Business representatives in Gozo often insist that double insularity places on them additional burdens when compared to their counterparts in Malta. They feel that this undeniable fact justifies their call for special action being taken by the government to stimulate demand of their goods and services.

The most recent list of demands was made in a breakfast meeting as part of the Budget 2012 consultation process. The Gozo Business Chamber and the Gozo Tourism Association defined as “positive discrimination” their wish list of mainly fiscal easing measures for their businesses. This, they believe, is the only way to overcome the sluggish growth being experienced in Gozo.

The government’s reaction to the demands is that the country has other more pressing priorities and that it was already taking substantial measures to support Gozo, including the assistance given to launch 80 Eco-Gozo proposals, which “together amounted to an investment of €25 million”. It was also implied that the government’s support for Air Malta, which, so far, has amounted to €60 million with a further €30-€40 million earmarked for next year, will indirectly support tourism in Gozo.

The more pressing demands of Gozo businesses are the “one-time concession to waive duty on property development” and public investment to “build new yacht marinas, berthing facilities for cruise liners and for a ship repair facility”. Some of the “incentives” requested, like the Gozo Channel special offers to entice domestic tourism, amount to little more than subsidies to prop up demand for services in Gozo. Others take the form of infrastructural investment to promote the supply of such services.

The Minister of Finance prefers to look at the bigger picture of public financial management and emphasises that the priorities of the government remain the increase of economic activity throughout the whole country, continued investment in education and fiscal prudence to aggravate the already critical debt burden. While not openly shooting down any particular proposal that the Gozo business representatives made, his message was that Gozo’s needs have to be seen in the context of what is happening in the whole economy generally.

An analysis of Gozo’s natural strengths and weaknesses will undoubtedly lead to a clear indication that tourism offers the best fit for the island’s economic ambitions. This industry has the big advantage that it generates substantial demand for labour that can easily be supplied in Gozo. However, Gozo also has a particular profile that limits its attraction to mass tourism in a much more significant way than is the case in Malta. The small size of Gozo, combined with its unique natural beauty, can be a unique selling point if the island markets itself well in the niche tourism market. While few tourism operators would deny this fact, many argue that the niche tourism strategy is still not well defined and even less well implemented. Marketing Gozo for mass tourism, whether local or foreign, will generate some much-needed short-term cash flow but it also prevents niche tourism, which is almost by definition exclusive, from making deep roots.

Until Gozo gets a well-defined tourism strategy supported by a commitment to invest public funds judiciously in the industry’s infrastructure, tourism operators will continue to struggle to fill up the accommodation available and to ensure sufficient demand for the ancillary tourism services that already exist.

More than positive discrimination, what Gozo needs is a well-defined economic policy focused on gradually replacing day-trip tourism with strong niche tourism.

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