Given that competitiveness is very a complex issue, there is a need for an overarching set of coherent directions – in other words a strategy – to guide Government, the business community and the trade unions in taking consistent steps towards the promotion of competitiveness. It does not make sense to have Government moving in one direction and the other social partners moving in other directions. In addition, given the diverse interests of the social partners there is the need for consensus-building in the drawing up of such a strategies.

One point clearly outlined by the Prime Minister when launching this document is that this budget will be aimed at boosting our national competitiveness. Over the past years, the Nationalist Government has steered Malta into making giant leaps in the quality of living of its citizens. Nevertheless, we must not take the prosperity that we have created for granted. Various factors, both internal and external, have forced us to face stiff competition from other countries and regions. We are therefore in the process of realigning our strategy in accordance with the realities of today’s world.

The need to be competitive is for Malta a vital economic imperative. Our small size and our lack of natural resources translate into a very open and vulnerable economy. However this openness could become a source of economic resilience if backed by a strong competitive position that provides resistance against external shocks and allows successful participation in markets that are spread over different geographical regions and a varied range of products and services.

The degree of competitiveness is thus the key factor that could determine whether Malta’s inherent openness translates into a weakness or a strength.

As outlined in the pre-budget document, specific measures to enhance competitiveness will be aimed at:

• Mobilising investment first of all by providing a stable macro-economic climate and also by channelling direct public investment into the infrastructure which underpins private sector activity, primarily in transport and communications networks, utilities, the environment and national heritage.

• The continuous upgrading of the workforce skills through lifelong learning and education and bringing forth the necessary changes in the education system.

• The reinforcement of an entrepreneurial culture which seeks to take advantage of business opportunities both local and foreign and eliminating unnecessary hurdles and minimising government-induced costs while ensuring fair competition and regulation.

• Ensuring flexible markets to endow the economy with a capacity to adapt to emerging trends and developments.

• Boosting innovation especially in high value-added, technology-intensive products and channelling government support to strategic investment thrusts in identified sectors.

All these broad objectives will be pursued up to the year 2010 as envisaged in the pre-budget document – which will also be the guiding principle of the National Reform Programme which is being drawn up as Malta’s response to the Revised Lisbon Strategy. The first draft of this reform programme will be issued for public consultation in the coming days.

I augur that a whole collaborative effort is made from all concerned parties to make the upcoming budget an important step in continuing to secure a prosperous future for Malta.

Censu Galea is Competitiveness and

Communications Minister