this week: Skyrocketing to the top
Do business or speculate
Edwin Vassallo, Parliamentary Secretary responsible for SMEs and the
self employed, noted that business is not at all easy in Malta when
speaking to our sister paper MaltaToday. That may prove be one of the
great understatements of the year and, as the expected pre-EU membership
boom continues to elude, many must be feeling a sense of disillusion
if not despair.
Not all business is struggling along, however, and the expected building
boom in spite of ever rising prices is a reality.
The boom is falsely fuelled, and buyers will find that the prices they
are paying now may be higher than where the market will settle in the
months and years to come.
MEPA on its part announced a record number of commercial premises being
approved recently with the number of offices, retail outlets and warehouses
reaching a record 1,019 in 2002, up by 29 per cent on the prior year.
Of course many times that number will have changed hands during the
year, but while start-ups are struggling with government bureaucracy,
archaic infrastructure and small markets, there is always another side
to the coin.
Somebody buying or building a new commercial premises as a business
can avoid business plans and other various headaches by simply hanging
on to the property until they find a buyer prepared to pay an adequate
better price. This is disparagingly called speculation and
there is probably much more of this than genuine business start-up purchases.
The commercial banks in Malta, as well as the authorities, would do
well to distinguish between those wanting to employ and produce.
So far there is no such distinction. Speculation is hard on the environment,
and does not involve any real value added. If Malta is really going
to get on the sustainable development track, a track which will ensure
sustainable economics, it should be channelling its benefits into those
with the entrepreneurial spirit, those that Parliamentary Secretary
Vassallo is so keen to encourage and promote.
FOIs cost of living increase
At the risk of further confusing the issue about minimum wages and
cost-of-living increases, The Malta Financial and Business Times supports
the Federation of Industrys suggestion that cost-of-living increases
should be granted only to minimum wage earners.
The idea of across the border increases already sits uncomfortably in
our throats, but our social conscience and business acumen would suggest
that retaining a cost-of-living increase for minimum wage earners, no
matter how much is earned in Spain, Latvia and Slovenia makes sense.
Raising the wages of low earners will encourage more spending and ensure
that less people fall through societys social net.
We concur with the FOI that other cost of living increases should not
be considered automatic and should be part of those increases contemplated
in collective agreements.
Performance related increases should take off to replace cost-of-living
increases, and begin to change employees mentality to work and
Just as we need to promote a culture of enterprise we need to encourage
a society that rewards diligence and effort and punishes sloth.
Malta needs a born-again type of conversion in its commercial sector,
and to get over its socialist hangover. Malta needs dynamic entrepreneurs,
but these must be understood and followed by creative employees that
will work to achieving a quantum jump in the quality of products and
services that are being offered.