A strong economy; a future for our children l Robert Abela

Recent years have been anything but dull for governments around the world. We have had to deal with a global pandemic, an energy crisis, logistics challenges, an unprecedented surge in inflation, the rise of far-right populism, the flaring of multiple conflicts, wars close to us and the emergence once again of trade tariffs. 

In many countries this has led to a sharp slowdown in economic growth, a literal explosion in national debt, a rise in poverty, a drop in employment and a general weakening of living standards; with much less spending power, higher taxes, higher energy bills. Economic giants such as France have been downgraded, governments have collapsed, and mainstream political parties seem no longer able to gain a majority unless they set up fragile coalitions. 

Yet here in Malta the picture is totally different. Rating agencies have affirmed their positive ratings for us. The IMF has forecast we will remain the strongest growing EU economy till at least 2030. The recent EY attractiveness survey found that 94% of foreign-owned firms expect to still be in Malta 10 years from now. Additionally, nine out of 10 firms said they will either expand or maintain their investment here. 

Our economy is a third larger than it was before the pandemic while the number of those seeking employment has fallen by a third. Was this what the experts had predicted? Did anyone during the pandemic predict that in five years’ time some would be discussing the possibility of over-tourism in Malta. If my memory serves me right, the experts were warning us that it would be several years before we managed to get tourism back to what it had been in 2019. 

Similarly, when at the start of the energy price shock, I discussed my belief that we had to keep energy and fuel prices stable, the experts in the room told me that we would not be able to afford that for long. They predicted that our national debt would spiral. Today, our debt ratio is around half that of the euro area. 

When during the pandemic I started to sketch my long-term economic vision for Malta, many told me to focus on our immediate challenges, as we could not afford to think that far ahead. Today, I am happy I trusted my gut feeling and remained optimistic about Malta, its people and its businesses.  

By adopting progressive economic policies, today we are in a much stronger position than countries that went for the short-term attractiveness of austerity. The money they saved compared to us in the first couple of years is nothing to that which they had to spend thereafter as their economy tanked under the pressures of price increases and faltering business sentiment. 

The support we gave families and businesses meant that we managed to protect the productive capacity of our nation. Families were not burdened by debt, while businesses had the ability to step up production rapidly and take advantage of opportunities as they remained competitive. 

This is exactly what we had predicted. A resilient economy allows you to plan ahead. If families and businesses know that government has their back, they are less wary of shocks and external developments. They can continue to build and invest and push even further. 

Now that Malta has a GDP per capita that features among the top 10 EU countries, our targets need to change. That is why in Malta Vision 2050 we have gone for three broader measures of success. 

First, we want to be amongst the top 10 countries in the world in terms of human development. Second, we want our median household disposable income to exceed by 15% the EU average. Third, we want the life satisfaction of the Maltese to be among the best in Europe. 

These goals, at first glance, may seem to differ greatly from the usual targets of stable economic growth, low inflation and full employment. And yet, if you look closely, they are not so different. 

Without a dynamic economy, the three goals of Malta Vision 2050 cannot be achieved. But while good macroeconomic performance is a necessary condition to achieve these goals, it is not a sufficient condition. Rather it must be supplemented by broader policies that increase income equality and lead to wider opportunities for all. Policies that valorise our human resources while creating the right conditions for people to upskill and take advantage of emerging economic sectors. Policies that prioritise investment not just in physical and human capital, but also in the preservation and optimal use of our natural resources. 

In recent weeks the team in charge of the next stage of the Malta Vision 2050 process has been hard at work synthesising the suggestions and ideas of businesses, associations and interested citizens. What is emerging is truly something never seen before in this country. Not a strategy built by one political party or one administration. But a national strategy built by our nation for our nation. 

Tomorrow, people will rightly be focusing on the various budget measures. Budget measures that will show how our strong economy creates welfare and benefits for all in society. Yet, the budget is but the first step in our path to achieving a new prosperity. A prosperity that utilises our strong economy to build a better future for our children. Together we can bring this vision to life and begin the Malta of tomorrow, today.