Labour deputy leader lists economic ills

The new spring promised by the prime minister before the election had translated into an increase in unemployment and a lack of job security which was creating uncertainty and undermining economic activity, Labour deputy leader Charles Mangion said yesterday.

Exports were going down, the country's biggest exporter was facing difficulties and others were not expanding, Dr Mangion said.

The export of products and services dropped by nearly three per cent in nominal terms last year compared with 2002, which had also been a weak year.

At the same time, investors were leaving the country because of bureaucracy in spite of the fact that Malta Enterprise was set up on the premise that it would provide 10,000 jobs.

In the tourism sector, room occupancy between 2001 and 2003 dropped in all hotel categories, profit from tourism went down by an average of six per cent and a number of hotels were closing down because their owners could not continue carrying financial losses.

Dr Mangion said that direct productive investment had gone down between 2002 and 2003 and the only registered increase was in the sale, at a loss, of the RJ70s - the aircraft that had caused so many problems for Air Malta.

At the same time, the country was suffering from a serious problem of lack of competitiveness.

He said there were also problems in privatisation as could be seen from Maltapost. Regulators were inefficient when it came to addressing such problems.

Dr Mangion said the country's financial situation was deteriorating despite promises by the government that it would control the deficit.

The national debt had increased by Lm200 million in 2003, equivalent to more than Lm500,000 a day between December 2002 and November 2003.

At the same time, the interest on debt reached some Lm1.4 million a week, much more than the expenditure on the free health services, which were currently being threatened.

Dr Mangion said the Labour Party was proposing that a national plan for the stabilisation and regeneration of the economy should be drawn up as soon as possible.

The party was proposing an immediate plan of action to be taken with the aim of controlling the flood of discharges. Measures to render the country more competitive were also required.

Dr Mangion said that rather than hastening to put Malta into the eurozone, the government should implement a plan of economic expansion in all sectors, primarily manufacture, tourism and services, with the aim of creating new employment.