Month: May 2012

Staying the course in Vision 2015

By Ivan Debono

In September 2010, in a much-publicised event, a working group under the aegis of MZPN (Team 2015) presented a report to the prime minister on the Vision 2015 programme. The event and the report made that evening’s headlines, and both were promptly forgotten.

The report opened with a quote by David Galula on the difficulty of changing established ways of thinking. Indeed, the objectives of Vision 2015 are as much about changing Maltese mindsets as they are about Maltese economic development. The report had the undoubted virtue of stating that things must change.

It also urged our political leaders to think in strategic terms. And strategic planning starts with a good look at the map.

Malta’s circumstances create particular challenges. Our microstate covers a mere 300 square kilometres, with the sixth highest population density in the world. We chose the path of independence in 1964. It was never going to be easy for a tiny island isolated at the extreme southern edge of Europe to function as an independent state. Our economy, our energy supply, our links with the rest of the world, and the wellbeing of our people were now entirely up to us.

One might argue that in these fifty years we have managed to do quite well. By the standards of an ex-colony (for want of a better term), we certainly have. But EU membership in 2004 brought additional responsibilities. There are now new standards which we rightfully aspire to as a European nation, and the basic necessities – housing, healthcare, food supply and security within our borders – are no longer sufficient.

Today’s citizens expect much more. They want quality. Not just the basic goods, but consumer choice and luxury products; not just jobs, but quality careers; not just a roof over their heads, but proper urban planning and environmental benchmarks.

There is a growing realisation that the quality of life is as important as GDP in measuring national wellbeing. It has given rise to a new paradigm in economic metrics: Happiness Economics.

Alongside the quality of life, the aim of the Vision 2015 is to increase Malta’s GDP per capita to 95% of the EU average by 2020. Missing this target would be a real danger, since Malta would risk falling to pre-1987 levels of prosperity and quality of life.

The government must therefore prepare the road ahead for the achievement of this goal. This must be done in a spirit of calm conviction and determination. How can we reach our objectives and put Malta among the winners?

The first condition for victory is for politicians to speak truthfully.

We are living on the cusp of history. Tomorrow’s world will be radically different from today’s.

The new global situation casts doubt upon the European model, which combines economic development with quality of life and social justice. Faced with the changes brought about by globalisation, the financial markets’ growing strength and new technologies, we have often made up for our decrease in competitiveness by an increase in public expenditure. The Maltese may have had the impression that this was free money. On the contrary, it was financed by public debt. The current economic crisis has implacably revealed one fact: to save the European model, things must change.

We need a credible roadmap which is clear and ambitious enough to achieve this change. This is the second condition for success. The government’s strategy must be built around three keywords.

The first is courage – the courage to reform. We must finance our economic model by the wealth which we create, not by the debt which we incur. Europe has no raw materials, and neither does Malta. Its only wealth is its human capital: the intelligence and enterprising spirit of its people.

We must therefore work more, not by increasing working hours, but by working more efficiently. It is vital to move beyond the idea of a job for life. We must accept that today’s worker will have to retrain, change jobs, and possibly change job sector several times. But to do so, work must be made more attractive. Above all, we must change our relationship with work in order to re-inject motivation, innovation and personal responsibility on the workplace.

The goals set by Vision 2015 require a radical shake-up of our job market. We must move away from low-skilled, low-paid labour. This is no easy task, and it raises the question of whether our education system is equipped to train tomorrow’s workforce. On the other hand, it is not enough to aim to for a post-secondary enrolment rate of 98% if we cannot guarantee that the same percentage of jobs will require a post-secondary diploma.

Malta’s demography poses its own challenges. If the status quo is maintained, the gap between social security expenditure and contributions will increase to unsustainable levels. It has been suggested in some reports that the way forward is Dynamic Social Security. Whatever the name, it is clear is that social security must be targeted more efficiently. Its burden must be shared more fairly and more effectively.

Courage is also required if public expenditure is to be lowered – the government’s, for a start, but also that of other administrative structures. We must aim for a cost-effective education and health system. We are still far from the “tightening of belts” of the 1970s and early 80s, but the changes which must be made require an effort throughout all levels of society.

Unity of action is the second keyword. We must change from a country of vested interests and petty divisions to a united and confident society.

When we applied to join the EU, we set high standards for our country. To our credit, we managed to achieve them. But EU membership was not the end of the road. It was the start of a new one, with more challenges and higher rewards. Now is not the time to lose focus. Whatever our national political issues, they must not distract us from far more important strategic choices.

The third essential keyword is global awareness. Our political institutions are being asphyxiated by debates centred around and limited to Maltese or local issues, where our only reference is this tiny archipelago. We should be looking closely at the wider world. Someone, somewhere, has faced the problems we are facing today, and it is in our interest to learn from other countries, especially fellow EU members.

We run the danger of seeing Europe relegated to the back benches of a globalised world, with Malta out of the game altogether, and our destiny determined by a US-Chinese G2. If we are to steer our own course, we must establish a common policy with other EU members. This is the only way for Malta to have any influence in world affairs.

We should bring a message of clarity to European economic policy. How can we compete with Chinese firms when their production cost is twenty or thirty times smaller, when they do not have to contend with trade unions, health and safety or environmental rules? We have to state clearly that protectionism is not a dirty word. Europe’s founding fathers had a protectionist vision which has been eroded by a combination of impotent submission to globalisation and a naïve belief that economic development would lift the Third World out of poverty.

Malta cannot count on its own internal market to power its economy. Without aiming to emulate the economic giants, we must aim at innovation and exportation, without which we will be unable to profit from globalisation and the common European market.

The third condition for victory is to govern in a way which allows the successful undertaking of the necessary reforms, notwithstanding the obvious obstacles and the accompanying mistrust. In this respect, the opposition has not been very helpful. But the government is not free from blame.

It is always the gulf between political discourse and reality which creates disillusionment. If the Maltese are to be convinced of the need for reform, it is not enough for the our political leaders to publish reports and roadmaps. They must set the example.

Vision 2015 requires a collective effort. Everyone must be associated in this strategy: the government, MPs, political parties, clubs, movements and think-tanks. The government should not fear public debate. On the contrary, it should welcome it. Governments with a stable majority are often rendered immobile by a lack of audacity.

In 1964, Malta chose the path of independence. Forty years later it joined the EU. Achieving that coveted status was hard. But this is one medal that is harder to keep than it was to get.

This article was published in The Malta Independent on Sunday on 29 April, 2012

The utility of Nato

By Ivan Debono

Heads of government will be gathering in Chicago tomorrow and Monday for a Nato summit hosted by Barack Obama.

The meeting comes at a crucial moment for Nato. Originally founded in 1949 as a bulwark against Soviet expansionism in Europe, it found itself battling Islamist terrorists in the mountains of Afghanistan 60 years later.

The summit’s concern is the question of a future strategy for Nato. It has become something of a cliché to say that the geopolitical landscape has changed beyond recognition. For military planners, the difficulty lies in developing new paradigms for the use of military force in the 21st century.

On one hand, the military arsenal in the hands of actual or potential enemies and hostile nations has never been so powerful. So the catching-up game continues.

On the other hand, the deontology of war has evolved. It is no longer politically possible for Western nations to wage all-out war. Non-state actors, such as Al Qaeda, know this and have used it to their advantage.

The question, in the words of General Sir Rupert Smith, is “the utility of force”. The summit’s focus is the no less important question of the utility of Nato.

There are three major issues.

Firstly, Nato’s role in the defence of Europe.

Times have changed since 1949. As the US Department of Defence’s 2012 Strategic Guidance document succinctly states, “most European countries are now producers of security rather than consumers of it”. During the Libyan conflict, the United States, for the first time since Suez, took the back seat in an operation involving European powers. It sent a clear message to us Europeans that we will henceforth have to deal with problems in our own backyard ourselves.

This is linked to the second question of a strategy for the “arc of instability”, which has been the US’s military focus since 1990. Initially, it was a continuation of the Eisenhower doctrine of protecting the US’s primary energy supply in the Middle East. After 9/11, the mission brief was widened when Islamist militancy threatened the primacy of the western politico-cultural model.

The Arab revolutions have introduced an unknown quantity into the equation. Should Nato intervene? If so, which way? With its hands full in Afghanistan, Nato is hardly in a position to shape the strategic outcome of North Africa and the Middle East.

Which brings us to the third question and the foremost issue of the summit: a road map for the final phases of the Afghan mission. Nato planners will have their work cut out for them.

With François Hollande in power, France has accelerated the timetable for the withdrawal of its troops and has disrupted everyone else’s plans, as Angela Merkel made clear in a recent speech. In any case, everyone else is under pressure to leave.

An old military dictum says that amateurs discuss strategy while experts worry about logistics. The problem of disengagement in Afghanistan is a logistical one. Nato and the International Security Assistance Force (ISAF) have accumulated an enormous amount of matériel in Afghanistan in these 11 years.

The Pakistani route is extremely risky. Afghanistan is landlocked and Nato has no strategic airlift capability to speak of, which leaves only one option: the northern route, through the Uzbek-Tajik corridor. In any case, Nato will once again need Russian transport aircraft. In the end, some of the equipment may well be left behind and handed over to the Afghan National Army.

Beyond these issues is the larger question of the new US strategic posture. The Defence Strategic Guideline clearly indicates that America’s focus will now be China and the Pacific rim. This strategic realignment was underscored by the recent deployment of 2,000 US marines to Darwin, Australia. This is not just an issue for the US, for Nato must now deal with the new geopolitical landscape as the US gradually closes its bases in Europe.

Strategic interests now transcend national boundaries. The wars of the future will not be about territory but about resources, from oil to water to rare earth metals, and about informational and cultural dominance, prosperity and employment. Nato was founded to defend the strategic interests of the US and Europe. If it is to maintain its relevance into the 21st century, it too must evolve. But this issue will require more than a two-day summit.

This article was published in The Times of Malta on May 19, 2012

Soft leaders, hard times

By Ivan Debono

If I’d had a French vote on 6^th May I’d have given it to Nicolas Sarkozy without hesitation. In fact I gave my vote to his political party, the UMP, in 2008’s municipal elections in Paris, and in 2009’s European elections and never regretted it. In 2012, Sarkozy was still the best option.

There has been a flood of post-mortems in the wake of Sarkozy’s defeat. Press opinion, as we know, is not electoral opinion. Most press opinion outside France consistently failed to get a correct reading of the French situation. What’s more, the US and UK media could hardly be expected to look favourably upon a Europhile French president, so they were biased right from the start.

Inside France, most of the press, true to its traditions, is fervently left-wing. The French intellectual left sees itself as the holder of the moral high ground. It could never stomach Sarkozy’s emotional sincerity, or his popularity with blue-collar workers, whom it had snobbed.

Which leaves us with the electorate. Why didn’t the French elect Sarkozy? Most pundits have blamed his opportunism, his nastiness or his showy opulence.

Opportunism? Hardly. Sarkozy’s first measure in 2007 was to reach out to the opposition and include socialists and centrists in his government: Bernard Kouchner, Martin Hirsch, Fadela Amara, among others. Most of them unashamedly supported Hollande in 2012. Nastiness? Sarkozy endured five years of jibes by the press over anything: his short stature, his marital life, his accent. Anything but his policies.

As for opulence, socialist politicians are hardly representative of the average French income. Just this week, François Hollande published his declaration of assets: a very comfortable 1.17 million euros. Just enough to avoid the wealth tax, which starts at 1.3 million. His much-vaunted fiscal reform will still spare him.

Between 2007 and 2012, Sarkozy lost around 4% of the total vote, in both election rounds. These 4% are mostly the Orléanist, liberal right. They elected Sarkozy because he was the first French politician to offer a strategy for France in a globalised world. They were disappointed when he backtracked so soon.  His budget reforms still left public expenditure at a record 56% of GDP. Universities were granted autonomy, but not the freedom to select students. The retirement age was raised to 62. In most European countries it is 65.

Beyond that, there is the general feeling of unrealised expectations among the ordinary, silent French, the petits gens so cherished by the centrist François Bayrou, the ones who never feature in the foreign press. The one astonishing fact of this election is that the figures do not add up: there were more right-wing than left-wing votes. Yet the socialist Hollande won.

These voters wanted an uncompromising, reformist president, a Gaullist even – a 2007 vintage Sarkozy who would not pander to left-wing critics. There was a glimmer of hope last February, when Sarkozy was rumoured to have decided on a vast reform of the welfare state. But it came to nothing, and in the end the candidate Sarkozy went to the polls with a timid, unambitious list of electoral proposals, a mere shadow of his 2007 programme.

Sarkozy did not lose because he was too much to the right, but because he was too soft. He sought compromise when he should have taken the hard line. Hollande built his whole programme, and his political career, on compromise. And the French know it. They have nicknamed him Monsieur Flanby, after a well-known brand of caramel custard. All over France, supermarket assistants, with exquisite Gallic wit, have been stacking “Président” cheese next to “Flanby” cartons on the cold counter. The message is clear: even his supporters acknowledge his major weakness.

Having been brought to power by a disparate coalition of socialists, communists, Trotskyites and radical greens whose only uniting feature was an antipathy for Sarkozy and nostalgia for the Golden Years of Mitterrand, he will find that compromise won’t get him very far.

Sarkozy promised not to be another Louis XVI. He emulated him in planning a multitude of reforms which were never completed. As Tocqueville, writing on pre-Revolutionary France, said: “The most dangerous moment for a bad government is when it starts to reform.” Indeed. Hollande is now president, France is crying out for reform, and the critical moment is upon us.

This article was published in The Times of Malta on 16 May, 2012.