Labour woos the business sector

The Labour Party's decision to set up a business forum can be seen as an attempt by Labour leader Joseph Muscat to engage with a part of Maltese society with which it has had a turbulent past: the private sector. It must also be seen in the wider context of Dr Muscat's attempt at building bridges and turning his party into a movement where there is space for everyone considered to be a "moderate" or "progressive".

The members of the business forum are former Sea Malta chairman and entrepreneur Marlene Mizzi (who is its chairman), Emmanuel Mallia, a criminal lawyer, economists John Cassar White and Joe Vella Bonnici, former Maltacom CEO Stephen Muscat and businessman Paul Vella.

This latest attempt by Dr Muscat, aimed at showing the business community that Labour will adopt pro-business policies once in office, must be seen in the wider context of the difficult relationship between the two sides when the party was in power.

During the Socialist governments of Dom Mintoff and Karmenu Mifsud Bonnici between 1971 and 1987, the state played a very large role in the economy, there were many government-owned monopolies, a system of bulk-buying for essential food items and certain commodities was in place, imported goods were subject to ridiculously high protective levies, price control orders were enforced, individual licences were required for imported goods and the public sector was bloated.

During these years anti-business sentiment was rampant in government circles and the Labour Party constantly referred to itself as a Socialist Party and a workers movement. The private sector survived this difficult period and some businesses did do well, especially if they enjoyed protection through high import tariffs or a monopoly status, but the business community was given a new lease of life when the Nationalist Party was elected to office in 1987 and embarked on a programme of liberalisation and later, privatisation.

When Alfred Sant was elected Prime Minister after Labour's 1996 electoral victory, he attempted to open a new chapter in relations with the business community. Indeed the party had during its campaign pledged to make the private sector the motor of the economy. Initially, a number of businessmen were impressed by Dr Sant's emphasis on sound public finances and the important role of the private sector in the economy.

However, the honeymoon was short-lived as the business community grew increasingly frustrated with Dr Sant's anti-EU membership stance, his removal of VAT and the time wasted on finding a replacement for VAT. Business confidence was lacking throughout this period and Dr Sant's Labour government collapsed after 22 months in office.

John Cassar White, a former chairman of Malta Shipyards and a member of Labour's business forum, believes that no political party can afford to remain static in its attitudes and beliefs for any length of time "because otherwise it will be shunned by society".

He told The Times Business: "I believe that the Labour Party understands the importance of private enterprise in the creation of wealth without which you cannot really have any social justice"

Mr Cassar White believes business and politics need to work together to create wealth that can then be used to improve the quality of life of people.

"In today's economic conditions every effort should be to made to ensure that businesses understand the economic priorities of the country and that the political priorities build on the dynamism of business. I believe that this is what the Labour Party is trying to achieve through this forum."

Asked whether the forum targetted businesses of all sizes and if it is aimed at certain business sectors such as manufacturing and tourism, Mr Cassar White said the business community covers a broad spectrum and the forum "will presumably want to dialogue with every sector"

"Of course, there will be priorities and tourism, for instance, could be one such priority since it includes various types of operators ranging from small firms to large businesses," he added.

Mr Cassar White does not believe the creation of this business forum will jeopardise the party's special relationship with the GWU.

"Trade unions are very important stakeholders in every economy and in every business. I am sure that the forum will maintain contacts with all the stakeholders including the unions and will not exclude anyone."