The road to Lisbon

The European Commission last week published the Fifth Lisbon Scoreboard prepared by the Centre for European Reform (CER). It does not take much effort to understand that half way through its 10-year reform programme, the European Union is way behind its objective of becoming the world's most competitive economy.

Some weeks ago, European Commission President José Manuel Barroso stated that the Lisbon Strategy should be given a new focus, aiming more at creating economic growth and employment.

Since 2000, when the Lisbon Strategy was originally launched, the EU has undertaken to reform most of its policies and systems, from education to financial services, to energy and innovation.

In spite of these reforms the EU is nowhere close to the Lisbon targets. The situation is further accentuated by the competitive threat Europe is facing from China and India with regard to manufacturing and services companies. Other challenges come in the form of demographic changes, with a shrinking proportion of workers to pensioners. Europe is not at its healthiest, the scoreboard tells us.

Less than a full year from membership, Malta is given a "laggard" certificate in this exercise, placing at the very bottom of the 27-strong list which also includes Bulgaria and Romania, two candidate countries. The independent study, however, qualifies this negative showing by stating that "it is hard to make a definitive judgement about the tiny island state of Malta - it does not supply data for many of the key Lisbon measures'. The report goes on to say that other Eastern European new member states are a major concern for the Lisbon process. Needless to say, Malta and its minuscule economy is not making the heavyweights in Brussels lose much sleep.

For the local policy makers and stakeholders, it is indeed a cause for concern. Not having all the data and statistics can be seen, in the short term, as a justification for placing last in the list. But it also tells us that we need to polish up our act and stop bickering on petty parochial issues and look closely at how the country can attain a level of competitiveness which will assure us of a credible place in the global economy.

The report gives Malta the "villain" stamp where human resources and skills are concerned. Malta has the highest number of people without full education and the lowest number of female employment.

This situation has already been made known through other benchmarking exercises, namely the Innovation Scoreboard and the Competitiveness Index published over these last three years. The former had highlighted the deficit of science and engineering graduates, a primary ingredient if we seriously intend to attract high-value investment.

The situation is further complicated by the low level of growth registered over the last three years and the fiscal deficit as a percentage of GDP. In this unexciting scenario, Malta lost an opportunity to forge a social pact which would have given us a much-needed consensus to be able to address the real issues. It seems we are living in a country where it is more important to debate on issues like local elections, public holidays, gas cylinders and sympathy strikes than on how to kick-start our competitiveness and to increase our productivity.

The Malta Federation of Industry has been transmitting this message on each and every possible occasion. We simply cannot afford to lose more time and energy running on the spot. It is our duty, from the Prime Minister in his office in Valletta to the leaders of civil society down to the production workers in our industrial zones, to understand that nobody out there owes anyone a living.

The future of manufacturing in Malta can only remain feasible if we take the necessary decisions to become more competitive through innovative methods, to diversify our product and to reduce our costs.

Where do we go from here? Some say that the Lisbon targets are unreal for a small economy like ours. This is possibly true but not a good enough reason for us not to have our own, attainable targets.

The new European Commission President has appealed to all member states to produce an annual Lisbon Action Plan which would include measures that each country plans to take to meet its targets. Mr Barroso also insists that countries are to appoint a political champion to drive the action plan - a "Mr or Ms Lisbon".

The Federation of Industry appeals to the government to launch a national action plan for competitiveness based on achievable objectives and aimed at increasing growth and creating employment. It also appeals to all social partners to participate in the ownership and delivery of this plan.

Time is not on our side.

Mr Bajada is president of the Malta Federation of Industry.