Our front page story today deals with the fact that employment generated by the construction industry fell in Q2 by 10 per cent when compared to 2009.

The GRTU believes that such figures confirm that the construction industry, which they say is one of the pillars of the Maltese economy, is in the doldrums.

This is fact. But have the GRTU not heard of sustainable development? Let us start by explaining what sustainable development means. In 1995, the EU benchmarked a three per cent-of-GDP deficit as being ideal for sustainable development. This meant that if governments spent more than three per cent of what was being produced, then there was a danger that the bubble might eventually burst.

Fast forward to 2009 and 2010. We saw, and still see, countries running dangerously high deficits of 10 and 12 per cent and more. We all know what happened when that bubble burst. Europe was thrown into turmoil while the viability of the euro was put into serious question.

In the end, Europe opted to bail out Greece, which was close to default, and in turn made Spain, Ireland and others slash their deficit.

One may ask why we are quoting GDP and deficits to illustrate our point. And the answer is simple. It is exactly the same principle in construction. For years on end, Malta has been one large building site, with houses being demolished here, there and everywhere to make room for thousands of tiny apartments in blocks of 20 and more. There was a glut on the market. Supply in that sector had become so saturated that speculators could not get rid of them. The original builders made a killing at the start, selling off land so that contractors could build apartment block on apartment block. And that is where the bubble burst. Most people who wanted to buy a home never even looked at these apartments, and when the feel-good factor evaporated from the construction sector, several contractors were lumped with apartment blocks they could not sell. And this is what we mean by sustainable development. Instead of pacing the rate of construction, most moguls decided to try and make the quickest buck possible. The bubble burst, the apartment industry imploded and that was the end of that.

Now the GRTU is saying that the industry is in the doldrums. It is not. What has happened is that too many people were too greedy too quickly. In essence, speculators shot themselves in the foot and a great many people are happy to have seen it happen. To add insult to injury, contractors went on to blast MEPA for being too slow in the issuing of building permits. Isn’t that what MEPA is for? To see whether a development is sustainable, needed and, above all else, within the parameters of legislation?

The GRTU then blew the lid on discussions with the PM to boost the sector and the answer was that there were several capital projects in the pipeline for which tenders would be issued soon enough. We ask the question... is this not also a form of bailout in the context of a burst bubble? We reiterate that the situation which players in the industry find themselves in is their own fault. Speculation makes full use of the very loose financial regulations that come with a capitalist economy. But then you simply cannot turn around and ask for protectionism as soon as capitalism turns to bite the hand that feeds it. The rules are simple – survival of the fittest. If you bled the market dry in a money-making frenzy – it is up to you to deal with the fallout.