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.

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