"Boomtown" Malta

It is nice to be back to Malta for a few days, even though the weather is not significantly better than in Germany. I had friends to come and visit me, and I also caught up with those on the island. I am very sorry, I was not able to see everybody, but I will be back soon.

The little country is in a building boom and for some this causes discontent. It is hard to keep the balance between building up capacity and infrastructure at the same time at such a pace. That's quite normal - everywhere. A risk then often is, that the infrastructure development falls back, or the technology used is dysfunktional because there can be no "money made" with it. I would guess this risk is even higher in Malta, because there are hefty subsidies on public services. A lot of projects I see, are just an expansion, but not a true modernisation. This is a limited strategy in such a small country. Now the developers still have cash, given the rising property prices and extremely low interest rates. Should the coming demand have been hugely overestimated, then specially for the larger developments, the potential bubble would hit the developers and then the banks quite quickly. It's always the same game and not unseen in Malta either. Luckily there is a large proportion of foreign cash coming in, which is not borrowed from local banks. However, this drives up inflation and subsequently labour cost, which is one of the few competitive advantages. Further, even with all creativity to create "opportunities", also the ways of attracting foreigners into Malta are limited. Specially, for those who really want to live, work and spend money here: facing bad infrastructure, outdated and ineffective institutions, political trench battles, low management competence, unskilled workers, and a weak education system. I would be personally not unhappy to see a slower economic growth in Malta, and a better balance. But now, that it made "boom" already, I guess we will just watch how high it flies. 

 View on the Rabat Citadelle (Victoria in colonial wording) in Gozo, where the pace is still lower than on the main island Malta.

View on the Rabat Citadelle (Victoria in colonial wording) in Gozo, where the pace is still lower than on the main island Malta.