Talking about an ‘Economic Revolution’...

That’s the thing about Finance Ministers, you know. They’re always so... ‘inconsiderate’.

Take Clyde Caruana, for instance. And before you all pounce on me: I’m not suggesting that he is significantly ‘worse’, in this respect, than any of his predecessors. No, it’s just that he happens to be the only Finance Minister we’ve actually got, right now – and that we’ve had, for the past three years – and... well, just look at him, will you?

Constantly talking about an ‘economic revolution’, that never seems to actually get off the ground (I mean, it’s only been three years now: how long are these things supposed to even take, anyway?)... and in the process, constantly raising public expectations of ‘great future economic reforms’, which will ‘radically transform our lives for the better’...

.. without, it seems, ever getting around to ‘Phase Two’ of the operation: and actually bringing about all the changes, implied in his otherwise glorious ‘economic vision for the future of Malta.’

By my count, this is actually the third (3rd) consecutive year, that Clyde Caruana has explicitly promised us – unequivocally, and in no uncertain terms – ‘an overhaul of our entire way of economic thinking’... an ‘earthquake of change’, in the way this country manages its economic affairs... a ‘thorough recalibration of...’

... but never mind: we could literally spend all week, coming up with different ways to describe the wonderful ‘vision’ that he keeps dangling before our collective noses. And let’s face it: that is precisely what Caruana himself has been doing, ever since he became Finance Minister in 2020.

Last Sunday, for instance, he said:   

a) “Malta must find other ways to grow the economy in a future that ‘must rest on everything except construction’”;

b) “We don’t need to sustain the current rate of construction to prosper, and we cannot afford it. We are already paying too high a price for it because we are small, and it has had an impact on our health and environment”;

c) “We must change our economic model. And we have already done this before. During the British era, most of our economy depended on the British, but that didn’t prevent us from exploring new ways to prosper when we gained independence. That’s what we should do again, now.”

And if any of that sounds vaguely familiar... it’s probably because Clyde Caruana had told us exactly the same thing – in almost exactly the same words, too - when addressing a National Statistics Office event in October 2022:

“We need to overhaul our entire economic model. If we stick with the same recipe, then instead of spending one hour in traffic to get to work, we will start spending one and a half hours or two hours. We will keep building hotels, but beds won’t be filled. It is clear that the recipe of the past can’t apply to the future...”

And even earlier – in September 2021 – he had informed a pre-budget consultation meeting that: “Malta must change its economic model to deprioritise construction and find new ways of generating growth that do not damage the environment [...] We need to change the way we think, we need to change the way our economy works. If we repeat the same things, we will get the same results...”

In other words: Clyde Caruana has consistently promised to ‘radically overhaul Malta’s entire economic model’ (and in very specific ways, to boot); but – as far as I can see, anyway - he has not so far lifted even the tiniest of fingers, to actually bring about any of these promised ‘changes’, himself.

Even though, as Finance Minister, Clyde Caruana is arguably the ONLY person, in the entire country, who actually CAN pave the way towards precisely that sort of ‘economic revolution’.

I might be mistaken, of course.... but last I looked, the Finance Minister was supposed to shape his government’s ‘economic vision for the country’; and government, in turn, was supposed to pass whatever legislation is needed, through Parliament, to actually translate that ‘vision’ into reality.

And when you apply that, to the specific changes that Caruana has all along been talking about... it shouldn’t even be all that difficult (in theory, anyway) to  at least, ‘set the ball rolling’, from now: so that, who knows? Maybe this ‘revolution’ he keeps talking about, might one day even actually HAPPEN, for a change!

Take ‘construction and development’, for instance. If Clyde Caruana really believes (as he has now affirmed on at least three separate occasions) that Malta’s economy has to ‘move away from construction’, and towards a more sustainable model based on ‘economic development, instead of economic growth’...

... then what, exactly, is stopping him from proposing all the legislative changes (including, presumably, a much-needed revision of the 2006 Local Plans), for this ‘transformation’ to actually happen, in practice?

And if that’s too much to ask: why has Caruana’s government never done anything at all, to iron out all the ‘loopholes’ that exist in all Malta’s other policies and guidelines, concerning ‘rural development’?

To the best of my knowledge, there is absolutely nothing impeding Clyde Caruana’s government from amending those laws: to remove, say, the infamous loophole about ‘converting derelict ruins into habitations’; or ‘re-purposing disused agricultural developments’...

The same applies to ‘urban development’, by the way. If Clyde Caruana is genuinely concerned about the ‘health impact’ (both mental, and physical) caused by overdevelopment in built-up areas... not to mention the loss of Malta’s traditional streetscapes, to ‘pencil-development’...

... I, for one, fail to comprehend why the Finance Minister is not also insisting that his own government passes new legislation – which it could very easily do, tomorrow - that would actually protect those ‘typical Maltese streetscapes’, that Caruana is (apparently) so worried about ‘losing’.

Once again, all it would really take is the removal of certain widely-known loopholes, from our current legislation: such as the practice of ‘salami-slicing’... whereby large applications are ‘cunningly disguised’ as a bunch of much smaller ones: by simply splitting the property up into separate segments (each to be adjudicated individually by the Planning Authority, etc.).

In any case, I could go on – speaking of the PA: if everyone (Caruana included) now agrees that it was such a bad idea, in 2015, to split up the dual roles of ‘Planning’ and ‘Environmental’ regulation, into two separate authorities...

... then what, exactly, is stopping the present government from embarking on yet another Planning Authority reform: this time, to either ‘reverse that decision’ altogether... or at least, to ‘restore the balance’ between those two (equally vital, but hopelessly uneven) functions?

But no. Over the past three years, Clyde Caruana has consistently told us that ‘all of the above’ (and a lot more beside) is what we all NEED to be doing, to achieve the necessary ‘economic revolution’ - but at the same time: not only has he himself done nothing whatsoever, as Finance Minister, to actually get this dratted ‘revolution’ off the ground...

... but last Sunday – just literally a few seconds after saying: ‘our economic model needs to change’, and all that – Clyde Caruana also said that: “Last year the economy grew nominally by 13 per cent, and most of it was not thanks to construction, but due to the financial, gaming and tourism sectors and other industries of the sort [...].Malta needs to expand more of those industries.”

Now: much as I hate to be the ‘bearer of bad news’, and all that: there are two, teenie-weenie little problems, with that assertion.

The first is that: the ‘financial’, ‘gaming’ and (least of all) ‘TOURISM’ sectors, can hardly be described as ‘new, innovative industries’ for 21st century Malta. The former two were actually introduced by past Nationalist administrations, in what already feels like an entire lifetime ago...

... and as for the latter: tourism has – for better or worse - been the mainstay of the Maltese economy, ever since the late 1950s (at the very earliest).

Which of course brings me to the second problem: all three of those industries – but tourism, most of all - have themselves been part of the general driving force, that has enabled so much uncontrolled ‘construction and development’ to even occur in this country, to begin with.

In the case of tourism, the connection is rather glaringly self-evident (just look at how many new hotels are currently at application stage, or already under construction, even as we speak)... but in the case of financial services, and (especially) gaming: the effects are reflected mostly in the ‘price of property’,  rather than in the amount of development that is actually going on, at any given moment.

Either way, however: all three of those industries have clearly ‘contributed’, in their own way, to precisely the sort of problems that Clyde Caruana’s ‘economic revolution’ was all along intended to address.

And besides: all three of those industries happen to ‘already be here’, anyway.  For how much longer, of course, remains to be seen – there’s also the small matter of an imminent tax-reform, that may (at minimum) ‘adversely affect’ Malta’s financial and gaming sectors; and in the worst-case scenario, it might wipe both of them out, altogether...

... but one thing is certain. There is nothing even remotely ‘revolutionary’, about an economic vision that proposes simply ‘retaining Malta’s current economic model’: as it is today, and unchanged in any detail.

After all: wasn’t it Clyde Caruana himself, who so recently told us: ‘If we repeat the same mistakes, we will only get the same results...”?