18 June 2003

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Toon 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.

FOI’s cost of living increase suggestion

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 Industry’s 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 society’s 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 reward.
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.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Business Times, Newsworks Ltd, 2 Cali House, Vjal ir-Rihan, San Gwann SGN 02, Malta
Tel: (356) 21382741-3, 21382745-6 | Fax: (356) 21385075 | E-mail