Oh what a circus
"Oh what a circus, oh what a show!" This line came to mind given the hullabaloo taking place in the Malta Council for Economic and Social Development, our country, over a few days of leave. This at a time when our community should be undergoing surgery and not struggling hard to swallow an aspirin.
Undoubtedly, the government is a victim of its own spin; that the economy is on the way to recovery, that soon our workers will be enjoying the pay and conditions of their counterparts in the European Union and so forth.
The most troubling factor is that our leaders do not seem to understand and much less have the necessary commitment to take the economy forward. Lino Spiteri (January 24) was very explicit when he took the government to task for giving the impression that the reduction of a few days leave or public holidays will "guarantee economic growth". And, I would add, that it will fail miserably in restoring the competitiveness of our economy. I wonder who are those economists who are giving this sort of advice to the government.
And I ponder as to why the employers' associations do not want to budge over this issue. Is this now a matter of pique or some sort of symbolic victory? They should come clean and tell the general public which enterprises, and how, will benefit from such a measure. Otherwise, we could have a repeat experience of what happened in 1992 when the Nationalist government decided to devalue the lira.
No, Mr Prime Minister a few holidays fewer will not do the trick. At best, it may slow down the bleeding. Competitiveness is not just about a few months of rising imports or decreasing unemployment. Competitiveness is about all that which affects and enables each one of us, our enterprises, our country to earn a living. Today and tomorrow.
Neither are the measures proposed in this year's budget sufficient. We are at the end of the street. Four consecutive years of no real economic growth is proof enough.
We now need to leave behind us the street that served us quite well in the last four decades or so. Now it is about time that we move onto the highway. Our economy still has all the traits of a developing one. Just joining the EU will not change that. Our cost structures do not permit us to play the "low cost" game anymore.
If we are to compete less with the developing world and more with the developed one then we have to understand the dynamics of the evolving global economy and determine where best to position ourselves. In manufacturing, tourism, finance and insurance, shipping and film-making, among others. This in a coherent, synergistic way and not piecemeal. Formulating a competitiveness strategy is similar to composing a piece of music where all the sounds resonate and are in harmony with each other.
And while it is important to keep in mind what the World Economic Forum and similar organisations have to say about competitiveness, we should never forget that Malta has very particular characteristics - size, location, phase of development, being an island - that impact on the sort of competitiveness path that our country can follow.
Ultimately, of course, it all comes down to a question of technology and human capital. Over the last four centuries, technology (comprising both technical and marketing know-how) has been the primary driver of value creation, increased productivity and economic growth. Knowledge which, as we all are aware, has become the backbone of the economy, does not exist in a vacuum. We need to assess how Malta is obtaining, absorbing, adapting, developing its technology. What has happened to the national research and development audit and the technology foresight exercise which the Malta Council for Science and Technology was carrying out? Competitiveness demands that we work "smarter" and not for less pay.
Our country, in particular, cannot afford not to seriously address the dichotomy between our economic development requirements and the education system. This has been said at least since the late 1980s. Representatives of the business community were nominated on the university senate and other key educational bodies. It is about time we seriously ask ourselves what went wrong.
There are a lot of questions and considerations that need to be addressed if our economy is to move forward. Malta needs a national, not just a social pact entrenched in a serious strategic plan. Failure to act will cost us dearly.
The circus could, just like in the song, be a funeral.