Robert Abela warns of labour market challenges to Malta's economic growth

Prime Minister Robert Abela warned that Malta's labour market might not have enough workers to fulfill certain investments, posing a challenge to the country's economic growth. 

In an interview on the Labour Party's radio station, Abela kicked off the interview with praise for Malta’s economic recovery, but said that this revival comes with its own challengers, especially when it comes to finding the resources for new investments.

“We’re at full employment but still in a situation where we might not have enough workers to carry out certain investments,” Abela said.

“It’s another big challenge, trying to achieve economic growth and unfortunately not having the most important resource – the human one – to do this.”

He added that government has been working on reforms at Identity Malta, specifically mentioning changes in the way visa applications are approved, to tackle this challenge.

Tourism and aviation

Abela described tourism as the backbone of the economy and said that it’s important to create new economic niches to keep the sector growing.

“The private sector didn’t stop during the pandemic. There were hotels with no tourists. The absolute majority […] that continued renovating hotels, investing in them and increasing capacity. Tourists coming to Malta were welcomed by a sector that was open for business.”

He recalled a recent investment by Ryanair, which will see the airline build a €20 million maintenance facility for its aircraft in Malta.”

“To have an international airline like Ryanair expand its operation in Malta in this way shows a level of trust,” he said. “These are truly jobs of quality, not just because of income but also in terms of job satisfaction.”

“Do we have enough human resources to fill these roles? Yes and no. We have to train our youth for these new sectors,” he said.

Greylisting

Malta was official removed from the FATF greylist last month after the international anti-money laundering body noted ‘significant progress’ from government to address certain deficiencies in its money laundering and terrorist financing efforts.

Abela said this delisting was a message of trust in the country, adding that from all the countries that have been on this greylist, Malta spent the least amount of time in it.

“We saw positive signs immediately. Investors looking at our country and seeing we’ve been delisted meant well,” he said, especially with regards to sectors like igaming and financial services.

Inflation

Abela mentioned that Malta currently has the lowest rate of inflation in the European Union.

“[This] has to be seen in context. We’re an island on the periphery of the EU. We’re more susceptible, as a small island, to be hit more strongly by inflation because we’re dependent on other countries.”

He explained that, as an importing country, businesses importing from abroad will be more exposed to increasing costs from imported foods, fuels and primary materials.

Abela added that the Labour government’s first priority at the onset of the inflation crisis was to protect pensioners.

“Consistently, ever since Joseph Muscat became Prime Minister in 2013, we’ve given priority to pensioners.”

After pensioners, Abela said the next priority was families on low income.

“Let’s look at petrol. In Malta, you can get 15 litres of petrol for €20. That same €20 in Greece and Spain gives you eight litres.”

“If we didn’t take this measure and subsidise electricity, petrol and diesel, we wouldn’t have just seen an increase in prices at the petrol pump or on your electricity bill, but we would have also seen ripple effects.”

European Council

Abela reflected on EU-level meetings in recent weeks and months, especially after the war in Ukraine broke out.

He said that, during these discussions on the war, the Maltese government approached the debate with three principles in mind: “peace, the importance of diplomacy in war resolution, and saying what is right”.

However, Abela said he held reservations as to whether his counterparts at European Council meetings prioritise the needs of EU citizens.

“Sometimes I have doubts. Are there certain other priorities coming in the way? Sometimes I suspect that those who are supposed to be prioritizing people first are keeping them second.

Work-Life Balance Directive

Abela briefly touched on a new legislative package which transposes the EU’s Work-Life Balance Directive. Under the reform, fathers will receive 10 days paid leave while parents will receive two months paid leave at the national parental leave rate.

“We wanted to make sure that we don’t only give more rights to workers, but also see that we do it sustainability,” he said.

He continued that his government wanted to introduce more rights, but did not want to hinder the productivity or viability of businesses.

However, Abela did not acknowledge recent criticisms from various women, parents, and rights organisations on the legislative package.

The organisations accused government of excluding civil society from the conversation, adding that the rate at which the parental leave will be given was too low with the current rise in cost of living.