As we welcome the New Year, we would do well to look at our achievements in recent months and start thinking of how to sustain what is good and how to improve matters that could have been done better.
During the last days of 2015, the National Statistics Office published its figures for regional gross domestic product (GDP) covering the 2011-2014 period. The picture emerging from these statistics is truly encouraging. Whilst during 2014 GDP increased by 5.8 per cent in Malta, the growth in Gozo reached 8.1 per cent. The Gross Value Added in Malta increased by 4.9 per cent, whilst that of Gozo increased by 7.3 per cent. Employment in Gozo was also up, increasing by 4.8 per cent compared with the 3.9 per cent increase registered in Malta.
These are the first steps towards achieving full convergence with Malta. It is also a confirmation that Gozo is contributing positively to the national growth rates, something that was unthinkable only a few years ago.
When a person is inundated with positive news, it is expected that he or she becomes less responsive to good news. The economic success achieved during the last two years has created a sense of security and at times people take it for granted. Just to put these figures into their context, growth in Gozo between 2000 and 2005 averaged 0.4 per cent, while between 2009 and 2012 it managed an average of 3.9 per cent. In employment, the same dynamics were present: the number of people gainfully employed increased by an average of 2.2 per cent between the first five years of the new millennium and by one per cent during the last legislature.
As I had the opportunity to state, these achievements do not occur by pure coincidence. Rather, they are the result of a clear strategy built on the genuine input of all the stakeholders and numerous individuals that were willing to contribute towards the growth and development of Gozo.
The government is a key player in creating the necessary environment that is conducive to growth. However, ultimately it is the private sector which invests its resources and skills in new ventures and creates employment and wealth. The central role of the private sector increases our confidence that economic growth will not be a one trick pony but instead will be sustained in the future.
It is exactly for this reason that we are confident that the success achieved during the last two-and-a-half years is not an accident. They are, instead, the first results of a new norm. This can only happen if economic growth is backed up by strong fundamentals.
The NSO figures shed further light, albeit indirectly, on this important issue. If one looks at the details provided, one notes that the growth in Gross Value Added (GVA) was very much a broad-based development, with all sectors, (except financial/insurance and real estate) registering very positive growth. Yet even for these two sectors where GVA declined, employment increased, suggesting that these sectors will see an improvement in the months to come.
Another indicator of sustainability is the degree of volatility - how much growth oscillates from one period to another. Having a sector registering a good performance in one year and then declining in the next is no good. Good fundamentals point towards consecutive periods of expansion.
In fact, discounting for agriculture which is impacted by seasonal and one-off events, the overwhelming majority of sectors registered both consecutive and accelerating growth. Manufacturing in Gozo, which suffered a massive contraction in importance during the last two decades, seems to have succeeded in turning the corner, registering an increase in GVA of 4.2 per cent. This augurs very well for the future, especially now that a leading manufacturing firm in IT and related services has started operations in Gozo.
The changes we are seeing in Gozo are part of a long-term process. During the past two decades, our economic reality has changed but at times we failed to take note and preferred to persist in trying the same old thing. This Administration is not afraid to explore new things and go into new growth sectors. The decision to back RS2 to start its operation in Gozo is one of them. The Barts school and the new hospital in Gozo is another example.
These results and events should please a lot of people and show that Gozo is looking at new growth paths, giving the island a breath of fresh air and investment. A new year brings innovative resolutions, although uncertainties are also a part of life. We are confident that what we have achieved so far is built on strong foundations and we will do everything in our power to ensure that its success is strengthened in the coming years. We know that we still have a lot of work to do but I am sure that, together, we can see a better Gozo in the coming years - a Gozo that will make us all proud.