Post-pandemic boom

By Kevin-James Fenech

Kevin is the founder and owner of JOB Search - jobsearch.mt and FENCI Consulting fenci.eu.

Boom boom boom ! Bye bye face mask and hello recovery.

The economic recovery is literally round the corner. It will be V-shaped, there might be a few small bumps initially but we are about to witness 3+ years of extremely strong growth.

The USA is forecast to hit 6.5% growth in 2021; Britain 5.5%; Eurozone 5%; China 9%. The list goes on but I think you get the point.

The pandemic has left scars and the psychological trauma will linger on even when the recovery starts but it is now important to change gear.

Domestically we have very low levels of infection, hospital admissions and COVID-19 deaths. The virus is merely in general circulation and the level of  transmission is low and most certainly not rising. We soon will also achieve herd immunity (June) and the vaccine really is working. Borrowing the UK’s ‘COVID Alert Level System’ (1-5), Malta is now on Level 2 i.e. ‘COVID-19 is present but the number of cases and transmission is low’.

So as Malta re-opens next month and tourism re-starts, we really need to think of finally removing the restriction of wearing face masks at least outside. I never agreed with this imposition since the science is at best mixed and this should always have been a personal choice but let’s not get into that debate. To be fair, the health authorities were big enough to admit they overstepped the mark when originally they had insisted on people wearing a face mask this summer when at the beach. Yet they must now do the same when it comes to the recovery. Summer doesn’t lend it self well to people wearing a face mask outside plus if the recovery truly is to kick-start during summer as we achieve herd immunity and we truly do believe 100% in the science of the vaccines, we need to scale back public health control of peoples’ liberties and freedoms. Malta must truly feel like a holiday island !

I also believe the government must now inject confidence and it can only do this as public health laws become guidelines or recommendations and peoples’ liberties are allowed thrive again. The massive government stimulus is not enough to kick-start the economic recovery, we also need confidence and the perception on the ground needs to tangibly reinforce this.

Employers, Captains of Industry, banks, entrepreneurs and people with disposable income must all have the confidence that the recovery is on track to happen this summer. I think tourists back on our island will do wonders but so will the scaling back of public health restrictions and laws.

In addition to confidence, we also need certainty that taxes will not be hiked during the recovery (2021-2024) to pay off Malta’s CVOID induced debt. I think high growth during the recovery period will result in more income for the government, so it really doesn’t need to increase taxes but there has to be a commitment by both parties that none of them will increase taxes during 2021-2023 recovery.

Boom boom boom will only be strong if there is confidence in the economy, certainty that taxes will not be hiked and public health restrictions removed. I literally don’t want to see the face or hear the voice of Dr. Charmaine Gauci during the recovery (she symbolises the pandemic not hope and recovery). The country has been traumatised enough during the pandemic and we now need to look at the imminent recovery this summer, free from public health restrictions and an economic climate which rewards entrepreneurship and built on a strong tourism revival.

Lastly, and I’ve already written about this before (‘Big government is back’ on 9 October 2020), we also need to rein back Big Government. This means an economy which isn’t dependent on government spending but also a type of government which creates the right market conditions for the economy to grow but then lets the free market operate freely. I fear that as a society we’ve been too quiet during the pandemic, when it comes to the temporary loss of our liberties and freedom. History has shown us that a thriving free market is always dependent on small government with minimal government intervention and a libertarian style of government.

To achieve boom boom boom we need public health restrictions to be lifted, tourism to flourish and to have faith in the science of vaccines. It can be a good summer which ushers in the post-pandemic recovery but the government has to set the tone and create the right conditions for the free market and our freedoms to flourish.

Out with the face masks would be a good start! Boom boom boom.