Strategy reviews are a constant in the life of every business. They should also be so for political leaders responsible for driving the country’s economy.
There are clear indications that we are about to see some significant rethinking of some of the strategies that drove the business model adopted by the government in the last few years.
Finance and Employment Minister, Clyde Caruana, in an interview with The Sunday Times of Malta, touched on some, but not all, of the main dynamics that drive the local economy.
Perhaps the most interesting comment that he made was that, soon, the main thrust of the government’s labour policy will not be so much that of importing large amounts of low-skilled workers but investing more in the upgrade of skills, which would improve productivity.
This is indeed a remarkable and laudable change. The backdrop to this change is an educational system that, for decades, has underperformed as achievement levels remain among the worst in the EU.
The appointment of a new minister of finance should help the educational sector to prepare more local young people to face the challenges of the Fourth Industrial Revolution.
Caruana was probably given a poisoned chalice when he was made responsible for Air Malta. The national airline has been in restructuring mode for at least two decades. Once again, new plans are being hatched for its restructuring. The running of the airline is draining taxpayers’ money consistently.
The appointment of a new executive chairman with no experience in the airline business is in line with past fallacious practices.
Leading a troubled airline facing existential threats calls for relevant leadership experience in the industry. A different set of management skills is needed if the intention of the shareholders is to continue to control expenses by shrinking the company.
A more pressing challenge in the short term is that of Malta passing the Moneyval test by avoiding greylisting. In a few months’ time, the anti-financial crime watchdog decision could determine the future of the local financial services industry. It is encouraging that the finance minister is ‘boldly’ optimistic about the outcome.
The botched and scandalous Steward Health Care contract is yet another major obstacle in the clean-up of the toxic legacy left by previous prime minister Joseph Muscat.
The revision of the hospital management contract will, hopefully, lead to the avoidance of the payment of hefty penalties for breach of contract by the government.
Caruana was less convincing when discussing the future of the golden passports scheme.
He may not publicly acknowledge that Malta’s loss of reputation in recent years was substantially linked to the selling of EU citizenship.
The stark reality is that the passports scheme will continue to hang like an albatross around the country’s neck.
Nothing was said about tourism, Malta’s main economic engine. The present policymakers, and some operators, prefer to remain in their comfort zone by promoting mass tourism with cheap imported labour as its bedrock.
There are better ways of adding value to a valuable asset that, for too long, has lacked the innovative management that it deserves.
The onset of COVID and the quickly approaching general election seem to be acting as a stimulus for both our main political parties to define an economic renewal plan for the next decade.