The international recession is already making landfall notwithstanding the Finance Minister’s pretentious claims that the economy is resilient to international pressures. Well, if anyone had to go by his assurances on job security at ST Microelectronics then you will come on my side. He was shot down by ST itself a couple of hours after he claimed that no jobs will be shed in spite of the international crises. Well, he must now be chilling up to the fact that there will be more than 400 redundancies by the end of the year, according to ST itself.

We have now also been assured by the ministry that the hypothetical departure of ST Microelectronics would not deal a severe blow to the economy. It seems the Finance Minister is putting his foot in his mouth more often these days. One doesn’t oil the economy with garbled rhetoric but rather with action to stimulate it, the type we are seeing major economies abroad embarking upon.

Quite unfortunately this government is pretty sure it can weather the storm with the type of medicine it has procured in the last budget. Add the utilities’ tariffs and what you have is a potentially inflammable cocktail of austerity and bureaucracy, hardly the pat on the back the economy requires to be able to surf the waves. I wouldn’t be smoking a cigar in this scenario.

True, you have success stories like the one at Lufthansa Technik (LT), which is in continuous growth. SmartCity is also on the cards but not yet a trump one. In time we will see whether it will create added value to our economy or if it will turn out to be another speculative real-estate operation the likes of which this country has already experienced. If the government exploits its technological remit to the fullest extent it could very well provide a parallel to ST. But SmartCity’s relevance to the current crises is, to put it mildly, negligible as right now it cannot provide jobs nor can it foster economic activity.

But what is being gained at LT is swiftly being lost at other industries that are, and hopefully will remain, major contributors to our economy. Indeed the international recession is not only hitting just one sector of our economy but its tentacles are more far-reaching than what we are being made to believe. Indeed it is affecting other sectors that were registering continuous growth up till the third quarter of this year. This is very worrying.

An important yardstick of our competitiveness is our export potential. It has been in free fall for the last 18 months so much so that in one year, Malta has lost e100 million in exports. Economic observers normally point at ST for fluctuations in export patterns. Indeed in spite of falling exports our financial services as well as the pharmaceutical, printing and plastic sectors as well as on-line gaming were in continuous growth even up to a good part of 2008.

But now the scenario is changing. For the very first time, after a longish period of growth, these sectors have begun to shrink. Indeed exports in these sectors have fallen by a staggering 27 per cent in the last three months of 2008 with the pharmaceutical industry taking the brunt. Had it been a one-off it would not be raising any eyebrows, but in reality the slowdown was registered in each month since October. The writing is on the wall.

With recession deepening abroad, particularly in our exporting economies, these sectors are expected to experience more problems irrespective of how sweetly the government speaks of our economy. Needless to mention the manufacturing sector against which the recessionary tidal waves are already crashing and leaving a trail of redundancies and worsening conditions of work at major factories.

Making bold assurances, like the ones made by the Finance Minister as well as by the Prime Minister, is like sacrificing the economy on the alter of political expedience.

We need a government that sits down with these industries to devise a beneficial short-term plan to cushion them from the boiling cauldron of the international crises.

We need a government that thinks about the economy not politics.

Dr Gavin Gulia is the opposition’s main spokesman on the economy and the self-employed