Three Predictions for 2008

 28^th December 2007
The Malta Independent - Friday Wisdom

Planet Earth is about completing another cycle round the sun and those who are seeing it through are one year older and most of us are showing it. An additional wrinkle here, a louder ouch to pick a handkerchief from the floor and generally a creeping loss of agility and flexibility. Hopefully we are also one year wiser.

So is it wisdom or folly that in this last contribution for 2007 I propose to make three predictions for next year? The future is uncertain to all and one event could change the basis on which any predictions are made. However we cannot avoid trying to configure and prepare for the immediate future purely because of the possibility, big or small, of some fat tail event that would change the entire landscape.

So whether through wisdom or folly here are my predictions.

The safest bet is related to the Maltese property market. The supply/demand equation is changing so rapidly because of an over-supply in the pipeline that it is quite predictable, with limited risk of error, that the Maltese property market will cool down substantially in 2008 with certain sectors of the market where the supply/demand is way out of balance starting to show outright price reductions in the 10-15 per cent range.

Quality real estate tends to be less affected by such cycles due to more balanced demand-supply situation pulling on our attraction to foreign investors looking for a place in the sun. However, given that the real estate market has gone soft in most countries it is quite likely for the cooling down of the Malta property market to be felt across the board though in the first-time home buyer market it will be felt in a higher dimension than in the luxury market.

A prediction regarding the outcome of a general election is always risky and given that a week is a long time in politics any predictions will have to be made with great reservations. But how can anyone make predictions for 2008 and leave out the outcome of the general elections which will dominate the political calendar?

After 21 years of nearly uninterrupted tenure by a PN government I predict that by a hair or by a mile this time it will be Labour. There are innumerable satellite reasons why the majority can be expected to switch its political preference in 2008 but the core reason is the electorate’s fatigue with a PN government.

This could be unfair on Dr Gonzi who seems to score consistently higher than Dr Sant in any opinion survey involving a direct choice between the two leaders but this is not enough to overcome the swell of fatigue with his government. People wanted this change in 1996 and did not quite get it. After backing the old horse for another five years between 1998 and 2003 people were also ready for a change but Labour forced their hand by making them choose between it and the EU.

Now the fatigue has reached proportions that it could overcome any obstacle. The absence of any higher order issue, like the EU was in the 2003 general elections, leaves no visible obstacle in the way of fatigue to deliver what it should have delivered in 2003. Add to this that many people do not perceive that the promised EU spring has been delivered through EU membership and the price oppression causing loss of disposable income by high energy prices translating themselves into high surcharges on utility bills which were a core reason why Labour government met its untimely end in 1998, fatigue will have tail wind support to deliver a change of government come next election.

Which brings me to the third and last prediction, which is however dependent on and resulting from my second prediction of a Labour government being returned to power following the next general election. This prediction is that while political administrative power will change, the wide network of power spread across society, which has continually helped the PN to have a smooth time in government, will not change allegiance. The network of power found in the business community, in the ecclesiastical corridors, in the civil service, at the university, among the intelligentsia, in the white collar union organisations, in the media and wherever there is any power to be exercised will survive any election result.

This network of power outside politics, which did its best to help their PN ally in politics, will use their power to passively or actively obstruct a new Labour government. Let me take a silly but telling example. I am sure many would remember the hunger strikers camping outside Castille in 1997 purely because a Labour government did not revoke the building permit for Portomaso project issued under a PN administration. How many hunger strikes have there been since the PN were back in power in 1998?

Today it is almost laughable that anyone would dare thinking of protesting through hunger strike for anything in this totally insensitive society let alone to protest against the highest level piece of real estate development in the Mediterranean these last 10 years.

When the PN is in government they have total control as it is a political cell in a power network spread across society. The cells in such network feed on each other to restore power to any cell that temporarily loses it. When Labour is in power its power is purely political and will find headwind from the surviving power of the remaining cells who are eager to help the PN recover their lost power. Will it ever change? It would be a happy new year indeed if it were to do so in 2008 giving an enhanced meaning to true democracy.