It is a peculiar characteristic of our country that even facts are given more than one facet, rather than serving as the definite and unambiguous starting point for an intelligent discussion. The main political parties aided and abetted by the long arm of their extensive media present the same basic financial and economic news as if it came from two different sources.
In a way this is an example of black humour. The main news broadcasts on the radio and television stations of the two parties follow each other. Those who listen to both in sequence are often left wondering whether they are covering the same subject matter when, say, the National Office of Statistics issues a media release on some set of macroeconomic indicators.
Confusion is made worse by the fact that the NSO publishes some indicators from different angles. The Retail Price Index is a typical case, being presented in three forms in the same release – month-to-month, year-to-year and 12-running months. Another example is the GDP, with a double variant. GDP is given in nominal and real terms, as well as on a quarter-on-previous-quarter and quarter-on-a-year-ago basis.
The NSO is by no means trying to be too clever by half or confusing. Its methodology is set, in the main, by the EU’s statistical centre, Eurostat. It always makes it exactly clear what it is that it is presenting to the public. The confusion arises from the way the general media present the indicators and in particular from the manner in which the political media interprets them.
In a country where financial and economic literacy is not very widespread, even at a basic level, the political media do not help at all. The rest of the media offer good guidance here and there, as with this newspaper’s business section and a couple of financial weeklies which are now published regularly, pink newsprint and all. But these appeal to a minority of somewhat specialised readers. Television and radio news reports have considerably greater presentation, which is why they serve to confound confusion.
The political parties reach out towards further controversy beyond reporting by the media. It is the job of the government of the day to take economic and financial initiatives, and of the opposition to evaluate and criticise them. Projection and criticism, unfortunately, are often tackled in an essentially partisan context. Rarely, if ever, is there proper technical appraisal which leads to an objective net conclusion for or against a measure.
This does not serve to mobilise any public discussion which, through popular assessment, demonstrates clear understanding of what is being proposed, necessary for the efficaciousness of implantation of what is put forward.
These and related issues came up in a private discussion which I had with Karm Farrugia, the veteran Keynesian economist. Karm has his political beliefs, which are well known. But they are critical beliefs, he never swallows anything whole. That is his style. In the decades that I have known him since he returned to Malta from his studies in London, he has always been like that. He accepted my invitation to contribute a regular financial column, the first of its kind, when I was editor of the now defunct daily, Malta News.
His contributions always appraised technically and objectively, and served as early education for readers in that area. Nowadays, on occasion he contributes to the letter columns of this newspaper, short, witty interventions which invariably make me, for one, think again and do so more thoroughly on the subject he addresses.
Karm Farrugia recently put forward an idea to me which, I believe, is worth sharing, in the context of what I wrote above regarding the way economic and financial news are often presented raw and, to boot, are interpreted according to political bias. The idea is to establish a panel of economists so that economic and financial proposals can be passed by them for their appraisal before they are implemented.
The panel would be apolitical, focusing solely on the merits of what is placed before it. How can that be assured, given that practically everything in Malta has a political flavour? My reply would be – through the self-respect of the members on the panel, and through what they produce. They shall be known and evaluated by the fruit of their labour. They will not be prophets, or come up with conclusions which must be agreed with.
But if they are outright political, they will publicly undermine their validity. If they are as Karm envisages them, they would help in the good governance of our country, as well as contributing towards better economic and financial literacy.
The way I have presented the idea leaves much to be desired. It can be fleshed out. To my mind it should be considered by the government and the opposition. Only positives can come out of it if it is implemented and works well. There are various non-political economists in academia and the private sector who could be considered for such a panel of persons who would not call themselves wise, but who could contribute towards greater wisdom.