As dire straits loom, businessman and former Chamber of Commerce and Enterprise chairman Reginald Fava complains that government’s arrogance on dialogue has reached unforgivable heights

Reginald Fava is a man of interesting tastes. The decor he chose for his boardroom includes dark green curtains, UV up-lighting, antique furniture and a framed caricature of himself first published by MaltaToday five years ago.
The latter seems to be the room’s most contemporary item – otherwise, the design takes you back anywhere between 1800 and 1978. The predominance of the 1970s style, however, seems to indicate when his glory days in business were.
Almost 40 years down the line, Reggie Fava stills seems to enjoy a good measure of success at Chemimart Group. That said, the current economic situation, tied up with this year’s budget measures, have affected him to the point where he cannot conceal his concern about growth.
“Although the budget and the energy tariffs are two separate issues, we must not forget that ultimately we all eat from the same pot,” he starts. “The budget measures will of course affect the operation of my business, along with everyone else’s. True, there have been certain adjustments, but over-all, when taking into account that the reform in utility tariffs will absorb every Euro in peoples’ pockets, the situation is not at all good.”
Along with many other members of the business community, Fava feels cornered with increasing operational costs on one side and lower consumption trends on the other. He attributes this slump in sales to lower consumer confidence – never good news for retail, especially with Christmas just round the corner.
“We are now living in a country whose people are scared of the future. People don’t know how much their new bills are going to be, so they stopped spending. In the meantime, my utility costs at the shops, offices and warehouses are crazy. Lighting is an essential part of retail because it enhances the outlook of an establishment. As much as you try to economise, what you can do is limited because we are living in a very competitive market and we always strive to be ahead of others,” he said.
As both businesses and households have been adversely affected by increasing energy costs, retail operators are not only worried about lower sales, price increases and higher operational bills. The threat on payroll costs is one issue many employers cannot afford to ignore.
“I am in touch with the situation, not just by speaking to people but also by speaking to my wife. Nowadays, as people go out shopping for food, money just flies out of their hands. In these circumstances, I cannot possibly ignore the fact that when employees are loyal and essential to the running of your operation, a €4.08 COLA increase will not be enough to make ends meet, so many employers are anticipating wages going up automatically.”
In a pre-budget comment Fava gave us two weeks ago, he had pointed out that medicine sales at his Chemimart shops have already taken a slump. Knowing that people cannot live without medicine, the situation is rather worrying. Medicines importers are traditionally known to be the last to feel the crunch, but Fava points out that there are many misconceptions about the pharmaceutical industry.
“Unfortunately, this country perceives medicine importers and distributors as crooks. Many see prices being unjustified or think that unnecessary products are being pushed down people’s throats to increase sales. This is the wrong perception, attributable to politicians who abuse of the vulnerability of the sick. They exploit people’s weaknesses to favour their egotistic propaganda. Whoever imports medicines to Malta is giving a service that is to be commended. Little is known about what we have to face in this industry. Importers are in a continuous battle with their agents abroad – who at times do not supply much needed products because of the smallness of our market. I am sorry to say that the qualities of the people working in this industry are not at all appreciated,” he points out.
“When there is an economic crisis, all sales go down – medicines, food, clothes: all the essentials. The reason is obvious. In the same way a seamstress must sew a dress using the material at hand, if you have a bank loan, you have to pay it. If you are living in a rented property, you have to pay the rent. We need to pay for car fuel also – although prices seem to be going down everywhere in the world but Malta. People will need to pay their water and electricity bills. We all know what’s happening. Sales go down every time we have such problems. The last time we saw medicine sales decreasing was during the oil crisis of 1974.”
This was the first budget worked out singlehandedly by Tonio Fenech, who is often perceived as ambitious. Many, including Fava, are critical of the Finance Minister’s projections on economic growth. While government is projecting 2.5% growth for next year, the EU is seeing the figure as being much closer to zero. If, as likely, Fenech’s projections go pear-shaped, the country can go off target by as much as €80 million in tax revenue next year.
“I think Tonio Fenech was too much of an optimist there,” Fava remarked. “I cannot imagine how he can collect as much in tax while the economy is experiencing a slowdown. It is obvious that when you earn less, you pay less tax – so I cannot possibly figure out where he got this idea from.”
Judging by the way he speaks of the current legislature, Fava feels very disappointed with the approach government chose to adopt.
“Government has really raised people’s expectations before elections. Very few were expecting these slaps in the face only months after they were voted in. You could argue that this is an international problem – but before elections we could all see where the oil price was heading. In my opinion there was no consideration to the money that people have to spend on Enemalta bills they will be receiving. I can describe this year’s budget in one phrase: we are scraping the bottom of the barrel.
“I was also very disappointed with the way the MCESD was treated. This council, which I formed part of when I presided over the Chamber of Commerce and Enterprise, is made up of leaders of trade unions and private sector organisations. It was deeply insulting to see it presented with a fait accompli. The MCESD has been effectively bulldozed. It is even more shameful for government to see that it has ignored the council’s unanimous decision not to proceed with the proposal as planned,” he said.
At that point, it is pertinent to ask what he thinks of Tonio Fenech: “If I have to pass judgement, it would be presumptuous on my part. But I do feel sorry for Tonio Fenech, I think he came in at a very delicate stage, when the economy is in such a bad state.”
Proceeding to draw a comparison between Fenech’s performance so far and that of his predecessors John Dalli and Lawrence Gonzi, Fava adds: “It is obvious that styles differ between one minister and another. There are those who know how to address their audiences, others who can do it less effectively and others who do not possess any such qualities at all. The basic difference lies in managing to attract to your side the ones you are trying to convince, or the opposite – chasing them off. It must be said that the Prime Minister has a lot of charisma.
“John Dalli is a star and I was very sorry to see what he had to go through. His tact when discussing is admirable. Had John Dalli been in charge of the electricity issue, I am convinced he wouldn’t have treated social partners the way others did.”
Was he implying Austin Gatt here?
“I wasn’t thinking of him specifically – but now that you mention him, yes, definitely. I think he was at the back of my mind. He fits the description. You cannot discuss with him.”
This pre-budget clash between the social partners and the government is unprecedented. This country has never seen employers agree with unions, mounting collective pressure on government over a national issue. In the past, when a one-off industrialist criticised government, we have often seen changes of tack when elections drew closer. Will the PN be forgiven this time?
“In normal circumstances, time is the best healer. Time passes and people forget. But I think this time round, we saw the worst possible behaviour. The MCESD was really treated badly and this goes to show that government is not respecting the ideals and principals on which the MCESD was formed. Everyone seems to be pretty upset. I think such a grave sin can only be forgiven by the Lord.”
It takes guts for a prominent businessman to be so frank on the political situation, and it seems Fava is well aware of this quality he possesses.
“Let us talk about budget and politics,” he decrees. “The thing that bothers me most in this country is that people’s opinion on government measures is generally based on the party they vote for. This is this country’s chronic disease – we are incapable of basing our opinion on facts, on what we see is happening around us.”
But irrespective of their political inclinations, a good number of industrialists have spoken out on the problem, and some were also very harsh in their statements.
“Of course, this issue affects business badly. If you attack one’s pocket, you’ve attacked everything. Some of those industrialists speaking out have their businesses at stake – they couldn’t avoid talking about it publicly. This is how things should be done, people need to talk. It’s healthy. We need to speak objectively and factually if we are to move on.”
Social partners spoke, and whoever had the opportunity to make his case, it was made. But government still went ahead obstinately. Ministers could be criticised on account of bad attitude – but really and truly, in the circumstances – what would have been the best alternative option?
“The problem is there and it is real, we cannot escape this. So as such, a decision had to be taken. But what hurts me most is that government did not choose to phase the introduction of new tariffs over a period of time. What is worse is that we must pay retroactively. Had discussions been conducted seriously, had government cushioned the impact of this decision in some way, we wouldn’t be facing this turmoil.”
Does this mean that the MCESD has been reduced to a talking shop rather than a consultative body?
“There is a lot of talk on dialogue. But if there was an issue that merited serious dialogue, it should have been this one. This is like preparing a recipe and forcing it down everyone’s throat. I recently met a highbrow EU scientist who came to Malta on an important project. It was really a pity to hear a person of such high calibre telling me that all we do in Malta is talk, talk, talk and end up doing nothing. I think his idea on Malta is not entirely off track.”

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