On economic structures

Thursday, 07 Mar 2013, 04:44

 

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There is much that Italian citizens are constantly griping about in the way that their economy is and has been managed over the last three decades. That country has committed the major mistake of promoting political management, per se, above good economic management. And the result is what we see: vast inequalities of income, a disastruous level of public debt, in certain areas even the deindustrialisation of the country.

And yet, as an academic, I cannot deny to remaining strongly interested in some of their economic management structures. Two which, operating at the highest levels of decision-making possible i.e. ministerial, still fascinate me are their CIPE and their CIP. CIPE stands for Comitato Inter-Ministeriale Programmazione Economica, and CIP stands for Comitato Inter-Ministeriale Prezzi.

CIPE and CIP work, so to speak, very much into each other, but those who sit on each of these ministerial committees are different. I see CIPE as being more important, because it is charged with economic planning in the short, medium, and long term. Round the table at CIPE’s regular meetings sit the various ministers (a big country usually has different ministers for each of these areas) responsible for the economy, finance, trade, industry, agriculture and fisheries, plus the governor of the country’s Central Bank. When specific subjects, like e.g. specific educational measures’ impact on the economy, are being discussed, then the ministers of those areas are also roped in.

It would be a big mistake to compare CIPE with Malta’s MCESD, or even the Cabinet. At CIPE executive decisions are often taken. Not so at MCESD where the presence of bodies like the trade unions, and certain constituted lobbying bodies, hampers this. Perhaps then the mistake in Italy’s structure is that such bodies are often only seen to be coming round the discussion table when some sort of clash or crisis would have become almost inevitable.

That said, I would hold that having a formally constituted CIPE in Malta, where the Prime Minister holds regular round-the-table formal discussions of what day-to-day, and even longer term, issues and decisions need to be discussed and decisions taken, would be a good thing for the country. Some readers might also ask “what about the Cabinet, isn’t ours doing what CIPE does?” The answer is a simple No.

Firstly because full cabinet meetings are usually too big for in-depth discussion of economic areas to be held, and knowledgeable decisions taken. And secondly because Cabinet time may also often be taken up with matters non-economic, including purely political strategy, especially when you get a Government that does not see the distinction between party and government.

Which leaves us with CIP, the inter-ministerial committee charged with regular monitoring of prices. We teach our students that inflation is best seen as a cancer which, if not tackled early, or regularly taken care of, can actually kill an economy. Having, again round a table and meeting regularly, certain key ministers, mainly those for trade, industry, and finance, and the national statistics authority chairman, can result in useful discussions and economically positive decisions.  It is at such a ministerial committe that inflation should first be spitted and key decisions about it taken.

So, do we need a CIPE and a CIP in Malta? Think about it Mr. Prime Minister-to-be.

Dr. John A. Consiglio teaches Economics at The University of Malta.

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