While defending its controversial policy to import more than 40,000 foreign workers, the government is refusing to say if any studies were carried out to establish the limit Malta’s infrastructure could handle.

In June last year, Times of Malta reported that Cabinet had approved plans to bring 43,000 foreign workers from non-EU countries on the grounds that this was necessary to sustain economic growth and create wealth.

A year down the line, however, this policy is increasingly coming under the spotlight amid criticism that it is fuelling a housing crisis, accentuating traffic congestion and promoting cheap labour.

Last month, Times of Malta sought the reaction of economist Clyde Caruana, the CEO of State agency Jobsplus, which is implementing this policy. By the time of writing however, the only feedback received was that the matter had been handed to the Employment Ministry but the latter has not replied despite pledging to do so.

The controversial policy was once again under scrutiny in the 2019 Budget speech, with Opposition leader Adrian Delia saying it was reinforcing the government’s strategy of generating economic through population increase.

In any economy the market gives the necessary price signal for supply to respond

This time around, the newspaper managed to get a reaction from Finance Minister Edward Scicluna who acknowledged that the government had been forced to take measures to address certain trends.

“In any economy the market gives the necessary price signal for supply to respond. Only in the case of market failure is the government obliged to intervene,” the Finance Minister said.

“This is what the Labour government is doing through the building of roads, waste management projects and social housing programmes,” he added.

However, Prof. Scicluna refuted Dr Delia’s criticism that economic growth was being fuelled by population growth.

“The country’s gross domestic product [economic growth] can be fuelled only by effective demand which foreigners can assist if they were to get money from abroad and which they spend on the island as is the case with foreign tourists,” he said.

“It cannot be fuelled by foreigners who come to Malta to earn money.

“This is basic economic theory which the leader of the Opposition seems not familiar with,” Prof. Scicluna added.

Reacting to criticism that the government lacks a long-term economic vision, he noted that the Budget was based on the “road map” outlined in two successive Labour manifestos which had been endorsed by a majority of the electorate.

Unanswered questions by Jobsplus and the Employment Ministry

• What is the approximate number of foreign workers in Malta at the moment?

• How many of them are third-country nationals (non-EU)?

• How many work permits have been approved in each month of this year?

• Is Jobsplus still of the opinion that an additional 40,000 foreign workers are needed?

• What studies are being carried out to ensure that the number will not strain the country’s infrastructure amid concerns that this is already leading to overpopulation and soaring housing prices?

• What is the maximum number of foreign workers that can be accommodated in context of the country’s infrastructural needs?

‘Controversy is misplaced or misunderstood’

Times of Malta sought the view of economist Gordon Cordina. This is what he had to say on the matter:

Migrant labour is generally needed to perform jobs that Maltese people are in general not willing to perform, or not capable to perform. Given that the input of human capital is essential to production, while the expansion potential of the type of jobs in which Maltese workers feel comfortable to engage in was limited, it logically follows that the upscaling of the growth prospects of the economy requires an inflow of migrant workers.

This is a story that has been repeated time and again in cities and regions which experienced rapid economic growth similar to that which is currently happening in Malta. Human capital is nowadays the most important form of foreign direct investment, which rapidly growing economies globally try to attract... Malta is clearly among them.

It follows that the controversy regarding whether migrant workers are needed or otherwise is misplaced or misunderstood. The issue for Maltese policymakers, legislators, social partners and stakeholders to confront, is the way in which the country is managing the demographic expansion to reap the benefits while avoiding certain obvious pitfalls.

From the economic perspective, the country needs to ensure that in due course, the lower productivity workers which are currently helping to build structures and provide basic services are replaced by higher skilled workers. The latter would occupy those structures and provide higher value added services.

Such workers should be sourced from abroad and through the development of indigenous talent.

Pressures on infrastructure, environment and social cohesion are other obvious challenges to manage, which may call for a more concerted effort between the government, employers, unions and NGOs. They must work together towards a long-term vision where our country would become the regional centre of choice for people to work, heal, learn, enjoy recreation and engage in creativity.

The lifestyle proposition which provides the best living standards to Maltese and foreign visitors alike is most likely to be the best competitive asset that Malta can enjoy in the long run.

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