To its credit, The Malta Independent gave front-page coverage, and carried the most comprehensive account of Prime Minister Gonzi’s speech at a recent business breakfast. Dr Gonzi’s theme was: Reform and the way forward.
The speech was described as an outline of “an ambitious five-year plan” to revitalise the economy. He defended the need to carry out the necessary reforms “even if these will cause some pain in the process”.
For those who have been crushed by taxation and are being singed by escalating living costs, Gonzi’s ominous words did not convey a message of Christmas cheer.
He declared that one did not embark on the process of change for the sake of it – but because this is required to revamp outdated work practices and those sectors that may have been good for the economy 10 years ago, but are obsolete today.
Coming from a government which has been in office for the best part of the last 18 years or so, the term “ambitious five-year plan” strikes me as more slimy than slick.
What plan?
What plan? How has it been cooked and by whom? The government has lacked an industrial policy for far too long. Although it had all the time at its disposal, it never came round to draw up any medium or short-term plan by which decision-makers and the social partners could navigate.
On the contrary, through the best part of the past l8 years, the government sought shelter behind a wall of pusillanimousness and equivocation, and its wait-and-see approach looked like paralysis.
During that time-span, the administration was hijacked by a money no problem syndrome, until the fiscal deficit became an overhanging monster, and Malta’s national debt bill rose from Lm87 million in l987 to Lm l,595,000 this last October!
In this way, the government dropped all contact with economic reality and promised a raft of suggestions on welfare, employment and joyrides of the EU gravy train.
A crisis, long foreseen and accurately assessed, matured in the form of investment fatigue, high unemployment, rising taxation and living costs.
Social emergency
The end result was inevitable - an undeclared state of social emergency, with the EU breathing down the government’s neck.
The government now had to pull itself together to make up for lost time, hence more taxes and austerity. And it has to look forward, to cope with Malta’s loss of competitiveness and the pressing challenge of economic survival.
Dr Gonzi put his cards on the table in the course of his business lunch speech.
These are his main proposals, in the order as printed in The Malta Independent:
(1) relinquishing certain sectors of the economy; these to be run by private enterprise;
(2) building on the three pillars that are the economy, education and the environment;
(3) concentrating on the expansion of the services sector (although a strong industrial base should be maintained, there has to be a change to more added value industry that exploited the capability of the island’s skilled workforce);
(4) continuing the process of fiscal consolidation with the ultimate aim of balancing the budget;
(5) reducing the public sector;
(6) generating new economic activity to replace the shedding of labors from outdated industries;
(7) doing what has to be done about excessive bureaucracy;
(8) careful management of vocational choices so that students may be guided to choose courses that would provide graduates in areas most needed by the economy e.g. science and information technology
Dr Gonzi also spoke of the government’s commitment to carry out reforms in the rental market and, quizzically, declared that he “could not understand how the price of certain commodities was so high in Malta, compared to other European countries”.
More pain
The above is no great shakes, and all of it could have been taken in hand by an energetic administration from the word go l8 years ago. Who won the day? Inertia, incompetence or what?
At this late stage, Dr Gonzi’s proposals may be considered as the latter-day version of the remorseless, ritual incantation of better things to come!
Pouring these ‘proposals’ out, under a fixed smile, at a business breakfast, will not make them any more dynamic.
Putting it bluntly, the government has no respectable clothes left on its back – only the mantle of power, on to which it clings relentlessly to preserve it from the mounting chagrin of the electorate, which is overtaxed and overwrought.
An electorate which has been short changed, and squeezed until the pips squeak, cannot be expected to show any enthusiasm when Dr Gonzi invites it ‘to bite the bullet’ and to entertain the prospects to yet more pain.
The government has to be persuaded to make common sense – not Euro-dogmatism – the platform of its appeal. It has to dispel the creeping impression that it is being frog marched by some hidden authority which, to some observers, seems to be situated in Brussels.
Politics is about ways and means. The rest is myth.
Malta badly needs an agreed policy, which promises a combination of discipline and social compassion, and which is capable of relighting the spark of initiative.
The government, which has, for so long, dropped all contact with economic and fiscal reality, must come round and make a dent in some of the monumental problems that confront our country. This calls for national unity, not for divisiveness.
The current festive season as a good time as any for goodwill and a change of heart.
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