I read this morning’s Times of Malta editorial that follows up Clyde Caruana’s recent remarks about the need to revolutionise Malta’s economic model. Leader says they should get on with it then. Fair enough. After all, as the editorial observes, there’s increasing consensus that we can’t go on like this.
There’s a phrase in the article that isn’t sitting well with me. “A realistic vision for tomorrow’s economy already exists.” Does it? Where is it?
It is not enough to want to wake up from today’s nightmare to think you have a plan about what to do tomorrow. The country’s patience with Joseph Muscat build it and money will come model is wearing universally thin, no doubt. Most of us understand that we’re running out of space on which to lay concrete. Most of us understand that there are more cars than running miles of road. Most of us understand the Dickensian squalor of 40 people to a Sliema apartment is no way to live.
I say most of us, because these opinions are by no means universal. Clyde Caruana called for a full-stop on this train that is taking us into a population of 800,000 by 2040 just to keep up with today’s expectations of economic growth. That will mean we’ll have money in our pockets (or some of us at least will) and a crowded slum in which to not spend it. He doesn’t think it’s a good idea. At all.
But Robert Abela rushed to soothe the money makers who fund his party. Silvio Schembri assured them we’ll be tweaking the economic model, not changing it. Which is an implicit promise he’ll change nothing meaningful.
So yeah, not everyone is unhappy with the model that we have. Not everyone thinks this is a nightmare.
But park that thought for a moment. After all, if we were to wait for unanimity to take some decisions for the country we’re not going to get anywhere.
A change in a country’s economic model, especially one that hasn’t been planned for, is a very painful process. In the 1960s the country was gripped in horror at the prospect of letting go of the colonial military services. I lived through the 1990s and watched One TV – it was called Super 1 then – interview denim factory workers leaving their jobs for the last time as their employers moved to Vietnam. People who sowed shoes in a factory all their adult lives were unimpressed with the promise of new jobs in accountancy and software.
And yet we made it. There was a plan. It wasn’t perfect. Individuals fell through the cracks because they felt or were too old or too set in their ways to be reskilled. But, as Mario De Marco recalls today, several new economic streams were created in a program of change and job creation. Some of the solutions to the problems of the economic shifts of the 1990s are the problems we need to solve now. Financial services based on relative secrecy or unfair tax advantage, gaming, tourism, aviation: all created jobs and all had side effects that we must now address.
Then we went crazy 10 years ago unleashing this all-consuming river god of ancient Japanese myth bloated and overgrown, swallowing with unstoppable greed every ‘opportunity’ to exploit land and labour without order and without a goal. We’ve marched headlong on a blind stampede were money justified everything and anything.
What happens next? What is our next economic model? And please spare me Robert Abela’s vague platitudes of “a greener economy”. That’s like saying we’re going to have a more walled house to live in. Things will be “greener” because the laws and the culture of the world are changing and we have no choice but to comply. Robert Abela did not discover global warming and an economy that adjusts to that reality owes no thanks to Clueless Bob.
A platitude that was passe’ when Bill Clinton was president – ‘a greener economy’ – does not economic policy make. Let alone ‘an economic vision’.
I’ll know someone is serious about a vision for a new economic model when I hear descriptions of economic verticals that the world will want to buy from us 5, 10, 15, and no more than 20 years from now. I want someone to tell me ‘We’re going to be making this or that’ and in the service of that identified priority we are going to discourage other economic activities that might drag the focus away from that objective.
Because, you see, economic policy is also about saying no to things. The last 10 years shows how misguided it is not to. Consider if you decided that tourism was an economic objective. But then you allow construction and congestion to ruin the views and locations that might have added to your tourism product.
Also, this country does not have infinite resources. No country does but our arsenal is extremely limited. Consider our human resources. Any economic vision needs to serve the ambition of generations born now to work in successful employment in adulthood. I’m hearing no one say anything about what we’re changing in our school curriculum to align our people to the “realistic vision of tomorrow’s economy” that we’re supposed to have.
Consider the present reality. We don’t just fly in people from South Asia to drive the food delivery bikes. We have a thriving gaming industry that flies in employees from all over Europe, particularly the Maths-savvy Balkans, because this country’s stock of software developers is notoriously weak in maths, language, problem solving, and creativity. They are automata who have been trained in little more than tracing the least effort possible to the quickest possible result and think that’s a good thing.
I am not looking to impose my own economic vision on anyone. But consider how in the world of AI where the only advantage we’re likely to have on thinking machines is our vulnerable human imagination and creativity and then remember that only around a dozen people a year start a language degree in this country. We say we want a film industry but there’s more spending on billboards promoting hair-dressing and security jobs (in the film industry) than is invested in creative work which can and should add economic value to the country and to the people concerned.
I’m mentioning these examples because technology and film are cited as key elements of this “realistic vision” we’re supposed to have. But the plan to recruit security guards on film sets is not a vision, or at least not a meaningfully ambitious one that might replace the easy money of incessant construction.
It’s a government’s job to set economic objectives and then, while private initiative pursues those objectives, the government must ensure there’s an enabling environment to let the money be made and be redistributed fairly to ensure no one is left behind.
Whatever “realistic vision” anyone might have, whatever new economic activity we might attract, we still have congested roads where it’s impossible to move from A to B. We still have courts that take decades to decide anything. We still have regulators under the thumb of political interference. We still have favouritism and corruption in public procurement. We still have poor air quality and an over-developed landscape. Schools are still way behind the needs of future adults. We still spend no money on research and development.
You want a realistic economic vision for tomorrow? Start running the country half way decently today. And then make your plan.