The government budget for the year 2003 is going to be a tough nut to crack, and not just in Malta. The most difficult task in the exercise will be to forecast what direction events will take. After years during which economic (and political) movements went rather slowly, the arrival of the pandemic and then the consequences of Putin’s war in the Ukraine have created scenarios of instability along a number of policy fronts.

With inflation ramping up, it is difficult for governments to resist the popular expectation for safeguards against the negative impact of price rises on existing standards of living. This can be done either through wage increases, or by subsidies, or via tax rebates or otherwise: but governments are expected to act.

Many governments have bowed their head to this imperative. One problem however for them is to estimate how long will they be having to keep these buffers in place? For they cost money. As of now, especially following the expenses run up during the pandemic, the financial position of quite a number is  approaching the danger area. If they must borrow more, as is probable, they will be doing so when interest rates – like prices – will be rising. 

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IT CAN’T BE DONE ALL AT ONCE

A problem that has become apparent in the public works carried out by all governments in recent years has been that they attempted to do too much at the same time. Instead of programming projects laid out over a horizon of five years say, so that with every year, twenty percent say of scheduled projects would get started and finished, many projects are launched in the first year which then take very long to get finished, say two or three years.

Frankly I do not understand why this has to happen. I used to believe it was due to the requirements laid down by the EU (or the Commission) when forking out the capital funds it would be transfering to Malta (which in the main were earmarked for such works). Or instead, there was some apprehension that given the lethargy endemic in Maltese society, if projects were not kickstarted all at once, the programme would grind to a halt when it was still half done. Or even that political reasons prevailed, in order to spread contracts around as much as possible.

These explanations no longer convince me so much.

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TUNISIA

Tunisia – our neighbour and friend – is passing through difficult political and economic times. It is true that the parliamentary system introduced after the Arab spring did not give the desired results and led to an impasse. Still it is possible that the cure adopted – though it did bring the pandemic under control – added to the damage by generating even more political divisions. Which is a pity, for on such a basis, confidence in the economy will decline further.

The country has many friends in Europe who all wish it to be in better shape. I realised this in the latter years of my attendance at the European Parliament. Except for some busybodies who would like to preach to all and sundry about what they should be doing, most accept that it must be the Tunisian people themselves who need to find satisfactory solutions to the challenges that their country is facing.