Corruption and populism – Malta Independent Online

As the economy prepares to re-open, many of us are full of pent-up energy, with plans of what wed like to do, and were in no mood to be judged or controlled by others.

Funnily enough, however, were also approaching the re-opening afflicted by various forms of fatigue: tired by Covid, tired of politicians, exhausted by the corruption.

We know theyre important but were not in a mood to sit and listen to more information. We just want to get up and go.

Its all understandable but heres why its important to see that corruption isnt just something you learn about. Its something that blocks you and shackles you from doing what you want to do. Its not the corruption revelations that weigh you down: it is the corruption itself.

The vicious circle is all documented. Transparency International looks at the impact of corruption on growth and inequality. It does not take a moralistic perspective. It simply focuses on corruption as an obstacle to economic growth, with a corrosive impact on business operations.

Ultimately, says Transparency International: Corruption is costly for companies There is a strong business case for fighting corruption. At the company level, corruption raises costs, introduces uncertainties, reputational risks and vulnerability to extortion. It depresses a companys valuations, makes access to capital more expensive and undermines fair competition While facilitation payments typically consist of small amounts, they can add up to substantial amounts when aggregated at the company, national or global level.

Transparency International also highlights that corruption affects inequality and income distribution. We can certainly see this is undeniably true of Malta.

As Noel Grima wrote in this paper a month ago, There is now incontrovertible proof that the years the Labour Party has been in office did not really benefit the social class a socialist government should be defending and promoting the poor.

Grima analysed the report published by The European Foundation for the Improvement of Living and Working Conditions, known as Eurofound. It found that the bottom half of Maltese society, which in 2010 owned 14% of total national wealth, by 2017 found it was owning just 10%.

In short, in just seven years, the poorer half of Malta saw its share of the nations wealth go down by a third of what it used to be.

And the richest 5% of the Maltese population, which under the capitalist PN administration owned one third of the national wealth, by 2017 was owning 40%.

In other words, the poor are getting poorer, and the super-rich are getting much richer.

Labour went into government mouthing the mantra that they would be eradicating poverty. They promised meritocracy (ha!). All they did was spout slogans against the establishment while secretly striking deals with a favoured few within it.

According to a study called A Political Theory of Populism, authored by Daron Acemoglu, Georgy Egorov and Konstantin Sonin, and published in The Quarterly Journal of Economics in 2013, the year Joseph Muscat came to power:

There has recently been a resurgence of populist politicians in several developing countries, particularly in Latin America. Hugo Chavez in Venezuela, the Kirchners in Argentina, Evo Morales in Bolivia, Alan Garca in Peru, and Rafael Correa in Ecuador are some of the examples. The label populist is often used to emphasize that these politicians use a rhetoric that aggressively defends the interests of the common man against the privileged elite.

Of course, at the time, Joseph Muscat was about to become the notorious populist he turned out to be, but he would have fit the same profile as the Latin American leaders mentioned in the article.

The same authors quote another study, which states: Populist regimes have historically tried to deal with income inequality problems through the use of overly expansive macroeconomic policies. These policies, which have relied on deficit financing, generalized controls, and a disregard for basic economic equilibria, have almost unavoidably resulted in major macroeconomic crises that have ended up hurting the poorer segments of society.

Sounds familiar, doesnt it? In Malta, Muscat was the protagonist of this movement. He left nothing to chance. He deliberately did what he did. Sadly, he had no plans for this countrys future economic growth and instead focused on the short-term business cycles in which he and his friends were (and are still) involved in a huge money-making political scam. He sold himself and his famous roadmap as the solution to the countrys problems, but his intentions were far from noble.

Muscat is no longer the Prime Minister of this country. Invictus left the scene with the award of the most corrupt leader in the world. Our country is sadly still caught up in the mess he left behind.

Corruption and populism have blurred our vision. In the eyes of many, politicians have all become not just dirty, but totally filthy. People are finding it hard to tell apart the clean politicians from the ones who gave us all such a bad name.

I honestly hope we all see the danger of the situation we are in. Our democracy will suffer if we do not collectively make an effort to change. This is not the responsibility of just a few of us. We all have to work hard towards this, not from the ivory tower but by rolling up our sleeves to clean up our country once and for all.

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Corruption and populism - Malta Independent Online