28 June - 4 July 2001

Over-supply of services in many sectors

by Ivan Brincat

Professional or trade bodies are being encouraged to participate in relevant European federations, according to an impact assessment report on the freedom of movement and establishment for various services sectors in Malta.
Such participation will enable Maltese bodies to learn from their European counterpart organisations and help them to develop an agreement on future strategy within the Union.
This recommendation is one of 25 policy recommendations and suggestions on this issue made in an impact assessment study the government published last week in which over 100 service sectors were evaluated. Due to the importance of this sector, only an executive summary was published.
The report says that some funding may be available to Maltese professional bodies to take part in these meetings.
It also suggests that at the
present time, a large number of professions are legally (but not in
practice) reserved for Maltese citizens. This would have to change on accession to the European Union, but since this affects higher professions which are already very internationally oriented, the study does not foresee any effect on the professions concerned.
The study, carried out by ACCESS Euro Consulting looked at the impact of EU membership on self-employed commercial agents, the wholesale and retail trades, hotels and restaurants, hairdressers, travel agents, various transport professions, aluminium works, the furniture industry, the construction industry and other sectors.
In many of these sectors there is an oversupply of services and the wages are substantially lower than those available elsewhere in the EU. The report concludes that the chances of foreigners coming to work in Malta are low.
It however suggests that there is a potential for a net outbound migration, particularly of the young, well-educated and mobile, in the years following EU accession.
This may amount initially to 0.4 per cent of the population emigrating per year, but after a few years, it is foreseen that there will be a balance between emigrants and returnees.
The study said there should be better regulation of businesses, particularly those that come into direct contact with the public. Regulating these professions would have the effect of establishing qualifications which would be required of inbound migrants. Failure to regulate would mean that there would be no controls on inbound migrants wishing to work in Malta.
“Our recommendation for a flexible and firm framework would be based around the development of the system of national vocational qualifications, particularly with regard to sectors which are economically sensitive, or under threat from inbound workers (aluminium frame makers, furniture industry, construction industry and so on). In the case of professions, we propose bringing their education, training and regulation up to date to reflect the conditions in the European market place.”
The report said these controls on professions and the requirements of the Immigration Act should be properly enforced. EU membership and common visa requirements will make it easier to restrict the influx of non-European citizens and migrant workers.
When analysing the conformity strategy for Malta, the report comes up with five suggestions: 1. Permits on premises which can be presented as a mechanism for requiring an improving quality of retail premises; 2. Certificates of competence can be presented as a consumer protection measure; 3. Our proposed development of planning and zoning would put the control of what shops are provided under local democratic control, with a view to avoiding future over or under-supply of various types of premises; 4. The requirement for import standards and quality, and the development of the Malta Crafts Council; and 5. The requirement that Maltese should be spoken by those who come in contact with the public in areas where less English is spoken is also a consumer-friendly measure.
The report concludes that what is needed is that Maltese service providers focus on fulfilling the demands of the market rather than relying on trying to keep foreigners out.