Issue link: https://maltatoday.uberflip.com/i/1520947
9 maltatoday | SUNDAY • 19 MAY 2024 OPINION micfal45@gmail.com Michael Falzon The effects of immigration AN article in a recent edition of The Economist attempted to assess the eco- nomic effects of an immigration boom that is evident in the richer countries of the world. The article explains: 'According to the IMF, the foreign-born labour force in America is 9% higher than at the start of 2019. In Britain, Canada and the euro zone it is around a fifth higher. America's im- migration surge means its economy will be 2% larger over the next decade than had been forecast. The influx of workers also explains the country's strong economic growth.' But – as we know quite well in Malta – The Economist goes on to say that the impact of immigration 'goes well beyond the mathematical effect on GDP as it ex- tends to inflation, living standards and government budgets', with many policy makers arguing that 'migration is help- ing contain price rises by relieving la- bour shortages'. The Economist argues that the evidence favouring this point of view is weak as facts point out to the op- posite direction. In fact, research suggests that in Aus- tralia each 100,000 increase in annual net overseas migration boosts rents by about 1%. Moreover, while the GDP of receiving countries has increased, the GDP per per- son has not – a reflection of the cheap jobs many of these immigrants take up. There are quite some similarities with what is happening in Malta. A few days ago, the EU Commission statement on GDP growth in member states said that Malta's economy is expected to show the strongest growth this year and next year. Malta's growth is expected to be the strongest across the EU while wage growth remains one of the lowest. It also adds that Malta has 'exceptionally strong immigra- tion'. Malta's GDP growth is impressive. Its GDP growth per person is not. Malta is attracting both high-end employees and low-end workers. It is the low-end workers in the hospitality, the caring and the con- struction industries that hold the biggest sway. Of course, Malta's statistics are moreover warped by the massive subsidy sustaining our fuel prices across the board. I wonder how long this situation will persist. Sometimes I wonder what the govern- ment's official economic direction is. More jobs can only translate into more foreigners coming to work in Malta, with the resulting consequences, including the need for more residences to house them. According to the Malta Developers Asso- ciation (MDA), there was an unprecedent- ed surge in the property market last Feb- ruary, marking it as the busiest February in recorded history of the property market. Promise of Sale agreements registered an impressive increase, rising from 1,318 in February 2023 to 1,420 in February 2024, reflecting an 8% growth. This upward tra- jectory is further underscored by a sub- stantial 9% increase in revenue, soaring from €380,599,136 in the previous year to €416,571,905. During March 2024, a total of 214,826 inbound tourists visited Malta for holi- day purposes, and 14,834 'tourists' came for business purposes. The largest share of inbound tourists was aged between 25 and 44 (35.3%), followed by the 45-64 age bracket (32.8%). Most of these tourists stayed in holiday apartments. Tourists visiting Malta in the first three months of 2024 amounted to 581,839, an increase of 31.3% over the same period in 2023. Total nights spent by inbound tour- ists went up by 17.7%, surpassing 3.4 mil- lion nights. How can environmental NGOs push for less new buildings when the system of 'buy to rent' has become the best local invest- ment for the citizen who has some capital that would otherwise decrease its purchas- ing power every day? This also contributes to the sense of well-being enjoyed by the middle classes, many of whom are the so- called 'switchers' whose support keeps La- bour in power. In Malta, the effect of migration on the property market and tourism and hence on the construction industry is tangible. Both sectors cannot survive without for- eign cheap labour. Will this economic 'growth' ever slow down? Complaining that this is destroying Mal- ta – as some perceive the construction industry to be doing – will not stop the demand and hence the surge in new build- ings. The real practical question is: how long will Malta keep on importing workers from abroad? PL shenanigans The Labour Party suffered two legal de- feats in the last few days. On Wednesday, a magistrate found that voters' addresses were shamefully manip- ulated to change their address to govern- ment apartments in Siggiewi even though these flats were not yet habitable. The magistrate ruled that they were in- duced into making a false declaration by government who are thus potential ac- complices in the criminal wrongdoing. The magistrate was deciding the first of a number of cases instituted by the Na- tionalist Party against 99 people in what it had described as a case of 'gerrymander- ing'. Siġġiewi is a battleground locality in the forthcoming local council elections, and the change of address would have im- pacted the number of eligible voters in that locality. It is, to say the least, demeaning for the Labour Party to resort to such stupid she- nanigans. The stupid comments made by the Minister for Housing regarding the circumstances that led to these cases are hardly inspiring. He should have known better. On the same day, the Employment Com- mission declared that Norman Vella's dis- missal from PBS soon after the 2013 elec- tion was 'politically discriminating' and condemned then Prime Minister Joseph Muscat and then Principal Permanent Secretary Mario Cutajar as having acted in an unacceptable way in a democratic so- ciety. Vella was deployed to PBS in August 2012 but after the 2013 general elections he was redeployed to the Immigration De- partment, stationed at the Malta Interna- tional Airport as border control officer. The Commission, chaired by lawyer Frank Testa, declared that Vella's rede- ployment stemmed from political discrim- ination and was thus unjustifiable in a tru- ly democratic society. It awarded Vella €15,000 in compensa- tion, plus interest running from the date of the decision until effective payment. One wonders whether there were oth- ers who suffered the same fate but did not pursue the issue as Norman Vella did. Sometimes people find themselves in cir- cumstances that make them opt to suffer in silence rather than pick the courage to fight for their rights. Malta is attracting both high-end employees and low-end workers