The way forward for industry
Recently elected Federation of Industry President Anton
Borg speaks to DAVID LINDSAY about a range of issue affecting Maltas
industrial sector, not least of which is the EU membership question.
Borg outlines the direction the FOI is to take this year and explains
that Maltas competitiveness remains at the top of the FOIs
The FOI has stated on many occasions that the lack of
consensus on EU membership has created uncertainty in the country and
in the economy? What is the FOIs view now that a referendum has
Given the reaction of both political parties to the result of the referendum,
and pending general elections within less than a month, and in terms
of the uncertainty these events create, the FOI cannot see any difference
in the situation now than before the referendum.
We are hoping that the country will show its preference to EU membership.
The upcoming general election will remove this uncertainty by giving
a clear mandate to the next Government to lead Malta for the next five
years and to consolidate our relations with the European Union for the
future without further delay.
What aspects of EU membership concern the FOI most and in what respects
do you think Maltas industrial sector stands to gain from accession?
In what ways would the sector lose out should Malta fail to accede to
EU membership encompasses the whole economic and social life of the
country. It is, therefore, intrinsically linked to industry. It affects
its costs, its competitive behaviour, its relations with its employees
and its relations with society such as the environment and the
sustainability of its development.
Through EU membership the industrial sector stands to gain from access
to new markets within the EU and to countries outside the EU with which
there are bilateral trade treaties giving free access to products and
services. The moment Malta signs on to the EU treaties it will also
sign to participate in these trade agreements and our industry will
become entitled to the same benefits.
EU membership also means free entry into all member states for Maltas
processed food and beverage products. Industry stands to benefit from
all EU programmes aimed at supporting SMEs in their efforts to grow,
innovate and develop further. Part of the financial package negotiated
by Government is aimed at assisting industry directly.
Indirectly, industry will also stand to gain from infrastructure projects,
especially those relating to the improvement of the environment. Without
the financial assistance derived from EU membership, Government would
need to raise financing for those same projects, which would mean higher
taxation for industry and the workers it employs.
Is the FOI satisfied with the ways in which the restructuring of industry
is being carried out? If not, in what ways would you like to see this
The process for assisting industry to restructure has now taken off
satisfactorily. Through its directorship on the Board of IPSE, the FOI
has applied its own pressures so that this can happen. The funds are
available and an increased and important number of programmes are available
for industrial benefit. Each enterprise that presents IPSE with a serious
plan is helped on various counts.
The food processing and beverage firms, however, are latecomers to the
restructuring process. They have problems in becoming EU compliant to
veterinary and health regulations in a short period of time. Their efficiently
also needs to be improved upon and all this in a year when all protection
is bound to finish and the local market will be opened, thus threatening
their market position.
Some of the firms in the food/beverage sector need factory space that
the Malta Development Corporation does not currently have. This could
set these firms back on their plans. An effort needs to be made by the
MDC to increase factory space availability in the shortest time possible.
While acknowledging the fact that much hangs in the balance in light
of next months general elections, could you outline the direction
the FOI is expected to take over the course of the rest of the year?
Competitiveness remains at the top of our agenda. We have been saying,
even in recent weeks, that the problems in the public sector need a
solution such as the overmanning in public corporations and certain
There needs to be control on public expenditure if taxation levels are
not to rise. There is the Social Welfare problem, which is also linked
to taxation and public expenditure levels.
Maltas public debt needs to be brought under control if Malta
is to take its place in the Economic and Monetary Union, while the Ports
problem has also remained without solution.
The FOI will be looking at what the political parties propose to do
about these problems in the next legislature. We expect both political
parties to announce clear plans on their agenda.
We want to see our economy stepping up its development tempo. What concrete
plans have the main political parties prepared in their respects? Just
like the rest of the country, we expect clear answers to these matters.
Industrys future depends on this. Workers will depend on this.
The future of the whole economy depends on immediate solutions to these
pending problems that hurt competitiveness.
The latest statistics show an increase in manufacturing sales and investment
over last years fourth quarter. What would you say led to the
increases and what are the FOIs tentative projections for this
The FOI is pleased to note an increase in manufacturing sales and investment
figures over the same period of the previous year.
This however, does not give any room for complacency. The situation
in the world markets is still uncertain. The threat of war and terrorism
is still there. Prices of oil are at a record high and Germany and Japan
are still caught in a stronghold by recession. Global stock markets
are on a downward trend and certain decisions are not being taken in
respect of new investment.
It would be highly presumptuous of the FOI to give projections for the
year. But we will soon publish our Industry Trends Survey for the first
half of 2003, which shows some indications of what manufacturing firms
How do you see Maltas industrial sector competing, as an EU member,
with fellow accession countries, many of which carry lower wage bills,
production costs and have overland transport to the rest of the EC?
Maltas competitiveness has been under threat for many years and
industry has been making an effort to overcome threats from wherever
The same situation will continue and our enterprises will have to continue
with their efforts, whatever the outcome of the EU membership question.
As I said before, the FOI is expecting that the Government will be implementing,
over next month, quick and long-lasting measures to supplement industry
The increase in competition from Central and Eastern European countries
which will become EU member states is a further challenge. Maltas
industry would be in a better position to face this challenge if the
country takes the road to EU membership, as the countries of Central
and Eastern Europe are doing.