22 MAY 2002
By Miriam Dunn
The Parliamentary Secretary in the Economic Services Ministry has expressed his disappointment that businessmen are not gearing up for new market challenges as best they could.
Giving an example of a case in point, George Hyzler says: "For instance, I would have expected a greater degree of co-operation between existing established businesses, possibly in the form of mergers, that would allow them to strengthen their position. Not only in the local market to face competition, but more importantly internationally."
Dr Hyzler believes the level of success that Maltas entrepreneurs can achieve boils down to attitude.
"Our inward-looking entrepreneur must respond to the realities of a liberalised market," he says. "My belief is that our businesses will do well once they detach themselves totally from their protectionist mentality and go in search of new markets. The European Union will provide them with new opportunities in this regard."
On the thorny issue of cashflow problems, Dr Hyzler believes the business sector is, unfortunately, having to deal with the legacy of tax evasion which dogged the island for years.
"We have been brought up on a diet of unpaid dues, especially to government entities," he explains. "Arrears of income tax, social security contributions, telephone, water and electricity bills, have all contributed significantly to our national fiscal deficit and allowed businesses to exist in a false sense of stability.
"In reality these are yesterdays problems that have caught up with us. Increased efficiency in the collection of dues and taxes has of course challenged this attitude and to a certain extent contributed to todays liquidity problems."
Dr Hyzler also concedes that small businesses are at the mercy of larger companies who delay payments, but stresses that EU membership will put in place certain legislation which will help in this regard.
"A measure that will be adopted upon EU accession relates to the imposition of very high penalties for such delay," he says. "This should go a long way towards helping small businesses in their cashflow problems.
"I expect that a better credit management culture as well as new policies being adopted by the commercial banks should also help address this phenomenon."