The Maltese electorate is about to face the challenge of a consultative referendum over the issue of Malta's future relationship with the European Union.

Whatever the outcome, it would immediately have to come to terms with a general election. The ensuing mandate will determine who will be in the national cockpit.

Irrespective of the final outcome, the people will eventually find themselves together in the same boat, aspiring for survival in a tough world of unforgiving competition.

The object of government is the good of the people and the greatest good of a people is their liberty. Next to liberty is the economic well-being of the people.

The issue of Malta's relationship with the EU is closely related to these two basic considerations. On the one hand, there is the question of Malta's sovereignty being subordinated to a supra-national authority and, on the other, there is the issue of Malta's ability to survive on its own unaided resources.

Edmund Burke once remarked that party divisions, whether on the whole operating for good or evil, are things inseparable from free government. If democracy is to prevail, we have to abide ultimately by the popular will and move on along the path of destiny.

But not before Malta weathers the referendum and general election storms.

After than, bread-and-butter issues will, once again, be predominant, irrespective of whether or not Malta would have acceded to the EU.

The foremost problem would be how to resuscitate the economy and sanitise the government's finances.

The problem is primarily domestic and the eventual solution, if any, has to be worked out in Valletta, not Brussels.

Malta's economic predicament is largely the result of political ineptitude and mismanagement compounded by the inefficiency of an untrained bureaucracy. It takes the nation's collective resolve to reactivate the economic engine and set course towards better times.

There are too few producers in this island and far too many people trying to live off them.

Recent trends have seen more factories closing and less direct investment coming to our shores.

Large numbers of workers have moved out of industry and on to various service occupations where they still consume and produce none themselves.

Their needs, therefore, have been met at the expense of the balance of payments. The taking away by taxation of an increasing proportion of what workers produce explains the acceleration of wage inflation.

At present we suffer from high unemployment, low production, low growth, turbulence in the tourist sector and the Stock Exchange, which is our capital market, has been in the doldrums for many months.

The structural fault in Malta's economy, of too few people in the productive sector, is the main explanation of our weak economic performance, although one must not overlook other contributing factors. These include excessively high taxation, inadequate incentives, restrictive practices, a traditional bias in favour of imports against manufacturing for export, hostility to change and bureaucratic sloth.

These are the dragons that must be slayed if Malta is to move forward with the prospect of eventual success.

Change of this nature could not be achieved by local government edict or by cracking the whip in Brussels. What is needed is an act of national resolve from the grassroots, with the full participation of civil society in general and the social partners in particular.

Malta has to live by its own efforts, earning its living through the initiative of its people by sheer enterprise and productive effort. It can survive if it achieves growth, by producing more and by selling its goods and services.

Businessmen and workers are in the same boat. They must row as a team - and, in this, there is no room for partisan rivalries.

Politicians have been in agreement that Malta needs an institution that brings together the social partners and government representatives to agree on basic national economic objectives.

The nucleus of a national economic forum has been set up. It was initially known as the Malta Council for Economic Development and subsequently as Malta Council for Economic and Social Development. But although the body was willing, the spirit proved to be weak.

The council has been denied the necessary human and financial resources, and never grew to maturity. It acts as handmaiden of the government at best and as an ornamental set-up at worst.

Malta needs an authentic industrial forum where both sides of industry would be subject to public scrutiny and where the social partners would, in turn, take joint initiatives of their own, with full government support, to promote productivity and economic performance.

It is a forum where industry would have to explain the defects of management, obsolete techniques and inadequate training and where the trade unions would have to argue and justify higher wages without increasing unemployment or adding to inflation.

Some of the proceedings of such a council should be in public and preferably televised.

In such a situation, a representative government would relinquish its position as uniquely responsible for a national incomes policy to seek a social contract or partnership with the most important corporate forces, namely the trade unions and employer organisations.

While competition is necessary both for an efficient economy and a free society, cooperation and consensus are also necessary for the preservation of the same society.