Call for Lisbon Agenda implementation proposals

The government is receiving recommendations from the public on how Malta could best work towards the attainment of the targets of the Lisbon Agenda for economic competitiveness, Minister Censu Galea told Parliament.

Winding up the three-day debate on the Lisbon Agenda late on Wednesday, Mr Galea said recommendations would continue to be received in the coming weeks and months ahead of the drawing up of the national action plan on the Lisbon agenda after the summer. This was something which had been recommended by the Lisbon agenda mid-term review, with the plan focussing on national needs within the parameters of the agnda targets.

He said the government was committed to carrying out various reforms, such as at the ports. It also wanted to roll back bureaucracy, facilitate business start-ups, and raise the employment rate, one way being by reducing the number of workers who stopped working early.

Malta, he said, would also continue the fight in the EU to retain the opt-out from the Working Time Directive in order to enable workers to work beyond the eight hours of overtime which the directive lays down.

"Workers should continue to enjoy the right of deciding how much to work and contribute to the economy," the minister said.

The government also wanted to build on the liberalisation process started over the past few years because this had brought about greater efficiency and choice.

He said that while the opposition was blaming the government for poor scoring by Malta in Lisbon agenda comparisons with other countries, it was worth pointing out that countries which joined the EU with Malta had been able to make faster progress because economic reforms and their accession process also found the backing of the opposition.

And in criticising Maltese education levels, the opposition would do well to remember the state of the sector under Labour before 1997, when access to the university was severely limited and there was no Mcast. Where would Malta be had all that not changed? He would not deny that much remained to be made, but he would also recognise the progress made in areas such as education, information technology and telecommunications.

Mr Galea said that ultimately, the success of the Lisbon agenda depended on everybody's contribution.

Earlier, Charles Mangion, the last speaker for the opposition, said countries had to address the necessary policies under the Lisbon agenda according to their own realities.

A key element which the government needed to urgently tackle was excessive bureaucracy which hindered economic growth.

The government also needed to create a better investment climate, raise the employment rate, improve education standards and address problems in tourism.

It was a matter of concern in Malta that the proportion of people at risk of poverty had increased. Low income workers were being increasingly burdened as inflation was rising faster than wages.

It was wrong to give the impression that social benefits were the cause of the country's financial problems. He was not saying that one should not review how best to manage, say, the health sector and how to achieve better results from the spending on education. But one should not blame the social sector for the country's ills in order to take the easy way out and perform spending cuts there.

Indeed, the percentage of GDP allocated to total social security benefits was unchanged in the past two years and indeed had hardly changed since 1995.

The achievements of the Lisbon agenda targets would remain a wish list unless the country recognised its realities and what its problems were. And it was important to keep in mind that the agenda linked its economic growth targets with social cohesion. Europe had distinguished itself by building the welfare state.

Dr Mangion said one reality in Malta was how in the first quarter of this year, exports as well as the importation of industrial goods had declined. Imports of capital goods were down by Lm17 million and exports had shed Lm51 million. The trade gap widened from Lm77 million to Lm109 million. This was a trend carried over from last year.

There were both domestic and international factors for these declines, but one should certainly not blame international terrorism, as some government speakers had. That was a factor common for all international trade, but other countries were doing better than Malta.

Dr Mangion said the Lisbon agenda should be put in its right perspective. It could be divided into six main sectors namely the general economic situation, jobs, innovation and research, economic change, social cohesion and the environment.

All had their relative importance. Social cohesion and the environment were both given a lot of importance and this was a reality Malta should also plan for. The government should come up with incentives for the people to use alternative sources of energy, for example. There should be a plan to encourage the use of public transport.

The agenda aimed for economic growth of three per cent, but that level had only been reached by a few countries, such as Estonia, Latvia, Poland and the Czech Republic, not least because of good governance and accountability.

In contrast, Malta in the past three years saw a drop in GDP per capita from 77 per cent in 2000 to 71.7 per cent this year and the downward trend was projected to continue. Labour productivity per person employed had declined from 95.2 per cent of the EU average in 1999 to 84 per cent last year and it was expected to reach 83.3 per cent next year, according to the convergence report.

Public debt had risen from 57 per cent of GDP five years ago to 75 per cent last year.

Dr Mangion observed that the Lisbon agenda set a 70 per cent employment target. This was important for social cohesion. But the trend in Malta was negative. It was true that male employment was among the highest. but too few women were working. Women who opted to focus on bringing up their children should be commended but what facilities, such as child care centres, were being provided for those who wished to work?

How was it that the national plan for employment showed that male employment would drop by one per cent by 2010?

Dr Mangion reiterated criticism by the opposition on the low percentage of young people in post secondary education compared to the EU average, and, especially, the low number of students following science subjects.

This reality, he said, had to be seen against the fact that Malta's outlay on education was similar, as a percentage of GDP, to most European countries.

Malta had ended up with fewer skilled workers after trade schools were closed instead of bring improved. And a pool of skilled workers at Malta Drydocks was under-employed.

He also asked what had become of reform at the Malta Tourism Authority, saying an MTA team assigned to oversee the process was removed a month ago. Was the government not capable of implementing the reform it had paid for? The MTA, since 1999, had consumed Lm45 million but tourism numbers had not improved. There had been much talk on improving the tourist product, but not much else.

Dr Mangion said private enterprise needed venture capital. The government had promised venture capital, but nothing had happened.

Privatisation had not yielded new direct investment, and, indeed, even the privatisation plans had practically ground to a halt.

Concluding, Dr Mangion said it was about time the government started taking initiatives such as to tackle the problems of bureacracy, education, business promotion, tourism and accountability.