Minister of Finance and Employment Clyde Caruana

2022

Quality as a Priority

The coming year will be primarily marked on Malta’s ability to sustain the progress achieved in the initial steps towards the recovery from CoVid-19, says Minister of finance and employment Clyde Caruana.

2021 will be considered a significant year for our economy, a pivotal year characterised by the country overcoming further challenges thrown at it by the pandemic, up until the beginning of the third quarter of the year, to finally emerge with a greater sense of determination, endeavour and above all a renewed sense of pre-pandemic normality, in this last quarter, states Minister Clyde Caruana.

“Our main purpose for the year was to consolidate our efforts in the fight against COVID-19 whilst seeing that businesses find a stronger footing. Our goals have been achieved, as demonstrated through vaccination rates, economic activity rates, and employment rates.” According to Mr Caruana, 2022 will be primarily marked on Malta’s ability to sustain the progress achieved in the initial steps towards the recovery from COVID-19.

“There are still plenty of pitfalls ahead, especially since the vaccination rates in Europe are considerably lower than Malta’s, and further restrictions on the continent and on a global level could increase price instability and decrease demand.”

Moreover, Malta has to also contend with the variables deriving from the pandemic, such as energy prices, supply-chains dysfunctions and transport cost.

“On the upside, our solid response to the pandemic has left the country in a relatively favourable position compared to its European counterparts,” Mr Caruana says, “In either case, 2022 is to be earmarked for the prioritisation of quality; quality of lives, quality of our labour force, quality of our export content and quality of Malta’s unique selling proposition.

This requires a shift in mindset, he stresses. A country’s growth is often defined through the year-on-year increase in the GDP. Focusing on such GDP growth has many-a-time provided comfort to world leaders that an economy is moving in the right direction, nonetheless, economists advocate that this economic measurement may be misleading when making policy decisions for everyone’s best interest, including that of our children and other generations beyond.

“Considerations must be made of other costs which do not feature in this ‘cash flow’ analysis. We are to be more concerned about the quality of life or technically ‘sustainable economic development’. When we prioritise sustainable economic development over economic growth, we are aiming at an economy that is sufficient and resilient, a society that is fair, just, and equal, and an environment that is valorised, protected and which contributes to the same society’s wellbeing.”

It is in this context that Minister Caruana speaks of the construction sector. “Without a doubt an important contributor to our economy historically, today, and in the years to come. The growth of the construction sector was both a direct result of the rapid growth of other sectors, such as financial services and gaming, and a result of lack of investment alternatives – thereby gaps in the financial services sector resulted in construction projects remaining the most lucrative and tangible means of investment for the common family head and the businessman alike.”

Yet, he adds, we need to be conscious that the sector comes with inherent non-monetary costs, mostly of an environmental and social welfare type, including noise and air pollution, negative visual impacts, and the reduction of physical space, to name but a few. “Being a small, densely populated, island-state with no other island to serve as

activity rates in the EU in 2020, at 60.1%, to now having one of the highest activity rates in the EU, at 77.4%. The success witnessed in terms of quantum is to be translated in the retention of knowledge within the labour force, especially of our older workforce, and the improved quality of skills. Hereby our work in 2022 shall relate to the implementation of the recently launched National Employment Policy, of which measures such as tax benefits for older workers, part-timers and overtime workers have already been introduced.” Nonetheless, a key challenge over the coming years shall be the overcoming of skills shortages, also in the face of high Early School Leavers and low education attainment levels. “Efforts will be placed on deriving the best output from our human capital, for the improvement of Malta’s competitiveness in the attraction of new sectors, new business, and in combination with investment in technology, for improved productivity rates. It is through such a leap that Malta, as a whole nation, can then also look earnestly and concretely to further improvements in the work/life balance for a better quality of life.” n “2022 is to be earmarked for the prioritisation of quality; quality of lives, quality of our labour force, quality of our export content and quality of Malta’s unique selling proposition.”

our Plan B, we do not afford to make a wrong decision in the use of our land. Aside from these aspects, we need to be able to develop a well-balanced portfolio of sectors that offer the country the right resilience and hence reduced dependency on key sectors, in the face of possible future challenges. For the pursuit of quality of life, we need to also aim towards sectors that have lower environmental and social welfare costs.”

Minister Caruana says that, to thrive in such sectors, there is the need of the right amount of investment in technology, supported through adequate skills. “This brings me to the quality of the labour force. Huge strides have been made over the past decade in terms of activating the workforce to include wider cohorts of females, as well as the older workforce and the long-term unemployed, moving Malta from having some of the lowest