People 23/06/2002

An elderly labourite with a modern vision

He confronted Mintoff on a number of occasions. He even worked with Karmenu Mifsud Bonnici, describing him as a very efficient Prime Minister and also having good relations with Eddie Fenech Adami. RAY ABDILLA talks to Karmenu Farrugia at his home in Madliena

Karmenu Farrugia, founder of the Malta Development Corporation, better known as an economist, accountant and University lecturer believes that Malta could attract more investment but unfortunately can’t do so because the MDC today is not competent enough.

He said that today the MDC has extra manpower but not with the right attitude and experience to bring foreign investment. He said that the best times for the Corporation were in the years between 1969 and 1972. But then both governments started to employ political appointees and that is when this new institution started to go downhill.

Mr Farrugia recalls how Mr Mintoff as Prime Minister was a hell of a good negotiator but the fights he had with him were frequent and sometimes nerveracking. "I loved it at the MDC but Mintoff was a difficult person to work with. Nine issues out of 10 he would approve but if you told him to do something about the other issue then you’d had it."

Mr Farrugia had moved on to the Central Bank, hoping that he would not only evade Mintoff’s frequent scenes but also to lend in distancing the Maltese Pound from the Sterling.

When I met Karmenu Farrugia at his home in Madliena, I really knew that this would be a long but interesting interview. He is the kind of man you never tire of interviewing. His experience is encyclopaedic. A self-confessed Labour Party supporterbrought up in a working class environment, he sticks to his ideals despite having voted twice against the party he supports.

Ironically that was during the Mintoff days when things were getting out of control. There are many issues on which he does not see eye to eye with Alfred Sant, not enough so far to affect his vote.

"I used to hate it when I witnessed the MLP moving away from its core values, the Labour Party becoming violent and corrupt, the Labour Party no longer the workers' and people’s party.

"And yes the Nationalist Party changed as well, I believe they for the better and from a right-wing party they have become more centrist now. Regarding Dr Alfred Sant, I believe his inexperience showed when he went to the polls after two years in office.

"He knew he was not popular anymore. He knew that the people did not like some measures he had taken and he knew that fighting Mintoff was not a good move. But after winning with a majority of 7,000 votes in 1996, he invited a heavy defeat, by a 13,000 vote margin.

‘The sharp hike in water and electricity bills was a political fiasco. It was a political suicide. But Dr Sant thought otherwise", Mr Farrugia emphasised.

Then I asked him about the European Union. Is it such an important issue and will we suffer if we miss the bus again? And what about Dr Sant’s ‘U-turn’ about scrapping the idea of partnership for Europe, at least for the first couple of years?

"It is simple," Mr Farrugua argues, "in or out there won’t be much difference. We will not die of hunger by staying out just as we will not change anything if we do go in. So you may ask am I in favour of EU adhesion or not? Yes, I’m in favour but only just. And why? "I favouraccession because of the measures we would be obliged to adopt for sure. The environment issue, the roads etc. We will have to abide by EU directives. Outside, we just promise, promise, promise, without doing nothing."

He said that in or out Europeans will still respect us. If the MLP wins the next General Elections both parties will come into an agreement on Malta’s role with the EU. If the Nationalist win, then we will continue on the road to accession.

Mr Farrugia praised Dr Karmenu Mifsud Bonnici and said that he was surely the best Prime Minister who worked hardest in favour of industry.

Mr Farrugia reminiscend about his childhood days and said that sometimes he wonders how he made it having lost his mother at a young age.

He was just six years old when he lost his mother. She was only 33. She left five orphans, the youngest an infant a few months old.

His father was a seaman with the Britsh navy and the children moved into their grandparents' Senglea home. Soon after the family had to move once more because World War II was to break out and the Cottonera area was a dangerous place to be.

"Thanks to my father we could still live quite well. We were even better off when my father volunteered to transfer to a minesweeper , and was promoted to Chief Petty Officer.

"We moved to Zejtun as everyone had to leave Cottonera. When I grew up a little I went to work for a contractor, nicknamed "Tal-Qutu" We used to go to Brizebbugia, near Ghar Dalam. A gunpost was being built and we used to help by carrying buckets of water to to the site.

We sometimes used to work near the port carrying beans and flourinto the stores. Yes, we sorely needed the money."One fine day, a police sergeant told Mr Farrugia that he needed to speak to him at the Zejtun Police Station.: war or no war he was to go to school. The next day Karm started going to school. Luckily for him the air raids started to ease up and his life of education began under the guidance of a Mr Baldacchino.

"I remember that in my class there were the likes of Dun Ang Seychell and Lorry Saliba. For about nine months we used to learn English, Arithmetic and General Knowledge. I then sat for the lyceum examination and finished first from all school. That year the first 12 placed were awarded a scholarship In 1950 education beyond primary school was against payment so I was lucky to be among those 12."

"When I was 18, just after my finals, I joined the Civil Service" Those days entering the Civil Service was the ultimate goal for many. But not for Mr Farrugia. In 1956 he was sent by the governement on an accountancy course.

He was sent to the University of London and sat for a couple of examinations, in which he did well. Mr Farrugia wanted to continue his studies in economics but the government of Malta needed accountants. He did return to England later to study where he also married, Back in Malta the Farrugias were the first man to ,move to Sta Lucia. "I was the first resident at Sta. Lucia as I bid highest for the rent of a home. It was a Lm65 a year , when a month's wages were less.

Mr Farrugia also won a two-year scholarship with the United Nations. From then on he could afford to have children and his children were born soon after.

When he came back to Malta he was engaged to lecture at the Old University and continues to this day. He also used to write for some newspapers, obviously under a nom de plume because during those days it was forbidden for governement employees to write for newspapers. He only used to write financial and economical features, signing GNOME.

Meanwhile in March 1968, the Malta Development Corporation set up replacing the Aids to Industries Board. Mr Farrugia was appointed Manager of the MDC under Dr George Borg Olivier’s administration.

In June, of 1971 Mr Mintoff took office and Mr Farrugia was made General Manager of MDC an Englishman who held the post until then being given the red card. John Mizzi was made Chairman.

"The 1969-72 period were the best years of the MDC. Although 85 per cent of industries came from the UK we started to attract German interest in Malta Many German companies came to Malta to invest in industry.

"In 1973, I left the MDC to take up the post of Deputy Governor of the Central Bank. I thought I was done with Mintoff. But I was mistaken. The quarrels continued because my impression that Dr Guze Abela as Finance Minister would be my Boss, was completely wrong. Mintoff turned up regularly to run the show himself."

In such a scenario Mr Farrugia proposed the devaluation of the Lira.The drop in sterling meant that we would have to devalue to keep Maltese industry competitive. We wanted to devalue by 2 or 3 per cent, but surprisingly Mintoff wanted it to be 5 per cent. He was Prime Minister so we had to abide by his decision.

Mr Farrugia said that to his surprise about four months later Mintoff spoke to him and told him to revert to the original proposal because he thought that he had made a mistake.

Many Maltese not having enough information about devaluation, the banks would exchange Lira for Sterling at a pound for a pound, which meanst that the banks were overcharging the Maltese. The 100,000 tourists or so that came from the UK would get less than a Maltese pound for their sterling.

When the sterling continued to lose its strength against the dollar another devaluationbecame necessary. Pressure from Mintoff drove Mr Farrugia toopt to leave the Central Bank on pension. Mr Mintoff tried to keep him there but Mr Farrugia refused to stay on.

‘I then started to work as a consultant with several companies and these included the diamond factory called Jodic, for which I also acted as Managing Director.. Then I moved on to Valletta Light Clothing where I stayed for 12 years." The Labour Party's poor relationship with the Federation of Industriesprompted industrialists to ask Mr Farrugia to accept the post of President of the FOI. "Luckily Mintoff resigned as Prime Minister at the time and Dr Karmenu Mifsud Bonnici was elected as Prime Minister. We worked together as a team and Dr Mifsud Bonnici was wonderful to work with. During his reign we did a lot of good things for industry."

"The bureaucracy started to diminish and aid started to reach industry in Malta. Unfortunately Dr Mifsud Bonnici didn't get enough time in office .Inspite of its record of corruption, being in government too long, violence, etc, the Labour Party lost the election by only a very small margin.

"In 1986 I was also made Acting Chairman of the MDC and after the Nationalist Party won the elections in 1987 I resigned". But the PN government appointed him to the Board of Levies, a post he still occupies. The day after the PN won the 1992 general elections, unfortunately also the day after his 58-year old English wife died of cancer, he was appointed General Manager at Malta Shipbuilding. He took on responsibility for the completion of work on seven ships for Russia and a Norwegian tanker. When the MLP won the election in 1996 he moved to Sea Malta but only stayed there for four months because he could not work with the Chief Executive.