The way forward - 2

Consider the following scenario. In the mid-Sixties both Malta and Singapore obtained their independence from their British colonisers. The similarities between Malta and Singapore go further. Malta at approximately 1,200 persons/km2 is the second densest country globally after Singapore at 5,500 persons/km2. Malta is 1/5 built upon with an average housing density of 27 units per hectare as compared to Singapore being 4/5 built upon at a housing density of 142 units per hectare.

In 1965 Singapore's wealth was a quarter greater than Malta's, according to gross domestic product, GDP/capita criteria; however over this intervening period Singapore's wealth has spiralled up. In the year 2000 Singapore's GDP/ capita stood at 2.25 times that of Malta. Over this 35-year period Singapore's GDP was subjected to an 11.5% annual growth, as compared to Malta's at 9.25% over the same period.

However, if this growth is measured over the past 25-year period, it works out at 9% per annum for Singapore and 5.25% per annum for Malta. It has been argued that Singapore's public housing programme with a 90% subsidised home-ownership, by lowering the price of a major wage-good, has lowered the wage, thus it may be credited with stimulating faster economic growth and employment creation.

The massive absorption of household resources into financing the cost of housing effects the household's purchasing power. This leads to a drop in domestic saving, thus curbing productive investment and economic growth.

Now consider the next scenario. Eire, the most successful of the EU countries is situated at the back door of Europe, having a similar speculative housing market as Malta's, with a substantial 200%+ residential market price increase occurring over the past 20 years.

As at the year 2000, Eire's GDP/capita was 10% higher than Singapore's and three times that of Malta. Twenty-five years ago the Irish wealth was 25% higher than Singapore's and 2.25 times that of Malta. The Irish economy has also been subjected to a 9% per annum rise over the past 25 years.

Could Malta's slower wealth growth taken over the past 25 years at 5.25% per annum, as compared to Singapore's and Eire's at 9% per annum, be attributed to a lower working efficiency of the Maltese population over the past years under review? Should not the whole population sector be engaged to promote Malta's efficiency in the coming years?

However, the GDP standing of a country does not tell the whole story. A better indicator could be the Human Development Index (HDI), to assess the level of social development. The United Nations Development Programme (UNDP), to assess and compare development, has developed this index since 1990. Besides the wealth of the nation, it consists of three combined major indices: life expectancy; educational attainment; and income.

Of the three countries considered in these scenarios all fall in the first group of the High Human Development countries. In 1995 Malta placed 34th, followed by Singapore at 35th, while Eire placed 19th, out of 174 countries. In 2002 Malta moved up to 30th, surpassed however, by Singapore at 25th, with Eire moving up to 18th.

The rest of the dabbling in numeric harmony is now left to the econometricians to pave the way forward towards higher growth resulting in more sustainable wage packets. From the above it could appear unfortunate that the Economic Services is no longer a separate ministry but attached to various other ministries.

My four professional colleagues now forming almost a third of the Cabinet, who have made the profession proud, have a share in stimulating further greater economic growth leading to an improved quality of life for Maltese households.

Mr Camilleri, Eur.Ing, A&CE, B.Sc., (Eng)., BA (Arch.)., C.Eng., A.C.I.Arb., M.I.Struct.E., FICE, is an architect and civil engineer and structural and property investments consultant.