The Chairman’s Message

2019 was an eventful and challenging year in which the Council kept growing, receiving as much as an 80 per cent increase in its public funding for its recurrent expenditure over the previous year totalling €910,000, and an additional €600,000 in capital funds for the restoration of its newly acquired government premises in 8, Old Mint Street, Valletta.

We closed the year with a national crisis of historic proportions, which has deeply affected all aspects of the Maltese society, including its economy – and the book industry. The National Book Council cancelled its National Book Prize ceremony at the Auberge de Castille, the seat of the Prime Minister, where the ceremony has been traditionally held. The decision was made after officials in the Office of the Prime Minister were implicated in the investigations of the murder of Daphne Caruana Galizia. The decision by the Book Council was unanimously supported by the book industry stakeholders, despite its potential negative economic repercussions. The National Book Council was  also the first public entity to formally celebrate the legacy of Daphne Caruana Galizia in an event at the 2018 Malta Book Festival.

One of our main aims is to increase the industry stakeholders’ revenue, mainly when it comes to publishers and authors. Last year’s substantial increase in funding allowed us to further invest in marketing and audiovisual productions, as well as to increase the value of the National Book Prize prize money – which will have been disbursed by the time this report is published. The execution of our strategy is progressing very well thanks to sustained public funding support. Admittedly, I had strong qualms about some decisions made by newly-appointed bureaucrats in the finance department of the Ministry of Education. My qualms were made public in order to strengthen the autonomous position of the National Book Council. I can confirm that the disagreements have since been resolved.

For a few years now, the book industry has been struggling with a drop in sales in brick-and-mortar stores. The increasing sales at the Malta Book Festival along with purchases of books for schools made by the Literacy Agency have been offsetting these losses.

The Malta Book Festival has sustained an exponential increase in book sales ever since 2014. Sales during the 2019 Malta Book Festival matched those in 2018, partly due to reduced exhibition space in Sacra Infermeria Hall as a result of emergency restoration works. Restrictions notwithstanding, we adjusted by utilizing the MCC Republic Hall (that has a capacity of about 1,200 people) for the main school shows. We also organized shorter visits as compared to previous years.

The Malta Book Festival may face further challenges in the next few years. The Republic Hall, which usually hosts big theatrical shows, will be taken up by Cirque de Soleil – an event publicly subsidised by the former Ministry for Tourism, under the direction of the now disgraced Minister Konrad Mizzi. Our position is very clear on this matter. The National Book Council has been the most regular and consistent client to the MCC along the years, even during times of severe recession. For this reason, we expect the MCC to remain loyal to the National Book Council and provide access to all halls at the MCC during the first two weeks of November, during which the Malta Book Festival has traditionally taken place. The Malta Book Festival is an event of national importance and the government should support it further by enacting a subsidiary legislation to allow for these dates to be permanently booked on an exclusive basis. These particular dates – right after the mid-term school holidays – have been set following many years of market analysis. Our aim is to keep them secure on a permanent basis. We also have informal agreement with Żigużajg, in order not to clash with their shows on the same dates.

2019 was increasingly busy for us in terms of our legislative and policy work. For the first time ever, we have convened a National Writers’ Congress and presented a charter of authors’ rights which was unanimously approved by at the congress. During the writers’ congress we have promised publishers to introduce tax-incentives so as to incentivize royalty payments. Our promise is in the process of being fulfilled: the legislation for the tax-incentives has been drafted and we are awaiting its publication by the Ministry of Finance.

The National Book Council has also been trusted by the government to redraft Malta’s copyright laws to bring them into line with the recent European Union Directive on copyright and related rights in the Digital Single Market. This EU directive will significantly impact on the book industry, and it is in our interest to ensure that the transposition of the Directive is beneficial to our industry. There is already an informal agreement between publishers and the Ministry of Education over the Education Exception, as brokered by the National Book Council, and the agreement between both parties and the National Book Council is set to be signed in 2020.

In 2019 the National Book Council has also received the first capital allocation to restore its newly acquired premises in Valletta, the 16th century baroque building. We have successfully prevented the further deterioration of the building (the timber beams supporting the upper roof were giving way and as a consequence stone slabs were collapsing on the building). The restoration of the roof is progressing quickly and is due be completed by early 2020. One of our biggest constraints with the project is a bureaucratic lag in the Contracts Department and the Procurement Department of the Ministry. We are also challenged by the fact that two small basement level rooms of the building are still to be transferred to the Ministry of Education. The Lands Department and the Housing Authority are currently coordinating this process (an old lady lives in one of those rooms is to be provided with alternative accommodation). We hope that the said departments keep cooperating with us to ensure that the process is finalized. Our ultimate aim is to turn the palazzo into a new point of sale with a culturally-oriented bookshop, a literature museum and the National Book Council offices: a functional book centre in a beautiful historical building.

We have retained our momentum in other operations such as literary exports and translation. Maltese literature is ever-spreading across borders. Lou Drofenik has been one of the most promoted authors in 2019, together with other National Book Prize winning authors. Further public funding will enable us to expand our export work, a field where we are experiencing ever increasing success. Additionally, for the first-time ever, the National Book Council has commissioned its first-ever feature film based on a prize-winning Maltese novel.

I am also proud to say that in 2019 I have consolidated the final stages in building a strong team of employees and associates who are highly skilled and can guarantee continuity and growth. Further investment in human resources will be made in 2020 so as to keep consolidating and developing our team.

Looking back from 2013, I am incredibly proud we have come this far. The National Book Council has grown from a minuscule entity with hardly any funds, into a strong and influential organization which sustains the book industry, and protects the interests of publishers and authors. We will keep implementing our vision by expanding our stakeholders’ revenue opportunities through our public projects, and by ensuring that the book industry keeps growing and sustaining itself. We look forward to 2020. We will be working on the required and significant legal reforms, to keep sustaining growth  for the book industry despite the challenges we face.

Annual Report for 2019

The National Book Council regrets to announce that the 2019 National Book Prize Ceremony planned for 9 December cannot be held under the heavy shadow of the Office of the Prime Minister having been implicated in the investigation of the murder of Daphne Caruana Galizia.

Whilst this does not constitute an endorsement of the views held by Daphne Caruana Galizia, her role as a writer and harbinger of momentous political changes must be acknowledged.

These times are testament to the strength of the written word; the celebration of literature is given a stronger voice if we participate in the historical events unfolding nationally. The current national crisis deserves our undivided attention.

As a historian specialising in the British and post-War period in Malta, I have written extensively on the 1960s and the Church-Labour conflict.

However, when Archbishop Charles Scicluna asked for forgiveness for burying Labour stalwarts in unconsecrated ground, I could not be as pretentious as to comment. It is the Labourites who experienced the 1960s who are mostly entitled to react and we should wait for their own reaction before we comment. Scicluna’s comments were received by a barrage of commentary, most of which was welcoming and most of it superfluous; but some Labourites who lived those days did actually welcome his comments. Soon later, the Archbishop, also with reference to the Church-Labour conflict of the 1960s, claimed that “he would give his life to heal the wounds of the past”.

When Archbishop Joseph Mercieca made his apology it was made conditional on the basis that both parties would forgive each other. Hardly anyone from Labourites of the 1960s accepted this apology – they simply ignored it.

Admittedly, this time round, Scicluna’s message seems to have been more welcomed by those who have lived those times. However, if I would be pretentious to say or suggest as to how Scicluna’s comments should be received, I would do an equal disservice if, as a historian, I would fail to mention the facts of the historical situation or the fact that many Labourites of the 1960s are still yet to comment (or have refused to do so).

As a historian I am very uncertain on what Archbishop Scicluna wants to give his life for. If he has apologised for burying Labour stalwarts like Ġuże Ellul-Mercer in unconsecrated ground, then that was very clear, but it should also be pointed out that this was only a very small part of the wide and systematic war waged by the Church against Labour and Labourites during that time. When in March 1962 Archbishop Michael Gonzi interdicted the Labour executive committee and later on released the infamous pastoral arguing that Labourites were not good Catholics, a declaration of holy war was made which had divided society even further and pushed it closer into civil strife. The mortal sin was not publicly declared but it was clearly implied, and priests applied it effectively in their duties: Labour party members and activists were barred from making full use of the Church’s sacramental services and those who voted for Labour ‘were going to hell’.

Understanding Gonzi’s power

History has not been just to the Labourites of those times and the exalted biographies of Michael Gonzi, badly researched and horribly written with hagiographic intent, have obfuscated his persona and his history with lies and pseudo-historiography. Obviously, these hagiographies ignore the historical context and significance of his actions which his fans obfuscate with endearing adjectives such as “strong” and “steadfast”. For to understand Gonzi is to understand what happened during that decade, and that also means to understand the main protagonists – the people who suffered the brunt of the Church’s hostility and those who militated in its favour.

First of all, we have to understand that wherever you came from, back then, the Church was an integral part of your life, although it had much more influence and power in the rural areas which had remained insular and deeply conservative compared to the harbour area. Losing recognition by the Church meant being ostracised from the rest of society: a society where the parish priest had to write your reference letter to be accepted for a job, where he consulted you on your sexuality, psychology, even financial affairs, many a times making sure you would well compensate the Church upon your death, and of course… provided you with political direction.

The education system was run by clerics and their lackeys; parish priests could refer you to the mental health hospital at will!
Overcoming this overwhelming social institution took a Labour Party with its 51,000 “soldiers of steel” (suldati tal-azzar) who voted for it despite being condemned and vilified.

And it was a wild animal, yet a much educated genius who could lead Labour in these insurmountable odds: Dom Mintoff, who would counter-preach to his masses, that they did not need to give their inheritance to the Church for them to ascend to heaven. Mintoff did not just do politics. He educated the masses against a constant backdrop of brainwashing by the clerics.

Psychological warfare

The tangible results of Gonzi’s war were very immediate.

Families were torn apart. Labour activists were ostracised from social organisations. Children of Labour activists and known sympathisers were bullied at school and in the villages. Priests wielded more power and Labour youths’ chances of finding jobs decreased even further, exacerbating their already miserable economic situation. This was the bleak backdrop of Independence: in the 1960s as much as 60,000 men and women had left the islands in search for work – back then comprising as much as 20% of the population.

And here lies a very important reason why going to hell was actually much worse than it sounds today. For the oppressed and hard-working Catholic-Labourite, mired in a dire economic scenario, who struggled to make ends meet, the Catholic religion could provide some hope and light at the end of the tunnel – death at least promised a good afterlife. Now, all the hard work and lifetime devotion to Church and God mattered no longer as the Labourite was bound for damnation anyway. In other words, Gonzi took away from the most vulnerable the most important religious element of Christianity: the resilient and spiritual hope that they could one day be saved. Gonzi sent these people to hell.

The Church’s psychological warfare, waged in a society which could barely feed itself, affected the fundamental social and economic relationships of the working masses, and the most vulnerable were most affected.

So when pseudo-intellectuals from Tal-Qroqq preach their nauseating, elitist diatribes on the affliction of tribalism in our society, they should pause and read a history book to at least understand the fundamental class-consciousness inherent in the historical struggles which have developed throughout history and formed the society we live in today. Let me explain it simply to the publicly-paid, pseudo-intellectuals out there who patronise Labour supporters with their anthropological bullshit: Labour does not have a siege mentality because of Mediterranean tribalism. Labour and the working class was besieged in history by various forces: the professional and commercial elite, British imperialism, the Church with its army of devoted supporters (mostly village dwellers who had never read anything or heard any other teaching or doctrine other than what was prescribed by the clerics).

The organic and cooperative familial model of the Labour Party – which includes tens of thousands of members who consider the party as their main social and public institution – is misinterpreted as “tribalism”. But in reality it is a communal structure developed by historical exigencies. Labour Party members support each other because history thought them so. Genuine socialists should not shun this model as “tribalism”, but work to conserve it against rent-seeking and other abuses.

Gonzi’s political war

On the other hand, the political ramifications of Gonzi’s war dealt a critical blow to Labour’s chances of governing the country. Practically, a large section of society rose up to militate against the Labour Party and a violent confrontation between two large sections of society, the Labourites and the Church’s devotees, was brewing.

Labour’s meeting in Gozo in 1961 was spared from barricades after the local police knew in advance what the Gozitans’ intentions really were, but the Church’s devotees still made sure to make the meeting unsuccessful by drowning out Mintoff’s voice with Church bells and loud protests.

When the same kind of bell-ringing was repeated a year later in the mainland during a Labour meeting in Luqa, Labourites were confident enough to start a riot. It was only then that the British governor, Guy Grantham, knowing very well that the situation could escalate into bloody violence, approached Gonzi with a strong insistence to end the bell-ringing and tone down his war. Gonzi complied because he had no other choice – the British were his guarantors and allies in case Mintoff took power. Labour eventually lost the elections that year and the dirty work had already been done anyway.

The Church-Labour conflict abated thanks to the British’s insistence with the bishops not to escalate tensions in society. The British considered Malta a strategic base and could not afford to have its strategic use compromised by internal strife and conflict. Eventually, Gonzi laid down his arms in 1969 and declared peace with Labour following pressure from the Vatican as well, and after a very strongly-fought election in 1971, Labour won the election by just around 5,000 votes.

Yet, Gonzi did not lose faith that somehow he could have some form of guarantee and protection against the rising tide of socialist emancipation. In 1972, while Mintoff was negotiating a new defence agreement with Britain, Gonzi was busy holding discussions with Gino Birindelli in Rome, the previous NATO commander who was immediately dismissed by Mintoff as a ‘persona non grata’ in the first 24 hours of the re-elected Labour government.

We may as of now, have no excerpts of the talks held between Gonzi and Birindelli, but we can surmise such discussions did not dwell on peaceful intentions. Birindelli had by then joined the Italian fascists (he was president of Almirante’s far-right Italian Social Movement from 1972-1973, serving as an MP up to 1976) and was also a member of the Italian masonic lodge P2, which was involved in conspiring with Latin American military officers in their dirty wars against leftists and dissidents, and implicated in the 1980 Bologna massacre when a fascist terror group bombed the central Bologna train station and killed 85 people.

It would be naive to think that Mintoff’s friendly antics with Gonzi after the peace – the exchange of flowers, the blessings and the letters – were anything more than formal politics.

Peace was made only because the working-class movement had won and the Church had lost. And Gonzi did not start the war to lose it, but when he did lose he had no other choice but to play along. When he was desperately scouring for support in Rome in the early 1970s Gonzi was as vulnerable as ever. Mintoff on the other hand stuck with the accords of the peace made with Church: introducing civil marriage but not divorce. Mintoff threaded cautiously and let sleeping dogs lie. An astute statesman, Mintoff knew there was yet more time for the next secular leap forward, but it was a matter of waiting until society began emancipating itself economically and through education.

Scicluna’s motives

If Archbishop Charles Scicluna has ulterior motives for his recent comments, or is actually genuine and honest on what he is saying, one is still yet to see.

I write this because it is very hard to trust Archbishop Scicluna, given the history of how he entered his office. Scicluna was forced to take up the Archbishopric after Paul Cremona was forced to resign in a climate dominated by the influence of a conservative faction of the Church, led by ‘father Beirut’ Joe Borg. Cremona served his role purely as a spiritual leader and refused to get involved in politics, something which infuriated the conservative clerics who wanted a militant archbishop to take on Labour’s influence. Scicluna complied with a political campaign against Labour and its allies, alienating even more Labourites from the Church. He failed to help Simon Busuttil make headway in the 2017 elections and the conservative clerics were left with egg on their face.

After the last election, Scicluna’s political commentary decreased substantially.

Archbishop Michael Gonzi should not be rehabilitated in history as a legitimate historical figure who contributed to the progress and development of society – he did not. Gonzi was a historical pariah and an educated thug who wielded his hostile power without any consideration to those he affected.

Any demand for forgiveness which comes with an asymmetric contract of conditions, such as the rehabilitation of Michael Gonzi, is not a genuine demand for forgiveness at all, but a deceitful way to cloak the Church’s historical abuses and minimise their impact in history.

If forgiveness comes with an openness to history, then it could be more genuine. Scicluna is not an idiot. He is an intellectual and a respected functionary of the Pope. If Scicluna intends to heal the wounds of the past, he could do so much better by avoiding hyperbolic statements such as “I’d give my life to this” and by simply acknowledging history itself.

As a historian, I am still to be convinced of Scicluna’s intentions.

https://www.maltatoday.com.mt/news/national/98701/apologies_or_deceit_scicluna_and_the_deep_wounds_of_the_1960s_interdett?fbclid=IwAR121hlHcAg1M3jCrpmA7nc5tyQP-TVXF4TSYJ7r7LUtZj_dF4wPBgCcyok#.XdTtEd-YUqp

Knocking Down Muscat’s Post-Fordist Equilibrium

Joseph Muscat’s economic strategy pulled Malta out of recession, yet Muscat’s post-Fordist model has also brought new economic and social problems which will intensify in a short and long-term horizon if they are not addressed. In order to address these new economic and social problems a new economic strategy is needed especially in the context of an international economic and political landscape which is changing very rapidly and becoming increasingly volatile.

As explained in my previous article, Malta’s economy and its underlying problems from a fundamental viewpoint, the rapidly rising value of property has excessively outrun the rise of wages. As wages in 2018 have grown at an estimated of 20% from their 2013 levels, the value of property and rent has grown by up to more than 100% in the same time-frame. Speculation on property has not abated and building regulations including enforcement of the same regulations have been kept unchanged, allowing for the unperturbed and chaotic frenzy of construction to go on. During the last couple of weeks, several incidents took place where building contractors literally knocked down neighbouring dwellings sending their dwellers out into the streets. Government has reacted by halting all excavation works until new regulations are drawn up, yet new regulations are being drawn by the same people who lead us into this dire mess in the first place.

Robert Musumeci is government’s prime consultant on building and development regulations and reportedly made a killing from the same ODZ policy he helped design. Musumeci is an ex-Nationalist Party mayor who broke ranks from his party and today, in showing gratitude to the government which helped him become richer by providing him with the best possible conflict of interest in recent Maltese planning and development history, is often seen on television parroting propaganda for the government. Meanwhile, government still keeps on its payroll as a consultant, Sandro Chetcuti, a construction developer who represents the Malta Developers Association. One of the members of the MDA is Michael Falzon, a previous Nationalist minister who as minister had concealed his money from the public’s view in a bank account of a Swiss bank.

As also explained in my previously article cited above, the GDP component for the construction industry is by far much less significant compared to the GDP component for services such as igaming and tourism. Yet, government does not seem to intend to reduce the attention and importance it is giving to the local construction-lobby. Clearly, Muscat’s post-Fordist method with regards to the construction industry is failing ordinary people in every aspect, but this should have been obvious from the start. Finding a compromise between the social and economic interests of the community and the highly speculative local-construction industry is impossible when developers have free rein in their operations, dictate government policy and can effectively ruin people’s lives with impunity. As of now there is no balance, and the least government could do is to reformulate its policy and laws with experts who are not conflicted and have the interests of the community at heart, however this may be too late as we reach a near-crisis point on social and economic levels. Instead, a much more rigorous approach may now be needed, preferably a new economic model which would address the construction industry as part of larger and systematic framework based on a long-term time horizon in order to provide stability in the market.

Malta, like the rest of the Western world will be facing challenging times as the world heads to a recession, and the once the recession starts, the mostly affected industries will be those which are most highly speculative and most at risk. Malta’s construction industry will be the first to be bitten when the international economic scenario begins to get rougher, however this does not mean that property prices will tumble to pre-2013 levels. History can help us get an idea of what could happen. Every time Malta entered a recessionary period, such as in 1969, 1980 and 2008, property prices never tumbled, but real-wages did receive significant pressures downward with precarious work and underemployment increasing rapidly especially in 1969 and 2008. This means that there may be no light at the end of the tunnel for average-wage earning individuals when it comes to future property prices. The key to the issue may lie in supply and demand, unless direct controls on speculation are put in place.

Muscat’s economic policies may have been excellent at getting Malta out of its stagnant recessionary state, but times have already changed significantly since 2013 and Muscat’s post-Fordist model is becoming increasingly outdated in today’s economic and social challenges. As always, Malta needs to adapt to its economic surroundings and in doing so it needs to be innovative to get an edge over other countries. As of now, Malta’s tax laws have helped it earn its income by attracting foreign direct investment – this is what has always been the main key for Malta’s economic development. Malta does not have an industrial bourgeoisie and neither does it have an entrepreneurial class which invests its capital in long-term productive investments. Speculation in real estate remains king for local capital with the industrious entrepreneur being the exception rather than the rule. If all our economic sectors have as of now thrived and prospered with foreign capital, why not consider adding the foreign capital-investment factor in local real-estate as well? This should come with a new regulated framework as part of a holistic economic model.

One economic sector Malta has never been part of is investment banking. Government has as of now done the right thing by increasing its stake in local banks, but to what end? We should now take the opportunity to begin considering the creation of a Maltese investment bank by partnering with a foreign investment bank which would bring much needed capital to our economy for investment projects and additionally, affordable housing. A large affordable housing project backed by an investment bank with combined local and foreign capital can break the back the of the local construction-lobby regime. After all, this government has sold cheap land to several local magnates to build luxury-apartments. Instead, government could sell its land at even higher prices for large affordable housing projects. The projects would keep the construction industry going while at the same providing an amount of property stock to the extent of stabilising property prices on a long-term basis while allowing wages and salaries to grow.

Obviously, we have to get rid of the Musumecis and the Chetcutis and all the incompetent and greedy Nationalists who have jumped on Labour’s bandwagon simply for their own personal gain. We need to step up our game and realise that our future does not depend on the corrupt, toxic and the dumb-cowboy capital of the local property speculators. We have to overhaul our planning and building laws and have them written by independent experts, step-up enforcement and purge our planning institutions from incompetent and insalubrious directors and CEOs who have nothing to offer but their stupidity and their moral corruption. Meanwhile, we have to draw up a new economic plan and begin exploring the possibility of building our own investment bank which may be used as an economic power-house and a strategic asset for our social and economic development. The days of dumb-cowboy capital should end once for all.

Labour is riding a wave of economic growth, but what lies behind this economic success and what is in store for Malta’s economy in the future? What is happening on the ground and what do the numbers really tell us?

From 2013 to 2017, Malta’s GDP grew by an average of 6.8 per cent per year, an impressive sum considering the slow growth taking place in the EU across these years and the ensuing global economic and political challenges. Labour, aided by low-oil prices, has managed to create a very open, flexible and thriving business market. Numbers don’t lie and indeed it is true that at face value the economy is doing well. However, behind the numbers showing rapid economic growth, there are also other numbers that show deeply-embedded structural problems which could easily lead into social crisis.

Prime-Minister Joseph Muscat has successfully implemented a third-way, centrist and post-fordist economic model by theoretically bringing an economic compromise between the interests of one economic class and the others. The main principles of this economic model are industrial peace, a welfare system that provides the essential layers of protection to the vulnerable sections of society, and a free market that is freely accessible to all businesses and individuals.

Muscat has implemented his vision in practice in a multi-pronged manner with the underlying principle of prioritising an increase in expenditure through the market. Income tax has been progressively reduced, except for the highest-income bracket, inducing in turn higher expenditure levels in the economy. Red-tape and bureaucracy for businesses have been reduced to a great extent, while building regulations have been reduced exponentially, thus allowing a construction boom that seems to have no end in sight. More foreign companies and workers have relocated to Malta and have significantly contributed to the the increase of government’s taxation revenue by 32 per cent in 2016 compared to its 2013 level. Economic growth was registered mostly in the services sector, but the construction industry – which now compromises 4 per cent of GDP – and the real-estate industry – comprising of 5 per cent of GDP – also grew substantially. In 2017 alone 8,513 apartments were built as opposed to the 2062 apartments built in 2013. The gaming industry, which currently comprises 12 per cent of GDP at around €1.2 billion in nominal terms, registered sustained growth along the years along with the tourism at 6.1 per cent of GDP and retail and catering at 21 per cent of GDP. Agriculture and industrial production in electronic components and pharmaceuticals have kept their long-term decline.

Expenditure in the welfare state has increased considerably with recurrent expenditure on health and education in 2019 to amount at an average of 59 per cent higher than 2013 levels. The education system has been revamped and the health sector has been improved drastically cutting waiting lists across all its services. Free childcare was also introduced and energy prices have been lowered compared to pre-2013 levels. Government has also exponentially increased its spending on culture and the arts. Unemploymenr rate in 2018 stood at 3.8 per cent.

Structural changes in the energy sector also heavily affected the economy and these should be noted. Enemalta, which was entering bankruptcy territory in 2013, had been bailed out with a Chinese investment in exchange for a minority stake in the company, while a new gas-powered plant was built to diversify energy supply, and contribute to long-term security and lower prices. The gas deal was also overshadowed in a corruption scandal in which ex-Minister of Energy Konrad Mizzi and Prime Minister’s Chief of Staff Keith Schembri were alleged to take kickbacks via 17 Black, a company owned by Tumas Group CEO and Electrogas Director Yorgen Fenech (Electrogas is the consortium which owns and supplies the gas-fired plant in Delimara). The allegations have been recently backed up by exposing emails by Nexia BT (the accountants of Mizzi and Schembri who opened shell-companies in Panama for them) that state that Mizzi and Schembri were to receive a million euros each from 17 Black.

The gas corruption scandal has overshadowed a significant structural adjustment to the economy that helped boost growth. Government has no longer restricted large capital projects to particular Maltese oligarchs. Labour has opened up government procurement and has reduced systematic preferential treatment to a number of Maltese oligarchs. Systemic preferential treatment has also been wavered when it comes to permits and government deals. This is also the reason why Muscat keeps receiving strong support from a middle-class base, which traditionally had been PN, and why he is perceived to have opened the economy to all. This doesn’t mean that Labour is not using its power of incumbency to provide preferential treatment to some of its supporters. Nepotism and preferential treatment do not appear to have been eradicated. What Muscat has changed was the rigid structural system of preferential treatment to particular oligarchs through government bureaucracy and State structures. At the same time, Muscat is trying to ensure to appease most of the big businesses by allowing them to expand their projects and giving them even more land deals, while at the same time allowing smaller competitors to access to government deals and procurement. Muscat has perfectly projected himself as a leader who allows open and accessible business to all: to oligarchs and small-businesses alike.

The structural government system of preferential treatment under PN had allowed for the growth of local oligarchs at the expense of public property and assets, and it was part of a broader raison d’être in how the economy was run, by basically sustaining a debt-ridden government by selling off state assets. Muscat also ended the State fire-sale policy , but the 30-year concession to St. Luke’s, Karen Grech, and Gozo Hospital to a private company by then Minister of Health, Konrad Mizzi, had opened the government to accusations it intended to privatise the health sector. Mizzi’s successor as health minister, Chris Fearne, has as of now refused to entertain the idea of further private concessions in the health sector and instead focused on ramping up the budget of public health. It must yet be seen what Fearne’s long-term plans for the health-sector are, but his recent meetings with local magnate Żaren Vassallo may also indicate that Fearne may plan further public-private partnerships in the health sector. On the other hand, Konrad Mizzi, who is now Minister of Tourism, has as of now refused to sell the national airline and is making efforts to salvage it after years of malpractice under PN governments. Government has also purchased 49 per cent of Lombard Bank and increased its share-holding in Bank of Valletta with capital raised from passport sales, practically going against the the fire-sale trend of public-assets unless one would consider Konrad Mizzi’s foray into the health sector.

When Labour entered office in 2013, it inherited a heavily indebted State-energy company and a heavily indebted government with a stagnant economy. The layers of security to Malta’s debt are multifaceted, but the main layer of defence is the fact that public debt is held through bonds, most of which are locally owned. A strong home ownership rate along with a cheap housing market had also enabled people to survive the recession of 2009, while local banks were not exposed to risk and had ample assets at their disposal. Labour has managed to begin reducing the deficit, while the debt to GDP ratio has decreased significantly from 68.7 in 2013 to 50.8 in 2017. This decrease is owed to the strong increase in government’s recurrent revenue, but, as of now, government also has the comfort of sponsoring large chunks of capital projects – especially infrastructural projects with money made from passport sales. Government debt in 2013 was calculated at €5 billion and in September 2017 debt was calculated at €5.8 billion. Government revenue and expenditure in 2013 was €3 billion and €3.2 billion respectively, and in 2017 was €4.3 billion and €4.1 billion respectively producing enough a surplus to start repaying debt (different data sets may give different figures, but are all consistent with a significant surplus).

The numbers of the economy tell a story of a strong and growing economy, although one would do well to still worry about debt levels. Austerity policies would not solve the public debt problem, and they would in turn create a social crisis. Government needs to ensure that the economy keeps growing so as to sustain its increasing revenue levels, but this could only be done if economic forces produce consistent growth levels. In textbook economics, a sustained economic growth without slumps is the exception rather than the rule, and thus government should seek to minimise its risks by diversification while simultaneously emphasising and prioritising economic growth, which is sustained by productive forces rather than speculative forces (that are more prone to risk). Currently, the government is ignoring the social and economic risks that come by with growth through speculative forces. One should also not ignore the potential economic problems brought by potential corruption practices and government-lead private-public deals which give low public returns, thus auditing and transparent practices are also important for material ends.

Government has been wise enough to build a symbiotic relationship with the gaming industry, through an efficient legal regime that enables it to operate efficiently and competitively. Government has also tried to build a symbiotic relationship with the construction and real-estate industries, which have had their profits increase exponentially at a large social and environmental cost, and minimal economic return compared to other industries. And as the construction industry is going in overdrive, one would naturally assume the property prices would be also increasing. Here we find the seeds of an incoming social crisis. Wages in Malta have increased by an average of 20 per cent in five years. From an average wage of €1,600 in 2013, the average wage today has risen to €1,800. The minimum wage has risen from €648 in 2013 to €747 in 2018, but the value of property, compared to its 2013 level, has increased by 100 per cent in most areas, with some areas even increasing at higher levels. According to NSO statistics, by 2016 in order to purchase a property in the cheapest areas, one had to be on an income of at least €20,000 – even higher than the national average.

Government has so far refused to consider the option of price controls in the rental market, but it has begun preparations for the construction of social housing units and aims to introduce a basic regulatory framework in the rental market. Ideally, social-housing should go to those who are mostly in need, prioritising first on pensioners, retirees, disabled, victims of abuse and single parents in the low-income brackets, but social housing units may not even be sufficient to cater for all of the low-income bracket. Even the average wage by itself is not enough to purchase a property, hence condemning single people with an average wage to remain in the rental market. Although property prices may not increase as much as they did between 2014 and 2017, the ever-increasing demand to property in Malta and the lack of land ensures that property prices may very well keep increasing. Moreover, if the economy intends to keep growing in the services and tourism industries, a sustained increase in foreign workers and property buyers attracted through the said industries will only contribute to higher demand in property. At the same time, government has to ensure that the value of property doesn’t compromise the competitiveness of foreign businesses in Malta. The price of property was, for example, one of the factors which had incentivised many companies and hedge funds to move from London to Malta.

The main factor that has so far averted a housing crisis is the very high home-ownership of 78 per cent, but at current inflation levels there is a long-term limit to how much the children of home-owning parents will be able to use their parents’ capital to become home-owners as well. In the long-term, the current discrepancy between the average wage and the property value will contribute to a situation where tomorrow’s families will be, in average, less rich than their peers in real terms. On the other hand, the lowest-income bracket group has been hit severely adding severe pressure on homeless shelters and charitable institutions. If the construction and real-estate industries is allowed to work unregulated, the housing crisis will only unfold gradually with ever decreasing rates of home-ownership in the long term. If Maltese people lost their possibility to own a home, social mobility would decrease, which would in turn enable for a higher gap between social classes. Further in the long term, the housing crisis would also be bad to the economy, given that the economic dividend of money spent in goods and services is higher in real value than the profit dividend in money spent in rent. In the short term, Labour should also raise the minimum wage so as to help those who have been hit in the hardest manner.

Clearly, there is a market-dysfunction in which the construction and real-estate industries are growing at a significant social and economic cost. If government is to implement controls in the rental market and intervene in the housing market in a multi-pronged manner, the rate of profit in the real-estate and construction industries may decrease in the short-term, but it may also keep it competitive in the long-term. Such a course of action is inevitable if we are see to a reversal in the decline of the home-ownership rate. The fact that government has refused to stop the multiple pending applications for fuel pumps in outside-development zones shows the difficult stage the situation has reached. There is nothing that can justify such a rampant form of development with meagre short-term profits. A case in point is the low public dividend in exchange of DB’ Group and Corinthia’s land deals of Pembroke and St Julians respectively.

Back in the 1970s, when Malta had socialism and double-digit GDP growth rates, Labour solved a housing crisis that was much more extensive than today’s. Labour built many social-housing units aimed for the most vulnerable and lower-income brackets, but it also built many housing units that were then sold at an affordable price to average-wage earners. In this way, Labour ensured that everyone could have a house by simultaneously managing to stabilise market prices. Unless current government starts regulating property speculation through price control or by building an extensive number of affordable housing, housing affordability will remain on the downside both in the short term and the long term.

Government should drop its obsession with the hazardous construction and real estate industries and instead start seeking foreign capital investment that is actually productive. Manufacturing, IT and hi-tech industries are growing in Eastern Europe. Croatia is home to a local company that produces electric cars. While companies in Canada are reaping multi-million dollars in revenue for the cultivation of marijuana, we still fail to see the economic and environmental potential of Malta having a fully-fledged marijuana cultivation industry. We have not yet even begun seriously considering to getting into the renewable energy sector. Productive capital investment will not come from local sources. In Malta, the industrial capitalist is an exception rather than the rule. Yet, if high-tech production industries are making a comeback in Eastern Europe, there is no reason why we shouldn’t be attracting such kind of foreign capital to Malta.

Government has done well by reverting previous austerity policies and increasing the contribution to the welfare state, but it is also clear that a large section of the population, composed of low-income earners and pensioners are at serious risk of poverty. Further discussion on Malta’s economic model is needed to ensure that we have an economic plan that works for all and not just for the few. After all, Labour should dictate its economic policy in line with its traditional principles of social justice. One main principle that should lie at the heart of Labour’s economic policy is that economic growth should be an end to social and economic emancipation and not strictly an end to private profits. If Labour keeps the balance right, it can legitimately claim to be left-wing.

Statistics sourced from Central Bank of Malta, National Statistics Office and Ministry of Finance.

Loranne Vella’s Rokit, published by Merlin Publishers, won the National Book Prize 2018 in the category Novels in Maltese and English against the run of play. The final results have been close to call until the very end of the adjudication deadline.

The odds were higher for other participants, and in particular Gioele Galea with the deep mystical and spiritual musings in his memoir Tħabbat Xtaqtek (Horizons). With this rare book in the Maltese literary canon, Galea gave a new voice to Maltese literature by producing a humbling, moving, deeply introspective spiritual memoir that is delivered in a poised and paternal writing away from the well-known patronising tones of similar literature.

Yet, albeit such a decision-making process is by definition a complex endeavour, particularly when it involves high-level competitors, the National Book Prize judges eventually had no doubts and bestowed the prize upon Loranne Vella.

With Rokit, Loranne Vella distinguished herself with yet another prize-winning novel that crosses genre boundaries between adult and young adults fiction. Vella is well-known for her trilogy It-Triloġija tal-Fiddien, a fantasy saga co-written with Simon Bartolo. Aimed at teenagers, Vella and Bartolo’s trilogy was an all-out bestseller that also captivated an adult audience. This time round, Loranne Vella wrote a novel for adults – which unwittingly reads like a coming-of-age novel for teenagers. Rokit has all the ingredients to make it an appealing read to teenagers and adults alike.

Benjamin, one of the main characters of the novel, leaves his house during his teenage years to join the resistance in a world fraught with chaos, war and climate catastrophe.

The story is based in the late 21st century Malta, which has by then reverted back to foreign subjugation. Malta begins to be gradually depopulated due to forced migration, and the island is beset with food-shortages, a total ban on electronic communications, and desert storms. The setting is dystopian, but the narrator of the story, who eventually reveals herself to be a protagonist in the story, keeps the tone of the narrative optimistic and friendly, leaving the reader hoping for a positive closure to the dramatic story.

Although the setting and the background of the story is dark and the characters live in oppressive conditions, they have close relationships and warm feelings towards each other while enjoying a certain degree of freedom throughout the story. In brief, by not offering an Orwellian dark atmosphere, Rokit proves instead to be a fantasy novel with an adventurous spirit, in which the element of fantasy manages to leave a glimmer of light in the darkness.

The narrator does not go into detail on the political, social and economic ramifications of the background setting. The narrator prefers to focus more on the development and emotions of the characters, thus making the novel even more accessible to young readers. As Benjamin comes of age, we learn of his feelings towards his father, his mother, his family, the world and himself. We get to know of his struggles.

Through the interesting interaction between characters, whose relationship unfold and develop along with the plot, the reader is led to a fantastic ending through a dystopian and chaotic labyrinth of events. The plot is enticing and not too overtly complex, which allows the reader to be curiously left wondering what happens next. Halfway through the novel the reader gets to finally encounter the rocket that gives the title to the novel, and to understand its important significance to the story.

Loranne Vella has established herself as one of the major Maltese novelists for teenagers and made her name in the fantasy genre – a somewhat endearing feat considering how challenging it may prove to be to win the attention of teenagers.

The adult fiction genre today is becoming increasingly difficult to tag as age brackets in novels tend to have looser age limits, and young readers tend to access adult fiction at an increasingly younger age. Loranne Vella has successfully created a fantasy genre for adults that is more accessible to young adults and a page-turner, proving once again that classifying a title into just one genre can straight-jacket it and limit its appeal.

https://www.maltatoday.com.mt/comment/blogs/91758/rokit_crosses_genre_boundaries_with_awardwinning_novel?fbclid=IwAR1UOCPilQ9lv1KsK5EH5WCpm67BD-tJchSxVVSdHKzqIBKRYe_2qCX_vgA#