The World Economic Forum’s Global Competitiveness Report 2006-2007 improved Malta’s ranking in the race for competitiveness. Malta’s results were explained at a business breakfast, held recently at the Le Meridien Phoenicia, organised by The Malta Business Weekly.

Malta improved its overall ranking from 44th place to 39th. The number of countries surveyed in the last WEC report increased from 117 to l25 and, for the first time, included such countries as Angola, Barbados, Burkino Faso, Lesotho and Zambia.

The factors that contributed to the upswing in Malta’s ranking relate to the progress registered in our information and communication technology sector. The high penetration levels, in terms of personal computers, internet access and mobile telephony, has decidedly enhanced Malta’s potential to hold its own in the globalised market.

Good marks

Malta has also scored relatively good marks in terms of education and training.

Whether or not it exploits this potential in practical terms is another matter.

The WEF report has less uplifting things to say on the country’s macroeconomic front. Malta’s rankings are substantially further down the competitiveness ladder.

Malta ranks 76 out of l25, mainly due to its budget deficit, its public debt and inflationary pressures, that are peaking upwards.

This has to do with the actual – not the potential. In terms of performance, Malta’s macroeconomic situation emerges as inferior in rank to nine, of the 10, new EU member states.

In relation to these competitors, Malta is losing ground.

Value generation

Economist John Grech, head of Competitive Malta, the firm that sponsored the survey, said local businessmen are “obsessed with structures, politics and controls”. He thinks that entrepreneurs need to grow up and concentrate on value generation. In his considered view, “we have to stop thinking about ourselves as a little village. Being small can be an advantage so long as we react quickly”.

There is a lot to be said for this. If enterprising businessmen exploit their telecommunications tools to advantage, for example, they can compete with the best of their rivals, even on the strength of their smallness!

But although inventiveness and initiative are prime factors for success in the competitive world, it would be a mistake to expect businessmen to play the role of Tarzan in the world jungle.

They would perform with far better effect if the environment in which they operate is congenial rather than hostile.

There are often burdens and costs standing in the way, in the shape of government induced costs and vexatious bureaucratic controls.

Impediments

Some of the long-standing impediments to progress were highlighted at the business breakfast held at the Le Meridien Phoenicia. And the laments came from authoritative sources, representing the Chamber of Commerce, the Federation of Industries and the Chamber of Small and Medium Enterprises (GRTU).

They related, inter alia, to taxation issues, and to dealings with the Malta Environment and Planning Authority and government departments, where there is a great deal of overlapping of work, and requests for information. There has been no agreed national industry policy, and although there has been repeated anticipation of a venture capital scheme for business start-ups, nothing has ever materialised.

Opportunities lost

These and other related issues are of a technical nature, at times involving conflicting interests.

This does not make these problems less urgent and less vital to Malta’s economic viability.

All the while there has been the Malta Council for Economic and Social Development to consider these problems, and to clear the way forward in conditions of social harmony. These issues ought to have been topmost in the MCESD agenda. They weren’t.

Failure to achieve results means opportunities lost. It explains why this year’s World Economic Forum rankings placed Malta down the ladder, when it came to assessing our macroeconomic predicament.

It bears keeping clearly in mind that the above is not about politics. It is about lost initiatives and, therefore, lost opportunities.

For this, Malta has paid, and is still paying, a price.

Like it or not, politicians have to face the music.

[email protected]