Opinion COVID-19 Economic r

TEN POLICY PILLARS

Claudio Grech

THE HEADLINE POLICY PILLARS

In articulating, examining and putting forward our recommended measures, programmes and initiatives, we shall be aligning our policy basis along the lines of a set of 10 headline policy pillars as set out below. The headline policy pillars are intended to frame the proposed approach towards recovery in a manner that will instill coherence, viability and structure in the way the measures will be deployed.

Policy Pillar 1: Short-term relief:

providing targeted, temporary and timely relief to all those enterprises that have been materially impacted, with relief intensity linked to the extent of impact on revenues and liquidity.

Moreover, relief packages are to be reviewed to support the specific requirements of the targeted industries, ensuring that businesses are provided with adequate levels of investment aid (in grants and tax credits) to enable them to rapidly make the necessary restructuring, realignment and transformational efforts to achieve sustainability and safeguard jobs.

This relief should also take into account the investments/re-engineering of operations that certain sectors would need to undertake to align their practices to the evolving health protocols and operational revisions imposed by the authorities. The rigorous adherence to these protocols is fundamental to ensure the larger objective of protecting lives, containing viral infection rates and promoting a healthy nation are duly secured and sustained throughout this challenging period.

Most importantly relief (in whichever form, grants or loans) should not be construed as bail-out of failed or irresponsible enterprises but as an economic stimulus to support healthy businesses nurse the damage inflicted by the economic storm and helping them emerge stronger out of it.

Policy Pillar 2: Instilling confidence:

reducing uncertainty by setting out a clear time-lined plan of decisions to instill investor confidence and enable enterprises to adequately plan the restructuring of their economic activity and its alignment to the wider physical distancing regime in place from time to time. Businesses work in cycles of years, requiring upfront risk and investment which is recouped at a later stage in the lifespan of a business. Enterprise cannot switch on and off: this would just disincentive proper investment and pave the way for short-term and quick-fix businesses, contributing minimal value to the economic wellbeing of the nation.

This needs to be coupled with the cessation of divergent messages issued at the highest levels of government. A case in point is the contrasting positions on the opening and closure of businesses, with one message stating that all is easing back into normality and the other indicating that there could be a temporary opening for summer and a subsequent closure in autumn or winter. The logic underlying these mixed signals is perplexing and sow a widespread lack of certainty that undermines business confidence to a significant extent.

Policy Pillar 3: Strengthening the relationship between health and the economy: this crisis should not be turned

into a balancing act, with the two elements pulling in different directions. A healthy nation will deliver a healthy economy and a healthy economy will deliver a healthy nation: we should leverage the success of our healthcare services in containing the COVID-19 transmission, assiduously protect our success, avoid resurgence and position our nation’s health as our key differentiator, becoming a regional health beacon, a breeding ground for high valueadded investment and a hotspot for quality tourism seeking a healthy and safe jurisdiction.

We should build our economic revival on the back of the success of our virus containment efforts, the wider compliance demonstrated by the people and the priceless commitment of our healthcare personnel. Rather than muting our healthcare professionals, we need to engage into an iterative process of further de-risking of workplaces, schools and public spaces. This approach should be extensively adopted and permanently regulated to ensure that even in the event of a second wave, the country would be adequately prepared and in control of the curve, hence cushioning any further impacts.

Policy Pillar 4: An economic transformation: we need to think out of the box and should seek to turn the COVID-19 crisis into an opportunity to fix what is broken in our economic model and pave the path for an economic transformation and a shared economic vision for Malta. Within a global context, which will mark new boundaries for human development, we should seize the

opportunity to stamp out the economics of senseless consumption, development at all costs and zero-sum activities which pit progress against people. We should engage with the social

and economic stakeholders to build the vision and strategy for our next-generation economy, leading the efforts of our country in a common direction of prosperity, health and social justice.

We should commit ourselves to park electoral cycles and act as visionary leaders, enacting strategic legislation and spearheading programmes to carve out new economic sectors which will embrace the green economy, sustainability, liveability, environmental protection and the shaping of an island economy that leverages technology to serve as a hotbed of talent, innovation and a hyper-connected society. The post COVID-19 economy we should be seeking is not the return to a previous one, which was failing people and society at large, but one which seeks higher valueadded, lower land utilisation, an improvement in wages and the dilution of labour arbitrage.

It goes without saying that it is critical that the efforts to create a digital society are seriously prioritised whereby government becomes a key investor in technology transformation. In parallel, we cannot take the existing sectors for granted and hence we need to shape strategies to safeguard and further transform and expand the vertical chain of existing key economic sectors such as financial services need to be implemented.

Policy Pillar 5: A new social pact:

at the core of our proposed policy agenda is the critical need to shape and curate a new social pact between constituted bodies, social partners, civil society and both political parties, enshrining the fundamental components of the economic transformation we seek to attain in the aftermath of the COVID-19 crisis.

This is a unique and timely opportunity to genuinely seek the formation of a united platform that elevates sustainability, quality of life and social mobility to the highest level of our economic priorities. We must be bold and visionary enough to consider the COVID-19 challenge to be a bridge masked in a crisis, which can bring together all the partners to carve out a social pact that will gel the interests of all stakeholders in a bond to which all the key decision-makers would be willing to commit to, over the long-term.

The social pact needs to be complementary to the economic vision we are aspiring for and has to address sensitive matters such as the paramount importance of mental health in the workplace, the living income, worklife balance, productivity levels, the informal economy and the treatment of contract-based employment. This Pact will shape the soul of our economy and serve as a stark reminder that an economic vision is not just about the numbers but more about the people, with social justice and human dignity being the principal values at the core of the policies.

Policy Pillar 6: An indigenous private health sector: reflective of our direction

to position Malta as a healthy nation and our strategic thinking of sparking an economic transformation should be the stewardship of a strong and resilient indigenous private health care sector in Malta to complement (and not compete with) the public health care service provision.

The first step should be the appreciation of the investment made by our existing entrepreneurs in this domain and their incentivisation in investing further and evolving their business model. Successive governments have never treated the local healthcare pioneers seriously enough and have always looked at them as second-tier operators, starving them of adequate jumpstartfunding and support. This crisis should serve as an opportunity to address this short-sighted view and seek to engage with this sector to position it as a strategic pillar of the recovery plan.

Our national vision should be that of helping existing efforts into regional healthcare beacons, adequately prepared for similar pandemic outbreaks and readily structured to provide crucial support to the public healthcare system.

These facilities should not only be considered as stop-gap support providers but as integral players with a dedicated space in the provision of the national health service going forward. While these facilities and any new ones that may emerge would play a pivotal role in any future pandemic, their strategic function would be one that expands the healthcare service portfolio offered in Malta, evolving us as a health specialisation centre in the region.

This approach needs to be expanded to seriously recognise those healthcare professionals operating in self-employment in the sector to bring them on as part of a digital platform of collaboration, with publicly funded infrastructure enabling the stronger proliferation of telemedicine with a “digitalfirst” approach and the strong application of artificial intelligence tools to help in virtual patient engagement as a complementary practice to the community care. This will also enable us, as a nation that prioritises health on its agenda, to be even more adequately prepared in the event of virus resurgence.

In the next layer, this should then be further extended through the nurturing of a local ecosystem in the healthcare domain,