FOI sees lack of state interest in economic reform

The government cannot be excused any further for its lack of interest and action on the reform agenda for the economy, the Federation of Industry said in a strongly worded statement.

The FOI noted "with concern" the introduction of the euro tariff with effect from November 15 by the seven member lines of the Shipping Conference for Italy, Malta and Tunisia.

The conference lines, including Sea Malta and Grimaldi, which are the main carriers of trailers to and from Malta, used this as an occasion to raise seafreight rates between Malta and Italian ports, as well as for shipping merchandise to and from Tunis and Marseilles, the federation said.

"The pressure of competitiveness should now be a matter of urgent national concern. There is no time to lose to tackle business competitiveness on all fronts," the FOI said.

The federation expressed total disappointment that vital transport links for shipping and receiving merchandise were hit by tariff increases ranging between seven and 14 per cent.

"The situation is all the more serious when this increase follows another one of 10 per cent implemented two-and-a-half years ago. Malta's industry, a vital sector in our economy that generates the highest value added in the country, is suffering from diminished competitiveness and this is yet another serious blow that will continue to weaken industry's performance," the FOI said.

It said that following an exchange of views with Sea Malta, "it has become evident that local government-induced costs and international compliance costs are at the root cause of such an increase in tariffs.

"Official registration fees of vessels were increased substantially in Malta and pilotage fees were increased by 90 per cent.

"There were also new international compliance costs connected with the implementation of the International Safety Management (ISM) code and the new international ship and Port Facility Security Code (ISPS)," the FOI said.

The federation warned all stakeholders in the economy that industry was facing severe competitiveness problems. As a result, companies have repeatedly registered a reduction in profits, a situation that could not be borne indefinitely, it said. "It is therefore to be expected that industry has to take drastic decisions and over the past year there has been a consequent number of closures of enterprises and a reduction of several hundred jobs.

"There should be no illusions about industry's disappointing performance being limited to the clothing industry. Enterprises in other sectors that are usually considered to be strong are becoming increasingly vulnerable in a difficult global market environment.

"Even the tourism sector is suffering from lack of competitiveness and from decreased profitability," the FOI said.