The problem is not economic growth but those who don’t understand economics

Last week, I wrote an article detailing the unpredictability of the Duty on Documents and Transfers Act for properties that honest buyers, especially first-time buyers, acquire and subsequently pay additional fees for. The response was massive. I can disclose that, on my social media alone, the article was viewed 40,000 times by followers and non-followers on Facebook.

When one considers that the article is in English and that I am reaching these numbers during a period when most people are supposedly in holiday mode, it signifies something. This is the same pattern I observed before the general election when writing about current issues and humbly offering alternative solutions to deter and solve problems. People were closely following what I was writing. Something different was happening in the run-up to the general election. It is understandable to receive messages of encouragement from Labour supporters to submit my name for the general election with the PL. However, there were also PN supporters asking me to consider submitting my name for the general election with the PL. It is at times unexplainable and perplexing. But I got the gist of why. I did not just receive a few messages. Several persons even gave me their mobile numbers to keep in touch.

You might ask why I am writing this article, which might not have anything to do with the title. I will arrive at that point later. Besides the messages I receive on social media, I also engage with people in person – at village festas, community events, and even during home visits. The same pattern is emerging when people talk to me. Many tell me that they follow what I write, be it on social media or in the local newspapers, because I have kept consistent arguments over the past four years. One of them even told me that I am not a facsimile of others, and my brand is distinctive from the rest. The reason is that when I write about something, I criticise constructively in a way that does not harm anyone, and I humbly try to provide solutions. Perhaps this is why I was elected. People voted for me because they wanted consistency, as well as someone who doesn’t bend under pressure.

Now, when I speak about consistency, as you may all recall, I always reiterated that economic growth isn’t the problem. The problem, as it stems, is a planning and implementation problem. And this is not symptomatic of the PL government. It has always been, and it will take courage to change it, including bipartisan principles that should be inalienable, whoever is in government. Let’s take the environment. What we must do is keep more oversight so as not to allow chaotic conditions to thrive. Also, we have situations where we have more people on these islands not just permanently but also seasonally. Indeed, those who write about economic growth can’t understand the underlying positive effects. Alas, many of those writing and expressing their opinions are not economists.

An article written by a lawyer or a medical doctor doesn’t give the reasons why growth is bad. They argue that growth is not yielding the expected results. Firstly, we need to see what results they are talking about. Let me break this down. The starting point must be the understanding that the metrics provided universally, and those used by credit rating agencies as well as the European Commission, are the debt-to-GDP ratio and the deficit-to-GDP ratio. Indeed, there are other indices, but the starting point is economic growth. Because the lower the denominator, the bigger the ratio, and hence why we need economic growth.

Now, if economic growth means that we have additional tourists, additional seating capacities and services at our restaurants and hotels, and additional people living here to service our hospitals and medical care, then we need to manage the country with high precision, without hindering economic growth. And this means that whatever we do must be operationally efficient and implementable. At times, it must harshly punish those who are not complying with the current regulations to use it as a deterrent. We do not afford to relax, and we do not afford to start a political discourse that harms rather than helps facilitate our day-to-day work. Thumbs up to those involved in increasing the on-the-spot fines.

Also, we need to understand that people are indeed generating income. The only problem is that our political discourse has become one in which politicians either sweep issues under the carpet or avoid addressing them altogether for fear of stepping on others’ toes, and in the meantime, the Opposition fuels and foments a narrative that doesn’t paint the reality. We indeed have a situation where some areas need to be badly managed, with strict protocols. And here I must congratulate Minister Glenn Bedingfield for the good work he’s doing in several areas in Malta, including the increased surveillance in the ninth and 10th districts, which badly needed the on-the-spot fines and the suspension of accommodation licenses of those not complying with regulations and disturbing residential areas. Other districts are affected, too.

Certainly, economic growth is good as the country advances. Besides, we economists strive to distribute wealth more justly, and we also think of those who are really in need. What needs to be done is the right distribution of wealth, and this is a separate argument from economic growth, although intrinsically linked. And the problem we currently have is that some economic activities are indeed impinging on the quality of life of some residents, not least overdevelopment. I already stated this in a preceding article. I don’t understand the reason why piles of construction debris must sit next to an office and a residential area. Piles of construction waste are sprouting everywhere. The level of pollution and its consequences, including bad air quality, have reached an obnoxious level. And this is why those who do not understand what growth brings are linking everything to economic growth, rather than the sector itself, lack of implementation, lax policies, and the mischievous young tourists.

We need to step up our control and increase the penalties, as has already been done, and if need be, deploy additional human resources to address these challenges. That would represent truly productive employment and meaningful work.