Gozo’s business exodus is causing chaos | Joseph G. Grech

A pre-electoral employment spree has deprived several Gozitan companies of their workforce. For Gozo Business Chamber president Joseph G. Grech, this constitutes a crisis that must be resolved

raphael_vassallo
Raphael Vassallo
2 July 2017, 10:00am
Last updated on 3 July 2017, 9:05am
Gozo Business Chamber president, Joseph G. Grech
Gozo Business Chamber president, Joseph G. Grech
Gozo may have a reputation (at least, among tourists and non-Gozitans in general) as a somewhat sleepy, unspoilt Mediterranean island providing an idyllic backdrop to the occasional weekend break here and there. But beneath this external veneer of peace and tranquillity, trouble seems to be brewing among the island’s small (but economically vital) business sector.

Employment has traditionally always been an issue for Gozo: lack of local job opportunities drives thousands of Gozitans to commute to their workplaces in Malta each day. But what little employment was already on offer appears to have been severely affected by a series of government schemes, enacted before the last election, that enticed hundreds of private sector employees to leave their jobs for employment with government contractors.

This employment spree hit companies that are mostly involved in manufacturing and the construction industry, apart from many small enterprises. A sizeable number of new employees joined the Gozo Channel company, which took on just under 150 workers; others opted for jobs in security, carers and as cleaners... mainly working with those companies subcontracted by government agencies and departments.

Joseph G. Grech, president of the Gozo Business Chamber, does not mince his words when asked how this unexpected development actually affected the Gozo-based companies where all these people were previously employed.

“First of all we were immediately bombarded by phone-calls from our members. They were affected, naturally. One moment they had had a staff complement of trained workers – some of whom had been working for them for years – and from one second to the next, these employees all left. You can just imagine the chaos that erupted at these workplaces...”

Has any attempt been made to quantify the actual impact, though? 

“From a survey we conducted, the number of employees involved runs into the hundreds. I don’t have the exact figures at hand right now, but as I recall it was somewhere in the region of around 900 workers, who upped and left the private sector all at once... and those companies are still looking for replacements. For a small economy like Gozo, 900 is a large figure. The population of Gozo is officially estimated at around 33,000. So every single employee who leaves private sector employment constitutes a large loss. I think it was a heavy slap in the face for the Gozitan businessman and entrepreneur... because it all happened in one go. It wasn’t a case of one or two people leaving: they all left together...” 

What about the effect on the companies concerned? What sort of ‘chaos’ are we talking about, exactly?

“The effect was significant. It’s not easy to quantify; but some of our members called us saying that there’s been a slowdown in work orders, because they don’t have enough staff to handle them. There were one or two foreign companies which even told us that their CEOs were flying in from abroad: to see, among other things, whether to relocate to other countries. There are other companies which, normally at this time of year, would employ a number of temporary employees to cope with the workload... these found that, not only were there no new recruits, but their existing staff left them as well. So they are now with their backs to the wall. What are they going to do? So the effect was big. I only hope that a solution can be found...”

The Gozo Business Chamber is already in talks with the various government ministries concerned – Employment and Investment, Gozo, etc. What solutions is it actually proposing?

“On our part, we have already had a few meetings with the relevant government departments. We will have others. The question we’re asking is whether anything can be done to address the staff shortages these companies and entities are now experiencing: even, if necessary, by bringing in workers from overseas. Because let’s face it: the ones who have left, are gone now. And it’s their choice. I’m not saying there is anything wrong with working with the government. But we are still left with a serious situation to somehow solve...

“Perhaps there is this idea that, if you work with the government, you have more security of tenure: you have ‘a job for life’, so to speak. That could be part of it. What I can say is that, in some cases, they were getting paid more in their previous jobs than what they are earning now. So I don’t think the reason could have been a question of salaries...”  

Ironically, this also comes at a time when the government is actively trying to encourage more companies to relocate to Gozo by means of tax incentives. Gozo was in fact given considerable prominence in both parties’ manifestos: so isn’t this development, in a sense, a betrayal of the promise to address the perception of Gozo’s employment issues?

“Let me put it this way: I welcome the fact that everyone recognises the need to address these problems. It’s not a perception that there is no work in Gozo. It is true that there isn’t work for everyone. In fact, every day about 1,000 people cross over to Malta: there are three ferry boats coming and going all the time. So yes, Gozo could do with more workplaces: but then again, it’s always been this way. There has never been a time when the entire population of Gozo could work in Gozo. People have always had to find work in Malta; and then, where possible, if a vacancy arises they might come back. But what we found irksome about this latest development is that these were not people who were unemployed: these were people who were already working. They had jobs, but they left to sign up to these new schemes with government contractors...”

The timing also suggests that there may have been political motivation behind the sudden employment spree. If so, isn’t it ironic that a move intended to attract votes in Gozo should also have damaged Gozo’s business sector so severely?

“You could see it that way...” he breaks into a chuckle: “It’s like having children at home. You promise them a lot of things; then later you tell yourself: ‘now look what I’ve done!’... I don’t think the intention was actually to cause the damage; but then, everything has its cause and effect.” 

This brings us to a long-standing issue concerning Gozo: there is no shortage of electoral promises addressing the sister island’s needs... but is there really a holistic, long-term vision for the future of the island? At least, from a business perspective?

 “I would say, so far, there has never really been a long-term business plan for Gozo. This is one of the things we brought up into our meetings with the ministry. There is need for a clear vision of the direction we want to take Gozo in. If we have a sense of direction, we might one day get where we want to go. But if we just wander off in the hope of some day getting somewhere, we’ll end up taking every road instead of the one we want to take...”

What road would that be? From the perspective of an outsider looking in, the bulk of Gozo’s business sector seems to be rooted in tourism. There are other sectors, true; but the island has geared itself up as primarily a tourist destination. Is this enough of a foundation to build a long-term economy upon? 

 “I think it would be a big mistake if the people doing the planning think only in one direction. We cannot rely too heavily on any one sector – be it tourism, manufacturing, financial services, etc. – because the way markets fluctuate, we could be on top today, but crash to the bottom tomorrow.  If we don’t have enough variety, we could lose everything in one fell swoop. This is true of any sector: at the moment, tourism is doing well. And long may it remain so. But it wouldn’t take much for tourists to start choosing other destinations apart from Gozo. We need to maintain a balance, so that all business sectors are given their due importance.”

Still, some form of prioritisation must take place. How does the Business Chamber assess Gozo’s priorities at the moment? 

“The one thing we emphasise most is connectivity. Let me give you a small example: take two places, for instance, a city, and a small village... and put a road between them. Which will benefit the most? The big city, or the small village?”

The small village...

“Precisely. The smaller you are, the more connectivity you need. Our preferred solution would be a submarine tunnel connecting the two islands. But it’s not enough: the existing ferry service has to remain. It is an important part of our tourism product. A lot of foreigners who come to Malta would never even have seen the sea... just imagine how much they would have sailed on a ship before. To cross the channel by sea is a huge attraction in itself. Ideally, however, we should have the ability to cross by sea, by land and by air.

“But I’m not talking only about physical connectivity in that sense. In today’s world, it is important to be digitally connected too. We also need another fibre-optic cable for internet connectivity. As things stand, we only have one: so when foreign investors come here, they always ask what would happen if that one fibre-optic cable were to be disconnected, for whatever reason. With only one cable, the investor doesn’t have the peace of mind that, come what may, he would still be able to work. And we all know what it means to work in today’s world: each minute is worth thousands of euros...”

At the same time, however, efforts in the past to increase connectivity seem to have failed. Just consider how many other services used to exist, but no longer do... the hovercraft, the sea-plane, the helicopter service. Could it just be that the economies of scale do not work for that kind of transport?

“There were different reasons why those services stopped. The sea-plane, for instance, was never very much in demand. But the same cannot be said for the helicopter. That was a valuable service. But it was never meant to be a solution for Gozitans who need to commute to Malta every day. It was a highly important part of the tourism infrastructure: the advantage it gave was that tourists arriving at the Malta airport could continue to Gozo immediately, checking their luggage through all the way. Same with the return flight. In fact, one of the problems today is that – even if the ferry service has improved – most tourists who come to Gozo end up leaving a day before their flight from Malta.  They spend their last night in Malta, to be closer to the airport. When we had the helicopter, on the other hand, the schedule was synchronised with the departure flights; tourists could check in before leaving Gozo. It was more convenient all round...”

It was never really economically viable, though...

“No, perhaps not. But my view is that – if we really want to retain an essential service like that, and there isn’t enough local demand to make it viable – there would have to be some kind of financial assistance coming from somewhere.”

Is that possible under EU regulations, however?

“There are specific areas where a certain amount of subsidy is permitted under European law. The Gozo manufacturing sector, for example, benefits from a small subsidy to cover extra expenses involved in freight and transport. Even so, you will often find that similar products may cost slightly more in Gozo than in Malta, because it costs more to get delivered here.  Not to mention that other issue that rarely gets talked about: time. It costs more, in both time and money, to run a factory in Gozo than it would in Malta. This is another reason why connectivity is such a priority for us. A tunnel would alleviate many of these problems.”

How feasible is the idea, though? 

“According to studies commissioned by the Gozo Chamber, it would be both feasible, and economically viable. A tunnel between Malta and Gozo could end up financing itself. But the biggest advantage is how it would affect the Gozitan worker employed in Malta. They would be able to drive to work, as if they were leaving from Mellieha. Consider how much time that would save them. There are people here... parents with small children... who never get to see their children at all. They would get up early in the morning to go to work, long before the children are awake. And by the time they get back – especially in winter – their children will already be asleep.” 

To give some perspective on this time issue: how long would it take to commute from Gozo to, say, Valletta... and get there in time to start work at 9am?

“Generally speaking, your day would have to start at around six in the morning. But you might want to start even earlier.  Between six and 7.30, there is even a chance that you won’t make the next ferry, because there will be so many cars trying to board at the same time. In fact, the ferry service runs every half-hour, instead of every 45 minutes, during those hours. And bear in mind that if you do catch the 7.30 ferry, there is practically no chance of getting to Valletta before 9.30. Because, then, you have to face the traffic in Malta!” He shrugs in patient resignation. “ But that, to be fair, is an issue which has to be addressed on its own, and not because of how it affects Gozitans. As with all the other issues: we need to sit round a table, and come to an agreement for a long-term plan taking all these priorities into account.”