Can we rethink the economy, post-COVID-19?

Beyond the crude attempt by Tony Zahra to deride the science behind COVID- 19, the truth is that whether we like it or not, we have to find ways to move on.  

My biggest concern, and I guess it should be the concern of everyone else, is mapping out a post-COVID economic vision. 

It appears that the spoils and the priorities go to those sectors who stamp their feet and make most noise. Expect the hoteliers and construction lobby to be the ones who will wave their hands highest and get the bigger share of attention and funding. 

We really need to take a small break and come to terms with the fact that we need to get the right brains round a table. 

This is not the time for bigotry and partisanship. We need a coalition of ideas, of people from all walks of life, backgrounds… to rethink the way our economy should work. 

This is a great opportunity to redress the great mistakes, the neoliberal decisions that just opened the economy and asked questions later. We need to bring in people who will see the way the financial services industry will be impacted and how the i-gaming industry will change. 

We need to come to terms with the fact that the volume of foreigners in Malta will never be as high as in 2019 and 2018, and that there will be a surplus of property and that prices of homes and offices and shops will have to come down. 

We need to encourage investment in new industries, the ones that will stand out from the rest. Discard those that are short-term, and those industries that provide dividends and make sense. We cannot take too many risks. In this regard we have to implement clear strategies and come up with decisions. 

To get tourists to Malta, we have to improve connectivity and competitive pricing; those who argue that we will prosper with five-star tourism are underestimating the multiplier-effect of mass tourism and cheap hotel packages. Ultimately, we need tourists, not a small posse of high-end visitors. We need to get the numbers back on track and the only way to do this is to offer giveaway trips to Malta from European destinations. We need to revisit the Air Malta model, recreate it by closing the company if need be, and offer cheaper flights by subventions to negotiate the possibility of more low-cost travel to Malta. Bring hotel accommodation tariffs down by more direct sponsorship and make eating out more price-sensitive. 

In the construction segment, we need a major overhaul in our planning policies in diverting construction and speculators to new work into infrastructural upgrades, regeneration of our city centres and other works related to the gentrification of our town centres. And more importantly, a direct role in the upkeep of our vast cultural heritage. We cannot go incrementing the property market which will soon be oversaturated. 

It is the time to say no. Fundamentally we should continue to market Malta’s financial services to EU companies. Critics of our taxation system for foreign multinationals (this newspaper is one of them) must also realise that Malta’s position at the borders of the EU requires a strong competitive edge against other EU member states, like Germany, whose surplus economies and strong trade balances are always sucking up currency from import-dependent countries like ours. 

For Robert Abela, this is an opportunity to seriously think what his legacy will be all about. He could consider turning this island into an environmental paradise, if only he had the courage to visualise this future, with zero-tolerance for dumping, and a serious investment in aesthetics, a pristine countryside and more significantly the creation of green open areas. It would mean that anyone visiting Malta will be impressed with the quality of the surroundings and the general upkeep of the country, and make this island liveable for its citizens. 

South of the border 

Malta’s brinkmanship with the European Union on migration has not been a success story. For those not living in a bubble, this is Europe for you. Small nations like ours are price-takers. The shots are called by the big boys. 

The other day on TVM, talking of the European Union, former prime minister Lawrence Gonzi admitted that there was little empathy for Malta from EU leaders in 2012 when Malta faced a migration issue. In 2012, Gonzi did not express this complaint about the EU vocally, but that is politics.  

With Joseph Muscat, it was different matter. His time in the European Parliament thought him that there was no straight line and that no one would act for nothing in return. 

His excellent relationship with Matteo Renzi meant that Italy picked up the tab on migration. Muscat also had extensively good relationships with EU leaders, something that must have sharpened his appetite for a top EU post. And he used this when he needed to have a solution to international problems such as ‘burden sharing’. 

He was so close to French president Emanuel Macron, that at one point he wanted the Labour party to dump Socialist International (it was eventually removed from SI when it no longer paid its fees), to join Macron’s party in the European Parliament with a new liberal grouping. He was also very close to Conservative PM David Cameron, preferring him to the ‘mediocrity’ of Jeremy Corbyn, his socialist counterpart. 

Robert Abela has none of these advantages. He has no close friendships with prime ministers and he has little experience on the international front. 

On Friday night, Malta’s decision to veto Operation Irini’s force commander’s appointment failed to materialise and instead it simply abstained. Somewhere, it was clear that Germany and France were not impressed with Malta’s little muscle. 

So it was clear that Malta will soon have to retreat and probably accept to take in the migrants from the Captain Morgan boats. 

As in all things, we are caught between a rock and a hard place. The double-faced Europe that preaches solidarity is nowhere to be seen. The Europe that condemns our financial services industry (when a good deal of EU member states like the Netherlands have their own tax avoidance structures) still misses the point of what solidarity means. 

We cannot fight a giant. We can learn how to engage with it and sweet-talk it in understanding us, perhaps. But some battles must also be lost. Nothing will change if we have nothing to offer in return. Or nothing to fight back with. Robert Abela should know this.