The Malta Independent 24 October 2021, Sunday

Opinion: Labour’s heresy - Kevin Cassar

Saturday, 11 September 2021, 16:16 Last update: about 2 months ago

“We performed an economic miracle” was Labour’s hollow claim in its 2017 Manifesto: L-Aqwa Zmien (The best of times). Muscat’s government performed no divine marvel.  Yet the repetitiveness and insistence with which the fable of Muscat’s economic genius was pushed, has etched an indelible mark in Malta’s psyche.

Labour’s illusion of its own competence is still perpetuated by Muscat’s continuity candidate, Robert Abela. In his latest interview with ONE, Abela persisted with Labour’s hyperbole.  “People believe our word” he proclaimed, “because our word is our contract”. “The electoral manifesto is our contract with the people, who know they can trust Labour to deliver” he insisted.

Abela was perpetuating the myths in Labour’s 2017 manifesto. It heralded “a government that delivers what it promises”. Peering into that manifesto reveals the magnitude of the chasm between Labour’s fiction and reality.

“Story of a Maltese economic miracle” is the first section’s grandiose title. It kicks off with the most important promise: the per capita GDP will exceed that of the European Union mean. The manifesto boasted that per capita GDP had reached 93% of the European average in 2017.

Joseph Muscat’s government, it pledged, will make it 100%.  Did Labour keep its key promise? No. Quite the opposite.

In 2020 it had fallen in real terms to 26,013 dollars from 29,149 in 2019 - only 82% of the European Union mean.  Labour not only failed to meet its central pledge but did not even retain the 2017 level.  

Labour’s next big promise was that GDP growth would reach a mean of 6.5%.  Labour didn’t even come close. In 2018 it was 5.18%, in 2019 5.54% and in 2020 GDP shrank, not grew, by 7%. Where was Labour’s economic miracle?

In 2010, soon after the 2008 global economic crisis Lawrence Gonzi’s much maligned government could boast 5.54%.  In 2000, in the ‘dark’ days of Fenech Adami’s leadership it was 19.7%.  If Joseph Muscat’s meagre mean growth is an economic miracle, what is Fenech Adami’s 19.7% growth?

Labour’s heretical boasts of divine economic power are completely shattered when the percentage growth of GDP per capita is considered. In 2018 this was only 1.57%.  In 2020, due to the COVID pandemic, this shrank by almost 11%. In 2012, the final full year under the Gonzi administration it was 3.18%, double that of 2018.

Labour’s economic miracle was nothing but an illusion, an overinflated bubble of air, manufactured and perpetuated by a slick propaganda machine.

The government that supposedly delivers what it promises failed miserably to deliver on its key promises.  It failed to deliver on plenty more.

Take Promise 6: we will work harder to strengthen the structures by fostering a culture of fiscal morality.  Labour’s strategy to foster morality was to set up secretive financial structures in Panama, allow Yorgen Fenech to make millions out of the Mozura wind farm and Electrogas power station, award billions worth of illegal contracts and direct orders and demolish regulatory authorities.

Promise 43 pledged to continue to build on the success of the citizenship by investment programme. Labour bragged that government had created a strong economic niche out of nothing. The reality - European Union launched infringement procedures against Malta.  After being given a chance to replace the scheme with a new programme compliant with mandatory residency requirements Labour deceived its European partners and circumvented the rules, losing the last shred of credibility for Malta. Malta now faces legal action as a result of Labour’s malfeasance.

Promise 51 vowed to strengthen the digital gaming industry.  Instead, the man Labour tasked to oversee the industry, Heathcliff Farrugia faces criminal charges for trading in influence with Yorgen Fenech. His predecessor, the disgraced and disgraceful Joseph Cushieri travelled to Las Vegas with the alleged murderer and helped him draft a letter to get a gaming licence extension.  Bloomberg reported that Malta has become a “gaming hub plagued by corruption and money laundering”. Forbes reported about “scandals and mafia allegations” in Malta’s online betting industry. Sicilian prosecutors described Malta as the Mafia’s ATM.

Promise 71 promised “we will work to safeguard and develop networks with correspondent banks”. In 2019 Deutsche Bank pulled the plug on its correspondent banking services to Malta’s financial institutions. Soon after, in 2020, Dutch bank ING cut its ties with Bank of Valletta. Austria’s Raffiesen bank was the last institution offering correspondent services.  It decided to terminate its services in March 2021 but was begged to delay until May while Bank of Valletta scrambled desperately for an alternative. As Labour’s L-Aqwa Zmien points out correspondent banking is “crucial for international financial transactions for businesses”. The only miracle Labour has managed is the disappearance of correspondent banks.

Of course the list of bogus promises is too long to list. We will exempt those graduating with Masters or PhD degrees from paying income tax for a maximum of two years, we will become an international center of Fintech, we will set up a Startup campus in Smart City, we will start a massive campaign to rebrand Malta as a startup destination, we will be at the forefront of the Blockchain sector, we will develop a business Park in the old landfill in Luqa……

The sickest joke of all was point 4:  “Our country enjoys strong fiscal credibility”. In June 2021 Reuters’ headline read: “Global dirty money watchdog adds Malta to greylist”.  FATF acted after years of international criticism of Maltese policy making, including the sale of passports, as well as the lack of legal action against government officials with secret offshore companies. The UK put Malta on its red list of high risk jurisdictions. Moody’s gave Malta a negative outlook.

The International Monetary Fund commented that greylisting leads to a large and statistically significant reduction in capital inflow as investors shift funds out of the affected countries.

Robert Abela brags “the people believe our word”. Of course you could believe Labour’s cult fiction - “we performed an economic miracle”. Or you could believe the International Monetary Fund.

 

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