Blueprint for economic success
The present administration is convinced its economic strategy is the best way forward for the country. Growth at all costs seems to be the mantra propelling this strategy. The above-average growth of the last few years reduced unemployment to record levels and boosted the income of many. However, there is another side to this strategy that relates to the social, environmental and reputational cost that is being incurred and not managed effectively.
Frank Farrugia, the outgoing president to the Malta Chamber of Commerce, Enterprise and Industry, in his final address to this business organisation promised a new economic vision document that will be presented to the government as part of the ongoing socio-economic dialogue between the social partners. This is a refreshing initiative that, hopefully, will challenge some of the dubious assumptions that underpin the government’s strategic thinking.
The Prime Minister says the country has no option but to continue with the growth-at-all-costs strategy to be able to improve pensions and the physical infrastructure including the introduction of a metro system to ease the traffic gridlock. JobsPlus chairman Clyde Caruana insists that Malta must continue to import low-paid as well as highly-skilled workers to cater for the multitude of projects in the pipeline.
The not-so-subliminal message is that ordinary people have to put up with the deterioration of their physical environment as the construction industry roars ahead, thousands of new vehicles increase the traffic congestion every week and young couples struggle to hire or buy a new apartment to start living as a family.
One looks forward to a realistic economic blueprint from the Chamber of Commerce, Enterprise and Industry that will demonstrate there are alternatives to this administration’s economic plans.
The backbone of any good economic programme will always be sustainability. Sustainability has to be built on various pillars. An essential pillar is diversification.
At present, some of Malta’s more successful economic activities depend on the tax competitiveness offered by our business-friendly legislation to direct foreign investors. One needs hardly point out that this competitive advantage is vulnerable to decisions that may be taken in Brussels about tax harmonisation and the pressure seems to be growing in that regard. Malta’s reputation as a quasi-tax haven drives home the point it needs to rely on much more solid competitive advantages if it wants to attract investment in the long term.
Another pillar of sustainability is a well-educated workforce that can meet the requirements of today’s employers. The failures of the present public education system are glaring. The low achievement levels of so many of our young people is a disgrace that makes one doubt the commitment to social justice of this administration.
The role of the government in the economy may appear to have diminished in recent years because there are fewer State-controlled businesses. However, the concentration of power in the administrative arm of government does not inspire much confidence in foreign and local investors who take the long-term view on where they should commit their money. The separation of power between the legislative, administrative, judicial and regulatory arms of government needs to be much clearer than it is at present.
Finally, a successful economic blueprint must have the hallmark of a good quality of life for society that is built of fairness.
This is a Times of Malta print editorial