Present economic model is ‘unsustainable’ – The Malta Chamber CEO

The upcoming Budget for 2024 is an “opportunity” to address pressing issues that have been left “ineffectively tackled” for years, according to The Malta Chamber CEO Marthese Portelli.

Speaking to MaltaCEOs.mt, she underscores the pressure being placed on Malta by the sharp increase in population.

“The present economic model, requiring the importation of an additional 20,000 workers annually, is unsustainable,” she says. “It is pushing the country’s infrastructure to breaking point.”

Finance Minister Clyde Caruana stated in June that Malta’s population would need to grow to 800,000 (from the current c. 520,000) by 2040 if it hopes to maintain the significantly high growth rate it has been accustomed to over the last years.

Although he has been credited as the architect behind the formula that has driven remarkable economic growth, Minister Caruana has also sought to take the initial steps to wean the economy off its dependence to cheap migrant labour. Last year, he launched an initiative that sought to understand the skills and competences available in the local labour market, with the intention of better aligning economic and educational priorities. In April 2023, he doubled down on his warning, telling BusinessNow.mt: “We need to do changes to our economic model.”

Dr Portelli agrees, saying the country needs “a higher calibre of skilled workers coupled with increased investment in technology.

“We need to incentivise a shift away from labour-intensive activities towards an economic model which is not dependent on increasing the population.”

The Malta Chamber CEO adds that “bold, yet right decisions” need to be taken to address a growing number of pressing issues, including daily traffic jams, problems with utilities, shabbiness, the lack of proper waste management, planning policy abuse and over-construction, tragedies at workplaces, enforcement, proper governance, transparency and accountability.

“These factors are contributing to an erosion in the quality of life of people and make the country unattractive for high quality investors and visitors alike.”