Malta’s slow burning socio-economic issues

Malta may have escaped the worst consequences of the protracting eurozone economic downturn, but no one must be fooled into thinking that our future prosperity can be guaranteed without addressing a number of serious socio-economic challenges. These are slow burning issues that will not demand a solution in the next few months, but they will simply not go away until we show the determination to address them.

The issue that needs the most urgent attention is that of education

Two of these issues are closely connected: our pensions and health systems. They are both related to the demographic facts that our population is growing older, that we are living longer and that most of us will need increasing medical support as we do so.

The Government has done well to appoint an action committee to look into the issues of ageing and to come up with an active ageing strategy. The need for further reform in our pensions system will become more pressing in the next few years. This will not be so because the IMF and the European Commission will keep telling us that our pensions system is inadequate, but because social pressure will increase to ensure that our present and future pensioners are guaranteed a decent quality of life that can only be given by a robust pensions’ reform.

While one can hope that economic growth that should be at least double that of the eurozone can dull the pain of further reform, we need to have contingency plans in case this does not happen. While it may not be the right time to introduce a mandatory savings element in our pensions system, we should be considering setting some milestones that indicate when this should be done. In the meantime, the introduction of fiscal incentives to encourage voluntary long-term savings for retirement should be introduced as early as in the next Budget.

Our health system also needs major reform to cater for our ageing population. Mater Dei hospital is already showing signs that it is inadequate for our present and future needs. Even when the oncology unit is completed, we will need further capital expenditure to create sufficient capacity for both the medical and social needs of the population, especially the elderly. The rehabilitation of St Luke’s Hospital or parts of it could be one cost effective solution for this pressing challenge.

Other capital resources will be needed to upgrade the equipment needed for today and more so for tomorrow. But the most painful element for the minister of finance will be finding enough funds for the day-to-day running of our medical services. Our health system should remain free for all at the point of delivery. To do this we need to introduce a health insurance scheme that covers everyone and is funded by those in employment. Once again the political dilemma will be the timing of such a sensible scheme as the current economic climate is still not bright enough to introduce new burdens on employers and employees.

But the issue that needs the most urgent attention is that of education. For the past three decades our educational system has suffered from benign neglect. I use the word ‘benign’ because I believe that what was basically wrong in our approach to education was not that we were not prepared to dedicate financial resources, but that our priorities were in the wrong order.

Success in education cannot be gauged merely by the amount of money we spend on building new schools, refurbishing old ones, by the money we spend on stipends, or by the number of students we have in University and MCAST.

The Economist recently made a very incisive comment on what is wrong with education in Europe, including in Malta: “What matters is not just the number of years of education people get, but its content. This means the expanding of study of science and technology and closing the gap between the world of education and the world of work – for example by upgrading vocational education and technical education and by forging closer relationship between companies and schools.”

Our stipends system needs to be calibrated to encourage more students to go for the harder educational options by following courses in science, mathematics and technology. We also need to address the social issues that are creating an underclass of students who are not really interested in preparing themselves for the workplace by working hard to educate themselves.

It is time to start dealing with these slow burning issues.

johncassarwhite@yahoo.com