Sustainability indicators

Eurostat, the statistical office of the EU, publishes a series of indicators under the broad heading of sustainable development. These indicators include data on socio-economic development, production and consumption, social inclusion, demography, public health, energy, climate, transport, natural resources, and governance.

Since this data covers the 27 member states of the EU, it provides ample opportunity to draw comparisons between Malta and the other countries.

One can also assess whether Malta is close or far away from the benchmark of the EU average. I have made a selection of these indicators, which admittedly is partial.

The most basic of indicators is an economic one and it refers to the growth rate of real gross domestic product per inhabitant.

Thus the data takes account of population size and inflation. The growth rate for Malta has been 2.8 per cent, 2.6 per cent and 3.1 per cent for the last three years.

This is higher than the EU average, which was 1.4 per cent in 2005, 2.7 per cent in 2006 and 2.5 per cent last year. Some countries such as Slovakia, Latvia and Lithuania have had spectacular growth rates, around the 10 per cent mark. On the other hand countries such as Cyprus and Ireland had a lower growth rate last year.

One of the factors that underpin growth in the gross domestic product is investment. This is because investment is a key driver of economic growth, and without investment any economy cannot stand up to the challenges of international competition.

In Malta total investment as a percentage of gdp was at 19.5 per cent in the last three years. The average for the 27 EU member states was 21.5 per cent. In this case Ireland and Cyprus had a higher figure as well.

Malta can rightfully boast of an increase in investment over these last three years; however it has not been able to match what is happening within the EU.

An element of the sustainability issue is energy consumption. This brings in the issue of environmental sustainability and the need to balance it with economic sustainability.

Economic growth, no matter how desirable it may be, cannot be achieved at a high energy cost and a consequential increase in pollution. So one needs to compare the amount of energy consumed with the level of the gross domestic product.

A lower energy intensity means that a country is able to produce the same level of output using less energy. The data available refers to 2005. In 2005, Malta needed just less than 270 kilogrammes of energy per €1,000 of output.

This is 16 per cent less than the level registered in 1995, which in itself is a positive sign.

However, the average for the EU member states was 208 kilogrammes per €1,000 of output, indicating much higher energy intensity for Malta. The reasons for this may be various; probably the main one being that we have an inefficient electricity generating system.

Another environmental indicator is the amount of waste generated by households. In 2006 this stood at 652 kilogrammes per capita, compared to 517 kilogrammes for the 27 EU member states.

What is even more worrying is that over the last five years the data for the EU has been fairly stable, while that for Malta shows a steady increase. The question that needs to be asked is whether the economy can sustain such a level of waste.

The third pillar of sustainability is social inclusion. One important indicator is the inequality of income distribution, which is measured by Eurostat as the ratio of total (disposable) income received by the 20 per cent of the population with the highest income to that received by the 20 per cent of the population with the lowest income.

In Malta the ratio is 4.2 per cent, while the EU average is 4.8. A higher ratio indicates a higher inequality of income and a greater risk of social inclusion. Therefore the data for Malta indicates a higher level of social inclusion for Malta than the EU average.

I strongly believe that this data confirms once more the need that we have as a country to place sustainability at the centre of our political agenda. Sustainability is not guided by short term needs but by long term ones. For this reason there needs to be consensus on how to address certain issues.

We have to understand that the economy can only thrive if we manage to create balance between the need to generate wealth with the need to achieve more social cohesion and the need to protect the environment in which we live and work. The consensus is required to establish where that balance lies.