Pirandello is one of my favourite writers and dramatists. An Italian author, who was awarded the Nobel Prize for Literature in 1934 for his bold and brilliant renovation of the drama and the stage, Pirandello’s works include novels, hundreds of short stories, and 40 plays, some of which are written in Sicilian dialect. Typical for Pirandello is to show how art or illusion mixes with reality and how people see things in very different ways – words are unreliable and reality is at the same time true and false.
His theory of relativity reminds me very much about the current state of the Maltese economy. No matter how you look at it, at different times or at different periods, the economy is, according to the Finance Ministry, always pretty good – even when most economic indicators are showing quite the opposite. So you can never say that the government is wrong in its assessment because the economic reality it projects is at the same time true as much as it is false.
The finance minister is on record in stating that the economy is growing at the rate of 3.5 per cent in spite of the situation on the international front and that this led to an increase in government income of e57 million in the first six months. This is all very true. But in the eyes of Pirandello, when you delve deeper you see the false bottom of the minister’s argument. Indeed recurrent expenditure in the first six months of this year has increased to more than e123 million when the government had estimated that it would increase by e66.3 million over the whole year. The deficit exploded, increasing by e80 million over the projected figure while public debt already exceeded the government’s target by e70 million.
Indeed 2.5 per cent of the 3.5 per cent expansion was due to government consumption. This meant that some 70 per cent of this expansion was due effectively to the sharp rise in the government’s recurrent expenditure. In truly Pirandellian style, this is a very healthy economy based on sound finances – when you see things the way the minister wants you to see them.
True, online gaming and the financial services sector have registered growth and have been consistent in their contribution to our economy. The low cost airlines have helped the tourism sector to improve while the government has invested heavily in education and health. But how do all these facts impact on our economy? By simply stating that the gross domestic product is growing without explaining how and why, and who was benefiting from it is to say the least superficial and very economic with the truth.
In spite of all the hype about employment increases, according to the last Labour Force Survey the average wage rose by three per cent in the first quarter of 2008, with the average wage in the public sector increasing by 3.5 per cent. This meant that the average rise per head in the private sector was far lower than three per cent.
Needless to mention that the heavy increase in wages in public administration, more notably in the departments of health and education, was due to the spate of promotions and recruitments made before the last general elections. So it is more than obvious to Pirandello that the economy grew because the government recklessly sprinkled electoral favours all around. All this occurred while inflation in Malta was at the rate of four per cent, which in real terms results in a sharp drop in consumer purchasing power. Pirandello must be turning in his grave.
These statistics are also linked to the indications being given in the Consumer Confidence Survey just published for the next 12 months with the sharpest fall in consumer confidence occurring in May. Also there are clear signs of difficulties ahead in many private sectors of the economy. The Industrial Confidence Indicator for Malta published by Eurostat showed that since the general election the negative feeling among entrepreneurs in the manufacturing industry is at historically low levels.
To make matters worse according to the internationally acclaimed Global Property Guide, in Malta property prices seem to be falling. Indeed local banks have become more cautious when funding credit facilities in the construction industry, as they are now weary that more sooner than later they might be meeting difficulties to recoup loans because of a possible plunge in property sales and prices.
You see? Pirandello was right. There is nothing in this world that is the truth and nothing but the truth. Nor is it that everything is false. Indeed things can be true and false at the same time. I cannot blame Tonio Fenech if he sees things his way. Of course he can’t blame me either if I see things how I really think they are.
Dr Gulia is Labour main spokesman on the Economy and the Self-Employed