gvern irid li l-MIC jinforma biss dwar is-shubija.

Tajbda din. Mela il-poplu Malti ser jigi mitlub f`referendum biex jiddeciedi iridx lil pajjizna isir membru fl-UE izda flok nuruh iz-zewg nahat tal-munita nuruh u nibbumbardjawh f`informazzjoni fuq naha wahda biss. U biex tkompli tghaxxaqha ma tinghatax informazzjoni fuq in-naha kollha tal-munita tas-shubija.` Izda biss dwar l-aspetti pozittivi tas-shubija. Dwar l-aspetti negattivi dwar dawn nitkellmu mill-anqas.

Ghalhekk sikwit tal-MIC jinfurmawna kemm l-istudenti taghna jkunu jistghu isegwu programmi ta` studji barra minn Malta.` Dan huwa minnu. Izda huwa minnu wkoll li dan ikun japplika b`mod limitat ghal ftit mijiet ta` studenti u li dan jista` jigi negozjat ukoll f`relazzajoni specjali bhal ma ghandhom l-Isvizzeri u Norvegizi. Ma tantx jghidulna lanqas li shubija taghti dritt lil studenti barranin jigu jistudjaw fostna` bl-istess kundizzjoniet ta` l-istudenti Maltin,` hlief l-istipendju.

Dan ifisser li studenti barranin ikollhom dritt jigu jistudjaw b`xejn fl-universita` taghna flok ihallsu ghall-istudji taghhom f`pajjizhom. Dan probabbli jfisser li is-sistema ta` universita` b`xejn, ahseb w`ara l-istipendji, ma jibqghux aktar sostenibbli ghal pajjizna u maz-zmien l-universita` ssir bi hlas biex nilqghu ghall-influss ta` studenti barranin. Ma nkunux nistghu naghmluha bi hlas ghal barranin biss. Li jkun jghodd ghalihom ikun jghodd ukoll ghal studenti Maltin.

Issa dan mhux argument li wahdu ghandu jorbot u jholl favur jew kontra shubija fl-UE. Izda tajjeb li l-informazzjoni titwassal sewwa u shiha ghand ic-cittadini biex dawn ikunu jistghu jiddeciedu b`mod infurmat.

Izda bil-fondi tal-gvern lanqas biss ma qed nghatu stampa shiha dwar is-shubija.` Ahseb w` ara kemm qed nghatu informazzjoni dwar l-ghazliet l-ohra.` U issa b`mod formali huwa maghruf li l-Gvern ma jridx jivvota flus biex il-poplu jkollu taghrif ekwivalenti fuq l-ghazliet l-ohra.

Il-Gvern iridna biss nemmnu li hemm triq wahda. Li s-salib tqil kemm hu tqil irridu ngorruh.

Kif jista` l-poplu jiddeciedu f`referendum jekk ma jkollux taghrif shih mhux biss dwar is-shubija izda wkoll dwar l-alternattivi ghas-shubija` Jew hemm min jibza li jekk jaghti taghrif shih il-poplu malajr wasal ghal konkluzjoni ovvja li rabtiet specjali bhal dawn huma l-aktar addattati ghal pajjizna`

Din hija pozzizzjoni inaccettabbli li timmina l-izvolgiment tad-demokrazija f`pajjizna. Il-Partit Laburista irid ilesti risposta politika.

Escapism

The Malta Independent

Escapism

As a nation we specialise in the tendency to indulge in pleasant fantasies in order to escape unpleasant realities.

We pride ourselves in having a fully functional democracy and pretend not to notice that the glaring democratic deficiencies which rule our everyday life.

Without any legislation controlling political party funding and political donations I cannot as a citizen accept that many of the government decision are uninfluenced by the genorisity shown by the business sector to add oil to the machinery of the party in government. So while at Super One we hardly afford an occassional press advert Net TV with much lower audiences and ratings afford regular advertising and billboard exposure.` While the government goes through the motions of public tenders, these tenders are cancelled and re-issued quite liberally when results are not quite in line with designed plans.

While conservatives in government find unreserved support from influential media and from business constituted bodies these same opinion shapers used to fault a Labour government endlessly even for insignificant or imaginary slips.

We pretend that it is quite normal for ministers to earn from their political post a fraction of what some of them used to earn in private practice.

Even strange court or justice decisions remain unchallenged by public opinion. Clear cases of politically motivated presidential pardons which endows` the executive the unearned right to delineate politically who could walk away free from punishment for admitted serious criminal offences from those who have to waste their youth waiting for delayed justice in a lonely prison cell,` remain unchallenged. Even the court`s reluctance to give protection to` defenseless citizens no longer pricks the national conscience. Whilst` the beneficiary of the presidential pardon continues to collect serious criminal offences with monotonous regularity` not one thought is spared for two young persons wasting their life in prison facing charges whose only corroboration is that of the said beneficiary.

Whilst in other countries the student corps` acts as a stimulant to the national conscience protesting against legal and social injustices, in Malta our students would only complain if their material interest through their stipend is in any way questioned. The same national political divisions are practiced to perfection at our Junior College and University through pseudo non-political student organisations. We have` corrupted with money on the streets of Paceville and Bugibba the tender conscience of our youth.

What sort of quality of life have we given to our family units who have to spend edgy sleepless weekend nights waiting for their youths to arrive home without material damage`

Are the generous Xmas charitable collections a feeble attempt to wash our conscience from` the lethargy which make us accept these injustices without guilt throughout the year. What social earthquake can induce us to shake off this deep-rooted escapism`

TINA

Il-Kullhadd TINA

TINA tfisser There Is No Alternative. Argument li qed juzawh b`insistenza u qawwa dawk li qed imexxu l-progett ta` shubija fl-Unjoni Ewropeja.

L-argument jimxi xi haga hekk. Tista ssib hafna difetti fil-progett tas-shubija. Tista` tipprova li hemm hafna zvantaggi u tbatija tistenna lill-poplu Malti biex iwettaq dan il-progett specjalment jekk dan isir fi zmien li qed janticipa l-gvern. Izda fl-ahhar mill-ahhar dan kollu bla sugu ghax m`hemmx alternattiva.` Hemm biss triq wahda . Tqila kemm hi tqila hemm biss it-triq tas-shubija fl-Unjoni Ewropeja.

Meta jitqajjmu argumenti li fil-fatt jezistu triq jew toroq ohra ir-risposta ta` dawn hija li dawn it-toroq jezistu biss fit-tejorija u fil-prattika hemm biss triq wahda. Ghax it-toroq l-ohra tant huma koroh li lanqas biss ghandhom jigu kkunsidrati.` Ghax it-toroq l-ohra jwassluna ghal izolament totali li jhalluna wehidna wehidna bhal qazba tixxejjer mar-rih.

Dan huwa ragunar perikoluz li jehtieg nirribattih b`mod effittiv, bit-taghlim u bil-kitba tal-perzwazjoni. Huwa argument ta` min ghandu ghamad li jrid jara biss triq wahda u li ma jrid ikun jaf b`xejn izjed. Huwa argument stramb u pregudikat ghal min jiftahar li jhobb l-ghazla f`kollox izda f`haga bhal din qed jichad l-ghazla, jibza mil-ghazla u jixtieq sa ma jemmen li m`hemmx ghazla.

Se ntenni kif ghamilt kemm il-darba. Ghal-pajjiz sovran gzira zghira fil-periferija tal-kontinent ewropej ma jghoddux l-istess argumenti, l-istess ragunar li jghodd ghal pajjizi ohra.` Kieku konna pajjiz fil-kontinent ewropew b`popolazzjoni ta` hafna miljuni kieku nirragunaw bhal Polonja. Kieku hergin minn xi hamsin sengha ta` komunizmu u qed nghixu fil-biza li r`Russja terga tiblana kieku nirragunaw bhal Estonia. Kieku pajjizna maqsum min-nofs u mahkum minn forza barranija li tista` tigi sfurzata tohrog biss minn forza ikbar li ninghaqdu maghha kieku nirragunaw bhal Cipru.

Izda pajjizna Malta. Gzira ckejna ta` anqas minn 400,000 abitant li bid-differenzi kollha ta` bejnietna ahna poplu lkoll ta` l-istess razza. Ghandna tradizzjoni qawwija ta` demokrazija stabbli u effittiva. Permezz tal-politika tan-newtralita` hrigna lill-pajjizna minn kull riskju ta` okkupazzjoni barranija.

Dan ifisser li ma ghandiex l-istess motivazzjonijiet li ghandhom pajjizi ohra biex nissiehbu fl-UE. Jekk inkejlu b`kejlna u mhux b`kejl haddiehor ma tistax ma tasalx ghal konkluzjoni li jekk immexxu pajjizna bis-serjeta` u mhux bl-irresponsabbilita` finanzjarja ta` dawn l-ahhar snin, pajjizna tassew ghandu ghazla tassew dwar ir-relazzjoni li ghandu jkollna ma l-UE.

Ifisser li biex pajjizna jipprezerva il-flessibilta li jkollu pajjiz zghir, biex naghmlu l-ahjar uzu tal-pozizzjoni strategika ta` pajjizna, biex npoggu lilna nfusna differenti minn min huwa ferm ikbar minnha jkun ferm ahjar li nzommu rajna f`idejna u mhux nintrabtu li nimxu bl-itess regoli ta` haddiehor.

Dan bl-ebda mod ma jfisser izolament. Anzi jifsser li ghandna nifthu u nikkumercjaw ma kullhadd bla rbit li ggib magha shubija fl-UE. L-ewwel u qabel xejn ifisser li ma l-UE naghmlu ftehim ta` kummerc hieles li jkun jinkorpora l-kummerc industrijali fi zmien qasir u bil-mod il-mod jigi estiz ghas-servizzi b`pass u temp li jirrispetta l-ikadenzi ta` ristrutturar effettiv ta` l-ekonomija. Ghalhekk mhux minnu li nkunu qed ninghalqu fina nfusna. Inkunu qed nifthu izda nfithu mhux skond ir-regoli ta` haddiehor izda skond ir-rejaltajiet ta` pajjizna.

Ifisser li fil-biedja nzommu certu protezzjoni permanenti, Mhux ghax nemmnu fil-protezzjonismu.` Izda ghax dan huwa punt strategiku biex il-biedja li tghibx minn fuq wicc din l-art maltija. Jekk hawn min jahseb li l-UE dan ma taccettahx mela `l min jghid hekk nghidulu li ma jafx jinnegozja u ma jafx juza l-pozizzjoni startegika taghna biex jikseb dak li haddiehor ma jkunx lest itik mall-ewwel.

Mhux talli ma ninghalqux go fina talli nkunu nistghu naghmlu trattati ta` kummerc hieles ma zoni jew pajjizi ohra minghajr l-irbit li ggibna fih shubija shiha.` Dan jghina biex nixtru l-materja prima u l-ikel li nikkunsmaw bl-irhas prezzijiet fis-swieq internazzjonali.

Mela hemm triq ohra.` Mhux triq ward u zahar izda triq aktar addatata ghal pajjizna min shubija fl-UE. Triq iebsa li jehtieg kuragg u determinazzjoni biex nibqghu kmandi f`pajjizna u mhux nichdu is-sovranita` ta pajjizna biex nitwahhdu ma` unita` ferm ikbar li minkejja kull intenzjoni tajba inevitabbilment mat-tul taz-zmien trendina regjun u mhux pajjiz sovran.

Hemm triq ohra li ghandna nzommu miotuha bla ma nghalqu toroq ohra biex ma naqghux fl-istess zball li qed jaqghu fih dawk li qed nitkazaw bihom. Ghalina m`hemmx TINA.

Hidden Obligations

The Malta Independent

Hidden obligations

Not only Government accounting is still on a cash basis without the discipline of accruals and provisions, but` the Government also runs a hidden account from where certain payments are funded without passing through the parliamentary checks and controls of the Consolidated Account.

Technically this account is known as the Treasury Clearance Fund and is intended to fund short term loans which are expected to be repaid. These` are therefore` kept separate from the Consolidated Account where payments are either current and therefore expensed in a definite manner, or capital which would at best be returned over a long term horizon, if at all.

The Auditor General report covering the Public Accounts for 1999 points out that some payments funded from the Treasury Clearance Fund have been outstanding for an excessive long time, rendering doubtful their eventual recovery. Where recovery seems improbable the funds will have to be provided for from the Consolidated Fund entailing additional expenditure to the Government to reflect an investment which has already gone sour.

Nearly Lm51 million are due to the Treasury Clearance Fund from Malta Drydocks and Malta Shipbuilding. Hope springs eternal but classifying these loans as capable of being repaid in the short term and avoiding the need to provide for them from the Consolidated Account seems as improbable as the 30th day of February.

Other amounts are less substantial but nonetheless disturbing.` Lm141,500 advanced to government delegations travelling abroad prior to 1993 are still unaccounted for and suspensed in the Treasury clearance Fund.` Lm531,583 advanced in October 1995 for funding the Mediterranean Crans-Montana` Forum Conference` remains similarly` in suspense in the Treasury Clearance Fund. Is it not obvious that the time is overdue` for proper account for this Funding to be given to parliament through the Consolidated Fund`

The Auditor General`s report also gives details of the guarantees and letters of comfort issued by the government in respect of borrowing obligations of government controlled companies. These borrowings do not form part` of the national debt computation which is already worryingly high on its own,` having increased from 28% of the GDP in 1992 to over 60% currently.

Guarantees and letters of comfort are meant to be contingent obligations and are not expected to result into real obligations which will have to be funded from the Consolidated Fund. However some items are clearly covering non- recoverable loans and sooner or later the Consolidated Fund will have to face reality.`

How do these sound to you` Lm 51,626,095 guarantees for loans given to Malta Drydocks.` Lm27,665,949 for loans given to Water Services Corporation.` Lm22,314,836 for loans to Gozo Ferries Co. Ltd. Lm9,561,017 for loans to Malta Gantry Manufacturing Ltd. Lm7,620,935 for loans to Malta Shipbuilding.` Lm 3,977,720 for loans to Malta Win Cargo and Lm3,064,521 for loans to Malta Counter Trade..

These on their own amount to Lm126 million loans which are clearly unrecoverable. The debtors involved enjoying government guarantees to their credit are either defunct or are being given yearly subsidies from the Consolidated Fund to survive.

And this does not include over Lm100 million guaranteed for Freeport that is also still demanding yearly subsidies from government and other doubtful amounts due .` Malta Government Loans` owes Lm21.4 million and there are` Lm14.7 millions loans to METCO/ Malta Government Investments. These borrowers` are probably fronting for the final user of these loans and consequently` it is difficult to assess recoverability.

As you can see these amount as not exactly petty cash. It is high time for the public to be given a full account of these hidden liabilities and for serious financial controls to be introduced to stop this irreverent practice of using the Treasury Clearance Fund to avoid the discipline of the Consolidated Fund accounting.