Gozo’s hopes of catching up with Malta and eventually with the rest of Europe in its level of economic development are being shattered year after year.

A recently published NSO news release on the regional Gross Domestic Product (GDP) for the years 2004-2007 had a lead statement saying that Gozo is contributing e315.2m to national GDP. Out of its time-series context, that statement could be just a red herring.

Delving deeper into that NSO release, one finds that, after four years in the EU, Gozo is lagging further behind Malta in its economic development, in the creation of wealth and in economic output than it was prior to accession.

On analysis, the NSO’s figures show that, with EU accession, the previous downward trend in Gozo’s contribution to national GDP has continued inexorably in that direction. In 2003, the last year before accession, that contribution stood at 5.95 per cent. It went down to 5.9 per cent in 2004, 5.86 per cent in 2005, 5.84 per cent in 2006 and 5.79 per cent in 2007. This successive yearly decline in Gozo’s share of created national wealth means that, in the first four years of accession, Gozo lost e21 million of this wealth. This is more than twice the total amount of Gozo’s 10 per cent share of post-accession funds that the Maltese islands received from the EU during the same four years.

Indeed, joining the EU without adequate support was not a sure bet for Gozo. We now have irrefutable proof that its 10 per cent share of EU funds – less the various leakages in the island’s tiny, weak and wide open economy – does not suffice to halt, let alone to reverse, the regressive trend of wealth created in Gozo compared to that created nationally.

A closer look at the underlying factors leading to Gozo’s declining share of national GDP further confirms that the island’s economy is in need of greater support, not just in terms of EU funds but also in terms of an effective state-aid policy.

Gross Value Added

Gross Value Added (GVA) is one of the key indicators used for measuring the economic output rather than the wealth of a region. This key economic indicator gives yet another proof that in 2007 Gozo was lagging further behind Malta than it was in 2003. Indeed whereas in 2003 Gozo’s GVA stood at 5.91 per cent of the national one, it was down at 5.78 per cent in 2007 after four years of continuous decline.

Moreover, the Gross Value Added per job in Gozo was 92.52 per cent of the comparative national value in 2003 and 92.37 per cent in 2007.

Employment

In 2003, the average national total employment stood at 155,217 and increased to 167,306 in 2007, an increase of 7.8 per cent. In Gozo during the same period, total employment increased from 9,986 to 10,478, an increase of 4.9 per cent.

It need be noted that whereas 15.4 per cent of the national gainfully occupied population have a part-time employment as their primary job; the relative figure for Gozo is 18.5 per cent.

Again, the average number of registered unemployed for 2003 was 7,134 at the national level and 551 in Gozo. The former was down to 5,540 in 2008, a decrease of 22.3 per cent; whereas the Gozo average for the same year was up to 675, an increase of 22.5 per cent.

Consequential to all this, the national unemployment rate went down from 4.4 per cent of the labour force in 2003 to 3.5 per cent in 2007, whereas during the same period this rate for Gozo went up from 5.2 per cent to 6.0 per cent.

This bleak employment scenario for Gozo becomes even bleaker when put in an activity rate context as those in employment together with those seeking work in Gozo are only 55 per cent of the working age population. For Malta that rate is 63 per cent.

Obviously, convergence is not making any progress in Gozo. More substantial and effective support is needed for a catching-up effort to make an impact on the island’s development rate.

One would hope that the EU Office in Malta made Brussels aware of this precarious economic situation in Gozo and that the Commission then took necessary remedial action. Otherwise the EU principles of solidarity with backward regions and of harmonious development would not be worth much for Gozo.

Frank J Psaila

Victoria