Sunday 18 September 2005

Lessons from Japan

The Malta Independent of Sunday

The only thing that Malta and Japan probably have in common is the colour of their national flags. Contrasts, however, abound – especially in recent political experience.

In 1998 a Labour government lost a vote in parliament on a relatively innocuous Cottonera project when one of its MPs voted with the opposition. Prime Minister Sant considered this a vote of no confidence and called a premature snap election, confident that the electorate would return him to power with an increased majority. The result was just the opposite and Labour was returned to opposition, seeing a majority of 8,000 votes in 1996 changed to a minority by as much as 12,000 votes in less than two years.

This summer, the Japanese Prime had a similar experience. Members of his own LDP party voted against the privatisation of the Japanese postal system that Prime Minister Koizumi, considered essential for executing the economic reform programme he was elected to deliver. He called their bluff. He dissolved the lower house of parliament and called an election, which was held last weekend, to seek a refreshed mandate from the electorate to unblock the parliamentary barriers that his colleagues had forced upon him. In the process Koizumi, dismissed the dissenters from the LDP to ensure that they are not re-elected within his new parliamentary majority.

Koizumi was re-elected with a strong majority and now has a clear mandate to continue with his economic reform programme, including the gradual privatisation of the postal system.

Is it that Japanese leaders are better than ours at convincing voters of the need to endorse reform programmes or is it that the Maltese electorate prefers to escape reality and much-needed reform, and opts to continue living on borrowed time and borrowed money, prejudicing the future of coming generations?

Your guess is as good as mine but then the behaviour of the respective political leaders could be indicative.

Koizumi made it clear that if he was not returned with a stronger mandate he would resign and pack his political bags. Even with the stronger mandate he obtained, he nevertheless made it clear in the post-election victory messages that he still plans to resign next year, as he feels that he has taken the country as far as he can and he will make room for a new energy to take the country forward.

Not only did Dr Sant not resign, following the loss of his audacious and unnecessary move in 1998, but he kept his top post with the MLP in spite of the disgraceful results Labour achieved in the 2003 referendum/general election, which basically annihilated all that Labour had fought for under Sant’s leadership since 1992. Thirteen years into his job, Sant sticks to his post, prejudicing Labour’s otherwise clear chances for the next election by insisting on selling Labour’s refreshed policy contents in old, discredited wrappers.

Prime Minister Gonzi is not a Koizumi either. Koizumi gave one and all a lesson of what leadership is all about. He showed how inspired leaders can turn with success to their electorate with clear programmes of what they want to do and why, and obtain a specific mandate to execute. No ambiguity about what they want. No hiding behind laborious and often useless public consultation processes. People elect leaders to lead, not to coordinate.

The Gonzi government seems to understand that its mission is to launch discussion documents about what needs to be done and hope that the public will express something nearing consensus, thus easing government’s way to execute such proposals.

Take the latest of such reports issued by the Management Efficiency Unit – National Reform Programme (NRP) team, acting on a brief received from a Cabinet sub-committee ominously referred to as CCC (Cabinet Committee for Competitiveness). In investment circles, CCC is the lowest grade given to bonds with a serious risk of default by their issuers.

The content of such a report is immaterial for the purpose of my argument. What matters is that the authors of such a report who, in most of the narrative, speak with governmental authority (“The government wants…”, “The government is committed...”, “The government intends...”, The government plans…” – the government this and the government that), make it clear that their report

“is intended as a public consultation document and that Government will only commit itself to any of the proposals put forward following a thorough examination of the feedback received through the consultation period and an evaluation of their financial implications. The opinions expressed in the NRP do not represent the views, past, present or future, of the Government but are those formulated by the NRP coordination team within the Management Efficiency Unit after a first phase of wide-ranging consultations”

This is coordination not leadership. People are busy with their lives and elect their leaders to lead and then present themselves for endorsement or kicking out every so often, as provided for in the Constitution. How can government continue to live in the clouds and hope to secure a guilt-sharing consensus to do what needs to be done? Government is clearly distancing itself from the NRP document lest it should become an electoral liability. How can it expect others to embrace something from which government is itself keeping its distance?

If government is doing so when we are still in parliamentary mid-term, what confidence can we have that it will thoroughly deliver the hard but necessary measures when elections get nearer and consensus proves elusive, as was the case with the innocuous measure of abolishing leave in lieu of public holidays that fall at the weekend?

The government also seems totally confused as to why we are doing all this. In defining the way forward in the introduction to the Report, it is declared that:

All feedback received will be analysed and factored in the prioritisation and selection of the final NRP measures which should form part of the final draft. The final draft is then subject to CCC and Cabinet approval prior to a debate in parliament. Only then can the final NRP be submitted to the European Commission.

So is the objective of all this effort just to send a report to the EU Commission? I should think that the objective is to execute the reform programme yesterday rather than tomorrow. But no, the objective is to send the NRP report to the EU, in the misguided thinking that problems can be solved by the composition and submission of nicely worded reports.

This reminds me of the experience I had when I was, for all too brief a time, chairman of Mid-Med Bank. An organisation employing 1,800 people had a dangerous culture of division between the people at head office and those on the ground, in branches and in the operating centres. The people at head office had the habit of solving problems by issuing directives through a circular that people in the branches were expected to execute unquestioningly.

For people at head office, the problem was solved the moment the circular was written and dished out. In reality, the problem probably started there. Operators in branches were cheesed off by the ambiguity or impracticalities of the solutions prescribed by head office people who could not appreciate the realities at ground zero. Solutions are rarely solved by writing reports. They are solved by inspirational leadership, creating a positive team-building “can do” culture through continuous and informal interaction.

If government thinks that problems can be solved by report writers, it should go on holiday to
Japan, hand-in-hand with the leader of the opposition.

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