A different world awaits us

We are all learning how to live a new ‘normal’ lifestyle. I cannot recall such a drastic and sudden change imposed on everybody as that imposed by the COVID-19 pandemic. Confined to our homes, we now have a once in a lifetime opportunity to, well, stop and think.

The first reaction has to be that globalisation has happened and is here to stay. The speed at which this pandemic spread, attacking the lungs of thousands, is breathtaking – pun not intended.

Within five months, practically the whole world is on lockdown, most airports are closed, traffic jams have become a distant memory and pollution levels are down to a historical low. One month of this is behind us but, we still have at least three or four months more to go.

Many appreciate that the economic impact of all this will be huge, but few comprehend how really massive it will be. As the IMF report published on the 9 April put it: “Entire sections of the Maltese economy, especially in the services sector, are forced to operate well below normal capacity due to reduced labour supply and administrative closures. Sectors related to tourism and transportation, which provide major sources of income for the Maltese people, are especially affected.”

Having brought down national debt from 70% of GDP to 40% in a few years, Malta can very well end up where we started by the end of next year. All the wealth our small country had accumulated will probably be gone.

This situation has triggered another EU crisis. Southern Europe has been the hardest hit by the pandemic, but this is also the region that can least afford to overspend. Italian national debt is at 135% and can rise to 170% when the Maastricht treaty imposes a limit of 60%. Here we are again – similar to what had happened in Greece, with the south asking the north to share its wealth after it had chosen to misbehave fiscally.

The usual EU compromise has been reached but the Italians are not happy with it and are still expecting to be subsidized. This time, they say, it is not their fault. The situation recalls the classic fable of the happy go lucky cricket and the busy ant: both have to cope with wintry conditions.

In our own small world, the impact has been deep on all fronts. At the bottom of the scale we find thousands of third country nationals who are jobless, cannot pay rent and cannot even go home. One minister put in his foot in it beautifully but, emotions apart, he made the correct assessment. Our economy has crash-landed and we do not have jobs for them. Jobless and hungry, they can be a major source of social unrest. Now the government is correctly trying to organize repatriation flights for those who want to leave. It will be an expensive task, with all the Nepalese, Indians and Filipinos working in Malta, but there is no other option.

The construction industry is still going on somewhat, mostly finishing projects already under way. Once these are ready, I doubt if any developer will start new initiatives until we will have a clearer view of the future.

Third-country work permits are frozen. Rents have fallen drastically. The new rental law has been rendered obsolete overnight. This is the danger of meddling with market forces. Tenants can now move to cheaper accommodation. The effect of all this on the gaming and financial sectors remains to be seen – both in Malta and abroad – but the strong possibility of working from home in this sector has made adaptation to the new normal easier.

On the political side, this mess has been a ‘deus ex machina’ for those who retired into oblivion after having a splendid run of seven years of unbounded opportunities. Now their unlucky successors face as many years of retrenchment. Sounds biblical.

In the current circumstances, Chris Fearne has proved to be the better man in the Labour Party. He has unmistakably outshone Robert Abela and earned the respect of even his political adversaries. Meanwhile Adrian Delia has finally got the chance to make some gains as the feel-good factor is gone for good.

From a personal perspective, we find we have to look at our mobile to find out what day it is. The lack of the usual routine has had a sort of jet-lag effect. We do not go to work or work at home in our pyjamas. We eat when we are hungry and wake up at 2am, watch films on television besides the daily war bulletins of our new national heroine, Charmaine Gauci.

The ‘old’ issues like Brexit, environment, Iran and female zealots seem long forgotten. We have not heard of Greta Thunberg and her climate change pronouncements of human extinction for ages as we struggle to cope with the more tangible and imminent COVID-19.

Some fanatics have tried to manipulate the popular fear from the pandemic to promote their own ideological beliefs. There has been a resurgence of racism, this time aimed at Asians. Some came out with the silly suggestion to tax the windfall profits of banks, when there were no windfall profits and the banks are getting ready for their worst year ever.       

We do not know how long this will go on and where we will end up after it is over. Some enterprises will not survive and others will prosper. One thing is sure. The party is over and when the current circumstances end, it will be a different world.

Perhaps it is the time to stop and think. This tsunami has forced some unpleasant decisions for all of us. Is it the right time to sort out Air Malta, once and for all? Should we go back to 5% plus economic growth based on the annual importation of some 10,000 ‘cheap’ foreign workers, ignoring the social and environmental implications? Or should we aim at a slower but steadier growth based on increased value added per capita? In the long run, the latter is more sustainable.

And what about the hitherto untested cannabis and blockchain initiatives?

The silver lining around the dark clouds is that, for Malta, this should be the right time to adjust some of the populist ideas that have dominated the political philosophy embraced in the last few years and to move towards a longer lasting model; as well as returning to the moral high ground.