Opinion • February 1 2004

A touch of levity amidst gloom

Karmenu Farrugia brings us his latest observations from an uneventful week
Last Friday I was invited to speak on Malta’s current economic climate at an industrial relations seminar. I cannot remember the number of occasions since the ‘60s when I spoke exactly on the same topic at various fora. Always with a balanced mixture of problems, shortcomings, achievements and prospects.
Not so this time. The problems are multifarious and passim, the shortcomings are explained on world recession and globalisation, the achievements are political and now history, and the prospects…..well, that depends on whether the politicos in government can for once forget about the voters, desensitise themselves against the inevitable barbs from the opposition about reaping the whirlwind, impose a strict diet on an over-indulgent consumistic society for a longish retrenchment period, listen to impartial and independent economists in confidence and, as a result, may eventually manage the restructuring exercise which everybody wants but only if without any pain anywhere. Mission impossible.
I needed a break from the gloom. Fortuitously, it arrived earlier than expected when I decided to catch up with unread recent newspapers. Indeed, I obtained more relief than I bargained for, sufficient to lighten my heart and my soul for the rest of the day. Mind you, not due to any optimism suddenly staring me in the face. No such luck. Only my own peculiar type of humour extracted from innocuous writings.
"The President’s visit to Italy shifts from politics to business" ran the headline in an english daily. Every citizen believes that the President quit politics when he assumed office five years ago. But, obviously, not that particular reporter.
"Equality Promotion Commission appointed" on the next page. Five women, three men. Equality?
In regarding economists and accountants as "dastardly parasites" , a correspondent in this newspaper condemned me to be "hung" (sic) for daring to suggest a surtax on incomes exceeding Lm 10,000 p.a. Being hanged on the gallows is evidently not enough to satisfy this gentleman. He wants my body hung like a carcass in an abattoir.
The ‘Front Maltin Inqumu’ still insists on renegotiating the treaty with the EU due to be signed in three months from now. After a referendum and a general election?
With a 5.5 percent unemployment level, the Dutch government has decided to curb the number of workers from the EU acceding countries until May next year because unemployment had "recently risen." Holland has one of the most liberal traditions in allowing foreigners to live and work there. Furthermore, its official unemployment figure is real, not illusory like ours which tends to hide under-employment/deployment in the public sector which encompasses over 40 percent of the economy. Not to mention Holland’s much higher employment density and its GDP per capita (even in purchasing power parity, PPP) at 11 percent higher than the EU average, whereas ours is 31 pertcent lower - a gap of 42 percent. The joke: go to any catering establishment or building site and see for yourselves the number of foreign workers, mostly paid below minimum wage levels. Today even pickpockets are flourishing. In two days last week at least six ladies had their wallets stolen from their handbags whilst shopping at a Sliema department store.
Then I read about a protest by a company against nearly Lm 60,000 being charged by way of official taxed bills of legal fees even before the case had been decided. In my book, the method by which the court establishes legal fees is more akin to business deals than to a profession. No wonder we have so many lawyers. Pity most are not export-oriented, thereby contributing to our national well-being instead of causing so much disruption, unnecessary costs and frustrations in frequently postponing court hearings that eventually take years to be finalized. In addition to government-induced costs, businessmen have to carry court-induced costs. And no constituted body has ever complained!
Now listen to some economic wisdom by a firm of accountants. A 20 percent increase in ferry fares would "cost the Gozitan economy Lm1.7m per year while only increasing profits for Gozo Channel by Lm 270,000." At 45 percent, the resultant figures would be Lm 3.9m and Lm388,000 respectively. No doubt, when calculating these figures the accountants employed an economist to discover the price elasticity of demand for tourist passengers to Gozo, their spending when there and the resultant multiplier function in order to arrive at the effect on the economy. One must not forget that the multiplier works both ways. Hence, if Gozo Channel were to reduce fares by 45percent, simultaneously receiving a subsidy from government of Lm 388,000, the latter is bound to recoup more in VAT and income tax from the Lm 3.9m additional injection in Gozo’s economy. How about that, Minister? Of course, the accountants appeared to have ignored the fact that what is Gozo’s gain is a loss to Malta. Quits.
I have held shares in Maltacom since its part-privitisation seven years ago or so. Last week a messenger came along personally with an invitation to attend the chairman’s exciting profit figures. The Post Office simply could not be trusted even for a whole week! I was not addressed as a shareholder, but as a columnist. Another title to boot. Isn’t it enough that everyone wants to be addressed as doctor, chevalier, honourable, captain …now even Ing. ! Soon I’ll start calling myself Econ. or Acct. K Farrugia . Wow.
"Keep smiling" I muttered to myself, particularly after reading what HSBC’s chief executive officer told breakfast-eaters, "Malta has a lot going for it. The quality of life here is hard to beat." Whose life? HSBC’s expatriate managers? Its shareholders? What happened to the investment projects we were supposed to attract through HSBC, a moral condition on their part for buying Mid-Med on the cheap? I know not one. But I do know of the many charges introduced in the banking system for ‘services’ which previously were always regarded as part and parcel of the bank’s administration costs. The most blatant, by way of just one example, is a one-per-mille charge each year on the renewal of facilities. A computer-stored letter which hardly ever changes year on year would charge Lm500 on total facilities of Lm 500,000. And what about the fees charged on the millions of repatriated funds? The banks do indeed have a lot going for them, whilst Malta’s economy totters.
To crown my evening of smiles on my face I heard , over FM Bronja, a charming lady presenter introducing one of Malta’s ambassadors, here on holiday, as "His Excellency….." The same rank as the President of the Republic. Do you think this ambassador bothered to tell the lady that such protocol applies only to ambassadors from other countries living here in Malta? Give you just one guess. Right. Such sycophancy reeks of colonialist days of old, not forty years after independence. I can never forget the occasion when Middle Sea Insurance last changed its chairman. In its annual report the company stated that its chairman had been "elevated" (not appointed) to the judiciary. One would have thought it was a court notice, not a businessman’s report.
My smiles suddenly faded.