Self-help mode

Economic might is the modern, all-powerful phenomenon. All countries are at each other's mercy with globalisation; the most resourceful, industrious and competitive states normally succeed in gaining a cutting edge over competitors. The mobility of capital has opened new niches for a number of countries; it has also been conducive to the mobility of labour.

While enterprising people are benefiting from this economic development, it is crystal-clear that many countries, sometimes even industrialised ones, are finding it hard to compete in this new environment. At times, it appears debatable whether long-established states can maintain their welfare systems.

The performance of developing countries has declined in the prevalent economic situation. Some appear to be unable to look for new opportunities to exploit their latent physical and human resources. Instead, they tend to rely on foreign capital to kick-start their economies.

In this way, though not benefiting from profits made in their domestic economy, countries with an inflow of foreign direct investment may create work opportunities for the otherwise unemployed army of workers. However, to overcome national deficits and trade imbalances, some countries are reducing the social net of the welfare state by introducing new ceilings to save on benefit payments and restrict the country's expenditure flow.

It makes sense that developing states attempt to lower their expenditure to balance their budgets; but the problem is that advanced countries are also conscious of the growing unsustainability of their welfare programmes. It is a situation that makes people ponder on how much the state can look after the individual on reaching retirement age. In fact many countries, experiencing longer lifespans, are taking steps to postpone the retirement age.

There are instances when pension levels, in real terms, have actually declined. Active measures have also been taken in many European countries that have already raised the pensionable age or are in the process of doing so. This despite the fact that employees have spent all their working lives paying national insurance contributions.

Many pensioners are already feeling the pinch. They are enduring hardship simply because their pension is not enough to cope with the rising cost of living. The irony is that there have been wage and salary adjustments but none for pensions.

Though Malta is meeting the globalisation challenge and is able to attract foreign direct investment, pensions are deemed to be unsustainable. Those dependent on a social services pension have had their pension capped for about 25 years. According to Government that ceiling will only change in 15 years' time.

Apparently, greater economic activity is not enough to generate enough wealth to make up for equitable pension adjustments that take account of the real values that have taken place in wages and salaries in relation to pension rights. Government has already announced its intention to increase the pensionable age and is creating other adjustments to ensure that the upcoming generation will get their pension entitlement.

More than a decade has passed since the unsustainability of pensions was first broached; yet no tangible results have been achieved. There is complete disagreement between the major parties about pensions. It seems that one just cannot rely on politicians to rectify an injustice and ensure that the present standard of living and quality of life are maintained in the near future.

The next best option that pensioners and the rising generations can follow is to adopt the self-help mode. People should be less concerned about the many political promises that are continually made but hardly kept. Instead of relying on politicians' best intentions one should think of what one could do for oneself.

In their book The Social Agenda of the Catholic Church, the editors, Robert Sirico and Maciej Zieba, quote Pope John Paul II's 1984 encyclical Sollicitudo Rei Socialis: "It should be noted that in today's world, among other rights, the right of economic initiative is often suppressed. Yet it is a right which is important not only for the individual but also for the common good. Experience shows us that the denial of this right or its limitation in the name of an alleged 'equality' of every one in society, diminishes, or, in practice, absolutely destroys the spirit of initiative, that is to say, the creative subjectivity of the citizen.

"As a consequence, there arises, not so much a true equality as a 'levelling down'. In the place of creative initiative there appear passivity, dependence and submission to the bureaucratic apparatus which, as the only 'ordering' and decision-making' body - if not also the 'owner' - of the entire totality of goods and the means of production, puts everyone in a position of almost absolute dependence, which is similar to the traditional dependence of the worker-proletarian in capitalism."

It should not be implied that in Malta initiative and creativity in economic activities are stifled. Undeniably, however, there is a dependence syndrome among the people who expect that the state should provide everything. This culture should be resisted and everyone should examine what a person can do to move forward in life. Indeed, there are many ways to take up in order to create an atmosphere of self-reliance.

When all education barriers have been removed, it is advisable that people, particularly those raising a family, should invest in education to discover the family's potential and latent powers. Education is the route to discover many possibilities and opportunities. It will certainly help to augment the earning capacity either in paid employment or setting up any type of business enterprise.

Another option is to keep long-term considerations in mind. Expenditures should only be incurred as long as they contribute to maintain a healthy body, increase personal knowledge and expand earning possibilities. The implication is that consistent savings should be targeted for retirement so that state's pension dependence will be minimised.

More savings can ensue either with increased income or else by controlling consumption. A better combination will result if both approaches are applied. Measures must be taken not to let one's savings decline in their value because of inflationary tendencies.

There are many options. Investment in health insurance will be one of them. But the cost of health care is always going up and provision for this eventuality must be made. Savings can be invested in other ways that unearned income will increase. If one is not averse to risk, one could start a small business outlet, set up import/export agencies, provide accommodation for tourists, enter into partnerships with established business firms, and resort to other ideas that can be feasible to undertake.

If direct business involvement is excluded, one could invest in companies listed on the Malta Stock Exchange. Some companies that are doing well; others have never exceeded the price of the initial offering. Obviously, the best bet is to choose the successful ones.

Today many people have the required expertise in the financial services field and they can provide advice. With the Internet, overseas stock exchanges are also accessible to everyone. Stockbrokers can help lay persons. Savers can also consult the Internet and examine the trend overseas companies are taking to ensure that one's savings are not invested in companies whose future is not so good.

The individual person is not so helpless. One can see what can be done for oneself. Less reliance on other people's good intentions and more self-help will tend to offer a better option for one's retirement in this globalised world.