Flashback

This article was published in The Independent on Sunday 06.04.2014

Old age brings disadvantages. However, it also comes along with the benefit of many flashbacks that permit analysis and interpretation of current situations in the light of comparable past experiences.

This week I was invited to participate in a discussion programme on Net TV and the experience triggered a reflection on a similar situation some 27 years ago, when Labour was struggling to adjust to its new role in Opposition following three consecutive legislatures in government. Equally now the PN is finding it hard to adjust to its new role in Opposition after a quarter-of-a-century in government sliced in two halves by the short interlude of Labour government between 1996 and 1998.

An overlong stretch in executive power, which I categorise as anything beyond two legislatures, gets so deep under the skin that it becomes natural to assume that the loss of executive power is a purely temporary phenomenon merely designed to prove that democracy still works, and that in no time at all the electorate will realise its mistake in voting for change and will restore it to executive power, come the first opportunity of the next general election.

I well remember a stalwart Labour representative arguing after the 1987 election, which Labour lost by some 5,000 votes, that Labour should easily win the 1992 election as it would take merely 2,500 voters to float back after realising that Labour was Malta’s natural government – as if in the five-year interlude between one election and the next, everything else stays frozen while some of the deserters repent.

With an election defeat of unprecedented proportions, the PN can only follow such false reasoning if it assumes that nearly 18,000 voters will repent. Yet although the likelihood of this happening is extremely more far-fetched than it was during Labour’s first term in Opposition, the mindset is identical.

I could hardly believe my ears when a PN representative in the TV debate went on a long litany of doomsday-mongering, arguing that the cabinet reshuffle brings instability, that people are scared, that consumption is waning and investment is nowhere to be seen as unemployment is shooting up and inflation falls to dangerously low levels.

The message was that Malta cannot do without a PN government, that the sky has fallen in since the last election and that unless people repent and put the PN where they naturally belong, the country is doomed to economic ruin in the hands of Labour, whose leadership and management, as well as its rank and file, consist solely of amateurs trying to wear boots too big for their feet.

Now there is not a shred of evidence to confirm any such doomsday claims. On the contrary, the economic statistics being churned out show a rapidly improving situation. GDP for 2013, according to the first flash reading, shows a real growth of 2.4 per cent, four times more than in the previous year and amongst the best in the EU. Unemployment as measured by the last Labour Force Survey, which overrides erratic shifts between un/registered un/employment, shows a fall from 6.5 per cent in the last quarter of 2012 to 6.4 per cent in the last quarter of 2013. It also shows the labour participation rate increasing from 63.6 per cent to 65.3 per cent, proving that more people who had dropped out of the labour market are returning to or seeking employment. Tourist arrivals and earnings continue to break records month after month.

And while inflation – at just over one per cent – is below the target of two per cent, it is much better than the eurozone average of just 0.5 per cent and is being kept low for virtuous reasons. It is not that prices are showing a general tendency to grow so slowly, but it more that the government is effectively controlling the price of energy and reducing the impact of other government-induced costs, which have reflected lower measured inflation for some time. Should we complain of lower inflation as we start benefitting from the 25 per cent shave on utility prices?

There are three main reasons why things are evidently getting better. Firstly, it is because the uncertainty of political instability of the last legislature had forced people to postpone consumption and investment which has now sprung back as the election delivered stability. Secondly, it is because government policies to reduce the cost of utilities while making work pay are further encouraging investment and consumption. And lastly, it is because the international scenario around us is brightening up better than we could have expected a year ago.

Many of the eurozone countries in distress are showing promising signs of healing because they can start servicing their borrowings through normal capital markets operations at a fair and sustainable price and because growth is re-emerging as the EU adopts a more balanced stance between fiscal prudence/austerity and stimulus/restructuring for economic growth. In Italy in particular there is evidence of fresh air blowing through a government determined to push through much needed economic adjustments and this is helping consumer and business optimism which are the foundations of future economic growth.

The PN will eventually realise that nagging and doomsday-mongering are poor credentials for seeking to regain the electorate’s confidence. Just as it was with Labour after the 1987 defeat, it will take a second defeat for the PN to realise that only positive change can bring home the bacon.