Two steps forward, three steps back

It was a crazy week. We learnt that Consuelo Scerri Herrera will not be chief justice after being cast to the dogs in parliament. The Nationalist Party did not fall apart either when faced with that name.

We also saw Donald Trump being the shameful person he has always been when he ‘proudly’ hosted a video on his Truth Social depicting the Obamas as apes. We were also regaled with Jeffrey Epstein’s photos and emails, including one by the US ambassador to Malta’s husband making some very interesting comments about women companions. 

And after first declaring that funds to mitigate the damage caused by Storm Harry will also cover illegal structures, we had a partial climb-down by making funds conditional to regularisation. We now can expect the illegal dwellings to be regularised at super record speed by the Planning Authority.

The same can be said about the decision to allow fast cars with red plates to be able to roam the streets from Friday morning and not from Friday evening. The decision came after Transport Minister Chris Bonett said he met a chap called Joe who lamented that he could not visit the mechanic during the week.

And this when I start to wonder whether politicians really consider people to be complete idiots. Most of us drive cars and pay insurance and licence for the whole week, and when we have an appointment with the mechanic, we usually leave the car the night before and deposit the car keys in a special letter box. 

So, really and truly Bonett should have told this guy Joe to leave his keys and car at the mechanic on Sunday evening.

The decision to have red plates on the road is simply an ‘electoral’ gift to those who want to drive their ‘special’ car for longer while benefitting from advantageous road taxes.    

The move counters the attempt by government to reduce cars from the road, best exemplified by the cash gift to those who renounce their driving licence.

All these events arose as the International Monetary Fund (IMF) issued yet another report on Malta.

The general conclusions were that Malta was doing great but the steroids it was taking were going to run short. And the primary two considerations in the report were overpopulation and the infrastructural stress it is causing.

The report stated that Malta experienced the largest percentage population increase in the EU driven by a surge of foreign workers. In years leading up to 2024, Malta’s population grew by 26% to over half a million inhabitants.

The report rightly noted that the growth was largely driven by a sharp rise in the foreign resident population, from 5.5% of the workforce in 2013 to 28.1% in 2024.

Over that same period, the labour force grew from just under 190,000 to nearly 317,000, relative to an increase of only around 100,000 in the preceding 50 years.

Foreign workers accounted for 75% of the rise in employment numbers since 2013 and today they stand for 39% of the workforce, with non-EU nationals alone making up 27%. The share of foreign workers tops 50% in the construction industry, and accommodation and food sectors.

Yet the report emphasises that labour shortages and skills mismatches have emerged as a by-product of rapid economic growth.

Over 68% of employers in Malta’s services sector said that labour shortages limit their activities against an average of only 24% in the EU, while 90% of respondents in an EIB investment survey said the availability of skilled labour was the primary obstacle to long-term investment along with uncertainty about the future

The IMF report highlighted that population density has exacerbated overcrowding, strained services and increased pollution, traffic congestion, and environmental destruction.

The most worrying aspect of the report showed that in 2023 alone, half of Malta’s foreign workers departed within two years of arrival, while nearly a third of EU nationals left their jobs after just one year.

The report states that several factors have been attributed to this trend, including rising housing costs, comparatively low salaries, limited access to banking and home loans, and restricted opportunities for career growth.

Nothing new, but the writing has been on the wall, and no one has tried to address this issue.

It is no wonder that Malta ranked 46 out of 53 countries as a desirable location for living and working abroad, down from 3rd place in 2015, due to concerns about overpopulation.

The IMF report makes for sober reading. It is an alarm bell and no matter how poor the PN is in promoting its economic vision, the IMF strengthens many of the arguments originating from the Opposition benches about over-population and the need to diversify.

The so-called 2050 vision, which the government intends to unveil plans to tackle this reality, but the next step is to go beyond words and pompous declarations.

Growth pushed upwards by robust tourism, online gaming, and professional services has resulted in historically-low unemployment numbers. But success has reached its limits because of infrastructure constraints, population density, and tight labour markets. This all suggests we need to change our economic model. 

Of course, that is easier said than done.