Solving Malta’s skills shortage: ‘Women, education and foreign talent,’ says Muscat

Prime Minister says multi-faceted approach can solve talent problem, but Adrian Delia highlights Malta’s reputation troubles

Prime Minister Joseph Muscat
Prime Minister Joseph Muscat

Malta’s increasing labour shortage problem requires a multi-pronged strategy, and attracting more women to the workforce is key, Prime Minister Joseph Muscat said.

Muscat told EY’s Attractiveness Event on Friday that shortage of labour in Malta was a “problem of modern times” and that he “wouldn’t barter this problem for others, such as high unemployment.”

The EY survey showed that only 27% of foreign investors are managing to source people with the required skills.

“The ways to solve this are by increasing female participation in the workforce, bettering education and training provided to cater for the labour market, and attracting foreign workers,” Muscat said.

“Yes, there is a talent shortage… The level of female participation in the labour market was astonishingly low five or six years ago, at 40%. With in-work benefits and other policies, this has risen to 63%, which is still way below the European average. So, the first solution is having gender mainstreaming within the context of labour market policy.”

Read also: Skills shortage, fading regulatory edge affecting Malta’s attractiveness

Muscat said the second tactic was “upping our game when it comes to education”, conceding that previous government made massive investments in education.

“We are building on that, and over the next five years we will be doubling our investment in education.”

The third part of the solution was attracting foreign talent.

“We cannot overlook this. It is not popular to say, but it is true,” he remarked.

“I disagree with the idea the economy is growing because foreigners are coming to Malta. Foreigners are coming to Malta because the economy is growing,” Muscat said, underlining that only 18% of foreign workers were engaged in elementary occupations, with the rest holding managerial or similar positions.

Reputation is key – Delia

Adrian Delia, also interviewed after the presentation of the EY Survey, stressed that reputation was the biggest factor affecting Malta’s competitiveness.

While the country always had to contend with fierce foreign competition, its priority now was to “restore its reputation, which used to be second to none.”

Noting the findings of the Moneyval report publishes in the past months, Delia said Malta had to look out to “remove the [reputational] threat enforce our businesses and before anyone looking at the country for potential investment.”

Asked whether – in light of his criticism of what he claims is an economy based on population growth – Malta should put the brakes on its economic expansion, Delia said this was not the case. “We are not talking about brakes, but balance. Economic growth must be sustainable. It is not easy to find the balance between balance and sustainability,” he said, pointing out that a carrying capacity survey was absolutely necessary, and that planning ahead was crucial.

All encompassing, not sectorial approach

Muscat spoke about the future of Malta’s growth, saying that economic growth would not be “silo-based”.

One area where growth would come would be in the regulatory services arena. “We should think more of regulatory services rather than individual areas such as financial services, gaming, blockchain, medicine registration and so on. These all fall under the category of regulatory services and this is a core specialisation which we can deepen,” he said.

Another area of growth would be climate-related policy. “I beg to differ with those who think of climate change as some sort of tree-hugger subject. It is mostly an economic subject,” he said, noting that climate policy was relevant to various economic areas mentioned in the EY Attractiveness survey.

The EU is currently debating the introduction of a carbon-border tax on products imported into the Union which do not meet its climate-related standards. “There is a very delicate balance which needs to be struck here, since this will most likely hit the most vulnerable in society who consume such products the most,” Muscat said.

“But it’s unfair that Europeans have such high standards on the environment and climate and that such products are then dumped on us.”

He said this was a big debate for the coming months, and an opportunity for Malta to be “the pro-business climate-sensitive” jurisdiction in Europe.