The coming 12 months could well be dubbed the year of the challenge in many walks of life; from the economic to the religious, from the political to the personal.

The government's biggest challenge this year will be the economy. Its ability to handle it will no doubt continue to be affected by the world around us, but this will be no excuse for poor stewardship. The deficit ballooned to more than €400 million last November and this administration must be held to account on its promises to bring that down.

However, more important than that in many people's eyes will be the government's ability to deal with the increasing cost of living, which is likely to be the main yardstick by which this administration is judged. With higher water and electricity bills landing on people's doorsteps, the government is under more pressure than ever to find a long-term solution to the problem and also to stem the unjustifiable rise in the price of food and medicinal items.

Quite independently of his hands-on role to help bring this about, the Prime Minister needs to overcome certain other obstacles - primarily ones connected with his one-seat majority in Parliament. He must take a firmer stand with media-happy backbenchers who seek to pursue their own agendas under the guise of constituent or the national interest and not forget those who have stood loyally by his side. He has to live by his electoral promise to listen more but at the same time act decisively and use all the interpersonal skills at his disposal to communicate those decisions.

Although it is conceivable that Joseph Muscat could win an election by doing virtually nothing and remaining as gaffe-free as possible, he must use 2010 to build the Labour Party as a credible alternative government. This requires much more than vacuous clichés and stolen phrases from the revered former leaders of both parties. The opposition leader must demonstrate that he has the necessary discipline, capacity and, most importantly, people around him who are able to run the country in the years ahead. There is little doubting that there is some painful development and surgery ahead if he is to achieve this.

But our politicians are not the only ones with challenges ahead this year. President George Abela, who has received almost universal praise for his front-line effort to raise an almighty sum during the L-Istrina campaign, would do well to maintain the interest he has generated in the presidency. But he must do this in a measured manner - one that focuses on the President's role as a figurehead rather than a celebrity. As much as it makes sense for the President to be close to the people, the post could be devalued if the person who occupies it is viewed without distinction as one of them.

The Church in Malta also has a challenge: to use the forthcoming visit of Pope Benedict to rekindle enthusiasm in those who are a little distant from it and then push on from there to communicate with them in a more embracing, straightforward and accessible manner. It needs to project a message of inclusion rather than exclusion and put its message across in a language that reflects the times we live in.

The rest of us have a challenge too, to play a genuine role in the economic recovery by cooperating when we are required to do so and saving criticism for when it is justified and not inspired by ulterior motive. Happy New Year.