Continues from yesterday’s article on ‘Children of the Moon’

Part 5: The role of capital

The musical social critic Alan Parsons Project in the lyrics of their song ‘Money Talks’  highlights the effect of corruption on a disenfranchised subject and how money can either make or break a state.

Money don’t grow on a money tree
The more you take leave less for me
Money don’t buy what you really need
It’ll make an iceman cry, it’ll make a stone man bleed
But when you come right down to it
No matter who you are
It ties you down but it can set you free
Someday you might get over it
But in the meantime

It burns you up in the first degree

Labour, then and now, have always shown ineptitude in economic management.

Dom Mintoff’s idea of running an economy was to drain the country’s limited resources by smashing an egg with a sledgehammer, thereby draining it of its fill. He broke up the infrastructure, he broke the health service and education system. He suppressed the private sector. He nationalised all institutions and used extreme discriminatory patronage in favour of his supporters, thereby lowering standards generally.

This is to be expected as these appointees were manifestly unsuitable for their jobs as are most of today’s persons of trust.

Pandering to Mu’ammar Gaddafi and his funds, he expelled the British forces. In his narrow-mindedness, he did not realise the vast potential their presence could have contributed to the economy. 

Having achieved his objective, Gaddafi cut Mintoff off. No more Libyan funds. 

The Archcrook Mintoff was outwitted by his Libyan blood brother and the hitherto lucrative English tourism market he killed off. He killed tourism in general by cutting down on water and electricity supply to areas where tourists resided. All government-run institutions were loss-making. The bloated public service generated a huge wage bill that was unsustainable. The recurrent expenditure of the social services he instituted was close to becoming unsustainable after the international handouts dried up.

He had an obsessive aversion to taking loans or running a debt. So salaries were very low as the cost of living spiralled upward, and the quality of life was very low. Shops were sparse and the range of all goods, including basic foodstuffs, was limited and of poor quality as a result of his import controls.

Maltese travellers at Luqa airport were treated like potential smugglers and subjected to exhaustive humiliating suitcase searches. He was unable to invest the handouts in anything durable or productive. Most of his investments failed, apart from a few low yield factories. He refused to invest in all types of technology, including IT.

In his control mania, he felt he would not be able to control these machines. His international relations were disastrous and Malta was an inconsequential third world pariah state the wealthy West ignored. He generated the revenue to distribute among his supporters by overtaxing the self-employed.

All the while, corruption was institutionalised and endemic. While his useful idiots lived just above the poverty line thanks to his initiatives, the socialist priestly politicians and their henchmen lived in luxury. Mintoff was reported to be one of the wealthiest men in Europe by an international magazine when he was at his peak of power.

His destructive policies generated progressively more unrest and he increasingly relied on violence to suppress any dissent. After ten years of Mintoffianism, he realised his policies were failing, so he retired on a high but ensured he still yielded power by undemocratically appointing his loyal successor.

He was obsessed with his image and legacy.

It was up to the Nationalists to pick up the pieces and rebuild the country, the economy, improve the quality of life, Malta’s international reputation and relations. They inherited a broken, impoverished country drained of its best minds and with a hostile, uncompromising Labour electorate instigated by the militant dockyard workers.

They developed the water supply and electrical supply. They invested in telephony. They stimulated the private sector, encouraging it to grow and to become the main motor of the economy while concurrently trimming the bloated public services and decreasing recurrent expenditure. They invested in IT, computer technology and other technologies. They improved the tourism product and, eventually,  tourism flourished as a consequence of a multitude of brave decisions.

Health care improved in leaps and bounds as did education. They initiated the MCAST to entice investors. They reversed the Labour policy of centralised rule. They created the social partners’ forum. They introduced pluralism and encouraged public debate and criticism of government policies. They liberalised society reversing years of Labour oppression. They privatised loss-making government institutions,  converting them into profit-making enterprises from which the country could only gain.

They diversified the economy by creating many new high-quality niches. They restructured the taxation profile to encourage investment. They opened up to the international community and enticed  Malta’ s best minds back. They embellished every community through the local councils, built high standard roads, advertised their burgeoning culture effectively to the outside world.

EU accession and adopting the euro were crucial in taking up the economy several notches higher, so that when the global recession set in, Malta remained one of the best performing economies in Europe.

Labour, under Sant, fiercely opposed EU accession and this relates to Labour’s absolutist tendencies and self-serving interests. They knew they would be in power one day and were not  prepared to tolerate being accountable to any other authority.

Basically, Labour  wants to do what it wants.

Their narrow party interest come before that of the nation. They knew that accession would result in the dissolution of the grossly overstaffed underemployed dockyard, their bedrock of support from which all opposition to the constructive nationalist economic policies arose. The dockyard was responsible for a large chunk of the national debt through the huge subsidies dating back to Mintoff’s time. Labour treated them and the GWU as his elite praetorians who had to be especially well nurtured. 

So,  if the economy under Lawrence Gonzi was so robust and sustainable, why did he lose the elections?

It was the money factor: firstly, the high water and electricity bills,  justifiable because of the record high oil prices and, secondly, the belated clamping down on the construction industry in favour of the environment.