Unsustainable electoral promises threaten Malta’s economy – Chamber

The biggest threat to Malta’s economic well-being comes from compromising the country’s competitiveness through “unsustainable electoral promises”, according to Tancred Tabone, the president of the Chamber of Commerce, Industry and Enterprise.

The Chamber has always been an active contributor to social dialogue

Interviewed by The Times Business, Mr Tabone said: “We believe that, at present, the biggest threat to our economic well-being is the prospect of compromising our competiveness with unsustainable electoral promises. Through collective and wise decision taking – with competitiveness in mind – the Maltese economy has performed positively, even at the height of the global financial crisis.

“As President of the Malta Chamber, I must call upon our political leaders to continue to act responsibly, even during periods of electoral campaigning and, above all, to treat the safeguarding of national competitiveness as a matter of highest priority. Our past achievements in competitiveness were hard-earned through effective social dialogue and through the collective efforts of our workers and entrepreneurs. Politicians must not compromise the interests of our workers and entrepreneurs – the latter risk their capital to provide jobs and a decent living for over two-thirds of our working population.”

Mr Tabone said the Maltese economy is performing comparatively well notwithstanding the renewed uncertainty across the euro area.

“On the basis of key indicators, including unemployment and last year’s GDP figures, the Maltese economy outperformed most other EU member states,” he said.

“Indeed, our economic performance has been recognised by the IMF Executive Board in its recent report stating that the economy has continued to perform well amidst considerable turbulence in the euro area”.

Mr Tabone stressed that Karen Ward, a London-based HSBC economist recently warned that the eurozone crisis was actually close to its beginning, rather than the end.

“However, she stated that Malta has been successful in dealing with the downturn and the island had the potential to be one of the outperformers in Europe. She also highlighted Malta’s vulnerability to the uncertain conditions prevailing globally. Indeed, experience has shown that Malta is certainly not immune to turbulence affecting our trading partner countries.”

Mr Tabone said the Malta Chamber has always been an active contributor to social dialogue and highlighted that it has and continues to dedicate “precious time and resources” to the MCESD because it firmly believes in the importance of such dialogue.

“Over the past months, the Malta Chamber has defended the Council’s current formula not because it wants a status quo but because the formula has been a successful one. Such success should not be taken for granted. Decisions of the composition of MCESD need to ensure balance between obtaining wide representative views of all sectors while, at the same time, maintaining a manageable environment for discussion,” he said.

The Chamber president said social dialogue must remain effective, and the widening of the MCESD cannot be treated lightly and should be the result of a clear process of analysis in terms of impact.

“The Malta Chamber was grossly disappointed by the manner in which the widening of the MCESD took place. In our view, a better engagement of the current social partners was required. What is however more worrying is that the opposition spokesperson for social dialogue has now been quoted as saying that a change in government would lead to a further enlargement of MCESD – and this without any reference to any kind of consultation with the current social partners.”

Mr Tabone urged the government and opposition to afford social dialogue and the MCESD the respect and attention it deserves because this is one of the main defenders of the nation’s competitiveness and a stalwart of long-term, socio-economic stability in the country.

He said that as president of the Malta Chamber, he felt duty bound to emphasise that working conditions must not be reduced “to a political football”.

He added: “Our country needs to ensure it is able to provide a workforce with the right skills, competitive salaries and working practices. If our economic well-being is to prevail, we must ensure that such factors are firmly in place.”

Mr Tabone said the term “precarious work” has been “over-used and abused” and that it was time to put things into perspective.

“As long as an employer operates according to the laws of the country and remunerates its employees accordingly, any accusation of exploiting workers would be totally unfounded. Working conditions that include flexible hours, performance bonuses or definite contracts are positive in that they safeguard employment and reward good performance. What is truly deplorable is the employment of people in breach of the law, the deprivation of flexibility or fundamental rights, including freedom of association, or employment under conditions that are, nowadays, no longer acceptable,” he said.

He said the Chamber had worked actively within an MCESD working group to agree on a revised COLA formula which includes an element of productivity to safeguard competitiveness.

“Nevertheless, we still await the implementation of this revised formula on which consensus at MCESD has long been reached.”

He added: “Another MCESD working group we were involved in last year studied family friendly measures. This concluded that maternity leave was not the most efficient measure to attract mothers to the workforce. The same conclusion was reached by an earlier, scientific study commissioned by the Malta Business Bureau. Yet this repeated advice was ignored and maternity leave was extended at the last Budget. This, in the context of the opposition’s stand in favour of even longer maternity leave.”

Mr Tabone appealed to Malta’s political leaders, on behalf of the business community, “to act in due regard of our nation’s competitiveness because it is only through our competitiveness that our country can continue to thrive, grow and generate prosperity for our people.”