A glance at Malta’s growth patterns during the past few years from the supply point of view indicates a very strong contribution in terms of capital accumulation. While between 2008 and 2012, capital accumulation averaged less than 1%, the years between 2013 and 2020 display a rate of circa 2%. Over several years such margins make a huge difference due to their cumulative effects.
The government does not necessarily have to directly provide the investment. It can sow the seeds for the necessary support infrastructure, organisations, and programs, and guide their development, indirectly.
The goal would be to increase the capability of the private sector to provide the systems and support necessary to sustain economic development. Such approach will enhance public investment and further attract capital from the private sector – both locally and internationally. This is the role that the Maltese Government has played very effectively since 2013, both directly through investment as well as in encouraging investment from the private sector.
This investment was not limited only to Malta. Gozo benefitted hugely from increased investment over the past few years. In terms of private investment, the number of new establishments that have opened in the past few years is evident. Gozo has changed from a place which was seeing people leave to settle in Malta, to one which is now attracting hundreds of people, from returning Gozitans, to Maltese and foreigners settling in.
Public investment came through millions invested in infrastructure, as is evident to those that had the opportunity to visit the island in the past few years. For 2022 the government has allocated the largest budget to Gozo in its history.
The chart below shows the capital budget allocated to Gozo over the years, from a mere €4 million in 2009 to €27 million for 2022.
These figures must also be viewed against the fact that prior to 2013, the Gozo Ministry also included health and education. Hence, the figures from 2013 onwards are underestimated due to the fact that capital expenditure on health and education are not captured, unlike in the pre-2013 period. The last major public investment in Gozo prior to 2013 goes back to the sports complex in the early 1990s.
Where will the €27 million be spent?
A large part of the 27 million euro allocated for 2022 will go towards roads infrastructure. In fact, €11 million are planned for investment in arterial and residential roads. A further €10 million will go towards the restoration of rubble walls across Gozo – over and above the 30 kilometres of rubble walls already restored through EU funding. Moreover, 2022 will mark the commencement of the restoration process of the aqueducts located on the outskirts of Victoria.
€6 million will be allocated to the aquatic centre which will include an Olympic-level swimming pool and a new sports pavilion.
Further investment in infrastructure includes the completion of the reverse osmosis plant in Ħondoq ir-Rummien, with a total cost of €11 million. This project will make Gozo independent in terms of water supply.
The Gozo Museum, the Aquatic Centre and the new road to Nadur will soon be completed. Gozitans and other residents will be able to see a quality leap in infrastructure.
Even if many fails to stop and think about the benefits of capital expenditure, the result is there for everyone to see. Gozo is a good example.