The current difficult economic situation calls for action. Of course, we need to analyse where things are not functioning well and what is causing our current economic slowdown. We have to concentrate both on the short-term perspective as well as the long-term if we are to move out of the current recession fast.
I fear that we are still stuck in the analysis stage. We are risking paralysis by analysis. During the last few weeks business and political analysts received two very important documents that offered a diagnosis of the weakness of our economy, as well as a prognosis that should lead our political leaders to prescribe the right medicine for a fast recovery.
The first report was the IMF 2009 consultation document, the gist of which can be found in the concluding statement. This crisp 19-paragraph statement is written in simple plain language with very little technical jargon. The ideas expressed in it are crystal clear. The reader is left in no doubt as to what the IMF consultants are prescribing.
The second document is the Pre-Budget Document 2010 - Growth, Jobs and Social Cohesion. This was supplemented by another document entitled Benchmarking Malta's Competitiveness. These documents' merit is the depth of analysis that they contain on various aspects of our economy including the elements of our competitiveness, the labour market conditions, the impact on our economy of an aging population, the state of public finances, and the economic development of Gozo.
Where this latter document fails is in its lack of clarity on what strategies the government may be considering to stimulate the economy, create jobs, get public finances under control and preserve our social welfare system. It fails to challenge interested parties with ideas that may be controversial, but that could spark a healthy discussion on what is needed to preserve our common economic interests.
What should have been a spur for three-months of pre-budget brain storming has turned out to be a rather blunt instrument that is inadequate to dissect the different layers of opinion that exist on the way we can plan our economic future. It is a shame that both political and economic analysts, as well as the media, have given more importance to the pre-budget document than to the IMF report that has a razor-sharp edge.
One could argue that the government did not want to make the pre-budget document an instrument of controversy. In fact, it is written in an academic style that is thankfully bereft of irritating political rhetoric.
But we need not fear a civil debate on the way ahead on issues that we may not all agree on, but that ultimately will affect us all.
There is, for instance, irrefutable proof that our social services systems need to be reformed if they are to be sustainable in future. Doing nothing about this issue is not an option. Or rather, it is the worst option because it could mean that in a few years time these services will be diluted leaving the weakest in our society to fend for themselves.
The same applies to our educational system. Despite substantial public expenditure on education we are still scoring very badly in the league of its achievement. Pushing more students through the educational system is only a small part of the solution. Building new schools, refurbishing old ones, granting scholarships, and paying stipends are all worthwhile tactics.
However, the acid test of our educational system is whether it is making our young people more employable. I have seen little so far that proves the relevance of our educational curricula to twenty first century skills that are needed by the new knowledge economy we are aspiring to build.
In the absence of sufficiently clear direction in the pre-budget document one hopes that the political parties, trade unions, employers, academia and the media will kick-start a healthy discussion on what needs to be considered to help us define a plan of action to modernise our economy.
No government should ever outsource the thinking process that is so necessary for defining economic strategy. That is why we now need to move from the analysis stage to the action stage of defining our future.
johncassarwhite@yahoo.com