Monday, 26 January 2009

Attracting Foreign Investment: The Truth Behind the Rhetoric

Nowadays, one can often hear countless politicians and opinion leaders talking about the importance of attracting foreign investment. The idea is that new foreign companies that set up shop in one's country are supposed to generate several jobs and contribute to increasing the nation's Gross Domestic Product (GDP). When talking about foreign investment, most Christian Democrat and even Social Democrat politicians frequently limit their rhetoric to the creation of many jobs. Far less discourse seems to be devoted to analysing the quality of the new jobs.

The facts about the many aspects related to foreign investment tend to be featured in magazines that are usually read by business owners and other individuals who wield a great deal of economic power within a particular society. One of the latest editions of The Economist (January 24th-30th 2009) showed an advert with the following heading: "Need to Cut Costs? Invest in Macedonia". The same advert included the following wording: "Competitive Labor at EUR 400/Month Avg Gross Salary". The most shocking part of the advert is the one which states "1/3 of social contributions cut by 2011". I can only imagine the facial expression of the Macedonian citizen who depends on his/her salary in order to survive when the wording of such an advert is explained in everyday terms!!!

As far as Malta is concerned, one could also find some interesting information in a magazine called Country Profiler Malta. Whilst leafing through a recent edition, I came across a section entitled "Why Malta?". Among the reasons listed to lure foreign investors to Malta, the following were rather striking: "Consistently pro-business government policies", "A 'can-do' business environment", and - most shocking of them all - "Dedicated, competitively priced human resources"!!! Among the "competitively priced human resources", one can find the thousands of Maltese employees who are being paid little more than the minimum wage every month. Furthermore, the same magazine reports that "Salary costs in Malta are 40 - 50 per cent of those in Ireland, the UK, France, Belgium, the Netherlands and Luxembourg" (p. 46).

According to an article published in The Times of Malta (December 2008), the minimum wage in Malta amounted to EUR 612 per month in July 2008. The same article added that "Minimum wage legislation in Malta was introduced in 1974. Eurostat said that since 2000, the minimum wage in Malta increased by €105 a month or more than €157 a year." The biggest problem here is that EUR 612 or so per month cannot do much for individuals who have a mortage, need to feed themselves, have to buy new clothes every now and then, pay utility bills, etc. Sadly, during the 2008 general election, neither the PN nor the MLP mentioned the possibility of increasing the minimum wage so that it could reflect the current average survival expenditure for a Maltese person. The excuse is always the same - if the minimum wage is increased, Malta risks losing several foreign companies that will set up shop in countries whereby they can spend less money in terms of wages. And since Malta has "consistently pro-business government policies", top priority is not given to the worker, but to the businesses!

The more heavily one relies on foreign investment, the greater the dangers for the workers and for the country as a whole. When a foreign company decides to move to a different country, thousands of jobs can be lost and a great deal of taxation income could also be kissed good bye. Moreover, foreign companies are obsessed with generating profits to swell the pockets of the shareholders that might often be living abroad! It is precisely for these reasons that governments should try to set up as many state companies as possible. Any profits earned by a state company could be used to fund a number of projects relating to the company itself or to the country.

As is the case in many other capitalist countries, there are countless individuals in this country who are devoting several hours each day to making a handful of shareholders extremely rich. Many of these people do not seem to be aware of how much better their lives could be if a huge chunk of the wealth they were generating would be targeted towards the development of better schools, clinics, child care centres, etc. Instead, many of these individuals continue giving up a minimum of 8 hours per day to allow a few people to become richer whilst they themselves are given salaries that often fail to cover more than a list of monthly fixed expenses! What ever happened to the concept of a decent standard of living for each and every worker? The PN is clearly not interested in this matter and the MLP does not give me the impression that they are willing to do much to change the economic system that preserves the exploitation of thousands of Maltese workers on a daily basis...

Saturday, 17 January 2009

2008: A Good Year

2008 was definitely a good year! On a personal level, some of the most important events that took place last year were:

- Being promoted to a Senior Insurance Officer (Claims);
- Obtaining the mortgage to buy a beautiful apartment;
- Attending a political conference in Brussels;
- Going to Rome with my wife to celebrate my birthday;
- Passed the Chartered Insurance Institute (CII) Business Practice exam.

Hopefully, 2009 will be an even better year! :)

Sunday, 11 January 2009

More Posts Coming Soon!!!

No, I have not lost interest in blogging! :) It's just that the last few weeks have been so hectic that I have not had some proper time to write one of the many posts that I would like to publish here!

Even though we are already heading towards mid-January, I would like to write a brief review of 2008...then something about living in the capitalist jungle...and so much more! :)