Pro forma

It has been happening with greater frequency these past months. Yet, the administration insists there is nothing unusual about what is going on; indeed, that things are all as they should be. Among the more recent instances was the reversion overnight of a public deficit figure posted by the National Statistics Office (NSO) for the year 1996 - they suddenly cut it by some Lm88 million, claiming there had been a one-off mistake.

Then there was the persistent claim by the Prime Minister and other government spokesmen that, during 2006, over 6,000 new jobs had been created. Those who like me pore over the data published by the NSO, ETC and what have you, still can find no trace of where these figures might have come from.

We have been told from Brussels that Maltese public expenditure accounts are now being adjusted for accruals. Yet, there is no trace as to how the calculations are being conducted and what the methodology is. At the Malta end, the Finance Ministry prefers to keep a tight lip on this matter, while continuing with its old merry ways of publishing expenditure data on a cash basis.

Again, for most of the past year, controversy persisted regarding how exactly the fuels surcharge was being calculated. The ministry of investments and whatever kept insisting it was always in the right, kept fudging the data and kept ignoring the technical evaluations presented by the Labour opposition and others, to assess the transparency and correctness of the benchmarking being made for the surcharge.

Then, last summer, the government played footsie with the technical parameters relating to the Smart City project. The data it presented initially for the extent of high tech operations airbrushed out of the picture the overwhelming percentage of land and resources the project would be allocating to traditional real estate development.

And so it goes. When new zones were brought into the scheme of land on which building can take place, once more, the data about the percentage of new land being opened up for development turned to be elastic... depending on which statistics were being brandished on which day by which government minister.

However, the most recent caper in this scenario of changing statistical landscapes, scripted to fit the government's policy agendas and targets, really goes off limits. Without giving any warning, and while publishing routine quarterly updates of macro-economic material, the NSO last month revised GDP data going back to 1996. The Gross Domestic Product "measures" the size of the economy. Such measures taken over successive periods, every year say, tell us whether we are enjoying economic growth or suffering the reverse.

That measures of the economy taken 10 years ago need revision now is curious in the extreme. That such "corrections" are carried out very casually, and without any explanation being given, says a lot about the attitudes of public decision makers and their political masters.

For it so happens that economic performance across the board has been revised by scores of millions of liri. And it so happens too that most measures for GDP and other significant variables were downsized up to the year when Lawrence Gonzi became Prime Minister. And, by coincidence surely, the same measures were revised upwards since that year.

True to form, the NSO had its technical excuses lined up. And, possibly, the fact that the subject of economic statistics must sound abstruse to most people set their mind at rest: the matter would soon drop out of public sight. Ah, they said, we have to adjust macro-economic data to the methodology followed by the EU, and this is what we have been doing. Also, the revisions carried out are not so significant. They hardly change the analysis that has been made in past years and is being made today about ongoing economic performance. The Malta Statistics Authority apparently allowed itself to be soft soaped by this palaver, which is cause for further concern.

However, a preliminary technical assessment of what can be seen of the NSO workings reveals that there are multiple inconsistencies in the methods used to "revise" past macro-economic data. Advantage seems to have been taken of information-gathering lacunae in certain sectors of economic activity, to adopt estimates that affect the overall direction of economic performance as recorded by official statistics, in one way rather than in another. Moreover, it is hardly clear how revisions could today be reasonably carried out regarding the performance of certain economic sectors going back 10 to five years.

The suspicion has thus been further confirmed that the NSO has become subject to rampant political manipulation. One can find little comfort in the point that the EU's statistical agency "audits" what the NSO does. Really? So could the government, and Eurostat for that matter, come clean regarding how public expenditure accruals are being taken into account, as of now?

Concerns about the NSO and its manipulations may appear abstruse and too technical for wide-ranging polemics. But the issues raised relate too to the integrity with which our public institutions function, and eventually to the trust that can be placed in the management of economic policy. Economic data is like the positional readings a ship must continually take to reach its next port of call safely. If real-life data is being collated on a pro forma basis, purely to satisfy political targets and independently of coherence, consistency and factuality, then the ship of state could become one big ship of fools.