It is now over 40 years since Malta assumed independence and switched from a fortress to a market economy. During this relatively short span of time, the tempo of economic development had to be sustained and, at times, accelerated.

Malta has since joined the European Union and forms part of the world’s largest single market. This “window of opportunity” opened up at a time when Malta’s economic growth stalled and when the winds of competition were gathering momentum and reaching gale force.

The road ahead is hard and challenging.

The assumption that development is a natural phenomenon is fallacious. There is no automatic economic strategy readily available for every nation to forge ahead towards unlimited prosperity

One school of thought had advocated that the essential ingredient for successful development is the encouragement of market forces to propel the engine of industrialisation.

On the other hand, other economists used to preach that it is State intervention that stimulates growth.

Modern source of wealth

Then came the age of electronics and the leap of technology, and the new realisation that knowledge is power… This leads many economists to proclaim that, in this modern age, real power and added value are not in things but in thoughts.

The new source of wealth of nations is the freedom of creative and enterprising individuals who control information technology, move funds between capital markets or send data rushing down fibre optic cables, or bouncing off satellites, at the speed of sound. The new opportunities are not exclusively available to a few industrialised countries.

In former times, economic development called for discernment and initiative, as well as the venerable virtues: thrift, hard work and careful planning. In today’s world, enterprise, however industrious and daring, has no chance unless it has the know-how.

The human factor

The human factor is increasingly coming into play and dominating the development game. In its positive form, the human factor stands out, almost dramatically, in the story of the economic resurgence of post-war Japan, and in particular the spectacle of Japan’s rise to industrial pre-eminence, especially in certain advanced manufacturing sectors.

The emergence of the South-East Asian “tigers” was just as spectacular in the field of electronics.

The large-scale process of out-sourcing of business to India and China is not explained simply by low wage differentials, but by the ready availability of an educated workforce in sufficient numbers. It introduces a determining new factor in the competitive equation.

In this fast-changing environment, Malta must work with a greater sense of purpose and be more outward-looking in its initiatives, if we are to maintain our place in the sun, and achieve living standards commensurate with the European average.

Prime essentials

The first essential is that we keep abreast with developments and that we keep our eyes skinned for opportunities.

We have to be outward looking to earn our keep. We have to invest more in education and training, not only at the level of the workforce, but even more so at managerial and civil service levels

When it comes to attracting new investments, probing the European single market and looking at the wider world horizons for opportunities, business executives and State bureaucrats must know how to negotiate hurdles, as well as snares, associated with EU and other international directives and conventions.

This is the work of specialists – and we are very short of them. Their availability will make a crucial difference at a time when the need to promote growth is of the essence.

The initiative of the Malta Business Bureau, the joint advisory office of the Malta Chamber of Commerce and Enterprise, the Federation of Industry and the Malta Hotels and Restaurants Association, to hold a conference focusing on what is happening within the EU institutions vis-à-vis Malta is to be commended.

It is plain for all to see that, one year after Malta’s EU accession, we are experiencing difficulties in coping with the huge amount of work originating from the EU institutions, clearly indicative of the need for enhanced understanding of the role we have to play and the opportunities that may arise therefrom – there is a gap to be filled at both the public and private sector levels.

Progress in this area must be coordinated with the full involvement of civil society and cannot be allowed to become the preserve of self-serving civil servants and politicians who happen to be in control of the Executive.

This is where the seeds of a social pact should first be sown. It is an area where all involved will be joint winners or joint losers.

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