Anna Mallia | Wednesday, 11 February 2009

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They all told us that protectionism was over. They all told us that this was the era of globalisation – the one in which we must think globally. That in this day and age of modern technology, of the collapse of the Soviet Union, of the end of the Cold War, we are now to think globally because the world has become one big happy family.
They told us that if we do not join in the club of globalisation we would be left behind and we would be isolated from the rest of the world. They assured us that now was the time for a free-market economy, with the least State intervention, if at all, because the role of the State was now that of a regulator and no longer as a controller. They assured us that with globalisation, all States will work in the same direction and the benefits of this system were that we will all reap the profits globally.
And we believed them.
But what they did not tell us was that with globalisation, even the trouble gets globalised. We were led to believe that globalisation means more open markets, easy access to other markets and more opportunities which make our home a better place to be in.
But when the first storm hit globalisation, globalisation was not there to protect us from the storm. Take the financial crisis in America, the rampant abuse by the bankers in giving unsecured loans that has led not only to the collapse of the system in America, but it also roped us in the crisis when we had nothing to do with all this trouble, notwithstanding the fact that we played by the rules.
This crisis has put the clock back to State control and sent the message that globalisation can never replace State intervention and State control. Or rather, the State as a regulator of the system of globalisation has failed, because notwithstanding all the financial and economic gurus in the world, none of them was able to predict the crisis that we are in now.
All the governments in the world, who so vehemently preached the benefits of globalisation, had to inject State money in the banks in order to reassure their people that their money is not in jeopardy. Had they not done this, they would have risked the collapse of the whole system as the people would have withdrawn all their investments and deposits for fear that they will remain without any.
Malta was not irresponsible as America was, but notwithstanding we still had to bear the brunt and now they are telling us that we have to make sacrifices because of the crisis in the international situation. Of course, they do not mention that globalisation is in crisis, but that it is the international situation that is in crisis.
What we have learnt for sure is that the world was starting to run before learning how to walk on the road of globalisation. As otherwise how could you explain how the International Monetary Fund only just now discovered that there is no international regime regulating financial institutions, who for their personal greed, continue to give loans and overdraft facilities and other lending facilities without adequate security?
Mind you, in Malta the Financial Services Authority sees nothing wrong in this, as otherwise how can it approve the issue of unsecured bonds, and trust the financial advisers with this job when we all know that the role of the advisers and of our banks, for all that matters, is now more focused on increasing their commission rather than increasing your capital?
Thanks to this crisis, we have also learnt that when the storm hits, it is you who has to protect yourself, and that you cannot wait for your globalisation partners to come and help you. This is what Obama did and this is the message he sent us, and we are grateful for that. Obama introduced an incentive packet to his people which gives them benefits if they buy American products and they make use of all that is American.
Yes, the country that champions free trade introduced protectionism, the same protectionism that Mintoff introduced but which was, and still is so loudly deplored by the present administration and the globalisation supporters from all political parties. Obama does not care about free trade now, he does not care about the shouts of EU and Canada, he is not worried about being taken to court for breaking the golden rule of the free market; all he cares about now is his people and about lifting his people from the shit that irresponsible people have put them in.
We have a lot of lessons to learn from Obama: first of all, globalisation is only there when the sun shines because in times of crisis, you do not find help from your globalisation partners. Secondly, that State protection is here to stay, because without it everything can collapse; that a free market without trade barriers is good but not in a time of crisis; that had the international economic gurus been responsible, they would come up with a regime controlling or regulating globalisation before preaching and encouraging it.
Now I know how right those protestors were all over the world every time there was a meeting of the G8. But the irony is that the people who warned us about the risks of globalisation ended being beaten up by the people, or jailed and even murdered in the riots, and those who got us in this mess, stay free and have the cheek to tell us that the fault is not theirs but of the international crisis.
If Obama sent globalisation to hell because his people come first, why shouldn’t we do the same? Why do we have to wait for the blessing of Brussels to do what we need to do in this country – not higher electricity tariffs, but a stimulus or an injection which will bring us to the end of the tunnel. We cannot continue to blame the international crisis when we are part of this crisis.
Had you not noticed that we are back to the situation in the 1980s when State control and the major investments were construction, construction and construction? Mind you, most of the people in Malta who are flying the government’s flag nowadays are the ones who made their millions thanks to the state protectionism and the construction business in the 1980s.
They might have a short memory, but we don’t!

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