The new face of Malta

The very positive International Monetary Fund (IMF) report on Malta released earlier this week points out that strong migration inflows have boosted Malta’s potential growth and have even offset Malta’s declining working age population.

The massive inflow of non-Maltese workers is a game changing event in our country but it is taking us far too long a time to understand its deep implications and that most of this change is positive. For some time immigration originated mostly from outside the EU but soon after Malta became a member of the EU, the proportion reversed dramatically.

According to a very professional and interesting policy paper (Understanding the Macroeconomic Impact of Migration in Malta) published last December by the Central Bank of Malta and written by Dr Aaron G. Grech, Head of the Economic Research Department of the Central Bank, in 2014 there were 15,600 EU nationals and another 6,200 third country nationals working in Malta. Amazingly, Malta has become a positive contributor to the European unemployment scenario.

The number of foreign workers, of all origins, has risen from 1.3% of the labour force in 2000 to 10.1% in 2014. The average age of the labour force of our hitherto aging population has fallen by 3% when it should have risen by 1%. Moreover these individual foreign workers contribute a good 10% of our income tax and NI contributions – some €100 million in 2014. Over that, these individuals also pay VAT, stamp duties, and other taxes,

Incredibly, our inevitable pension reform has been pushed years forward because of the lower average age of foreign migrants. And they are not taking any of our jobs, a popular myth which is just not true. The employment rate of Maltese nationals is still surging. The Maltese economy has created so many jobs that every second job has to go to a foreign worker. Were it not for them, our economic growth rate would have been stunted. 

It results that there are many jobs that cannot be taken up by Maltese nationals and this is where the administration needs to get its act together. Is our younger generation learning enough from the high level foreign job takers to replace them? Is our educational system fine tuned enough to turn out the graduates Malta really needs? 

Foreign workers have also taken jobs that the Maltese do not want to do. Half the workers in our tourism and hospitality sector are foreign, keeping the industry competitive. There has been a marked improvement in our restaurants with the inflow of Italians… not to mention the good manners of foreign bus drivers.

Costs would shoot up in the construction sector without the Syrians, Serbians and Africans. The Somalis keep this country clean while a substantial number of Filipinos take care of our elderly.

The success of the Maltese economy that our Labour Prime Minister boasts so much about is mostly the result of the influx of foreign workers since our EU membership – a phenomenon that the Labour Party predicted as one of the more frightful negatives of EU membership.

Such is the irony of history.

An island in transition

No year is like another, but on careful observation there are periods in the history of any country that were defining moments. We are in the middle of one such period.

One of these defining events in our recent history was the granting of Malta to the Knights Hospitaller of St John in 1530. From a typical Mediterranean island inhabited by farmers and fishermen, Malta became a military base living off piracy and the riches of the noble families of Europe. In 1530 the Maltese population was not more than 30,000 and when the Knights left it had risen to 100,000.

Another decisive year was 1800, when the British took over and used Malta as one of their important naval bases. They spent so much on their military base that by the time they left the population had more than trebled despite some 100,000 having emigrated in the fifties and the earty sixties.

This brings us to another crucial year: 1964 and Independence. Undoubtedly, Malta would have been a very different country if we had not taken the bull by the horns in that decisive year. The last defining year was 2004 when Malta finally joined Europe, and when for the first time in our history, the other European nations, believe it or not, treated us as equals. When it joined the EU, Malta became of age – a developed European state, small but proud of its achievements. Today, nobody denies that our entry into the EU has been a resounding success.

There is a strong correlation between economic performance and population. Some would say that population is in the longer run a function of economic activity. Humanity gravitates towards a booming economy and abandons one in the doldrums.

Since 1980 the Maltese population has been slowly growing. Malta had been a net exporter of labour until returning emigrants tried their luck again in the early eighties.

Since joining the EU, our economy has forged ahead under strong guidance and financial support for the restructuring needed in all spheres of our lives. The pace has been breathtaking and some may have not been able to keep up, but most Maltese rose admirably to the occasion.

The most powerful change of the current socio economic revolution engineered by our entry into the EU has been our transition from a net exporter of labour to a massive net importer. Many have found this very substantial inflow of people with different cultures than ours a terrifying experience. 

The latest outburst has been the sight of some 100 Muslims praying in Msida. But this is small fry when compared to the daily life of the admirable headmistress of the state primary school of St Paul’s Bay that has to cope fairly with a dozen religions and more than a score of nationalities in her school. 

And it is just starting.

It is time to think deeper into this whole issue and avoid getting hot under the collar if 100 Muslims pray in our streets. They are a very small fraction of the 26,000 foreign workers who have contributed in no small manner to Malta having Europe’s best performing economy. 

Who would have believed this in 1964?