raphael_vassallo
Raphael Vassallo

You can’t be a prostitute and a virgin

I can't imagine how a non-consenting country could possibly be induced into a life of corruption against its own will...

raphael_vassallo
Raphael Vassallo
9 November 2017, 7:53am
(Photo: ABC)
(Photo: ABC)
Well, not at the same time, anyway... though it remains an incontestable fact that every single prostitute who has ever existed – anywhere in the world, at any time - will have once been a virgin.  

It is perhaps for this reason that the verb ‘to prostitute oneself’ is so often used as a correlative for ‘to become corrupt’. (Terribly unfair on all those honest, hard-working people who go by that collective appellation, I know... but then again, this world has never exactly been a ‘fair’ place to begin with). Just as people are not born prostitutes, countries are not inherently ‘corrupt’ by virtue of their very being. They tend to lose their moral direction just like people tend to lose their virginity: not through some random chance occurrence... but mostly because they want to.  

OK, I’ll admit the analogy breaks down at certain points. Some people might lose their virginity to a rapist, or to other circumstances beyond their own control. I can’t imagine, for instance, how a non-consenting country could possibly be induced into a life of corruption against its will: because, for instance, someone spiked its drink. 

On the whole, however, it works well enough for the point I’m trying to make: a point that was beautifully illustrated this week by the aptly-named ‘Paradise Papers’ revelations.

There is absolutely no point pretending to be ‘surprised’ by the fact that Malta has been used for tax evasion and money laundering purposes by so many of the world’s richest (and dodgiest) customers. That is precisely what our economy has been tailored to do, under different administrations of government, over the past 10 years.

Those companies and entities named in the Paradise Papers were all listed on the public register From an economy previously based on tourism, manufacturing and (depending how far back you go) textiles, we have consciously and deliberately re-bored Malta’s economic engine to run chiefly on sectors like financial services and i-gaming: which we attract through a generous system of ‘tax incentives’... specifically, by offering a tax rebate which works out at 85%.

We didn’t need the ‘Paradise Papers’ to know that. But they do help to understand how spectacularly successful this strategy really was. We set out to attract precisely the sort of companies that would be interested in avoiding paying tax in their home countries – and, by extension, to deprive their local economies of the means to fund public schools, hospitals, pensions, social service, etc; and with them, naturally, we also attracted the sort of ‘companies’ that are actually interested in hiding (and laundering) ill-gotten money from all sorts of dodgy sources.

That’s what generally happens, when you tailor your entire financial infrastructure to cater for people with things to hide.

That was our declared strategy... and boy, was it successful. So much so, that the two political parties actually argue over which was more instrumental in its extraordinary success. The Nationalists (as usual) claim all the credit... because they were the ones who designed those actual economic structures before 2013. Labour, on its part, argues that it has managed those structures far better than the PN... resulting in the materialisation of a budget surplus that Gonzi had often promised, but never delivered.

What neither of those two parties ever mentions is that this ‘economic system’ they both boast about is actually just a bottomless quagmire of filth and corruption. So, as far as I’m concerned, they are both welcome to take all the credit for it they like: after all, it reflects with equal precision upon them both. A corrupt system, designed and perfected by two corrupt parties. What’s there not to boast about?

But let’s not pretend it was an accident, or a case of ‘unforeseen circumstances’. Quite the contrary, it was a very deliberate, pre-meditated economic strategy. And we didn’t exactly conceal our intentions, either. This explains Finance Minister Edward Scicluna’s reaction: “There was no secrecy whatsoever,” he said.  Those companies and entities named in the Paradise Papers were “all listed on the public register”. 

Yes, and in countries where prostitution is legal, bordellos are advertised in the local equivalent of the Yellow Pages. There is no ‘secrecy’ there, either. In fact, that is the entire point: we were selling our wares in public. We openly declared and advertised our ambition to get filthy rich, filthy quick, through tax avoidance schemes – and other related activities, such as the sale of passports – and it worked, too. We did get filthy rich.

Malta is, in fact, a wealthy country in today’s economically troubled world. I won’t go into whether this wealth ‘trickles down’ or not... I’ll leave that all to all the Milton-Keynesians out there - but there is a lot more money in Malta today than there ever has been in the past. For four consecutive years, we have registered the second highest economic growth rate in the EU after Germany.  Where did all this money come from?

What do you think fuelled all that growth... if not the glut of dirty money that was being channelled to our islands through all this perfectly legal, non-secretive scheming?  

All this underscores the radical hypocrisy that has gripped in the entire country in the wake of the Panama Papers scandal in 2016. The only reason the rest of the world considered those revelations as ‘scandalous’ was because they exposed the extent to which the legitimate financial services sector – banks, lawyers, accountancy firms, etc. – was complicit in global tax evasion.

In Malta, on the other hand, the only aspect of that scandal that ever excited popular interest was the exposure of Konrad Mizzi and Keith Schembri as beneficial owners of undeclared companies in Panama. Curiously, hardly anyone even noticed that there were other, non-political names mentioned in those papers: in fact, the list itself reads almost like a roll-call of the ‘great and good’ of our entire business/financial community. Even the most reputable legal and accountancy names were exposed as deeply intertwined with an international system designed to help the very rich hide their wealth. 

But none of that mattered: the only thing we ever really talked about was the ‘corrupt cabal at Castille’... and even then, only about whether those two should have resigned/been sacked/faced criminal charges. At no point did we stop to ask ourselves whether we wanted to actually keep a disgusting economic system that has plunged Malta directly into a global network of crooks and gangsters. 

Perhaps we were too busy making tonnes of dirty money to even notice. Or perhaps it’s because we only ever actually see things when they are filtered for our benefit through the prism of local politics. Either way, it’s always the same. As long as we get to decapitate a few political rivals, and proudly affix their heads to the battlements of our own party headquarters... everything else is irrelevant. 

The only snag is that ‘heads on battlements’ will not even begin to address the real underlying issue. Still less will it be addressed through such simplistic ‘solutions’ as a change of government (especially now, that the Opposition is led by someone with more proven links to that network than anyone else in politics). But that, I suppose, is also part of the reason for our national obsession with politics. By focusing only on the political dimension, we conveniently avoid ever having to confront all our own warts and blemishes.

This brings me to the original headline. You can’t be a prostitute and a virgin... and by the same token, you cannot claim to be ‘aghast’ or ‘indignant’ at Malta’s exposure as a money laundering haven... without also arguing against the same economic strategy that made the transformation possible in the first place. 

When I tried to make this point a while back, I got a lot of angry feedback to my suggestion that we just scrap those tax avoidance schemes altogether, and bring our taxation regime back into line with most other European countries. Well, I can now understand those reactions. Just think how many bankers, financial services professionals, lawyers, accountants, etc., would have benefitted financially from the glut of untold millions channelled through Malta in recent years.  Just think how much these people would all lose, if Malta were to go back to being the unassuming, poor and largely ignored country we used to be until very recently.

And I would understand their position, too... if only they were honest about it. But no: rather than admit that the only reason for Malta’s economic success is that we availed of every legal tax loophole under the sun... they want to protest loudly at the ‘corruption’ of certain government officials – and ONLY those officials - while continuing to gorge at the same trough themselves. It’s the ‘corruption’ that annoys them, you see. Not the tonnes of money they themselves have made – and stand to continue making in future - through the same corrupt system.

The same goes for most – though not all - the people protesting about ‘good governance’ in this country. Unless we recognise that clean public governance is incompatible with the vampiric economic model we ourselves have consciously chosen for our country... sorry, folks, but you can forget it. 

As far as I can see, the choice facing Malta is very straightforward. We either keep ourselves plugged into that filthy lucre machine - in which case, we should stop even complaining about our growing international reputation as a corrupt country, and instead simply embrace it; or else, we just scrap that economic model once and for all, and kiss goodbye to all the associated wealth and economic growth that goes with it.

After all: you cannot live off the earnings of prostitution, and then complain about prostitutes on your doorstep.