Editorial | Wednesday, 16 April 2008

Go for the social pact

Following the general election and particularly its result the time is ripe for all the social partners together with the government that heads are knocked together to reach agreement on the introduction of a social pact in the country.
Malta needs this culture of working together to be introduced as soon as possible. Countries that managed to reach consensus on a social pact have advanced not only socially but also most especially economically.
It is of utmost importance that the social partners and the political class discover that by working together the country’s resources will not only be put to better use but will help achieve the growth so necessary if we are to retain our standard of living.
A few years back the social partners tried to achieve a social pact but they failed. Government blamed the GWU while the union claimed the pact was too one-sided and asked for too big a sacrifice from its members.
Now is no longer the time to reminisce or to play the blame game. It is time for a fresh start.
The reasons why it is opportune to try again are not limited to the timing, which is of crucial importance given the black clouds looming on the horizon, but also include the positive business climate such a pact will bring to the country.
The MCESD is the ideal forum where such a pact should be hammered out.
The Irish experience of the social pact is a success story not only because most of the social partners saw the bigger picture but also because decisions were not taken solely on a consensus basis. If disagreement prevailed a vote determined the final decision.
Malta’s decision-making model at MCESD is based on consensus. A noble ideal but one that can in many ways shackle progress since unions and business organisations could be tempted to defend their turf.
The writing is on the wall. A sobre analysis of the Lisbon Agenda shows clearly that Malta in many respects is a laggard running right at the bottom of the league tables not by design neither by carelessness but simply because the working practises and the structures are not in place to allow the country to compete on an equal basis with bigger countries.
The agenda for achieving a social pact must include addressing the short comings of the country from a bloated public service to low participation of women in the market place, from the worrying number of early school leavers to illiteracy rates, from excessive public holidays to unnecessary red tape.
These matters need to be addressed and solutions proposed requiring hard decisions if they are to be implemented. This can only materialise if there is general consensus on the hard decisions.
Government can simply plough along on its own but it would make much more sense to have the social partners agreeing in principle to most of the decisions that need to be taken to shore up the country as the hard times loom.
Beefing up the MCESD and placing the social pact foremost on its agenda is a top priority. The timing is right, the mood in the country would welcome it with open arms while the benefits such a pact can achieve are undeniable.
The country can ill afford instability of any sort in view of the difficult global economic situation brewing with an American recession round the corner, a weakened Sterling, a Europe finding itself in increased difficulty competing in a world dominated by the new Chinese and Indian economise, the hike in the price of oil and even more alarmingly the increase in the price of cereals.
We can choose to sit and wait for the good times to continue rolling but that would be a recipe for disaster. Now is the time of reckoning for Lawrence Gonzi’s government and its ability to open a sincere dialogue to achieve consensus with the social partners.
Our level of competitiveness needs to increase if we are to survive the onslaught.
The message emanating from this newspaper is loud and clear: go for a social pact. The timing and prevailing conditions are ideal.