Chal­lenges in de­ci­sion mak­ing

Malta Independent - - DEBATE & ANALYSIS -

Sim­ple and straight­for­ward an­swers are far from the norm, with the ma­jor­ity of choices avail­able hav­ing ei­ther reper­cus­sions or op­por­tu­nity costs.

The art, or science, of de­cid­ing might ap­pear a sim­ple act. To an at­ten­tive mind, com­plex­ity and de­mands be­come rather ob­vi­ous. For peo­ple hold­ing pub­lic of­fice, de­ci­sions or a lack thereof on what to change and what level and qual­ity of pub­lic goods to pro­vide are just a few ex­am­ples of this com­plex­ity. Of­ten, it is as­sumed that ad­min­is­trat­ing and pro­vid­ing such goods and ser­vices in a small com­mu­nity is much eas­ier as the com­plex­ity and dif­fi­cul­ties can be scaled down. Ex­pe­ri­ence and ev­i­dence show that this is not the case.

The non-scal­able prop­erty of pol­icy-mak­ing is most ev­i­dent in small com­mu­ni­ties such as Gozo. Ir­re­spec­tive of the size, a cer­tain level of ser­vices is ex­pected and this in­volves costs. How­ever, in con­trast to com­mu­ni­ties of a cer­tain size, small ones like Gozo can­not ben­e­fit from economies of scale. In other words, the cost of pro­vi­sion will be higher be­cause it can­not be spread over a large amount.

When this is com­pounded to other con­straints that are present in small com­mu­ni­ties – such as a lack of hu­man re­sources and spe­cialised ex­per­tise – the re­sult can be ei­ther a sub-op­ti­mal pro­vi­sion of ser­vices or goods or else pro­vi­sion of in­fe­rior qual­ity.

This is where the is­sue of state aid comes into play. State aid is a very sen­si­tive topic in pol­icy-mak­ing in the Euro­pean Union, as it can be used to sup­port cer­tain in­dus­tries and re­strict com­pe­ti­tion. This of­ten leads to rigid in­ter­pre­ta­tion and ap­pli­ca­tions of th­ese rules. How­ever, state aid rules within the EU can­not be ap­plied in such a way, es­pe­cially when deal­ing with re­gions scat­tered across the con­ti­nent, all fac­ing dif­fer­ent cir­cum­stances and chal­lenges. It makes no sense to have the same cri­te­ria ap­plied uni­formly to pe­riph­eral re­gions as well as to city cen­tres. Ap­ply­ing them uni­formly would mean in­creas­ing the struc­tural dis­par­i­ties that al­ready ex­ist be­tween the cen­tre and the pe­riph­ery of the EU.

This is why it is my be­lief that, cou­pled with in­fra­struc­ture de­vel­op­ment mea­sures, we must also be pre­pared to pro­vide state aid to act as an in­cen­tive. Lim­it­ing such projects to the de min­imis amount of aid is not al­ways ap­pro­pri­ate to ef­fec­tively mit­i­gate this sit­u­a­tion. We must make sure that state aid be­comes an ef­fec­tive in­stru­ment that can help us ad­dress the in­her­ent con­straints that are the re­sult of our small size.

In re­cent years we have con­tin­ued to work on the prin­ci­ple that we need to sup­port our stake­hold­ers in the eco­nomic de­vel­op­ment of the is­land. An ex­am­ple is the Gozo Fod­der Scheme, whereby farm­ers and breed­ers can ob­tain aid to help with the costs of trans­port­ing grain to Gozo. Mak­ing the best use of the avail­able struc­tures and ben­e­fit­ting in a sus­tain­able way from state aid is part of the so­lu­tion. How­ever, the real trick is to nur­ture a cul­ture which, in­stead of look­ing at con­straints pre­sented by small size, sees op­por­tu­ni­ties. We are con­scious that with­out the ini­tia­tive and risk-tak­ing of many lo­cal in­di­vid­u­als, lot of things would not be pos­si­ble. The vi­sion and de­ter­mi­na­tion demon­strated by th­ese peo­ple is truly re­mark­able, es­pe­cially when one con­sid­ers the dif­fi­cul­ties and bar­ri­ers that they have to face and over­come.

In our present role as pol­i­cy­mak­ers, we have am­ply demon­strated that we are pre­pared to work with all those that are ready to con­trib­ute to the ben­e­fi­cial de­vel­op­ment of Gozo. Our re­sources are too far lim­ited to do away with a size­able chunk of it just be­cause there are ar­eas of dis­agree­ment. This is how we see our roles as pol­icy-mak­ers: in­ter­ven­ing when nec­es­sary while in­volv­ing stake­hold­ers as much as we can.

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