In whatever way one looks at the figures, it is very difficult not to arrive at the conclusion that Malta is enjoying one of its finest hours in terms of economic advancements. The various reports by international agencies have projected very positive views about Malta and it has been vindicated by the news that the fiscal deficit that has been with us for 35 years has come to an end. For a whole generation, the idea that public finance could be in surplus was unheard of.
Nowadays, modern society tries to put a value on almost everything and feels a need to measure how we perceive progress and development. While some are rather subjective and qualitative, based on personal experience and perspective, a need to have a common standard that is consistent across time and space is imperative. Thus, the emergence of official statistics that attempt to measure many things with some receiving constant attention by the media, policymakers, the political class and the public.
Such attention can be understood as official statistics shed light on what is happening around us, both as individuals and as a nation. They measure how our economy is doing, how public finances are managed and how job creation is evolving.
Like most of all other concepts devised by the human mind, statistics are not without faults. There are limitations and caveats as statistical estimates often give a partial view of reality. For example, the index which measures inflation gives only the change in prices of a typical household. Many other different households with differing income and expenditure patterns might experience a different rate of inflation but it does not mean the official measure is faulty. We just need to understand what a particular statistic is attempting to measure.
Trying to attribute characteristics to statistics beyond what they were intended for often gives the illusion that statistics can be interpreted to give contrasting conclusions. Hence, the saying that there are lies, damn lies and statistics. It is not statistics that lie but their casual and uneducated interpretation.
The National Office of Statistics regularly produces numerous estimates and indications that provide valuable information. These are occasionally supplemented by other figures produced by research agencies.
Beyond any interpretation of short-term changes, there is a very clear pattern that shows that our economy is doing exceptionally well.
Growth in the gross domestic product, a declining debt ratio, a deficit that has now turned into a surplus, record growth in employment and historically low levels of unemployment all point towards the same conclusion. Apart from these, Eurobarometer figures that attempt to measure consumer and business sentiments, among others, reinforce this conclusion. To those one can add the surveys produced by the local business community that, again, point towards an economic boom.
Obviously, there might be some groups within our population that are not as positive about what is going on because they might feel they are not benefitting enough. Again, the emphasis is on ‘not benefitting enough’ and very rarely on ‘losing out’ or ‘being worse off’.
While statistics do not necessarily give the whole picture, it is very difficult to argue against a pattern that is consistent both across time as well as supported by all available indicators. As Abraham Lincoln once said: “You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time.”
As one just cannot fool all the people all the time, statistics cannot be all wrong all the time.
Silvio Schembri, Labour Mp
Statistics do not come without their weaknesses. Although an efficient tool in the collection and processing of information, statistical data does not always reflect lived reality. Statistics may precisely describe situations but fail to interpret them meaningfully. Statistical information always requires decoding to arrive at facts.
While the picture they present can be technically correct, it is not necessarily factually correct. It may be legitimate to say that Malta’s economy is flourishing but the reading must be qualified: it is not growing equally across all sectors and only a part of the business community is enjoying the success. In a small economy, a one-off situation or a large order is enough to alter the readings of statistical data significantly. The seemingly eternal bubble has its limits too and it can burst. In fact, statistics form a base of historical information that does not determine the present, not least the future.
The current situation in the construction industry offers a good illustration of this. We can already observe shifts in this line of business even if none of the limits are imposed anymore. Smaller contractors or sub-contractors complain that, often, payments are received late. Moreover, there is a sharp rise in barter arrangements where such contractors are offered apartments in kind instead of payments when they can neither afford to keep them nor wait to resell them. This is not picked up by statistical measurements.
Equally worrying is the lack of data reflecting the challenges that commercial outlets are facing. Retailers and shopkeepers are presented with more difficulties as the trend has swiftly moved towards shopping malls. If that were not enough, another hurdle is the growing practice of late VAT refunds by the government, even if businesses incur a fine whenever they are late with their VAT payments.
This particular segment is part of the backbone of Malta’s economy, however, its activity is not taken up by statistics. Do we know what the real state of the sector is, how many businesses closed down and how many employees lost their jobs?
The general working environment itself goes undetected by statistical reports. This government has thrown the concept of a level playing field out of the window and caters only to the multiple pre-election agreements. Let the competition be fair and equal; allow the investors to fulfill their flair and creativity. Short-term gain will eventually translate into long-term pain but, again, statistics do not account for this.
The most reliable feel for the economic situation is lived reality both in terms of business and personal experience. A noticeable and troubling sign is that, today, one has to work more and harder to keep up the same level of income.
Quality of life is certainly not captured by statistical trends. Our towns and cities have changed drastically in the past few years and not necessarily for the better. Take Swieqi, for example, where the face of the locality has become practically unrecognisable in four short years. Apartment blocks are being built in virtually every street, noise levels are high, pollution is heavy, roads and pavements have been left in a state of hopelessness and there is no proper street lighting. This is the price that residents have to pay for lack of sound planning and, yet, it has absolutely no weight in any statistical figures.
The real test of economic performance is in the standard of living and not in statistics. While the government constantly boasts about reports showing an economy that is growing on paper, the quality of life has deteriorated greatly.
Unless the economy improves the standard of living any talk of growth remains only political spin.
Robert Arrigo, Pn Spokesman For Small Businesses