Socio-Economic Impact Assessment on Malta\'s

Socio-Economic Impact Assessment on Malta's Accession in the EU

CONCEPTUALISING PRIVATISATION IN MALTA.

Why the topic was chosen and importance

Importance of Research to Management and Malta.

Major Research

Major Research

Variables or factors profiling and identifying who will be impacted.

an economic overview of the Maltese economy.

Context of topic in the main research area.

Sources of Information to be used.

European Union and Malta - the Economy.

Is privatization the only way forward for Malta?

RELEVANCE TO THE MAIN RESEARCH QUESTION

Relevance to the main research Question

What are the Maltese economic objectives of Privatisation?

What has been achieved till now?

CHAPTER 4 - L, ITERATURE REVIEW

Literature Review

International

Productive Efficiency Theory

Principal Agent Relationship

Property Right Theory

Information Sources

Internet Journals.

General findings points

Local

Sources

CHAPTER 5 - METHODOLGOY

5 Methodology

5.1 Conceptual framework and methodology. 45

5.2 Variables to be used. 46

5.3 Layout 47

5.4 Primary data collection such as surveys. 47

5.4.1 Qualitative 48

5.4.2 Quantitative. 48

5.5 Economic Data collection and relevance. 48

5.6 Socio Data collection and relevance. 49

5.7 Survey Methodology

5.8 Questionnaire Research Flow chart. 52

5.9 Data Processing and analysis 53

5.10 Conceptual Triangulation approach. 54

CHAPTER 6 - FACTORS FOR ANALYSIS

Factors for Analysis

6.1 Enterprise Performance 56

6.2 Capacity Utilization 58

6.3 Investment 58

6.4 Taxes 60

6.5 Employment 62

6.6 Gender Pattern of Employment 64

Economic Trends of Privatisation 65

Fiscal Impact of Privatisation Process

CHAPTER 7-RECOMMENDATIONS IN CONNECTION WITH CONCEPT THEORY.

7. Recommendations in connection with concept theory 70

7.1 Unresolved questions that have evolved through this research 72

7.2 The way forward and further studies 73

7.3 Envisaged Limitations and problems 73

7.4 Expected significance. 74

7.5 Time schedule 75

CHAPTER 8- INTERVIEW SURVEY OF PRIVATIZED ENTERPRISE.

8. Survey

8.1 Interviewer's introduction. 77

8.2 Section1 - Background Information 78

8.3 Section 2 - Employment 79

8.4 Section 3 - Investment, Production costs and Sales. 80

8.5 Qualitative Assessment of Privatisation Process in Malta. 81

CHAPTER 9-QUESTIONNAIRE DESIGN.

9. Questionnaire.

9.1 Design Philosophy. 85

9.2 Questionnaire. 88

9.2.1 Section 1 - Organizational Details

9.2.2 Section 2 - Privatization Project

9.2.3 Section 3 - Privatization Expectations. 91

9.2.4 Section 4 - Economic Impacts because of privatization. 92

9.2.5 Section 5 - EU policy goals. 94

CHAPTER 10- FURTHER RESEARCH.

10. Further Study.

10.1 Conceptualization of further research. 99

10.2 Annex 1.

10.2.1 List of websites. 100

10.2.2 References

10.2.3 Bibliography

10.3 Pilot Research - Data documents used for this study. 109

10.3.1 Graphs List

10.3.2 Data Tables List

10.4 List of abbreviations used and their meanings. 111

10.5 Excel data and graphs 112

10.6 HTML computer code for project website. 148

10.7 Project Website 158

10.8 Profile of Research Student. 159

CHAPTER 1

1. Introduction

Background to Study

Malta embarked on the privatization of government owned enterprises. Although privatization was intended to result into fiscal benefits and equity enhancing effects through income distribution, reduction of inequalities in access to goods and services by limiting opportunities for favouritism, corruption there are concerns that privatization has hurt the socio economic welfare of the majority. Civil society concerns are that benefits have gone almost to the managers of the process. There is a feeling that government has not facilitated adequate participation of the locals in the process, thus the locals feeling robbed of national assets that were built through the accumulation of taxpayers contributions.

There should not be an extra space between these two paragraphs.

Also, in transition economies, the key issue of institutionalized reform towards a market economy was to do away with the centralized management of government assets, state owned enterprise and move towards a decentralized or private individual ownership and decision making over these assets. At the same time, privatization was held up the liberalization of prices and markets, which made many state owned enterprises unprofitable and saddled them up with large debts, which they were unable to service. Therefore restructuring of assets and debts, together with improved management, was the only solution to that problem.

Delete: There is also the fear that l Like Greece, when Malta acceded to the EU, its credibility on international financial markets has already improved (Moody has already increased our ratings), and thus the authorities gained easier access to foreign savings, which help cover growing budget deficits. In fact the Maltese budget deficit has increased substantially during the years. It is therefore generally feared by the Maltese that the widespread privatization of public companies is only an excuse to raise the necessary money to make up for the domestic spending like unemployment benefits, pensions etc. Consequently, these measures decrease the scale of investments and thus reduce chances for the dynamic development of the Maltese economy.

Background and Motivation:

This topic was chosen in order to research the socio - economic effect of privatising previously government owned companies on the Maltese economy. Since this research incorporates both the social and the economic aspect of privatisation this would therefore include the carrying out of surveys, interviews and questionnaires. However for this part of the research I am limiting myself to statistics and other data obtained from various sources, compare these local data, analyse and disseminate it according to the needs in order to compare like with like to other countries that have already joined the European block before Malta.

To achieve this target I am focusing on two major companies in Malta, Mid Med bank that was privatised and became HSBC and Air Malta, which has privatised core sections within the company. However, for the final research other companies would also be considered in order to span the research and achieve a better objective result.

An overview of the Maltese economy:

Going back to the 1950's the Maltese economy was basically to service the British forces that had been stationed on the island. Over the years, the forces have gradually declined, and so also the importance of Malta in the global power outlook. The country became independent in 1964, and from that time, the concentration of the government has been to make the islands into a viable economic unit based on tourism and manufacturing. In the running of the country, there have been two parties- Labour and Nationalists. Their views of the role of the state in the development of the economic activities have been different. The fait of labour was in the direct involvement of the state, whereas the Nationalists were favouring the private sector. Yet, development in terms of GNP has taken place, and risen to Lm364 million in 1991 from Lm108 million in 1971. The major part of the growth has taken place from the contributions from the government. The political aspect of this is clearly understood when the chief economic advisor of Malta in the seventies was Lord Balogh, and he believed totally in Keynes. The influence was so high that commodities were being imported by the government and sold at discounted prices. This naturally led to a large growth in the public sector and controls, and that in turn led to a loss of private initiative. This could be seen in the employment positions, and the growth was only in the public sector, whereas, the jobs physically decreased in the private sector. There was also lot of growth in organizations like Tele Malta Corporation, Ene-Malta Corporation, and Air Malta Sea Malta etc.