Exporting Capital

The Malta Independent

Exporting Capital

Isn`t funny that just about when everyone admits that re-structuring is not working as no new direct productive investment is being undertaken, two Maltese Groups in the hospitality sector announce plans to tap the Maltese capital markets to finance overseas hotel projects.

There is absolutely nothing wrong in Maltese entrepreneurs seeking to expand their productive operations beyond our shore. Indeed this has to be encouraged to ensure that we partake our fair share of the growth being experienced in the region.

But something must be seriously wrong with the workings of our economy if foreign projects can be financed on the local capital markets but no one taps these markets to launch new investment initiatives that could provide new employment opportunities and facilitate the re-structuring process.

Ministers and their mouthpieces can continue to turn statistics on their head as much as they like to pretend that the economy has been placed on a sustainable growth path. They are only fooling themselves.

The Director of the Planning Authority was on TV recently proclaiming that accusations that the PA is slowing down the economic tempo are unfair.` He stated that if the projects, which were approved by the PA, were to actually start there would result a shortage of manpower.

The fact that our capital markets have capacity to finance foreign projects proves that shortage of investable funds is not a barrier to realisation of these projects.

The only logical conclusion is that entrepreneurs cannot muster enough confidence in the economic feasibility of many such projects already approved, given the grey clouds which as dulling the economic scenario.

Yet as re-structuring involves destruction of fictitious or protected jobs we could be facing unsustainable unemployment levels if the investment drought persists. This could well be tolerable within an EU which left high unemployment as the safety valve to bring within the Maastricht criteria the other economic variables to qualify for Monetary Union.

But within our close-knit society can we take such high levels of unemployment without causing grave social friction`

Alfred Mifsud