If the Labour government follows through on reclaiming Manoel Island from MIDI after its failure to fulfil contractual obligations, it would mark the end of a deal that stands as a textbook example of Malta’s long history of rent-seeking by some of the country’s most powerful business families.
The public land deal by which MIDI’s major shareholders enriched themselves, involves two major families that historically grew their businesses out of monopoly and rent-seeking practices: Alf Mizzi & Sons (major food importers) and Gasan Enterprises (previously a public transport and vehicle-import monopoly).
Until this very day, the descendants of the legacy companies they run have not changed in principle and habit.
The prevailing and most consistent trait of Malta’s feudal class of business rent-seekers has always been this: they never take risks with their own capital. As a result, they avoid investing in productive or innovative ventures within the local economy, opting instead to place their proceeds in foreign securities and overseas property. These are not just my words, but also the conclusions of the Mowatt-Chalmers Royal Commission of Malta published in 1912.
During the British colonial era, most of Malta’s private economy was run by feudal and rent-seeking practices, until the Labour Party broke this trend in the 1970s by centering economic growth on foreign capital rather than on the prevailing rent-seeking practices.
You can read more about this history in my history books.
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