As a small island with no natural resources, Malta often faced long periods during which poverty was rife and jobs scarce.
Authors on the subject of emigration reveal how emigrated workers faced hardships and found assimilation with the host country difficult. Perhaps before the 1950s reigned a low educational level among the masses and consequently one observes the typical Maltese emigrant often secluding himself from host communities.
This article traces the economic development through days following the departure of the Knights of Malta (1798) up to the present day. Thanks to studies on emigration by Fr Alfred Vella in his erudite treatise (Malta - Emigration) on which I base my comments. I try to trace how islanders suffered spells of poverty followed by short periods of economic growth. On a positive note, it is evident that the subsequent Anglo-French conflicts in the Mediterranean brought significant prosperity to the Maltese economy, largely due to the medical services provided to wounded soldiers in local hospitals.
However, by 1813 the economic boom came to an end. By the 1820s famine was rife. A cholera epidemic in 1837 killed nearly 5% of the population and subsequent quarantine restrictions closed all Mediterranean suppliers to Maltese ports.
This produced great hardship resulting in poor conditions especially for port and dockyard workers. The obvious safety valve for jobless souls was emigration and thus during 1825/7 there was a potential yet unfunded scheme for Maltese emigrants wanting to travel to the West Indies, to Cephalonia (Ionian Islands) and territories of South Africa and Australasia.
However, the Colonial Office and the Treasury in London refused to subsidise such aid schemes. Later, due to other initiatives, saw over 10,000 Maltese workers settling in Australia, Canada, the United Kingdom and the United States. This figure reached a high of 90,000, or 30% of the population of Malta. Fast forward to the 20th century, especially after World War II, job opportunities in Malta were few, consequently the jobless chose to travel to Australia, the United States of America, Canada, the United Kingdom and other countries. During such post-war times, Britain encouraged emigration as part of a strategy of populating the Empire, and this policy helped us.
Particularly, for low-skilled workers, emigration was a blessing as the British services gradually withdrew their forces from the colonies. This drive to emigrate sadly involved whole families. Approximately 18,000 Maltese people emigrated to Canada between 1946 and 1981. One notes during the late 1960s the Borg Oliver administration saw a new wave of expatriates moving to Malta, namely rich British pensioners.
A clever scheme offered them a preferential low tax of sixpence in the Pound. Following the landslide election of the Mintoff administration in 1971, this tax scheme was tweaked downwards and as Malta's currency lost parity with the Sterling, soon the crop of rich Brits departed. The 1970s saw a global depression mainly caused by the high oil prices charged by the gulf producers in 1973/9. By May 2004, thanks to the Fenech Adami government, Malta joined the European Union.
As can be expected, hundreds relocated to Brussels and Luxembourg to seek improved living conditions, better pay and advance in career prospects. Historically, Malta has been a country of emigration for centuries, but our fortunes changed since we joined the EU mobility project. Good to mention that a Golden Passport scheme, run exclusively by Henley and Partners, was introduced by the Joseph Muscat administration in 2014. This sold expensive passports to non-EU citizens via citizenship by investment together with an option of granting Citizenship by Naturalisation for Exceptional Services.
A team of accredited Golden Passport owners rented a property, but statistics show that contrary to what was the official justification of granting passports, many oligarchs, anointed as Maltese citizens, did not honour their pledge to invest or reside permanently. Still, all this accumulated wealth and gradually prosperity with jobs created. Yet, we now pay a price for success - a shortage of both skilled and unskilled workers.
Malta's economy remains strong by European standards, despite a projected slowdown in GDP growth from 6% in 2024 to 4% in 2025. Growth has been fuelled by buoyant tourism, professional services and domestic demand, but is now expected to ease as employment and external demand moderate.
In 2011, immigration contributed to 4.9% of the total population. This volte face can be evidenced in 2023, observing an impressive cohort of 103,718 are foreigners. Next chapter saw a growing army of enterprising temping agencies which advertise for third country nationals (TCNs) to join against an initial charge.
Almost overnight, we host 63,000 TCNs driving buses, serving in retail shops, hospitals, hotels and restaurants, others are busy helping on building sites while workers dutifully clean our towns and villages. So, one might ask - what is the morale of this article? The answer is that Malta's destiny has gradually changed from a country aiding workers to emigrate to one reaching an immigration status. Castille boasts of full employment with the lowest percentage of people on the dole. Naturally, the rate of economic growth rests on Castille sourcing an adequate supply of skilled workers.
In 2013, Eurostat statistics show a population of 422,509, a decade later, that number ballooned by 119,542, reaching 542,051. Today, major industries and HR professionals face enormous problems and higher wage costs due to this demographic change. Action must be taken to implement improvements in all HR areas: from early-stage education to vocational training or the inculcation of hard and soft skills. More advanced up-skilling activities must continue to remain supported by Jobsplus and MCAST. It is a tough job to train workers who now face mounting AI challenges.
Over investment in low-return economic activities that rely on low-cost labour must be reduced, while ideally enterprises that invest heavily in technology and highly skilled human capital should be supported. Ultimately, the business community's diagnoses and prognoses on the economy's health will only contribute to much-needed change if transformational political and business leaders follow through with a credible action plan.
A clear strategy within MCESD that integrates innovation, sustainability and economic diversification will be crucial to securing future prosperity. It is positive to see efforts in this direction, including Vision 2050, but it is now wise that at the end of the consultation period, Castille implements a cohesive strategy with clear milestones.
George M. Mangion is senior partner at PKF Malta
gmm@pkfmalta.com