Malta Independent

Challenges in decision making

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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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