Last week’s announcement by Minister for Finance and Employment Clyde Caruana that the time is up for the economic model that drove Malta’s growth since the Labour Party returned to power in 2013 sent shockwaves around the country, as economic stakeholders digested its implications.
In a speech launching a new skills survey to gather more data about the skills and talents of the Maltese population, Minister Caruana pointed to the successes of the economic plan that saw Malta register sustained growth and a roughly 25 per cent increase in its population in less than a decade.
Looking back on its outcomes, he said that the costly measures introduced by Government to dampen the effects of the pandemic and soaring energy prices would not have been possible without a strong labour market.
The Nationalist Party (PN) was quick to argue that Minister Caruana’s statement comes after “years of justifying economic policy based solely on unfettered population”, characterising it as an “admission that this policy has failed”.
Jerome Caruana Cilia, the Opposition spokesperson on finance, criticised Minister Caruana for not heeding the warning put forward by the PN and business representatives. “He had to bring the population to a desperate situation, with workers, parents, and students stuck in traffic for hours and businessowners losing sales due to congestion, before realising that his policy failed.”
In comments made to BusinessNow.mt, Malta Chamber of SMEs CEO Abigail Agius Mamo states that the organisation “fully agrees that a new economic model is needed.”
She asserts that this does not mean that Malta will be wiping current progress and business models, but creating new opportunities.
“At the end of the day,” she says, “Malta is facing a number of harmful challenges and it is indeed a fact that in order to mitigate and resolve such challenges we need to have a different ways of doing things.”
Ms Agius Mamo argues that the challenges are “so significant that a higher level of management is required as opposed to a fragmented approach which will not reach the right levels of change”.
She continues: “It is great to see that there is a realisation of this, and problems that have been left to accumulate without the right intervention are now going to be addressed adequately.
“Consumption is still important for business and we believe that numbers will continue being an important factor during the transition to a more quality model. Rather than big numbers spending less, Malta is fine-tuning this to a lower number spending more, which is a different kind of consumption.”
Ms Agius Mamo concludes: “At the moment Malta has become an expensive country but it is not able to deliver on the quality to match that and this is exactly where Malta needs to graduate.”
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