PM calls for adoption of social pact

Prime Minister Eddie Fenech Adami yesterday said the Union Haddiema Maghqudin had become a protagonist by drafting a social pact document and expressed the hope that other unions and social partners would take its cue as such a pact was the key to success.

Speaking at the union's general conference, the prime minister said he was very satisfied that a union had compiled such a document because although he was sure that some aspects of it would be changed following widespread discussion, he always believed that for the country to move ahead there had to be dialogue, not confrontation and division.

"The social pact is a guarantee that we can make the most of our human resources. It is essential if we are to create wealth, to get the best out of business, workers and government and see how everyone's efforts can be blended together and strengthen the economy," he said.

Dr Fenech Adami said the government had been advocating the need for such a pact using different terminology for the past two years. The setting up of the Malta Council for Economic and Social Development had been a step in this direction. The forum was still not as efficient as one would have liked it to be but he said he was sure it was the tool where the social pact would be forged.

He said the government was sometimes criticised for decisions it had taken, such as the one about the restructuring of the drydocks.

"We have not found the solution but have moved a step ahead. In 1987, the ship repair and shipbuilding employed 8,000 people. They now employ 1,600. True there are 400 in other productive employment elsewhere and we hope they will be absorbed by the private sector. But there is a social dimension too and we did not sack 1,000 people, which some say is what needs to be done.

"Gone are days of short term solutions. We need the whole picture and that is what a social pact is all about," Dr Fenech Adami said.

A bid to make the country tick - G. Vella

The social pact should sensitise the government and future governments should not promise what cannot be delivered, UHM secretary general Gejtu Vella said.

"Governments have to be outward not inward looking. We do not live alone in the world. We are an island but we are not isolated and we cannot pretend that we are not affected by what happens even in remote parts of the world," Mr Vella said.

Mr Vella said all airlines "went into a cautious mode after the September 11 attacks and some slashed jobs, others went bust. But in Malta the opposite happened. As a union we are glad when increases are given but who was responsible for increases to Air Malta staff in the collective agreement finalised after September 11," he asked.

Mr Vella said the increases given at the time went beyond the norm in the country and now unions were meeting the government because there are difficulties at Air Malta. "The workers who received hefty increase are wondering what will happen to their job," he said.

He said Malta was at the crossroads and decisions had to be taken. The union felt it was its duty to do something positive by drafting the social pact.

"We have eradicated the 'us' and 'them' phrases from our vocabulary. We are in a trust building phase between employers, the government and employers. There is also the opposition, Alternattiva Demokratika, the Church and civil society," Mr Vella said.

He appealed to the Malta Labour Party, AD and the Nationalist Party to come forth and say how the economy could be improved.

Mr Vella said that although improvements had been made, Malta should start comparing itself to developed countries and not keep making comparisons to what had been achieved locally.

He said Malta had a lot of faults but there was also a lot of good that needed to be strengthened and what was not good had to be changed. He criticised the unnecessary bureaucracy by many authorities and agencies.

"These are all demi-gods appointed by the government. All have their territory. But what are these costing businesses, small businesses in particular? Why must one go to and fro to get a rubber stamp. Why not pre-define the period within which a licence has to be issued," he asked.

Mr Vella said the social pact had all the ingredients to make the country tick and hoped that the discussion about it would continue so that it would be finalised and implemented.

He said his union will not accept any politician saying there were alternatives to the social pact unless he said what these alternatives were.

Need for politics based on consensus - H. Vassallo

The chairman of Alternattiva Demokratika, Harry Vassallo said the social pact was a plan that had to be further built upon but he expressed doubts as to whether Malta had the right foundations on which the pact could be built.

"It is a bold step by a trade union to recognise the difficulties and make such a proposal in such a professional way. AD is willing to go out of its way to see unification and the way forward," Dr Vassallo said.

He said AD was not willing to paint a rosy picture when things were not well and added that the two main political parties hid information fearing a mauling from the other side.

Dr Vassallo said all appeared to be well before the last general election but now we were hearing of problems in every sector.

"We are expecting a miracle from the social pact when our two party political system works like a stone crushing machine. Political parties do not leave an inch of space to each other.

"Governments in Europe are coalition governments that do not hide any information. We need to have permanent transparency, which can hardly come about as long as the party in government keeps hiding information. AD has a vital role to play," he said.

The first step in breaking the mould could be in the June 12 elections for the European parliament if AD elects a member, he said. "We want politics based on consensus. We have done our part and will continue to do so. Now it's up to you," he said.

It's all about trust - J. Wienen

The secretary general of the World Confederation of Labour, Jaap Wienen said the social pact drawn up by the UHM had all the ingredients to make the country "a success".

Two of the key factors in the pact as proposed by the union were the dissemination of reliable and clear information and education and training of the workforce.

Mr Wienen said the social pact was all about trust between the social partners and the government should share information with the unions.

He spoke on the economic forecasts for Europe which showed that the EU was still far from achieving the Lisbon agenda and that there was a need for a better balance between economic and social developments in the EU.

"Social partnership is a key element in the European social model and the UHM document expresses an excellent balance between economic and social development. A well balanced social pact can stimulate the economy and better workers' position. But it has to be complete and have the full commitment of all parties involved," he said.

Many reforms are imperative - G. Tanti

UHM president Gejtu Tanti said he was pleased to note that over the past three years the union was strengthened and became better organised, Malta had become part of the EU and there was dialogue between the social partners.

Those were the three targets the union had set itself at its general conference three years ago, Mr Tanti said.

Mr Tanti said there were many reforms that had to take place, such as in the health sector and pensions reforms, and if these were not carried out carefully there could be negative economic and social impacts.

He said the time was now ripe for a social pact to be implemented both because of the economic and social situation and the international situation as well as due to the fact that Malta was now part of the EU.

At the beginning of yesterday's meeting, Mr Tanti, Mr Vella and Joseph S. Vella, vice president, were confirmed in their posts for the next three years.

The union delegates unanimously approved the union's document entitled A Social Pact For A Better Future.

The UHM also launched its hymn.

Opposition leader Alfred Sant, who was pencilled in to address the conference at 3.35 p.m. did not turn up. No explanations were given.

No more room for pique - J.C. Grech

John C. Grech, one of those who drafted the UHM's social pact document, said the challenge Malta faced was how to make itself more competitive.

Competitiveness did not mean lower wages. But everyone had to realise there was no more room for pique.

"The capacity to confront and floor each other is extraordinary. It is important to make it quick as otherwise we can never reach the stage others are in economically," Mr Grech said.

Everyone had to work together and shoulder some of the burden in order for everyone to benefit. The social pact created an environment of shared dominance and addressed the mechanism of how the country could move ahead by addressing priority areas.

"We need to look beyond the tip of our noses if we want to survive," insisted Mr Grech.

Stefano Mallia, another of the authors, then outlined the salient points of the proposed social pact, most of which had been reported in The Times on Monday.

It aims to enhance competitiveness; increase efficiency in the labour market and promote innovation; reduce bureaucracy and create a business friendly environment; provide a stable economic framework and enhance the tourism product.

The threat of slow growth - M. Bonello

Ireland has forged six social pacts since 1987 and has reversed a situation worse than Malta's, Central Bank governor Michael C. Bonello said.

The different pacts ranged from curbing wage bills to modernising education and health.

In 2002 Ireland's GDP was 2.5 times higher than in 1999. Its growth rate was nearly eight per cent. The government deficit, which used to be worse than Malta's, had disappeared, and the country ended up with a positive balance. Unemployment was down to four per cent in 2001 from 16 per cent in 1993 and the stable, dynamic economy was attracting a lot of investment.

Malta, Mr Bonello said, had reached a good standard of living but this was under threat from slow growth, now at under three per cent, due mainly to lack of competitiveness. Malta was practically at a standstill while other countries were progressing.

The decline in tourism and in the electronics industry were big factors in the low growth rate. Malta had very vulnerable markets that were hit by demand from abroad and government could not increase spending to fuel the economy because of the deficit problem.

Malta was also affected by excessive consumption and its exports did not make good enough for its imports. "The more you consume the less you grow and Malta is practically consuming its GDP. The country needs to recover from its internal and external deficit and needs to boost its competitiveness in order to export more," Mr Bonello said.

The country also needed to invest more in research.

Productivity was on the rise, especially in industries that competed for overseas markets, but salaries had risen. Figures showed that the economy grew most when productivity increased at a rate higher than the cost of labour.

The labour participation rate was low, especially for women and elderly people. Although the government did not consume a lot of the GDP, countries with similar government expenditure had considerably higher economic growth.

Malta's expenditure on educaton was also low and it had the highest rate of early school-leavers.

For Malta to converge with the EU's average of GDP per capita by 2025, the economy needed to grow by 4.5 per cent annually. If growth remained the same, it would never do it, Mr Bonello said.