Editorial

Just when the European Union's statistical agency came out saying a few days ago that the greater part of the rise in inflation in Malta was more attributable to an increase in the prices of food items than to that of fuel, the energy corporation raised the price of diesel. The rise came immediately after the expiry of the price stability agreements under which a number of firms had committed themselves not to increase prices in the first quarter of the changeover to the euro. Few would have thought a government corporation would be the first, at least publicly, anyway, to raise prices. But the move shows the stark reality of market forces and, in a way, the sheer impracticability of what Labour had proposed only up to a few weeks ago when in the election campaign they promised to halve the fuel surcharge irrespective of the price at which fuel was being bought. This was probably one of the most reckless proposals ever made by a political party, one that was slammed in no uncertain manner even by leading Labour lights operating outside party structures.

The rise in the price of diesel sent alarm bells ringing in quarters representing businesses using diesel as fuel in their operations, especially those struggling either to keep their heads above water or firms which, in view of other factors, such as, for example, the high value of the euro, are finding it more and more difficult to fend off competition. To these, it is of little consolation to be told, as they have been by the corporation, that except for four countries within the EU, the price of diesel in Malta was the cheapest than anywhere in the rest of the EU.

The rise could now also push operators running local services to pass it on to the consumer, strengthening further the fear that the extra cost-of-living wage allowance granted in the budget for this year has already been eaten away by the rise in commodities registered so far.

In the budget for this year, the government gave an extra allowance to make up for the expected rise in the prices of foodstuffs.

With inflation now touching the four per cent mark, the problem is bound to give headaches not just to the government but also to both manufacturing and services industries. Checking abuse naturally helps keep costs down but, other than this, operators would perhaps also need to work for greater efficiency and, in a number of cases, particularly in areas under government control, such as corporations, greater productivity.

Much is made, and rightly so, of the need to raise productivity but this does not always depend on the workers. Often enough, outdated work practices are blamed for low productivity. Make no mistake about it, such work practices still bedevil a number of places but sometimes the workers get all the blame for it when the evidence shows that part of it ought to be put at the door of the owners. Take the shipyards, renowned, for good reason, for inflexibility in work practices. One serious problem that few brought up until it was raised by the former chairman was lack of investment in the yard's infrastructure. Up to some time ago, the shipyard was still using some cable dating back to the war or even before. To drive the point home, the former chairman had also remarked that they had just replaced a 100-year-old air compressor. These shortcomings were now being corrected but the point is that responding to competitive pressures usually requires an all-round response to problems.

Now that Malta is in the European Union, we are getting increasingly more exposed to situations that call on the country to fall into line and, in some areas, to get our act together so that we can conform to norms or be better able to overcome difficulties.