After the long days of anticipation and the associated razzmatazz, the 2005 Commonwealth Heads of Government Meeting is over. The captains and kings departed and have returned home. And we are left holding the baby – a debilitated economy, urgently in need of close attention.

Granted that the government has had to contend with adverse outside factors beyond its direct control, such as the rise in the price of oil on the world markets, and the adverse impact of globalisation, the case for proactive and positive, countervailing policies is all the more urgent. In this regard, government policy leaves much to be desired.

Electoral assessment

Whether this is due to incompetence or inertia is a matter for political argument. Politics only come into the matter so far as politically-responsible ministers have not succeeded in giving a satisfactory account of their stewardship. It is the electorate, to whom ministers are finally responsible, who will make the final judgment on the matter.

Ministers come and go. The bureaucrats and managerial technocrats who advised them remain in place. Some of them were the tail that wagged the dog, while the economy was languishing in recent years. Who is there to separate the wheat from the chaff, and ensure that the government – any government – is served by a resourceful, can-do, managerial class with drive and initiative?

During the past five years or so, Malta’s economy lost its rhythm and stalled. It suffered reverses in both the manufacturing as well as the tourist sector. Rather than stand up to contain the rising tide of adversity, the government was, at best, passive. At worst, it compounded its own problems.

It did not come round to cut its coat according to its cloth and take drastic measures to reduce public expenditure. It sustained a deliberate deficit-spending policy, punctuated by some particularly ostentatious blunders, like the purchase of property in Brussels, and expensive, luxury cars for ministers.

It went in for major infrastructural projects – eg Mater Dei Hospital and the Gozo Ferry Terminal works – which overran the original budget estimates and turned out to be financial bottomless pits.

While the economy was sagging under the pressures of globalisation, and needed resuscitation, the government increased tax and other burdens, undermining business competitiveness.

Unilateral decisions

These, and others like them, were unilateral government decisions, taken without consultation and, more often than not, driven by political, rather than economic, considerations.

There will, no doubt, be many a political argument to contest the above. Political arguments are interminable and will never make good for the lost ground.

The point is, on the one hand, to practice frugality and, on the other, to increase productivity and wealth, through enterprise and initiative, and the proper use of available resources.

We cannot hold back the process of globalisation, and some manufacturing firms will lose their export markets and fold up. But we could have anticipated the inevitable, and started earlier on to identify niche markets that offer other possibilities. Recently, we have achieved some worthwhile results in this direction. More initiative and new incentives could help turn the tide.

Malta’s main asset, and its major foreign-exchange revenue earner, is its tourist sector. Its main challenge is to enhance its competitiveness and its ability to give value for money.

Why was it necessary to “re-brand” Malta all over again, as the Malta Tourism Authority is doing, rather than develop additional niche markets, while drastically upgrading the existing product?

It is of no use if we aim at attracting more five-star tourists, unless we make sure that we can offer five-star facilities and a five-star environment outside our five-star hotels. This calls for public cooperation. But it also calls for discipline and enforcement from official quarters which has been lacking.

Gozo – microcosm of Malta

Gozo is, in a sense, a microcosm of Malta and its fortunes reflect the success or failure of the government’s economic management.

Suffice it to say that, ever since 1999, MDC and Malta Enterprise assisted only seven companies to set up shop in Gozo. It has been reported that, between then, they created nine full-time and two part-time jobs!

The workforce at the Xewkija industrial estate shrunk from 840 in 2002 to 270 last August.

Over the span of the last seven years, the number of Gozitans whose source of income was derived from part-time employment increased by over 60 per cent.

The tourist sector in Gozo suffered a major reverse, which seems to be ongoing.

So much so that, during the first nine months of this year, the Gozo Channel ferry reduced the number of cross-channel ferry runs by no less than 1,300. It carried 25,200 less vehicles and 46,000 less passengers than it did during the same time last year.

The new helicopter service could not be said to have taken off commercially. It has been said that it is cheaper to travel from the UK to Sardinia, than to cross from Malta to Gozo by helicopter.

No wonder only 10,000 passengers will have used the service during its first year of operation – which is a far cry from the official 40,000

target.

Tangible crisis

The Gozo economy is plainly and tangibly in crisis. Meanwhile, the infrastructural project to provide modern quay facilities at Mgarr/ Cirkewwa, originally estimated to cost Lm8 million and now estimated to cost Lm14 million, has been in a state of suspended animation for some long time. The ill-fated Fort Chambrai project is still forlornly seeking comfort in the laps of the gods!

The total negative impact of all this on the Gozitan community could be felt but not measured. Bureaucratic sleight of hand, and a mixture of propaganda and alienation, will cover up a good part of the damage. But it could be erased.

Over the larger canvas that is Malta, the overall damage to the economic landscape is both measurable and visible.

It is plainly visible from Brussels. Not so from the Auberge de Castille and the finance ministry!

It strikes me as if the electorate is by no means amused!

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