The Maltese economy has experienced significant growth in recent years, but according to Kevin J Borg, Malta Employers’ Association Director General, this expansion has been largely driven by domestic growth and this has invariably led to a situation of heightened internal competition for customers and resources, driving up costs and eroding profit margins to a minimum. It comes as no surprise, therefore, to receive reports that entrepreneurs are becoming increasingly cautious about future investment decisions.
“Unfortunately, this rise in operating costs is not commensurate to an increase in value-added or productivity. Prices in the rental market have been driven upwards a few years back and have remained at a very high level. This is having a significant impact not only on residential units but also on certain commercial sectors such as retail and catering. Coupled with the shortage of personnel, the situation is pushing many business owners to the brink and we have already seen some noteworthy casualties.
“There will be more unless there is a gradual correction which does not impose further shocks to the economy,” said Borg.
Borg’s vision highlights the need for Malta’s prosperity to be aligned with the well-being of its people, emphasizing quality, innovation, the adoption of technology and strategic long-term planning to ensure sustainable growth.
“We need a reconfiguration of Malta’s priorities. Malta should shift its focus more on quality and innovation and less on critical mass. This is truly the way forward. We must also focus on export-led growth because we cannot expect to continue expanding our economy by growing our population further while providing “more of the same” products and services.”
Citing tourism as an example, the MEA Director General says strategies should aim for Malta to climb higher up the value chain by offering a quality product to a tourist with a higher capacity and propensity to spend. “We need to do more with less because we have simply reached our natural saturation point in many sectors where it is becoming less logical to expand further. We need to gradually alter our course”
Borg, in fact, underlines that the transformation needs to be gradual in order to avoid shocks. He calls for long-term planning to ensure that any corrective policy is not detrimental to people and resources, and that it is inspired by the realities of the country’s physical and social characteristics.
Foreign workers issue will take ‘generations’ to address
Borg also addressed public concerns about the impact of foreign workers on our shores.
“The example of the hospital emergency department is often mentioned to amplify the point that the country has not prepared to accommodate such large numbers of foreign workers” he says. “People are right when they feel that they now have to wait substantially longer to be seen to by a doctor but the stark reality is that without the foreigners amongst us, we would not be discussing waiting times, but rather whether we are actually able to run the emergency department.”
“Such is Malta’s dependence on foreign nationals, especially with many young Maltese professionals opting for careers abroad,” he added.
“There are no quick fixes to the population challenge also because Malta’s fertility rate is amongst the lowest in the EU. This challenge is going to take generations to address as now, the economy has built a dependency on foreign workers that will be hard to shake off painlessly.”
Investing in education and career guidance
Borg has clear ideas on how the Maltese economy can enhance its productivity and move up the value chain.
“We need to be more creative in offering products and services that are more original and innovative. Their production must complement our physical characteristics. To do this we need more visionaries and specialists. Plus, we have to learn to be more collaborative and thrive on the formation of alliances. The country requires a collective effort to address the root causes.”
Channelling future generations towards the right careers
Borg advocates greater investment in career guidance structures. “In this area, we need an injection of resources at a national level,” he said.
“Guidance teachers and educators are doing a lot but unfortunately the resources are scarce. In their limited time, these professionals need to meet with students but they must also keep abreast of the new careers which our evolving economy is constantly creating. We recognise that this creates a massive challenge which needs to be overcome to ensure that our young people are made aware of the exciting career prospects that exist for them out there.”
Borg envisages a central role for the MEA to facilitate such collaboration and pledges the MEA’s full support to the competent authorities for this noble cause.
A new chapter for the MEA
Borg’s vision for the MEA is of continuity and strategic evolution, based on its reputation for informed and research-based positions on industrial relations and employment matters.
“The MEA is a credible organisation whose contribution is always based on specialised knowledge and trusted insights rather than knee-jerk reactions. My goal is to ensure the MEA remains not only relevant but pivotal in today’s dynamic employment and industrial relations space as well as in the context of membership support and the country’s social dialogue process.
“Our core values and mission as a trusted national stakeholder remain unchanged. But we want to explore innovative ways to make use of innovative touch-points with members and strengthen our engagement with broader stakeholders, including government entities, the media and the public.
“Change and innovation are essential. This is why we encourage our members to adapt. But the MEA will lead by example by adopting new technologies and communication strategies.
“Embracing digitalisation and social media will enable us to step seamlessly ahead into the future by better serving those who rely on our expertise now and in the years to come,” concluded Borg.
This interview was first published in The Corporate Times.