The Ministry of Finance published, together with the pre-budget 2010 document, an analysis benchmarking Malta's competitiveness. Very correctly the Minister of Finance stated in the foreword to the document that competitiveness is determined by several factors and variables, that impact on our social, physical, cultural and economic environment.

It is also determined by national institutions as much as it is determined by a range if what have been termed as hard (for example the quality of the telecommunications infrastructure) and soft (the quality of our labour supply) infrastructures.

The benchmarking exercise undertaken by the Ministry of Finance was very comprehensive and covered a wide range of macro economic indicators. These indicators were then compared to countries that either represent our core markets for the export of goods and services or are seen as our competitors. In certain areas Malta scores well while in other areas it does not score so well.

One striking bit of information is the amount of greenhouse emissions that Malta has, when compared to other countries. In Malta's case it is well above the EU average, but this could be a result of the fact that we are a small island which requires us to have our own power station. With regard to ICT we score very well, which is a direct result of a deliberate strategy to facilitate the use of ICT in this country.

So Malta's current position could be the result of factors outside our control, as well the result of wrong and bad decisions that we have taken, even in the distant past. For example in the case of further education, although we have been making big strides forward for the last couple of decades, we need to take account of the fact that, up to 22 years ago, participation in further education was not encouraged at all. Thus such a benchmarking exercise, as that undertaken by the Ministry of Finance, is a constant state of evolution.

However, to my mind there is one element that needs to be constantly considered. Although we speak of national competitiveness, the real issue of competitiveness is a micro economic one and not a macro economic one. When we speak of competitiveness we need to speak about individual businesses. It is these individual businesses that in their collective render a country competitive. When individual businesses invest, they increase their productive capacity, employment, and their sales.

This in turn reflects itself in growth in the gross domestic product, which is an indicator of national competitiveness. So when we talk of competitiveness, we need to assess those factors that render individual businesses competitive.

In his presentation at a business breakfast, the Ministry of Finance spoke about a range of policy implications that impact competitiveness. They included public sector reform, taxation, investment, fiscal sustainability, education, and research and innovation. However, when we refer to the competitiveness of individual businesses, there is a range of issues that would need to be addressed at the level of the firm and need to be embraced as company policy.

These include the use of resources, the product, the skills of the workforce and market positioning. I believe that, on each of these items, the government and the private sector need to engage with each other to ensure that there are effective synergies between policies at the level of the firm and national policies.

There are several examples that can be given to show the need for these effective synergies. The government may provide incentives to students to undertake post-graduate studies up to doctorate level. On the other hand, is the private sector prepared to undertake further research and development in Malta making use of these PhDs?

A service provider may be investing in upgrading its product to deliver superior quality and charge a higher price. On the other hand is there enough investment in the supporting infrastructure that would justify such superior quality at a higher price?

There is something else that needs to be kept in mind when speaking about competitiveness. Competitiveness does not necessarily bring about well-being. Well-being is more about what the people feel about the way they are living and is dependent on another host of factors. A country may score highly on the competitiveness scale, but the well-being of its people is unlikely to be high if there is a high crime rate or if people feel generally unhappy. So any discussion on competitiveness is incomplete if it does not also include the aspect of well-being.