An overwhelming majority of foreign businesses in Malta believe that the country’s infrastructure is woefully unprepared for population growth.
The finding comes from the latest EY Malta Attractiveness survey, which will be unveiled on Wednesday as part of the company’s Future Realised conference.
Times of Malta is informed that almost 90% of the survey’s respondents think that Malta is poorly prepared for population growth, with the country’s infrastructural shortcomings believed to be among the main reasons for this.
The survey sheds light on the way foreign investors view Malta’s prospects, its attractiveness as an investment destination, and the challenges it faces in the future.
It is likely to reveal investors’ growing concern at the poor state of Malta’s general infrastructure and of the country’s natural environment.
The findings appear to be in line with the population’s growing concern over the country’s natural and built environment, as well as its basic infrastructure.
A previous EY survey found that 93% of young people believe that the state of the environment is getting worse, with overdevelopment and traffic at the forefront of their concerns.
Likewise, several Times of Malta surveys over the past year have shown that overconstruction, traffic and the environment are some of the issues that people are most worried about.
This raises questions about whether Malta will remain an attractive prospect for foreign investors after the looming changes in Malta’s corporate tax regime come into effect.
Previous editions of the survey had found that Malta’s attractiveness had crashed from over a high of 87% in 2016 to an all-time low of 37% in 2021, before rebounding back to a respectable 58% last year.
In some ways, this finding reflects Malta’s situation as a country at a crossroads, looking for a path away from the reliance on imported labour that has characterised the past years.
The survey is “an opportunity to reframe our future”, say EY Malta, noting how the need for investing in infrastructure was also raised in debates related to previous editions of the survey.
“The question still stands today, and this will be debated again at this year’s event,” an EY spokesperson said.
EY Malta said the survey shows the need for “an economic model that focuses more on well-being and the quality of life of our residents, where the benefits of an attractive tax system are eclipsed by the strength of our talent pool, digital infrastructure, innovation environment, quality of life and social fabric”.
Senior government and opposition officials have often spoken about the need for a new economic model in recent times.
Earlier this year, finance minister Clyde Caruana warned that the country’s population will balloon to 800,000 by 2040 at the current pace.
More recently, PN proposed a plan to curb “excessive” population growth, with shadow finance minister Jerome Caruana Cilia saying that Malta’s “economic recipe” needs to change.
However, what this new economic recipe should be or how Malta can be weaned off its reliance on growing the population is still unclear.
Some, such as the Malta Chamber, have proposed a cap on non-EU workers. This was swiftly dismissed by Caruana, who said that changes need to be brought about “without any shocks”.
The government has nonetheless pledged to limit population growth, despite admitting that many non-EU workers contribute heavily to Malta’s economy.