The Malta Independent 23 February 2019, Saturday

New economy, traditional economy and collapse

Mark A. Sammut Sunday, 20 January 2019, 10:40 Last update: about 2 months ago

'Best in Europe', 'Envy of the World' ... grandiloquent slogans intended to beguile the masses and bypass the thinking classes who can clearly see through the sham.

For a sham it is.

New Economy

The Best in Europe Envy of the World did not manage to attract big names and important institutions leaving Britain in the wake of Brexit. Inviting the Indians two months before the due date does not amount to much, even if Article 50 is extended. The overwhelming majority of those leaving Britain have moved - or intend moving - to Dublin or Frankfurt, even though neither is Eire: the Best in Europe nor Germany: the Envy of the World.

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Lithuania now has the second highest number of e-money licences (45) in Europe, after the UK (146), and one of the licences has been issued to Google to operate in the EU. Bloomberg has reported that the small Baltic nation envisages that its Fintech sector will expand by 15 per cent this year and Fitch Ratings confirmed that "Lithuania's drive to establish itself as a tech hub will attract further foreign investment." One would have expected the Best in Europe to issue the second highest, if not the highest, number of e-money licences. But that's real achievement, not just blah, blah, blah.

Traditional Economy

The grandiloquence has luckily been limited to the new economy, even though it has been more hot air than actual achievement. Now it has transpired that the local pork industry - like the poultry industry before it - is facing possible extinction.

I remember some 20 years ago, the Pig Breeders Cooperative secured a one-million lira (€2.3 million) deal with importers from Avola, Sicily. The Sicilians had undertaken to buy Lm1 million worth of Maltese pork.

Where has that entrepreneurial spirit and business acumen gone in these 'Best in Europe', 'Envy of the World' best of times?

The entire vision underpinning the present administration's style of government is short-termist and, at the end of the day, sterile. It is built on the over-exploitation of the natural and urban environment, on innovations in civil rights (which are, in essence, economically sterile and serve only to catch votes), and ephemeral projects such as bitcoin, cryptocurrency, AI, etc... It's all myopic and short-termist: there's no long-term branding in sight.

The brand

What has Malta invested in a Maltese brand? Absolutely nothing, apart from tourism - although, in the long run, over-development will eventually kill this goose which lays golden eggs.

The brand philosophy can succeed. It succeeded in the past: just consider the successful exportation of the Maltese potato (the Alpha variety) to the Netherlands where it is considered a delicacy and you pay good money to eat it in restaurants.  Since 2014, however, it seems that this success story has turned into another failure - there seems to be no vision to sustain the exportation of the "exotic" Maltese potato.

Why is nothing being done to have a decent export strategy for pork, potatoes and other agricultural products? The answer: because potatoes and pork are not as posh as a talking "female" robot?

The Italians have their extraordinary brand 'Made in Italy' for hams and all the different types of salumi, cheeses, olive oil and pasta. Why can we not devise something similar for our products? Why can we not look for niche markets?

A Maltese entrepreneur has opened an agricultural enterprise in Sicily and is exporting award-winning oil and other olive-derived products to select clients in the UK. A brilliant mind. Why not apply that vision ... ?

The State has to be the prime actor in such an effort, because our industries are small and our domestic market (shorn of protective measures) is not only insignificant but also open to devastating foreign competition. We simply do not have the economies of scale required.

The Sicilians have recently created a consortium of pasta-makers and others from the agricultural and food sector and flown to the US to strike deals over there. The information I have from Sicilian friends is that they have started to penetrate the supermarkets. I'm referring to the 15 Sicilian businesses who have created the 'Made in Sicily' brand: Gustoso Sicilian Food Excellence.

The 15 companies were selected and invited to join on the strength of their traditional and unspoilt products, links to the production areas, family history and tradition in the field.

If Sicily - which is neither the Best in Europe nor the Envy of the World - can do it, why can't we? Why can't we have the long-term vision to protract the past into the future without passing through a devastating present? But let's be realistic: this Sicilian project did not materialise out of thin air. It comes on the back of years of investment and spade-work to prepare for the Sicilian Brand.

My Personal Library (37)

Jared Diamond (b. 1937) is mostly known for Guns, Germs, and Steel (1997), a book which, I must say, has fascinated me and on which I base my anti-racist views. It's a book that everybody should read, particularly in these xenophobia-infested times.

But today I want to devote a few paragraphs to another book of Diamond's: Collapse, to which I referred in the title. The full name is Collapse: How Societies Choose to Fail or Succeed, and it was published in 2005.

Professor Diamond, ranked 9th among the world's top 100 public intellectuals, argues that the root problem in four out of five factors leading to collapse, is overpopulation in relation to the practicable carrying capacity of the environment.

He enumerates a number of environmental problems that have historically contributed to the collapse of past societies:

1.                 Deforestation and habitat destruction

2.                 Soil problems (erosion, salinisation, soil fertility losses)

3.                 Water management problems

4.                 Over-hunting and over-fishing

5.                 Effects of introduced species on native species

6.                 Over-population

7.                 Increased per-capita impact of people.

Analyse these seven deadly sins and what the present administration is doing to try to avoid or minimise them and you'll find that not only is it not avoiding them but it has actually gone into overkill mode. ODZ permits destroying the habitat. Soil is continuously lost. The proposed Malta-Gozo tunnel could ruin the only decent aquifer on the main island. Over-hunting and over-fishing: is there anything left to hunt and/or fish? The proposed rehabilitation of the Chadwick Lakes has brought to the fore the issue of non-native species in our countryside. Over-population is actually a government policy (!). And the per-capita impact of people is sky-high. The Government of Malta is committing all of the deadly sins which bring the collapse of a society, and with much fanfare to boot!

It is lost in a frenzy of Best in Europe balderdash and the Envy of the World craze to build more more and even more and eat into the environment as if there were no tomorrow, and it's paving the way for our collapse.

In his conclusion, Professor Diamond writes:

"One of the main lessons to be learned from the collapses of [...] past societies [...] is that a society's steep decline may begin only a decade or two after the society reaches its peak numbers, wealth and power [...] The reason is simple: maximum population, wealth, resource consumption and waste production mean maximum environmental impact, approaching the limit where impact outstrips resources."

What is to be done?

Plan long term, says Jared Diamond. "Make bold, courageous, anticipatory decisions at a time when problems have become perceptible but before they have reached crisis proportions".

Be willing to reconsider core values, he adds. "Make painful decisions about values. Which of the values that formerly served a society well can continue to be maintained under new, changed circumstances? Which of these treasured values must instead be jettisoned and replaced with different approaches?"

These are the questions the country needs to answer. Not Keith-Schembri-inspired short-termism, or never-ending PN internal strife, but long-term planning. It's true, in the long run we're all dead. But hopefully not our children and their children. That means being the 'Best in Europe' and the 'Envy of the World'.


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