Part-time government

Is the current Administration engaged on a part-time basis, or what? This is the logical question to ask following a number of statements made by key government representatives.

The government pours self-praise on itself for landing the SmartCity project, which it links directly to its industrial policy, but then acts as if it has nothing to do with the closure of VF and the downsizing of other factories, which are also linked to the same policy.

The government gives the impression it is directly responsible for the increases in the Shipyards' order books, but then blames everyone - "from management to workers", in the minister's own words - but itself for the fact that the enterprise has not achieved its targets.

Government ministers give the impression they are the masterminds of cultural activities if they are a success, but then are quick to disclaim responsibility if something goes rotten, as in a recent case in Gozo.

The government claims it is pro-environment because it reverses its decision on the Xaghra l-Hamra, only to then decide to ruin another Hamra, this time the Ramla.

It seems to be the profile of an Administration which is engaged only part-time in managing our country.

May I just stop on the VF redundancies and the downsizing at Bortex. The government said that it will look into the possibility of tapping in the European Union Globalisation Adjustment Fund to part finance retraining programmes for these workers. It did so after both Labour and the General Workers' Union appealed that it makes such a move.

A proactive government would have done its homework long ago.

Was it not the minister responsible for the sector who staked a "bet" in public that all textile companies on the island would be closing down?

So the government cannot say it did not see it coming.

But there is a more fundamental problem. Not only is the government not helping the manufacturing industry with many of the decisions it is taking - read the utility surcharge being levied - but it does not believe that manufacturing has a future in the country.

They still see it, to paraphrase what Fr Peter Serracino Inglott wrote two decades ago, as some sort of "Marxist fixation" not worth the hassle.

The latest addition is the mantra that textiles - they refer to this particular sector but subconsciously they refer to basically all manufacturing industry - does not have a future in Malta since our wages have increased. Thus, it is a result of the success of the economy. It is obvious that globalisation facilitates the relocation of enterprises to places where they will incur lower costs, including those related to labour.

Nevertheless, limiting the argument to this factor - while omitting all other elements including government-induced costs and incentive packages - is at best simplistic, and at worst misleading.

If the argument put forward by the Nationalist Party and its lackeys is correct, then one would assume that the textile industry is absent from the manufacturing scenario of those countries which have higher wages than Malta.

The acid test is the facts and figures outlining the textile and garment sector in Europe.

According to Eurostat, the top five member states in terms of value added in the manufacture of textiles, clothing and leather products are Italy (€22,479 million), France (€8,247 million), Germany (€8,046 million), Spain (€6,695 million) and the United Kingdom (€6,481 million).

At the same time, the member states that employ most persons in this sector are Italy (757,500 workers), Poland (298,900 workers), Portugal (284,900 workers), Spain (279,600 workers) and France (227,400 workers).

All these member states, but one, have a minimum wage which is higher than the Maltese statutory minimum (€585): the United Kingdom (€1,361), France (€1,254) and Spain (€666).

In the case of Germany and Italy, which do not have a statutory minimum wage, official statistics show that the average earnings per hour in the manufacturing sector are €16.60 and €9.93 respectively. When extrapolated to a 40-hour week, this means that workers tend to earn an average monthly salary of €2,656 in Germany and €1,588 in Italy.

It is only in the case of Portugal (€437) and Poland (€234) that the minimum wage is lower than ours.

Acid test failed.

Thus, the argument that textiles in particular and manufacturing in general does not have a future in Malta because our wages are getting higher is simply a fallacy.

Instead of just crying that we are losing competitiveness because of our cost components, we need policies that help industry - even textiles and garments - explore new specialised sectors that are thriving elsewhere.

Mr Muscat is a Labour member of the European Parliament and vice president of the Economic and Monetary Affairs Committee.

www.josephmuscat.com