Friday, 26 September 2003

Hole in the Bucket

The Malta Independent 

In his Independence speech the Prime Minister declared five problem areas where he expects broad national interest to prevail over narrow sectorial interest. Politely he chastised business organisations and some trade unions for losing their pre-referendum zeal for an altruistic team effort approach to national problem solving.

Following the post-election fatigue and the summer lull this was a bad start for two reasons. Firstly because the government cannot expect the sort of co-operation it demands and expects, unless it recites a mea culpa as a preamble to undertaking this arduous exercise.` Secondly because the five problem areas indicated are hotchpotch of cause and effect which must be segregated and identified as such if we are to apply true solutions to the causes rather than waste scarce resources in treating symptoms.

Dr Fenech Adami has been Prime Minister for more than 16 years if the short interlude of Labour`s 22 months is disregarded. Problems of the sort identified do not grow overnight and even if one tries there is a limit to how much permanent damage one can do in 22 months.

The identified problem areas are largely, if not totally, the works of governments under the current Prime Minister. He cannot talk as if these problems were fathered by others and everyone else could be blamed but his government. When one is at the top the buck stops there.

If today we have a problem in creating jobs it is because we have lost competitiveness and are not attracting investment in the right quantity and quality. If social services have become unsustainable it is because they have been allowed to become so often by putting political self-interest before truly national interest. If public service has become too expensive to carry it is because we have only paid lip service to its re-structuring while in reality we were creating jobs for the boys in a myriad of public service quangos.

If the public deficit has spun out of control it is because over the years a culture of money no problem has been allowed to pervade the public administration and in the many cases all problems have been temporarily solved by resorting to the national cheque book. If Malta Drydocks is still a drain on national budget it is because taxpayers funds which were diverted to keep the enterprise afloat have not been accompanied by truly re-structuring measures.

And if we go by symptoms we have much more than five problem areas. Symptoms are all over the place and the list could be extended by including many other para-statal organisations which are draining central funds when in the `bad` old times of `ahleb Guz` the flow of funds was in the other direction.

So the first thing that has to be recited is that if we are where we are today it is because over the last sixteen years the free-spending culture cultivated by the Fenech Adami`s different versions of government has landed us in this financial mess. It has served well the PN`s self-interest through buying electoral loyalty at the expense of the national interest.

And if we are to be serious about finding real solutions we must start by condemning such self-destructive vices and invoke the external discipline of EU membership as a good opportunity to turn a new leaf and work together on real lasting solutions rather than just seek to blame all else in an exercise of false self-righteousness.

After this demonstrative but essential ritual then we must pass to separate the source of the problem from the symptom. We can argue that public deficit is not permitting us to keep financing the Drydocks and is negating us the possibility of making more investments to grow the economy so as to create more jobs and to be able to afford the public service and social services we are used to which themselves are however the source of the public sector deficit. We would have mentioned the five problem areas in a circular flow without a beginning or an end leaving us staring` at the problem without knowing where to break into the vicious circle to start addressing the cure.` It reminds me of a hole in the bucket.

Recent pronouncements by the Minister of Finance and by the Prime Minister that the deficit has worsened because of revenue shortfall is a bad omen. I smell an inclination to attack the problem from the revenue side when the real source of the problem is the expenditure side. And whilst social services must stay within affordable limits I dare say that it is not social services expenditure that should bear the brunt of the necessary adjustment.

Unless we are courageous enough to address the problem at source to ensure that the Maltese work force is productively employed and earning its way in a competitively globalised world, we would be treating the symptoms rather then the source of the problem. This will lead to digging ourselves deeper into the hole we got ourselves into. No matter how hard reality remains what it is.

Sunday, 21 September 2003

It Never Rains

The Malta Independent on Sunday 
I have not read the analysis report prepared for Labour Party’s national executive by an autonomous Working Group composed of three respectable gentlemen. I refused to read it under the aura of secrecy with which it has been surrounded. I made my submissions to the Working Group and did not impose any condition of confidentiality or secrecy for my submissions. I believe in transparency. The argument that the wide distribution or publication of the report would give ammunition to political opponents to castigate the party with, is unconvincing and probably serves better individuals who should be called to account rather than the party that needs to do what it needs to do to learn from mistakes and to regenerate itself in its quest to obtain majority support at next elections.

Furthermore I cannot see how confidentiality could square up with making this analysis available in good time to at least the nearly 1,000 delegates of the general conference who are expected to make informed decisions about the party’s emerging policies. The risk of the General Conference delegates having to take important strategic decisions without the benefit of a proper analysis of what went wrong for Labour, is far bigger than the risk of leakages through enabling the delegates to be properly informed before making their decisions for the party’s future.

So even whilst I had every opportunity to gain access to the analysis I refused to read it under these conditions. Still I can make my own analysis and assessment of why Labour lost and I put the reasons under three categories: strategic errors, tactical errors and stupid errors.

The Strategic Error was Labour’s insensible insistence that the EU issue had to be bundled with the election issue and that a referendum was unnecessary and unbinding. It is easy to point out that in January 2001 the general conference had decided to proceed accordingly. But it does well to remember that at the time the working assumption was that EU membership would be wrapped during the then current legislature and the motivation for Labour to insist that the issue be decided through an election was meant for Labour to have a chance to be in government before the issue is decided because it was clear that it would be pretty difficult for Labour to win a referendum organised by a PN government who could not be trusted to make it a level playing field for the yes and no.

The moment it became clear that execution of the EU membership project had slipped into the next legislature, Labour’s interest was to demand the separation of the EU issue from the election and for a binding referendum to be held within a very tight schedule after the election to respect the EU accession calendar. Labour did in fact belatedly switch strategy on these lines but inexplicably shot itself in the brain by incredibly demanding a 60 per cent threshold for the referendum to be binding. This gave full justification to the Prime Minister to proceed with a calendar of events which perfectly suited the PN’s interest without alienating public opinion as Labour managed to do with the 60 per cent condition.

So Labour placed themselves in the strategically destructive position where the more convincingly they criticised the government for weaknesses on the domestic front, the more they strengthened the case for EU membership and weakened Labour’s own bid for winning the election when it was clear that, by Labour’s own choice, the EU issue would gain supremacy in voters’ mind over domestic issues.

Tactically Labour messed up the referendum issue even once they decided upon it. In politics to succeed you need to make the right choices and to make them on time. Whilst in voters’ mind there was no doubt where the government stood on the referendum issue, Labour’s obsession not to disclose their position on the issue prior to the publication of the writ could have kept the PN in dark. But equally kept in the dark was the inquisitive segment of the electorate who was seeking Labour’s guidance on the issue and who were totally confused when Labour gave its three option vote for the referendum. Clearly the objective was to fudge the referendum result which became clearly predictable, and so postpone judgement for the election and thus make the strategic bundling mistake that I mentioned previously.

The Stupid mistake was the very acceptance to participate in a referendum just before the election when this was a tool of partisan politics to weaken Labour further then they chose to do for themselves when they opted to bundle the EU issue with the election issue. A referendum just before an election gives a very detailed view of the element of disgruntlement amongst PN voters and affords the government the facility to address this disgruntlement with clinical precision using taxpayers’ funds.

Strategically, tactically and rationally Labour did their best to ensure that the wheels of democratic alternation of power stop functioning and condemn themselves to an unduly long term in opposition. This forces Labour to regularly repeal old policies which they have no opportunity to execute through government, and adopt diametrically opposed new ones as new realities make old choices out-dated and unrealistic. This to the chagrin of those who are not prepared to accept new realities and prefer to continue living in the past rather than demand a proper account of why Labour gave a walk-over to the PN at last election.

The political situation in
Malta is much like last week’s weather – it never rains here, it pours. The government has used up all its energies to get re-elected on the EU platform and has no energy left to address the real issues and seems to be waiting for the EU stick to start taking care of our weaknesses come next 1 May. The opposition is rightly reviewing its policies in the light of the new realities but adamantly refuses to conduct a timely, serious and due account of true accountability of why they have to stay for so long in opposition. Internal squabbles between those who want the new policies and those who want to stick to the old ones are quite a convenient excuse to postpone the accountability exercise until it becomes irrelevant.

Friday, 19 September 2003

Referenda Season

The Malta Independent 

This is the referenda season. In the short space of one week, three national referenda decide important matters regarding the future of the EU.

Estonians overwhelmingly approved their country’s accession into the EU last Sunday as the Swedes were just as overwhelmingly refusing to give up their currency to get into the Euro.

Latvia will be the last country to confirm through a popular referendum whether or not to proceed with EU membership. Besides Malta, Latvia is the only other candidate country where the referendum decision was, and still is, no forgone conclusion. In Latvia, there is a vibrant movement against their joining the EU and next Sunday we will see whether the decisive segment of undecided voters will sway to the Yes vote to give the EU Commission a 100% success rate among candidate countries, or whether Latvia will be the exception to rule. Indications are that the Yes will pip their nose at the finishing line but with a thin margin.

These referenda force me to reflect.
Latvia has given itself 5 months of extra debate following the signing of the Treaty in Athens to permit an informed decision by the population. What reason was there for Malta to hold the referendum one month before the signing of the Treaty at a time when the Treaty was still making the rounds of final approval in the European Parliament, before the Treaty was widely discussed in all its details and before it was available in Maltese translation?

I have long maintained that the choice of 8 March for
Malta to be the first country to go to the accession referendum was determined by the convenience of partisan politics and not by national interest. The holding of the referendum before the election became a partisan political tool, funded by the taxpayers, permitting the government a very detailed view of the state of voter disgruntlement. This gave the PN a perfect opportunity to address the disgruntlement during the five weeks between the referendum and the election, resorting to the lowest level of political clientelism that has eroded the soul of this country.

If there is one particular point in time when Labour threw away the last election it is when in January their leader replied to the PM’s offer to reach agreement for a referendum in March and attached a 60 per cent condition to a proposal for a binding post-election referendum. This permitted the Prime Minister to disregard Labour’s views and proceed in the manner which was most politically convenient for the PN without offending public opinion. Had Labour simply replied by making an unconditional offer to hold a binding referendum after the election, we would probably be holding a truly national EU referendum next weekend concurrently with
Latvia but under a Labour government.

Which makes all of us who feel that on the domestic front the country is overdue for a change of administration, just wonder why Labour chose to be so sadomasochist to submit itself to the 52 per cent majority decision at the election but expected a 60 per cent threshold just three months earlier! With such a record how can Alfred Sant claim that his personal position lends credibility to labour’s new EU policy?

The Swedish nej to the Euro shows that while the power of the media cannot be under-estimated, Labour’s phobia that the media disadvantage cannot be overcome is a convenient excuse for the deficiency of the policy content. The Swedes, as the Danish three years earlier, pushed aside all the pressure from the broad spectrum of the political corps, the big business associations and a large part of the Trade Union movement to stamp down their feet and declare in no uncertain terms that they do not want to take unquantifiable risk with their social democracy model.

On the maxim that the electorate is always right, these referenda are delivering a clear message. At ground zero people are quite comfortable with the enlargement but are not at all comfortable with the centralisation and deepening one size fits all that the Commission is trying to impose. EU leaders had better take note if they expect the new EU constitution to be accepted by the people whom they represent.


Friday, 12 September 2003

Two Years Later

The Malta Independent 

Two years after 9/11 the world is quite a different place from what it used to be. Could it be though that the change is mostly superficial and that the underlying causes that led to 9/11 remain unaddressed fermenting slowly until the time is ripe for their next hit?

The old regimes in Afghanistan and Iraq are no more. The US, with or without the cover of UN resolution, has moved in both places to dismantle regimes which were aiding and abetting organisations involved in terrorist attacks or were otherwise supposedly toying with weapons of mass destruction.

But events are proving that it is far easier to destabilise a regime through force than it is to fill the resultant power vacuum with anything resembling an orderly transition to a system of self-rule and eventually to a fully fledged democracy.

While Mullah and Hussein are no more and remain at large escaping US attempts to bring them to international justice, President Bush and Prime Minister Blair have not come out of this in good shape or unscathed.

US is failing in its attempts to install a stable system of security in Iraq, with the daily occurrence of US soldiers falling victims of violence of resistant groups. It seems to have entered the war on Iraq without a clear exit strategy. President Bush is being forced to enter the last lap of his re-election presidential campaign facing a public, nervous about America’s inability to score victory in peace and not only in war. With the Middle East road map also largely in tatters, President Bush could find that what seemed an impetus from international political successes are in fact turning into a liability.

Which means that President Bush would need to base his re-election bid more on domestic economic performance rather than on the 9/11 popularity dividend. Having seen President Bush Snr. losing out his re-confirmation bid mainly due to domestic economic troubles which quickly wiped out the Gulf War success dividend in the short space of 18 months, President Bush Jnr. is unlikely to overlook the relevance of the ‘its-the-economy-stupid’ syndrome to clinch re-election.

Continual defence spending to support
US presence in Iraq will prop up the US economy but at the huge expense of building strategic budget deficit which eventually will lead to higher interest rates. So President Bush is betting his chances on a strong economic re-bound in good time before Autumn next year and that the economic growth will cascade to the employment sector to translate growth into increased job opportunities for voters to feel comfortable about re-confirming their President about this time next year.

Tony Blair seems to have lost his shine. His best asset remains the inability of the conservative opposition to be perceived as a serious alternative. The Hutton investigation will probably be responsible not only for the premature departure of Alistair Campbell, Blair’s media chief, but could lead to the resignation of Minister of Defence Hoon. This tarnishing of Blair’s image comes at a rather odd time when Blair could also lose the virtual duel with Chancellor Brown about holding the referendum on
Sterling’s Euro entry on this side of next elections. If, as seems likely, Sweden will next Sunday vote against giving up their krona for the Euro, the risk of pushing an early referendum on the British electorate will be too big even for Blair to contemplate and will expose Blair as being out-smarted by his own Chancellor.

So two years after 9/11, the two main leaders who enjoyed an immediate dividend for the resoluteness to rally from the shock of the disaster impact and fight back terrorism at its source, are labouring under the stress of the enormous resources they have used in the process without convincing evidence that they took care not only of the immediate propagators of terrorism but more importantly of its underlying source.

Because Saddams and Mullahs come and go but freedom fighters who misguidedly consider terrorism as their best form of expression unfortunately remain. Indeed with
America being perceived as a defiant occupant by common Iraqis suffering instability and lack of security, Iraq is probably currently the best nursery for future terrorists.

This delivers a strong lesson that the events that make it to the surface, be they terrorist attacks or
America’s response thereto, are just but the symptoms of the problem. The causes lie far beneath the surface. The most evident lesson from the events of the last two years is that it is far far more expensive and wasteful to react to the symptoms and far far more economic and productive to adopt a long term strategy to understand and address the underlying causes of terrorism.

President Bush and Prime Minister Blair should also have learnt that they cannot do this on their own. Much as they may dislike Chirac’s personality, there is no doubt that Chirac holds the chips for securing UN approval for a broad based peace plan for the Middle-East and for the transition to self-rule in
Iraq. It is time for the US and UK to re-assess the situation of their presence in Iraq and of the lack of progress of the Middle East road map, and accept that peace cannot be imposed by force but more likely by the moral backing of a UN approved peace plan.

Two years later it’s time to look beneath the surface


Sunday, 7 September 2003

Groups Sub-Groups and Left-Outs.

The Malta Independent on Sunday 


Austria, the Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Ireland , Latvia, Lithuania, Poland, Portugal, Slovakia, Slovenia and Sweden issued a call for changes to the draft EU Constitution, proposed by the European Convention in July. This came out from a meeting this week in Prague organised by the small countries of the enlarged EU to prepare common positions for the up-coming Inter Governmental Conference (ICG) in Rome starting October 4th.

The 15 countries ignored warnings by German Foreign Minister Joschka Fischer that the compromise reached by the Convention should not be tampered with. They said in a statement: "some issues ranging from aspects of institutional structures to decision-making procedures would require further consideration".

One of the key demands of the smaller countries is that each should be guaranteed a post of a commissioner with full voting rights. Under the Convention's proposal there would be only 15 commissioners with full voting rights for 25 Member States.

The smaller countries also want to reopen the proposal for a permanent president to replace the current six-month rotating presidency which gives each Member State equal rights at leading the EU. The smaller countries are convinced that the current proposal favours the bigger Member States, notably Germany, France, UK, Italy and Spain.` The position of the `small` countries is broadly supported by the Commission itself.

The 15 country members or candidates that met this week, under a group termed as the smaller EU states ( strangely including Poland that is anything but small) clearly think that Germany, France and UK, the biggest three, are trying to push through changes which tilt the balance of power within the EU in their (big countries) favour.

So we have 15 `small` accusing the `big` 5. That means that 20 members have somehow been framed with this `conflict`. This leaves out 5 countries to make the whole set of 25 actual or prospective members.

It was confirmed that Belgium, Luxembourg and Netherlands were invited but declined the invitation either because they do not agree with the position taken by the grouping or do not wish to be aligned with any grouping.

There are 2 left-outs. Cyprus and Malta certainly had all the credentials to be invited to attend the small countries pre-ICG preparatory meeting to align positions to make sure that the EU constitution will protect their rights.

Yet for some odd reasons Malta and Cyprus were not even invited to attend the Prague meeting. Government has confirmed as much but stopped short of telling us what it intends to do to ensure we are not relegated to an irrelevant status within the EU. Because if the small countries of the EU have already stated ignoring us, what prospect do we have to ensure that we are not even more ignored by the big countries that normally pull all strings within the EU` Government should not take such things lightly. It is most definitely in Malta`s interest to lobby for retention of a permanent fully fledged EU Commissioner as well as for the keeping the present rotation system for EU presidency. If we take this first one lightly others will follow as a matter of course.

IMF Staff Report 2003

Positive assessment but structural reforms and fiscal consolidation lose momentum is the one-line summary of the IMF Staff report on Malta released this week.

For as long as we continue to have the capacity to finance the deficit internally without recourse to foreign borrowing sources, including the IMF itself, the IMF will continue to issue benign assessments of our economy.` It will give over-weight attention to professed reform intentions to cushion the adverse impact of current economic faults.

But should we ever run out of the capacity to finance deficits internally the IMF will be less impressed by promises, often unfulfilled, of future reforms, and will start giving overweight attention to the adverse impact of current problems.

Probably IMF has silently accepted that it is inevitable for reforms to lose momentum in an election year when government loosens up for electoral popularity purposes. But they know quite well that the only way we can preserve our ability to finance internally our deficits is by real re-structuring to ensure that the demands for public financing is reduced both in absolute terms and in relative terms to the GDP.  They certainly expect us to pass from intentions to real action if we are to see the positive long-term benefits of the discipline of adhering to EU rules in general and EMU rules in particular.

Well and truly during the next 12 months, our true will to re-structure will be under the close observation of the IMF and all international rating agencies. We can disregard this only at our peril.

Friday, 5 September 2003


The Malta Independent 

MLP`s Vigilance and Disciplinary Board took the unusual (to say the least) step of finding me guilty of making criticism which in their opinion damages the Party, without giving me any hearing, without indicating chapter and verse which part of my criticism they find objection to and why, and without in any way bringing any arguments to counter my criticism.  

The media has been on to me seeking my views on the matter. This is as expected because the Vigilance Board made their action doubly unusual by releasing their decision to the Press Saturday lunchtime without even giving me time to raise an appeal as provided by the Party statute.

So far I gave the media a short no comment, which does not however mean I did the same to the Vigilance Board. On Monday morning I hand delivered to the Board and to the Party General Secretary my decision to resign from all positions within the MLP. I will not enter into further details, at least for the time being. But I never accept threats from anyone especially if the objective of such threats is to dissuade me from using my right to fair criticism. I could not stay within the MLP with such a threat on my head.

Knowing well how much I treasure my right to think freely and objectively I have enough grounds to suspect that the whole matter was engineered in a way to trigger my resignation by whoever was feeling uncomfortable with my criticism and could provide no real answer to it. It was also meant to deliver a warning to the internal critics lest they dare to carry their views beyond the internal boundaries where their faint waves of criticism uselessly wash the strong breakwater structures of grounded bureaucracy.

I most categorically deny that my criticism damages the MLP. On the contrary my criticism benefits the MLP by preserving the trust of those who lost faith in the Party, following its poor electoral performance and the strange way the leadership election contest was conducted. My criticism is meant to prod the party to do what all parties that lose consecutive elections do i.e. rather than simply demand accountability from others, bring accountability in-house.

I treasure my consistency and credibility much more than such attributes are appreciated currently within the MLP. I do look forward to the day when the MLP not only tolerates such attributes but embraces and promotes them. That would be an MLP I will gladly re-join because the sign of consistency is changing one`s mind in the face of changing circumstances.

Meanwhile if there is anyone damaging the MLP it is the Vigilance Board through the way they go about executing their function and the way they interpret and judge who is damaging the party, whether the `imbeciles` who selflessly criticise and demand accountability or those whose failings give rise to such criticism and use the bureaucracy to avoid being held accountable.

And it is just as well that this is being written on the 5th anniversary of the 1998 election. This was the day when the Samsons within Labour brought down the temple on all Labourites` heads and gave the government back on a silver platter to the PN. In the process they denied the country the essential alternation of power without which democracy will lack true substance.

The absence of a true post-1998 exercise of analysis and accountability led to an even more painful and damaging experience in 2003. It was truly a case of a giving the second consecutive election to the PN this time on a golden platter just when the majority was really in favour of a change of administration. Labour actually forced people not to vote it in power.

On this 5th anniversary of such infamous day should Labour not reflect whether it needs to suffer a third consecutive defeat before shaking off its lethargy. Neither Labour nor the country can afford that.

Thursday, 4 September 2003



Min jghix bix-xabla jrid ikun lest imut bix-xabla. Min jikkritika allura jehtieg jaccetta li jigi kkritikat. Min bhali jikteb fil-media u jikkritika hafna bilfors li jrid jaccetta li jigi kkritikat. Jien mhux biss naccetta l-kritika, izda permezz tal-website tieghi naghti access shih lil min irid jikkritikani dirett bla ma jkollu ghalfejn jikteb fil-gazzetti. Nircievi hafna ‘feedback’ bl-e-mails u safejn huwa possibbli jien nirrispondi u nghid fejn naqbel u fejn ma naqbilx u ghaliex.

Sfortunatament hawn min jahseb li l-kritika hija hazina. Min jahseb li xoghlna huwa biss li nkunu kritici versu l-avversarji. Min jahseb li ahna ghandna nkunu distruttivi fil-kritika taghna u jaghmel x’jaghmel il-Gvern nohorgu kontra halli nuru li ahna oppozizzjoni qawwija.

Izda mbaghad meta jikkritikana haddiehor nizblu. U jekk issir kritika lejna nfusna nipprovaw nifgaw il-kritika bi skuza komda halli ma npaxxux lill-avversarji taghna. Ghax hawn min flok il-kritika jiggudikaha fuq il-merti taghha jiggudikaha fuq kif jirreagixxu n-Nazzjonalisti. Jekk issir kritika u n-Nazzjonalisti ma jghidu xejn jghaddi kollox. Kif jifthu halqhom in-Nazzjonalisti qishom gibdulna l-ispaga u noqomsu.

Jien ma nikkritikax fil-vojt.
Meta nikkritika naghmlu bil-fatti u bil-figuri. Meta nesprimi opinjoni fuq xi haga, apparti li ma nipprezentahiex bhala fatt divin, noqghod attent hafna li l-opinjoni tieghi tkun wahda informata, opinjoni li nista’ nsostniha.

Hafna drabi nipprova mhux biss nikkritika, izda nesprimi fehmiet fuq certi linji ta’ gwida li jistghu jwasslu biex tigi rrangata l-kawza li wasslet ghall-kritika. U meta nsib li kont zbaljat inkun lest nibdel l-opinjoni u anke nammetti li kont zbaljat.

Izda l-kritika hija tajba u necessarja. U kultant biex iccaqlaq l-affarijiet ma tistax toqghod tikkritika biss fil-maghluq.
Meta ssib bibien maghluqin li l-kritika tieghek ma jkunux lesti jisimghuha, il-kritika ghandha ssir bil-mod li l-aktar tasal.

Fil-passat il-kritika tieghi wasslet biex il-partit ha decizjonijiet li kienu ilhom jigu evitati u li kien hemm bzonn xi hadd li johrog il-problema fil-berah halli l-affarijiet jiccaqalqu.

Nista’ mmur lura sa l-1990 meta kont l-ewwel li ghidt li biex il-partit jerga’ jigbed il-maggoranza warajh irridu nnehhu l-ghaqda statutorja li kien hemm mal-GWU u rridu nimmodernizzaw billi nibnu centru nazzjonali gdid u mhux nibqghu l-Macina. Aktar ricenti wrejt il-bzonn li ma nibqghux ankrati mal-politika tat-tnehhija tal-VAT li kienet giet sorvolata
minn zviluppi ekonomici u politici.

Urejt ukoll il-bzonn li l-partit jissepara l-‘issues’ ta’ l-Unjoni Ewropea mill-elezzjoni generali, haga li giet accettata biss wara li kien digà sar ir-referendum u meta kien fadal biss tliet gimghat ghall-elezzjoni. Kien tard wisq biex bidla bhal din ikollha l-effett mixtieq.
Meta nikkritika ma nkunx personali. Nikkritika l-ghemil mhux il-persuna. Nista’ ma naqbilx ma’ dak li jkun, izda xorta nirrispettah u nzommu bhala habib ghalkemm nibqa’ nipprova nikkonvincih halli ngibu jifhimha bhali.

Wara l-elezzjoni kkritikajt kif saru l-affarijiet fil-Partit Laburista. Ghamiltu internament u kelli naghmlu esternament. Ma kkritikajt lil hadd personali u fil-kritika nzomm f’mohhi principju wiehed: bil-kritika se nghin jew se ntellef milli l-Partit Laburista jerga’ jmur fil-Gvern kemm jista’ jkun malajr?

M’ghandix dubju li bil-kritika nkun qed nghin.
Meta l-kritika tieghi nstemghet wara t-tieni telfa ta’ l-1992 nehhejna mill-ewwel l-ghaqda statutorja mal-GWU u bdejna l-process tac-Centru Nazzjonali Laburista (CNL). U fl-1996 wasalna. Frahna. Bkejna bil-ferh.

Wara t-tieni telfa ta’ l-2003 saru affarijiet b’mod li jgerrxu u mhux jigbdu lejna l-apprezzament ta’ min tbieghed minna. M’ghandix ghalfejn noqghod nirrepeti ruhi. Kont car u preciz fil-kritika tieghi li kont digà ghamiltha internament qabel ma graw l-affarijiet biex nipprova li ma nhallihomx jigru kif graw.

Mela ma nifhimx ghalfejn hemm min flok jargumenta u jmeri l-kritika tieghi jipprova jattakka lili bhallikieku jien xi wiehed li nparla fil-vojt u nikkritika bl-ad-docc jew li ghandi xi agenda kontra xi hadd.

Jien m’ghandi kontra hadd. Ghandi biss favur il-Partit Laburista u favur in-nies li qeghdin ibatu diskriminazzjoni ghax mhux qeghdin jirnexxielna nirbhu l-Gvern.

U jdejjaqni meta min jikkritikani flok jargumenta u jirribatti jipprova jintimida bl-insinwazzjonijiet. U zgur li ma nixtieqx li nkun Sansun li nwaqqa’ t-tempju fuq ras il-Laburisti biss u nhalli lin-Nazzjonalisti jgawdu. Dan inhallih ghal minflok halla l-irjus jibirdu, instiga biex immorru ghall-elezzjoni fl-1998 meta lanqas konna ilna sentejn fil-Gvern.

Ghal min instiga li norbtu l-kwistjoni ta’ l-Unjoni Ewropea ma’ l-elezzjoni biex ghat-tieni darba konsekuttiva tajna rigal fuq platt tal-fidda lill-PN u zamm lil-Laburisti midrubin taht it-terrapien ta’ tempju mgarraf. Dak in-nhar tassew waqqajna t-tempju fuq ras il-Laburisti biss u paxxejna lill-avversarji.

Jien xewqti li
nara lill-partit jibni fis-sod biex fl-elezzjoni li jmiss, tigi meta tigi, kmieni jew tard, il-partit imur fejn jixraqlu. Imur fil-Gvern minn fejn biss jista’ jilhaq l-ghanijiet tieghu li jipprotegi lin-nies tax-xoghol.

Bil-habi u billi nohonqu l-kritika ma naslu mkien. Bid-diskussjoni miftuha li ggib il-bidliet li hemm bzonn, naslu bhalma konna wasalna bejn l-1992 u l-1996.

Monday, 1 September 2003

Solutions Starts with a `D`


It is almost becoming boring repetition every time a set of economic data comes out having to argue that the economic situation in general and public finance situation in particular are a serious cause for concern.

The July 2003 (for the month of July 2003 and for the 7 months up to July 2003) public finance figures released late last Friday 29th August 2003 is yet again a further confirmation that matters are deteriorating at a sharp pace. The deficit for the 7 months reached Lm128 million up a further Lm14 million from the position as at end June 2003.

Compared to the position last year, the deficit as at July 2002 was Lm72 million. But to be consistent with past criticism it is fair to say that the real deficit was Lm93 million as in July 2002 Lm21 million extraordinary revenue from MIA privatisation was included as ordinary revenue.

On a real like for like basis the deficit is Lm35 million (38%) more than last year after adjusting for last year’s extraordinary revenue. At the June mid-point the situation compared to last year was also Lm35 million worse off so one might argue that in reality July this year essentially produced the same dismal result of July last year.

Between August and December 2002 the deficit in these last 5 months of last year deteriorated by a further Lm10 million. So if we keep pace with last year the end of year deficit will increase by Lm10 million over the position as at end July touching the LM138 million.

If, and it is big if, grant revenue of some Lm20 million from the EU and Italian financial protocol materialises in real cash flow terms by end of this year, the deficit will close at some Lm118 million compared to an original projection of Lm74 million.

So when we were recently informed that the deficit this year will overshoot the budget and will exceed Lm100 million we were in fact being told part of the real picture. The deficit, failing accounting camouflages, will be anything between Lm120 and Lm140 million depending on whether grant revenues materialise this year or not.

Which tells us that we have a problem but does not tell us much about the solution. Which tells us that unless we start taking serious measures to address our macro-economic faults and our structural public finance deficit and worrying speed with which national debt is accumulating (+Lm171 million over this time last year despite MIA privatisation revenues in November 2002 from sale of 20% equity to the general public for some Lm 9 million) we would be extremely irresponsible to set any date in the near future where we can hope to join the Euro.
If we were to join the Euro when we have such strong imbalances and when we are clearly losing our competitiveness on a global basis, we would be giving up one of the major policy tools with which we can address and manage a road to recovery.

So I think it is about time that we start the debate about the level at which the Maltese Lira will at some distant future time be fused into the Euro. Before we come to such point of fusion we must ensure that our economy is growing at a sustainable level, and is competitive globally both on a level of trade (exports and imports) as well as on a level of capital transfers particular the attraction of FDI.

We are far away from such sustainability and we can get to this point either gradually by keeping a domestic inflation rate below that of our competitors for a long period of time, or immediately via a revision of the external value and composition of the Maltese Lira. I am not concerned that we have to time for a gradualist approach after years of neglect and in any event with international inflation rates at historic lows it is difficult to beat our trading partners on this score.

So more and more I can convinced that we should not rule out the immediacy of a solution that starts with a D provided we accept the this is only the start of a solution and that further restraint and adjustment would be necessary to render our economy more flexible and more competitive. The solution starts with a D. It certainly does not end with it.


Strategy 1 No Risk Lm 1007.417
Strategy 2 Medium Risk Lm 1011.220 (after Lm40 charges)
Strategy 3 High Risk Lm Lm 1180.000 (after Lm31 charges)
Strategy 4 High Risk For Currency. Lm 1066.000 (after Lm40charges)

All prices and rates of exchange are the latest available on
Saturday 30th August 2003.

Strategy 1 continued to accumulate simple bank deposit interest.

Strategy 3 is temporarily all liquid cash after cashing in the profit from Maltacom shares. This strategy is the one most ahead so far with 18% net of charges.

Strategy 3 & 4 kept steady this week as equities and bonds (international) were mostly involved in sideway moves which left them at the end much the same as where they started from. This is not bad considering that normally August sees soft equity prices.

Strategy 4 is 2nd most profitable with 6.6% net of charges.

All 4 strategies started on
1st June 2003 with Lm1000 each and percentages above mentioned as since start date of the portfolio not p.a.