Many reform programmes fail because those entrusted to lead the change agenda lack a sense of urgency. Societal leaders and economic experts have clearly articulated the need for reforms in the Maltese economy. Yet, beyond the rhetoric, there is little indication that the government is prepared to do what it takes to put the economy on a more sustainable trajectory.
Marthese Portelli, the Malta Chamber CEO, did not mince her words when she highlighted the various economic challenges that must be urgently addressed. The chamber’s pre-budget 2025 document lists the reform priorities the business community believes are not being adequately addressed by the government.
Portelli argues: “We need to speed up the implementation process of all the decisions that need to be taken in the interest of Malta, some of which might not be exactly popular immediately in the short term but will benefit the country in the longer term.”
The economic and social pressures created by the government’s fallacious labour market policy that has promoted economic growth for more than a decade through the mass importation of third-country nationals is arguably the most pressing issue that needs to be addressed.
Unfortunately, the dependence of many enterprises and public services on imported labour has become chronic. New restrictions will undoubtedly hurt some businesses, but the chamber’s recommendation for proposing caps on TCNs is necessary.
Employment Minister Byron Camilleri has spoken of plans of a new economic migration policy which will aim to better align migration with the actual needs of the labour market. Of course, such a readjustment could take years, and it is impossible to predict its success now that the horse has bolted.
The chamber is also correct in insisting that the education system must be reformed to optimise human capital investment. This sector has been underperforming for decades despite the heavy public expenditure. A reformed education system must prepare our young people for the challenges of the modern economy.
Unfortunately, the dependence of many enterprises and public services on imported labour has become chronic
While tourism will continue to be one of the main enablers of economic growth, the chamber acknowledges that it must not continue to increase capacity when the physical infrastructure is already strained.
Tourism policymakers are beginning to recognise that the mass tourism model they promoted must be reformed.
The chamber’s recommendation for a moratorium on new hotel developments makes sense, even if it is just one element of the required reforms to make the industry more sustainable.
The increasing economic dependence on the construction industry must be urgently addressed. The chamber is rightly concerned with the Planning Authority’s liberal policy to promote building more structures, especially offices and supermarkets.
This policy harms the environment and creates an oversupply of services that will eventually have a negative economic effect.
Portelli also raised the issue of the importance of appointing CEOs “on merit, competitively, and transparently”.
Nepotism, clientelism, cronyism, and patronage in public sector appointments are rampant and waste taxpayers’ money and are one crucial reason why public services are deteriorating so fast.
As Budget 2025 looms, the government must be aware of the biggest issue we are facing: the deteriorating quality of life. There are many reasons for this, from overdevelopment to the lack of green space to an unreliable electricity supply, and falling standards in public services, especially health, and traffic chaos.
In the next budget, the government must put an end to economic reform inertia. The prime minister must honour his pledge after the European Parliament election to listen to the voice of the people frustrated by the way their lives are being affected by the government’s prevailing doctrine of economic growth at all costs.