Issue link: https://maltatoday.uberflip.com/i/1318996
8 maltatoday | SUNDAY • 13 DECEMBER 2020 INTERVIEW The prime minister has just ex- pressed confidence that the sit- uation will return to normality by around March. As someone who represents small and me- dium enterprises – including most of Malta's leisure and hos- pitality industry – what is the feeling at street-level? Do the GRTU's members share Dr Abe- la's optimism? Let me start with this: the leisure industry went through a lot of turbulence this year. In March, the entire market was shut down: and when we opened up again in July, it was at a time when tourism demand was down due to the global cri- sis. Meanwhile, domestic con- sumption fell to record lows. And then, in August, the clubs were asked to close down com- pletely… and the bars were al- lowed carry on. Now, the bars have been forced to close, too. As for the ones that are still in business today: you have to bear in mind that the leisure industry is made up of different sectors. There are some that are most- ly dependent on the domestic market; you have others that are mainly tourism-oriented; and then there are the ones that have a marketing mix, and cater for both. So certain sectors of the in- dustry - especially those that cater for the domestic market - are still somehow ticking over: though whether they are 'doing well' or not, is another question. But then, the element that is completely tourism-related… those are obviously out of the market altogether. If you have a restaurant that always depend- ed on the occupancy of a cluster of hotels – for instance, in Qaw- ra… then you're out of business completely. There are quite a few operators in this sector: and obviously, they're feeling it, So the situation, in a nutshell, is that business are essential- ly coughing up from their own funds, to keep themselves in the market; government is helping as best it can… and obviously, we are lobbying for stronger support to fill in this gap, until an eventual economic recov- ery… On that point: how effective has the government's recov- ery package - wage subsidies, vouchers, etc. – really been, in practice? It helped. No doubt about it. The wage supplement certainly helped. The vouchers helped as well, to a certain extent: even if they went only to the domestic sector. But then again, it's not just wages. A business also has rent to pay – and leisure busi- ness tend to be sited in high- cost areas – on top of water, electricity, and so on. And another thing that's worth mentioning is that the social distancing regulations them- selves also eliminated from the market certain establishments (mostly restaurants) that are so small, that they cannot meet the physical 2-metre spacing requirements between tables, for instance. Economically, it meant that what they'd be left with, in terms of occupancy, wouldn't be enough to cover their expenses. So when you look at subsidies: yes, they helped. In some cases, they helped businesses directly. But in others, they didn't really help at all… This raises the question of what can be done, to keep business- es ticking over, beyond govern- ment subsidies and consumer incentivisation schemes. What sort of additional support are you asking for? There's a lot than can still be done, and not just by govern- ment. The banks, for instance, could show a little understand- ing, by extending mortgages. Because the ordinary rules of engagement have changed. This is, after all, uncharted territory: none of us could predict how long this crisis would last. So we're all improvising as we go along. And don't forget that, before the crisis, there was an econom- ic boom. There were a lot of projects on the go, all the time: extensions, refurbishments, and God-knows-what else. So we began the year with excess capacity – remember that we came out of 2019 with 2.7 mil- lion tourists. This means that, last March, our industry was geared up for those figures: and I'm not talking about bars now. I'm talking about bed content… about the direct demand, and the derived demand, across the whole cycle. It's not just bars, restaurants and hotels… there are also the suppliers, the delivery-men… and entire chain of small oper- ations, that all depend on Malta maintaining the previous year's tourism figures. Not to mention the retail market: around 70% of which relies on tourism, too. So a lot of people, across the entire spectrum, are now fac- ing difficulties with loan re- payments. And even just with ordinary trading loans. Because once you're closed… [shrugs] that's it. really. Banks do need a show a little more understanding about this situation… and stretch a little further, too. Especially at a time when they are also registering 'forced savings'. Because if peo- ple aren't spending, they're sav- ing: and that's not a good thing, if it's forced by circumstances. But it also means that the banks themselves are liquid. So - just as everyone else has had to adapt to the new realities – the banks can make an extra effort, too. As for government: I am aware that Keynesian economics is considered 'dated'; but I would say that now is the time for it. Governments – not just in Mal- ta – now have to pump more money into the economy. And there is, quite rightly, an under- standing to that effect, within the European Union. 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