An economic vision for Malta – absent or top secret?

Almost ten years have passed since Malta joined the European Union. Since then, a global economic vision for our country was earmarked to be the best way forward in generating national wealth by successive Nationalist governments.

This drive nurtured the creation of government’s Vision 2015 for Malta, highlighting the Nationalist Party’s goal to make Malta and Gozo a centre of excellence in a number of high value-added sectors by 2015, namely in Information and Communication Technology (ICT), health services, financial intermediation, international education services, aeronautical engineering, renewable energy sources, maritime logistics, audio-visual, remote gaming operations, pharmaceutical and tourism sectors.

This strategy met its objectives and earned Malta economic success, both in terms of job creation and output. Today our island is still reaping the benefits of this vision. Nothwithstanding such a feat, it is a widely accepted notion amongst economists that the country’s vision needs to be continually modernised, adaptable, flexible, resilient and outward-looking to face the challenges of increased competition on a worldwide level.

First year of Labour administration

During the first year of Labour administration, economic priorities have been turned upside-down. The long-promised roadmap and the much-awaited refreshed vision the Labour Party was calling for from the Opposition benches has proved to be either absent or is being kept top secret.

On the contrary, the Labour government preferred to embark on a quick-win strategy in search of scoring short-lived political points amongst the electorate. The fundamental golden rule to achieve economic sustainability, that ‘wealth needs to be created before distributed,’ has been completly ignored.

Considering that the current Finance Minister is a Professor in economics and that the Prime Minister considers himself to be the father of economic roadmaps  all this makes it somewhat a little bit more unnerving.

Is it economically sustainable to refund VAT on the registration tax paid on imported cars, thus putting the finance minister in a straight jacket by taxing productive activity in the future to compensate for past imported consumption? Is it economically wise to centre the country’s efforts on the IIP (citizen’s scheme) at a cost of the island’s credibility and reputation? Are we on the same wavelength that restricting our fortunes for the coming years on this specific scheme is a risky and short-sighted strategy?

Have enough jobs been created to absorb the projected increase in female participation rate as a result of the positive incentives aimed at encouraging women to join the labour market? Why has such a budgetary measure been kept in silo from other incentives aimed at fostering economic growth and job creation? Is it a clear case of putting the cart before the horse? Is it economically sensible to remain passive about the fact that the much discussed reform in the transport sector is going to cost millions more in subsidies?

Today’s economic state of affairs is characterised by a number of alarming indicators; the increase in unemployment levels reached almost 8,000 persons, marking the highest levels in years, the fact that the government is opting for public sector employment as a short-term remedial measure to mitgate this social problem, the highest drop reported by Malta in export levels around Europe (drop of 21% in 2013), the recent substantial drop in industrial production (by 11.5%), the weak economic performance reported in the local construction and manufacturing sectors during 2013.

These and other worrying issues justify a strong call for a re-energised, holistic and synchronised vision characterised by sharp foresight and a project management approach towards economic progress.

It is clear that the Labour government needs to clarify and communicate its ideas of where it wants the country to be in the coming five to ten years’ time. The electorate does not and will not benefit from political spins and from the government’s wasting of resources on presenting an attractive package, but rather from the creation of economic welfare and national wealth.

This is far more demanding and challenging than a mere effective marketing campaign. The Ministy of Finance in its nicely portrayed releases last September issued a statement that Malta needs to create 70,000 new jobs. Can government exponents explain how much of these new jobs will be created by the private sector and in what sectors? And what about the tangible steps on promises made in making Malta a magnet of foreign direct investment enhanced by the premise of reducing bureaucracy by 25%? 

A professional strategy to achieve a much desired bouyant performance in the labour market is all about market signals. Potential entrants in the labour market need to know in advance where the hard-earned opportunities are being created, to subsequently enhance their technical skills and abilities in areas that are being demanded by the industry.

It is part of the game that business concepts experience natural death after they have reaped significant economic benefits to our country for years. The electorate wants the peace of mind that the government, as a policy-maker, has the vision to fill in the potential vacuum created by possibly re-scaled industries. Case in point is the pharmaceutical sector, where we have seen one of the leading companies having to take the hard decision of laying off 110 workers.

History has shown that economic prosperity and well-being are the results of clear vision and determined leadership that really listens to what stakeholders have to say. What needs to be urgently stressed now, after more than a year of change in administration, is an effective communication of the economic strategy the Labour government will be embarking on during the coming years.

After the first year of Labour administration, discussions should have already been shifted on fairness, equity and an even distribution of wealth creation reaped out of this vision, which we were led to believe, had already been formulated by the PL during its long absence from government benches.

The present ‘wait and see approach’ on this economic fundamental is a clear example of initiative dampener to the business community and to personal initiatives. If the government is truly one that listens, and not just hears, what is hampering it to react to this cry for a vision when it should have been proactive on this issue? What is keeping the government from dishing out the roadmap on this long-awaited economic vision? Is it completely absent? Or even more of a concern, why is it being kept top secret?  

Stefano Mallia is a Nationalist MEP candidate.