Aiming for perfection

Few are the Mediterranean and eurozone countries that are not facing an economic crisis. Even the Nether­lands, a country that had previously appeared to have weathered the storm, is finding itself in some difficulty.

Several economies in the EU are suffering from severe unemployment, high budget deficits and slow economic growth.

Malta does have its difficulties but the talk of the town seems not to be the economy but something else.

Yet, research consistently shows that although the Maltese mention issues such as the behaviour of some parliamentarians and water and electricity bills among the country’s problems, it’s the economy and employment that concerns them most in the long-term.

The (in)famous statement “It’s the economy stupid” is so relevant to us.

This does not mean that the Maltese feel that the economy is not performing well; there is official data to rest their minds.

It only means that they may fear that either our economy will eventually have to shrink as a consequence of the current international turmoil or that it will not continue growing at the same rate as it has done in the last 25 years.

I would only like to touch upon this second point.

A colleague of mine recently told me that our country’s strategy over the next five years is to aim for perfection, even though achieving perfection may prove to be impossible. I think he is right.

If we take stock of where we came from and where we have arrived, it should not take the intelligence of Galileo to recognise that the economy has done well.

It has created tens of thousands of jobs in the private sector. It has become a diversified economy.

The infrastructure has been modernised. Investment has boomed.

The tax system does not serve as a disincentive to work and ear income. Consumers have a choice whenever they wish to buy anything. So what does aiming for perfection really mean?

We have certainly come a long way but there is still a lot to be done. Here I would like to focus on four particular areas. I would like to start off with the social dimension.

No matter how much our economy grows, there will always be a segment of the population that will require state support for one reason or another.

This segment cannot be forgotten but, on the other hand, social welfare cannot prove to be a disincentive to work (as may be happening today).

Even when we speak of jobs, we need to keep in mind that there will always be a segment of the population that cannot be expected to do work of a high value-added content.

Thus job creation policies have to take this into account.

Another area is taxation. We probably do not need any drastic change in our taxation system.

However, we need to keep in mind that in some countries, the percentage of income that goes into tax is lower than ours. So some tweaking in that direction is required.

However, the key issue here is the elimination of tax evasion. This would allow for a reduction in taxation and an improvement in government spending.

The third area is attitudes and behaviour, an area where improvement is definitely required. Maybe one example typifies it all.

Whether we agree or not, our country is spending tens of millions of euros on the City Gate Project, which is expected to enhance the entrance to Valletta.

However, while walking out of Valletta, I noticed there was still a hawker selling shoes.

Unless we recognise that City Gate is the entrance to our capital city and not to a souk, we will never fully enjoy the respect of others and we certainly will not achieve perfection.

We need to cultivate a culture of abhorrence towards mediocrity.

The fourth area is regulation. While government reduced its role in the operation of the economy, it strengthened its role as regulator.

Mepa, the Malta Financial Services Authority, Transport Malta and the Malta Resources Authority are all examples of such regulatory bodies.

In many respects they have been doing a very good job. In some areas, they adopt the easy way out, preferring to stick by the book when common sense is dictating otherwise.

We cannot afford to lose real good opportunities for investment and job creation because the regulatory bodies are not up to scratch!

We should not be afraid to aim for perfection. It will continue to distinguish us from other countries. However, to achieve perfection, we need to pursue the common good.

We must have diversity but not divisiveness. We should not lower standards but we must help everyone raise his or her standards.