Common thread in business leaders’ views

A common thread runs through practically all the opinions expressed by business leaders about how Malta should face up to the impact of the recession, which many are expecting to hit Europe this year.

Some are clearer than others in their views but they agree that one of the best ways to cushion the impact of an economic slowdown and to lay the ground for further economic growth is to bring about greater competitiveness, a matter that is rarely out of the business world’s radar screen.

Yet, few appear to be ever satisfied at the level of progress made, as shown by the complaints often made either by the organisations representing particular sectors or by specific firms.

Quite understandably, employers do not miss an opportunity to stress the importance of competitiveness; their businesses – and the jobs of their workers – depend on it. The director general of the Malta Employers’ Association, Joe Farrugia, was quite to the point when he said that the people’s aspirations could only be realised if the country were productive and competitive.

Figures given in a public consultation document dealing with the island’s national reform programme show that labour productivity had experienced only a moderate growth over the decade to 2009 and actually declined relative to the EU average. In 2000, Malta’s labour productivity had almost reached the EU average but by 2009 this had declined to about 88 per cent.

How is Malta faring now? Has productivity continued to decline or is it improving?

Mr Farrugia had words of wisdom when he said: “Job retention, and, more importantly, job creation depend heavily on competitiveness and social partners should be unified in their efforts to make Malta a safe haven to invest based on the stability of our financial services sector, stable industrial relations and an infrastructure that is business friendly”.

The chief executive officer of HSBC in Malta, Mark Watkinson, feels that Malta has to address structural issues that are hindering the economy’s international competitiveness and adopt more productivity-enhancing measures.

At least three of the business leaders also feel that contingency plans ought to be drawn up to meet any possible adverse effect of a new recession or to tackle the situation in the event that the economy does not expand at the rate expected.

The government acted quickly when the 2008-2009 recession hit a number of export-oriented firms. It wisely helped them to ride the storm and, as a result, managed to save hundreds of jobs. But it would seem that it is taking longer than expected for the country to tackle long-running problems.

The best place where the social partners can contribute towards the drawing up of contingency plans is the Malta Council for Economic and Social Development. In the opinion of the Chamber of Commerce, Enterprise and Industry, for example, social partners must unite and work towards common positions with the aim of safeguarding the island’s competitiveness and attractiveness to investors.

Greater unity will be achieved if the council allows the participation in its fold of the new trade union confederation, Forum. There should be no further dragging of feet over this issue. The council ought to be a dynamic body where the social partners come up with ideas on how to solve current problems and, even more importantly, to foresee possible difficulties. It needs to make its presence felt more strongly and it also ought to have much better communications with the public than it has at present.