There is no doubt that the world is bracing itself for challenging economic times. As the COVID pandemic continues to leave a trail of economic devastation across the world, we are seeing millions of people becoming unemployed, economies falling into deep recessions and international trade plummeting.
Malta is not immune to these challenges. Our economy remains heavily dependent on tourism and this pandemic has caused a sharp contraction in tourism numbers. It is practically going to be a lost year for our hoteliers who employ thousands of workers and who have invested millions of euros in their product offering. Tourism is just one of the sectors that have been faced with the direct effect of the pandemic; one cannot forget retail and also other sectors which will indirectly suffer from this invisible threat.
It is precisely at this juncture that we should come together as a country and evaluate our economic policy, strategy and model. Over the last few years, Malta’s has registered fast growth and low unemployment. Although the quantity of growth has been significant, also topping European charts, not much can be said about the quality of growth. And it is precisely this that we need to focus upon. Economic statistics are not an end in themselves but need to be seen as a means to an end, with the end being human-centric growth.
We can infer the quality of growth through other statistics such as those published earlier this month by the European Commission on living and income conditions. I must say that going through the numbers has saddened me and made me question even more our current economic model.
Without delving into too much detail I will give an overview of the key results. The survey found that in 2019, there were 82,758 persons who live with an annual income below €9,212. Yes, you have read correctly. 82,758 people with an annual income below €9,212. This is when real GDP growth rate was 4.4 per cent as opposed to an average of 1.2 per cent in the euro area.
We need an economy with a social heart- Bernard Grech
While we were trumpeting our success in terms of GDP, close to 20 per cent of Malta’s population was at risk of poverty. Other metrics including the population at risk of severe material deprivation also increased from the previous year. Is this the economy we aspire to have? Is our focus going to remain solely focused on GDP growth?
These are the questions that we need to ask ourselves and this is the right time to do so. We need to come together as a country; government, the opposition, civil society, the business class and industrial base, the self-employed and the workers, to chart a new collective economic model for our country.
We need an economic model that talks about inclusivity.
We need to see that people are lifted out of the risk of poverty and not remain stuck in this poverty trap.
We need an economy with a social heart; one that awards hard work and is able to sustain the most vulnerable.
We need an economy that not only generates wealth but also creates investment in our people, in their education, in their skills and in their future potential.
We need an economy that is also green and sees the environment as a critical and integral pillar and not just as a passive and extractive resource.
We need an economy that invests and promotes our heritage, culture and arts as they can support the establishment of a creative and innovative economy.
We need an economy that is digital to the core in which citizens, businesses and visitors can interact and access services through digital channels.
We need an economy that is built on good governance, robust regulations and working institutions.
We need an economy that is built on values and that places human dignity before human greed.
We need above all an economy that works for people and not people that work for the economy.
Above all, we need an economy that works for you.
Bernard Grech is PN leadership candidate.