‘We have reached a natural saturation point in many sectors where further expansion is becoming illogical’ – Kevin J. Borg

Economic expansion has strained the workforce, with foreign workers sometimes surpassing Maltese nationals in organisations represented by the Malta Employers Association. But how can the government address the challenges of unsustainable growth?

In the fifth of a seven-part series, first featured on Business Now magazine, we explore the insights of Kevin J. Borg, Director General of the Malta Employers’ Association, which brings together employers from all sectors of industry and commerce in Malta.

“Malta’s economy has expanded at a very fast pace, to the extent that we also managed to bounce back from the COVID-19 setback relatively quickly,” says Kevin, highlighting various factors that contributed to this, including a strong demand for tourism and hospitality services, as well as sustained growth in the building and construction industry, which fuels other ancillary sectors.

Sharing his views on Malta’s workforce composition, the Director General describes it as “mixed”, with foreign workers even exceeding Maltese nationals in a number of MEA-represented organisations. “This phenomenon has come about due to our rapid economic growth, where demand for personnel exceeded the supply for both skilled and unskilled workers,” he explains, which in turn, “brought about an injection of talent and positive work ethic in some aspects, but it has also created a number of challenges both at a micro and more so at a macro level.”

Noting that the real estate and construction sectors have contributed “immensely” to the socio-economic and environmental predicament of the country, Kevin believes that the situation will require correction in the years to come. “People are growing tired of living in a permanent building site and I would like to believe that at some point, the authorities will take heed of this. Besides, better long-term planning is required because the market will not sustain ‘more of the same’ types of commercial development, most of which generates inward-looking business activity,” he affirms.

Going on to highlight the need for a better balance between growth in tourism numbers, environmental preservation, and infrastructure capacity, Kevin attests, “if we are not careful, I believe we are on course to ‘kill the proverbial goose’. Our tourism industry needs strategic long-term planning, and employer organisations have been saying this for decades. Short-term results are being achieved to the detriment of the industry’s long-term sustainability because the current business model, based on maximisation of numbers, is negatively impacting visitors’ experience and damaging our reputation as a prime tourist destination.”

Looking ahead at the key areas for economic development, the Director General believes that Malta should aim to move up the value chain by offering a higher-quality product in sectors where we have reached saturation.

“We need to immediately but gradually alter our course. For instance, in tourism, we must refocus the industry to attract tourists with higher spending capacities and propensities. We need to achieve more with less, as we have reached a natural saturation point in many sectors where further expansion is becoming illogical,” he maintains, emphasising that any transformation must be gradual to avoid unnecessary shocks. “Careful long-term planning is essential to ensure that any corrective policies are not detrimental to people and resources.”

This interview was first carried in the 2024 edition of Business Now Magazine, the sister brand to BusinessNow.mt and produced by Content House Group