The Malta Independent 2 May 2024, Thursday
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Government Spending is no way to measure performance

Malta Independent Sunday, 24 September 2006, 00:00 Last update: about 12 years ago

The Prime Minister’s speech, which ended the PN’s festivities marking the 42nd anniversary of independence, reminded me of the experience I had when a Labour government, as soon as it was elected in autumn of 1996, tasked me to conduct a strategic audit review of the then MSU.

I had reported how the then MSU management used to measure their performance by the amount of money they extracted from central government to spend on IT, even though a good slice was in fact spent on refurbishing, embellishing and maintaining their headquarters, then at Villa Portelli in Kalkara. In my report I had recommended an approach where MSU had to be paid and measured by what it delivers rather than by how much it spends. It is satisfying that most of my recommendations in that report were adopted and implemented and survive to this very day, even though I would have expected MITTS, the new name I had given to MSU, to expand and sell its competences internationally rather than continue to rely solely, or mostly on government contracts for its commercial viability.

In the same way, the Prime Minister devoted a good part of his speech singing self-praise for the increased government spend on various votes, recurrent and capital, expecting the people to judge performance by how much of our money the government spends rather than by the mileage we get for the amount of our money the government chooses to spend.

Clearly, we are still doing politics the same old stale way. We use national feasts to divide us rather than unite us; to deprecate opponents rather than attempt to bridge differences to ensure we can overcome external threats and challenges with singularity of purpose, conserving our energies to progress together rather than fight on how to share the spoils. In the same breath that we are told that we should not get into election mode so early as the election is probably some 18 months away, the Prime Minister delivers a fully loaded political speech in perfect election mode rather than the vision of a national leader.

I don’t think we should be impressed because the government is spending so many millions on education, more than what Labour had spent in its last full year in government in 1997. What fails to deliver the bacon is the fact that of all EU members, in spite of our very substantial spend on education, we have the highest percentage of early school leavers (those who leave school with a low secondary level education and abandon all further studies) in the age group between 18 and 24.

In reality, the amounts devoted to the recurrent spend on education gets absorbed largely by student stipends, which are then spent mostly on ordinary consumption. All this while we starve practically all funding to our research libraries and devote pretty little to R&D and innovation.

I am little impressed by the far too may millions we have spent on the Mater Dei hospital, which is probably holding the world record for the longest project under development. It took the Americans less time from inception to completion to land on the moon in the sixties than it will take to have our Mater Dei Hospital reasonably operational. And in the process, medical equipment excluded, the hospital will cost at least three times the investment needed to construct, in fully operational mode, a five-star hotel of similar size were it to be built with today’s money on the same site.

What the government will be judged upon is not how much money we are spending to build some decent roads but why this is being done in the 17th year, nearly consecutive, of the PN in government after these roads were done and redone several times, literally throwing our money down the drain. What hurts our pride is the total absence of common sense when such road works should be started and how soon they should be finished. This summer, it was shameful that each time I had to go to the airport to welcome foreign guests I had to struggle my way through the totally disorganised deviations in the main road artery just outside the airport.

Work on the St Paul’s Bay bypass was again started just before summer and now that summer is over, one wonders why we did bother to start at this awkward time when so little work has been completed.

Strangely, the Prime Minister in his politically loaded speech could not find the time to refer to the problem that is pre-occupying all who realise that standard of living improvement must be based on sustainable economic growth, which in our circumstances must necessarily co-exist with a strong performance in our tourism industry. Surely we deserved some re-assurance that government is sensitive to the problems in this crucial sector where we are falling behind just as our main competitors are moving ahead.

I hope we have not built any false illusions that low-cost airlines on their own will be enough to return our tourism industry to a growth path. The problem is much deeper than that and we have to ensure that we realise our strengths and weaknesses and then focus on the market segment that can appreciate our strengths and overlook our weaknesses. What has caused the malady in our tourism performance is that we have kept selling ourselves to the same old price-sensitive segment, which now has a wider choice at a cheaper price. We need to know what we can offer that distinguishes us from competitors and build value in that distinctive competence and project our marketing strategy to the sector which could be interested to pay a premium price for our uniqueness.

Lovely weather, sun, sea, sand and hotel rooms offer no comparative advantages. It is our unique history, our culture, our way of doing things, our hospitality (is it still there?), our joie de vivre, and our ability to converse in several languages that should be the basic ingredients for our long-term brand building. But we cannot start by selling the brand before polishing the basic ingredients that go into our brand recipe.

I suggest that the next time the government checks with the people whether it has earned its stripes for its performance, it uses different benchmarks than the mere quantum of spending of our money. I strongly suggest that the government offers to be measured by the progress being made in achieving the targets of the Lisbon agenda, to which we are committed but which remain as elusive as ever.

www.alfredmifsud.com

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