Density as destiny. Population, growth & urbanism

One chart should fundamentally change how we argue about Malta and this was clear during a discussion I had with Kurt Sansone after the publication of the IMF Article IV Report on Malta.

IMF staff calculations place Malta’s population density at close to 1,800 people per square kilometre, with the note that the latest Malta data corresponds to 2024. In the same comparison, the Netherlands sits at a fraction of that level, while most European countries are not even in the same conversation. Malta is not marginally denser than its peers. It is an outlier.

That is not a demographic curiosity. It is an economic diagnosis.

The IMF chart showing population density. Malta is an outlier with the highest density in the EU

If Malta is this dense, then our reference points should not be other countries. They should be cities. Dense, interconnected systems where infrastructure, governance, skills and institutional design determine whether proximity becomes a source of productivity and innovation or a source of congestion, stress and decline.

The IMF report, even in its measured language, essentially describes a city economy. Malta’s growth has been driven by services exports such as tourism, gaming and business services, supported by a large inflow of foreign workers and visitors. This has increased population density and placed pressure on infrastructure, housing, public services and the environment. Labour shortages coexist with skills mismatches. Capacity constraints are becoming binding. These are not the problems of rural economies or dispersed nations. These are urban problems.

Urban economics has studied this dynamic for decades. One of its most influential contemporary voices is Edward Glaeser, a Harvard professor often described as the world’s leading economist of cities. His work is not ideological. It is empirical. He studies why cities grow and decline, why some become engines of innovation while others become trapped in stagnation.

His central argument is deceptively simple—cities thrive because proximity accelerates the exchange of ideas. When talented people are physically close to one another, they learn faster, collaborate more easily, form new ventures more readily, and create knowledge spill overs that lift productivity across the system. Density, when managed well, is an asset. It is the reason cities like London, New York, Singapore and Amsterdam generate disproportionate economic value relative to their size.

But Glaeser’s work is equally clear about the other side of the coin. Density is not automatically beneficial. It only becomes an advantage when supported by the right foundations. Without good governance, effective transport, functional housing markets, strong education systems and coherent institutions, density becomes a tax rather than a dividend. This is where Malta’s challenge lies.

Movement is the first system that defines whether density works. In cities, time is currency. Every minute lost in congestion is lost productivity, lost wellbeing and lost economic potential. Malta remains overwhelmingly car dependent, despite its extreme density. That is not simply an environmental issue. It is an economic one. In dense urban systems, mass transit, walkability, proximity and connectivity are not luxuries. They are the infrastructure of productivity. When movement fails, labour markets become less efficient, firms struggle to match with talent, and the entire urban ecosystem underperforms.

Housing is the second pressure point. In dense systems, land is the most constrained resource. Prices become signals of value, but they also shape who can live where and who can access opportunity. When housing costs rise faster than wages and productivity, the city either becomes exclusionary or it compensates by importing labour at scale while compressing living conditions. Malta’s labour market now relies on foreign workers for over a third of total employment. That is not inherently negative, but it is structurally revealing. It signals that growth has been achieved by expanding headcount in a system where physical space, infrastructure and services are already under strain.

Skills and matching are the third pillar. Cities are dense with human capital. The strongest predictor of a city’s long-term prosperity is not population size, but the educational and skill composition of its workforce. Urban economists have shown repeatedly that places with higher concentrations of skilled workers experience faster innovation, higher wages, stronger firm formation and more resilient growth. Density amplifies talent. But density without talent amplifies pressure.

This is where the IMF’s emphasis on productivity, skills and structural reform intersects perfectly with the city lens. The fund is effectively saying that Malta has reached the limits of labour-driven growth. The next phase must be productivity-driven. That means fewer gains from adding people, and greater gains from increasing value per person. In a city economy, this transition is not optional. It is survival.

Treating Malta as a city rather than as a conventional nation-state means reframing economic policy around place and systems rather than sectors and silos. Cities succeed because their transport, housing, planning, skills, innovation and governance systems are aligned toward a coherent direction.

It means asking different questions. Not “How fast is GDP growing?” but “How much value is generated per square kilometre?” Not “How many jobs were created?” but “How efficiently can people access opportunity?” Not “How many buildings were approved?” but “How liveable and productive is the urban environment?”

It also forces a different approach to governance. Dense systems require coordination. Fragmented decision-making becomes costly.

Malta’s current governance architecture does not reflect its urban reality. Planning, transport, education, infrastructure, housing and economic development remain too fragmented, too politicised and too reactive. That fragmentation is corrosive in a hyper-dense environment.

The provocation is this: Malta has been speaking and governing as if it were a small country, while living the reality of a megacity.

The frustration many people feel about congestion, overdevelopment, overstretched services and declining quality of life is often channelled toward population growth or migration. But that misses the deeper structural issue. Density itself is not the enemy. Poorly managed density is.

Malta already possesses many advantages that successful cities strive for. It is safe. It is connected. It has strong service sectors. It attracts international talent. It has entrepreneurial depth. But it is not yet operating as a high-performance city. Its systems have not caught up with its density.

Vision 2050, if it is to be meaningful, should be treated as a city blueprint rather than a national brochure. Infrastructure investment should be assessed in terms of urban productivity. Education reform should be framed around building the skills density that successful cities require. Transport reform should be understood as economic reform. Planning should be seen as a productivity tool, not merely a regulatory hurdle.

The choice Malta faces is not whether to become a city. It already is one. The choice is whether it becomes a well-run city or a congested one. A learning city or a transactional one. A city that converts proximity into opportunity or one that allows proximity to degrade into pressure.

The chart does not just show density. It shows urgency.