The speech which the recently appointed President Myriam Spiteri Debono gave to the country’s political leaders appears to have struck a positive chord with a number of people. The speech can be analysed from different perspectives. I would like to apply it to an economic dimension.
She was reported saying by this newspaper: “The relentless pursuit of riches, more often than not, translates itself into various forms of corruption; the pursuer becomes indifferent to the suffering he may directly or indirectly cause others”.
She referred to it as the “disease of greed”.
Over the past 12 months, I have mentioned the need to change our economic model because it has been rewarding the few at the expense of the rest. I have mentioned the need to address the market failure we have in the property market.
I have mentioned the need to safeguard the interests of future generations by not burdening them with an unsustainable level of public sector debt. I have mentioned the importance of promoting the common good.
The symptoms are evident for all to see. We have experienced irreparable damage to the environment. We have experienced grave damage to Malta’s reputation. We have experienced the theft and squandering of public funds. We have experienced corruption both in the private sector and in the public sector at various levels. We have experienced theft and a lack of care for public assets. We have experienced self-gratification and the feeding of personal egos through the use of public funds. We have experienced the difficulty of young persons to become owners of their own homes.
Each of these elements are symptoms of greed and a relentless pursuit of riches.
We should not confuse entrepreneurship with a pursuit of greed
In an editorial, this newspaper wrote about the downside of a lower labour-cost economy, which is what our economy has become. It quoted Eurostat data that workers in Malta earn €14.20 per hour before taxes, less than half the EU-wide average. An earlier KPMG report found that wage increases over the last two years were entirely eaten up by rapid inflation, leaving workers worse off in purchasing power and rendering real wages stagnant since 2018.
On the other hand, we are proud to be classified as an advanced economy by the International Monetary Fund and are considered a high-income country by the World Bank. We are also proud to have a gross domestic product per capita which is around the EU average. The snag is that our wages are not around the EU average.
In addition, the Gini coefficient index, which measures how equal a country’s distribution of income is, shows that income inequality in Malta is increasing. Again this data is a symptom of greed.
An economy built on greed is not sustainable. We should not confuse entrepreneurship with a pursuit of greed. Our economy needs private sector entrepreneurship, and it has thrived when this was encouraged. However, our economy has faltered when private sector entrepreneurship was channelled towards fattening one’s individual pockets. Greed is not a value which we should embrace in our economy.