When the House of Representatives discussed the Lisbon Agenda on 17 May, Malta’s overall performance in recent years came under close scrutiny.
To be precise, Malta’s performance had already been scrutinised and measured by the yardstick of the Lisbon targets, which had been set by the EU in 2000.
With the facts and figures available and at its disposable, the House found itself faced with reality, and the inescapable conclusion was that the chickens have come home to roost.
Declared objective
When the Lisbon agenda was drawn up, the EU had l5 members. Ten candidates, Malta included, were standing by waiting for accession.
The declared objective of the Agenda was to transform the EU into a dynamic and knowledge-based economy, at the cutting edge of world competition, and well placed to stand up to any challenge emanating from the American and the emerging Chinese markets
It has become apparent that the original targets were over optimistic, particularly when it came to catching up with the US in decisive areas such as technology, innovation and employment. They have since been reviewed.
A Nationalist government has managed Malta’s economy without interruption well before the year 2000, and the government had every opportunity to prepare the ground in order to meet the Lisbon targets.
Malta’s performance
When the review took place, it was established that Malta’s performance was far from reassuring. It has transpired that, while government ministers and spokesmen were claiming that the economy was “on track”, Malta’s productivity per capita had declined, from 95.2 per cent of the EU average in l999, to 84 per cent last year, and is expected to decline further to 83.3 per cent this year.
Our GDP per capita has declined further below the EU average and is expected to drop to 70.7 per cent of the EU average next year.
The Lisbon overall employment target was to achieve an average employment rate of 70 per cent by 2010, and a female employment rate of 60 per cent. Malta’s employment rate last year lagged at 54 per cent, and the participation rate or women was 33.6 per cent in 2003. It rose imperceptibly to 33.63 per cent in 2004.
Although Malta’s expenditure on education, in percentage terms of GDP, is roughly equivalent to that of most other EU member States, only 47.9 per cent of Maltese youths pursued their education beyond the secondary school stage, compared to the EU average of 76.4 per cent.
The number of graduates in science and technology fell from 3.9 per 1000 in l999 to 3.1 per 1000 in 2003.
We have suffered from investment fatigue while living costs escalated, leading to further erosion of our competitiveness,
Years of folly
More than ever before, the folly of the Fenech Adami money no problem years stands out to haunt the ministers who were in charge while the economy languished.
Local commentators who had their ears to the ground highlighted Malta’s predicament, to no avail. They denounced the government’s capricious prodigality and incompetence at the right time, only to be brushed aside and ignored.
The end result is that Malta is now in a deeper hole than it was in l996, and the situation can only be turned round if there is national consensus on a programme of economic regeneration.
This could not be achieved simply by selling the family silver and by squeezing more taxes out of an economy already flogged to near-death.
The accent has to be on the quick identification and exploitation of productive areas that offer opportunities for investment, employment and profitable returns.
It calls for a plan, drawn up and implemented by consensus, and for the full support and involvement of all the social partners.
A “Valletta strategy”
Dr George Vella, Opposition EU spokesman, proposed a “Valletta strategy” and a Malta blueprint to fit into the Lisbon Agenda, but insisted on “balanced development” that would not antagonise the workers by trespassing on their social rights.
Considering that the Maltese sovereign electorate has locked Malta into the EU, through the process of a free democratic election, the case for full and unreserved commitment to the implementation of the Lisbon Agenda is strong.
It has been, as it were, pre-empted by two separate unilateral decisions of the Gonzi government to impose on Malta two other imperatives, namely the discipline of a Convergence Programme and that called for joining ERM II.
To what extent these disciplines will respect hard-won social and consumer rights enjoyed by the workers has yet to be seen.
It is in Malta’s interest that the air is cleared without delay. With the right leadership, a balance can be struck making possible harmonious forward movement.
It is one thing for Dr George Vella to speak. It is another for the government to act positively in response.
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