The world we live in

Recent history has shown us that many of the innovative approaches to commerce and politics have first found fertile ground abroad, most often in the United States.

Capitalism in America is regarded in a different light than how we, Europeans, see it; almost as a way of life. The economic wellbeing is given priority, and if the recent Presidential election is anything to go by, the economic situation of the individual is a major deciding voting factor for millions of Americans.

The success of Donald Trump was based on economic nationalism and ‘America first’ policies. Vast numbers of people, away from the wealthy coasts and disillusioned by an economy that they no longer were felt a part of, found refuge in his politics. Which is why any candidate opposing Donald Trump must have a strong economic policy, possibly with similar undertones, in order to have any chance especially with a bullish economy.

We can either sink in political nitpicking and idealism of a world which no longer exists, or pull up our sleeves and work to make sure we’re competitive and bring in investment

This business-first approach to things isn’t restricted to the national level. States often have to battle it out between themselves to lure investment from each other. They compete with each other to bring in jobs and investment, and usually their state politician’s future is dependent on it. The reality is that economic performance is tied with the politician responsible for it, perhaps disproportionately.

A few months back, the online giant Amazon issued a public call to attract bidders for its second headquarters, which will be built away from where it resides now in Seattle. States were invited to submit proposals on what they were offering and why Amazon should locate its second most important operational facility there. It’s easy to see why this would be so attractive for a number of states – the project is worth $5 billion, and it will create 50,000 high end jobs. Wherever this goes, the place will get a huge economic lift and completely change the area for the better, because where these jobs are created will have a domino effect. The area’s prosperity will be strengthened, small businesses will crop up and a long list of positive effects will follow from there on. Needless to say, it was a bloodbath among the different states.

Amazon received a ton of offers. 238 in all. Every patch of land with a politician in the US, and Canada, seemed to have submitted a bid. Just days ago, Amazon shortlisted the best twenty. Most of the bids have been made public and the published offers were pretty incredible.

Atlanta has offered $1 billion and to install Jeff Bezos, the company’s CEO, as mayor in their residing city. Chicago offered $2 billion, mostly in tax breaks, and said it was willing to go beyond that.

In Columbus, Ohio the city offered a 15-year tax break, including 100% property tax abatement, together with a 35% income tax refund.

There were many others which offered all sorts of tax breaks: Los Angeles, Denver and Pittsburgh among them. All these offers usually include free provision of land, free housing and various other incentives. There was a city which even offered to employ public officials at the sole disposition of Amazon, to make sure each and every need was catered for.

Among those not on the shortlist is Detroit, which promised it its 242-page offer that it would give the company its employees’ state income tax for 20 years, 28 acres of the city’s east Riverfront and 30 years without incurring real estate, personal property, city income or utility user taxes. That offer is worth billions, but it didn’t even make it to the shortlist.

The most advantageous offer made public was that of Newark which will be offering $7 billion in tax incentives and a string of other attractive propositions. On just that published number, that’s a whopping $140,000 in incentives per job created.

This is all on top of various other things which the company enjoys, including a recent corporate tax cut from 35% to 21%.

For good or bad, this is the game we’re all playing. The barriers have dropped and nobody is owed a living. When good jobs, and in some cases just jobs, are up for grabs we must compete and we have to understand that competition is fierce.

Malta may not be able to offer land as much as others, but we must have other means to remain competitive. Notwithstanding the fiscal ones, we must make sure we are competitive in terms of skills and infrastructure. What the Amazon bidding war has shown was simply a glimpse of the decision process of big business – a process usually reserved for the boardroom and away from prying eyes. As a country we must make sure we do not politicise investment, because we do not have that luxury.

The battle is rough as it is. We must work together to continue bringing investment and jobs to this country. We can either sink in political nitpicking and idealism of a world which no longer exists, or pull up our sleeves and work to make sure we’re competitive and bring in investment. As the mantra goes: it is not the strongest or the most intelligent that win, but the ones who adapt most to change.