Malta today wears two distinct faces: one of a booming economy and the other of complaints about decisions that adversely affect the quality of life. There has rarely been a time when the difference has been sharper than it is today.
There is no shortage of superlatives from the government to describe the growth of the economy but, in sharp contrast to this, the quality of life is deteriorating as a result of lack of enforcement in certain areas, with the government appearing to be either unwilling or impotent to check the downward trend. At times, the government itself acts as a contributor to the decline, as shown by its indifferent attitude towards the environment.
On the bright side, there is much to be happy about the reports that are coming out from the credit rating agencies on the state of the economy. The latest one, from Fitch, is excellent, and confirms the good work that has been done over the years under different administrations to build a sound economic basis.
To its credit, Joseph Muscat’s government continued to steer the economy in the right direction, with measures aimed at stepping up the participation rate of women in the labour force and policies that helped keep Malta in the league as an attract investment location, though much remains to be done to improve efficiency. This administration has also had the added advantage of running the country in a favourable international economic climate.
Fitch has upgraded Malta’s long-term rating to A+ with a stable outlook. One reason for the move was an improvement in public debt dynamics, as reflected by the fast-declining gross general government debt. The agency forecasts such debt to decrease to 50 per cent of gross domestic product in 2019, slightly higher than the ‘A’ median of 48.8 per cent and supported by strong nominal gross domestic product growth and recurrent primary surpluses.
Fitch gives a long list of good points and forecasts that the economy is set to continue to grow at a faster pace than its similarly rated peers with real GDP growth projected at 4.3 per cent this year and 3.7 per cent next year. Not bad at all.
Dr Muscat was quick to hail the agency’s report, remarking, not unreasonably, that it would help attract more foreign investment, though there are other parameters than such growth that prospective foreign investors would normally take into account when considering possible locations for investment. For example, Malta needs to do a great deal more to raise its ranking in the World Bank’s Ease of Doing Business index.
Buoyed by such results, the Prime Minister has spoken of his government’s plan to introduce what he called the first batch of proposals from their election programme that would make a difference to people’s lives. In such an improved economic situation, people expect some of the benefits to percolate to all classes of society through measures or programmes that improve their living standards.
Above all, however, there needs to be a consistent, concentrated effort to improve the quality of life. What use is it if the country has a strong gross domestic product but the people are denied the simple enjoyment of living in a clean environment? With the economy doing well, the government should start thinking about such matters too.