Of trust, transparency, efficiency and corruption

In the past week I read two comments made by the ex-prime minister and his minister of finance which made me reflect on why our politicians are finding it difficult to make Malta a more efficient place to do business. In the 2012 World Bank "Ease of Doing Business" ranking, Malta comes in at a shocking 102 out of 185 countries. We are ranked at the very bottom of the list of EU countries, which I suppose is to be expected - however what is bewildering is that we fare worse than countries like Vietnam, Zambia, Mongolia and many other countries many of us would be unable to find on a map.

The first comment that struck me was Lawrence Gonzi's expression of disappointment - that he had been let down by people he trusted - when talking to MaltaToday about the oil procurement scandal. Clearly Maltese politicians think that putting 'trusted' people from their inner circle in hot positions ensures good performance, and that based on that, checks and balances are not essential. After all, if you trust a person blindly, you would not need to check on them regularly. Is it not so? In fact, if you really do trust a person, it almost follows that checking on that person's performance obsessively would be a betrayal of that trust.

The fact is that a simple audit of Enemalta's oil procurement process might have saved our national energy company millions of euros. The alleged bribes were paid from our to the suppliers' accounts, however there is no doubt whatsoever that the 'extra cost' was added to Enemalta's bill. So the country has paid a very high price for Lawrence Gonzi's decision to trust certain people and to allow them to operate without the appropriate oversight.

Gonzi hints that Joseph Muscat is repeating the same mistake, and a spate of appointments of MPs and unelected Labour candidates to sensitive positions seems to confirm this. As a person who has been an employer for many years I can attest to the fact that it is never a good idea to employ someone close to you. If you have a personal relationship with the person you appoint, it makes it doubly difficult to fire them if they do not deliver or discipline them if they bend the rules. This is something that politicians in Malta do not seem to take into consideration when selecting who to appoint to certain positions.

The second comment was made by Tonio Fenech, who claimed that he was unaware of his ministry's repeated insistence that Transport Malta stop issuing direct orders to Georg Sapiano's legal firm. So in this case, where checks and balances were in place, they seem to have been wilfully ignored.

Going back to Malta's lack of ease in doing business, our World Bank ranking is mostly negatively affected by how difficult or complex it is to start a business, get building permits and electricity, get credit and enforce contracts. So inefficiencies at MEPA, Enemalta and our justice system are not only a nuisance to you and me, but are actually negatively affecting our economy.

Anyone who has passed through the nightmare of building a house knows that most of the time is spent waiting - waiting for MEPA, waiting for ARMs, waiting for Enemalta, waiting for Water Services. You manage to overcome one hurdle and almost immediately run into another one! Imagine waiting for weeks for a signature on a piece of paper, for an appointment or for a hearing, while losing thousands of euros a week. No wonder people are tempted to grease a palm or two. Corruption and inefficiency go together.

If Joseph Muscat wants to decrease bureaucracy and increase efficiency as promised, he must realise that he cannot and must not depend fully on people of his inner circle. Instead he should seek to recruit people he can hire and fire like any serious private company would do. Like any high-ranking executives in the private sector, Muscat's appointees should have targets that need to be met, with failure not being an option. Wilfully not complying with company procurement policy, especially after one has been warned, is certainly a valid enough reason for immediate dismissal. Why should the rules be different in the public sector? Unfortunately for the prime minister, finding the right people is not enough. Without changing the civil service's cumbersome employment regulations, which prevent you from rewarding efficiency and punishing mediocrity, or investing money into decent IT systems, miracles cannot be expected.

A prime minister or a finance minister cannot be expected to micro-manage all the inefficient monsters plaguing our country. However, there are entities that are trusted by the general public (and disliked by politicians) that seem to be really good at finding the holes in the system. Countless reports by the Auditor General, the Ombudsman or the MEPA auditor have been dismissed or even criticised by the government. At the moment, Muscat revels in any criticism, as to him this is proof of his predecessor's incompetence. The real test will come when a critical audit is done which points at some deficiency under his watch.   

We are all paying the price for the cronyism and inefficiencies of the past, and it is vital that the practice does not continue into the future. People voted for a change last March, and the new administration would be well advised to ensure that such change actually materialises. Simply replacing the 'trusted' faces will not cut it.