A very strange spring

A mother phoned me up, upset that her daughter, who will be graduating in a few weeks' time, has ended up without a job after being promised four years ago that the Health Department needs her and her fellow graduates and would be employing them for at least the first two years. But now they are being told to register as unemployed. They asked an obvious question: what has changed since four years ago? The answer they got was: "Government has no money. You know what situation the country is in!"

A lot has changed in Malta... since the last general election! After being promised so many goodies during the 2003 election campaign, Government is now working on its budget for 2005, and there is talk that it has to cut its spending by another Lm20 million after cutting by more millions its expenditure for 2004.

The Nationalist Party filled the country with great expectations before the general election. But since then we have been told repeatedly to trim our great expectations. We all remember an election billboard telling us that the country's finances are on a sound footing. We are now told to forget that reassuring message as Government is admitting that its expenditure has run out of control, the structural deficit and public debt have continued to soar and that there is not enough money to finance government's initiatives to sustain let alone improve our quality of life in the future.

During the election campaign the Nationalist Party in government decided not to publish any official statistics showing how the deficit and public debt were climbing. At the same time all the speakers at the mass meetings were saying how Government was on track to control the deficit and public debt and the targets were being met comfortably.

As the Nationalist Party celebrated its April general elections victory we were told that a new spring is upon us. It has since turned out to be a very strange wintry spring where the trees started shedding their leaves and branches, and the only new shoots are items of bad news.

To make the situation more "alarming" (the word used by Health Minister Louis Deguara after the general election to emphasise that the present publicly financed health service is unaffordable) our economy remains in dire straits. In the long run only strong economic growth can sustain prosperity and a high quality of life.

For some years irresponsible governance run on a "money no problem" philosophy can create an artificial bubble where people feel good and are lulled into not bothering that they - and their country - are living beyond their means.

Where are the new jobs coming from?

But ultimately economic fundamentals take over and when they do, no amount of spinning and image management can transform the ugly reality created by irresponsible management of the country's finances, poor governance and the lack of a healthy business environment that attracts new foreign direct investment.

Is there any serious commitment by government to improve its management of public finances? Is there any sign of a new energy in a government exhausted by office fatigue? What steps are being taken to bring about a much-needed economic recovery?

The plain fact is that this recovery cannot rain down on us like manna from heaven. We need a serious reform strategy to relaunch development and improve national competitiveness.

Till 18 months ago we were guaranteed that solutions to all our problems would rain down on us from heaven like manna. We were guaranteed that joining the European Union (EU) would be like reaching the Promised Land flowing with milk and honey.

But a serious reading of the Bible shows that not even God guaranteed freely flowing milk and honey in the Promised Land. In fact, a short time after the Jews entered the Promised Land, the Lord sent them an angel to warn them of the disasters ahead if they did not behave in the right way.

EU membership does not guarantee freely flowing milk and honey. EU membership does not suspend the laws of economics. We have to work for our living.

The EU and the rest of the world do not owe us a living. We have to run the country well. The EU will not do it for us.

Simply conforming to EU membership obligations will not guarantee us stronger economic growth for a better quality of life. We have to perform better than we have done so far in governing this country if we are to make the best of EU membership and improve our quality of life.

EU membership is no soft option. We have to manage stronger economic growth without the policy instruments we have had so far in attracting tourists, manufacturing companies, and financial business to Malta. We have to ensure new and stronger economic growth without tax holidays and other fiscal incentives and state aid not permitted by EU membership rules.

Lots of praise is being heaped on the National Action Plan for Employment. But the plan fails to address the most important question that determines the generation of jobs: what is government doing to create the right business environment to attract new investment and to keep existing investment in Malta and Gozo?

evaristbartolo@hotmail.com