On a national level, the government budget has the all important task of redistributing resources as well as creating and setting a set of incentives that are deemed necessary to stimulate economic growth and ensure social justice

Given the increasing difficulties we are facing in Gozo, many expected that this year’s budget could have made an extra effort to address the prevailing situation. However, this year’s leaves much to be desired.

Gozo is characterised by a low employment rate and a high unemployment rate especially for those aged between 20 and 30 years. Tourism is stagnant, while the manufacturing base that in the past years used to generate and offer employment opportunities to many Gozitans is now inexistent. The eco-Gozo concept is failing miserably to provide the necessary platform to stimulate employment. Investment in Gozo in terms of gross fixed capital formation as well as in terms of foreign direct investment is almost missing. It was against this scenario that the budget was expected to give a new impetus to the Gozitan economy and to provide answers and solutions to the various challenges faced.

Permanent employments that offer the desirable level of job satisfaction cannot be created simply by promoting vague and empty slogans. Employment opportunities can only be created if economic prospects are good and the fundamentals are solid enough. The economy cannot flourish if investment fails to take place. Last year, foreign direct investment in Gozo amounted to a miserable €1.5 million, while productive investment was not only on a low record, it also failed to create any significant employment opportunities. The three projects approved by Malta Enterprise for this year offered employment to only eight people. Employment in Gozo only increased during the first half of the current year because of an 11% increase in public administration employment.

The lack of private investment must be re-addressed by a higher level of public investment. However, total public capital investment in Gozo for 2011 amounted to only €16.5 million and in the financial estimates for 2012 public capital investment is expected to decline by almost €1 million, down to €15.3 million. Out of this amount, almost €1.5 million are planned for road construction and maintenance, while €4 million are dedicated to eco-Gozo. On the other hand, only €35,000 are dedicated to improve tourist facilities.

The eco-Gozo concept around which most of the prospects that this administration has for Gozo seem to revolve is becoming more vague and few seem to understand what it really strives to achieve. In previous budgets we were told that the eco-Gozo project will consist of €25 million spread over three years, but now we are told that this sum will be spent over five years. Out of the €11 million initially meant to be utilised, we are told that only €3 million have been used so far. The budget speech states that for the next two years the bulk of investment under the eco-Gozo umbrella is planned to go towards a programme of aid so that the economic operators in Gozo will invest in alternative energy. No further details are provided but presumably this is only limited to investment in solar energy. Its success depends on how many operators will eventually opt for such schemes. If past practice is of any guide, then very few will bet against the latter possibility.

The budget speech also makes specific reference to the lack of employment in Gozo. It acknowledges that “the progress in employment and jobs in Malta during the recent years is not proceeding at the same pace in Gozo”. It is indeed a big admission as the Ministry for Gozo has always claimed the contrary. What is still unclear is how this challenge will be tackled. The budget speech states that “some situations may be improved with coordinated effort, such as the requirement that MEPA and other authorities understand better the reality in Gozo” – although how this could create sustainable employment is up to everyone’s intelligence to guess.

In a nutshell, the budget only contemplates minor works for Gozo, such as the cleaning of valleys and the collection of rainwater. There is no mentioning of concrete proposals that would enhance Gozo as a unique tourist destination and how to attract productive investment that would guarantee employment to Gozitans in Gozo. Furthermore, it fails to set targets, without which any positive subsequent outcome could easily be interpreted as a success.