‘The Stolper Report’
Publisher: Quinque Publishers / 2023
Pages: 262pp
Quinque Publishers have published in facsimile the 60-year-old Stolper Report on the Maltese economy.
In 1964 Professor Wolfgang Stolper from the University of Michigan was commissioned by the United Nations to draw up a report on the Maltese economy coinciding with Malta’s attainment of Independence in 1964.
Stolper, of Austrian origin, had moved first with his family to Berlin and then in 1933 when Hitler and the Nazis were gaining power, to the United States.
There he studied at Harvard University under Joseph Schumpeter. Later on he was to collaborate with the other famous economist, Paul A. Samuelson.
The now republished facsimile of the Stolper Report does not feature so far among the official list of his publications, which goes to show the importance of this republication.
Apart from this the republication of the report fills an important gap in the study of the history of Malta in those turbulent years when Malta was being granted independence before it was prepared for it.
Britain, the colonial overlord, was handing out independence to country after country regardless whether the country in question was ready for it. Many were not and there is a long list of them which collapsed in civil war just a few months after independence.
In Malta’s case, its situation was rendered even more precarious when, again, the British overlord unilaterally decided to slim down its military presence that had been the mainstay of the British presence practically since the 1814 Vienna Congress, which assigned Malta to Britain in a definitive way.
So with one hand Britain was giving Malta its independence which the Maltese until persuaded by George Borg Olivier did not really want (they wanted something called Dominion Status instead) but at the same time Britain was taking away the mainstay of this small island’s economy – its naval ship repair dockyard. And also the stationing of thousands of British troops and their families.
Only a man of the stature of George Borg Olivier would undertake to launch the ship of state in such stormy seas.
The report shows the way. Obviously, it is not the whole story. Though few in number, there are books about Malta’s history in the 1960s which explain how Malta’s economic miracle became a fact.
Nor is this the whole story, either. There is the Mintoff factor to consider, which came later, the derailing of the economic miracle brought about by the wrong policies that Mintoff introduced together with the Mintoffian hordes fuelled by hatred that when the British flag was lowered they were not in power. That sad story has not been fully written so far, either.
On the one hand there was the gradual forward movement by the economy under Borg Olivier, West-leaning, coherent and democrat (with some exceptions) and on the other a country and a government led by a maverick, a demagogue, ideologically nearer to the Third World than to Malta’s traditional ally, the West.
Even in Opposition Mintoff was a factor to reckon with, as the six-month crippling strike at the dockyard showed.
A press release carried by most news outlets in November without any debate or context referred to a conference jointly organised by the Faculty of Economics, Management and Accountancy of the University and the Central Bank of Malta brought together, it said, by former prime minister Alfred Sant.
Among the speakers there were the former Nationalist minister Tonio Fenech, the Acting Governor of the Central Bank, Alexander Demarco, and various speakers from academe.
The point I want to make in as forceful manner as possible is the point made by the report itself and not necessarily the points made by the various speakers, at least according to the report.
The Stolper Report describes how the authorities were advised to tackle the various aspects of the Maltese economy of the time.
But immediately we are faced with the huge problem of emigration – the Report makes it very clear that there could be no future for the Maltese economy unless there were massive emigration outflows.
Now that the situation has been reversed and Malta is now inundated with Third Country Nationals many times working for rock bottom wages we tend to regard the almost forced emigration of thousands of Maltese as somehow wrong. The emigrants were accompanied to the ships with bands and blessings.
Most had the lowest level of education and in Australia, Canada and the UK had to take on the lowest of jobs. Then, as things do, their children grew up, were educated and many now have good jobs.
The main thrust of the economy under Borg Olivier (and his redoubtable Minister of Finance Giovanni Felice) was Tourism.
Encouraged by the government, but owned by the private sector, hotels like the Hilton, the Sheraton, the Cote d’Or and others flourished.
Then came the factories, the new industrial estates, the links with the foreign owners.
All this required space, which Malta (thought it) had and workers specialised in construction and in operating the machines.
Time and again the report outlines how it came to hit a brick wall – the outmoded, centralised way in which the civil service expected to run things, even at the cost of efficiency. And run to the party and the minister for guidance at each and every difficulty.
As the afore-mentioned conference seems to have pointed out, only the telephone system, out of the utilities, has been privatised in all these 60 years.
Saying this hides a whole story – how the Mintoff regime lumped us with cast-offs from other countries – such as the Strowger system which then the next Nationalist government threw out, fortunately for us. Where would we be if this brave step was not taken?
There were then more wrong turnings brought about by the Mintoff regime – the socialism introduced all over the place, the dismantling of the National Bank, which may not have been exempt from mistakes, and the pall brought in over the whole country with the austerity measures.
After the Jewish victory in the six-day war the mostly Arab oil-producing countries of OPEC hiked the price of oil.
Mintoff reacted by draconian austerity measures – street lighting reduced to a minimum, or just switched off, etc.
Other countries also brought in austerity measures but removed them after a while. I remember the Pope being driven in a horse carriage when he went to place flowers at the Madonna pillar in Piazza di Spagna on 8 December 1973.
But otherwise all was normal – shops were open and advertising billboards lit – a far cry from austerity-blighted Malta. No wonder that when the incubus was lifted in 1987 the economy exploded.
There are other facets of this Mintoffian nightmare – the centralisation of imports, the so-called import substitution, the Desserta chocolate and all the other substitutes of well-known brand names which got people flocking to Sicily to stock up on toothpaste.
Without forgetting the continual peddling of the Maltese neutrality to get poor substitutes of anything in return from China, Romania and so on. We became the people clamouring, begging, for hand-outs.
This and perhaps more was the result of the 1971 vote that threw out the reforms proposed by the Stolper Report.
Its validity is proved by the disaster that followed its shelving.
Many will agree with me, others will not – Malta’s economic progress lost something like 20 years when the Stolper Report ceased to be followed. As the November conference agreed, on some matters some negative traits of our country are still there, 60 years later.
Others would point out at increases in the minimum wage and a freer rein on such matters as construction but again this deviation from Stolper is the cause of our lopsided development. There we remain, till today at least.
This post was originally published on here
