The Maltese economy has been performing well in the last few years, and the good performance is expected to persist for the coming few years. The government may think it has discovered the elixir of long-term economic well-being and feels tempted to put the steering of the economy on autopilot.

The EU’s autumn economic forecast predicts that the Maltese economy will continue to be the best performing in the Union for the next two years, even if it may experience a slight decrease from recent growth rates. Forecast growth of 4.2 per cent for 2020 and 3.9 per cent in 2021 are impressive. But this good news does not come without any warnings.

The Maltese economy is becoming increasingly dependent on its low taxation regime. The low cost of operations and a skilled workforce are today much less of competitive advantage than was the case up to a few years ago. With Malta reaching full employment and local specialised labour being scarce, most economic activities now depend on the mass importation of foreign labour. This phenomenon presents formidable challenges as wage inflation, and housing shortages are eroding Malta’s competitiveness.

Rapid economic growth is also raising questions on the pressures being exerted on the island’s infrastructure, the natural environment, the social fabric and the characteristics that define Malta’s culture. Not everyone is thrilled to see Malta going in the same direction as Middle East cities like Dubai.

The escalation of property prices is not just a concern for economists who argue whether we are inflating a bubble that will eventually burst.

It is a problem for young people who want to put their foot on the property ladder but cannot afford to do so.

The success in tourism is partly the result of almost 9,000 property owners putting their properties for hire by tourists on websites like Airbnb thereby crowding out locals from the rental market. The tax leakage from such renting activities is hardly being addressed by the government, which like previous administrations has preferred to close an eye on shadow economy activities. 

The pressures on our roads is another cause of deterioration on the quality of life of most people, despite the excellent economic figures.

Air pollution and the stress caused by gridlocked roads are not being factored in the costs of growth.

The government seems determined to leave the economic engines to run on autopilot. Large-scale projects in the aviation, health and tourism sectors are being encouraged. We rarely hear how the social and economic costs of this investment are being measured and managed.

A country’s long-term prosperity depends on the quality of its educational system, the protection of the environment, sound urban planning that shuns overdevelopment, and sustainable health services. Malta’s rapid growth in population, the ageing profile of the indigenous population, the underperformance of the educational system, and the barely controlled property development are formidable challenges that no amount of economic growth will eliminate. 

Steering the ship of state on autopilot exposes this and future generations to serious risks in years to come when the present political leaders are no longer around.

It is dangerous to assume that beneath the present, calm economic waters, there are no hidden reefs that pose dangers to our community.