Paying for an illusion

The Malta Independent

Paying for an illusion

By consistently avoiding reality government is shooting itself in the foot and hypothecating our future economic sustainability. Hearing comments as that by the Minister of Finance that the deficit will shrink to Lm85 million by budget day can only send messages that all is well with our public finances and no restraint need be made in making fresh demands on such future resources.

The truth is quite different. The public deficit is not being addressed. In the seven months January to July it was more than what it was in the same period of 1998. Making comparisons with the purposely inflated budget deficit for the whole of 1998 suggests that we are on the mend. Reality is that government cannot control its expenditure and keeps applying increased tax revenues to finance more expenditure rather than to address the deficit.` Consequently the national debt and its burden keep rising at alarming speed.

But this week the mad habit of avoiding reality reached new heights. Replying` to an economic commentator who accused the government of hiding payments by using the Treasury Clearance Fund,` the Acting Director of Information replied verbatim `This fund provides for temporary payments intended to be repaid to government within stipulated times.Freeport received an advance of Lm8.35 million to fund its long term loan interest payment..These payments were funded from the Treasury Clearance Fund as they will be repaid to government from privatisation revenues of the same entity`.

If not financial misrepresentation this is financial management mediocrity.` When funds are advanced from the Treasury Clearance Funds to finance the operations and financial charges of Freeport, they ought to be repaid from Freeport`s normal revenue streams. ` Normally such payments are funded through the banking system. The fact that recourse had to be made to the government as shareholder for funding indicates that the prospects of payback are very obscure if not downright non-existent. Consequently` the case for such funding from the Treasury Clearance Funds rather than the Consolidated Fund is very dubious.` But with government`s DOI spokesperson admitting black on white that these will not be repaid from Freeport in the normal course of operations but from privatisation revenues of Freeport, than the matter becomes` financial heresy.

In simple terms this means that we are spending privatisation revenues well before they materialise. That when privatisation revenues do materialise rather than financing the budgetary gap in the consolidated accounts they have to be addressed to repay the temporary loans in the Treasury Clearance Fund and in the banking system in the form `government guaranteed debts which will never be repaid from the normal assets they were meant to finance in the first instance.

My calculation is that a funding gap of nearly Lm400 million exists outside the budget. The medium term financial strategy 1999- 2004 indicated gross privatisation revenues of Lm220 million during the period of which Lm82million` have already been consumed in 1999/2000 through the sale of Mid-Med Bank.

So my question is who is going to address this other black hole` Are we going to be constrained to sell all we have under financial crisis purely to address the hidden black holes as the government official spokesperson unashamedly suggests.

Once the illusion disappears, as illusions unavoidably do, the private individual made artificially richer by the money no problem culture whilst the state coffers were being impoverished, will have to pay through his nose and ears for the horrible cost of a tragic illusion.

Let the figures speak

The Malta Independent on Sunday Let the figures speak!

NSO figures regarding the state of public finances as at the end of July 2001 speak louder then the platitudes uttered by those` who are finding that the margin for further hiding of the truly appalling` state of affairs is getting narrower by the day.

` Jan-July` Jan-July` Jan-July` Jan-July ` ` 1998` 1999 2000 2001 Govt.` Expenditure(1) 342` 4% 383` 12% 403 5% 429 6% Govt Ordinary Revenue(2) 281 7% 299` 6%` 341 14%` 361 6% ` ------ ----- ----- ----- Deficit` ` 61` 84 ` 62` ` 69 ` ==== ==== === === Gross Govt Debt (3) 749` 817` 897` 994 Interest Payments ` 29` 32 35 36

Source:` NSO` all figures in Lm millions (1)



net of contributions to sinking funds (2)



excluding grants, loans, & sale of assets (3)



Position as at end period (4)



Percentages show increase over previous year

These are figures cleansed of the manipulation by the incoming PN government who in the last quarter of 1998 exploded expenditure to darken the starting point and make subsequent` comparisons to Labour`s 1998 much brighter than they in fact are.

These are figures which compare like with like.` Often government compares deficit figures under Labour inclusive of provisions for sinking funds which are then excluded in figures from 1999.

These figures tell that though we have collectively paid Lm80 million more taxes in these seven months than we did in the comparable 7 months of 1998 under a Labour administration, an increase of no less than 28%,` government deficit is Lm8 million or 13%` more than it was three years ago.

These figures tell that during these three years gross national debt increased by Lm245 million or 33% in spite of pocketing one-off privatisation revenues of Lm82 million without which the debt would have increased by Lm327 million or 44%.

And unless we want to bury our head in the sand these figures tell us` that we are driving full speed ahead towards a fall which will smash our social fabric to pieces. Whilst government revenue growth is suffocating economic growth by squeezing liquidity from the private sector which meanwhile has to contend with increasingly complex and expensive bureaucracy, government is not really addressing the deficit problem and is only using the enhanced revenues to finance expenditure which is running out of control.

And the IMF has told us that we have a lot of off-budget expenditure which should be included. Some Lm23 million of it in the year 2000 alone` according the last IMF report.

This country can`t afford to continue throwing these awful millions into black holes without adopting real, though unavoidably painful, cures. We are playing with the standard of living of our children, with the risk of throwing below the poverty line most of those who depend on fixed incomes who when the bubble burst will find that their fixed income does not go half as much as is necessary to maintain their real living standards.

Clearly those who created this financial mess and who will be cursed by history for leaving this atrocious legacy, do not have what it takes to get us out of it.` More likely is that they will augment their financial irresponsibility by` accessing` privatisation revenues to buy some time before the pressure cooker explodes. Labour`s recent proposed policy update is a noble` wish list of socially just but often conflicting objectives.` But it does not constitute an action plan as bold as is demanded by` the financial tragedy facing us.

Whilst taxation enforcement has to take its due place in the cure recipe certainly the major emphasis must be placed on economic growth and expenditure control. Often these re-inforce each other.` We must devise schemes to motivate` people in the public sector who are being paid a full time salary for a part-time job to go into real productive jobs. We can then achieve economies in government` recurrent expenditure bill` whilst achieving real production enhancement from resourceful people whose creativity and initiative is suffocated by the bureaucracy of the public sector.

Well,` this may sound unrealistic to our political class. May I ask them to have a look at what`s happening in Argentina if they want to see how much more` painful the medicine would be if their inertia and irresponsibility` will lead this blessed nation to swallow the sour medicine in one gulp rather applying it in the right doses in due time.

Let the figures speak

The Malta Independent on Sunday Let the figures speak!

NSO figures regarding the state of public finances as at the end of July 2001 speak louder then the platitudes uttered by those` who are finding that the margin for further hiding of the truly appalling` state of affairs is getting narrower by the day.

` Jan-July` Jan-July` Jan-July` Jan-July ` ` 1998` 1999 2000 2001 Govt.` Expenditure(1) 342` 4% 383` 12% 403 5% 429 6% Govt Ordinary Revenue(2) 281 7% 299` 6%` 341 14%` 361 6% ` ------ ----- ----- ----- Deficit` ` 61` 84 ` 62` ` 69 ` ==== ==== === === Gross Govt Debt (3) 749` 817` 897` 994 Interest Payments ` 29` 32 35 36

Source:` NSO` all figures in Lm millions (1)



net of contributions to sinking funds (2)



excluding grants, loans, & sale of assets (3)



Position as at end period (4)



Percentages show increase over previous year

These are figures cleansed of the manipulation by the incoming PN government who in the last quarter of 1998 exploded expenditure to darken the starting point and make subsequent` comparisons to Labour`s 1998 much brighter than they in fact are.

These are figures which compare like with like.` Often government compares deficit figures under Labour inclusive of provisions for sinking funds which are then excluded in figures from 1999.

These figures tell that though we have collectively paid Lm80 million more taxes in these seven months than we did in the comparable 7 months of 1998 under a Labour administration, an increase of no less than 28%,` government deficit is Lm8 million or 13%` more than it was three years ago.

These figures tell that during these three years gross national debt increased by Lm245 million or 33% in spite of pocketing one-off privatisation revenues of Lm82 million without which the debt would have increased by Lm327 million or 44%.

And unless we want to bury our head in the sand these figures tell us` that we are driving full speed ahead towards a fall which will smash our social fabric to pieces. Whilst government revenue growth is suffocating economic growth by squeezing liquidity from the private sector which meanwhile has to contend with increasingly complex and expensive bureaucracy, government is not really addressing the deficit problem and is only using the enhanced revenues to finance expenditure which is running out of control.

And the IMF has told us that we have a lot of off-budget expenditure which should be included. Some Lm23 million of it in the year 2000 alone` according the last IMF report.

This country can`t afford to continue throwing these awful millions into black holes without adopting real, though unavoidably painful, cures. We are playing with the standard of living of our children, with the risk of throwing below the poverty line most of those who depend on fixed incomes who when the bubble burst will find that their fixed income does not go half as much as is necessary to maintain their real living standards.

Clearly those who created this financial mess and who will be cursed by history for leaving this atrocious legacy, do not have what it takes to get us out of it.` More likely is that they will augment their financial irresponsibility by` accessing` privatisation revenues to buy some time before the pressure cooker explodes. Labour`s recent proposed policy update is a noble` wish list of socially just but often conflicting objectives.` But it does not constitute an action plan as bold as is demanded by` the financial tragedy facing us.

Whilst taxation enforcement has to take its due place in the cure recipe certainly the major emphasis must be placed on economic growth and expenditure control. Often these re-inforce each other.` We must devise schemes to motivate` people in the public sector who are being paid a full time salary for a part-time job to go into real productive jobs. We can then achieve economies in government` recurrent expenditure bill` whilst achieving real production enhancement from resourceful people whose creativity and initiative is suffocated by the bureaucracy of the public sector.

Well,` this may sound unrealistic to our political class. May I ask them to have a look at what`s happening in Argentina if they want to see how much more` painful the medicine would be if their inertia and irresponsibility` will lead this blessed nation to swallow the sour medicine in one gulp rather applying it in the right doses in due time.

Celebrating zeros

The Malta Independent

Celebrating zeros

This last week we had reason to `celebrate` many zeros. We had the third anniversary of the solemn declaration made by the then Deputy Leader of the PN, in front of the whole party elite, that had Malta not frozen its EU membership application it would have received Lm100 million from the EU.

If that figure may be too big for you too fathom that is one followed by eight zeroes or roughly` one and half times the amount government got for selling Mid-Med Bank. It is roughly equal to the amount of government`s spends on social security for 7 months.` It is more than the whole capital expenditure of the government for one year.

The seriousness of the issue aggravates when considering that this statement was made` in the peak of a premature election campaign. The confused voter was given an easily deceptive choice which made mockery of the democratic process. Alfred Sant`s persistent nagging about the magnitude of the financial problem left behind by the nationalist administration of 1992 `1996 or the PN`s re-assurance that the government finances are fine; that they will be made better by receiving an annual nine digit cheque` from Brussels so that the easy life of money no problem culture could` be extended eternally.

Time has a habit of bringing the chickens home to roost. And so are they doing as three years have not` been enough to deliver the bonanza from Brussels. On the contrary we are spending more then the little we get in our eagerness to join the EU. We have also lost the annual grant we used to get under the Italian Financial protocol which has been allowed to expire as we pretend we are now premier division and do not need to seek aid from anyone.

The public finance figures for the 7 months to July 2001 published this week bear witness to these undelivered promises. Although ordinary revenue (read taxes) are Lm19 million or 6% more than last year the deficit still increased by Lm7 million to Lm69 million. Bottom line is that in spite of being squeezed by more taxation government keeps spending it faster leaving the deficit problem largely unaddressed. An this is not the whole story as the growth in public debt indicates that there are many funded payments which have still not been properly accounted through the budget.

So this month we are collectively celebrating the gross public debt passing the psychological barrier of` one billion liri. That is one with nine zeroes behind it equivalent to 64% of the market value of all that we produced in the year 2000.

That is serious enough both in the absolute numbers level as well as in the alarming growth rate with which it is accumulating. Its debt servicing cost has doubled over the last 4 years in spite of pocketing no less than Lm120 million privatisation revenues without which the public debt would have swelled that much further.

But what is even more serious is that there exist approximately` Lm400 million which are already funded either through loans through the Treasury Clearance Fund ( the chances of recovery of which are not much better than wishing for a month of Sundays) or through Bank loans guaranteed by the government which sooner are later have to be called by their real name ` central government debt funded outside the budget which can only be serviced and repaid from central government contributions.

Whilst celebrating the zeros as they continue to roll over crushing our economy I muse that we have not even started the first step towards solving this problem ` that of recognising and admitting its magnitude!

Problems that can't wait

The Malta Independent

Problems that can`t wait

Last weekend was a new experience. Whilst knowing that August is considered the political month of folly` I never imagined that folly could reach such extremes. I realise that the media machine which justifies the government in all seasons runs dry during the holiday season and they have to create issues out of thin air.

But crucifying me for the mere historical interpretation of the motivations behind the condoning of violence by Labour governments of the 70`s and 80`s and an appeal for these motivations to be removed so that we can live in a true democracy where governments are allowed to execute their political mandate, is quite revealing.

Clearly the political cell of the` network orchestrated this barrage to try to turn my argument on its head and depict me, as one of the more credible critics of its performance, as a perpetrator of violence.` I who have never raised a hand on anyone and who make consistent use of the media to persuade, I who condemn violence in all its forms, I got depicted as a perpetrator of violence. In the chorus orchestrated there was an element that if democracy were to be` likened to the church hierarchy he would not even merit to be an altar boy.

This despicable trait of killing the messenger in order to weaken the message has been the main reason why I have so far consistently refused to join the political mainstream. It is also the reason which` is now making me seriously consider joining it if I can persuade myself that it is more possible to change it from within than from outside.

And change it must if we are to survive. Take the issue of pension reforms. This issue must be tackled.` It cannot wait forever. The numbers are there and the mathematics won`t change. Yet rather than having the political culture` to find long term solutions to such problems which would otherwise haunt governments of tomorrow more than of today, we just turn the issue into a political ping pong. And it is not a simple matter of blaming the opposition` for keeping aloof` and` letting the government carry the whole political burden. It is the whole political culture which betrays, lies and humiliates opponents in the most unfair manner who than cannot be expected to play ball where they should.

Government on its part, seeing the political liability involved in giving its imprimatur to a technical report prepared by technicians of its trust, starts distancing itself from the recommendations of the report even before these are officially presented.

The end result is that whilst talk is cheap solutions are made to look expensive in political terms and therefore they are left for posterity to face the problem probably when it would be too late to create real, lasting and not so painful solutions.

Our country deserves better. Our country deserves politicians who compete in providing the best solutions rather than those who excel in fudging the issues and rely on yesteryear`s spectres to confuse the focus on the country`s current` real problems.

It needs politicians who accept that whilst we must preserve the social fabric that guarantees two-thirds pension to all present contributors up to a middle income level, this can only be sustained if schemes are introduced and economic scenarios are created where people are motivated to continue working beyond pension age, where female participation in the labour market is raised to European levels, and where the health sector has to be separated from the national insurance and funded separately from mainstream taxation and from fiscal incentives to adopt private health insurance.

Dr Gonzi please use your energies to orchestrate such solutions not to silence well meaning critics.

IMF warning

The Malta Independent on Sunday IMF warning

I read the IMF update report on Malta and I am writing this commentary thereon before I heard the government and opposition reaction to it. But then they are all too predictable.

The IMF report couched in technical verbiage and subtle hidden messages is essentially a warning signal to the whole country.` I strongly advice that we listen carefully to the general message rather than just pick the bits which suit either the government or opposition and throw it in the face of the opposing party.

In simple terms the general message is:

Whilst good progress has been made in containing and reducing the public deficit this has come solely from the revenue side by increasing and enforcing taxation.` The expenditure side has been neglected.

Taxation increases and enforcement has probably reached their` limit of efficiency and further progress must now come from the expenditure side.

Expenditure economies must necessarily touch the public sector payroll expenditure, pension reform and aggressive privatisation programme.

Currency weights in the Maltese lira basket have lost touch with reality and should be adjusted to reflect non-primary sector trade patterns.

Loss of currency reserves by the monetary authorities was quite worrying during 2000 and the country needs to reverse this trend soon and cannot reduce domestic interest rates in line with international trend before foreign reserves are rebuilt.

The government should review its medium term financial strategy and include off-budget fiscal operations.

GDP growth prospects for current year are optimistic as the export sector, which underpinned the growth of 2000, will be effected by the international slowdown especially in the technology sector. Maltese exports and value added- manufacturing is particularly exposed to the micro-electronic branch of the technology sector and as tourism has lost its growth,` government optimism for GDP growth in 2001` is not underpinned by realistic expectations.

The government and opposition can choose to ignore the real significance of the IMF report and continue to play their political games.` But as a country we can ill-afford to do so. Now that we are past the half way mark of the current year we can form a strong opinion on the extent IMF warnings have assumed added or lesser` importance by the outcome of current performance.

Government recurrent expenditure remains anything but addressed. Government debt continues to grow at worrying speed.` Privatisation has stalled after the Mid-Med fiasco and the only one on track, the Public Lotto, seems heading for a similar obscure process excluding the public at large.

The Maltese lira remains unrealistically overvalued by the undue weight of the US Dollar in the Maltese lira basket.` Foreign official reserves are still falling and GDP growth is down to a mere 2%, mostly underpinned by wage increases awarded to government employees whilst GNP has downright contracted.

And whilst government deficit is in line with the medium term strategy this is meaningless for two reasons. GDP growth is not in line with the medium term financial strategy and the off-budget financing is becoming so significant that` the budget deficit does not tell the full story.

In fact this question of off-budget financing is becoming a bit of a charade. Probably to many readers` it is news that the Ministry of Finance apart from the budget account known as the Consolidated Fund has` another account called the Treasury Clearance Fund` (TCF). Government is supposed to use this account to fund temporary loans which are to be repaid within a short time and therefore will self adjust without the need to `dirty` the consolidated fund. Now if anybody thinks that transfers and loans to Malta Drydocks, Malta Shipbuilding and Freeport are temporary and these will be repaid anytime soon if ever, then such body is a real eternal optimist. Yet in 2000 this TCF made payments equivalent to 1.5% of the GDP which must be something like a cool Lm23 million.

And if one neutralizes the 1998 camouflage engineered by the incoming Minister of Finance by taking long outstanding payments from the TCF and putting them through the consolidated fund to inflate the budget deficit then` it is not so difficult to conclude that the reduction in the budget deficit is more apparent than real. The increased tax revenues which have swelled government revenue, drained our pockets, and stalled the economy have in their large majority financed increased expenditure without really addressing the deficit.

The IMF has given us the yellow card.` Hopefully we will never need to knock on IMF`s doors if we continue losing reserves at the current concerning rate.` Yet some people in authority prefer exaggerating violence spectres of the past rather than tackling the problems of the present.

IMF warning

The Malta Independent on Sunday IMF warning

I read the IMF update report on Malta and I am writing this commentary thereon before I heard the government and opposition reaction to it. But then they are all too predictable.

The IMF report couched in technical verbiage and subtle hidden messages is essentially a warning signal to the whole country.` I strongly advice that we listen carefully to the general message rather than just pick the bits which suit either the government or opposition and throw it in the face of the opposing party.

In simple terms the general message is:

Whilst good progress has been made in containing and reducing the public deficit this has come solely from the revenue side by increasing and enforcing taxation.` The expenditure side has been neglected.

Taxation increases and enforcement has probably reached their` limit of efficiency and further progress must now come from the expenditure side.

Expenditure economies must necessarily touch the public sector payroll expenditure, pension reform and aggressive privatisation programme.

Currency weights in the Maltese lira basket have lost touch with reality and should be adjusted to reflect non-primary sector trade patterns.

Loss of currency reserves by the monetary authorities was quite worrying during 2000 and the country needs to reverse this trend soon and cannot reduce domestic interest rates in line with international trend before foreign reserves are rebuilt.

The government should review its medium term financial strategy and include off-budget fiscal operations.

GDP growth prospects for current year are optimistic as the export sector, which underpinned the growth of 2000, will be effected by the international slowdown especially in the technology sector. Maltese exports and value added- manufacturing is particularly exposed to the micro-electronic branch of the technology sector and as tourism has lost its growth,` government optimism for GDP growth in 2001` is not underpinned by realistic expectations.

The government and opposition can choose to ignore the real significance of the IMF report and continue to play their political games.` But as a country we can ill-afford to do so. Now that we are past the half way mark of the current year we can form a strong opinion on the extent IMF warnings have assumed added or lesser` importance by the outcome of current performance.

Government recurrent expenditure remains anything but addressed. Government debt continues to grow at worrying speed.` Privatisation has stalled after the Mid-Med fiasco and the only one on track, the Public Lotto, seems heading for a similar obscure process excluding the public at large.

The Maltese lira remains unrealistically overvalued by the undue weight of the US Dollar in the Maltese lira basket.` Foreign official reserves are still falling and GDP growth is down to a mere 2%, mostly underpinned by wage increases awarded to government employees whilst GNP has downright contracted.

And whilst government deficit is in line with the medium term strategy this is meaningless for two reasons. GDP growth is not in line with the medium term financial strategy and the off-budget financing is becoming so significant that` the budget deficit does not tell the full story.

In fact this question of off-budget financing is becoming a bit of a charade. Probably to many readers` it is news that the Ministry of Finance apart from the budget account known as the Consolidated Fund has` another account called the Treasury Clearance Fund` (TCF). Government is supposed to use this account to fund temporary loans which are to be repaid within a short time and therefore will self adjust without the need to `dirty` the consolidated fund. Now if anybody thinks that transfers and loans to Malta Drydocks, Malta Shipbuilding and Freeport are temporary and these will be repaid anytime soon if ever, then such body is a real eternal optimist. Yet in 2000 this TCF made payments equivalent to 1.5% of the GDP which must be something like a cool Lm23 million.

And if one neutralizes the 1998 camouflage engineered by the incoming Minister of Finance by taking long outstanding payments from the TCF and putting them through the consolidated fund to inflate the budget deficit then` it is not so difficult to conclude that the reduction in the budget deficit is more apparent than real. The increased tax revenues which have swelled government revenue, drained our pockets, and stalled the economy have in their large majority financed increased expenditure without really addressing the deficit.

The IMF has given us the yellow card.` Hopefully we will never need to knock on IMF`s doors if we continue losing reserves at the current concerning rate.` Yet some people in authority prefer exaggerating violence spectres of the past rather than tackling the problems of the present.

Qbadt huta

Il-Kullhadd Qdabt huta

Na ghadnix immur nistad.` Kont nintilef intella l-vopi, l-brieqex u xi kultant xi sparlu.` Izda l-gimgha l-ohra stadt u dbadt sew. Qbadt fis-sunnara lil Lawrence Gonzi u lil media nazzjonalista.

Ghedt dawn qeghdin darhom mal-hajt.` Mejtin biex jaqilghu l-inkwiet f`Awwissu biex joskuraw lil partit laburista. Il-bicca tal-kummissjoni elettorali kienet intenzjonatha biex tal-labour ifuru f`Awwissu u jtellfu lil poplu il-paci u kalma li jixtieq fi zmien il-vaganzi.

Ghedt ha nara ftit kemm huma ddisprati biex jaqbdu ma xi haga. U ktibt artiklu kif naghmel kull nar ta` gimgha fl-Independent.` U gharaxt lill-imhuh fil-partit nazzjonalista b`argument semplici.

L-argument li jekk gvern laburista meta jirbah l-elezzjoni li gejja u jsib min jaghmillu ostakli biex ma jkunx jista` jaqdi id-dmir tal-mandat elettorali tieghu, allura nigu kostretti nuzaw il-forza biex min ma jridx jahdem maghna jitwarrab u min jostakolha id-demokrazija icedi.

Din mhux xi haga ta` barra minn hawn.` In-nazzjonalisti stess anke f`din il-legizlatura meta dehrilhom li l-GWU qed tilghab il-loghba politika, u m`hiniex qed nghid li dan kien hekk, ma hasbuhiex darbtejn biex uzaw il-forza u l-vjolenza fuq l-ufficjali tal-GWU.

U lanqas ma dehrilhom li kellhom jikkundannaw il-vjolenza moqzieza ta` wara l-elezzjoni. Ewforija kien sejhilha l-Prim Ministru. U meta lil hija Tarcisju dahlu ghalih f`daru bil-lejl ghal xejn b`xejn u ferewh serjament ,` raw kif ghamlu biex lil dawk li nstabu hatju wehhlihom anqas milli tehel jekk jaqbduk bla seat belt.

Ghedt ha nitfa` lixka bl-artiklu tieghi u jekk in-nazzjonalisti tassew iddisprati ghal diversiv jaqbzu fuqu biex idawwruh ha jippruvaw ipengu lil tal-Labour bhala vjolenti. X`jimporta ghalihom li tajna prova ta rgulija kbira kemm meta hadna il-poter fl-1996 kif ukoll meta tlaqnih fl-1998`

U ma mortx zball. Il-Ministru Gonzi u l-media nazzjonalista li tizfen ghal bakketta tieghu qabzu fuqu bhal ilpup bil-guh. Daqstant jinsabu ddisprati n-n-nazzjonalisti. U meta ndunaw li l-bicca splodiet f`idejhom ghax anke uhud minn shabhom stess u l-media li s-soltu tappoghom inkundizzjonalment, haduha kontrihom jew qaghdu lura, dehru kemm fil-fatt jinsabu gharwenin quddiem il-poplu.

Dehru li jridu demokrazija ghalihom u demokrazija ghal haddiehor. Dehru li r-regoli tad-demokrazija jridu jgebbduhom u jaqilbuhom rashom `l isfel biex dejjem jahdmu favur taghhom.

Il-prova ta kemm partit` jemmen fid-demokrazija ma tigix meta ghandu l-maggoranza.` Tigi meta l-partit jitlef il-maggoranza u jigi msejjah jghaddi l-poter lil partit oppost. Hemm tara kemm partit jemmen veru fid-demokrazija.

Il-partit laburista ceda l-poter bla problemi ta xejn fl-1987 u fl-1998. Izda mhux hekk biss.` Fl-1955 u fl-1998 ceda l-poter meta rrezenja qabel iz-zmien ghax fehem li dan kien fl-interess tad-demokrazija. Kieku fittex l-interess tal-poter il-partit laburista kien jibqa jiggrokkja fil-poter kemm fl-1955 kif ukoll fl-1998 u jhalli lid-demokrazija ssaffar.` U fl-1987 il-Partit Laburista sista biex isir it-tibdil fil-kostituzzjoni minkejja li kien jaf li minghajr dan it-tibdil seta jibqa fil-poter anke minghajr ma jgib maggoranza tal-voti.

Ikkomparaw dan mar-rekord nazzjonalista li kellu jcedi l-poter darbtejn fl-1971 u fl-1996. Fl-1971 zammew lil Malta mdendla jitolbu recounts tal-5 distrett avolja kienu jafu li tilfu l-maggoranza tal-voti.` U wara ftit xhur kien hemm attentat biex jinxtara deputat laburista biex jaqsam il-kamra u jwaqqa l-gvern.` U fl-1996 qaghdu bhal prostituta tichad li dinbet u minflok titkaza bil-vergni ghax tilbes skullat.` Kull ostruzzjoni li setghu jaghmlu ghal gvern laburista ghamluha, inkluz abbuz mill-anzjanita` tal-Perit Mintoff biex dawruh kontra l-partit tieghu stess u jaghtihom lura il-poter qabel zmienu.

Is-sigra tingharaf mil-frott taghha u l-Ministru Gonzi kkonvinca biss li l-gvern tieghu nieqes minn record li jista jsib appogg mal-poplu u lest jiggranfa ma kull diversiv biex jaljena.

Alfred Mifsud

Democratic pudding

The Malta Independent

Democratic pudding

You must have heard the story of the man who took the police to court for using force to stop him from battering his wife to death. He argued that he had every right to mistreat his wife and that the police had no right to interfere in family affairs` by using force against him.

This story flashed in mind when over last weekend Minister Gonzi and the nationalist media conveniently misinterpreted my contribution of last week and gave it` a meaning directly opposite to what was intended.

The battered wife is democracy. The violent husband is the nationalist party, supported as it is by a wide power network, that pretends to have` a perpetual title to govern and to obstruct undemocratically even when Labour gets a valid electoral mandate. The police are the labour party who if constrained to use force to save democracy they are charged by the violent husband for having used force to stop him abusing his wife.` `That`s what Minister Gonzi sounded like when he claimed I instigated Labour to use violence to govern.

The difference between Labour and Nationalists come out from the history books. Post-war history clearly show that Labour seek power to govern in the interest of the nation whereas the nationalist seek power to govern in the interest of the network. The difference is that Labour use power to protect democracy whilst the Nationalist use democracy to protect their power.

The test comes at the time democracy calls for power to be passed on.` This is the basic test which chooses users from abusers of democracy.

In the post war period Labour lost two elections when in power. In 1987 and in 1998 transition of power was immediate and smooth without any obstruction from its donors. But that is not the whole story. Three times in the post-war history Labour unilaterally chose that in the interest of democracy it was time to let the power pass. In 1958 and 1998 a Labour government resigned to protect democracy when it could have easily stayed in power to protect selfish interests. In 1987 Labour rose above itself to change the constitution,` the status quo of which could have given Labour a permanent stay in power against the democratic wish of the majority.

Compare this to the two times that the nationalists had to pass on power in recent history. In 1971 with a clear majority vote in Labour`s favour the country was kept in high suspense by repeated calls for manual recounts of the 5th district. `A few months down the electoral mandate we even had attempts to bribe a Labour MP to cross the floor. Than look at 1996 and see how lying through their teeth the nationalist spent their months in opposition denying the existence of a financial problem of colossal proportions which they had themselves architectured, and instigating popular dissent against tough fiscal measures which Labour had no real choice but to adopt.

And to complete the picture just remember that in name of democracy the Nationalist won two elections when their allies in the power network were freely awarding mortal sins to whoever voted, read or even heard Labour. And seeing public opinion turning against them we had recently high level appeals from nationalists quarters instigating Church authorities to throw their weight behind the nationalist political bandwagon again as if this was still 1961.

As in other aspects of life, the proof of the democratic pudding is in the eating and not in cheap talk and fact twisting.

Modus Vivendi

The Times of Malta



The weekend papers provided two examples of the need for a prospective Labour government to strike a modus vivendi with organisations which would rather have it as a permanent opposition.

HSBC`s CEO Tom Robson impresses no one when he stresses that his bank is apolitical and would not fear a Labour government. In his interview in The Times of August 4th he was both political and contradictory.` He said Labours` Switzerland in the Mediterranean policy, which he does not understand, could be the ideal world for HSBC. How could something which he does not understand be also ideal`

Yet Mr Robson apart, a Labour government and HSBC have to find a modus vivendi. Labour model for the Maltese economy is open and aggressive welcoming investors who do not just exploit the domestic market but actually bring value added to our economy through offering competitive goods and services to a global community.` HSBC global reach and financial strength and ability to be part of this cannot be disputed.

But it would be difficult to realise such a modus vivendi if HSBC stick to Mr Robson`s arguments which are basically two:

In Malta HSBC are so dominant in the banking market that they can raise prices for services without really caring much about the competition.` HSBC do not think that their size and dominant position should be used against them when they fix prices for services which must be commercial all the way.` The social obligations of their size are fully discharged by the HSBC Cares for Children Fund.

A future Labour government would not dare touch HSBC fearing it could use their global reach to tell the world what a bad place for investment Malta has become since Labour has taken over.

Of the 79 countries in which HSBC has a presence there is not one where they command over 50% of the banking market. Of these 79 countries there is not one in which HSBC bought a dominant position and a majority market share without having to face competition.

This is not the way HSBC do business world-wide. Just look at the way they are going about disposing their investment in Lombard. At the right price, to the right buyer and we will take our time to do that, Mr Robson declared.` Sound words of advice which were not given to our Minister of Finance when he single handedly concluded the sale of a much bigger chunk, indeed majority control, of our largest bank to HSBC.



Quite the contrary HSBC tied our national purse curator not to negotiate with anyone else whilst negotiations with them were proceeding and the whole thing was wrapped up at half price in just a matter of weeks without even permitting our Minister the opportunity to seek advice from international sources; indeed not even to inform his colleagues in the cabinet.

If HSBC want to keep a future Labour government hostage to their global world-wide power in order to protect a dominant position which they do not have in any other jurisdiction in which they operate then this is arrogance of the first degree. It ought to be Labour`s priority to bring real competition in the local banking scene by reducing dominant positions to ensure that we have no single institution that can pretend it can raise charges at will without caring about the competition.

Are HSBC joining the power network which keeps the nationalists in power even when in opposition` In an article I recently published about this local reality I gave a historical perspective that Mintoff`s tenure of power was only shielded from `this power network by the threat or use force. I opined that unless we want a one party democracy this power network has to be dismantled to ensure that Labour is not constrained to use force to discharge the democratic mandate it wins in an election.

It must be really scraping the bottom of the barrel for the Deputy Prime Minister to argue that I am instigating Labour`s recourse to violence.` What I am instigating is the dismantling of the power network which obstruct the democratic discharge of a future Labour government, a network could be` about to recruit a new power cell.

And yet it is equally Labour`s responsibility to reach a reasonable modus vivendi with individual cells of a power network which must be wound down by persuasion and not by force.

Alfred Mifsud

Modus Vivendi

The Times of Malta



The weekend papers provided two examples of the need for a prospective Labour government to strike a modus vivendi with organisations which would rather have it as a permanent opposition.

HSBC`s CEO Tom Robson impresses no one when he stresses that his bank is apolitical and would not fear a Labour government. In his interview in The Times of August 4th he was both political and contradictory.` He said Labours` Switzerland in the Mediterranean policy, which he does not understand, could be the ideal world for HSBC. How could something which he does not understand be also ideal`

Yet Mr Robson apart, a Labour government and HSBC have to find a modus vivendi. Labour model for the Maltese economy is open and aggressive welcoming investors who do not just exploit the domestic market but actually bring value added to our economy through offering competitive goods and services to a global community.` HSBC global reach and financial strength and ability to be part of this cannot be disputed.

But it would be difficult to realise such a modus vivendi if HSBC stick to Mr Robson`s arguments which are basically two:

In Malta HSBC are so dominant in the banking market that they can raise prices for services without really caring much about the competition.` HSBC do not think that their size and dominant position should be used against them when they fix prices for services which must be commercial all the way.` The social obligations of their size are fully discharged by the HSBC Cares for Children Fund.

A future Labour government would not dare touch HSBC fearing it could use their global reach to tell the world what a bad place for investment Malta has become since Labour has taken over.

Of the 79 countries in which HSBC has a presence there is not one where they command over 50% of the banking market. Of these 79 countries there is not one in which HSBC bought a dominant position and a majority market share without having to face competition.

This is not the way HSBC do business world-wide. Just look at the way they are going about disposing their investment in Lombard. At the right price, to the right buyer and we will take our time to do that, Mr Robson declared.` Sound words of advice which were not given to our Minister of Finance when he single handedly concluded the sale of a much bigger chunk, indeed majority control, of our largest bank to HSBC.



Quite the contrary HSBC tied our national purse curator not to negotiate with anyone else whilst negotiations with them were proceeding and the whole thing was wrapped up at half price in just a matter of weeks without even permitting our Minister the opportunity to seek advice from international sources; indeed not even to inform his colleagues in the cabinet.

If HSBC want to keep a future Labour government hostage to their global world-wide power in order to protect a dominant position which they do not have in any other jurisdiction in which they operate then this is arrogance of the first degree. It ought to be Labour`s priority to bring real competition in the local banking scene by reducing dominant positions to ensure that we have no single institution that can pretend it can raise charges at will without caring about the competition.

Are HSBC joining the power network which keeps the nationalists in power even when in opposition` In an article I recently published about this local reality I gave a historical perspective that Mintoff`s tenure of power was only shielded from `this power network by the threat or use force. I opined that unless we want a one party democracy this power network has to be dismantled to ensure that Labour is not constrained to use force to discharge the democratic mandate it wins in an election.

It must be really scraping the bottom of the barrel for the Deputy Prime Minister to argue that I am instigating Labour`s recourse to violence.` What I am instigating is the dismantling of the power network which obstruct the democratic discharge of a future Labour government, a network could be` about to recruit a new power cell.

And yet it is equally Labour`s responsibility to reach a reasonable modus vivendi with individual cells of a power network which must be wound down by persuasion and not by force.

Alfred Mifsud

Modus Vivendi

The Times of Malta

Awissu - zmien ir-riflessjoni

Il-Kullhadd Awissu - zmien ir-riflessjoni

F`Awissu il-poplu Malti jhobb jiehu vaganza u ma jkunx tant attent ghal dak li jkun qed jinghad fl-ahbarijiet u fil-media. Ghalhekk nsostni li f`Awissu anke il-messaggi politici ghandhom jonqsu l-ewwelnett ghax ma jsibux min ikun attent jisma` u t-tieni biex nirrispettaw ix-xewqa tal-poplu li jiehu vaganza.

Sostnejt dan anke fis-sajf ta` l-1998. Stqarrejt li l-ghazla ta` elezzjoni fil-bidu ta` Settembru kienet infelici. Il-poplu ma jkunx iffokat f`Awissu waqt kampanja elettorali qalila. Il-poplu jikkastiga bla hniena lil min itellfu is-siesta tas-shana t`Awissu.

In-nazzjonalisti dan jafuh u mhux l-ewwel darba nibxu lil tal-Labour biex jaqilghu l-inkwiet matul Awissu. Il-kwistjoni ta` l-airport ta` sentejn ilu hu ezempju iehor.

Din is-sena ukoll qed jinbxuna biex infuru f`Awissu rigward il-kwistjoni tal-Kummissjoni Elettorali.` Ahna rridu nahdmu b`mohhna. Awissu nhalluh jghaddi bil-kwiet u nuzawh biex` nsinnu u niffriskaw l-istrategiji li rridu nhaddmu hekk kif is-shana tas-sajf thalli posta ghar-rih isfel ta` Settembru.

U l-istrategiji taghna irid ikollhom l-objettiv li jwasslu messaggi cari lill-elettorat biex inkabbru l-vantagg li bhalissa ghandna fuq in-nazzjonalisti halli dan nibqghu inziduh sa l-elezzjoni li gejja, tigi meta tigi.

Ma nistghux nistriehu fuq il-vantagg li ghandna. Ghal konfuzjoni u t-tahwid li hawn fil-pajjiz il-Partit Laburista missu ghandu vantagg car u indiskutibbli li ma jhalli ebda lok ghal xi rimonta min-nazzjonalisti sa l-elezzjoni li jmiss.

Importanti ghalhekk li matul Awissu nbaxxu l-vuci u mqawwu l-menti. Nifhmu li l-messaggi li rridu nwasslu lil-poplu huma erbgha.

L-ewwel huwa li krizi ekonomika li qedin fiha hija tort tan-nazzjonalisti u li n-nazzjonalisti ma jafux u ma jistghux johorgu lil pajjiz minn din il-krizi. Il-virus tal-poter mhux ihallihom jahdmu ghal gid tal-pajjiz u minflok qed jahdmu biex jiddefendu l-istess poter flok biex jindirizzaw il-problemi tal-pajjiz.

It-tieni li l-Partit Laburista huwa maghqud u determinat li kif jiehu l-gvern f`idejh ihaddem strategija li jifdu lil pajjizna mir-rovina ekonomika li dahhluh fiha n-nazzjonalisti. Li ma nibzghux niehdu decizjonijiet difficli basta kullhadd jifhem li meta jkun fil-gvern jikkmanda l-Partit Laburista u min mhux lest jahdem maghna, iwarrab jew inwarrbuh. Mhux se nhallu min jahwar min taht u jippretendi li jibqa` jikkmanda anke mill-oppozizzjoni.

Dan ma jsirx bi tpattija jew vendikazzjoni izda jsir biss biex ma nhallux lin-nazzjonalisti jergghu inawwru mandat demokratiku li l-poplu jkun ta lil Partit Laburista.

It-tielet huwa li l-Laburisti ghandhom dritt daqs haddiehor f`dan il-pajjiz u mhux ser naccettaw li jigu meqjusa bhala cittadini inferjuri. Dak li hu taghhom jehduh u maljar halli mbaghad wara nittrattaw lil kulhadd l-istess.

U fl-ahhar irridu nfehmu li ahna ma ghandna xejn kontra l-Unjoni Ewropeja. Li ahna nqsiu l-Unjoni Ewropeja bhala zvilupp pozittiv u li ghandna kull interess li l-UE tikber u ddahhal izjed membri maghha. Ahna izda nemmnu li ta` lanqas sa fejn nistghu naraw, ma jkunx fl-interess ta` pajjizna li jfittex shubija shiha ghax dan iwassal biex nitilfu rajna minn idejna. U l-esperjenza taghna f`dawn l-ahhar erbghin sena hija cara. B`rajna f;idejna mxejna. Meta rajna kien f`idejn haddiehor ir-rispett u l-kliem sabih ma ssarrafx f`mizuri prattici li hallewna nimxu `l quddiem. Dawn il-mizuri prattici nkisbu meta stajna npoggu fuq il-mejda tan-negozjati b`rajna f`idejna, nghatu u niehdu u nqabblu kif jaqbel.

Minn issa sa l-elezzjoni rridu nishqu fuq dawn l-erba` punti. Ma ghandiex ghalfejn nifthu hafna fromnti ohra u ma ghandiex ghalfejn nezageraw l-affarijiet ghax kif inhuma huma serji bizzejjed u l-ezagerazzjoni tghin lin-nazzjonalisti billi ttellef il-kredibilita` tal-kritika taghna.

Nawguralkom Awissu ta` mistrieh waqt li nibqghu nahdmu biex nlestulkom `l ahjar ghal wara.

Blairing the gap

The Malta Independent

Blairing the gap

The reason why this country seems in a perpetual electioneering` state is that in our two-party system the parties are roughly equal only in terms of voter popularity.` `On all other terms there is a huge gap, glaring and growing.

Whilst` Labour is a stand-alone political party facing internal competition from the GWU in terms of commercial activities conducted amongst the common base of supporters, the National party is a political cell in a power network which spans the social spectrum of the entire country.

When the nationalists are in power they have total power. Half the population of Labour sympathies starts feeling strangers in their own country. The political power of running the legislative and administrative pillars of democracy is fortified by effective and unrestrained support which the nationalists get from the other cells of the power network spread across the media, the judiciary, the intelligentsia, the church, the civil service, the business organisations and the white collar trade union sector.

In return the political cell feeds these other supporting cells with favourable treatment much of which has translated itself into the structural public financial deficit and the burgeoning national debt.

When in opposition the nationalist political cell loses its power but the power of the other cells in the network prevails and they start working to paint the labour` in government in the` darkest colours and obstructing the performance of its mandate. The 1996-1998 experience speaks volumes in this regard.

What was unacceptable and condemnable for the other power network cells under labour, become perfectly normal and acceptable under a PN administration even if the matter concerns something as basic for democracy as the appointment of an electoral commission acceptable to both parties, or the transparent running of the electoral process.

Mintoff used to bridge this power gap by the threat of violence which on occasions, by design or by accident, translated itself into real violence. Since labour rescinded, as is proper in a mature democracy, to the threat or use of violence, the nationalist power network has been having a field day , in and out of government.` The balance of power became firmly loaded against labour.

When labour was in government it was obstructed to in a way that rendered the country ungovernable,` in the process painting the nationalists, wrapped up in contradictions and compromises of their overstay in power,` as the choice of the lesser evil.

This situation has now reached breaking point. Unless they want to force labour to resort to the threat or use of violence with which Mintoff used to control the power network, the network must dismantle and give Labour a fair chance to govern in accordance with the electoral mandate.

Labour on its part needs to do what Tony Blair did in making the UK Labour Party acceptable in the former hard core conservative precincts, including the financial City. Labour needs to regain the hard core without losing the middle ground. Labour needs to be perceived as a sustainable alternative to a stale nationalist administration. Malta `s labour needs to fill the power gap by Blairing it.