Those familiar with Greek mythology are well aware of the legend of the golden fleece. A band of heroes, known as the Argonauts, led by Jason set out on a ship on a quest to retrieve this important treasure. Once in their hands, they return to fame and glory.
On 10 September, Jason Azzopardi announced his own quest. With his usual bombast, he announced that he was going to unveil the most courageous and radical proposal for Maltese industry since accession to the European Union. Now keep in mind that since then, we have had such measures as the adoption of the euro, the 25% reduction in commercial electricity tariffs, the implementation of the multi-million monthly wage supplement and the announcement of a half billion industrial infrastructure upgrade.
Many connected to Facebook to listen this radical proposal. Azzopardi did not lower expectations. His was a proposal that would, lead to an increase of 10% of GDP. Yes, 10% of GDP, that is with one swipe reverse, all of the economic impact of COVID-19 and an additional 2% of GDP on top. To give you some context, a Central Bank study had calculated that the cut in energy tariffs, the construction of the interconnector and the conversion of electricity generation to natural gas boosted GDP by between 0.8% and 3%. We are talking here of projects that together cost at least €400 million.
And yet, Azzopardi’s 10% miracle will be the result of a €40 million fund to compensate businesses for part of their transport costs. Veritably a case of spending ten times less to get a value ten times more. Nothing less than the golden fleece could achieve such a result. With €40 million, Azzopardi will create a higher value added of €1.4 billion (the equivalent of 10% of GDP). For every one euro invested, Azzopardi guarantees a return of €35. If the ċedoli gave such a return, the coffers of the PN would be overflowing with cash offers.
If the ċedoli gave such a return, the coffers of the PN would be overflowing with cash offers.
Unfortunately for our lost Argonaut his proposal failed to be greeted by much of a welcome party. First on the spot was the Malta Chamber, issuing a statement which while welcoming any allocation of funds to industry, especially during the current challenging times, concluded that the Opposition’s proposal “is not a cure, reason being that the fund compensates for just a fraction of the significant disadvantage being carried out by our businesses”. So much so for the most radical and courageous proposal ever made since Malta’s accession to the EU.
The 10% of GDP impact was nowhere to be seen in this press statement. Instead, the Chamber argued that “given the larger dimension of compensation required for the current significant disadvantage, a case for Malta as an Island Micro Nation State should be made at EU level.” The €40 million did not cut much ice with the hard-nosed importers and exporters. Frankly, if a €40 million fund creates a 10% rise in GDP, then all the assistance given to businesses since the pandemic started – roughly €40 million a month – should by now have tripled Malta’s GDP.
The more time passes, the more people are asking what on earth put in Bernard Grech’s mind to appoint Jason Azzopardi as opposition spokesperson on Competitiveness and Enterprise. By the same logic who will Dr Grech appoint as Minister for Finance if he becomes Prime Minister?
The more time passes, the more people are asking what on earth put in Bernard Grech’s mind to appoint Jason Azzopardi as spokesperson on Competitiveness and Enterprise.
Azzopardi’s performance on the 10th September was ludicrous. He was clearly out of his depth. Leave aside his half-baked proposal. The analysis he tried to make of the transport issue was completely wrong. For instance, he quoted the World Bank’s Logistics Performance Index. According to him this is an overall ranking of transport costs around the world and Malta had fared badly when compared to 2012.
In reality, this study is a survey measuring the efficiency of customs, the quality of the transport infrastructure, the ease of making deliveries, the ability to trace consignments and the frequency with which consignments arrive. In fact, in a slide used by Azzopardi, which according to him showed that the price of transport in Malta has worsened, when one looks at the legend of the World Bank chart, one realises that it relates to timeliness, that is on the frequency with which consignments arrive.
In addition, the report warns that when comparing scores, one should be careful as in some cases the sample is small and varies over time. So much so that the report warns that “Malta with 0.39 had the greatest confidence intervals”. The variation Azzopardi saw, in fact, falls well within this confidence interval. In simple terms, or in Azzopardi’s preferred parlance “b’mod safi”, in statistical terms the change that he said happened in reality is not strong enough to be sure of.
But the cherry on the cake was that Azzopardi was trying to explain transport costs rising in 2021 using a survey carried out in 2018. Obviously three years ago none of the logistics executives interviewed would have been able to anticipate the pandemic and the costs and disruption it would cause.
The golden fleece in the end did not get Jason much luck. This proposal is bound to do the same to Malta’s own lost Argonaut.