Now that the local council elections are out of the way and both parties are analysing the results of the 10 March poll from every possible angle, the country has already found itself shifting back to its ‘normal’ everyday life – rather bizarre way of life where political uncertainty continues to prevail. Notwithstanding the Prime Minister’s reassurances to the contrary, we continue to operate in an election mode
Life continues to go on, while Malta watchers – both local and foreign – try to predict what is likely to happen next, both in terms of when and how.
All this while key economic operators try to take stock of their prospects in the near and medium term while trying to decipher how correct the government data and economic indicators happen to be or else whether they have been subjected to any creative accounting, and or air brushing or not.
By the time of writing it even remains unclear why Budget 2012 seems to have failed to convince the EU Commission, as well as whether the expenditure cuts suggested to the government were imposed by the EU Commission or not. It remains equally baffling what capex (capital expenditure) seems to have been excluded from this exercise.
Meanwhile this week there have been various announcements which have shown up government in its true colours.
The call by Caritas for a rise in the minimum wage flies the face of all those who have been trying to downplay the fact that the social divide has been sharpening in Malta while the poverty trap is capturing more and more new victims. Although not one to see things in a one-dimensional black and white manner, I have long been detecting in my contacts with my constituents that poverty has long been rearing its head. At the same time, the so-called middle class has continued to wilt away.
It is pointless for the PM to appoint people like Simon Busuttil as special delegates in order to try and help the PN belatedly reconnect with the electorate, when the PM himself has continued to show a streak of political arrogance on various issues. Not only by congratulating himself for having raised the utility bills so steeply but also for having gone on record declaring that to his mind increasing the minimum wage will not necessarily address the social problems faced by poor families.
One issue that the PM is duty bound to address is the damning statement by Caritas Director Mons V Grech who insisted that money should not be seen as a handicap to improve the situation for society’s poorest, particularly when government found millions of euros to invest in various capricious capital projects. Surely with the right good will – and I will add political will too – the financial means to help the most vulnerable could be found as well.
On the investment front we had three separate news items. The PM’s investment promotion-geared business breakfast in London; the recent blow for GO plc’s minority shareholders and the downplayed news that former MaltaPost strategic partner Transend had closed down in New Zealand.
Let us tackle the three issues separately.
Experts in the investment sector have told me that such one-off business breakfasts do not yield the same level of results anymore as one-to-one targeted meetings might do. Apart from the fact that the PM’s London visit was bereft of any political meetings of substance, many saw it as a mere add-on to the so called Harrods event. Even more so when no one-to-one meetings were known to have been held in the City itself to target influential people who could be potentially interested in investing locally. From some pics I saw in the media, I saw far more familiar Maltese faces than those of unknown prospective investors. Someone close to the OPM told me that the primary objective could have been to project a business as usual aura and shed some of the prevailing uncertainty perception wise, even if deep down they knew that it would hardly add up to anything more than just yet another photo opportunity.
As for the GO plc minority shareholders, this is a typical case of a privatisation that seems to have definitely gone wrong for them. Particularly when one compares the dismal results of this company with the song and dance made by Minister Gatt when he had signed a share sale agreement with Tecom in respect of the entire government stake of 60% in GO plc which was known at the time as Maltacom plc. As a leading stock broker recently commented independently, not only was the company a very profitable telecoms company with very little debt and a huge cash pile by local standards at the time of the sell-off (some might prefer the word ‘sell out’!); but the minority shareholders had found that prior to government’s sale of its majority stake in Maltacom, it had decided not to distribute the cash pile in the company to the shareholders. Not even to itself as a then majority shareholder.
While I will use prudence not to comment in depth on a listed company, I still think that minority shareholders have every right to complain and moan publicly. Not only did their pressure on the company to distribute accumulated reserves which were well in excess of normal requirements to all shareholders fall on deaf ears. But even worse, the same minority shareholders had to face ever growing losses incurred by GO due to the now infamous investment in the Greek telecoms company Forthnet. So much for the claim by GO’s chairman in 2007 that the new strategic partners Tecom were “very good news for Maltacom”.
Which brings us to MaltaPost – prior to its acquisition by Lombard Bank. As an active member of the Public Accounts Committee, as way back as 2002 all it had taken me was a mere Google search to realise that the New Zealand company Transend, that the Nationalist government had intended to bring over as a strategic partner from New Zealand, sucked! I had gone public 10 years ago to show how prior to its Maltese investment, it had already run into problems when it took over the South African Postal Service by promising it to deliver profits within three years, which it never did.
Together with another parliamentary colleague of mine, I had also tabled a private member’s resolution in the House then declaring that the sale of government’s share in MaltaPost was not in the best public interest. Together with some other doubtful privatisations that have taken place since then, the MaltaPost and Maltacom experience both show that rather than harbouring any ideological bias against privatisation per se, the PL had – as it continues to do now – its finger on the pulse.
I will conclude this article by referring to the gist of the PM’s speech in London during the mentioned business breakfast.
According to media reports he had tried to assure those present of stability even if there had to be political changes on the island. It is interesting that the PM chose to talk the way he did by reassuring one and all that Malta provided long-term stability to businesses because there were no political controversies over major economic policy. Welcome news indeed. The pity is that in certain whispering campaigns conducted by circles close to the higher echelons of government and close to the diplomatic circuit, a different song is being sung. So much so that influential foreigners have even been given to understand that a potentially new Labour government could revert the island to a command economy in spite of Joseph Muscat’s repeated reassurances that a new would-be PL government would be one of the most business-friendly imaginable. As it should be.
It all seems to point in one direction – that it is risible for anyone in government to try and kid himself into believing that it is all ‘business as usual’. Even worse, to make us believe so too!
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Leo Brincat is the Shadow Minister for the Environment, Sustainable Development & Climate Change