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Reshuffles and the economy

Karmenu Vella has been moved from Minister for Tourism to a Commissioner post within the European Union.Karmenu Vella has been moved from Minister for Tourism to a Commissioner post within the European Union.

The restructuring of the team of ministers and parliamentary secretaries was bound to reflect on the managment of the Maltese economy. The whole team relates to it, some members more so than others, some directly and the rest indirectly. The economy produces the resources which have to be allocated by the government according to the priorities it thinks would contribute most to the generation of economic growth.

Two changes are of direct consequence to economic management. Within the economy ministry, the parliamentary secretary who complements the minister in his tasks was changed. José Herrera was brought in lieu of Edward Zammit Lewis.

The move does not pass any judgement, nor does it imply any change in policy and implementation focus. The ministry will continue to prioritise two functions. It will have to look after the existing members that fall under its remit. There is no crisis situation like that which afflicted the Nationalist administration six years ago.

The then-government dealt with problems in a way that mitigated to a large extent the threatening negative impact. Several companies which were moving towards the edge were brought back to sustainable operations. That has to be the objective of any government.

At present, problems that exist are not of a group nature but individual companies still require assistance. The mechanisms deployed by the economics ministry provide such assistance.

The second function is to promote as much productive investment as possible, both domestic as well as foreign.

That is the reason for being of Malta Enterprise. By all accounts the objective continues to succeed within an an ongoing business plan which sets targets and establishes workable means of achieving them.

The division of labour between minister and parliamentary secretary cannot be such as to engrave clear red lines of responsibilities. There is one responsibility: aim for growth and identify the best means of achieving it. Success can never be enough. Repeated failure would be disastrous.

Reshuffle or not, that emphasis should remain and continue to yield results within a framework of careful projections that take into account the various inputs which constitute it, and a careful eye for change.

The other ministerial move which impinges directly on the economy was the surprising decision to move Karmenu Vella from Minister for Tourism to a Commissioner post within the European Union.

Tourism remains a major sector in the Maltese economy. The shift in recent years towards economic activity dominated by services industries have not shifted tourism from being the main performer in the sector. The reason for that has been the continued gradual improvement in the overall performance of the industry. Under the previous administration Minister Mario de Marco was a calm but telling influence on the sector.

The change of government saw the return of Karmenu Vella who in the Labour administration of 1996-98 had excelled in charge of the industry, his name becoming synonymous with tourism.

Since then he gained in terms of academic achievement and operational experience in the highest echelons of the private tourism sector. In the first year of this administration’s life, he performed well, overseeing sustained growth in activity in the industry. His departure from it came as a shock.

It should not, however, mean that there will be negative developments. Edward Zammit Lewis, the new minister, does not bring tourism experience with him other than that of a general nature related to his work in legal practice. Nevertheless he is reputed to have a very keen brain which combines well with his easy personality.

He should build a good relationship with the operators in the trade, sticking to sensible rules which every one in charge of tourism must fiollow. These turn on a need to keep the closest possible contact with hoteliers – they are the risk-takers who put up millions of euros to build up a formidable asset base that has to compete in an increasingly harsh environment.

It is most likely that Minister Zammit Lewis will recognise that and build a strong two-way relationship with the industry.

He also inherits a Tourism Authority which is performing well and which should continue to respond to his policy directives effectively. He will need to develop a closer relationship with the Employment and Training Corporation, which falls within the portfolio of Evarist Bartolo, Minister for Education, to be ahead of the manpower requirements of the industry.

It is a growing phemomenon that a substantial part of those requirements is being met by expatriate resources. That will continue, but efforts have to be made to motivate and train local resources not to continue to abandon the sector.

Above all middle management resources will continue to be required. Collaboration between the ETC and the Institute of Tourism Studies should yield good results.

The industry is also benefiting from the unease in some competitor countries in the Mediterranean, but should not consider that other than as a transitory factor.

Nothing can be taken for granted. That will be the starting point of the new Minister for Tourism.

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