34 · MONEY
ECONOMY
ISSUE 58
TRICKLE-DOWN ECONOMICS A series of recent publications and research by the Central Bank of Malta has provided a wealth of data about the economy, in particular the impact that a few years of higher-than-average growth has had on the man in the street. MONEY analyses the data.
The rapid economic growth of the past few years in Malta has created prosperity which has brought about an inevitable trickle-down effect. Take the most obvious positives: more companies coming to Malta and boosting tax revenue. Thousands of foreigners renting properties and creating a source of income for their owners. A 17 per cent increase in population meaning 17 per cent more people to shop in supermarkets, to use mobile phones, to eat out in restaurants, and to fly in and out of the country – not to mention the increased number of relatives and friends who visit. Record-low unemployment meaning that those who wish to work can almost certainly find a job, while those who have a job are faced with various options if they wish to progress their career to achieve a better standard of living. However, there are also negatives: the takeup of the housing stock for rentals has meant fewer properties for sale – and higher prices for those properties that make it onto the market. Higher rental prices is one of the
factors that reduced the length of time that foreigners work here before moving on – as well as the lack of a school for their children, which is yet to materialise despite years of planning. And then of course, there are the social concerns: take, for example, the influx of foreign workers who are possibly being exploited by agents even before they land on the island to seek a better life for themselves and their families back home. Those standing at arms’ length from partisan politics take a dispassionate view, using data gathered painstakingly over the years to flag the slightest movements in trend lines. However, the truth is all too often buried in the political noise. To quote the immortal Dilbert cartoon: “Studies have shown that accurate numbers are not any more useful than the ones you make up.”
So, what has the Central Bank of Malta come up with recently?
Perhaps that is an exaggeration, as the numbers quoted by the ‘nay-sayers’ and by the ‘ra-ra’ band are often correct – but the figures can be taken out of context, giving a very different spin to the facts.
Studies, published in the Research Bulletin and in the Quarterly Review, delved into income and wealth inequality. Unfortunately, decades of political ideologies have failed to come up with a way to even out wealth
