2015: Towards Becoming a business class economy

 Lawrence Zammit's article on The Times of Malta

The start of a new year always brings with it a look at the way things are expected to develop in the coming twelve months. This year requires us as a country to take a fresh look at ourselves and decide where we really want to be in a few years’ time. It is the ideal time to do it.

We shall be halfway through the legislature and therefore a time when the political debate becomes less of a priority. We have a government in power that enjoys such a large majority that only an own goal can put it under any pressure. The facts show that we have had twenty-eight years of economic success. We were also at a cross roads then and we made the right choice. We chose the right path. To use airline jargon borrowed from a friend of mine, we moved from being in basic economy class to superior economy class.

Throughout this period we have had a transformation of our economy with less government intervention, market liberalisation, the development of the services sector, continued growth in employment, the impact of EU membership, the movement towards higher value added manufacturing and related activities, the re-engineering of the tourism sector, the privatisation of a number of activities, and heavy investment in the infrastructure. During this time, we made big strides in education, health and social welfare. Thus the social dimension and the economic dimension moved hand, supported by the strengthening of political democracy.

However we need to appreciate that this is now the proverbial water under the bridge. We cannot live forever on the strength of what we have achieved in these twenty-eight years. Yesterday was the start of a new year and we must accept that we are once more at a cross roads. Once more we need to make the right choice and choose the right path.

That path has to be the one that leads us to becoming a business class economy. I believe that there is general agreement that this is the path we must take; but I wonder whether there is an understanding as to which of the roads that we have in front of us is the one that will get is to the desired destination.

There are a number of considerations that we need to make. First, we can become a first class economy only if we re-invent ourselves. If we were to use the analogy of the product life cycle, we would realise that we have been in the maturity stage for a number of years. Unless we re-invent ourselves, we will soon move into the decline stage.

So far we may have been lucky in that other countries have been beset by the international financial and economic crisis, which appears to have affected us only minimally. So we have continued to look and feel good because other countries have moved backwards. What will happen when these countries start to move forward again?

The second consideration to make is about the kind of society would we like to have. To reduce the discussion on this point to simply talking about having a so-called more liberal society would be plain stupid. When we speak of the kind of society we would like to have, we must consider a number of issues ranging from education to health to social welfare, to the environment, leisure, and other areas.

We have proved that we do not need to sacrifice social cohesion on the altar of economic progress. The two can and should move together in the same direction. Solidarity is not a dirty word as much as profit is not a dirty word. The concept of the common good should be fundamental to our thinking as much as personal freedom should be.

This year which has just started must be the trigger to get us going to becoming a first class economy. However are we hungry and foolish (apologies to the late Steve Jobs of Apple fame) enough to set on this path? Have we fallen victim to the status quo trap?  The task ahead is not only government’s but of us all. 

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