This country must remain competitive

As illegal immigrants risk their lives crossing the Mediterranean on rickety boats in their frantic efforts to seek better lives in Europe, thousands of young people from a string of European states hit by financial crises head towards Latin American countries for exactly the same aim. This is one of the starkest ironies of contemporary history that presents contradictory facets of life and development that are sometimes hard to understand in today’s technological age.

Those that are fleeing sub-Sahara Africa are prepared to spend up to their last cent to fulfil their dream – for them and for their children. They also appear to take no account of any risk to their life or any temporary sacrifice to reach their goal. In sharp contrast, the young Europeans seeking new pastures away from their own country may not have experienced any of the hardships of those risking their lives to cross over to Europe but they are in a distressing situation as well. Many of them are graduates but have been out of work for so long that they see emigration as their only hope of ever fulfilling their dream. They are mainly from Spain, Portugal and Ireland. What this means is that, in the long term, their countries are losing precious talent that can be put to good use when their economies recover from the current downturns. Job statistics can sometimes camouflage the size of the problem as one tends to concentrate on percentages.

Take the latest batch of unemployment statistics from Eurostat, for instance. The agency said that the jobless figure in the eurozone hit a 15-year high of 10.8 per cent in February, up from 10.7 per cent over the previous month. It is only when the percentage is translated into the actual figure that the size of the problem can really be assessed. The 10.8 per cent works out at a staggering 17.1 million and the rise is of 1.48 million over the same month last year.

Taking the European Union as a whole, the unemployment figure comes to 24.55 million. What is particularly striking is that the eurozone’s unemployment rate has risen for 10 consecutive months.

Malta’s jobless rate has risen too but it is still far lower than that in other EU countries. In Malta’s case, what is worrying is that the highest unemployment figure is for those aged 25 years and under.

With the kind of austerity measures being taken by a number of countries in their efforts to bring their government’s finances under control, the way ahead is bound to get a bit bumpier before it can get any better. In fact, according to Eurostat, the outlook does not look all that promising. This is what it said: “With the eurozone likely having suffered a further GDP decline in the first quarter of 2012 and in danger of further contraction in the second quarter, and with business confidence still generally weak despite largely coming off the lows at the end of 2011, the likelihood is that the eurozone unemployment rate will move significantly higher.”

Earlier this year, the European Commission slashed Malta’s economic growth forecast for this year from 1.3 per cent to one per cent and, earlier this month, Ernst and Young reduced it a bit further, to 0.9 per cent.

Against the uncertain background presented by the economies of countries taking austerity measures, Malta must ensure that it does not take any foolish measures that could escalate costs and make exports and tourism uncompetitive.