Finance Minister Edward Scicluna hit the wrong note – not for the first time – when on the latest edition of Times Talk he called a set of export figures issued by the EU statistical agency Eurostat fake (fażul).
He argued that, as the survey only covered a sample of companies, it was therefore not representative of the whole sector. Although he later watered down his remark when he said that he meant the survey was flawed, his point of view still raised eyebrows by people in business and industry.
What, in fact, appears to be somewhat flawed are not the statistics but the minister’s assessment of the situation inmanufacturing. The issue arose when it was pointed out to the minister that exports had been falling.
Figures issued by both Eurostat and the National Statistics Office show a decline in exports but the finance minister contested the figures, arguing that if exports were falling as much as the figures showed, the country would have com-panies laying off people. In fact, he said, the sector had increased its workforce. In his view, the drop was due to depressed markets in Europe.
The Nationalist Party has been drawing attention to the decline in exports and to problems in manufacturing industry for quite some time now. The industry’s representative organisation too is expressing concern about the situation.
Giving its reaction to the minister’s remarks, the Chamber of Commerce, Enterprise and Industry said it was “dismayed by the fact that the minister appears to be downplaying the signals given by independent statistics” and its continuous calls to ensure that thenecessary fundamentals are in place to support industry through its present challenges and realities.
It is not often that the Chamber comes out using strong words against a government minister. The fact that it did soindicates that the situation does warrant greater attention than the government is giving it at present.
It has made it clear that it does not agree with the minister’s explanation that the reason for the decline in exports is a drop in external demand. In its view, the problem is declining competitiveness levels, due mainly to increased operating costs and improved competitiveness in certain overseas countries where the need to defend competitiveness has surpassed all other priorities.
The government may well argue that it will be greatly helping industry reduce unit costs when it cuts the energy tariffs in March. This will indeed help but, clearly, it is not enough. What other burdens can be eased in the bid to help boost exports?
Both gross value added and industrial production are down too. Eurostat figures for September showed that Malta was the worst performing EU country in industrial production.
According to Eurostat, industrial production dropped by 7.4 per cent, when the EU and eurozone average had improved. Are these figures flawed as well?
What exactly is happening in manufacturing? Is the drop restricted only to pharmaceutical products and computer, electronic and optical goods? What are the difficulties facing firms in these product lines?
What other sectors are reporting a drop in exports? Can they be helped in any way? The Chamber was right when it said that domestic demand alone could not be the engine of long-term sustainable economic growth.
While other sectors are making an important contribution to growth, it is also important to sustain and promote manufacturing in order to have a diversified economic base. Finding faults in statistics will not get the country anywhere.