Most of the socio-economic observers are pushing government into a very tight corner. This was fuelled by a comment which Minister Clyde Caruana passed some months ago. It was certainly not a slip of the tongue. Although shrouded, he repeated his statement on different occasions. He evidently wanted to sound the alarm bells; Malta needs to change the current economic model. In a nutshell, sustainability and improved quality of life should feature prominently in a new socio-economic model.
There is wide consensus amongst the socio-economic players. Malta needs to move away from a labour-intensive economy to a more value-added one. Indeed, climbing up the value-added economic ladder is not easy as one may think. A robust local and foreign direct investment strategy is necessary. This should be well intertwined with our educational system. An educational system which must be forward looking. In shaping the future of Malta, one needs to think outside the box. Malta's open small economy has the advantage to make the changes more swiftly and identify specific more value-added niches.
With a well-defined policy and an aggressive strategy, I do not foresee why Malta cannot repeat the economic successes achieved in the past when thousands of places of work were made redundant and replaced with new value-added employment opportunities.
I can share some vivid experiences when large footwear and textiles labour intensive factories served their workers with redundancy letters. There was the option to curtail wages to save jobs but that would have created precarious employment in the local labour market. It was Hobson's choice!
As expected, it was a traumatic experience for the workers and their families. My heart used to miss more than a beat while giving such agonising news to the many stunned workers. But that was a planned restructuring process which was inevitable.
Privatisation also brought about many challenges. Some fought tooth and nail that process and used workers for their partisan political advantage!
Today, with hindsight, we can safely say that privatisation brought about many challenges but indeed we have by far better employment opportunities in these sectors. Had government of that decade failed to privatise Maltacom, Malta Freeport, Malta International Airport, and other strategic places of work Malta could have failed to grasp the many opportunities we enjoy in the telephony technologies including mobile-phones and internet but, even more importantly, we must acknowledge that they support many gaming companies and the financial services with high-speed internet connections we enjoy today.
The financial services and ancillary services continued to be a driving force for the high-end of our work-force. These companies invested heavily and everybody can appreciate the transformation. These privatised companies are bottom line driven and have invested heavily in their infrastructure.
The Malta Drydocks was closed as it was neither productive nor efficient, with too many idle highly skilled workers wandering about during working hours. Concurrently, an aircraft maintenance company Lufthansa Technik was setting up in Malta. In a couple of months, the younger generation took the challenge and Lufthansa Technik was followed by other airline maintenance companies. This was all new foreign direct investment with more value added. Various pharmaceutical companies were also attracted to our shores.
Our economy continued to shift notwithstanding the world-wide economic recession which like the rest of the world impacted negatively Malta. An economic recession which was like the Great Depression of the 1930s. During that period Malta had a resilient economy and featured as the second-best economy after Germany.
Equally important was the setting-up of the Malta Maritime Pilots Co-operative providing sterling service in our harbours.
So basically, Malta has successfully managed to overcome an economic tsunami. What we are facing today is of our own making. Looking back one can easily identify some gross mistakes and make every effort not to fall in such pitfalls. Meaningful social dialogue is crucial, there is no place for arrogance or stubborn positions, authorities must not dig their heels to exercise their authority!
Malta cannot be an ostrich with its head in the sand because the authorities fear change.
Gejtu Vella
Human Resources & Industrial Relations Consultant