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From vulnerability to empowerment

A recent leader on The Times entitled Gozo: The Limitations Of Size And Geography (July 11) betrays a vulnerability mindset that is bedevilling the economic development of our sister island. It juxtapositions Gozo’s “attractiveness” against increased economic activity. Gozo needs better and not increased governance.

One thing is for sure: the Gozitan economy is stagnant. In 2009, Gozo’s GDP per capita was €10,600 compared to Malta’s €14,117. Gozo was one out of only three EU regions whose Purchasing Power Standard fell in the period 2000-2008. Considered a NUTS 3 level region, Gozo is not directly eligible for EU funds. It gets a 10 per cent share of the EU funds allocated to Malta.

It is a pity that, except for those statistics required by the EU, there is still a dire lack of adequate data for Gozo. From what is available, it results that employment in Gozo is concentrated in the public sector, agriculture and the construction industry. Tourism on the island is suffering as it has missed out on the traffic generated by low-cost airlines. Manufacturing continues to dwindle and accounts for less than five per cent of employment. Malta’s star performers, online gaming and financial services, are absent in Gozo. Foreign direct investment in Gozo has evaporated and, in 2009, stood at a mere €1.3 million. Some 1,400 Gozitans are obliged to commute daily to Malta for work purposes. Of these, 1,000 are employed with the government. A further 1,000 Gozitans study at the University or the Malta College of Arts, Science and Technology. The present trend is for them to take up residence in Malta, with their parents visiting them over the weekend. Gozitans fear that unless this situation is urgently addressed, Gozo will soon become a glorified old-people’s home.

Gozo is often presented as being a mere microcosm of Malta, suffering from “double-everything peripherality, smallness, vulnerability. Such thinking will get Gozo nowhere. A prosperous future for Gozo has to start from a changed mentality. It is up to the Gozitans themselves to define the sort of future they aspire for themselves and their children. The younger generations need to be given a voice. And how about the Gozitans living overseas? Being a Gozitan is more than having a Gozo address on the identity card.

It is unfortunate that there are no separate demographic projections for Gozo. In 2009, the island had a population of 31,295 (eight per cent of our total population). Fertility rates are falling and the population is aging at a faster rate than the rest of Malta. Gozo’s labour force amounts to 11,900, of whom 6,481 work in the private sector and 965 (eight per cent) are unemployed.

In shaping the future of their charming island, Gozitans need to think outside the box. They should resist one-size-fits-all, or cut-and-paste, solutions.

The Nationalist government, as part of its Vision 2015, first thought of having Gozo as a centre of excellence. When American Angelou Economics were asked to put some sense into the strategic process, Gozo became a sort of “afterthought”, an appendix to the master exercise.

Vision 2015 states: “While many of the target industries can apply to Gozo, some are especially suitable for the island”. Eco-Gozo promised much better. At least, its point of departure was Gozo itself. It is a pity that, for some mysterious reason, the full study was never published. Unfortunately, Eco-Gozo has been reduced to a cleaning and embellishment programme. Surely Gozo deserves much better than this.

Gozo cannot build its future on what it is not or that which it does not have. Luckily, today we are living in an age where resources are created and not inherited. What matters in modern business is competitive advantage and not comparative advantage. Competitive advantage starts with good strategic planning and is not dependent on just more subsidies and greater incentives. Gozo has ample resources: beauty, history, creativity, exoticness, the sea. Even peripherality, if properly exploited, can become a strength. Gozitans are renowned for their work ethic and entrepreneurship.

Better governance is needed to ensure that Gozo is able to fulfil its own vision. A strategy is only as good as to how it gets implemented. This requires ownership by the community involved and the political will to make it happen. Having a small labour force should not be a crippling factor, provided that the strategic thrust is on niche rather than mass activities, on “economies of scope” rather than “economies of scale”. For example, tourism in Gozo is overdependent on day-trippers and then there is talk about becoming a cruise destination.

Gozitans also have to learn to work together while competing among themselves and the rest of the world. Gozo’s worst enemy is fragmentation: trying to do too many things. Higher value results from specialisation and proper marketing. Gozo has much of what it takes for economic success but its offers have to be “repackaged” and developed to fit with its strategic direction.

The final objective is to generate enough wealth and job opportunities to support Gozo’s way of life. Gozo has to build itself into a brand supported by the authenticity of its product and by reputation. If it has to be Eco-Gozo, so be it. But this should not be an empty slogan or about the cleaning of valleys. It has to be an inspiration that guides public and private decision-making.

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