The Prime Minister recently announced that government economists are looking into what he defined as “strange statistics” relating to July’s inflation rate (The Times, September 17). Coming from the Prime Minister himself this is rather bizarre. While at it, these economists would do well to also look into the 20,000 jobs GonziPN claims to have created since the 2008 election.
Politicians (and economists) may play with statistics but families go by the purchasing power of their income- Joseph Vella Bonnici
Three months ago, the Governor of the Central Bank spoke about “statistical fuzziness”, indicating that “The Central Bank is studying the statistics and will seek further clarification from the NSO” (The Sunday Times, June 10). To date, no explanations have been given. If these authorities constantly doubt data which the Government itself prepares, who can blame the rest of us who are sceptical about local statistics?
The Opposition continues to accuse the Government of consistently meddling with data (Eurostat permitting) to suit its own agenda. This seems to be particularly the case with regard to the Government’s financial reporting. It is very rich of our Minister of Finance to criticise the Opposition for misleading the people. He alleges that the “Opposition’s misinformation campaign put investment at risk” (The Times, September 15).
If the honourable minister wishes to know what scares investors, he should have a good look at the 2012-2013 Competitiveness Report prepared by the World Economic Forum.
The Malta executive opinion survey finds that one in five entrepreneurs consider inefficient government bureaucracy as the major problem for doing business in our country. The report’s findings condemn Malta for the “burden of government regulation” on enterprise, placing our country in 104th position (out of 144 countries).
Another shameful ranking relates to “favouritism by government officials”, where Malta features in the 76th position.
These ratings reflect on the poverty of local governance, which is worse than that found in many underdeveloped societies.
Malta is among the 35 “innovation driven” economies on the strength of its GDP per capita ($21,028) and not because of its “innovativeness”, as claimed by the Ministry of Finance.
Malta ranks 48th in terms of its general innovation orientation and only 70th with regard to its “general capacity for innovation”.
These benchmarks should get the Ministry of Finance thinking how to improve the competitiveness of our economy rather than merely play politics.
It is very unhealthy for a country to have a GDP per capita much higher than its overall competitiveness ranking as this raises doubt on its capability to sustain that level of economic activity.
Still, our Ministry of Finance was quick to welcome the report, boasting that it is a ‘”positive certificate” for Malta, given that we moved up four places to 47th position in the overall ranking.
What the ministry conveniently failed to explain is that, had the same countries been surveyed as in the 2011-2012 report, Malta’s position would have remained unchanged (page 13).
It is true that Malta scores satisfactorily on a small number of indicators: the quality of the education system (16th), financial market development (15th), the number of fixed telephone lines (8th) and port infrastructure (15th). But this is, unfortunately, where the good news ends; Malta obtains a disappointing rating for many of the remaining indicators (over 100 in total).
Malta has a Third World classification (a ranking, say, above 80th position) when it comes to government debt (116th) and gross national savings (127th). It would be appropriate for the Ministry of Finance to comment on these ratings, which confirm that both the Government and households have been spending much more than they can afford. If restaurants are full over the weekend, it is because we are living for the day and are no longer saving. There was a time when Malta had one of the highest propensities to save in the world.
Other worrying indicators arising from our country’s unduly high placing include: quality of roads (105th), quality of electricity supply (72nd), the level of women in the workforce (123rd) and labour market rigidities (92nd).
Many of our enterprises too need to shape up as they get unacceptable scores for customer orientation (79th), willingness to delegate (81st) and the efficacy of corporate boards (84th).
The Government keeps telling us how lucky we are that, under its stewardship, Malta is not in the same economic situation as Greece. But why not benchmark Malta, say, with Singapore, an ex-British naval base?
Lee Kuan Yew, Singapore’s first Prime Minister, visited Malta in the 1970s to better understand what was driving our impressive growth rates. Today, Singapore has a GDP per capita twice ours. It once again ranks second in the latest competitiveness report (behind Switzerland).
The report notes that Singapore’s high placing is “a result of an outstanding performance across the entire index” and features in the top three countries in seven of the report’s 12 pillars. Perhaps it is about time that a Maltese Prime Minister visits Singapore.
If the WEF report is to be of any use to our society, it should guide the preparation of serious action plans meant to address the concerns raised. Competitiveness is not gauged through big, empty political talk. The Maltese people know pretty well the state of the economy for they live it every day.
Politicians (and economists) may play with statistics but families go by the purchasing power of their income.
fms18@onvol.net