Balancing the booms - Jordan De Bono

Balancing the booms - Jordan De Bono

Photo: Matthew Mirabelli

Photo: Matthew Mirabelli

No matter what one’s political agenda is, it’s hard to argue against the fact that the economy in Malta right now is on a high. Statistics from the media are constantly reminding us of this, from our record surplus to the country’s increasing GDP, to even more abstract findings that Malta’s ‘happiness’ climbed five places relative to last year.

Every day we hear of more projects, businesses and good news from all sources hitting our shores, and that’s great. But with all this surface-level fanfare, the more sceptical among us may begin to question whether this is a bubble, and how sustainable our recording-breaking economy actually is.

Sure, some may argue that not all Maltese society is equally benefitting from the fruits of our economy. But that’s beside the point. The economy is doing well, and it’s not just the government that’s recognised this; representatives from the European Union, International Monetary Fund and autonomous local institutions have all ascertained to this as well. But what’s actually driving all this growth?

Of course, there will never be one straight answer. Jobsplus have hinted that foreign workers are the main contributor. The Ministry of Finance put it down to the many business-friendly policies the current government has introduced.

Some industry leaders have linked it to the very much thriving gaming and financial services sectors, as well as the emerging blockchain sector. And then some may choose to look around them and count how many cranes the eye can see, and research to learn how many more are planned to be erected.

Construction in Malta, and in many countries worldwide, has always been the secret sauce to keeping an economy from depressing. It may very well be one of the smallest surface-level contributors in pure numbers to an economy.

But what most people don’t realise is the far-reaching, trickle-down effects the construction industry has on any economy, regardless of country.

Construction is the backbone of most industries. Take tourism, for example, which is frequently touted as by far being Malta’s largest contributor to the economy. Without construction, there wouldn’t be the many hotels and many more restaurants available for tourists to enjoy.

Without construction, restoration and revitalisation projects would not exist as interest points to bring tourists back and encourage new ones to come. Without construction, infrastructure such as roads would suffer more than they already do, to cater for the great influx of people commuting that Malta always suffers from.

And it isn’t just tourism. Construction builds the offices of all the international businesses setting up shop and relocating to Malta. Construction built our hospital, which keeps the vast majority of nurses and doctors properly employed. And it’s not only the end-users of all these buildings which benefit.

Construction is key, and in the short-term, that’s all that really matters

One needs electricians, engineers, plumbers, architects, cleaners, notaries and of course, builders to name a few of the many people involved in the construction, maintenance and upkeep of all these projects. In short, construction keeps people employed, it creates new opportunities for new employment, which opens more jobs, only requiring more people to become employed.

All these trickle-down effects aren’t directly linked to the construction industry, but that doesn’t make them any less dependent on it as a whole. Construction is key, and in the short-term, that’s all that really matters.

If people are employed, and the economy is doing great and the standard of living is only increasing, then that only means we should ramp up construction to reap these benefits even quicker. But is this really all that sustainable?

Too frequently on the news we hear of supposedly ‘Outside Development Zones’ being touted for development. One could argue there’s too many cranes and projects going on all that same time on such a tiny island. Green spaces are being lost.

Some people are indifferent to this. Some fear we’ll become the next Singapore, or Hong Kong; a city-state of high rises and artificiality. Construction mishandled is a worrying concept, one which threatens to strip away not just Malta’s natural beauty, but also our cultural identity, allowing Malta to look like just about any other developed nation’s cities.

The problem is, these are all long-term problems, and when we’re currently enjoying the short-term gains, it sometimes takes a lot of courage to realise the larger picture.

Construction is very much intertwined with the economy, but it isn’t the only affecting factor; just the easiest and most straight-forward. An ultimate fix would be to curb construction as much as possible, while still trying to keep as many people employed as possible, with the opportunity for new jobs to be created as well.

As it stands, construction is like a drug. People enjoy its benefits in the moment, but fail to properly consider the future consequences. If construction continues to be abused, it may then become an epidemic, requiring a cure to fix one problem that was solving another.

Jordan De Bono is a university student currently reading for a Bachelor of Commerce degree.

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