Competitiveness: the solution to creating new jobs

THE Malta Federation of Industry expressed concern about the local situation in a statement released on Wednesday. It said: "The unions are expressing their worries about the recent spate of job losses in the manufacturing and tourism industries - Malta's two most important sectors that earn foreign currency for the country and generate most jobs.

"The GWU talks about raising the awareness of the problem by public demonstrations in favour of the right to work. The UHM, the other major trade union, insists on a Social Pact."

"The FOI is also worried about the situation and sympathises with the unions and those workers who are found redundant and lose their job and their earnings.

"This is a symptom of the economic problems of our country. It is an indicator that enterprises are suffering in the global market place, losing market share and perhaps even the will to invest in Malta. This is indeed serious.

"But the FOI has been warning Government and the unions that even what appears now to be a strong investment is not safe any more from external market pressures. Export-oriented industry in all sectors, except in the machinery and transport sector, is suffering from reductions in their export figures; and that includes tourism.

"Although each entrepreneur does his best to retain and expand his operations, it is also true that performance and profitability in manufacturing and tourism have been on a downward trend for a number of years.

"The cause is not EU membership but our increased exposure to market pressures, the level of efficiency measured in terms of productivity increases, as well as the comparable lower costs for industry in other countries.

"Moreover, one cannot lose sight of the fact that the situation in Malta's public finances, and the accompanying and continuous upward push of taxation, is contributing to a diminishing disposable income in the hands of workers and entrepreneurs alike.

"It is becoming increasingly difficult for firms to increase their prices on the market while their profitability is being squeezed between increasing costs and resistance by the market to accept higher prices for goods and services.

"In the meantime, the Malta currency is becoming stronger and rendering exports more expensive to sell, while productivity increases are being surpassed by wage increases. In these circumstances no entrepreneur can be blamed if he shifts his operations away from Malta."

In conclusion the federation appealed to all stakeholders: "To show a sense of urgency by tackling competitiveness problems without delay if the situation is not to deteriorate further and if investment is to be saved and encouraged.

"The country needs to take drastic, immediate measures. There must be serious commitment from Government and trade unions to find a way out of the present difficult situation. This must start right away because it is an urgent requirement on which depend future investment and jobs.

"Industry is prepared to give its contribution to tripartite talks and to reach a serious agreement as long as negotiations start without pre-conditions from any side."