2 - 8 August 2001

Excellent initiative

The setting up of the Advisory Council to the Malta Enterprise Board is an excellent initiative and credit goes to the Minister for Economic Services, Prof. Josef Bonnici. He has managed to rope in the services and expertise of 12 “wise” men. Twelve individuals who are not only of Maltese origin, but very successful businessman and entrepreneurs who have made a name for themselves internationally. They have willingly and without remuneration accepted the government’s invitation to provide insights into government strategy and provide leads and introduction to new sources of foreign direct investment.
This is very important. While the Malta Development Corporation is actively working to attract new investment to Malta, in many markets the island is an unknown entity. Many believe that just because Malta was a British colony with strong links to the UK, investment will flow to Malta. This is not the case. The government knows full well that unless Malta is marketed well, FDI will not materialise. This is a major challenge for the government and it is in this regard that the council can be instrumental in attracting new investment and develop contacts with foreign organisations.
Prof. Bonnici said the first meeting last Saturday was extremely positive and the government had the opportunity to utilise the ideas and experience of these top businessmen. He said that Malta wanted to develop certain areas which could further boost growth and value added. We augur that the government not only takes into consideration what the council advises but acts accordingly. First of all, the 12 men on the council have far greater experience on the international scene than the government has. Secondly, they are not affected by local politics. Any suggestions they give are based on their knowledge and expertise and not political affiliations.
The advisory council has the making of something extremely positive yet the government must be willing to put aside its pride and accept any constructive criticism. The government must constantly remind itself that the advisory council is made up of top-notch people and not a group of high-ranking civil servants. The 12 members on the council have accepted to help the government but they will only continue to do so if they see the government responding to their efforts. The government has a perfect opportunity to develop a strategy for the future – a economic situation that is sustainable both from the economic and environmental perspective. The government now has the necessary tools to do so.

Summer recess

As most companies shut down and parliament rises for summer, it is perhaps a good time to sit back and take a look at the first six months of the year. For many, the first two quarters of 2001 were far from the best they experienced over the past few years. While public sector employees benefited from a huge salary increase, the rest of the private sector faced the prospect of lower wages as the taxation on fringe benefits came into force. In the meantime, consumer spending continued to go down, in turn badly affecting those doing business at the trade fair in Naxxar last month.
Whatever the reasons government may give, one must admit that the first six months of 2001 have not been easy for the people, the business community or the government. The latest figures from the Central Office of Statistics confirm the negative sentiment in the country. Consumer demand, the COS said, was more subdued than in any of the previous four quarters, thus resulting in a slower growth rate. While the Gross Domestic Product increased in nominal terms, this was mainly due to hefty increases in public sector salaries. This however badly affected the government finances structure. The negative economic feeling was further evidenced on the Malta Stock Exchange. The bearish market has not only affected trades in the major equities but even new offerings such as that for Fimbank were not encouraging. In fact, a number of companies that planned to go public, shelved their plans as they wait for better market conditions. In just under four months, Finance Minister John Dalli, will be presenting his government’s budget for 2002. Judging from the way the economy has performed over the past six months, Mr Dalli will face a daunting challenge to convince us that his fiscal measures have reaped the desired results. We hope that the social partners will soon start actively discussing with Mr Dalli what has to be done next year. We augur that the social partners will be realistic in their demands, such demands that reflect the true economic situation in the country. On the other hand, we hope that the Finance Minister takes into serious consideration what the social partners propose.