Issue link: https://maltatoday.uberflip.com/i/1304419
6 OPINION O fficial publications warn us of how the economy of Malta shrank 16.2 percent year-on-year in the sec- ond quarter of 2020, the biggest contraction ever due to the coro- navirus crisis. ere were wide- spread contractions across all main sectors of the economy. e services sector fell by 15.7 percent, mainly due to a 100.2 percent plunge in ac- commodation and food ser- vices as tourism halted. With these facts hurting our wellbe- ing, can we hide our head in the sand or shall we stand tall and face the future with cour- age and determination. In fact, the latter is the whole- some attitude assumed by our prime minister when address- ing the party faithful in his regular walkabouts over the island. He is reported smil- ing, consoling us that fewer deaths have actually occurred than the thousands predicted at the beginning of the pan- demic. Again, while many EU countries are resorting to full lockdowns to stem the spread of infections (for example Brit- ain has branded each town ac- cording to a three-tier system) yet Malta seems to tread cau- tiously on the introduction of a second lockdown. e business lobby is strong- ly against another lockdown knowing how sales were dis- mal during the first lockdown. One need not ask, why is there a drop in confidence when the government is label- ling its ninth budget as being the best ever? Promotion for the budget was hinged on the theme that the state has tri- pled welfare handouts and is paying a €5 weekly increase for pensioners - this is a generous budget. New Covid-19 precautions issued with no mass gatherings allowed, a six-person limit is imposed and everyone ventur- ing outside has to wear a mask or an approved visor. Bars and 'kazini' will be closed starting from next ursday and reopen in first week of December. Why is a mask essential. is is because when sneez- ing many of the larger droplets will quickly settle onto nearby surfaces while smaller ones remain suspended in the air for hours, where they can be breathed in. While the behav- iour of the virus-filled droplets in rooms with air conditioning and outside environments are less well understood, they are thought to settle on 2 surfaces more quickly in disturbed air. Even experts who advocate masking of communities say their impact on stopping the spread of disease is likely to be modest. e more people in a given space wear masks at their place of work , the less viral particles are making it into the space around them, decreasing exposure and risk. Will wearing masks become a habit for us as is the case in Asian countries? Not likely. One bets that Malta will be the first in the Med, to be- come unmasked. On the con- trary, in Paris, the wearing of designer masks is becoming quite fashionable. While med- ical-grade masks such as the N-95 mask provide the best protection against the spread, they're more expensive to use and in certain countries, they are mostly reserved for use by front-line healthcare workers. Masks are really a perfectly good public health interven- tion mainly as a means to pro- tect people against the droplets coming out of their respiratory tract especially from infected people. It is true that people who feel ill aren't supposed to go out at all, but initial evi- dence suggests people without symptoms may also transmit the coronavirus without know- ing they're infected. Surveys, show how nearly half of SARS- CoV-2 transmissions occur be- fore the infected person shows any symptoms. Take Italy - it has had a terri- ble experience with more peo- ple have now died in the land of "La Dolce Vita" than in Chi- na, where it originated. Back home, our prime minister is gung ho. He is ebullient about the 2021 budget proposals an- nounced last week with gen- erous measures which in his opinion, will help incentivise businesses. On One TV, he proudly an- nounced that his government wants businesses to be inno- vative and be up and running. Domestic demand must be rekindled with a feelgood fac- tor ignoring the stark fact that the number of daily infections has peaked to over 200. is autumn, schools started late due to last minute protective measures put in place and had to be rushed in much to cha- grin of teachers. e private sector is by now mostly working from home ex- cept where physical handling of merchandise or working at factories are concerned. Let us review the Labour Force survey for Q2 2020, this esti- mate indicate that, during the second quarter, total employ- ment stood at 259,523 while the unemployed persons stood at 12,031. By elimination, in- active persons totalled 166,861 (38.1 per cent) which is higher than the EU norm. Few appreciate that persons working in the public sec- tor including administration, defence, education, human health and social work ac- tivities (males and females) amount to 56030. Now the budget speech tells us that wage supplement till now, saved 100,000 jobs. is is a singular fact. Taking into consideration total employment of 259,523 less 56,030 state dependents, this leaves a non-public work- ing population of 203,493 out of which almost half are kept afloat by the wage supplement scheme. Obviously this is a precari- ous situation. is wage sup- plement scheme was origi- nally meant to end last June but was extended five times on a monthly basis up to Oc- tober. e finance minister after consultation with vari- ous stakeholders and unions decided to extend the scheme up to March next year. is is a generous welfare benefit to 100,000 workers, some of which are actually working on a three-day week. One must, of course, be cau- tious not to sound too mag- nanimous about the living conditions of such workers. Most earn no overtime and are living on a replica of Victor Hugo's miserable conditions. More negative news is the ef- fect of a No-Deal Brexit which now seems more imminent than ever. For many factories and im- porters who for many years did substantial business with the UK, the worst case scenar- io will probably mean a slow- er volume of business next year until diversification takes place. In the eventuality of a no- deal, the Chamber of Com- merce and the Malta Business Bureau are urging Maltese businesses to prepare for all eventualities. A joint statement stated that "while fully convinced on the need of a comprehensive part- nership deal with the UK, the chamber and the MBB are calling on Maltese businesses not to be caught offguard, par- ticularly at this moment when businesses might be focusing on finding a way to navigate through the COVID-19 crisis". In conclusion, following every great crisis, the world witnessed an increase in inno- vation, and new business ideas and models, consequently - the budget proposals currently debated in Parliament should ideally help innovators and start-ups overcome difficulties when climbing the slippery slope. George Mangion George Mangion is a senior partner of an audit and consultancy firm, and has over 25 years experience in accounting, taxation, financial and consultancy services. His efforts have seen PKF being instrumental in establishing many companies in Malta and ensured PKF become one of the foremost professional financial service providers on the Island Malta unmasked 29.10.2020