Facing the 21st century

A growing number of people are getting worried about unemployment and the lack of new job opportunities. More people are also preoccupied with the government1s inability to rein in the deficit and public debt. The mismanagement of the country's finances is putting the national economy and the welfare system at risk.

How times and versions of reality have changed! What a difference from just a few months ago, when the Nationalist Party conducted a strong electoral campaign insisting that the country's finances were on a sound footing and that the economic prospects looked more promising than ever before and a guarantee that education, environment, health care, roads and the general quality of life would reach top European standards.

The consistent message was that once Malta resolves positively the EU membership issue, everything would fall into place: "Malta is in the EU, all's right with the world!" I have met quite a few people who voted for EU membership because they have lost faith in local politicians. I used to argue, unsuccessfully, that EU membership would not make local politicians go away and that ultimately the success or failure of EU membership depends on the quality of local political governance.

Incompetent and corrupt politicians do not transfigure themselves once their country joins the EU. EU Commission officials do not run the political and administrative systems of member states. Ultimately it is national governments which have to deliver on the ground: whether in areas where it is exclusively within their national competence to operate or other areas which they run together with EU institutions.

Just a glance at the history of the EU shows that there have been countries which have prospered since joining the EU, while others are lagging behind. The difference lies in the ability of local politicians to get their act together and lead and manage their countries with success. Member states are not run on auto-pilot from Brussels. Things get (or do not) get done well (or badly) by national governments.

Take the economy. Governments must create the right environment to make their countries competitive. Even in this area it is up to national governments to deliver, or not deliver. Three years ago in Lisbon, EU leaders proclaimed that by 2010 EU member states would become the most competitive knowledge economies in the world. So far many member states have failed to translate this grand declaration into concrete policies and action plans. Other areas in the world are moving ahead.

Winning the skills race

In the last few days there have been attempts to put some energy and drive into what is generously called "the Lisbon strategy" and equip the EU member states with adequate education and training strategies for a successful knowledge economy.

We also need to get our act together in Malta in this crucial area if we are to have a viable economy and a cohesive society in the years ahead. We can only solve our deficit and debt problems and sustain our welfare state if we manage to create the proper environment for a competitive and successful economy.

Last April in the general election we were faced with a choice of how we should face our future: whether as members or as partners of the EU. Neither of them was an easy option. We still had to take inevitable steps to make our economy competitive and to learn to live outside the comfort zones we have grown used to in the last 30 years.

The basic difference was that within a partnership framework we could take steps more gradually and have more autonomous space to manoeuvre. Although we have a choice when it comes to relations with the EU, we have no choice when it comes to being in the world of the 21st century.

More than ever before investors are moving across the globe and basing their operations wherever it makes economic sense for them. They have also started fragmenting their companies by locating different parts of their operations in different countries to gain a competitive edge. They are moving across the different functions of their companies according to the strengths of the different countries where they decide to operate: depending on the availability of talent, capital, low costs or proximity to their most important customers.

What competitive edge are we going to provide in Malta and Gozo to today's investors? What parts of their functions would they be willing to locate in our islands? We cannot offer low costs anymore. We have to offer talent. We can only succeed if we manage to win the skills race. We must educate our young people in a way which makes sense in the 21st century. In an increasingly borderless world where capital, goods, services and people move more freely than ever before, the right education strategies make all the difference.

These strategies are needed both for those who are succeeding in the present system and for those who are failing. Those who are succeeding need to succeed in new ways while those who are failing need to be given the opportunities to develop the kind of employable skills in the world of the 21st century.

We also need effective retraining strategies for those who are already in employment if we are to have a successful economy that creates jobs and wealth to solve the structural deficit and public debt problems and sustain and improve the quality of life of our families and pensioners.

evaristbartolo@hotmail.com