Featured photo: Max Böhme, Unsplash
A trade deficit occurs when a country imports more than it exports.
In Malta’s case, it’s a big one: according to provisional figures from the National Statistics Office, Malta saw a trade deficit of –€4.1 billion last year (click here for an enlarged version of the visual below).
To give you an idea of the significance of that €4.1 billion figure, that is roughly the equivalent of three months’ worth of domestic economic productivity (in 2023, the GDP for the fourth quarter of the year amounted to around €4.9 billion).
Clearly, we are totally dependent on other countries for the basics. Food, water, medical and hygiene products, technological equipment that is essential for our infrastructure, the fuels we use to power our homes. Our local production capacity is nowhere near what it would need to be to provide the country with what it needs to sustain itself in the eventuality of a catastrophic event that impacts the global supply chain. We already felt a collective squeeze due to the complications caused by the pandemic – what we are talking about here is even worse.
It is tempting to bring up the usual, defensive argument. Malta is a tiny island with no natural resources and we must make do with what we have. Anytime this argument is brought up, we condemn ourselves to a future in which this problem remains a fact of life. It is the same argument we use to justify lax regulations that are written to the benefit of the white collar industries they are supposed to police.
Without offering advantageous tax credits for foreign direct investment, Malta loses its competitiveness. Never mind that those rebates upend the global balance of taxation; we will assiduously defend our right to screw your government out of taxpayer money greedy companies want to keep to themselves.
What about the alternatives that we were conditioned to be too short-sighted to see?
‘Malta will never be a car-free nation, because we love our cars too much. Malta will never have adequate afforestation efforts because we want to build roads and ridiculous apartment blocks in the middle of nowhere. Malta will never…’ and on and on it goes.
This isn’t just a matter of riding the crest of the green wave as an economic opportunity. This is a matter of survival.
We can bring up the usual arguments all we want. The fact is that, if we were to face a situation in which the global powers of the world decided to push the proverbial big red button, we would be as stranded as our grandparents were back in the days of the Second World War.
And, in case you think I’m being alarmist, believe me – I wish that was the case. I wish I was making a mountain of a molehill, but the reality is that we’re desperately unprepared.
Think about it for a minute. As we speak, we are enduring devastating climate change. Not ‘in a few years, we will start feeling the impact’ – now. Summers are already noticeably hotter than usual. Severe droughts and floods are already impacting at-risk communities. Extreme weather events bring abnormal developments within the ecosystems they affect, creating a cascade that destablises the food chain. You know, the very same food chain we are so fond of claiming we’re at the top of.
Though climate change is in fact a global crisis, it is not even at its worst yet, and already we are buckling beneath the weight of the existential challenges which we must come to terms with.
Though our prime minister, irresponsible as ever, is fond of making bewildering statements like ‘climate change challenges will not burden Malta, but create opportunities’, Malta made little progress with capitalising on those opportunities.
Remember that one of the Labour Party’s flagship ‘green’ proposals during the 2022 general elections was the publication of a tender for an offshore floating solar farm. The most recent reference I could find to anything similar is from May of this year, when the government claimed to have received 13 proposals for floating solar farms as part of a market consultation exercise.
Since then, there haven’t been any updates about this. We sent questions to both the energy regulator and the environment ministry for details, and will let you know whether we receive any further information. The point is that if the government does actually see this commitment through, it’s certainly not going to be within this year. Given the far more urgent crises in our energy sector, it is likely it won’t even happen within this legislature.
Besides our government’s failure to adequately prioritise renewable energy generation, we also have a major food and water security issue, problems which farmers and experts have been harping on about for years on end to no avail. Our agricultural sector has been decimated by disastrous land use policies. The chronic lack of consistency between one government administration and another means that nobody’s done anything about our extremely limited water production capacity.
Throw in all the geopolitical instability we see at the moment – the spectre of a Donald Trump presidency looming large across the whole world, the ongoing brutality in Ukraine and in Palestine, the polarisation of key European institutions like the EP and the Commission amid a reactionary swing to the far right – and you have a recipe for us very quickly finding out just what it means to be cut loose.
While we may think we afford to lounge away in our little Mediterranean corner of Europe, Europe itself is gearing for the worst. In some instances, the government is taking some precautionary steps. In many others, it is leaving a lot to be desired.
In April, the European Commission launched the Critical Medicines Alliance, an entity which brings together various stakeholders from the pharmaceutical sector to enhance security of supply, strengthen the availability of medicine, and reduce EU supply chain dependencies. A look at the alliance’s list of affiliates reveals that Malta’s ministry for health and the medicines authority which falls under its remit quietly signed up as members.
In this new reality of endless scrambling for rare metals, the European Commission began using the Critical Raw Materials Act – new legislation which is meant to secure a solid supply of key green transition metals like lithium, a crucial component in electric car batteries – to sign at least fourteen supply agreements with countries whose human and environmental rights records are dubious at best.
Meanwhile, at Malta Enterprise, the only reference I could find related to this act of legislation on their website was an article written by an EU affairs intern.
These are just two of the several ongoing, EU-wide initiatives which all but spell out what the future holds. Countries who have enough resources and production capacity to sustain their own populations will be spared logistical nightmares that would otherwise cripple them. Countries that have key resources but lack the means to sustain themselves will nonetheless bring bargaining chips to the negotiating table, and likewise fare better than they otherwise would.
Pray tell, what does a country like Malta, which Transparency International once infamously described as “the night manager of the EU’s back door, who if you drop them some hundreds of thousands of euros, will let you sneak in with little scrutiny,” have to offer to the global geopolitical chess game? Backdoor favours aren’t going to cut it anymore.
One of the main buzzwords in Brussels at the moment is ‘open strategic autonomy’, the idea that in this increasingly hostile world, Europe must do whatever needs to be done to ensure the show can go on even if the enemy cuts off trade we are dependent on. Though the concept does have its fair share of critics, it is unlikely that the buzz generated by the idea is going to go away anytime soon, especially when global order is so fraught.
In such a world, we must be able to go far beyond puerile declarations like ‘turning climate change into opportunities’ and seriously understand that if we aren’t geared to swim, we are most definitely going to sink.
As things stand, the over half a million people who live on the Maltese islands do not have a snowball’s chance in hell of surviving a real crisis. We barely make it through a heatwave these days.
To the rest of the world, that is a statistically negligible number of bodies. In the most brutal of terms, I doubt we’ll be missed.
To us, the ones who actually live here, those half a million include most (if not all) of our most beloved. Your mother, your father, your dog, even the annoying neighbour if you happen to have one of those – if you lived most of your life in Malta, then chances are your roots are here with you too.
I don’t expect the Maltese government to somehow become a totally self-sufficient unit that achieves the efficiency of a guerrilla cell. But I do expect to not be governed by short-sighted idiots who cannot make heads or tails of where to even begin when it comes to facing challenges of this scale.
If our government is not up to it, it should at the very least show it is smart enough to listen to those who are. Bring in a million experts if you need to, just as long as you morons figure out how you’re going to navigate a new era of protectionism without leaving an entire population stranded.
You’ve already ruined the country’s present. At least try and give it a fighting chance for the hostile future we face ahead of us.
