Executive Summary

EU accession triggered broad liberalization
Malta’s 2004 accession to the European Union (EU) acted as a catalyst for social, economic and political transformation. The EU’s liberal ethos propelled the 2011 introduction of divorce to one of the last bastions of catholic zealotry. Since 2013, the Maltese government has fueled this liberal current. Malta has considerably relaxed its censorship laws and extended rights to people with diverse gender identities and sexual orientations, including civil marriage. Recent legislation on domestic violence and reproductive rights have given practical expression to women’s right. The right to employment for disabled persons has also been codified, with employers penalized with fines for ignoring equality of opportunity laws. Since accession, Malta has extended maternity benefits and provided free child-care centers, enhanced pension rights and increased assistance for the elderly, upgraded health services, and embarked on a €50 million social housing project. The government is implementing recommendations on migrant integration by introducing reception centers, allowing migrants to register for work and setting up an integration program.
Forward strides in accountability, transparency
In terms of good governance, new measures have been introduced to enhance accountability and transparency. Demands under the Freedom of Information Act have multiplied and the ombuds office has been granted new areas of competence. These measures have effectively ensured greater scrutiny of the government. For its part, the National Audit Office has become more proactive. Legislation intended to regulate and improve the transparency of political party funding has been enacted. Ministers and members of parliament accused of breaching existing codes of ethics will become accountable to a Public Standards Office. One of the first acts of the current government was to remove statutes of limitations in cases of alleged corruption by politicians and senior officials. Also, legislation to increase efficiency within the judicial system has been introduced.
Growth resulting in
surpluses, debt
Malta’s economy continues to thrive, recording growth rates of up to 6% annually – among the highest in the EU – and obtaining generally positive ratings from credit agencies. The result is an economy that has shifted from a significant public deficit to a first time surplus; the debt-to-GDP ratio has been meaningfully reduced. Malta is experiencing an unprecedented upsurge in tourism, surpassing the two million inbound trips milestone in 2017. Despite implementing a hefty reduction in tariffs, the government also turned around the fortunes of the country’s sole energy provider, Enemalta, by attracting foreign investment and prompting greater efficiency within the corporation. Enemalta has transitioned to a gas-fired power station and increased the use of solar energy technologies.
Middle class, new underclass expanding. Clientelism, corruption becoming worse. Privatization drive lacks transparency
Socioeconomic and political developments have transformed the Maltese landscape. Rising economic wealth is impacting population and class structures as imported labor and refugee flows create a more diverse population. This has driven the expansion both of the middle class and a new underclass with little social capital. The four freedoms (i.e., free movement of goods, capital, services, and labor), open borders, and globalization have facilitated interactions between the domestic and international economy, bringing in big business. In concert, inevitably corollary practices of patronage and clientelism have also become internationalized. Widespread clientelism and corrupt practices are not a new phenomenon, but access to greater resources make them more lucrative. Construction, the industry that traditionally drives the Maltese economy, has long been a nexus of corrupt practices; the economic boom and soaring population, however, have increased the demand for real estate, exacerbating the problem. The splitting of the Malta Environment and Planning Authority (MEPA) into two authorities has not helped, instead attracting enormous criticism. Angered environmental groups are concerned that this will threaten what remains of Malta’s “green lungs.” A drive to render key service providers (e.g., in energy and health care) sustainable has facilitated a government program of privatization. While many stakeholders have been consulted, this process of privatization has been criticized for its lack of public consultation, transparency and accountability. The recent sale of several government hospitals to an international private health care provider is undergoing parliamentary scrutiny. Evidence of mismanagement in the tendering process along with decision-makers sidestepping formal procedures is fueling this reexamination.
Corruption investigator killed with car bomb
Illustrations of this political corruption include the current investigation of a minister and the prime minister’s chief of staff for receiving kickbacks from government business (revealed in the Panama Papers) as well as the car bomb murder of Maltese journalist Daphne Caruana Galizia, who had been working on a number of leads involving alleged government corruption. These events led to a European Parliament fact-finding mission in January 2018. Domestically, there is a growing intolerance of corruption; political maturity and economic wellbeing have increased the demand for democratic oversight. EU membership has meant multi-level governance – a power shift weakening the national executive, but strengthening oversight mechanisms and civil society.
Party system beginning
to fragment
In 2017, we also witnessed what may be the beginning of the party system fragmenting. Two MPs left the party of government, were reelected on the opposition party ticket and now sit in parliament under the newly constituted Democratic Party. For the first time in thirty years, three parties sit in parliament. Conflict in the main opposition party between liberal and conservative factions may lead to the fracture of the party and a new configuration of the party system. Despite the party of government maintaining a sizable majority of seats in parliament, the recent disarray in the party system has witnessed a rise in private members’ bills and increased the tendency for MPs to ignore the party whip when voting on controversial issues.
Confidence in government despite flaws
Following allegations, strenuously denied, that the prime minister’s wife held a secret overseas bank account, the governing party called early national elections in 2017. The prime minister’s party was returned to power with the largest majority since independence. The results indicated public confidence in the government’s economic and social policies as well as liberal ethos. Notwithstanding, demands from the president, judiciary, ombudsman and opposition for the government to honor its pledge to begin a process of constitutional reform continue unabated. Such a reform would give birth to a second republic and could facilitate the drive for good governance.
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