Now that the summer season is coming to an end, I have more time at my disposal to pen my summertime experience with people. Those who follow my social media page are cognisant of the fact, that one of the routes to understand people’s concerns, is to go to each town and village and talk to them. It goes beyond what statistical surveys reveal.
Certainly, one of the most powerful weapons to sensitise the market is to visit our town and village feasts celebrations. Indeed, we are blessed because such celebrations provide a unique opportunity to reach a wider audience. Several people underestimate the power of our culture and traditions. Personally, listening to people’s concerns is not always easy. Each individual has a story to tell. Some stories are at times even emotional. However, the general message was abundantly clear. People are not upset about the Prime Minister’s decisions on the handling of the Covid-19 pandemic and gargantuan sums of money pumped into the economy to provide economic stability. They seem to acknowledge how better off we are relative to other countries in Europe. What people are upset about is the management of certain scarce resources. The global political instability and economic turmoil amplified this sentiment. Hence, it created a sense of apathy across Europe. Obviously, these are all exogenous factors that are hitting home. However, there are other endogenous factors which require particular attention, including specific public sector policies.
Undeniably, in the past decade Malta adopted a neoliberal economic model. Yet, the transition to adjust such an economic model cannot coexist with a controlling practice within certain segments of the public sector. The two systems must move together, in the same direction, and almost in the same pace. While on one hand, economically, the government is pushing towards an interventionist approach to help households coping with global inflationary pressures, its scarce resources, within the public sector, are moving in a dissimilar direction and in a controlling fashion. Unquestionably, key personnel within the public service, must refrain from introducing controlling policies that require a higher administrative burden. Hayek coined it as the road to serfdom. Indeed, it fuels a sense of resentment among people, especially in times of inflation. Succinctly put, the government must not allow such bottlenecks and controlling practices to erode the feel-good factor created over the summer period. The momentum must keep going. The Opposition seem to have gauged this sentiment. Hence, the kerfuffle of the deceased voters. Surely, economic growth and the associated feel-good factor must persist until the Christmas recess and beyond, else, people will end up using minorities as scapegoats for any personal financial woes.
Nonetheless, the Opposition has a duty to not sway the electorate towards far-right voters in the upcoming European elections. They must refrain from any right-wing narrative. Case in point is the right-wing narrative of the Maltese economic model based on population growth. It is populist and economically incorrect. Actually, they sound daft when it is repeated. The President of the European Parliament spoke of populism in the past and she must give them some tips. Actually, Roberta Metsola’s duty is to not allow far-right voters to grow within the European Parliament’s corridor. Their political ideology is surely not in line with the EU values. Well, I received a burning rainbow flag on my social media page. Sincerely, it was appalling!
Unquestionably, if I had to list the major three concerns, surely, what tops the list is the number of third country nationals (TCNs) entering Malta. People told me that they are not against foreign workers. However, people seem to not favour the allowance of the free importation of labour. The prime minister seems to have understood how the market is functioning and is about to propose a new regulation. Simply put, we cannot have two systems within the realm of our economic model. The imbalance of the strict management of those employees falling within the perimeter of the public sector and the laissez faire importation of labour within the private sector requires an adjustment. When new markets are created, it takes time to understand the mechanics and to regulate where possible. Once a market is established a regulatory framework is required. When the private sector starts operating in the same fashion of a gambling industry, if left unregulated, it would function like a by-product of a casino. The regulation is needed to swing the number of workers entering Malta in the right sector and apply sanctioning.
Nonetheless, we must put things into perspective. We must admit that certain type of jobs will still be executed by TCNs or EU workers. Maltese people advanced and reached a certain level of standard of living. Many Maltese would rather refrain from engaging in certain blue-collar jobs. However, I never knew about the growing market of temping agencies in Malta. And it seems that it grew overtime to service the shortage of labour supply, especially within the retail sector. Nothing wrong with that if everything is ethically implemented and there is no exploitation. Hitherto, one of the best statistical publications that I encountered is included in the library of the Housing Authority. It gives a clear snapshot of what is really happening on the ground about the number of EU workers and TCNs. Foreign workers are required because the economy doubled in its size over the past decade.
In the first half of 2023, the Maltese economic growth rate eclipsed that of its peers in the eurozone. In a nutshell, the government is trying to preserve economic stability. Certainly, the problem is not actually a financial one. And that’s the result of proper economic decisions. Essentially, the Maltese government is sprinting to implement big capital projects. One of the recent outstanding projects is the Olympic-sized indoor swimming pool, an impressive investment at the Cottonera Sports complex. These are the type of performance-based budget concepts that are beneficial to society. Truly, the Maltese government must keep on pushing such projects in the years to come.
As I already mentioned in my preceding opinion pieces, the government is implementing an interventionist approach. People must understand that price control systems are not allowed within the EU. Therefore, we must forget the price controls, unless the EU steps in. Also, we are fortunate to have highly liquid banks in Malta which are also absorbing the interest rates increases. Imagine a situation where a household would end up paying higher mortgage rates on a monthly basis, along with other inflationary pressures. And imagine a situation where we have to slow economic growth. It would mean less subsidies on fuels, utility bills and less pension increases, meaning that we would go back to pre-2013. It is a two-edged sword situation!