The publication of the trade statistics by the National Office of Statistics for the period January to April 2009 can easily give rise to unjustified optimism about our foreign trade. The visible trade gap – the difference between total imports and total exports – went down by e81 million over the same period last year to e384

million.

This would normally be viewed positively, since a widening trade gap sustained over a long stretch of time will place serious stress on our balance of payments. However, a closer analysis of why this trade gap has narrowed in the first part of 2009 will reveal that we imported fewer industrial supplies, fuel and lubricants, and exported less machinery, transport equipment and semi-manufactured goods.

The reality is that falling imports are as worrying as falling exports. Even if one were to take into consideration the fact that the fall in the value of fuel imports can partly be explained by a fall in the price of oil, the decline in the importation of industrial supplies is very worrying. It signifies that the present and future growth prospects of manufacturing and other industries are bleak.

Our dependence on exports to generate sufficient economic growth in the long term makes us vulnerable to declines in demand from our international customers. Our local market is far too small to compensate for this loss and we can never really depend on local private and public consumption in the long-term.

The present economic situation is rendered even more challenging when one considers that our main services industry – tourism – is not really doing too well. Waiting for the dark clouds of the current economic downturn to pass as quickly as possible reveals a fatalistic attitude that will only prolong the current recession we are facing.

The government needs to do more to assist the various sectors of our economy to weather the current storms. We have repeatedly urged the government to engage in major infrastructure projects that are badly needed to improve our competitiveness.

The plans for the development of the Grand Harbour area have remained on the shelf of some ministry after being so colourfully displayed just over a year ago in the run up to the general election. Even the privatisation of the shipyard is taking far too long to materialise. The start-up period of any major project is always a long one, but bureaucracy, indecisiveness and pure and simple government lethargy will not help to make this process any quicker.

We also need to identify major projects for the upgrading of our tourism industry. Our islands remain filthy, especially in areas frequented by tourists. An embellishment programme is long overdue if we are to save the few opportunities that remain to rescue this industry from a major crisis in the next several months.

Other major work that needs to be taken up in earnest is the improvement of our road network. The shabbiness that is so evident in our roads is demoralising those who use them on a daily basis. The government seems to have given up even on this relatively simple and much needed project to create a feel good factor at a time when public morale is at its lowest for many years.

But perhaps the most important element that is missing is the government’s tangible commitment to make investment in our economy attractive to local and foreign entrepreneurs. Our education system, for instance, needs to be revamped to improve the academic qualification levels of our young people. This has to be done not by diluting standards but by reforming the way we educate young

people.

Muddling our way through the recession is the weak strategy of a weak government that has run out of ideas on how to stimulate the economy and create jobs. And yet, ask the operators of our various industries and they will tell you how abandoned they feel in the present economic crisis.

In the coming months the Labour Party will continue to make constructive criticisms on the way our economy is being managed and will also propose alternatives to resolve particular weaknesses. We will continue to prepare ourselves for the day when the electorate will call on us to fill the gap between the promises of a better future and the present sad reality of economic decline.

Dr Mangion is shadow minister for finance