What is Government’s economic vision, after all?

The continued Nationalist gripe that no new economic sectors are being created demonstrates how cut off they remain from the fast-evolving business community of Malta. It also suggests that they remain wedded to an outdated Gaullist/Soviet notion of industrial policy.

The Nationalist Party and its media allies have consistently pushed the narrative that the Labour government is bereft of a coherent economic strategy. In truth, this has been the Nationalists’ most consistent media strategy, as it has been in place even before Labour achieved power in 2013. At that time, the Nationalists had warned that a Labour government would lead to unemployment and to a financial bailout. Subsequent events showed how wrong that narrative was.

In recent months, the Nationalists have sought to redouble their efforts to try to diminish Labour’s economic credentials. Their main argument runs something like this: “Well, yes, Labour did grow the economy, but now that model has run out of steam and there is no new economic vision.”

This argument is misguided in various aspects. First, the argument that Malta’s economy has run out of steam runs counter to the other frequently heard argument that Malta is growing too quickly. Second, upon coming to power, while arguing he would ensure the continuity of economic and social progress, Prime Minister Robert Abela stated that he would be changing direction. Initially he signalled this by saying that, while under Joseph Muscat, economic policy was meant to be pro-business, his focus would be on pro-market policies. Subsequently, in mid-2020 he announced that, going forward, economic policy would be based on five pillars.

These were:

Sustainable Economic Growth geared towards quality-of-life improvements and increased resilience.

 • High Quality Infrastructure and Investment

Education and Employment

• The Environment

High Standards of Accountability, Governance, and Rule of Law

Following that, in 2021, Government published ‘A future-proof Malta: Malta’s economic vision 2021-2023’. This comprehensive document, which was subject to an extensive consultation process, had been welcomed by stakeholders and hailed as a much-needed initiative.

For the benefit of those who argue that Government has no economic vision, it is useful to reproduce the main action points set out in this strategic document.

Sustainable Economic Growth

The mission statement underpinning the first pillar of economic policy is that, “Malta will safeguard the retention of current growth industries while cultivating and creating a culture of innovation for new niches and engines of growth which lead to substantial quality-of-life improvements”. The key action points in this regard are redefining the measures of success, sustaining and supporting investment as a key driver, safeguarding and enhancing competitiveness, improving productivity by leveraging digital, and strengthening economic sectors and developing new clusters and niches.

High Quality Infrastructure and Investment

Under the infrastructure and investment pillar, the mission statement is: “In an increasingly globalised economy, Malta strives to develop a world-class, sustainable infrastructure across road, air, and sea transportation while creating a vibrant investment environment for domestic and foreign entrepreneurs and becoming a regional hub for start-ups”. The action points are to catalyse quality investment in infrastructure built around a national overarching plan, transition to safe and secure multi-modal mobility, secure a reliable, clean, and efficient energy mix, enhance digital connectivity and security, strengthen logistics connectivity, and enshrine protection of existing green and open spaces and provide new ones while maintaining a healthy environment.

Education and Employment

The mission statement for the education and employment pillar is that “Malta will provide the necessary conditions within which human capital can acquire the necessary knowledge and skills today to build the economy of the future, while creating high-quality and well-paying jobs and ensuring that Malta is a natural home that attracts and retains a pool of global talent”. The action points to achieve this are to frame the future skills landscape and prioritise the closing of skills gaps, to align education curricula with the skills required for tomorrow’s economy, to establish Malta as an International Education Hub of Excellence, to reskill and upskill the workforce with the skills required for tomorrow’s economy and to attract and retain diverse talent while curbing brain drain of the best talent.

The Environment

The environmental pillar’s aim is that “in safeguarding Malta’s future generations, we will facilitate and enable a smooth transition towards a circular and sustainable economy across all sectors of economic activity, while embracing new alternative energy practices to achieve carbon neutrality by 2050”. To achieve this, the country needs to ensure the efficient use of resources, including land, and better waste management, combat emissions and pollution, achieve carbon neutrality, provide green finance, protect Malta’s seas and harnessing the blue economy and preserve and restore nature habitats.

High Standards of Accountability, Governance, and Rule of Law

Under the fifth pillar, “Malta will continue to enhance and promote good governance across every sphere of public life and across its key institutions and decision-making authorities, affirming itself as a trustworthy, transparent, and efficient economic partner on the global sphere”. Here, the focus is on enshrining rule of law, strengthening governance and transparency and ensuring accountability, strengthening the regulatory environment to ensure and enforce compliance with the highest international standards, implementing the necessary reforms for a faster and fairer justice system, and prioritising data protection and privacy as fundamental prerequisites for a digital economy.

Translating vision into action

The 2022 Malta Flimkien electoral manifesto, with its thousand pledges, is fully inspired by this economic vision document, and the Budget for 2023 has already started the implementation of a fair share of these proposals into policies.

This does not mean that everything is plain sailing. No strategy document should be treated as an immutable bible, and priorities inevitably change over time. However, to argue that there is no detailed economic vision flies in the face of facts.

The continued Nationalist gripe that no new economic sectors are being created demonstrates how cut off they remain from the fast-evolving business community of Malta. It also suggests that they remain wedded to an outdated Gaullist/Soviet notion of industrial policy. The priorities for governments around the world are much more complicated than trying to select winning sectors. As argued in the Government’s Economic Vision 2021-2031, what is needed is a complete overhaul of existing practices so that we successfully achieve the digital and green revolutions that will guarantee our new prosperity.   

    

Main photo credit: Dalibor Vilovski

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