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.

Malta Independent - - Opinion - STEVE ELLUL Steve Ellul is the Chair­per­son of the PL’s Wealth Dis­tri­bu­tion Pol­icy Fora

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.

Photo: AP

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.

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