There are two sharply contrasting sides of the situation in Malta as it stands today. On the economic front, the country is doing well but, in terms of governance, the record is far from satisfactory and, judging by the shortcomings that keep surfacing regularly, the outlook does not look good either.

The government has good reason to be euphoric over the progress the economy keeps making from quarter to quarter, a result of a combination of factors that include a sound starting point inherited from the previous administration and measures introduced over the past two and a half years. The good performance is having a multiplier effect in that it is generating greater confidence in the country’s ability to move further ahead.

Just as credit rating agency Standard and Poor’s has come out saying that the island’s credit rating outlook remained positive and that the economy is expected to keep expanding by 2.8 per cent annually in real terms between this year and 2018, the government said that Malta’s economic sentiment indicator last month stood 11 per cent above the average. It was the second highest in the eurozone.

This is not bad at all and suggests that the country has kept up the economic growth momentum that could help give a further boost to the standard of living, narrowing further the gap with that obtaining in more advanced countries on the continent. However, wealth is not percolating down to all strata of society and the number of those at the risk of poverty is still high.

In Standard and Poor’s view, the country’s economic growth will continue to outpace that of the eurozone as a whole. This, it says, will be driven by strong investment in the energy sector and growth in consumption, underpinned by wage and employment, a steady net migration, the decline in oil prices and moderate inflation.

The decline in oil prices will no doubt give the government a further boost. However, since the drop has been very sharp, it is time for the government to reconsider further cuts, both in the price of fuel at the pump, which is still high, and the energy tariffs both for domestic and industrial use. If the benefit is not passed on to industry (and done so in time), both manufacturing and tourism may risk lose their competitive edge. This could then eventually reflect in a loss of exports and fewer tourists.

Standard and Poor’s made an observation that ought to be well considered in the context of the island’s good economic performance. It said the ratings were constrained by moderate contingent liabilities and a relatively low degree of economic diversification compared with Malta’s eurozone peers.

The government has in mind promoting education, healthcare and maritime trade as new potential economic sectors. All three could be promising, however, in its work to promote the development of these sectors it has to ensure it will not do anything that could go against other national interests.

For instance, in the case of the American ‘university’ project, now known to have suddenly morphed into an institute of higher education, it chose to agree to hand over to the promoters a pristine site at Żonqor Point, earning the wrath of all environmental organisations on the island.

Following the strong protest made by environmentalists, it has now reduced the size of the area in Żonqor allocated to the promoters but, seemingly out of pique, it is still giving the promoters a parcel of land there. This is not the way to do it.