We are living in a business world where the order of the day is to continually reposition our business. Foreign and local entrepreneurs based in Malta will certainly have to take into their stride a new factor: EU membership."
This was how FOI president Anton Borg opened his address, which outlined the conference conclusions at last week's FOI conference entitled "Repositioning our SMEs in the global market", which was organised by the Malta Federation of Industry with the support of the British High Commission and Bank of Valletta plc.
The one-day conference was split into four sessions. The first morning session consisted of five presentations delivered by keynote speakers: Joe Zammit Tabona, Malta Enterprise chairman; Tonio Depasquale, chief officer at BoV's Credit Management and Retail Business; Professor Lino Briguglio, head of the Economics Department at the University of Malta; Mr Borg, FOI president; and Sir John Egan, president, Confederation of British Industry (CBI).
These focused their presentations on aspects including developing support networks; financial requirements for SMEs; surviving the competition; challenges of the global market from within the EU; and how the UK industry has thrived in the global market.
The second session took the form of a discussion panel co-ordinated by journalist Godfrey Grima. The discussion panel involved all these speakers and focused on earning a living in the global market.
The two afternoon sessions of the conference were more focused on the human resources aspect of the competitiveness equation in view of SMEs being able to compete in the global market.
In fact the discussion panel, which was held in the last session of the conference, was dedicated to putting human resources at the top of the national agenda.
Michael Mallia, managing director of Multigas Ltd, chaired this discussion panel, which also involved the five speakers who delivered a presentation in the first afternoon session: Bruce Warman, CBI Employment Policy Committee member; Marc Butler Jordan, operations director at Trelleborg Dowty Malta; Tony Zarb, GWU secretary general; Gejtu Vella, UHM secretary general; and John P. Camilleri, ETC chief executive.
The presentations that were delivered during the first afternoon session discussed aspects like the UK industrial relations model; flexibility in the workplace; competing globally with the local labour force; how a national agreement between the social partners could help SMEs; as well as labour market mismatches.
British High Commissioner Vincent Fean opened the conference and Prime Minister Lawrence Gonzi delivered the closing address, following Mr Borg's address on the conference conclusions.
Mr Borg continued by stating that EU membership is not just a political watershed that this country has reached. "It is an economic and social reality that we should tap into. On the one hand, we are going to operate within the comfort of a single market that has a potential 450 million customers - the largest in the world," he said.
"On the other hand, whereas the global business climate forces the pace on us, even within the single market, our SMEs will now have several new opportunities offered as a direct result of EU membership.
"I am referring to a number of bilateral trade treaties concluded by the EU with the rest of the global market. There are of course a number of new rules that apply to us as members of the single market.
"Some of us are still feeling our way about until we get accustomed to these new rules that are meant to ensure fair play between countries, entrepreneurs in the various countries, consumers, workers and society at large.
"It is only fair to expect that everyone plays by the same set of rules; it is only fair to have the same set of standards of products and services to give the consumers in the single market an assurance of quality. If we do believe in the club we are about to join, we have to play by the rules.
Having said this I appeal to entrepreneurs who are already on the field of play, as well as to those who are looking to join the team, to re-evaluate their business potential, reassess the validity of their products and services, focus on existing and new markets, and find out more about where the new business opportunities lie.
"Above all else, be convinced that change is not a nuisance to be rid of. It could be a brand new opportunity for our business to grow, possibly in a different direction than what we have been used to in the past.
"Our quality of product and service might need some re-engineering; we might find it serves our purpose to get new strategic or technology partners. So many options to consider, so many decisions we might all have to take to get on track and hit the opportunities at the right angle to make our mark.
"It is not an easy task. We live in difficult times and have to compete for our own small market for the single market that most of us are already accustomed to and more so for the niches we target in the global market place.
"Our performance increasingly demands that we face new challenges boldly rather than feign that we are not part of all this. The (FOI) has repeatedly transmitted this message not only to industry but also to Government.
"We were the first to raise the alarm several years ago about the growing problem of government finances, the need for public corporations to be lean and mean, the need for the public debt and the deficit... and taxation to be reduced rather than be increased.
"The right decisions were not taken when we advocated them. Now the stark truth is sinking down to the roots of this country. Government cannot grow any more. Government cannot afford certain 'free meals' that were offered under our social and health set-up.
"Successive governments over the past 50 years whetted the appetite of the citizens of this country to demand more. Government now needs to reduce its scope and levels of operation in the economy.
"This means that taxation cannot continue to impinge so harshly on the economy, on both business and the workers. It means that Government's recurrent expenditure cannot continue to grow and that Government cannot tie up any human resources beyond the bare requirements.
"Everyone was shocked when we first questioned the sustainability of our social security and health set-up. No one has any doubts that we had said the truth and we had taken full responsibility about this and about the way public finance deficits had developed and are still developing.
"No one wanted to face the harsh decisions that needed to be taken. Now the atmosphere seems to have matured. Government and unions have finally come round to consider that serious reforms are needed, that entrepreneurship has to be supported.
"I hope no one misunderstands me. We're not talking of hand-outs or protection. Some commentators still think that this is what we are aiming at.
"The reforms we refer to mean that the public sector has to behave in tune with the realities of the global market. We mean that we are beyond the stage of any more soft options - like increasing taxation further for one excuse or other.
"The (FOI) has repeatedly underlined the high costs of Government services, that are increasing further rather than going down. We have highlighted the restrictive and archaic practices at our ports.
"The closed shop environment in respect of stevedores, port workers, the fees charged for unloading and loading of merchandise that do not reflect the cost of the service being provided but the situation that applied before the days of unitised cargo. At our ports there is an overlapping and confused management set-up where the regulator even gets involved in day-to-day management.
"We have regulatory authorities freshly formed that are seemingly being instructed to be self-financing. Legal notices stipulating new fees are becoming the order of the day. We have recent examples of this.
The Federation, together with the other employer bodies, is in the process of resisting the hefty fees for implementing data protection registration of employers running into thousands of liri in some cases. The Health Ministry imposed fees for registration of pharmaceuticals that we have also contested.
"Now the same Health Ministry is imposing fees on food manufacturers for stamping export licences. Trading operations licences previously applicable to the retail sector have been extended to the manufacturing industry.
"Government is now sending invoices and gathers hundreds of liri from each manufacturing and service firm. The more rent one pays, the higher the bill for a trading licence. We now have a forewarning from the last Budget that environment taxes were on the way.
"Taxation in Malta has now reached the European average ratio to GDP, an average that is, in reality, pushed in the region of 42% by such high taxation countries as the Scandinavians, France and Germany.
"These are not the kind of decisions that this country should be taking if the economy is to rise again, if entrepreneurs are to be attracted to expand their operations or to open shop in Malta.
"The policy-makers cannot live in another dimension from the business world. Sometimes one wonders whether there are two worlds in this small country of ours, where the private sector does its own thing and where the public sector is left alone to behave as it thinks fit and to solve the nation's problems in its own way and in the manner it considers to be most convenient.
"This is not the real world; this is not the European Union of nations that we are aspiring to join in a month's time.
"The (FOI) was the main promoter of the first tripartite agreement that set up social dialogue in Malta. We have come a long way from a three-way confrontation barely 15 years ago to three-way dialogue and better relations and understanding of the problems on all sides.
"But dialogue without meaningful decisions will mean nothing. An agreement embracing economic and social issues seems to be finding favour with Government and the UHM that is calling it a Social Pact.
"We support the idea of taking social dialogue to the right conclusions that will enable the country to get back to its right senses. We do want to help create jobs. But we know that this can only come about if we manage to enhance our dwindling competitiveness.
That will make all the difference between winning or losing opportunities, of expanding further our manufacturing and service industry. We support initiatives in this sense from whichever direction they come.
"In our opinion such an agreement can be reached by consensus on what the reforms are to be to give the desired results. We have to agree how progress is to be monitored and the priorities to be fixed."
The FOI president concluded his address by stating that the FOI believes that the new prime minister, who was also present at the end of the conference, has all the determination to see this country prosper.
"We also believe that the Prime Minister wants to take immediate steps to get this country moving. Let us take action now! The reality is that Malta has to compete in the global market. EU membership helps! But we have to solve our own internal problems. We need to walk the walk... and avoid further talk.
"We must move together - Government, trade unions and employer organisations - on a national action plan that will be conducive to economic revival. No political gimmicks from either the party in power or the Opposition party can perform the miracles that will spare us some pain in the short term if we want to see long-term gains.
"I am sure that goodwill exists. Let us have the courage to move forward together for the good of industry, the country, our economy and our citizens."