There is no doubt that amid a very turbulent international climate, our economy is experiencing strong economic growth overall. The resilience of the economy is acknowledged by the EU and the major independent credit rating agencies.
However, this buoyant momentum should not be taken for granted as there is a uniquely unstable international scenario around us. Surrounded by realities such as a looming Brexit, terrorism and political instability in neighbouring regions, the economy may not be allowed to coast on present achievements.
Following a vast and thorough consultation process, the Malta Chamber of Commerce, Enterprise and Industry advocated its vision and proposals for Budget 2017 with a main focus on two overarching priorities: the continued consolidation of public finances; and the implementation of policies that safeguard and enhance the many factors that contribute to competitiveness such as energy costs, adequate labour supply and transportation.
In order to avoid situations similar to previous years, when policies were announced without any prior consultation or proper implementation plans, the chamber expects that lessons have been learnt from the mistakes of the past.
Firstly, having the country’s financial house in order is the main platform on which to ensure sustainable economic growth, continued job creation and improvements in the quality of life of all social strata.
Secondly, the chamber prides itself in being the foremost organisation striving to guarantee the island’s competitiveness on every possible occasion. The upcoming Budget must therefore introduce policies that tangibly improve the nation’s competitiveness.
As the economy undergoes drastic reshaping, the labour market is being stretched to its limits and a number of gaps have surfaced in recent years
Notwithstanding recent cuts in energy costs, the government must realise that the cost of energy is a fundamental competitiveness factor that remains comparatively and inexplicably high for industrial consumers. The chamber has laid out a number of viable proposals to align energy costs with rates closer to EU averages such as another general reduction in the rates of energy, an overhaul of the night tariff system that renders off-peak operations more attractive, a system of purchasing flexibility from a variety of sources and an energy voucher scheme proportionate to investments carried out in renewable energy sources and efficient operations.
As the economy undergoes drastic reshaping, the labour market is being stretched to its limits and a number of gaps have surfaced in recent years.
The chamber supported the recent Making Work Pay initiatives that resulted in increased participation rates of females and the long-term unemployed.
Nevertheless, this is not enough and the chamber has long advocated the need for a holistic skills gap analysis coupled with the necessary updates to curricula.
On this note, the chamber is encouraged by Cabinet’s approval to establish a National Skills Council tasked with narrowing the skills gaps. It is imperative that the adjustments the Council deems vital are implemented swiftly and effectively as otherwise Malta risks rendering its main resource less relevant and therefore unattractive.
The chamber also recommends recognition of foreigners as a vital human resource significantly contributing to present economic performances. A package of incentives to attract and retain foreigners in the national labour market is well overdue, coupled with the need for a simpler and more efficient process to obtain work and residency permits.
The chamber has constantly insisted that transportation is a value-added sector and economic enabler for the entire economy.
The present acute traffic situation is negatively impacting daily lives, the economy and the environment and the initiatives taken thus far do not fit into a coherent and holistic plan to address the gridlock currently crippling the country. With the launch of Transport Malta’s National Transport Strategy 2050 and Transport Master Plan 2025, government clearly understands transportation’s strategic importance requiring major investment.
The guiding pillars proposed by the chamber are to have an economically, environmentally and socially sustainable plan, based on multimodal transportation infrastructure, stronger involvement of the private sector through PPPs, a competitive regulatory and fiscal environment and a realistic long term vision of the country’s transportation needs. In a similar vein, the chamber has continually iterated the vital strategic importance of a healthy national airline.
Its proposals lay out concrete recommendations on policies and strategies that, with correct and timely implementation, would preserve existing performance, sustain economic growth and improve areas of cost and non-cost factors that may hinder continued progress and prosperity for all strata of the economy and society if unchecked.
The government must treat the Budget in the context of a multi-annual framework and a long-term strategy to achieve sustainable growth. In this regard, the Malta chamber commends the present economic performance and calls for investment of the proceeds generated by this prosperous economic cycle to safeguard the future wellbeing of Malta.
Anton Borg is the president of the Malta Chamber of Commerce.