There is a puzzle lurking in the background of this year’s Budget. On the one hand, Joseph Muscat’s presentation of his government’s plans were delivered at a moment when his personal trust rating is at 51 per cent, an all-time high. On the other, the Global Competitiveness Index (GCI), just published, has trust in Maltese politicians crashing by 17 places – ranking Malta as 74th out of 137 countries, well into the bottom half.
What does this have to do with the Budget? Muscat was quick to draw a connection. The Budget’s redistribution of wealth, he said, justified the trust ‘‘families and businesses’’ had placed in the government.
He meant trust in himself personally, of course, but who’s minding the difference? (The government? It’s me). His budget message was addressed as much to those of little faith: “Look and behold!”
And yet, part of what we behold are the Malta figures of the GCI for 2017/18. It is published by the World Economic Forum and enters into details that go beyond the red tape and financing available to businesses. It also scrutinises the strength of non-economic institutions, like the independence of the judiciary, trust in politicians and honesty in public officials.
These institutions are part of the necessary environment for a robust economy, resilient to business cycles and external shocks. It’s not a coincidence that the world’s wealthiest countries also score high on trust, transparency and honesty. The GCI’s results are an important complement to the credit rating agencies, whose results are driven by their narrow focus.
Saudi Arabia, for example, was rated A+ and stable by Fitch in March – despite expert consensus that Saudi Arabia faces an economic upheaval within about five years, unless drastic reforms, themselves potentially destabilising, are undertaken. The Crown Prince’s political behaviour shows he believes the experts and not the credit agency.
Malta, too, is being given excellent ratings even as we ourselves have a rare consensus that schools, traffic and affordable housing all face a crunch (with adequate pensions not far behind). That clutch of crises affects, simultaneously, the future of the economy and the stability of families. On them depend affluence, welfare and dignity. If they go wrong, there is no future.
You may stop being ‘concerned’ by corruption if you think it’s so pervasive that there is nothing to be done about it
Unlike the rating agencies, the World Economic Forum has a broad understanding of how future-proof a country is. Muscat says the project of his second government is precisely the future-proofing of Malta, and that this budget is the start. But what does the GCI actually suggest?
It says that trust in politicians has slumped. That Malta also fell 10 places in the index measuring favouritism by government officials. It says that, on favouritism, we now rank, globally, rather worse than on trust in politicians. On the matter of political trust, we are 74th; on favouritism we are 89th out of 137 countries.
It’s true that, on the matter of bribes, we have remained stable at 43. Technically, it’s a rise of one place from last year, although that was the year of the Panama Papers. Not much of a baseline.
Worse, on judicial independence, the GCI has us down by seven places – from 44th to 51st. To my knowledge, this slide has slipped media attention. But apart from its intrinsic interest, it also has implications for the economy.
An independent judiciary is important for inward investors. It’s one of the things they look for when assessing if they are investing in a safe environment. Can they rely on independent, impartial referees if they have a problem with a local competitor or the government itself?
Against such figures, it is possible to argue that they are out of date. Yes, they tally with Transparency International’s report, earlier this year, that saw the perception of corruption spike up. But they seem contradicted by the results of a poll published this week by MaltaToday.
This poll showed that, despite trust in politicians having slumped according to the GCI, Muscat was enjoying a higher trust rating than he did even just before the general election. It’s even higher than his previous record, set four years ago right at the beginning of his premiership, of 47.4 per cent.
The same poll also shows that corruption, as a public ‘concern’, has dropped by almost 22 per cent nationally. It stood at 30 per cent in March and is now around eight per cent. It was spontaneously listed eighth in the list of public concerns.
However, a ‘concern’ with corruption is not the same as ‘perception’ of corruption. You may stop being ‘concerned’ by corruption if you think it’s so pervasive that there is nothing to be done about it. Your concern moves on to things that you think you can change. On corruption, lack of concern may simply be a collective, fatalistic shrug.
There’s reason to think that the ‘shrug’ interpretation is the correct one. It tallies with the rise in perception of favouritism among government officials, which surely cannot be the result of old data.
It is far more likely the result of the rampant government patronage recorded in the run-up of the general election. Among other matters, this saw half the army promoted. And there are unanswered questions about the spending and promises of each individual ministry that had more to do with electioneering than good governance.
In other words, the GCI’s perturbing figures are perfectly compatible with other poll results conducted recently. And behind the GCI figures lies even worse news.
For, if it is true that the lack of concern about corruption is really a collective shrug, then it means that corruption (perceived or otherwise) is becoming normalised. In such an environment, people will change their behaviour.
They will become more mercenary, more amoral, unbound by ethical norms because ethical codes appear stupid and irrational in the circumstances. It will further erode the very institutions the World Economic Forum sees as important drivers of prosperity.
As for the soaring trust in Muscat, that too can be explained even against the pessimistic backdrop. It’s a trust that, in a world dominated by patronage, he can be relied on. It’s trust in a good patron, ruler of a patrimonial regime, not the chief public servant of a liberal democracy.
Well, is it? Oh ye of little faith: look and behold.
ranierfsadni@europe.com