This week, I was eagerly waiting to write about this topic. The absurd narratives I read on social media are just dumbfounding. People tend not to understand the basics of economic theory, but they feel entitled to write whatever they think makes sense to them. Twelve years ago Malta stood at a crossroads. Indeed, the 2013 general election was not merely a contest of ideologies but a vote on our survival. Back then, utility bills had become a symbol of economic despair because under the Nationalist Party’s administration, electricity, fuel, and gas prices fluctuated bimonthly, burdened by an exorbitant surcharge that sent countless families and businesses into a financial freefall. The electorate, faced with 8,000 unemployed and a shrinking pool of job vacancies, voted for change to get out of this spiral economic downhill.
When the Labour Party assumed office, it inherited a precarious economic landscape. Malta was under the European Commission’s Excessive Deficit Procedure. Debt-to-GDP had surpassed 70%, and female participation in the labour market lagged far behind EU averages. The pension system teetered on the edge of unsustainability, strained by declining fertility rates and an aging population. The preceding government had responded with a series of revisions to the pensionable age and national insurance contributions, measures that, while necessary, lacked a broader strategy to address demographic and economic realities. And the European Commission was on our tail to fix it.
The new administration, however, did not merely manage the crisis, it reimagined the economy. It convinced the European Commission that Malta could expand its economic base, create jobs, and introduce structural reforms that would yield long-term dividends. Among the most transformative was the introduction of free childcare, a policy that not only eased the financial burden on families but also incentivised labour market participation, especially among women. Social benefits were tapered for those entering employment, ensuring that work paid and that the welfare system supported, rather than discouraged, economic activity.
The results were swift and deep. In just four years, the Labour Party in government doubled the GDP figures. Female participation in the labour market rose steadily, and today Malta boasts one of the highest rates in the European Union. The country exited the Excessive Deficit Procedure, and debt-to-GDP began its downward trajectory registering a surplus after so many years. The economy diversified, moving beyond its traditional pillars to embrace new sectors, from digital finance to advanced manufacturing. And while critics continue to harp on population growth, the truth is that Malta’s economic expansion was not driven by numbers alone, but by strategic policy choices.
One of the most misunderstood aspects of Malta’s economic evolution is the role of Third Country Nationals (TCNs) to service some sectors. Over the past decade, thousands of workers from Latin America, Asia, and beyond have moved to Malta, bringing with them a mix of skills and labour. They filled gaps in the workforce, supported growing industries, and contributed to the national insurance system. Yet, despite paying into the system, many will never receive a pension. Their contributions, however, are not lost, they sustain the pension fund, ensuring that future generations, including mine, can retire with dignity.
This is not exploitation but demographic compensation. With fertility rates low and life expectancy rising, Malta – like all advanced economies – must find ways to balance its social contract. The presence of TCNs is not a threat but a solution to some economic problems that we might have if they are not present among us. And yet, recent commentary in the local media, particularly from Opposition figures, has sought to vilify these workers, painting them as burdens rather than contributors. This narrative is not only economically illiterate but socially corrosive. And the mainstream media is just absent when politicians belittle TCNs, they just report what they say without criticising them.
Let us be clear on this, though. Surely, Malta’s economic model is not perfect. It is based on inclusion, investment, and innovation. The government did not resort to blanket austerity or populist giveaways. It chose targeted relief, strategic subsidies, and disciplined budgeting. The refusal to pass on energy costs to consumers preserved Malta’s zero-energy inflation rate, a feat unmatched across the Eurozone. As I already explained last week, Malta’s debt-to-GDP stands at 47.4%, well below the EU’s 60% threshold. Well, this fiscal space is what is giving the Labour government a competitive edge on its adversaries. Clearly, it allows the government to invest, respond to crises, and maintain credibility in international markets. Although I would prefer to be proactive than reactive in some areas, the Labour government is outperforming its peers. Unemployment is at a record low of 2.6%, and employment rates, especially among women, continue to climb. Tourism has become a year-round economic pillar, financial services are expanding, and the gaming sector remains robust. Even manufacturing, despite sectoral challenges, shows signs of adaptation.
And yet, the Opposition continues to harp a narrative of decline, especially scapegoating TCNs. They point to population growth as a proxy for economic expansion, ignoring the productivity gains, the rise in per capita income, and the structural reforms that underpin Malta’s success. It is indeed absurd. They complain about the presence of foreign workers while ignoring the demographic realities that necessitate their inclusion. They speak of inflation without acknowledging the government’s surgical approach to price stability. And now they are proposing measures on how to increase the fertility rate. You know, women being discussed by male politicians are reduced to walking incubators. It is truly mediocre and despairing.
The truth is that Malta’s economy has matured. It does not merely absorb shocks; it is anticipating them to smoothen out the impact. The Labour government acknowledges challenges, including demographic shifts, housing affordability, productivity constraints, and other challenges as a result of economic success. And let us not forget the everyday contributions of TCNs. They are not only building our economy, but they are also serving it, literally. From the comfort of our homes, we now receive groceries and takeaways delivered by workers from platforms like Wolt and Bolt. Gone are the days when we had to drive down the road to collect our food. Whether it’s raining cats and dogs or scorching hot outside, our meals and essentials arrive at our doorstep, often within minutes. This convenience, once unimaginable, is now routine, and it is powered by foreign labour.
The same applies to transport. TCNs have reduced waiting times for taxis and ride-hailing services, making mobility more efficient and affordable. Ironically, when the government began regulating the sector to ensure standards and safety, which I agree with, waiting times increased from one or two minutes to 15 in some cases. Ironically, people on social media complained that even prices shot up and waiting time increased. But this is the trade-off. We must decide what we want. Controls are necessary, yes. But as I’ve said before, we must be realistic. We cannot demand regulation and then complain about its consequences. We cannot expect service without labour, unless we get Amazon to deliver everything by drones!
