How the coronavirus interrupted Robert Abela’s honeymoon

Joseph Muscat benefitted from a perfect alignment of the stars: he enjoyed an era of lower oil prices, a spike in global tourism, and a relaxation of building rules that gave him a construction boom and a comeback from the 2009 global slowdown.

With his foot on the accelerator, Muscat triggered a period of growth which left the country breathless, and which left him immune to corruption allegations which in other circumstances could have spelt trouble for him.

His successor Robert Abela certainly enough defied the odds by winning the leadership battle and upstaging the seasoned Chris Fearne, subsequently showing acumen in uniting the party behind him while reaching out to critics. Polls showed him extending his lead over the Opposition, extending his appeal to a segment of PN-leaning voters who detested Muscat but who give Abela the benefit of the doubt.

With the PN spiraling into internal chaos, the prospect of an even stronger Labour hegemony loomed large on the political horizon.

But Abela now finds himself facing both the corruption legacy of his predecessor, complicated by his own promise of continuity, and two less predictable factors: the national outrage against the construction industry following the death of a woman in the seventh house collapse to date, and the coronavirus outbreak rocking not just the Maltese economy, but the world.

And all three together may have a domino effect.

If the coronavirus does trigger an international recession, fearing a slowdown in construction Abela may be not as keen on regulating construction, even if he may be under more pressure to do that after the latest tragedy.

And while for the past years people have been immunized by economic growth, anger against corruption may well grow in a context of economic decline.

In short: reality may be catching up with Abela, whose stars are not as lucky as those with which ‘teflon Muscat’ was blessed.

So what possible impact may the three crises situations have on Abela and how can he defuse them?

Textbook corruption

Facts revealed by this newspaper, namely how Vitals Global Healthcare directors Ram Tumuluri and Bluestone’s Mark Pawley paid themselves €1 million for each year since 2015 and a €5 million bonus in a back-dated contract they devised in June 2017, suggest that the hospital privatization was nothing short of a blatant exercise in self-enrichment.

Of all the scandals from the Muscat era, this scandal may well be the most tangible one, as it sounds like a textbook case of putting public goods at the disposal of crony capitalists who gave nothing in return.

Yet contractual obligations towards Stewards, the US Company that took over from Vitals, may well make Abela’s choices difficult.

Abela may well find himself in the same position as Alfred Sant when dealing with the San Raffaele inheritance the PN left him in 1996. So far, the public reaction at the swindle has been surprisingly meek with the news cycle taken over by more immediate threats, namely the coronavirus and the house collapse in Hamrun.

Still, if these two unrelated events trigger a slowdown in the economy, Abela may well end up more vulnerable to the corruption issue.

In this case, Abela has the advantage that this case dates back to the Muscat era. But this also tests his credentials as a reformer. One way out for Abela is to immediately kick out Konrad Mizzi from the party and publicly disgrace him.

This will at least force Mizzi to assume political responsibility for the scandal. But how far can Abela go in distancing himself from the Muscat clan, which included Mizzi?

Falling houses, rising anger

Abela’s reaction to the latest house collapse has been to go back to the drawing board by asking a new commission of four experts to assess the construction rules drafted only last year by government policy advisor Robert Musumeci.

But Abela has not asked infrastructure minister Ian Borg to shoulder political responsibility for failing to avert the latest tragedy, which has resulted in a woman losing her life.

Abela has been cautious in his criticism of the construction industry and seems reluctant in slowing it down, at least until Malta has the full capacity to enforce regulations.

Abela’s major concern may well be that a slowdown in construction could have a domino effect on other sectors of the economy.

Despite his good intentions, Abela could consider changing the economic model itself – reducing dependence on construction – as being too risky for his own personal fortunes, especially while the present moment remains dominated by uncertainty triggered by the coronavirus.

In short Abela may be a victim of Muscat’s economic success: the country may have become too addicted to growth on steroids, not to suffer the pains of withdrawal symptoms when the daily dose of building permits is interrupted.

A virus in the economy

Abela has also dithered in dealing with the coronavirus, first over whether to let the MSC Opera cruise liner enter Malta, and whether to stop flights from northern Italy, betraying signs of uncertainty.

While the cruise ship was refused entry despite business pressures (but after protests by doctors and health workers), a full travel ban from and to Italy was only stopped after Italian PM Giuseppe Conte announced a national lock-down on Monday.

It has even been reported that health minister Chris Fearne had wanted to stop flights from northern Italy earlier. Abela’s insistence on the country proceeding with a sense of normality may be based on a rational assessment, but taking any unnecessary risk may well return to haunt Abela.

His dithering also raises questions on whether Abela is putting economic considerations before public health.

And the health emergency has catapulted his erstwhile leadership rival into the national stage as someone people can trust with their health and wellbeing. Abela cannot afford to look less stringent than his own deputy PM, who excels in these moments.

That may explain why he called a press conference at midnight yesterday to announce the travel ban. But he remains under strain because of the economic repercussions of the virus, with businessmen in the tourism industry already demanding an ease in fiscal pressures, which if granted will result in a decline in government revenue.

If the international economy takes a nosedive, amidst a possible collapse of the Eurozone triggered by Italy, Abela may find himself in the same position Gonzi was in 2009 after winning an improbable election in 2008. In short: it could paralyse him.