Employers about to give up hope on port reform

Employers have almost given up hope that the much-anticipated port reforms will ever be concluded, Malta Employers Association president Pierre Fava told the association's annual general meeting.

He said that although there seemed to be consensus on the need for such reform to safeguard competitiveness, the will to forge ahead with its implementation was lacking.

Another source of frustration for employers, Mr Fava said, was the handling of the public holidays issue.

Following the International Labour Organisation's decision and months of negotiations between the social partners, the Employment and Relations Board failed to resolve the issue, even though employer bodies offered a sensible package for a solution and an agreement appeared to be in sight.

"What makes the situation worse is that such matters end up in the political arena, where blind opportunism prevails over economic logic.

"Can anyone seriously doubt the importance of increasing the number of productive days to maintain competitiveness and safeguard jobs?

"Is it just wishful thinking to expect that matters of national importance should be placed above short-sighted partisan politics," Mr Fava asked.

The only result of procrastination, he went on, was that Malta would be taken over by events instead of shaping such events to generate progress. This was why the MEA continuously pronounced itself in favour of the need for concrete action on matters such as pension reform. Delay was costly and should not be considered as an option.

A case in point where action led to immediate results was the introduction of low-cost carriers. After years of hesitation, the decision to allow Ryan Air to operate certain destinations was yielding positive results that would hopefully contribute to reverse the negative trend in tourism performance.

Mr Fava said that in spite of rigidities, the economy continued to transform itself at a rapid pace. Fiscal indicators reveal an improvement in the deficit situation which, combined with a modest inflation rate, should result in the adoption of the euro on the targeted date.

The real GDP growth of three per cent last year indicated an increase in economic activity that the MEA believe would be sustained, and ideally enhanced, this year. This was partly being achieved through controllable factors such as better management of government finances and a sustained reduction in public sector employment as well as through external developments, including the drop in oil prices last year.

The increasing current account balance, however, pointed to a vulnerability that needed to be addressed in order to achieve sustained economic growth, through improved export performance and foreign currency earnings.

The stable unemployment figures, combined with an increased labour force, reflected the diversified productive job opportunities that were being generated and which were absorbing employees made redundant in declining sectors of the economy. A point of concern was that, in spite of the substantial investment in education, many finished secondary education without basic literacy skills.

Employers were also being faced with a shortage of skills in many sectors and this was threatening to push up labour costs.

An increased demand for foreign employees was envisaged in the coming years, fuelled by the healthy and unprecedented surge in foreign direct investment, the realisation of projects such as SmartCity and the expansion of companies like Lufthansa Technik.

Mr Fava hoped such developments would further develop a positive brand image for Malta and establish it as a magnet for further investment through the combined and concerted efforts of all social partners. This, he said, should be the focus of social dialogue.