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