The Malta Independent 28 January 2023, Saturday
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The book that defied Mintoff

Noel Grima Tuesday, 29 November 2022, 12:09 Last update: about 3 months ago

Structure and Performance of the Maltese Economy. Author: Mokhtar M. Metwally. Publisher: AC Aquilina & Co Publishers / 1977. Pages: 169pp

I thought I had somehow mislaid it but now it miraculously surfaced. I have many times referred to it in my writings but now, having found it again, I could reread it again (and meanwhile, savouring the words of praise inscribed by the author I know I'm boasting).

This is the book that other publishers and printing presses shied away from touching. It was 1976 and Dom Mintoff had just been elected for a second subsequent term. The Nationalist Opposition under a tired leader had been beaten again, many of its clubs torched and devastated. The whole country was cowed into submission.

Except for an unknown university lecturer who hailed from Egypt and his small band of colleagues. And a small old printing press owned by the Church, still on letterpress technology when the offset technological revolution had already arrived in these shores.

I have often written that the technical problems of printing this book with so many equations and fractions were daunting. At the end we managed - by the simple expedient of creating a line block for those bits that could not be printed by letterpress.

The end result, I can now admit, is untidy.

But the message that the author wanted to give was clear - it gave the lie to so much boasting by Mintoff and his eager minions that the first Mintoff term (1972-1976) had been an amazing economic success, far better than the doddering second term by Giorgio Borg Olivier.

Using government statistics and economic analysis Metwally and his team proved that the rate of improvement of the Maltese economy had actually decreased in the Mintoff years.

The book first examined the Maltese economy in 1974. It found that unless the Maltese economy finds some other source to compensate for the loss of the rent of the defence facilities by 1979, Malta will face some balance of payments problems.

Next, the book examines how the economy developed over the past years. It found that prices in general went up faster after 1970 and in particular after 1972. The rise in cost of accommodation was the slowest while that of prices of imports was the fastest. Prices of consumer goods were 50% more in 1974 than their level in 1954.

GDP increased in real terms by 4.24% over the last two decades but the highest rate of growth occurred during the period 1961-1970 and the lowest in 1971-74.

Consumer expenditure increased at a higher rate than that of GDP during these two decades especially during the period 1961-1970.

While Gross Fixed Capital Formation increased at over 9% from 1954 to 1970, that rate declined to a negative rate of approximately 9% during 1971-74. In other words the process of adding to the wealth of the country slowed down drastically during 1971-74. Private investment, especially in construction, slowed down at a very disturbing rate following the 1966-70 real estate boom.

The personal sector in Malta had its worse performance during the period 1971-74. Wages and salaries increased, in real terms, by only 1% during 1971-74 as against 4.39% during 1954-60 and 5.51% in 1960-70. Malta simply does not care enough about building its wealth.

Personal savings increased by over 13% in 1954-60, by 4.64% in 1960-70 and decreased by a negative 36% during 1971-74. The growth of demand deposits fell from 9.31% in 1961-70 to -6.64% in 1971-74; that of savings deposits dropped from 7.58% to -8.20% and time deposits from 4.84% to 1.53%. This reflects lack of confidence in the banking system (also due to two major banks facing financial difficulties) and possibly hints that hoarding was growing at a faster rate.

And so on and so forth. The book ends with a series of suggestions for a better rate of growth of the Maltese economy which, as we know, were not followed by the Mintoff regime which continued to side with Third World pariahs, create a number of white elephants and at last, in desperation, create labour corps to take on the unemployed.

In the introduction, the author mentions his three assistants - P. L. Briguglio, E. P. Delia and J. C. Grech. The first has recently written that this book led to his estrangement from the Labour Party.

After leaving Malta, the author continued writing books such as on Macroeconomic Models of Islamic Doctrines (1981) and on Mathematical Formulation of Microeconomics (1995). He was recently connected to the University of Wollongong in Dubai.

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