We are sometimes so near events as they happen that we fail to grasp the overall significance.

Over the past months, we have seen quite a number of our best enterprises, who employ thousands, face problems. Since these crises are generally due to specific reasons we may fail to see there are underlying reasons connecting them together, since for the most part each crisis has its own peculiar genesis and development.

Let me try and list them in no particular order at all.

Bank of Valletta has its well-publicised misfortune regarding the Valletta Fund Management Property Fund

Middlesea lost around €60 million in its unfortunate Progress Assicurazioni Spa venture in Naples

GO’s investment in its Greek subsidiary Forthnet is causing massive problems and may even wipe out, the recent AGM was told, GO’s reserves

Air Malta’s huge problems are maybe not known in all their real contours

Enemalta’s problems do not relate solely to its power station extension but even more to its previous lack of proper financing and the curious cross-subsidising of some of its core business

Prior to this, there were also the huge problems relating to the dockyards, now no longer a drain on the country.

Each of these crises has its own genesis and particular contour.

Yet there is something that is common to them all: they each represent the heavy investment and ventures made in the 1970s and the 1980s to form the basis of the economic growth registered in those years.

Each represented a huge improvement in the way the Maltese in those years built their sovereignty from scratch, learned to do things in a big way, struggled in quite difficult times and managed to build an enterprise practically from scratch.

To judge them today with the benefit of hindsight and from the point of view of our position today would be unfair. Maybe they were insular in outlook, maybe they thought they had discovered the secret of longevity and eternal life but they each and collectively contributed to make Malta the way it is.

Now, however, for a whole variety of reasons, they are all in crisis. Most of the crises have particular characteristics, different timelines, but generally speaking they all show a company that is finding it difficult to come to terms with doing business in the second decade of the new century.

Very few of them have tried to anticipate the changes they needed to do; in fact, many were overtaken by events.

Some tried to do things in a novel way but have found that things are not all that rosy after all, nor is success guaranteed.

Many were built on the foundations of an island economy that was closed off to competition. When that changed, and the bastions of protectionism surrounding them were pulled down, these companies found themselves floundering in a wide open sea.

There is however one fact that is impressive, if one takes care to notice it: that while these generally big companies are in some trouble, the rest of the economy, well mainly, is flourishing.

Courageous entrepreneurs in many sectors, from manufacturing to services, to financial services, to so many other sectors, keep coming up with new ventures, create synergies, develop products, go for new markets, take up challenges with surprising equanimity, while these big corporations stumble or find the going difficult.

Scratching a bit deeper, one also finds that it is not just the business model of these corporations that has started to leak water but the economic thinking at its basis.

I have already mentioned the fact that these corporations were mainly born and nurtured in a vacuum, in the absence of any real competition. When competition came in, such as the low cost airlines in the case of Air Malta, huge problems afflicted the national airline.

There is also a distinct lack of exposure to the real business world elsewhere in the world. Cocooned in our small universe, for a long time we believed we were unique in the world and that things had to be done our way and our way only. We kept trying to re-invent the wheel and lost precious time and effort when all we had to do was to see how others do things and to get the many off the shelf solutions that existed.

This was in turn based on the misconception that what was valid everywhere else in the world could not be implemented in Malta because ‘that’s not the way we do things here’. Or because the models that worked abroad cannot work here for a variety of reasons.

I have not listed the soon-to-be-killed off public transport, for it is not a corporation. But the mental blockages and taboos that riddle this system soon to be consigned to history books can also be found, mutatis mutandis, in the big corporations who have suddenly and surprisingly found themselves to be floundering.

Almost 50 years after we attained our independence, it pains to say it, we are finding that economic logic and business sense are forcing us to attach ourselves to a foreign principal and to learn to do things his way. Need I mention the two corporations that have been taken over and shaken up and made to work by foreign principals?

Maybe one can object that from the list I mentioned at the beginning, one, that is GO, has been bought by a foreign principal and that it is the venture undertaken by this foreign principal that is causing the most problems. That is very true but this is the exception that confirms the rule.

There’s more. Many of these big ventures of the 1970s are staff heavy. The corollary to this is that they were used, Air Malta especially, by the political parties as places where they could park otherwise unemployable people.

That means, I am speaking in general terms here, that the people taken on were many times left without training or with little training, and that the heavy political (or rather partisan) environment awarded loyalty not ability or independent thinking.

In fact, many of the people in these corporations are now of a certain age that makes them practically unemployable and the persons themselves have become so used to being in employment that they have not thought of upgrading their skills or learning new skills. There is a huge difference between this generation and that of today’s youths who continually surprise us with the challenges they set themselves and with what they attain once given their head and allowed to learn.

It is not an easy task now to restructure these corporations in trouble. The pressure in almost all of them is to hive off those segments of the workforce that are a burden but this is a difficult task with enormous human cost. Nor does it mean that the younger ones can be any better for many times they have been for so long under the wings of the ‘children of the 1970s’ that they have assumed a completely wrong frame of mind and business template.

One pities the people who are trying to restructure Air Malta who have, every day, to do battle against this huge wall.

One would have to bring in here that other product of the 1980s, ST Micro, which while being private, shares some of the history of the corporations I mentioned. Even here, one notices that STM in Malta is mostly an assembly line. Its R&D is done elsewhere, as is its marketing.

These are the real problems that our people are facing. Sometimes, lost in our bubble, we think only of politics, that is the everlasting conflict between PN and LP, as if that is the be-all and end-all of Maltese life. That has its place too, as did the recent national debate on the advisability or otherwise of divorce in our country. But these two issues, by no means, are what people are thinking about from morning till evening.

Besides, when was the last time we dared raise our heads above the parapet wall and look around us?

The Libyan war is nearing resolution. We have absolutely no idea how it will unfold, nor what will be its impact on our small country.

We are members of the eurozone but we seem to have ended up believing our own spin that we are immune to the world’s big economic tempests (so much that our minister stayed here when his colleagues were debating the next tranche of help for Greece, while riots flared on the streets of Athens, while the government tottered, and while a brilliant minister was kicked out just because he was the one who proposed further austerity measures).

We just have no idea whether the euro is about to collapse, whether a default by Greece will bring about a tsunami like we’ve never seen, whether it’s the EU itself that will unravel and what are the options, realistically, open to us as a small open economy.

Imma l-aqwa li ghandna d-divorzju.

And that the government is a thief (it is) for adding €500 a week to the salaries of its ministers while the people are told to eat cake on a €1.16 raise a week.

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