"Malta moves closer to achieving UN sustainability goals," screamed some newspaper headlines last week, when the United Nations released its annual report on its Sustainable Development Goals around the world. The important qualification was that "challenges persist".
Malta rose 12 places in the rankings to 24th place out of 167 countries. It achieved a score of 79.3, which was seven points above the regional average. Unsurprisingly, Finland clocked in first with a score of 87.02 while another two Nordic countries ̶ Sweden and Denmark ̶ occupied the other two top places.
The rise in Malta's overall score was due to its objectives in 'quality education' being reached, municipal and electronic waste being reduced, and those covering 'clean water and sanitation' improving. But "major challenges" remained in ocean health, with Malta's 'clean waters score' falling by eight points to 48.9 out of 100. The UN report also pointed to an increase in the number of micrograms of fine particles per cubic metre - a measure of air pollution - when comparing 2023 to 2024, the most recent year for which data was available.
On the other hand, the report noted that Malta's score on the international Corruption Perceptions Index fell by five points last year, reaching an all-time low of 46. No worry, we are in the company of Montenegro and Romania, where the mafia is rife. With a little more effort, there is no doubt we can sink to the levels of Bulgaria and Colombia.
The UN SDG index tracks progress towards 17 global objectives, using 231 indicators. It is a comprehensive exercise that captures progress on poverty; hunger; health and wellbeing; quality education; gender equality; clean water and sanitation; affordable and clean energy; decent work and economic growth; industry, innovation and infrastructure; reduced inequalities; sustainable cities and communities; responsible consumption and production; climate action; life below water; life on land; peace, justice and strong institutions; and partnerships for the goals.
The challenge posed by the SDGs is to build sustainable economic growth that transforms an economy while tackling the social and ecological stresses caused by current economic models ̶. promoting prosperity while protecting the planet. There you have it in 35 words. And bingo, it cries out Malta, with an economy that is growing rapidly but is subject to various stresses which sow doubt as to whether prosperity is being properly shared, question the degree to which we are protecting our natural environment, and raise uncertainty as to the sustainability of the model.
The unprecedented economic growth of the last 12 years has unquestionably made Malta an economic and employment miracle and raised the standard of living of the Maltese. It was no mean feat. Some people criticise the use of the GDP measure as a weather-vane for economic progress, but the reality is that it is the only measure in town ̶ it is reliable and fact-driven, unlike other very subjective indices such as the vaunted Happiness Index. Even when we question the results of the economic model by, for example, referring to the rate of poverty or the state of the health and education systems, we do this by quoting hard statistics that measure them.
When we attach great importance to economics, it is because we know that it is the machine that society uses to allocate scarce resources to satisfy human needs. Many people seem to forget that resources are finite while human needs are almost infinite, and this is the eternal conundrum of development. The economic system allocates scarce resources to various competing ends. In doing so, it controls both the flow of natural and environmental resources into the production process (constructing buildings or manufacturing electronic components) and the flow of wastes (defective goods, dirty oil, used plastic containers) from the production and consumption processes back to the natural environment. The quality of the natural environment has a direct impact on the standard of living of society.
The problem is that the economic theories we have used in this century make little explicit mention of natural resources and sustainability. I myself read several economic textbooks when I was studying the subject, but it was only much later that I realised that natural resources and sustainability might be a determinant of growth potential. This failure could be attributed to the fact that, during the first two-thirds of the 20th century, resource, environmental, and ecological constraints were not as serious for most advanced countries as they are today.
On the other hand, over the last few decades, we have acknowledged that there is a new and feasible approach to development across the world, which is much more attractive than the dirty and destructive paths of the past. To do this, we must invest, and quickly. Our future will be shaped by capital investments that can drive clean, green, job-rich, and much healthier economic growth than hitherto.
Many experts reckon that, to propel the low-carbon transformation, investment in key systems ̶ energy, transport, industry, cities and land ̶ must be combined with institutional change, standards and regulation, design and good policy. Gross fixed capital formation must increase by around 2-3% of GDP per year above pre-pandemic levels. This investment must be primarily in the private sector, though it will take public investment to complement it and catalyse the revolution. That would mean a target of around 21.6-22.6% of GDP for Malta; we are currently achieving 21.75%.
Investment by the public sector is badly-needed in projects that deliver sustainability in transportation modes (certainly not of the fly-over kind), better outcomes in education and skills, and lowering poverty rates. Reducing poverty to lower rates must go hand-in-hand with strategies that reduce income inequalities and address a range of social needs, including education, health, social protection, and high-value-added job opportunities, while tackling climate change and environmental protection.
The UN report noted that even like Finland, Sweden, and Denmark face challenges in achieving multiple goals, notably due to unsustainable consumption" Let alone, Malta. It looks unlikely that Malta will achieve its SDG targets by 2030, but try we must.
As the report's lead author Jeffrey D. Sachs said, despite many countries making significant progress, "much more can be accomplished through stepped-up investments in education, green technologies, and digital solutions". Sachs added that the world needs peace and global cooperation to achieve the SDGs. Indeed, rising geopolitical tensions, widening global inequalities, and the escalating climate crisis do not augur well.
Frans Camilleri is an economist. He studied at Oxford and University of East Anglia, is a former corporate head at Air Malta, and has served on various public and private boards.