While Labour leader Joseph Muscat is reaching new heights in the way he keeps talking about Malta’s economic progress, the country finds itself mired in problems that are causing deep concern as shown by the political tension that has been rising over the past months.

Taking the bright side of the picture first, the latest report from the European Commission again confirms the healthy state of the economy. Although economic growth may have settled down from the high levels of 2014 and 2015, Brussels expects the country’s economic activity to remain robust, with the rate projected to remain well above the EU average.

Since the country could have hardly been able to register a fraction of this progress without the solid foundations built over the years, the continued improvement is a matter of satisfaction to all, irrespective of political beliefs.

With a general election now only a year away, it is most likely the government will keep using the island’s economic performance as the strongest card in its campaign for re-election.

However, good as the economic situation may well be at present, a number of issues are not being given the importance they deserve in the overall economic analysis. There is no question that tourism, financial services and gaming are doing well but the country does not appear to be moving fast enough to create new economic niches to boost revenue for the time when, for one reason or another, any of these crucial sectors slump.

It takes time for new niches, such as healthcare, to develop. However, greater energy could have been shown in moving ahead, especially in maritime activity, which is one line that is most suitable for Malta.

The country needs to think ahead and develop new revenue sources fast. A good eye-opener was the European Commission’s remark that, despite the boost to tax revenue given by the introduction of revenue-increasing measures in the Budget for this year, current revenue is expected to grow slower than nominal GDP due to lower proceeds from the citizenship scheme.

Taking a wider view of the picture, the country’s good economic performance is masking a raft of problems, chief of which is corruption. Losing 10 places in one year in Transparency International’s corruption perception index is no joke.

Yet, in refusing to tackle the biggest scandal of all – the opening of companies in a tax haven by one of his ministers and his chief of staff – the Prime Minister keeps going against public sentiment. By choosing to keep both at his side, he has shown he is on a different wavelength from the rest of the people, including, it must be said, many of his own.

Besides rampant nepotism and sleaze, there are other problems: the sharp rise in house rents; the number of people on the poverty line; the inadequacy of pensions; the rapid degradation of the environment and, now, the threat to freedom of expression. There is then the yet unsettled future of Air Malta, a matter that is of deep concern as the airline is the economy’s most stable air link to the continent.

The Prime Minister said last Sunday his party would be seeking a fresh mandate on the strength of its bold plans for the future rather than on its track record in economic performance. It would have been better had he first sought to deliver on his promises of transparency, accountability and meritocracy and made sure to keep governance standards high.

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