The Malta Chamber for Small and Medium Enterprises said the heavy job losses in export industries showed that the economic reform that was needed called for much more effective restructuring and much more convincing incentives and plans.

The restructuring needed in industries connected with direct and indirect exports was not resolving itself with the new investment in gaming, the new hospital and SmartCity, it said, adding that the loss of another 700 jobs in the export sector, coupled with the 800 lost last year brought the total to 1,500 in just one sector.

The GRTU pointed out that last year it had published a report drawn up by economist Prof. Joseph Falzon on Exports, Inflation and Value Added.

This had shown clearly that exports had declined in both real and nominal terms since 2000; over recent years exports had suffered continually from price deflation and the export sector’s contribution to the gross domestic product had declined as well.

The largest sector of the economy, manufacturing, had lost one out of every five jobs in 10 years; the sector had shown the lowest wage increases out of 15 economic sectors over the past nine years, and the rate of increases was lower than the rate of inflation.

The GRTU added that the report showed also that operating surpluses for the entire economy between 1996 and 2005 had reached only half the rise in inflation for the same period. The operating surpluses of the manufacturing and tourism sectors, the most important sectors for exports, had in fact over the period of 10 years declined instead of risen, which would have helped investments.

At the same time, the rise in profits per worker employed was only one-third the rate of inflation in the economy and in tourism and industry the operating surpluses per worker had declined, meaning that losses rose with a bigger workforce.

It was the same for value added for every worker in tourism and manufacturing, with the value added falling lower than the rate of inflation, so that the sector was not producing enough to make good for higher costs.

The GRTU said the economic reform that was needed could be implemented only with a heavy involvement by the government and all the social partners. This was a priority issue on which the Malta Council for Economic and Social Development, and the government, should agree without more loss of time.