Today is the last day of the year. It has the same feeling as the last day of 2020. Then, as now, we were all hoping that over the subsequent months, we would have left the coronavirus behind us and had turned over a new leaf. Facts have proved otherwise, and we are now hoping that 2022 would represent the year when we will have a fresh start.
The fresh start will depend greatly on any new variants to the virus and to the way science and the health authorities will respond. I do not believe that there will be a dramatic fresh start, but we are slowly evolving into the new norm which may include social distancing and, possibly, the wearing of masks in particular circumstances, but it would certainly mean different behaviour patterns.
However, before we get to that, we need to have a serious look back and assess 2021. For a number of businesses locally, and for a number of countries internationally, this has not been an easy year. The coronavirus and the resultant restrictions wreaked havoc for the second year running on businesses operating in the hospitality sector and other sectors. The question that needs to be asked is whether such businesses will be able to afford a third year like the previous two.
2021 is leaving behind it a great deal of uncertainty, with a lot of unanswered questions. Finding the answers to those questions in 2022 will be a challenge we have to face up to
It was also the year of Malta’s greylisting by the Financial Action Task Force (FATF). Some had seen it coming, most of us common people did not. However, what is worrying is that there are a number of institutions and people who should have seen the writing on the wall and decided to ignore it.
The impact of such greylisting may not be felt in the short term, but it could have more of a longer-term impact. Moreover, international business will not say that they are shying away from Malta because of the greylisting. They will cite other reasons, such as “now is not the time”, “we need to re-evaluate our international strategy”, “we need to assess how the global economy will perform after the pandemic”, and so on and so forth. The worst thing we can do is think that, even in this case, we can just have a fresh start as if nothing had happened.
2021 was also the year when inflation reared its head again. We had gotten used to an inflation rate close to zero per cent and interest rates not much above that. This reduced the cost of borrowing significantly and provided more scope for discretionary spending by consumers. With the rate of inflation rising and interest rates following in its footsteps, we will be facing another new reality, to which we are not used. It is likely to have a very sobering effect on suppliers and consumers after the euphoria of the past years.
In the international sphere, tensions appear to be high, with China being in strong disagreement with the US, the UK, Australia and other countries. Russia is seeking to flex its muscle on its border with Ukraine. Ethnic minorities seem to be going through a rough period, practically everywhere. We have got used to a lack of any large-scale conflict. Will this 2021 scenario present us with a new reality that requires us to look at things from a different perspective?
All this is leading me to think that 2021 is leaving behind it a great deal of uncertainty, with a lot of unanswered questions. Finding the answers to those questions in 2022 will be a challenge we have to face up to.
Best wishes to all for the new year.