SPEECH BY THE HON. DR. LAWRENCE GONZI, DEPUTY PRIME MINISTER AND MINISTER FOR SOCIAL POLICY, AT THE ANNUAL CONFERENCE OF THE FOUNDATION FOR HUMAN RESOURCES DEVELOPMENT – ST JULIANS – 17.10.2001

This has now changed in a dramatic manner. Information technology has shifted the focus onto the talents and abilities of the workforce. Modern day tools are no longer tools of automation but have become tools of creativity.

And therefore, the qualities that are required today from our workforce, are the ability to be imaginative, the ability to interrelate with fellow workers, and the ability to accept and to adapt to change even when this takes place at breathtaking speed. Intellectual and human capital is therefore today’s driving force in every modern economy.

Recognising that this change has taken place is perhaps our first challenge. It is a challenge because there are still pockets within our economy that strive to retain outdated work-practices, living under the illusion that the status quo represents their job security, when in reality it is the biggest danger that they face in today’s globalised world.

Of course, this applies to the whole spectrum of our labour scenario. It applies to workers in the same manner as it applies to employers, to employment agencies and to policy makers.

I suspect that this is why your agenda for this seminar is replete with references to the need to have a strategy which is based on the development of our human resources. Indeed you propose a Business formula which essentially states that positive Business results can only be achieved if there is a commitment towards an organisational culture that maximises on the human resource potential, if there is a consequent investment in Human Resource Development and if there is a conscious decision to put our money where our mouth is, and therefore providing the necessary financial resources to achieve these strategic aims.

I have already stated that these concepts apply across the board. They therefore apply to policy makers in the same manner as they apply to the public sector employment structures.

Allow me therefore to outline to you my government’s strategy in this regard. We have constantly stated that our focus is the citizen who rightly expects a decent quality of life sustained through productive employment, inclusive social and civic participation and security in old age. We have been and we continue to be committed to achieve this through pro-active measures, which enhance quality of life while supporting the weaker elements of our population.

In this context, I believe it would be useful if we take a quick snapshot of our labour market and then to contrast this with some of the more important initiatives launched by my government in the past three years – initiatives which have been taken in view of the strategic goal that we have, namely to develop our national human resources pool.

At the end of 2000, our national employment rate was 54%. Mathematically, this means that our aggregate national human resource pool, that is our working age (15-64) population, is working at half its capacity. The gap between the male and the female employment rates is very high: 75.4% for men compared to 32.1% for women. The employment rate for women between 15 and 64 years of age rose from 27.4% in 1994 to 32.1% in 2000. 52.5% of the increase in full-time employment was made up of women. After reaching a peak rate of 6% in January 2000, unemployment has been steadily going down to 4.7% in July 2001.

Since the early 1990s we have managed to implement a policy encouraging a marked and continuous shift towards private market services. The employment opportunities generated in this sector over the past ten years is indeed something that we should all be proud of. In 2000, the employment share in agriculture was 1.5%, that of industry 28.4% and that of services 70%, of which 66.4% was in private services. Comparing these statistics with those of the mid-eighties will certainly highlight the enormous strides that our country has made in such a brief span of time.

Another important aspect of analysis on which strategic decisions must be taken, relates to education. Education levels in the labour force are rather low compared to the EU average. 39% of the working age population have an educational level up to general secondary level while 32.2% successfully completed primary level education. 5.1% of the working population hold either graduate or post-graduate education. 32.9% of people in employment are in high-skill jobs and could be considered to be knowledge workers. The rest, hold either low-skilled or unskilled occupations. The LFS 2000 indicates that there might be a mild co-relation between the salary full-time employees earn, and their level of education.

This snapshot highlights the fact that the challenges facing employment policy today relate to participation rate and skill levels. This is particularly important in the context of an ageing population and a decline in birth rates, both from the point of view of labour supply and the capacity to finance social protection. This is why my government is concerned about the relatively large number of people who are inactive. Low participation rates, particularly for women and, to a lesser degree, older workers, are therefore at the centre of our attention. Similarly we are determined to continue with our policy to sustain and indeed increase the educational levels of our younger and older generations in order to address emerging skill shortages, which are particularly evident in the IT and construction sectors, in certain professions and in middle management.

We have analysed all this and today I am in a position to announce that towards the end of next year, we will be concluding Malta’s first national action plan on employment. This plan will allow us to meet the above challenges, to take forward the actions already started, and respond to new issues as they arise. In its plan, Government will be strengthening preventive measures and boosting participation levels, first and foremost among women and disadvantaged groups.

In the meantime, we have been very busy strengthening the building blocks which are vital ingredients of such a plan. During the past three years, a number of initiatives have been launched with the intention of investing and developing our national human resource pool, making education more relevant to the business cycles and economic prerogatives, while instilling a culture of lifelong learning. The following initiatives can be singled out:

• The setting up of a new National Minimum Curriculum (NMC) across all private and public sector schools focusing on stimulating learning not teaching, and basing schooling on desired learning outcomes. An important objective of the NMC is to enable productive and effective participation in the world of work. A high-powered Foundation for Educational Services has also been set up to oversee the implementation of the Curriculum and to steer the way for further reform of the education and training system. This Foundation is now launching a specialised institute that provides early intervention with those children who do not cope with the rest of their classmates and which provides support to these children’s parents.
• The creation of a Malta College of Applied Art, Science and Technology (MCAST) envisaged as a vocational education and training structure comprising a number of specialised institutes that work in a unified system. Complimentary is the setting up of the Malta Council for Professional and Vocational Qualifications, entrusted with the task of setting up National Vocational and Occupational Qualification (NVOQs) standards to accredit prior learning and to certify vocational competence and award certification;
• A collateral reform of the Trade School sector is taking place positioning Trade Schools as a bridge between the lower and higher levels of technical competence, enabling teenage students as well as adult working men and women to proceed to the MCAST;
• The launching of the ‘education-business links initiative’ between the Ministry of Education and the Federation of Industry, intended to

• provide children with a window into the world of industrial firms and be lectured by specialists to gain insight into the operational and managerial aspects of industry;

• A national structure for lifelong learning, launched by the Ministry of Education and National Culture with the participation of civil society to engender a culture of continued education and training for personal development and effectiveness;
• An operations review of the Employment and Training Corporation (ETC) together with the promulgation of a three-year business plan aimed at re-positioning the Corporation to better work towards the upgrading of human capital and to align itself to the EU Employment guidelines. Subsequently, a further cash-injection of Lm1 Million for the setting up of activation initiatives and programmes to push the unemployed to work.
• A national drive to go for e-government and e-services attracting to Malta leading firms to participate as partners with us in this exciting item which is foremost in our national agenda.

It is worth noting that all of these initiatives have been launched in partnership with both trade unions and employers’ representatives with the scope of making education and training more relevant to business.

We are expecting more from our workers, but we are also strengthening their rights and providing them with unprecedented benefits. The new draft Employment Relations Act due to be published in the coming days, shall usher a new era in worker rights, secure workplace protection and bridge working life with other social responsibilities and duties. They will also provide the legal infrastructure which is necessary in order to increase our participation rate, especially the female part of our population.

In this seminar, you have spoken about bottom line benefits of a human resource oriented strategy. Obviously, benefits are relative to one’s goals! The business community might measure benefits in relation to the financial bottom-line. Workers and their representatives might appreciate benefits if they translate themselves into financial rewards and incentives. Government believes that the resultant benefits of investing in the national human resource pool is a quality leap which increases economic performance and enhances quality of life for all citizens irrespective of their productive capacity.

Thank you