No, it’s not a printing mistake.
Economic poverty is being admirably tackled by the minister who will soon be elevated to the presidency of the Republic, intent on retaining the fight against such poverty and aided by such institutions as Caritas Malta.
It’s poverty in economics that astounds me and saddens me when I notice it in political circles. By way of illustration, here follow three examples recently put forward as indicative of “our economy daily losing its momentum”.
Drop in industrial production. No mention that this is being more than compensated for through increases in the production of services. In 2013, the GDP totalled €7186 million, up 4.4 per cent on 2012 (2.4 per cent in real terms) resulting from increases in the services sectors. The only drops occurred in manufacturing and construction, as expected, though not welcome. But to say that this phenomenon shows a slowdown in momentum betrays a paucity of economics knowledge.
Increase in unemployment.
No mention that the economy is generating additional jobs at a rate exceeding 400 every month, encouraging more females and pensioners to register with the ETC, thus expanding the labour supply, but also simultaneously resisting a corresponding drop in the number of unemployed.
This state of affairs is likely to continue until Malta’s labour participation rate approaches the European median.
Fall in retail trade.
Among the members in the EU, Malta’s economy is the least dependent on retail trade for its overall performance. While net incomes are rising, retail sales are dipping. This is partly the result of increases in relatively well-to-do pockets incentivised by the unwarranted, but politcally-motivated, reduction in income tax. Savings are also being encouraged, simultaneously swelling the banks with excess liquidity. Such a situation encourages the banks to desist from offering reasonable interest rates to depositors, while charging unduly high rates to borrowers, fattening their balance sheets.
No wonder that, finally, the economists’ conscience has been aroused and turned rebellious at the banks’ exorbitant charges, even with a hint of suspected collusion between them. And, yet, for instance, Bank of Valletta has hitherto failed to present a plan to dispense justice to the hundreds of smitten investors in its MMProperty Fund, a veritable fiasco if ever there was one.
This is to the embarrassment of the government, which had promised it in its electoral manifesto. While priding itself, justifiably, on its achievements throughout the year it has been in power, the government apparently cannot solve such a relatively small issue. I am reminded of my boyhood comic character ‘Have a Go, Joe a super-hero but who habitually failed in minor encounters.