The Malta Independent 24 January 2022, Monday

The economic impact

Alfred Sant MEP Thursday, 13 January 2022, 08:00 Last update: about 11 days ago

Since the Covid-19 pandemic struck, its economic impacts have been multiple. They just kept spreading. The most important first impact resulted from the steep decline in demand; for several sectors, it was almost total.  Some enterprises discovered that sales of their products and services had become practically inexistent. The worst in line were firms in transport and tourism.

Other problems emerged with the tremendous upheaval in employment structures that occurred, the damage done to educational systems which had and will continue to have long term economic consequences, the disruption of investment flows and of merchandise traffic, the shake up in public finances as governments went all out to spend as much as they could to prevent their economies from collapsing... Now, the latest impact that has gotten most attention is the way by which enterprises have come close to paralysis because so many of their staff have been infected with the virus or are in quarantine.

In past weeks, we have been hearing about this from industries, hotels and shops. The problem has been slowly gaining momentum since when, in the US and Europe, thousands of flights were cancelled because the staff who would  have run them were sick.

It will be quite difficult to arrive at a final estimate regarding what the economic costs of the pandemic will amount to. But we need to have such an estimate, in order to understand how and whether the efforts to promote recovery now being organised will be enough to compensate for the losses that have been registered.

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TIT FOR TAT

Whoever was looking from the outside at what has been happening in the Malta Parliament recently might conclude that MPs are playing a game of tit for tat. First a member from one side is discovered to have problems with the tax authorities, then somebody else from the other side; then vice versa and so on...

I am convinced this is not something that is pre-arranged but a story that rides on the usual surf which political controversies generate as soon as they get launched. And there is little doubt that in their wake, “spies” from both sides placed in the public administration will be making their “necessary” researches to dig out more dirt.

It does not look like this way of doing things will cease shortly. It is damaging the reputation of all MPs.

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GOVERNMENT EMPLOYMENT

One doubts whether it makes sense to simply take at face value the statistics that show how many people are employed with the public secctor. Since the third Fenech Adami administration (PN), a number of government jobs that previously used to be carried out by state employees, were hived off under contract to the private sector. This would then employ workers, many times under conditions that would be different to those of state employees who would be doing the same job.

The money to finance such operations would be paid for by the government, on the basis of the taxes we pay; employees would feature as private sector employees. No government to date has tried to rein in this practice; to the contrary.

Among the consequences: Government expenditures grow but how they are impacted by employment is not transparent; the employment conditions of workers engaged by the private sector are inferior to those offered by the government; the constitution which regulates how government employees should be treated will remain inoperative for the “private sector” employees. Everybody is well served, except perhaps taxpayers and the workers involved.

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