Is there anyone who really believed Joseph Muscat’s electoral promise that, under his premiership, Malta would position itself among the best in Europe? Could Muscat really deliver such an ambitious promise, and really challenge European powerhouses like Germany, France, UK, Italy and Spain?
Well, three years down the line, and against all odds, Muscat has indeed delivered this mammoth pledge, despite the crisis he inherited when taking office in 2013.
Let’s not forget that in 2013, Muscat inherited an economy which credit rating agencies had downgraded, and the European Commission imposed its second Excessive Deficit Procedure. From that bleak scenario, Malta today is indeed the envy of Europe.
Official statistics issued by Eurostat and the National Statistics Office show that the island is registering unprecedented growth, record employment, and the national deficit is being slowly brought under control.
Memory may be short, but for the record, Muscat was elected to office at a time when the incumbent PN administration was forced to effect immediate budgetary corrections to the tune of some €40 million, slashing a chunk of the island’s GDP.
The secret behind this extraordinary boom is that Muscat’s administration opted to forge with a truly business-friendly and economically savvy policy
To the contrary of the economic realities that are plaguing most European governments, who are forced to implement painful austerity measures, Muscat’s government has seen to increase student stipends, pensions and social services.
But it is in the employment sector where Malta has excelled.
Malta currently has one of the lowest unemployment rates in Europe, as its private sector is working at full throttle, churning out new jobs like never before. No, it’s not government mopping up numbers, but the private sector which is creating the opportunities and absorbing the numbers of those seeking jobs.
Take a look at these astounding figures. According to the National Statistics Office (NSO) public sector employees numbered 44,385 in February this year. In March, that number went down to 44,351.
The private sector on the other hand has shown unprecedented expansion. There were 130,815 employees working in this sector in February.
In March the number shot up to 132,017. Broken down, 100 more workers were taken up by the retail trade, 100 by the professional services, 150 by hotels and restaurants, 200 by the gaming sector, and some 500 others found jobs with other sectors, such as security, cleaning, and secretarial support.
Were that rate of growth to be repeated in the larger economies in Europe, millions of workers would be taking up employment.
Many will say that these spectacular results were obtained by Malta because, for instance, the price of oil has been very favourable. It may be a possibility, but the price of oil has been very favourable not just for Malta but also for the economies in Europe which are still not doing well at all.
The secret behind this extraordinary boom is that Muscat’s administration opted to forge with a truly business-friendly and economically savvy policy. While cutting red tape and paving the way for investment, investors have responded with confidence.
In tourism there has been an inexorable rise in arrival numbers. The situation in the Mediterranean has helped, but tourism entrepreneurs have chipped in with investments because they were confident in the industry’s future.
The government has also been innovative. The Individual Investor Programme, for one, has resulted in millions of euros pouring into the economy. This has indeed created income without the need to borrow.
It is the kind of money that has sadly led to unexplainable bitterness from the Opposition, whose criticism was surprisingly focused on the inflation rate, which in fact proves the country’s economic success.
The truth is that inflation today is a problem which most of our European partners wish to have. Compared to us, many EU states remain stagnant with deflation, zero growth, zero consumption and high unemployment. Malta is creating new wealth and is in a position to further distribute it justly among all sectors of society, most especially the ones most in need.
So from a situation of austerity imposed prior to the 2013 election, we are now proud participants of a genuine economic miracle. Muscat promised it and delivered it.
Karl Stagno-Navarra is a journalist specialised in euro-area governments for Bloomberg News and a current affairs programme presenter on One Television.