Sustainable Policies


Economic Policies

Showing significant gains in recent years, Malta falls into the upper-middle ranks (rank 14) with regard to economic policies. Its overall score in this area has improved by 1.0 point relative to 2014.

Growth rates have been very strong, and the overall unemployment rate has fallen to a low of around 3.4%. The shift toward the provision of internationally focused services has contributed to the country’s boom. However, domestic demand has replaced net exports as the principal driver of economic growth.

Overall labor-market activity rates are the EU’s highest among 25- to 54-year-olds. Policies have helped improve employment rates among women, but absolute levels remain low by EU standards. Fully 30% of companies report skills shortages, a skills mismatch and a growing reliance on foreign labor. Many companies are granted tax incentives, but tax evasion is a serious problem.

The budget has posted small surpluses for several years. Debt levels are moderately high, at a bit more than 40% of GDP. However, healthcare and pension-system costs may pose future fiscal-sustainability risks. Weak financial-sector enforcement has led to money-laundering concerns.

Social Policies

With a number of reform needs evident despite ongoing improvements, Malta falls into the lower-middle ranks (rank 26) with respect to social policies. Its score for this measure has improved by 0.7 points relative to 2014.

School drop-out rates are worrisomely high. Tertiary-level attainment levels are comparatively low, but education access generally is quite equitable. PISA scores lower than the OECD average. Fiscal and other support is provided to students at risk of failing, or who have failed to win admission to higher-education institutions.

Poverty and social exclusion risks are declining, but remain significant for children, people with disabilities, the elderly and non-EU migrants. Employment rates are low among women, though less so among young people. Workplace policies including free child care and financial incentives for mothers returning to work have led to recent gains. Rising house prices are a concern.

Pension spending is worryingly high as a share of GDP. Tax incentives are provided for investments in private pensions. The healthcare system offers inpatient and outpatient care for free, with some gaps. Wait times have decreased, but can still be long. A surge in sea arrivals and sea rescues of asylum seekers has led the government to reintroduce long periods of detention in substandard conditions.

Environmental Policies

With challenges shaped by its island geography, Malta scores relatively poorly (rank 32) in the area of environmental policies. Its score on this measure has improved by 0.4 points relative to 2014.

The renewable-energy share remains very small, with around 8% of its energy currently derived from renewable sources. In 2020, it will purchase €2 million in renewable energy credits from Estonia in order to meet its targets. It has shown the EU’s second-highest level of CO2 emissions increases in recent years, in part due to strong car use and a growing dependence on air conditioning.

Solar-power projects, an electrical interconnection line with Sicily, a shift to electric cars and a planned gas-fired power station may help reduce emissions. Plastic waste is a serious problem, but free plastic shopping bags are being banned, and single-use plastics phased out. The country suffers from scarce water resources, with the government’s approach to this issue as yet insufficient.

Development is on the rise, and many road-building projects have failed to follow planning procedures. The country is party to a large number of multilateral environmental agreements, but is not a leader in global environmental protection initiatives.

Robust Democracy


Quality of Democracy

Despite effective and impartial electoral laws, Malta scores relatively poorly in international comparison (rank 33) with regard to the quality of democracy. Its score in this area has improved by 0.5 points relative to 2014.

A recently passed law governs political-party donations, but the courts have thrown uncertainty into the enforcement process. While recent press-law reforms have eased the threat of libel for journalists, but press advocates say further strides are needed. Investigations into the murder of a prominent journalist examining corruption have led to political and economic elites.

Civil rights and political liberties are generally respected. Discrimination on the basis of political affiliation remains a problem, and women are underrepresented in many social areas. Sub-Saharan migrants in particular face broad levels of discrimination. The increased number of asylum seekers has led to deteriorating conditions.

Though anti-corruption measures have been strengthened, observers have called for stronger money-laundering regulations. Conflicts of interest remain common. There is little transparency in allocating public contracts. A new, less politicized judicial-appointments process is being developed, and a number of appointments made under the old system are being challenged.

Good Governance


Executive Capacity

Despite growing core-government steering capabilities, Malta falls into the lower-middle ranks (rank 26) with regard to executive capacity. Its score on this measure has improved by 0.9 points relative to 2014.

Strategic-planning capacities have improved in recent years, with more experts supporting the process. Spurred by recent policy failures, the Prime Minister’s Office has expanded its coordination and monitoring of line ministries, in part through central control of permanent secretaries in the ministries. A greater share of policy proposals must now be approved by the cabinet.

The RIA process is evolving, with assessment quality varying. Review of sustainability issues remains spotty, but is improving. The country lacks a systematic approach for reviewing whether laws and regulations have achieved their intended goals. Consultation processes have multiplied as the government has recognized the need to involve NGOs and the public in decision-making.

The quality of implemented projects has improved, particularly in the area of road works. Efforts to improve ministry and agency monitoring have expanded, but interministerial competition sometimes hinders the oversight process. Regulatory enforcement is sometimes biased toward powerful lobbies. A number of protests expressed popular discontent with the pace of unsustainable development.

Executive Accountability

Reflecting several notable weaknesses, Malta’s overall score for executive accountability falls into the middle ranks internationally (rank 23). Its score on this measure has improved by 0.1 point relative to 2014.

The part-time parliament has insufficient resources and comparatively weak executive-oversight powers, though a recently passed act gives it greater control over budget decisions. The audit office is independent and active, while the ombudsman is highly esteemed but has limited powers. The data-protection authority is effective and independent.

While media competition has improved public access to information, the primary media outlets are dominated by the country’s two political parties. Infotainment programming remains widespread. Public trust in the local media is very low. A large amount of policy information is easily accessible.

Political parties are giving members a growing voice in the selection of leaders, and are increasingly looking to civil society for agenda ideas. Economic-interest groups are usually capable of formulating relevant policies, but rarely act proactively. Non-economic groups too are typically reactive, but have played a key government-advisory role on issues such as migration.
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