The start of a new year often brings greater clarity. Now that the country has settled back into its routine and the political calendar has resumed in full, the structural deficiencies we face are once again at the forefront of public debate. This shift from the slower rhythm of late December to the more demanding tempo of January prompted me to reflect on Malta’s priorities for 2026 and what is genuinely required for the country’s progress.
When discussing the economy and growth, it is essential to establish some basic principles. Although I support economic development and supplementary metrics, including well-being indicators, alternative measures of national wealth are largely irrelevant given the standardised metrics at the EU and international levels. However, the structural challenges resulting from this wealth require attention. As I noted in my previous article on a K‑shaped economy, there is indeed irony in economic recoveries. Allowing unregulated capitalism to prevail leads to economic outcomes similar to those under communism, albeit from a different perspective. At times, capitalism functions like a by‑product of a casino within specific sectors, in the sense that outcomes depend more on speculation than on fundamentals. While I do not advocate for communism, my reference to housing affordability and space is meant purely as a structural comparison, not an ideological one.
Many of you may recall the experiences of Europeans who lived under communist regimes, where social housing apartments regularly failed to provide adequate space for families. During my visit to some EU capitals, I observed these buildings alongside modern flats in democracies. Indeed, this prompted further reflection on Europe as a liberal democracy. Despite our market economy and choice, not least modern facades and aggressive real estate marketing, the living spaces available to younger generations today are not much improved. The main change is increased choice, though at times household income is insufficient and consumers are pushed out of the market, leaving them with no choice but to rent. This thought naturally extends to Malta, where younger generations face similar constraints despite living in a market‑driven system. For example, a 110/120 sq.m. apartment now costs around €300,000, yet the space it offers is comparable to that in former communist housing.
While we economists do not want to disrupt the real estate market, we ought to critically assess current developments without destabilising the market. Well, the comparison remains unavoidable. Social housing under centrally-planned systems provided dwellings suited to that context, yet the current capitalist system now offers similar accommodations, rebranded as modern apartments. These structural deficiencies increasingly affect many individuals, especially first‑time buyers, singles, and separated people. Annual credits or token financial support from the Maltese government to support first‑time buyers and equity sharing, although welcome, do not address the underlying problems. The aggregate data might show that it is still affordable. But that might not be the case. Indeed, the current system often excludes politicians from technical decisions, even though responsibility still lies with Cabinet members in a functioning European democracy. Instead, politicians have become reliant on a system dominated by technocrats, template-based consultants, and overconfident experts, many of whom lack a complete understanding of politics due to limited experience. And whatever is said, this adds to a policy disequilibrium given Malta’s specific socio-economic circumstance. This shift from a political to a technical system is causing broad public disengagement from political processes.
Knowledge is essential. However, it is equally important to have politicians who understand both economic and technical domains. Without this balance, politicians risk becoming mere executors of others’ agendas, which erodes democratic accountability. And I observed quite a few over the past years. Many high‑ranking officials focus exclusively on quantitative and technical aspects, forgetting the political implications. Yet, politics requires informed decision-making that goes beyond data analysis, if any, and strategies that work for the party in government. Over the past three decades, the most effective politicians have shown both technical, strategic and political acumen. When consultants propose template-based or insensitive policies, politicians who lack a basic strategic understanding, even of simple strategic outcomes, often repeat expert advice without critical evaluation. While the current administration includes some capable technical politicians, those who rely solely on expert input without grasping the fundamentals carry substantial risks.
For these reasons, I have continually advocated structural reform when it comes to decision-making. While experts are necessary to analyse and interpret data, politicians must understand, question, and make informed decisions with political and economic insight. For instance, traditional quantitative economic analysis regularly fails to detect structural deficiencies in time, as such identification requires deep political intuition to mitigate them before they occur. This challenge is evident across the political spectrum. Growing dependence on experts will only worsen these problems. For instance, the current Finance Minister is good at his job because of his strategic economic and political insight. So is our Prime Minister. However, an overrepresentation of non‑analytical politicians has contributed to structural problems. Well, we cannot outsource political solutions to technical experts!
Without effective policy implementation, critical evaluation, and meaningful solutions, citizens are likely to become increasingly disengaged from political discourse because the experts around politicians cannot feel the sentiment on the ground. And politics isn’t an expo on social media. It requires daily decisions grounded in both technical understanding and political responsibility. And with what is happening around the world, not least the geopolitical realities, if our Parliament ends up devoid of proper politicians, who can understand international trade, economics, security and European politics, then we are doomed to fail time and time again to address our structural deficiencies.
