There is no denying that the Maltese body politic has been overwhelmed by the high intensity of a chronic fever-political polarisation. The fever has masked the nature of the disease, which has been endemic for the past decade or so.

It has been our folly to get more excited about trivialities than about substance. It has been our choice to get entangled in the hype about the EU, CHOGM and the like, instead of keeping our eyes fixed on the running sore that takes the shape of an unsustainable structural deficit and a mountain of rising debt.

A substantial part of the electorate has been, at one time, hoodwinked into believing that a “new spring” was about to break. Insistent promises kept on coming from the same sources holding the prospect of structural and other EU aid, thereby wiping out and making amends for the maladministration of Malta’s finances during the past decade.

Polarisation fever

Worst of all, while the polarisation fever continued to rise, and the public debate intensified at its most abysmal level, public opinion got more and more entangled in a miasma of empty slogans, claims and counter-claims, sound bites and the complicated details of hidden agendas, all of which were deliberately meant to distract attention and confuse the electorate.

During the past decade or so, the Maltese economy has been pushed dangerously in the direction of a black hole. In the absence of timely, last-minute measures, it may well be sucked in and devoured.

Public finance lies at the heart of the political process that precipitated the danger. Like a dagger, it is being pointed threateningly at the heart of Malta’s exhausted economy.

Driven by a “money no problem” philosophy, government expenditure rose from Lm240 million in 1986 to Lm989 million in 2005 – more than fourfold.

During the same time span, total revenue rose from Lm224 to Lm844

million.

Illusory ‘feel-good’ climate

In other words, the government deliberately overspent consistently, raising the level of excess public expenditure, thereby creating a false and illusory “feel-good” climate.

All of this was sustained by borrowing. The level of national debt soared from Lm63 million in 1986 to Lm1,400 million in 2005 – a debt bill running to an additional Lm1,337 million over and above that outstanding in l986. If State guaranteed loans taken by public corporations and entities are included, the total begins to approximate Malta’s GDP!

Like Mount Everest, this black hole is there and no amount of sound bites and efforts to conceal it will change this fact of life.

There was a time when it was claimed that this black hole was a figment. Public expenditure continued to rise and so did the level of public debt. Although plainly unsustainable, the spending spree continues unabated. Today, over and above a colossal debt bill, the Exchequer has to find about Lm75 million, each year, to service this debt – it has to be squeezed through taxation.

Innate problems

The tax-paying community has been taxed bone-dry and the economy has been stagnating. The immediate prospects are by no means bright, with liquidity problems, signs of declining consumption growth, a dearth of foreign investment, evidence of a capital flight and a dip in the balance of payments haunting the economy.

The sombre reality will not go away, nor will it evaporate in the hype of ministerial statements or the heat of polarisation. It will remain there, whether or not government ministers look the other way, or whether a government in waiting takes over at any given time.

If the economy is to be rescued, it has to be saved by local endeavour, and by a brave resolve to make amends for the excesses of the past, within the parameters of social justice. There must be an end to clientelism and nepotism.

To run away from the problem is to court disaster. The challenge is urgent and the range of remedial measures is restricted.

Outward oriented initiatives with the potential of increasing foreign earning and creating remunerative employment are of the essence. Public expenditure has to be contained, the cost of government must be brought down to size and the bureaucracy streamlined.

Sovereign electorate

There is increasing evidence that the tax-paying electorate, which is over-taxed and over-stretched, is coming round to take the right measure of these realities. It is demonstrating an awareness of its sovereign right to demand change, and to insist on a thorough cleansing of the Augean stables.

It serves no useful purpose if politicians will continue to rant about the mistakes and mismanagement of the past, although it would be wise to identify the culprits, and to remove them from harm’s way.

The real and urgent challenge is not for politicians to come up with solutions that will restore confidence, lead to renewed growth and give buoyancy to our stagnant economy, although such solutions are essential ingredients, if there will ever be forward movement.

The real question to ask is whether the sovereign electorate could be mobilised and electrified to a high pitch, until such time when it could exercise its sovereign rights at the ballot box.

With more austerity in sight and government heavy-handedness, the omens are set for change.

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