Avoiding skinny doughnuts

Last Updated on Thursday, 17 August, 2023 at 9:25 pm by Andre Camilleri

Last week I accepted an invitation to appear on a private TV station to discuss certain economic measures and readjustments that require pressing attention. A case in point is the hospital waiting list not just here in Malta but also in other EU member states.  Also, I referred to the EU’s political discourse which is completely devoid of people’s realities.

Clearly, the EU must reform itself and transit to implement harmonised directives that are beneficial to its citizens not least a charter that provides clear rights and timelines for EU patients. Patients in different EU states must not wait years for a surgery. Here in Malta, the elderly waits relatively a long time to undergo among others, an orthopaedic surgery. Now that I am meeting with people on the ground, I even met elderly patients who have been waiting over six years for a hip or a knee replacement. We must find a way to sanction the waiting list time. If we need to keep on importing workers from third countries, surely, we must look into highly-skilled professionals to reduce the waiting time of the current list. 

Certainly, we must find a way to also fix our problems, here in Malta, which are obviously a result of our economic success. When an economy doubles in size, just as it happened to our economy between 2013 and today, the factors of production, made of capital and labour, require the same scalability. Indeed, the rate of economic expansion was clearly bigger and quicker than the scalable rate of our human capital and capital in general, especially within our health sector, police force and the rest of the country’s infrastructure, bar the road network upgrade. Let us for a while leave aside the natural capital loss. In my TV interview I stated that we require effective and efficient utilisation of our scarce resources.

Certainly, in a small and limited territory like ours, strictly adhering to rules is not an option anymore but a requirement. Whereas in the past we afforded to ignore some matters which would not bother us, now that we are sizeably bigger in terms of permanent and temporary population, every little mishap is annoying us. For instance, I fail to understand, unless someone explains it to me, why third country nationals working in the private industry, especially in the retail sector, are not required to hold a private health insurance prior to entering Malta and which is partially or fully paid by their employers. Obviously, health insurance coverage must be made compulsory over and above the minimum wage, unless the retail sector wages are not revised to the point that third country nationals afford to pay the monthly payments. Here, we have a situation where a new market can be explored in the insurance sector.

The government should enter into talks with the private health sector, as well as the insurance sector. Those coming to live and work in Malta must be covered by a private health insurance. And here we must exclude the EU citizens due to EU rules. It would be wiser to use the private healthcare to ease the pressure on our emergency departments and generate additional private investments in this sector. Indeed, the waiting lists can be reduced, while healthcare prices must be regularly published. The concept of caveat emptor must apply even to merit goods and services. Nevertheless, it is logical that the waiting list grows once the population expands if the capacity of healthcare professionals and resources remain fairly constant.

Also, we can readjust the national insurance contributions for those living and working in Malta, and who fall within the perimeter of third country nationals. We can allow the use of our state hospital only to those who are working for the Maltese government. However, I would still ensure that the children of third country nationals, who are working in the private sector are offered proper education if their parents meet the necessary income criteria established by the state and who are also paying the national insurance contributions.

Furthermore, I would also ensure that private accommodation is properly regulated by the Housing Authority and coordinate ministries to redesign the waste and garbage collection system. Certain cities abroad require citizens to purchase and collect barcoded garbage bags from the local council or as known in Belgium Commune, registered under the name of individuals, particularly for some highly populated zones. Those responsible for the registration would be held accountable for the adherence of rules including the bearing of the payment of heavy fines if they do not follow the rules. It would serve in reducing litter in highly urbanised areas while keeping our towns and villages tidy.

Sustainability is wider than uttering to change our economic model. As part of my work, I have been attending conferences about sustainability, with several panellists posing as some economic gurus. At times I have to sit and listen to fictional economic theories. At some point I even bumped into an auditor who outlined the importance of changing our economic model to one which is not universally applied, rather than adjusting it to our new realities. One such economic model relates to the doughnut economic model.

Obviously, such economic model makes sense if its principles are universally applied because sustainability would be collectively imposed, thereby sanctioning the overuse of global scarce resources. Indeed, I wrote about it in my weekly column back in May and gave a general economic explanation to why it must not be applied here in Malta. Unless universally applied the doughnut economic model cannot work because universal rules revolve around attaining a higher economic growth rate. A higher economic growth rate would mean a lower deficit as well as a lower debt to GDP ratio. Plainly, it is a simple division. The bigger the denominator the lower the ratio. Undoubtedly, listening to those who just find economic models sexy in an utopian world, is dangerously ambitious.

Obviously, when I listen to those calling for a new economic model for Malta, based on resource boundaries, it saddens me to notice that most of them drive luxurious vehicles, live in massive villas and have accumulated extensive wealth through avarice. Nothing wrong about that. However absurd as it may sound, the same resource boundaries that they want to limit and deny to others, were actually exploited by them in their former capacity or early profession, primarily by sleeping with reckless investors. Unless those who believe in this economic model redistribute to society part of their accumulated wealth, which was primarily generated in their early profession at the detriment of the current generation by exploiting the scarce resources of their future generations, surely, they cannot be taken seriously.

To conclude, what we actually require is an economic adjustment. We swept our problems for far too long under the carpet. We now need to urgently act to attain an effective and efficient use of our scarce resources in order to coexist in a small territory like ours. And readjustment of certain contracts, worth millions of euros, must be discarded and instead assign financial resources to redesign our systems.

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