Looking beyond the budget
The economic impact of the pandemic is as systematic as it gets. Never before had so many economies faced a simultaneous and immediate shutdown of so many of their industries.
Just like the aftermath of a storm, all economies are at the stage where they try to put the pieces together and reignite entire sectors. All this while the storm is still raging.
This year’s budget is surely being prepared in a much different context than any that came before it. No other finance minister in our recent, and not-sorecent, history had to dwell on a global pandemic which led to a complete halt of our main economic activities. Indeed, for many of his European counterparts, the immediate restoration of their economy is the only essential objective.
The economic expansion registered in recent years, coupled with consistent fiscal discipline, however, allows Malta to be better placed at this juncture of its economic development. Not many other countries can use this downtime to change what is broken, create an ecosystem that truly supports new growth enablers and re-engineer their economic model to target sustainability, a better quality of life and long-term prosperity.
The pre-budget document signals a strong willingness to take up this rare opportunity without overlooking the importance of safeguarding lives and livelihoods threatened by the ongoing pandemic. The impression given is that the government is actively looking towards upscaling the economic vision for the years to come.
If we are truly committed towards this objective, the strengthening of the technology industry is essential. As a country, we need to ensure a proper infrastructure which attracts the industries of the future such as AI, quantum computing, digital games, cross reality, robotics, Medtech and aviation engineering, amongst others.
We should aspire to be the European jurisdiction of choice for start-ups. This will drive creativity, innovation and quality growth. Retaining and attracting human capital, extending collaboration with specialised universities and further expanding on the idea of Malta as a test-base for new technology will be critical. In tandem, we also need to properly look at ways to bridge the digital divide through education and improved internet access for all.
It is encouraging to see the commitment towards improving infrastructure being coupled with an ever-growing emphasis for greener spaces, particularly in urban areas. Intertwining this with policies that support the use of public transportation, inter-modality and the use of cleaner transport will lead to an overall improvement in our quality of life. The explicit commitment towards the 2050 carbon neutrality targets is a reflection that the European green deal will be embedded in Malta’s economic policy going forward.
Sustainable and quality-oriented tourism is also an important aspiration which should be properly planned for. The current calamity impacting this industry should not distract us from this long-term objective. Bold decisions will need to be taken. Air Malta can be a model in this respect. Whilst virtually all aircrafts were grounded, the national airline was actively embarking on initiatives aimed at enabling a faster post-COVID recovery, including a strong investment in digitalisation designed to enrich customer experience and the setting up of a post-pandemic flight structure covering 22 destinations directed at kickstarting the Maltese tourism industry. It is indeed refreshing to see company boards of government-owned entities taking such an entrepreneurial, can-do, attitude.
The prioritisation of good governance and the fight against financial criminality is pivotal for the long-term prosperity of our economy and our ability to attract foreign direct investment. All the above cannot be achieved without ensuring a properly functioning institutional framework that ensures the stability of our financial and banking jurisdiction.
Despite all the COVID related financial strain, this budget has a unique potential. We can decide to simply try to fix the financial damages brought about by this pandemic or perhaps, even better, build better foundations for an even stronger economic model for the generations to come.
A man holds on to a bus that abandoned the trip as he tries to cross a water-logged street after heavy rain in Mumbai, India, yesterday. India's monsoon season runs from June to September.