The Foundation for Human Resources Development (FHRD), the Malta Employers' Association (MEA) and the Centre for Labour Studies (CLS) of the University of Malta held a seminar last Monday at the Crowne Plaza Hotel, which is bound to have important economic implications.

The seminar succeeded to convey an important statistic to the Maltese people: in the field of economic co-operative endeavour, Malta lagged far behind the European Union.

The gap was a considerable one, making a mockery of much of what is being bandied about on the Maltese economy being close to convergence with that of the EU. There are several strategic areas where convergence with the EU is to be monitored, and several of these are of equal, if not greater importance than the ones that very often appear in the press, such as the extent of our budget deficit, and unemployment rate.

We hear no mention being made of our rate of productivity growth, as if it were an easy matter to measure in the case of ST Microelectronics. The ratio of GDP, which is taken up by co-operative organisations, is an indication of civilisation in a country, and the extent to which its labour force is master of its own destiny and not a contributor to its own enslavement.

Co-operatives are needed, for not everything can be well in the house of capitalism, and this is stated plainly by any A-level economics textbook. It speaks clearly about market failure and oligopolistic collusion, which can happen under capitalism. Solutions are provided for what can be done under such circumstances.

The best solution

The best solution to fight the excess of capitalism, which can be seen plainly by the exorbitant profits made by tobacco companies (just published in The Economist) is worker education.

Workers should know that tobacco is classified as a drug, which when smoked in sufficient quantities is more dangerous than cannabis. Tobacco is classified as a drug by the international drug fighting agencies.

When the masses patronise banks which finance tobacco companies, they are patronising the destruction of their children.

The point on ethical investment being the strongest raison d'être of the co-operative movement was made by more than one speaker in this seminar.

The most brilliant and detailed exposition was definitely that of John Mallia, top man of APEX organisation, which embraces the chief co-operative organisations in Malta. He was not afraid to say that the Malta co-operative movement was poor compared to that of Cyprus. This comes as no surprise at all.

Cyprus, which at one time was far behind Malta, has reached and is surpassing our island in all fields of economic endeavour, and not least that of economic education.

One need only look at the latest ACCA results. If co-operatives are to prosper in a country, there must be a high worker educational level. Co-operatives are strong in Germany and Italy, but they hardly get noticed in Malta.

I congratulate Mr Mallia for immediately answering a question which I put to him on the participation level of the co-operative movement in our GNP. His answer was that it was a miserable two per cent. He did not make use of the word "miserable", but I, with respect to my readers, especially from those who boast a socialist militant past, will make use of it with emphasis.

Malta does not deserve to be so socially backward, when it has excellent social legislation, and when the GWU occupies a palace worth several millions in Valletta, which could be the site of a co-operative bank.

The co-operative movement in Italy makes up seven per cent of its GNP, and 30 out of 100 to Italian companies are co-operatives. The Italian financial co-operative companies also venture into the field of high finance, and have been known to make massive profits for their members.

Now that the science of economics is much more advanced than it was in the Thirties, the likelihood of a financial blizzard engulfing the world economy again is remote indeed, but by no means non-existent. A man like former US Federal Reserve chairman Alan Greenspan will not always be with us, while the exploits in recent years of the blundering economists of the Bank of Japan can be studied in some detail every night on our Bloomberg screen.

A co-operative bank

I devote so much space to the mechanics of setting up a co-operative bank in Malta not because much that was said in the Crowne Plaza seminar was not worthy of attention and comment, but because co-operative banks were mentioned, and the name of Rabobank in particular.

The EU, it was stated at the seminar, wants to break down monopolies, and to some extent a co-operative bank is a monopoly, for it can buy other banks, but it is itself protected from a take-over by law. This situation cannot last in the EU now that Italy's Central Banker Antonio Fazio has been brought down.

A further point lacking in the Crowne Plaza seminars was the famous statement made by Luigi Luzzatti, the Italian co-operative bank theorist, who argued that the bourgeoisie's capital expertise was indispensable for the rapid development of co-operative banks.

There needs to be more competition in Maltese banking. In London there are 500 banks. In Malta they can be counted on the fingers of one hand. A trade union, or a Chamber of Commerce-inspired new bank, which need not be strictly co-operative, definitely has a role to play on the local scene.