Malta’s future, the financial sector and well-being

The million-dollar question for any sector trying to plan ahead is: What does the future hold? With Malta’s Vision 2050 now in draft, the financial services sector (FSS) can assess not only what the high-level progress goals mean for its future but also what it can do to contribute to that vision.

As currently drafted, the vision presents three key progress goals.

First, it aims for better performance on the Human Development Index (HDI) – which, by 2023, was already very high (at 0.924). The main contributor to this result was our high life expectancy (83.3 years), a relatively high Gross National Income per capita and mean years of schooling of 12.42 years.

The vision expects us to reach 10th place (from the current 24th) by 2050. To do so we will need to do better in schooling and, at least, retain our high income and health scores. For the FSS this means a larger, more educated market, with people living longer.

In turn, the FSS can contribute to this goal, primarily as it is one of the high potential sectors with a gross value added of over 1.6 times the Malta average and a higher contribution per full-time employee.

It can contribute to education by influencing the curriculum towards the kind of digital, financial and critical thinking tools and by offering opportunities for continued professional development.

It can contribute to better health by offering a wider suite of services to complement public health.

Second, the vision aims for a higher median income. Our present median, €18,940, is 93% of the EU average, and the aim is to reach 135%.

Pulling up the median means having more people earning higher incomes. The FSS will benefit from this as demand normally responds positively to income. Moreover, with its own relatively higher incomes, the sector is well placed to contribute to this goal.

An important question to examine is: What can the sector do to improve the plight of low-income earners? One answer is to improve access to finance and to offer a more diverse range of investment opportunities, complete with financial literacy.

Third and most relevant to the work of the Malta Well-being INDEX (Malta Foundation for the Well-being of Society and the University of Malta), the vision aims for a better ranking on life satisfaction. Life satisfaction in Malta is already marginally higher than the EU average (7.4 out of 10) ranking in 15th place, with the target being to be in the top five by 2050. Despite doing well on average, several Maltese people report very low levels of life satisfaction.

Research from the Well-being INDEX project suggests actions such as addressing poverty, improving the well-being of those with ill health, investing in mental health, fostering positive social, environmental and cultural experiences, addressing long hours of work, improving trust in government and reducing the perception of corruption, among others.

There is little doubt that the FSS is sensitive to these concerns as it aims to attract high-value employees who care about Malta’s attractiveness.

Stress is reputedly high among employees in the sector, particularly after the greylisting experience.

The FSS can also contribute to a better quality of life. It has fewer negative impacts than, say, construction and tourism but it can also contribute through initiatives in the health, social, environmental and social domains. Business in the FSS can improve employment practices for work-life balance, gender equality and by enhancing Malta’s reputation.

As I emphasised in my keynote address to the Institute for Financial Services Practitioners at the recent conference on the ‘Challenges and Opportunities for Financial Services in Malta’, if Malta’s future (and policy orientation) lies beyond GDP, then this helps the financial services sector pivot from business-as-usual so as to direct capital and human resources towards the bigger endgames of human development, equality and quality of life.

Marie Briguglio

Marie Briguglio is the principal investigator of the Malta Well-being INDEX project (www.wellbeingindex.mt).