The prolonged and intense summer heat of the past weeks has probably contributed a great deal to reducing the sense of urgency and purpose in people to get on with their work. A sense of aimlessness has sometimes crept in giving the impression that not much is happening. It is probably perfectly understandable given the circumstances; but at times, this leads us to miss out on certain bits of foreign news that are in themselves quite interesting and also contribute to understanding what is happening in this country.

Assiduous readers of The Economist know that the last three pages (excluding the cover) contain macro-economic data on the more developed countries and the leading emerging economies. The latest data on some of the countries makes very interesting reading, mainly because it shows that countries that have been hitherto seen as models for Malta are themselves experiencing the pinch of the international economic slowdown.

This should be proof enough that the current recession that has hit the world's leading economies has had a negative impact on Malta to a greater extent than we very often think.

For example, unemployment has risen in all the most advanced economies except Britain and Japan, when compared to a year ago. Industrial production has dropped in every country except Britain, Japan, Spain and Switzerland. Economic growth in general has been at best sluggish with all countries expecting to finish off the year no better off than when they started it, and in many cases they will be worse off.

The forecasts for 2004 are only slightly better; but so was 2003 expected to be better than 2002. And it has not been so. Any revisions in forecasts have only been pointing in one direction - downwards.

Possibly for us in Malta, one figure tends to say it all. The latest data on the gross domestic product for Switzerland shows zero growth, and there is a slight negative growth expected for the whole of 2003. What also emerges quite clearly is that the smaller countries (that is those countries that have a small domestic market to rely on and therefore cannot rely on growth of internal demand to push GDP growth upwards), have been the ones to suffer most.

Moreover, it is also now becoming fairly evident that most economies are on a very similar path in terms of their economic cycle.

With regard to the emerging economies, we have a similar picture. They are in the main experiencing positive economic growth, but this growth has been mainly driven by the domestic market and not by the international market. In fact, the growth rates are much lower than those that these same countries experienced a couple of years ago. Again, one set of data sticks out. It is that of Singapore, where the latest data on GDP shows a drop of 4.3 per cent, while industrial production has decreased by 7.3 per cent when compared to last year.

This information should not lead to complacency on our part. It would be very tempting to say that since the international economic slowdown has affected every economy - even those that are competing with us for foreign investment - then we can do very little to stimulate economic growth in Malta. Our past efforts show that there is much that we can do. I believe that we have been able to withstand the pressures of the recession in our major markets because we have been very capable to maintain our position and to encourage the larger foreign companies operating here to invest further in their Maltese operation.

However, this is still not enough. The negative economic cycle is bound to come to an end and it shall be those countries that have gone through a period of meaningful restructuring that shall be the main beneficiaries of a pick-up in the international economy.

In fact, to think that the current economic slowdown is just cyclical would be wrong. It has also been a structural one, which therefore requires restructuring measures. And I believe this is where debate in this country is lacking.

We have not yet faced up to the issue that irrespective of the nature of the next economic boom, we can no longer keep on doing things the way we have done them in the past 20 years. This is an issue that should concern all social partners as it not only has to do with our fiscal deficit, but also with our regulatory structures, our work practices, our approach to doing business. All these factors impact on the competitiveness of the firms operating in this country, be they in the services sector or in the manufacturing sector.

It is not so much an issue of the level of wages (although this is an important variable) but an issue of whatever has an impact on the level of the bottom line and the effort required to generate that bottom line.

So the summer heat may have reduced our sense of urgency and purpose to get on with our work, but we need to appreciate that we require a renewed drive to make the necessary policy decisions such that we would optimise the benefits of the next economic upturn.