Issue link: https://maltatoday.uberflip.com/i/1204548
Last year started with the high of an economic boom, and ended with the all-time low of a politi- cal crisis. What sort of impact, if any, did recent events have on Malta's economic climate? I don't believe we are in a po- sition to assess the full extent of the impact yet. We are talk- ing about something intangible, that will not just affect us in the immediacy. The full impact will be felt in the future: starting this year, and the years to follow. What we can say, however, is that a certain level of impact can already be felt. There was a lot of turmoil at the end of 2019, which affected consumer spending sen- timent… and obviously, it affect- ed business confidence too. Business sentiment is generally a very relevant and reliable indi- cator: you get an immediate feel from your customers; and if you work with foreign businesses, you will also get an indication of how Malta is regarded overseas. And we have already started see- ing a bit of a slowdown: January got off to a slower start than was originally expected. Ironically, however, the eco- nomic boom was in part the result a policy of deregulation (e.g., the electoral promise to 'slash bureaucracy'), which weakened national enforce- ment institutions. Do you share the concern that economic prosperity, in Malta, seems to be dependent on laxity in gov- ernance and enforcement? I don't agree with that, no. It's not just lack of regulation that can have negative consequences. Over-regulation can be a prob- lem, too. And the crisis itself was caused by corruption, not just by lax enforcement. Being 'pro-business', in itself, had noth- ing to do with it. Encouraging in- vestment, and putting incentives in place for businesses to work as efficiently as they can… that is not corruption. No; but having weaker enforce- ment agencies does make it easier for corruption to take place… The truth is that enforcement has always been a problem in Malta. When we are a presented with a legislative proposal that relies on enforcement, we always respond, a priori, that it is not going to work. Malta lacks the necessary resources, and an ad- equate enforcement infrastruc- ture. This is not a problem that sud- denly cropped up in 2018; it's not as though all government's enforcement officials were just spending their days having tea. No: the system ran exactly the same as it had always run before. But because the economy boomed so quickly, we were too slow to upgrade the infrastruc- ture and regulatory framework, and beef up the very limited re- sources at our disposal. A similar situation happened with the recommendations of the Venice Commission report, con- cerning good governance. Malta was not equipped for either the amount or the type of business we started to attract; and as we all now know, there were short- comings which we were not quick enough to address. Now, we are making up for lost time. Malta has a long list of shortcomings, and we have a lot to catch up on. Does the Chamber agree with Environment Minister Aaron Farrugia's proposal of a register for lobbyists, as well as a public record of all meetings between ministers and stakeholders? We have no problem with any- thing that will lead to increased transparency. As I said, we have a lot of shortcomings to catch up on… so at the moment, I don't believe we should be the ones to say, 'this might be a bit too much'. In fact, we are very far from doing 'too much'; we are still falling far short of what we need to be doing. So anything in the direction of greater transpar- ency and accountability is to be welcomed. Obviously, however, certain things should still be discussed: because we can get at the same point of arrival in different ways. So we still expect that stakehold- ers are consulted, and that things are done in the best way possi- ble… as opposed to decisions be- ing taken on paper, only to create more problems as we go along. Recent revelations suggest that these 'shortcomings' include the proximity of certain busi- nesses (e.g., the Tumas Fenech Group) to the seat of power. Doesn't the lack of transpar- ency, in questions concerning hidden influences over govern- ment, have an adverse effect on your members? It does, certainly. We have been feeling short-changed. One of the main things businesses complain about are tendering processes. As I recall, there was even a report on MaltaToday, which revealed the extent to which businesses were aware of corruption. It showed that local businesses experience certain injustices on a day-to-day basis; but also that they do not view corruption as being widespread among all businesses… only among the select few. The result is that, while others are given red-carpet treatment, everyone else is simply left to make the best deal possible out Malta has a lot of catching up to do, argues Malta Chamber of SMEs (formerly GRTU) CEO ABIGAIL MAMO: especially when it comes to creating a level playing field for local businesses Unfairness makes Maltese businesses 'second-class' Raphael Vassallo rvassallo@mediatoday.com.mt 8 maltatoday | SUNDAY • 26 JANUARY 2020 INTERVIEW Enforcement is not a problem that suddenly cropped up in 2018; it's not as though all government's enforcement officials were just spending their days having tea