Comment | Wednesday, 25 November 2009

Looking beyond tomorrow

The loss of 1000 jobs in October has been a sobering announcement. How many more were lost this month? With increased energy tariffs looming on the horizon as we break into 2010, the prospects seem bleak for other firms and their employees.
The determined optimism expressed by Minister Tonio Fenech announcing recovery from recession by mid-2010 may be the last straw we have to clutch and some of us may be grateful for it but it remains more a pious hope than a rational prediction. How can we expect our economy to grow at a faster rate than the EU average when we have no extraordinary stimulus package to outshine the massive injections being performed elsewhere?
A more substantial bit of silver lining in the form of the SR Technics project lays out attractive prospects for people with skills in the field of aircraft maintenance. How many of those who lost their jobs last month can apply? Hopefully, there will be found a sufficient number with appropriate skills and/or potential to develop them. Meanwhile what happens to the others?
We are told that ETC is doing a great job retraining people who are laid off and many who have been knocked sideways by the global recession are more than eager to return to a skilled job. The question we are all asking is how soon will that be?
Even as the world climbs out of its fear and mistrust and rediscovers the courage to take risks, recovery will be slow. The desire to return to the way things were before the crisis may be compelling but it is unlikely that they ever will be quite the same again.
The world is adjusting and we have to dodge and weave until it settles down again.
Given that there will be a significant period before external forces drive us forward again, we have to look to our domestic economy to generate well-being or at least to prevent the worst discomforts.
The budget did address this challenge with a number of useful schemes but it seemed not to give them sufficient importance. A lingering doubt remains that it will all be too little too late to be an effective stimulus. Experience from 2008 shows that the uptake of government offers has been slow or small either because the offer was not sufficiently attractive or because the devils in the details frightened everyone away. Will these schemes be less effective than we must hope they will be because they are strangled by red tape?
If the Maltese did not go for a Government offer it must have been because of poor design. The Maltese are renowned for their ability to exploit the system. Not so their Government. The uptake of EU funds by Malta has fallen far short of the sums available, by something like 50%. We cannot continue to miss opportunities at this rate. Not in a year as challenging as 2010 is expected to be. Capacity building in this sector, spending money to make sure that not a cent of the funds available are lost, would have been an excellent investment.
Domestic private wealth does not figure in the budget except by inference but there is more than ample evidence to show that there is plenty around in the form of capital seeking a home. Every private bond issue is almost instantly oversubscribed. There appear to be many millions of euros asking for somebody to employ them.
The public private partnership scheme for exploiting Government properties may be just the ticket. Massive wealth stagnating in the pockets of property developers and speculators is being offered an attractive employment in a field that seems familiar to its owners. Here too the details are critical but so far investors seemed to have favored enterprises they seem to know. The Government is a far safer partner than most and such investment far more fungible in case of need. What it will mean in practice and how far the public can stomach the privatisation of heritage assets may be another matter but as far as creativity goes this scheme has it all.
Can we go beyond it? In what other areas can the Government act as a pathfinder rather than as the principal actor? Can private small investors be given a safe haven in energy development? In research and development programmes?
This is a great time to invest in capital projects and none better to invite private capital to participate. Ironically it is the global financial crisis that can be the catalyst for moving the Maltese away from investing in Maltese properties and foreign stocks into becoming the drivers of domestic innovation and revenue generating enterprise. If such a force can be redirected, then finding employment for October’s global recession victims may not be beyond us.
If we can move fast enough and yet with the caution and prudence that kept our banks largely immune of the crisis, there may be cause for Tonio Fenech’s optimism too. What is needed is a credible vision of the future, a strategy, a framework in which to insert our efforts.


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25 November 2009


Malta Today


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