New economic model needed for next 10 years, finance minister warns

Clyde Caruana has acknowledged the economic recipe based on importation of labour of which he was a 'cheerleader' is unsuitable for the next decade

Finance minister Clyde Caruana
Finance minister Clyde Caruana

Clyde Caruana has acknowledged the economic recipe based on importation of labour of which he was a “cheerleader” is unsuitable for the next decade.

The Finance Minister said a new economic model was required when speaking at the launch of a labour force skills survey by the National Statistics Office.

Caruana said the survey would provide the data on which government economic policy for the next 10 years will be based.

“I was a cheer leader of government policy that favoured a growth in human resources to enable this country to expand its productivity,” Caruana said, adding that this encouraged more people to work and helped reduce dependency on social benefits.

However, he also admitted that the same recipe adopted over the past 10 years is unsuitable for the type of economic development the country should aim for in the next decade.

“People are expecting from the government, not only economic growth but economic development; it is not just a question of having more money in your pocket but having a better quality of life in all its totality,” Caruana said.

The minister said to achieve this jump in the quality of life, the model for economic development had to change from that adopted in the previous two legislatures.

He said people were now clamouring for a better quality of life.

“If we adopt the same recipe; in the morning, rather than being stuck for one hour in traffic, we will be stuck for one-and-a-half or two hours; the tourism sector will invest in hotels that will remain empty and this will apply to other sectors eventually,” he reiterated.

Caruana said that no government can guarantee prosperity if it is not based on research.

A skills census was promised in the last budget but Caruana explained that since this was a first exercise of its kind, the NSO recommended a survey.

It intends to assess the skills of the workforce and provide data on the gaps the country has.

Caruana had spoken about the need to emphasise quality jobs last year when announcing a consultation exercise on a new jobs policy for the country. Malta needs a better-skilled workforce to ensure improved incomes, he had said, but added the country still needed foreign labour.

After 2013, the Labour government kick-started the economy by adopting policies that encouraged people to work, while at the same time opening the floodgates for foreign labour to boost the workforce.

The country registered record growth and public finances also turned to black but the rapid growth in population and subsequent development came with social, environmental and infrastructural consequences.

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