Darling of Keynesian economics, Karm Farrugia dies

Affectionately described by the media as a ‘veteran economist’, Karm Farrugia was irreverent, bold and straight to the point

Karm Farrugia during an interview with sister paper Illum in 2016
Karm Farrugia during an interview with sister paper Illum in 2016

Karm Farrugia, affectionately described by the media as a “veteran economist” has died, aged 87.

He earned the “veteran” title having contributing to the national debate on the economy and public finances well into old age.

I got to know Karm around 2005 when I took over as editor of The Malta Financial and Business Times (the precursor of BusinessToday), often using him as a reference point for economic and financial matters.

He was one of three economists I consulted regularly, the others being today’s Finance Minister Edward Scicluna and Lino Spiteri, as I tried to gain a deeper understanding of economic policy.

Karm was one who would always pick up the phone, ready to impart his wisdom and contribute with his commentary on current affairs. He was also a regular contributor to MaltaToday.

A self-confessed convert of Keynesian economics, Karm had been a close aide of Prime Minister Dom Mintoff in the 1970s as the country was being prepared for its transition from an economy dependent on the British military to one based on industrialisation and tourism.

But Karm was no pushover and had later fallen out with Mintoff following disagreement. This was Karm: irreverent, bold and straight to the point with his observations.

It was a streak that Karm retained well into his long life.

I recall him giving me the bold headline that world was facing its “worst recession in 70 years” when, as editor of Illum, I had called him in 2008 for his views on the global events unfolding at the time.

The same streak was evident in 2012, when he formed part of a research team at Caritas that produced the report A Minimum Budget For A Decent Living.

Karm’s contribution to the report was to assess the claim for a higher minimum wage from an economic perspective. He forcefully made the economic case for an increase in the minimum wage because the rate at the time still reflected the social concept of decency prevailing in 1971 when it was first introduced.

He continued backing the claim for a higher minimum wage when the cry was taken up by the Anti-poverty Alliance in more recent times.

Karm studied accounting at the London University and obtained an MSc in economics from the London School of Economics and Political Science.

He also qualified as a cost and management accountant and auditor and was elected fellow of The Chartered Institute of Secretaries and Administrators.

For many years, he lectured economics and industrial management at the University of Malta and was a mentor to Edward Scicluna, one of his students.

When I spoke to Farrugia a few years ago, he spoke with pride of Scicluna’s stewardship of the economy and public finances. “He [Scicluna] must be the envy of his peers in the EU,” Karm had told me.

But despite his left-wing views, Karm was also a critical voice of the Labour Party.

In an interview with sister newspaper Illum in 2016, Karm did not hold his breath as the Panama Papers scandal unfolded. “The Labour Party must get rid of the opportunists within it,” he warned.

He had also criticised the party when it opposed EU membership at all costs.

Karm served as managing director of Malta Shipbuilding, acted as an economic consultant to the General Workers’ Union, and president of the Federation of Industry.

In 2015, Karm was appointed by Prime Minister Joseph Muscat as a member on the board of governors of the National Development Fund, which administers income from the sale of passports.

Karm died on Saturday leaving behind his daughters, Dawn, and her partner Joe, Julie, and her husband Alwyn, and his grandchildren Nicola, Katrina and Peter.

A private funeral was held on Tuesday.

From all of us at MaltaToday, heartfelt condolences go to his family. Farewell Karm.

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