Which Privitisation?

29^th June 2008
The Malta Independent on Sunday

The government seems to be getting itself geared for serious business after a lull of some three months during which the political agenda was ceded to Labour’s internal reformation.

The privatisation of the shipyards is a first test the government is putting to the “new generation” Opposition to force it out of the we-all-love-each-other mode the new Labour leader has adopted since his appointment.

Quite rightly, Labour is not opposing privatisation as a matter of principle. The Maltese taxpayer has a wide representation among the ever-growing uncommitted voter sector, which Labour has to attract its way if it is to become a winning generation, rather than merely a new political season. And the taxpayer has little appetite for carrying further burdens to subsidise our shipyards, which have not rendered a commercial profit since 1981, in spite of various waves of costly re-organisations. Privatisation cannot therefore be ruled out, especially if the default solution in the absence of more subsidies would then be bankruptcy and closure.

There are however privatisations and privatisations and, while accepting the principle, one has to be careful to ensure that it is conducted with due integrity and effectiveness. The Maltese taxpayer has been short-changed for far too long, as it was forced to finance round after round of restructuring and always led to believe that it would deliver financial sufficiency and commercial turnaround, yet always finding out that, like Oliver Twist, the shipyards kept regularly coming back for more. It would be tragic if the Maltese taxpayer were short-changed again in the process of the shipyards privatisation.

Privatising the shipyards is comparable only to the privatisation of the Freeport. It has not much to do with privatisations of banks, Maltacom, Maltapost, MIA and others, which largely operated in the local market and accordingly had a good track record of commercial viability.

Like the Freeport and probably more so, the shipyards have no local market of significance and their major asset is the infrastructure and its human capital, which, if properly managed, can be as efficient and resourceful as their peers in the private sector. Thankfully, unlike the Freeport, the shipyards are free from the dominance of a single client who, in the case of Freeport, found it convenient and possible to shape the process of privatisation its way.

The infrastructure is too precious and strategic to part with on a permanent basis. So privatisation parameters need to be established to define on what terms the government expects private operators to make use of such facilities. The government must also advance some ideas as to what actually is being offered. Is it the whole set-up as is under Malta Shipyards at present, or can it be broken down into components that can be privatised separately? Is Marsa to be lumped with the traditional dockyards or will it be treated separately?

Furthermore, the government must be clear about what obligations, vis-à-vis employees, it expects the winning bidder to assume. Is it expecting the private owner to take over the employees and then shed off labour through voluntary schemes, tying the winning bidder down to a period of no redundancies as was done in the Maltacom’s case? This process would inevitably deflate the privatisation price.

Or does the government intend to downsize the workforce in advance in order to secure a better privatisation price?

What studies has the government undertaken in order to arrive at a commercially feasible size of the workforce, bearing in mind that in the last round of re-organisation we were informed that further downsizing of the workforce would seriously jeopardise its commercial viability because of lack of economies of scale? Where does the truth lie? Has the truth changed or is it being adjusted to suit a pre-determined objective?

The shipyards problem did not surface yesterday. It has been in the making for over two decades. The much hoped for efficiency gains never materialised and the government seems to have accepted that under public ownership they never will. The diversification into growth areas of the marine industry where there was consistent growth (especially the leisure side related to yachts and cruise liners) remained unfulfilled, as for some reason or another our shipyards never teamed up in joint ventures with technical operators who had the expertise to develop these lines of diversification. Even less fulfilled was the ambition to branch out of marine altogether and develop “green energy” products like solar panels and components for wind energy projects.

So before hitting us with newly acquired wisdom (that seems to have been known to all except the unions and the government) that privatisation is the only way forward for our shipyards, the government should publish whatever studies it has about what led to failures of past rounds of restructuring and the best way forward to a successful privatisation, which does justice both to the workforce but certainly, and not least, to the taxpayer. If such studies are not available in spite of the problem being 21 years in the making, then it does not augur well for a privatisation that protects the national interest.

Circumstances like these convince me all the more about the need to remove the apartheid prevailing in our labour markets and start treating all workers threatened with redundancy with equal dignity, irrespective of whether their employer is public or private.

Winning in a globalised world demands labour flexibility not normally acceptable in publicly owned enterprises. This is largely the principal motivator to privatise operations that traditionally were performed in the public sector.

But in the meantime, it is scandalous if we continue to leave redundant workers in the private sector at the complete mercy of market mechanism while we continue to feather bed workers made redundant through privatisations. We should create a common mechanism for both, where the emphasis is on retraining and where organisations discharging employees through redundancies continue to pay part of the salary during the re-training period to ensure that, added to the unemployment social benefits, the employees involved suffer the least possible until they are placed in new productive employment.

Such redundancy mechanism against known and fair rules will render our economic operators more competitive knowing they have a facility to shrink their workforce, without causing social disruption, in order to remain competitive. The ability to shrink a work force is a strong motivator to grow one in the first place.

Death by Thousand Cuts

27^th June 2008
The Malta Independent - Friday Wisdom

The privatisation of our shipyards and the government’s determination not to consider any other alternative is the final chapter of a death by a thousand cuts. It is a practical example of how politicians and economists are breeds apart.

Economists and logical thinkers are in search of the truth which is itself a moving and evolving target as it is continually in a reflexive process with the search for truth itself and/or with politicians’ attempts to obfuscate it and change it to their view of the world. Politicians, on the other hand, are in search of preserving power and in the process the truth may have to be sacrificed. This could result from smug concepts such as that the electorate cannot handle the truth, to which I would add “without throwing politicians out of power”.

The shipyards have not made a profit since 1981. In the process of arriving to this last chapter they have undergone various waves of restructuring involving downsizing through voluntary retirement schemes and pumping of millions upon millions of liri in subsidies which seemed like pouring gold into a big black hole.

Yet nothing seemed to work. Management and unions continually blame each other. An industry which has all the ingredients for success (strategic location, good infrastructural facilities, healthy international order book for ship repair, skilled labour force etc, etc) still somehow continues to defy all attempts to render it efficient and profitable. Management argues that the workers and their unions promote inflexible work practices which are a barrier to operational efficiency while the unions blame management for poor organisation and for securing contracts on non-commercial terms.

In the meantime the taxpayer has been had. We have collectively sank more hundred millions of euros than I care to count in trying to turn the shipyards around to commercial success and at the end of it, as we are now at the 1,000th blow leading to final death, we still have very nothing to show for it.

The GWU proposed the setting up of a task force with wide representation to explore all alternatives and not simply the privatisation route. Surely there has been all time in the world to talk about ways other than privatisation to save our shipyards. If the shipyards still cannot stand on their own without further taxpayer support then the time for talking is over. Indeed the taxpayer has to be given due account as to why has it taken us so much time and so many resources to get to a logical conclusion which was apparent from the very beginning as the only real way out of the shipyards’ problem.

If the economists and logical thinkers would have had their way, the solution to the shipyard’s problem would have been arrived at much more quickly and with much less resources and it would have benefited everyone including the workers themselves. A small part of the resources burnt in arriving at a death by a thousand cuts would have been sufficient to retrain workers and re-employ them profitably in new processes that are managed with optimal efficiency and which are well integrated with our ability to compete profitably in a global economy. They would have earned more and enjoyed it more than living all these years with insecurity about sustainability of their employment.

Politicians work differently. As their primary objective is to obtain and retain power they prefer a tactic of making gradual changes over time so that nobody notices or those that do notice do not raise much of a protest. It does not matter to them how much resources and time get wasted to arrive at their objective provided they get there without compromising their position in authority.

It was 1985 when the then Prime Minister Dr Karmenu Mifsud Bonnici sought my assistance to explain why the then Malta Drydocks, which was administered a Council elected by the workers, was regularly suffering illiquidity problems leading to crisis requests for temporary loans from government even to meet wages. Reserves put aside for future generations in Posterity Fund (an equivalent to current day Sovereign Wealth Fund being amassed by oil exporting nations like Norway, Saudi Arabia and UAE and other surplus nations like Singapore and China) were in fact being funneled to never never loans to our shipyards purely to meet their day to day operational needs which banks were refusing to finance. They were evidently financing accumulating losses.

I spent two weeks talking to whoever was in authority at Malta Drydocks and at Malta Shipbuilding and after two weeks I felt I had enough information to go back to Dr Mifsud Bonnici with my findings.

The problem was evident. It was a problem of poor management and outdated work practices. Authority and responsibility were totally divorced. Management had responsibility without authority whereas the council and the unions had authority without responsibility. There was a deep-rooted belief that in one way or other shipyards were too important to fail and that one way or other the wages will be funded if not from normal operations, than from government loans or subsidies.

I told the Prime Minister that the culture was so deep-rooted and that resistance to change was so ingrained that only crisis, through closure of the finance and subsidy tap, will force a scenario which can effectively bring about real change. And that such real change has in one way or other to involve substantial downsizing of the workforce, or its breakdown into more manageable groups of say a few hundred workers each, and that employment has to follow strict commercial principles where there are no guarantees of success except through hard work and willingness to accept change to achieve efficiency and remain competitive.

I was not surprised that Dr Mifsud Bonnici could not accept such drastic solutions in the run up to an election which came along in May 1987 and brought in a generation and more of PN administrations. What I am surprised about is that it took a conservative administration 21 years to arrive at a solution which was pretty evident from the beginning.

Twenty one years ago many present EU members in central and Eastern Europe were still under communist rule. They spent much less time and relative money to restructure a whole economy than we did to restructure unsuccessfully a single industry.

Was the price of buying stability and long term political tenure by killing the shipyards by means of a thousand cuts, rather than through a more aggressive and speedy solution, worth paying?

I think not.

A Confluence of Problems

20^th June 2008

The Malta Independent - Friday Wisdom

The government’s decision to go for general elections in the first quarter is looking more enlightened by the confluence of problems that is taking place in this second quarter of 2008.

Many of these problems are international and beyond our control. Substantial gloom is gathering around the world economy as it is threatened by an unusual cocktail of economic slowdown, rising inflation and a very fragile international financial system.

We have slipped so rapidly from a goldilocks scenario (steady economic growth, contained unemployment and low inflation) to a scenario of stagflation where inflation generated by astronomical increase in energy and commodity prices is co-existing with slow growth verging on recession, forcing central banks to adopt a tightening monetary posture. While addressing inflation tighter monetary conditions and increased interest rates could clearly push the international economy in clear recession territory.

Being part of the global economy we cannot be excluded from carrying our share of the risks and exposure to these problems. Higher energy and commodity prices will inevitably have to cascade down to high retail prices of consumption products basic to everyday life and fairly inelastic, at least in the short term, to price movements. These will translate into higher fuel prices at the pump, higher utility rates, increased prices in such staples as our daily bread, and increased input costs of raw material for our building and manufacturing industry.

Beyond the immediate impact of higher costs on consumers and economic operators the confluence of these problems and the emerging recession scenario could inevitably lead to reduced external demand for our exports of goods and services. Will tourists continue to fly to Malta when faced with increased air-fares or would they prefer to take their holidays closer to home? Would the strengthening of the euro against the US dollar and the pound sterling render us too expensive compared to competitors whose costs are dollar based or sterling based?

These are not problems which are purely the domain of economists and bankers. They affect the daily life of most of us even of those who find economics too boring to contemplate. It raises questions on the sustainability of such important economic outfits as ST Microelectronics which has been providing employment for quite a few thousands of our most productive employees since the early eighties. The process of globalisation inevitably forces outfits like ST to cut costs in order to stay competitive in the face of stagnant demand and falling sales prices (at least in EUR terms) and it is only a matter of time that they will have to migrate manufacturing operations, in one shot or through an extended process, to other lower cost dollar based locations while keeping only the brain intensive processes or research and design in higher cost locations.

It raises the question whether continental European tourists would find it more economic to take their holidays closer to home or indeed fly to UK or USA, where the strength of the EUR could render the price of such holidays more attractive than holidays in EUR based countries.

It raises the question whether the building industry experiencing increased costs of raw material can survive in the face of falling demand for property and flat or falling prices. It brings into question the sustainability of tax systems like 12 per cent withholding tax at source on sale of property when sales will in effect start being made at prices which do not leave a commensurate margin of profits which justify such withholding rates.

It raises the question whether the population will have to cut back on its quality of life (reflecting itself in such discretionary spending as foreign holidays and dining out) when faced with stiffly higher energy prices and utility bills and uncertainty on the future earnings from their jobs, business or investments.

Added to this dangerous cocktail of international economic problems we have our own home-grown ones resulting from years of neglect or badly executed restructuring solutions to problems which have been dogging us for far too long. The most obvious is the re-emerging Shipyards problems which we are told needs yet another re-structuring and that this time the solution will have to involve both yet another down-sizing and privatisation in whole or in parts of the Shipyards operation.

At a time when the demand for ship repair services is quite high and efficient operators are normally price setters provided they can deliver timely quality services, there is no doubt that past restructuring exercises (of which we have had quite a few since the Shipyards operational losses started taking shape way back in 1985) have failed to deliver the bacon.

The unions and government/management can continue to blame each other till hell freezes over and as always the truth is somewhere in the middle. Nobody is totally at fault and no side is totally blameless. The truth however it is that the taxpayer is footing all the cost of these expensive restructurings and for goodness sake we must show the same dignity to all workers wherever they are employed.

We cannot tolerate a situation where employees who become redundant through the globalisation process after giving long years of productive and efficient service to private sector employers to be left totally exposed to the generosity or otherwise of their employers against whom the Unions hold pretty few levers with which to negotiate, whilst other employees who have long been bleeding the taxpayers with one round of subsidies after another, are yet again treated with privileges which their colleagues in the private sector cannot enjoy.

Whatever funds the taxpayer will have to foot to ease the transition of employees involved into new productive employment should be spread equitably among all affected employees, and should be directed mostly towards re-training and up-grading of skills to ensure continued employability rather than to facilitate early retirement leading to further stress on our productive capacity and social payments structures.

It is at times like these that the effectiveness of the MCESD needs to be proven.

   

Four Things Joseph Needs

15^th June 2008
The Malta Independent - Friday Wisdom

To say that Joseph was not my first preference for Labour leader is probably an understatement. That Joseph was elected with a large majority of the conference delegates is an undeniable fact.

So whilst upholding my view that Joseph does not represent the best risk-adjusted return* for Labour, this does not in any way impute that he is destined to fail. When a week is a long time in politics, five years are an eternity and things can change drastically for better or for worse.

Certainly the cards are stacked in Joseph’s favour. As the PN extend their tenure of power, voter fatigue in their regard will grow, possibly exponentially. Joseph’s predecessor came within a whisker of cashing in on this voter fatigue last March and was only denied success by his personal deficiency in credibility and ill-thought policies, which exposed convenience rather than conviction. It is true that at last election the PN gained some votes through their power of incumbency, but it is also true that they lost much more through the liability of incumbency that translates into voters’ fatigue.

Joseph is energetically attempting to throw away the baggage of his pre-2004 views on Malta’s potential as an EU member so that he comes along with little or no baggage. His first week in the post augurs well on his ability to develop policies based on conviction that will persuade a majority of the electorate he can be trusted with an opportunity to be a national rather than a mere party leader.

Still, Joseph has to work hard to achieve success and he desperately needs four basic things in his quest for it. He needs space, time, support and, most of all, undiluted good honest advice.

To start with, he needs space. Joseph should demand space, especially from those who helped him accede to leadership. Anyone who expects reward for doing what one believes in should be treated with extreme caution. The reward for those who helped him is having been successful, rather than gaining in status or importance in compensation. Joseph must be permitted to build his team on a blank sheet of paper. In doing so, a short prayer every day to the Almighty, asking Him to guard him from his friends whilst Joseph takes care of his adversaries or critics, would not be amiss.

Joseph needs time. It would be a grave mistake to rush too quickly into building an image as a strong alternative to Lawrence Gonzi. Peaking early is as dangerous as leaving it too late. The important thing is to build credibility gradually, one day at a time. In the meantime, let the PN fall into a sense of complacency whilst Joseph spends his initial energies re-inventing and re-invigorating the soft infrastructure of the party. Such calls as “your honeymoon is over – Labour is back in business” should be avoided at this early stage. Joseph must let the facts speak for themselves rather than come across as the bullying type. It does not become him.

Whatever the potential stored inside him, this is a new experience and quite a few banana skins await him. Dancing his way around them is going to demand a lot of support. Support from his family, in showing unity while suffering in silence until they can grow the thickness of skin to withstand repeated attempts for his destruction from those that do not wish him well in the zero sum game of politics. Support from his friends, who may be disappointed that he is not being grateful enough for the help they showed him in the process to get here. Support from neutrals, who should not rush to judge him by the inevitable gaffes that he will commit as he learns to handle the ropes of his new job. Support from his critics, who should not spare him any criticism but should do it with good intent to build him up rather than to destroy him. And even the support from his adversaries and “enemies” in pulling no punches, as this will help him get used quickly to the career he has now chosen.

Joseph should not believe for a single moment that his aspired new way of doing politics will be reciprocated by his political adversaries. Inevitably, they will continue to use all the tricks in the book to crush him and break him before he can build himself up. And as the PN is networked well with other power centres in society, such attacks will come from different sources, not necessarily the evident direct line of the political adversary.

They will criticise the way he speaks, the way he stands, the way he walks, his wardrobe and fashion tastes and all the other minutiae, while downplaying the substance of his political message. He should not be oversensitive in reacting to such criticism or in adopting it, hoping to silence them. Beauty is in the eye of the beholder and Joseph should make every effort to continue to be himself. Whatever he says or does, he should do it his way, as people can tell the difference between natural and artificial behaviour. People will choose a natural defect over a perfect artificiality every time.

But above all, Joseph needs good advice. The biggest mistake he can make is to surround himself with a court of yes-men, determined to please their leader by giving him only messages that delight him and protect him from the unpleasant realities that he must overcome in order to succeed. Joseph must ensure that he keeps open a spectrum of lines of communications both within and outside the party. He should live his interesting recognition that his critics are his best friends. Indeed they ought to be.

Joseph’s new role will demand a level of decision-making that he has never experienced before. A leader is as good as the decisions he makes. The leader’s decisions need to have a strategic purview that continually reinforces the social democratic doctrine of the party – strategic decisions that help achieve sustainable economic growth through business-friendly policies, coupled with distribution of wealth models that protect those who cannot protect themselves, those who, because of age, sickness or genuine unemployment, cannot participate fairly in the wealth creation process of normal economic activity.

This demands a very fine balance of sound economic posture and socially progressive measures. No 50 per cent reduction in the fuel surcharge at a time of exploding international energy costs, as this is socially regressive and stimulates a waste of scarce resources. No convenient crusades against internationally accepted models and standards like VAT. No pretensions that government can or should be like Santa Klaus, protecting us against international realities of high energy and food costs. Recognition that there are certain problems for which we have no immediate solution and that the burden should be fairly spread to avoid any hardship on those who are already too close to the bread line.

Having these four things does not guarantee Joseph any success. That is something on which he has to work for himself.


* Risk adjusted return is a term used in investment in order to establish a relationship between the return achieved and the risk assumed. So if an investment generates x return with y risk, it is considered better than a similar investment that also produces x return with y+1 risk.

 

Living Contradictions

13^th June 2008

The Malta Independent - Friday Wisdom

It is true that good leaders tend to grow when they are installed in their position. It is equally true that one of the hallmarks of good leadership is the ability to resolve conflicts and contradictions. It is also true that a smile, even when under stress, helps to reduce tensions permitting more objective analysis of the obstacles to be overcome.

But the contradictions that new Labour leader Dr Joseph Muscat has to resolve would take much more than a smiling solution. The analysis report about Labour 2008 defeat had counselled the new leader “to be tough with those who think that they own the party, or even worse, those who think that the party is indebted to them. The party has to cleanse itself from such infantile cliques before its professions of inclusiveness can be taken seriously”.

It is more than an impression that those who need to be cut to size before achieving the much aspired unity in Labour’s house are among those to whom the new leader is most grateful for having smoothened his way to success. Those who forced the other contestants to row upstream during the election contest while Muscat was permitted to row downstream.

Muscat’s leadership qualities will be put to test fairly soon. There are many true Labourites both inside and outside the party who feel that the leadership contest was unduly influenced by the incumbent administration. These people fear that change will be merely superficial and that in essence the more changes are made on the surface (hymn, logo, positive talk, smiles etc) the more things stay the same at their core where it really matters.

The new leader must prove their suspicions misplaced. He must show he has the emotional intelligence to eliminate all obstacles that stand between him and election victory by 2013, without fear or favour, without undue submissiveness to those who helped him make it to his post. Above all he must not surround himself with yes men who tell him only what he wants to hear and shield him from the reality that must never fall outside his purview.

Let’s give Muscat the benefit of the doubt and allow him space and time to roll out his leadership style, to do things his own way. But he must not take too long to prove he is his own man. This game is generally won or lost in the first 100 days so we may not have to wait long to pass judgement.

But we experienced another very dangerous contradiction last week courtesy of the Malta Environment and Planning Authority. It seems that Mepa manages to surprise whether it approves or declines development applications.

I have no technical competence to add value to the debate whether the development at Fort Cambridge (ex Holiday Inn) is less offensive with 23 floors and a high plot ratio to allow more open spaces on the ground, than with 16 floor edifices occupying a larger footprint.

What however I have a firm opinion about, however, is that once Mepa takes a decision and approves an outline development permit (ODP) application with 23 floors it is highly damaging for its credibility, and for the proper development of business against reliable rules, to have second thoughts forcing the developer to a totally different configuration at the full development stage.

This dangerous precedent, unless immediately corrected, basically nullifies the scope of making ODP applications as these have now become wobbly and subject to further revisions at the full development stage. This means that banks henceforth will not process finance applications on the basis of ODPs and will insist on full development permits before considering finance. Given the substantial expense and time involved in processing full development applications developers will grow reluctant to undertake such investments without the comfort of bank finance availability which hitherto was forthcoming on the basis of ODPs.

Mepa must put its house in order. It should either abolish Outline Development Applications or live by its decisions irrespective of any second opinions that incoming board members may have on the actions of their predecessors. If this country adopts the system where incoming executives feel free to ignore commitments given by their predecessors simply because the new incumbents think they are more clever than their fore-runners, than this country will become a banana republic shunned by serious investors

Change We Can Believe In

6^th June 2008
The Malta Independent - Friday Wisdom

My webmaster alerted me to the fact that last weekend’s contribution in The Malta Independent on Sunday was my one thousandth op-ed since 1999 which are all uploaded on my website. Since 24 September 1999, I have signed and collected 1,000 articles. So my webmaster suggested that I should celebrate the start of the second millennium with a very special contribution.

I was truly spoilt for choice of subjects this week. Alfred Sant’s resignation from Opposition Leader yesterday would normally merit an analysis of his 16-year stint as Labour leader. However there is little to add to the harsh criticism contained in his regard by the report of analysis for Labour’s 2008 election defeat and these last five years I have been pointing out how Alfred Sant had set Labour on a path to sure failure.

There is not much more to say except that he leaves behind a legacy of catastrophic election losses, unsustainable policies leading to colossal U-turns that chipped away credibility, internal financial ruin and cliques opposing each other rather than their political adversary.

Even his departure lacked grace. His remaining Opposition Leader but resigning from party leadership right up to the start of the EGC voting for the new leader is strange and unorthodox. He should have resigned both positions or stayed in both as caretaker until the new leader is elected. The way he did things leaves room for speculation of using his incumbency to influence the choice of his successor while appearing detached from the party corridors.

Obviously this week there is going on the actual voting process to elect a new Labour leader. By the time this is published, the voting result of the Thursday vote, which is unknown to me as I write, would be known. Unless Joseph Muscat got an outright 50 per cent plus one vote in the Thursday vote, it means he is facing a run-off this evening with the second-placed contender, who most probably would be George Abela. Any other results of the first-day vote would expose total and unhealthy detachment by the Labour delegates to the clear views of the general electorate captured by various opinion surveys held over the course of the last two months.

If Muscat was elected outright on the first vote, may God bless him with the fortitude and wisdom to extricate himself and the party from the stranglehold of the web of incumbents that worked so hard for his election.

If the contest is heading for a run-off this evening between the two favourite contenders, Muscat is still in time to show the true substance of his leadership potential by withdrawing from the contest in recognition of the fact he would be much better placed to be the next leader after Abela 10 years down the road. At age 44 and with probably five years’ ministerial experience on his CV he can then take Labour forward for the next quarter century somewhere in 2018.

If there is a run-off between Muscat and Abela this evening and Joseph decides to carry on till the finishing line, then in reality he would be losing even if he wins. He would lose the respect of honest and true Labourites who would see in him the image of Alfred Sant’s act of betrayal in seeking re-election after the 2003 election defeat. Muscat would in Sant’s tradition be seeking personal glory at the expense of the party’s interest in trying to pip out the person whom the electorate consistently regard as giving Labour the best prospect for winning the next elections.

Perhaps my readers are wondering why I do not apply the same reasoning even if Muscat were to win an outright majority in the first vote. Simply because at the first-vote stage, Muscat had no assurance that his standing back would permit Abela to accede to leadership when the contest was still a five-way race. However if in today’s vote the run-off is between Muscat and Abela, Joseph knows that by standing back, Abela would accede to leadership without any risk of the space vacated being filled by another contender whom Joseph rightly considers as ranking below his attributes for leadership.

This one thousand and one op-ed is happening on a historic day which could render Labour instantly as the party of the majority even if it would have to wait a whole legislature to translate such majority into an executive mandate. Or it could be yet another stage on Labour’s slippery slope towards oblivion if it elects a leader in defiance of the clearly-expressed views of the general electorate, and in so doing giving the PN an easy ride to making Gonzi a three-term Prime Minister.

The electorate is demanding from Labour change they can believe in. Which brings me to the other topic which would have merited a whole op-ed this week. Barack Obama has against all odds beaten Hilary Clinton for the Democrats’ nomination for the November US presidential election. A 46-year-old who achieved national recognition just four years ago in the Democratic Convention when Obama was still a state senator in Illinois, has catapulted himself to nation’s favourite for presidency by a battle-cry promise of “change we can believe in”. America seems well on the way to electing its first Afro-American coloured president.

Obama’s campaign has been a lesson that in politics what matters is not the colour of the skin, sex or the age of the contender. What matters is who can best offer the electorate change we can believe in.

Free But Scandalous Health Service

1^st June 2008
The Malta Independent On Sunday

The MLP leadership election has deservedly occupied much of the news space over the last two months. Hopefully this chapter will be closed before the coming weekend.

I have already expressed my view that George Abela offers Labour the best prospects for success irrespective of the PN government’s performance. Any other candidate would leave Labour’s future hostage to fortune, as his or her success at the next election would need substantial assistance from the government through sub-standard performance in the course of this legislature. Labour must aim to win by merit. Winning by default is a volatile concept too risky to rely on, as the result of the March 2008 election has shown.

The only thing I would add today is that I agree with the MLP election commission’s decision prohibiting the leadership candidates from live direct participation in Xarabank. I have always had the view that Xarabank’s format produces more entertainment than information and the leadership election is no circus. Personally, I have participated very frequently in Bondi’s discussion programmes but always refused Xarabank’s invitations, as the atmosphere there is not conducive to meaningful discussion.

The election commission should have however put together a programme where an independent moderator puts the same questions to all contenders with strict time limits for their answer. And the medium for such a programme should have been One TV. What Xarabank then decides to do on the subject without the direct participation of the contestants in the studio is no matter for the electoral commission to interfere with.

Life goes on and the honeymoon period for the new Gonzi administration is now over. Reality is hitting home. The rose-tinted view of the world, which was so predominant in the election campaign, is gradually being replaced by a more pragmatic but darker view of the challenges that await us.

Social Policy Minister John Dalli described the hospital waiting lists this week as “scandalous”, saying it was unheard of that one had to wait up to five years for certain operations. Unheard of? I do not think these waiting lists mushroomed in the last three months. They were there and Labour’s ineffective campaign made no issue to show that the supposedly free health service is in fact scandalous.

However, I was under the impression that the long waiting list and sub-standard service were restricted to certain types of surgery, like hip replacement, where waiting was not a matter of life or death though still very relevant for the quality of the patient’s life.

I was wrong. The shabby service at Mater Dei is now spilling all over the place. Take what this blogger wrote last Thursday (29 May) in a publicly accessible blog: “A few days before Easter my wife drove me to Mater Dei Emergency as I was suffering from a colic attack. We got there at 5pm; after six hours of waiting we were told we had to wait for approx three more hours to be seen to. Everyone could see I was in absolute pain could not even talk with pain. At last my family took me to a private hospital where I was operated on. It cost me over 1000 euros. Well Mr Dalli who is going to refund me the cost of the operation? There were over eight security officers doing nothing, the customer care girl kept disappearing and there was no one around to check the real emergency cases. WHAT A SHAME...”

What’s the point of having a free service if you cannot get it when you really need it? This is not an isolated case. Similar letters of complaint are appearing in the press with increased frequency. Hospitals are not merely beautiful buildings and state of the art equipment. Above all they should be systems and service; efficient, effective and timely service.

This leads me to another point that needs to be remembered. Let’s stop saying that the government is delivering a free health service. It is certainly not free as the taxpayer is paying for every cent spent. And increasingly it is not a health service, as the experience of the above blogger is forcing more and more people to take out private health insurance even though they are supposedly entitled to free health service courtesy of the taxpayer.

In reality many people are paying twice for health services. We are paying as taxpayers to fund the running expenses of our hospitals and health centres. And we are paying our private health insurance schemes because we do not believe that the “free” health service will meet our expectations of effectiveness and timeliness when we need them.

It is time for our politicians to come off their high horse of false social morality and be totally frank and honest with the electorate on whether the taxpayer (not the government) can really afford to provide free and efficient health service to all who need it, irrespective of social standing. If it remains free and scandalous then basically it is not free at all. It is doubly expensive, as this blogger has found to his cost.

I am fed up of promises of free this and free that, without making it clear that nothing is really free and that lack of resources mean that those who have no resources have to wait a scandalous number of years to get access to such free service, while those who can afford it are taking out private insurance as they doubt the reliability of the supposedly free service.

Is this situation socially acceptable? Or are we happy with the theory of a universally free health service and close our eyes to a very different and socially regressive reality?