Published on The Malta Independent¸ issue 8 May 2011
No¸ it was not a self-confessed pragmatist who coined this phrase¸ it came as an idea from the European Commission in an altruistic bout of zeal to reduce administrative burdens on small entities. The Commission is urging us to abide by the Small Business Act (SBA)¸ which primarily aims to improve the overall approach to entrepreneurship¸ by instilling the ‘Think Small First’ principle.
The SBA is a wide ranging set of pro-enterprise measures designed to make life easier for small and medium sized enterprises (SMEs). In a nutshell¸ it seeks to promote entrepreneurship and strengthen competitiveness. It sets out new actions to respond to challenges resulting from the economic crisis. Is this a pipe dream or a pragmatic approach to uproot the barriers to growth? On paper¸ the idea is to work out the right policy starting from trimming regulation in public service to promoting SMEs’ growth by helping them tackle the gargantuan problems that hamper their development. SBA says that the goal will be reached if and when bureaucracy is reduced by 25 per cent next year. Some may well reply… keep on dreaming. At the same time¸ observers of the local scene applaud the recent bill to enact the Malta Competition and Consumer Affairs Authority. Can it be the answer to our long awaited crusade to tackle red tape and help SMEs to flourish? It is certainly a step in the right direction. Party apologists keep telling us that the Authority¸ when fully functional¸ will itself be free from bureaucracy and be customer friendly and that complaints will be heard and acted upon. The Bill aims to set up a twin-headed structure¸ which would ensure fair competition and protect consumers. As a corollary to the motive to protect consumers¸ it will indirectly benefit small enterprises that supply the local market. Will it result in a harmonious balance where consumers can find the right product at a fair price while suppliers can be protected from the abuse of cartels¸ which monopolise the market? Only time will tell.
However¸ opposition spokesman Dr Mangion fears that setting up such an authority with a top heavy administration might lead to more bureaucracy and less efficiency. He also asked how the fair competition directorate would function in practice as well as succeed in eliminating any overlap with any other directorate within the same twin-headed authority. Speaking in Parliament¸ Dr Mangion said that five years ago the Prime Minister had announced a new committee under his chairmanship to make suggestions on reducing bureaucracy and taking the economy up to a more efficient level¸ but to his amazement such an ad hoc committee never functioned. To be fair¸ one must bear in mind that reforms focusing on cutting red tape have fallen by the wayside due to the severe recession of the past three years. Yes¸ there has been encouraging progress in some member states but in Malta we still have need to take significant measures to see any results. Perhaps it is thanks to the energetic chairman of Malta Enterprise who spearheaded the crusade against unnecessary red tape. But the reality is that his plate is full to capacity trying to mitigate the consequences of trade disruption arising from the civil war in Libya. He cannot concentrate completely on developing the full potential of small companies. Not with so much at stake resulting from the 800 workers out of a job due to the Libyan crisis.