The impressive economic growth of the last decade was primarily a result of the former prime minister’s economic strategy to boost production in various sectors by importing labour from the EU and third countries rather than improve productivity. 

There is little evidence that this strategy was backed by sound analysis of the impact this would have on the island’s health, educational and physical infrastructure, and the quality of life of people affected by rapid population growth. Recent surveys show that people are beginning to react to the adverse effects of the population explosion as they experience the harmful effects of liberal labour market policies.

Government ministers are now beginning to fret about the probable political consequences of citizens clamouring for changes in the failed labour market strategies of the last decade. Top government ministers say the government has embarked on a series of measures to limit the number of non-EU nationals living in Malta, and the prime minister stated that the government will not be supporting operators whose business model is solely focused on the importation of foreign labour.

At the same time, the government glosses over the challenges linked to reversing the failed labour market strategies of the PL administration.

Of course, it would be disastrous to take draconian measures to reduce the number of third-country nationals supporting the economy.

Our health system and tourism industry have become heavily dependent on high-skilled and low-skilled foreign nationals. We might continue to refuse to acknowledge the fact that exploited third-country nationals are providing us with many basic services as well as luxuries.

It is worrying that the government seems to function in silos, with various ministers expressing divergent views on addressing the current market failures. The administration should listen to what a number of business organisations are saying about reducing third-country nationals, namely that any plan should be accompanied by a strategy that addresses a shortage of prospective employees in various sectors. It also needs to be stressed that there is certainly no place for irrational xenophobia while policymakers formulate a long-term action plan to reduce the economy’s dependence on third-country nationals.

However, nibbling at the problem will only make it more acute in the medium term.

As correctly pointed out by the Malta Employers’ Association, our education system is not providing our youngsters with the right skills to make them employable in high-added-value economic activities

Like many EU countries, Malta faces a shrinking indigenous population as the birth rate is amongst the lowest in Europe. Moreover, as correctly pointed out by the Malta Employers’ Association, our education system is not providing our youngsters with the right skills to make them employable in high-added-value economic activities.

The government’s lethargy in defining the changes needed to address the current weaknesses in the country’s economic model is probably caused by the fear of telling people the realities we must face to change course.

Finance Minister Clyde Caruana was the mastermind of the liberal labour market strategies when he was the head of JobsPlus. He is now rightly concerned that the country cannot handle the effects of another population explosion to maintain the high rate of economic growth experienced in the last decade.

There is a risk that unless the cabinet speaks with one determined voice on the changes needed to put the economy on a stable keel, we will experience marginal policy changes that will only prolong the frustration of citizens disillusioned by failed policies.

Economic reforms are not just about boosting economic growth. They are about meeting people’s expectations of the quality of life they want for themselves and their children.

But before we conveniently turn our guns on the thousands of (exploited) workers simply doing their job, we should ask our government, as well as the many unscrupulous employers, how they intend to fix the failed labour market strategies of the past decade.