These last three weeks I have written about government's economic vision for Malta, more commonly known as Vision 2015. I have argued that the necessity for Vision 2015 lies in the fact that our economic model will certainly need to go through a significant change in the aftermath of the worst international recession in the last 80 years. However, Malta does not operate in a vacuum and thanks to our membership of the European Union, we need to take into account the strategy adopted by the EU, known as the Europe 2020 Strategy.
This strategy, which has been dubbed as "Europe's moment of truth", is considered to be "a fresh approach designed to help the EU member states move beyond the economic recession by focussing on sustainable and inclusive growth and improving the governance structure that is needed to make it happen".
Even at a European level, it is recognised that unless appropriate and innovative strategies are adopted, the structural economic weaknesses exposed by the recession could make future economic growth more difficult. This requires the EU member states to adopt a concerted approach. The EU has had to face the harsh reality that the economic crisis has wiped out the gains made in the years before 2008.
Some data say it all. Industrial production has decreased by 20 per cent and is back at the levels experienced in the 1990s. Ten per cent of the active population is unemployed. The average fiscal deficit is now at seven per cent. All the efforts made since the early 1980s to achieve fiscal consolidation have come to nothing with the current crisis. Against this scenario and with increased competition from emerging economies such as China, India and Brazil, as well as the other major economies such as the US and Japan, there is the need for a proactive approach that would help businesses operating in the EU to regain competitiveness and boost their productivity.
Otherwise the EU member states are risking a permanent decline in their growth potential. Although our crisis has not hit us as hard as it has hit the other EU member states, we are facing a similar challenge.
We either identify new economic development opportunities that would create more jobs and more wealth and would generate higher value added, or we run the risk of being sidelined forever. Hence the link between Vision 2015 and Europe 2020 is indispensable for us. This is even more so since the three priorities on which Europe 2020 is based are vey much consonant with those of Vision 2015.
These three priorities are smart, sustainable and inclusive growth. By smart growth is meant an economy based on knowledge and innovation. By sustainable growth is meant promoting a more resource-efficient, greener and competitive economy, while by inclusive growth is meant fostering a high unemployment economy that delivers economic and social cohesion.
The targets that were set by the European Council earlier this year for the Europe 2020 strategy are increasing the employment rate and research and development activities, raising educational levels, promoting social inclusion and achieving environmental goals.
Similarly, Vision 2015 is described as the path to a knowledge-based economy. Among the challenges that Vision 2015 mentions is the need to increase the employment rate and the need to improve the upper secondary and tertiary educational attainment of the workforce. The economic sectors that are being targeted are very much environment-friendly and efficient in the use of resources.
Maybe the troubles of the euro and the crisis in Greece have placed a number of other economic issues on the back burner and are not very visible in the media. On the other hand we do need to look into our own backyard because the future beckons for us.
Vision 2015 is not a leap in the dark but a concrete strategy aimed at giving this country a better economic future within the framework of the EU economy.