Our frail economy
As the government pulls out all stops to proclaim how good the economy is, and this is then fortified by credit rating agencies and the European Commission, it would be profitable to stop and reflect beyond the mere headlines.
We do have sustained growth in our economy and we do have the least unemployed in many years. Our growth rate has surpassed that of many other European countries.
But we are still among the poorer or not so poorer countries in Europe and we are by no means among the rich countries. Our GDP may have risen over the past years but it is still not comparable to that of the richer countries in the EU. Further details may be obtained from the compared figures especially from international sources of information.
Our economy may have been getting better, but the rate of growth will not get us to a level comparable to that of better countries in Europe. If we look back at the years since EU accession, we can see how we have improved but we can also see how long it will take us to move up in the scales.
We say it is still a frail economy since there has not been any sustainable improvement in the
basics and it is still struggling to improve.
Our economic growth, even the government admits this, is due mainly to the fact that we have allowed so many thousands of foreign workers in and these have kept wage increases down.
One must also add the hefty EU funds which have helped no end to improve Malta, especially as regards roads, etc. Without these funds, Malta would be impressively poorer or would have to fork out the money by itself, thus risking its financial situation.
The government makes a big deal about the low numbers of the unemployed, and this is a good development, as is the accompanying phenomenon of many women joining the labour force because of child care centres offered by the government.
But, understandably, those who have joined the labour force are working at the lowest level of employment. While this is a good development, we need far more than this to push growth and the economy upwards.
There are still a number of obstacles on the way to real growth, still many areas impeding real competitiveness and productivity. While we do have a number of high-fliers, we also have many people operating a low technology base.
We also have a number of poor people. One may discuss whether this is on the wane or on the increase, but it is an indisputable fact that this percentage of our population is below what we could call the poverty line.
To conclude, we may devote some space to the situation of pensioners. The Prime Minister spoke on this subject on Sunday and declared that his government will never accept the second pillar form of pensions. Now this is quite surprising, given that the second pillar is favoured the world over. Dr Muscat based his objection on the fact that to pay for this second pillar would require the employed, and the employers, an additional outlay each year.
Ironically, in the same speech, Dr Muscat disagreed with a person who objected to paying a €2,500 fine on a €200,000 house. With the same reasoning, he should have agreed with paying an additional sum so as to get a higher pension later on in life.
And that is the right way forward, unless we are to go on and await with anxiety the Budget Speech of each year to see what the government in its bounty has agreed to dole out to the pensioners.