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Challenging times for the Maltese economy

It is so easy to oversimplify the prospects of the Maltese economy. Many eco-nomists comment that watching GDP growth and unemployment levels is important, but there is more than these statistics to judging the state of health of an economy .

Fitch recently confirmed its rating for Malta and highlighted the real economic growth of 2.40 per cent achieved in 2013. Standard and Poor’s, as well as the Europ-ean Commission, similarly passed positive comments about both the results achieved in 2013 and the prospects for the Maltese eco-nomy for the next few years as a result of the government’s determination to tackle the Enemalta electricity generation issue.

The investment by Shanghai Electric Power, who bought 33 per cent of the shares of Enemalta, is indeed a major paradigm shift in the way the government manages its energy policy. From a corpor-ation that has a massive debt of over €800 million and could only rely on further rises in the tariffs it charges consumers, Enemalta together with the new privately-owned electricity generating company could serve as a catalyst for further economic growth. Private households as well as businesses need a reliable and affordable source of electricity, and now this could well become a reality.

Our tourism sector is also showing healthy signs of revival despite tough competition from neighbouring destinations. It is vitally important that new investment flows into this industry as for many years operators shied away from making new investment as they saw few prospects for growth. More needs to be done to ensure that our tourism product remains attractive, and this can only be done by constantly challenging ourselves to excel in the services we provide to our visitors.

But the reform agenda that I believe is necessary to put our minds at rest that our economic future is bright is quite a long one. Public finances, as pointed out by rating agencies and by the Europ-ean Commission, are still facing significant risks. While we often concentrate on the size of the annual budget deficit and the national debt, we often fail to discuss other important conseq-uences that could result from strained public finances.

One of the most serious challenges facing our economy and society is the future of our health-care system. Unfortunately, bad planning in the past has resulted in a substantial under-capacity for hospital care in Mater Dei Hospital. With an ageing population, lack of sufficient investment in new medical equipment in the past, as well as a dysfunctional management system, the demands on our healthcare system are not being satisfied to people’s expectations.

If our society values our free health system, it needs to accept that changes must be made in the business model we are using

The system can improve by making incremental improvements in the way our hospitals are run, but a root-and-branch reform will necessitate new investment that has to come from public funds. If our society values our free health system, it needs to accept that changes must be made in the business model we are using to ensure that free healthcare is viable.

Our educational system is similarly under-performing. Unless we get to the root of what is causing this under-performance, we can never be sure that the remedial action being taken is indeed going to give us the results that we need to make our educational system both economically and socially viable.

We need to listen more to what the educators have to say, the ones who face the day-to-day problems of managing a class of students. It was refreshing to hear the passionate comments by an educator who is responsible for running a school in one of our more socially difficult areas. She spoke from the heart about the social issues that are preventing so many of our students from making the most of our free educational system. Her words were far more inspiring than the political rhetoric that for years has dominated the public debate on the health of our educational system.

Another issue that will affect our economic future is the need for a change in the mindset of our society that has become too dependent on ‘the culture of dependence’ on politicians resolving our day-to-day challenges. To this one needs to add the importance of promoting the culture of savings that previous generations of Maltese people adopted to cushion the more negative effects of economic downturns in their lives.

We all need to discover again the value of thrift that has become so unfashionable in this consumer age that we are living in.

johncassarwhite@yahoo.com

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