Handouts are not enough

Last Updated on Thursday, 2 July, 2020 at 9:50 am by Andre Camilleri

There are differences both in degree and in thrust between the various helps that are being offered by governments to cope with the pandemic and its economic consequences.

All these helps aim to get the economies of the various countries back to growth, especially those countries where growth has been lacking since the 2008 crisis and even before that.

Here in Malta we tend to be rather complacent seeing we have had successive years of growth, a growth that surpassed that of bigger countries. We may then have been encouraged to be even more complacent by the redoubtable results of our fight against the pandemic.

The government has come up with at least three instalments of help, apart from the last bit which is being announced in these hours. Added up, this help has made substantial inroads in the national coffers.

People have been generally thankful but the help is running out. And those especially who have been relying almost exclusively on the help coming from the state now face the threat of trying to survive without this.

One hopes that the structures of social assistance can be widened and enlarged so as to be able to offer real help to those in need, this side of assistentialism.

What we are seeing however is the collapse of the small and medium sized businesses which seem, many of them at least, to have been swallowed up in a black hole.

The government help in this regard is both too small to be effective and too immediate to be of any real help. In these circumstances, those institutions, especially some banks, who came up with structured help to help those SMEs who really wanted to move on, who were really doing what needed to be done. In this regard, the government help, such as it was, was wrapped up in hype and less effective than it could have been.

Other governments did things differently. What is more important, the enterprises themselves, the SMEs, have a very different mind-set, less focused on what they can get from the government and more determined to fight back and find new opportunities around.

It is this sector that should merit help, real effective help from the state. The state would be giving them a fishing rod, rather than a basket full of fish.

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