Rebuilding to reap rewards

Understandably, the government and the Nationalist Party are disappointed that, after having been responsible for preparing Malta for its membership of the European Union, the Labour candidates for the election of five members of the European Parliament have overtaken the Nationalist candidates by such a wide margin.

After one has worked so hard to reach a political objective, in the meantime enduring periods of tension, experiencing financial hardships, facing all sorts of problems, but despite everything, persevering till the desired targets are secured, one expects to enjoy the fruit of one's labours.

However, this did not happen, despite a professionally planned campaign to convince voters that the PN's candidates were the best choice. Apparently, the majority of the electorate wanted to convey a message in the most tangible way without jeopardising the government.

People are unhappy with the way the administration is functioning as they perceive that the order of priorities is at times questionable, conclusions reached are sometimes illogical and that the decisions taken leave much to be desired. It is possible that even when hard decisions are taken, and this Government has proved that it is able to take them, the most feasible solutions are not always found.

Air Malta, the Public Broadcasting Service, Gozo Channel and the dockyard are typical examples. All were faced with similar symptoms but the cure provided was different.

In Air Malta's case, employees were asked to shoulder the financial mess, commuters are faced with increased fares in the case of Gozo Channel and in both PBS and the dockyard surplus labour was either offered early retirement schemes, or else, if this offer was rejected, they would be posted in the civil service (and in a few cases the private sector).

It is public knowledge that the private sector does not tolerate surplus labour, as this has to be paid for by the profits made by the employer. If any employee is redundant, the way out is shown clearly and unceremoniously.

In this respect, Government has had to deal with the trade unions. Clearly, the trade unions are stronger and their demands are higher whenever the public sector is involved. It is a question of two weights and two measures.

The solution was, obviously, the creation of more productive work, but Maltese governments did not feel the urgency to create work as long as the people were satisfied with a job, albeit an unproductive one, and industrial peace was ensured.

Such attitudes are conducive to new problems. We all know that the public service is inefficient and inundated with surplus labour, yet surplus labour found in public corporations consistently finds its way to the civil service to create the proper scenario for a complete cacophony.

Government's financial position is already in dire straits and added expenditure makes the situation more difficult. Worse, we all know that in the long run, pensions are unsustainable because the retiring age has remained the same despite a longer life span; yet in many instances early retirement schemes are provided. Perhaps this is the greatest paradox of our times.

People are realising that the quality of life has improved and the standard of living in Malta has been enhanced primarily through borrowed funds and not through the generation of wealth by the proper management of economic development.

The underlying problems with which the country has been plagued are still evident; the culture of dependence, particularly on government expenditure, is plainly obvious, and it is debatable whether the people are prepared to avail themselves of the huge opportunities that will come their way with this new EU story.

True, past governments benefited politically from the strategy of initiating economic activity based on borrowed funds as well as with the other approach of buying industrial peace. In a way some people benefited as well.

Clearly, however, reliance on borrowed funds cannot last for ever; unfortunately, the next step to ensuring consistent return on investments made was never taken; and there was a price tag for this deficiency. The price has to be paid ultimately.

It is the present Government that is facing the consequences of those short term perceived political advantages.

Undoubtedly, the present government is determined to tackle the many problems with which our country is burdened, find solutions and implement them for the benefit of all. It is a Herculean task for the number of problems is substantial and it is subject to dispute whether any government could tackle them simultaneously.

The situation requires deep reflection and study. It should focus on whether there are any underlying symptoms that can identify the core of the problems. It is quite easy to conclude that pensions, the civil service, the environment and excessive government expenditure are the problems. And the next logical step is to tackle them in turn, forgetting for the moment that while trying to solve them you might create other problems, as happened in the cases of PBS and the dockyard.

One is likely to recommend that each area mentioned requires particular attention and that specialised people need to be hired to suggest solutions. Yes, the number of reports commissioned and prepared is limitless. Malta paid substantial amounts for these reports, most of which served the purpose of preventing dust gathering on the bare shelves. There are other occasions when, because of political exigencies, remedial measures are not taken and problems are left to escalate to unmanageable proportions.

The EP and local council election results should be an eye-opener. Past practices may have been beneficial to governments as they helped them retain power, except for one instance. But now these practices are no longer tenable and so problems need attending to urgently.

Luckily for the government, the MLP's win is just a reminder of people's feelings about the way things are going. Though it gives the Opposition the satisfaction of becoming the biggest party, the MLP is still powerless to effect changes and meet people's demands. That role is still retained by Government.

It is quite easy to state that Malta's problems stem from mismanagement that borders on corruption and vested interests. If we really want to take off, we must focus on economic development with all its attendant ingredients in terms of education, health and a professional deployment of all our country's resources without any quarters being given to accommodate outside forces. We are still at a stage where we have to appreciate the type of resources around us, including cultural heritage, and exploit them to the full so as to impact on our national economy.

After realising exactly the size and level of the domestic platform, we have to embark on an outward-looking approach to discover new niches that are available abroad and still untapped.

We are still far off the mark of perceiving that each person has the ability to be an entrepreneur, always on the look out for new opportunities.

The culture of dependence will not allow us to stand on our own two feet. Perhaps this dependence syndrome has been purposely nurtured for selfish political ends. But now the end of the road is quite near.

If the present administration really means business and wants to meet all problems head on, instead of sacrificing economic development to political exigencies as used to happen in the past, there are at least three ways that can restore confidence in ourselves and achieve long-term results: allow more elbow room to people with ideas; adhere to a strict professional conduct in all dealings; and base all appointments on meritocracy.

It is hoped that in these coming four years, a new ray of light will shine on our shores. We have to prove our intention to outlaw corruption, vested interests, nepotism, dependence, and remember their meaning only to be able to shun them. Follow the requirements of economic development in all its salient features and Government will reap the rewards for its hard work, not as happened recently.

Dr Borda is an economist specialising in the economic development of small states.