The Malta Independent
As we are busy discussing parliamentary ratification of the EU constitution, a project that by all counts seems dead in the water, as the headlines were this week occupied by the resignation of the chairperson of Sea Malta on disagreement regarding the principle and/or the method for privatizing this strategic national resource, as government tries to impress us on the wisdom of past privatizations as the Freeport new owner announces the intention of investing in new bigger gantry cranes, a mere re-cycling of one year old news and when it happens would be little more than replacement of equipment that has been used beyond its economic life notwithstanding past assurances that Freeport was such an economically successful project that its then chairman deserved a national monument, whilst all this is happening we pay little attention to the more important reality that Rome is burning.
The increasingly efficient and reliable National Statistical Office issued the GDP figures for the first quarter of 1995 by means of a Release on the 9th of June. The fact that the overall economy during this first quarter contracted by -0.1% in real terms compared to a real growth of 1.4% in the previous quarter and 2.9% in the same quarter of 2004 seems of no importance to national media and economic commentators. It got little more than passing mention in the press.
However this does not change the fact that Rome is burning and the heat is being felt even if government friendly media easily swallows the bait of diversion by such issues as the entrenching anti-abortion measures in our constitution; a no priority issue, to say the least.
Ask employees in the private sector whose organizations are finding it increasingly difficult to remain globally competitive from a Malta operating base. Ask them how worried they are about the security of their jobs as their employers continue to squeeze the last drops of productivity by insisting on lower wages and reduced conditions of work. Unlike the public sector, the unions here are relatively powerless in such cases and will generally have to accept the introduction of inferior pay package and conditions of work to safeguard jobs. In the first quarter output in the manufacturing sector, mostly export oriented,` reduced by Lm29 million (more than 10%) value added reduced by Lm4.5 million (more than 5%) and operating surplus reduced Lm3.4 million (more than 7%).
The other pillar of growth, tourism, had a static performance with no growth in nominal terms and a small reduction in real terms. So you have manufacturing and tourism, basically the bulk of the productive sector, in a growth crisis and the overall GDP figures are not worse only through growth in telecommunications, financial services and real estate.
To confirm that Rome is burning ask the small enterprises, mostly retailers, who are finding it increasingly difficult to keep their head above the water as sales and consumption` remain flat and profit margins at micro-level erode as lack of employment opportunities forces individuals to try their luck in some self-employed activity which increases the supply offers in a stagnant market.
The basic truth which we continue to obstinately avoid, is that our productive sectors that sell their wares in the global market, are feeling the pain of loss of competitiveness and this pain unavoidably rubs on to employees in these private productive sectors who have to pay for such loss of competitiveness with their own skin. Compare this to employees in the public sector who not only feel secure in their jobs quite irrespective of performance, but as usual have this week started enjoying their summer half days.
With what moral authority can national institutions like the Central Bank preach from the mountain top on the need for restructuring at micro level ( in simple language read reduced payroll costs and/or increased efficiency) in the context of stable monetary policies when as an institution it is itself a leading example of waste of resources and resistance to the change of restructuring` Now that Central Bank`s formerly quite labour intensive functions related to Exchange Control and Regulation have all but disappeared, what re-structuring has the organization undertaken to ensure that it leads by example`
How long can the country support this apartheid in the labour market where the most productive are the most penalized and exposed to global pressures whilst the least productive are the most protected and unaccountable for their performance If we use the same argument for privatizing a national strategic asset like Sea Malta i.e. cumulative losses of some Lm 3 million over seven years, we would have to privatize most, probably all, public sector departments, authorities and organizations if we submit their operations to the discipline of activity based costing and rigorous financial reporting.
As Rome burns we continue to avoid the task with the highest priority ` that of restoring competitiveness to operators in the productive sector by launching a national effort where the pain of adjustment is shared by all and not only by those directly effected that happen also to be the most productive.
Alfred Mifsud
As we are busy discussing parliamentary ratification of the EU constitution, a project that by all counts seems dead in the water, as the headlines were this week occupied by the resignation of the chairperson of Sea Malta on disagreement regarding the principle and/or the method for privatizing this strategic national resource, as government tries to impress us on the wisdom of past privatizations as the Freeport new owner announces the intention of investing in new bigger gantry cranes, a mere re-cycling of one year old news and when it happens would be little more than replacement of equipment that has been used beyond its economic life notwithstanding past assurances that Freeport was such an economically successful project that its then chairman deserved a national monument, whilst all this is happening we pay little attention to the more important reality that Rome is burning.
The increasingly efficient and reliable National Statistical Office issued the GDP figures for the first quarter of 1995 by means of a Release on the 9th of June. The fact that the overall economy during this first quarter contracted by -0.1% in real terms compared to a real growth of 1.4% in the previous quarter and 2.9% in the same quarter of 2004 seems of no importance to national media and economic commentators. It got little more than passing mention in the press.
However this does not change the fact that Rome is burning and the heat is being felt even if government friendly media easily swallows the bait of diversion by such issues as the entrenching anti-abortion measures in our constitution; a no priority issue, to say the least.
Ask employees in the private sector whose organizations are finding it increasingly difficult to remain globally competitive from a Malta operating base. Ask them how worried they are about the security of their jobs as their employers continue to squeeze the last drops of productivity by insisting on lower wages and reduced conditions of work. Unlike the public sector, the unions here are relatively powerless in such cases and will generally have to accept the introduction of inferior pay package and conditions of work to safeguard jobs. In the first quarter output in the manufacturing sector, mostly export oriented,` reduced by Lm29 million (more than 10%) value added reduced by Lm4.5 million (more than 5%) and operating surplus reduced Lm3.4 million (more than 7%).
The other pillar of growth, tourism, had a static performance with no growth in nominal terms and a small reduction in real terms. So you have manufacturing and tourism, basically the bulk of the productive sector, in a growth crisis and the overall GDP figures are not worse only through growth in telecommunications, financial services and real estate.
To confirm that Rome is burning ask the small enterprises, mostly retailers, who are finding it increasingly difficult to keep their head above the water as sales and consumption` remain flat and profit margins at micro-level erode as lack of employment opportunities forces individuals to try their luck in some self-employed activity which increases the supply offers in a stagnant market.
The basic truth which we continue to obstinately avoid, is that our productive sectors that sell their wares in the global market, are feeling the pain of loss of competitiveness and this pain unavoidably rubs on to employees in these private productive sectors who have to pay for such loss of competitiveness with their own skin. Compare this to employees in the public sector who not only feel secure in their jobs quite irrespective of performance, but as usual have this week started enjoying their summer half days.
With what moral authority can national institutions like the Central Bank preach from the mountain top on the need for restructuring at micro level ( in simple language read reduced payroll costs and/or increased efficiency) in the context of stable monetary policies when as an institution it is itself a leading example of waste of resources and resistance to the change of restructuring` Now that Central Bank`s formerly quite labour intensive functions related to Exchange Control and Regulation have all but disappeared, what re-structuring has the organization undertaken to ensure that it leads by example`
How long can the country support this apartheid in the labour market where the most productive are the most penalized and exposed to global pressures whilst the least productive are the most protected and unaccountable for their performance If we use the same argument for privatizing a national strategic asset like Sea Malta i.e. cumulative losses of some Lm 3 million over seven years, we would have to privatize most, probably all, public sector departments, authorities and organizations if we submit their operations to the discipline of activity based costing and rigorous financial reporting.
As Rome burns we continue to avoid the task with the highest priority ` that of restoring competitiveness to operators in the productive sector by launching a national effort where the pain of adjustment is shared by all and not only by those directly effected that happen also to be the most productive.
Alfred Mifsud
No comments:
Post a Comment