Malta is currently experiencing a buoyant economy featuring unprecedented growth rates, consecutive fiscal surpluses, relative price stability, and full employment. This environment of stability is providing the ideal habitat for economic growth, new investment and the inspiration for budding new sectors.
The Malta Chamber is proud to share some of the satisfaction related to our country’s successes. Within the same context, however, it is also compelled to comment on the current situation and propose a way forward.
The Malta Chamber has repeatedly underlined the importance that Malta should use this moment of relative prosperity as a spring-board that will propel the country towards a desired and well-planned future. 2019 should be the year when we collectively capitalise on this economic resilience to invest in the necessary infrastructure and safeguard future sustainability.
This has been the Chamber’s mantra for a number of years now, and it is the more relevant than it ever was before. We need to sit down and take stock of the current situation while it is favourable, and analyse the strengths and weaknesses that are characterising our economy. We also need to map out a long-term plan of where we want to take our country in the next five to ten years.
With this in mind, the Chamber proposed that authorities should address the Budget from a multi-annual perspective. This means that rather than a merely financial and fiscal exercise, the annual budget would take the shape of a multi-annual economic vision for the country, automatically establishing a structure of continuity from one year to the next.
At a European Union level, where a seven-year financial framework is drawn, countries are in a position to plan ahead, as they will be aware with a degree of certainty, what finances are available and what policies will be expected to come into play. We wish to see the same happening at a local level, whereby our businesses will be in a position to plan ahead, well beyond the twelve-month limit, which will enable them to make better informed decisions about risk and investment.
The next natural step would be for Government to initiate a thorough impact assessment of the country’s ongoing growth with a view to set sustainable targets for maximum carrying capacities and output levels, in the country’s economic segments. This study would further recommend a way forward towards reaching the set output levels and maximising returns with the highest efficiency of resources. Once this analysis is concluded, a national debate on a new long-term economic, societal and environmental master plan for the country post 2020 would be in order.
At the same time, 2019 ought to be the year where we see more competitiveness-enhancing measures with a view to protect the recent economic achievements and ensure further sustainable growth. We must continuously question if our conditions are still right, if our competitors are providing better conditions and if we are still heading in the right direction.
Policy makers at a national level must be made aware that, in spite of the positive economic results achieved in the last years, there are weaknesses which need to be addressed. There exist a number of long-term threats that must be properly addressed through effective action plans.
In the present scenario, it is most relevant to ask whether the current rates of growth are sustainable with the same output and level of skills emerging from our educational institutions. If the constant rise in the overall cost of labour, rising operating costs and the prevailing rates of rent inflation are sounding alarm bells for our near future. If the current infrastructural network and the present internal transport and logistics structure are still adequate for the rate of growth expected in a year or so.
We must start taking these questions seriously as they risk to start posing a real threat to tomorrow’s economic growth.
The Chamber is proud of Malta’s achievements. Indeed, these achievements are the result of clever planning and hard work of our entrepreneurs, our workers as well as our political leaders. But we must not take these successes for granted. These successes were achieved because we provided the right conditions for them to materialise – and we must continue to do so.
The Malta Chamber, believes that this is the opportune time to capitalise on the successes of recent years and plan long-term where we want to take our country. These are exciting times indeed and the Chamber is all too pleased to once again be an integral part of the process.
This article was originally featured as a foreword by the Malta Chamber for Economic Vision 2019