There was a time when economic planning was associated with the concept of a centrally planned economy, and it conjured a negative sentiment. Students of economics know that a centrally planned economy, which is also known as a command economy, is an economic system where a government body makes economic decisions regarding the production and distribution of goods. This centrally planned economy was put into contrast with a market economy and was associated with Communist regimes, of which today we have far less than we had, say, 50 years ago.
As such, people in the West thought that a centrally planned economy was, by definition, undemocratic, as economic liberalism was associated with a democratic society. We are much wiser today as we know full well that lack of controls in a market economy can lead to an undemocratic society because of a lack of social justice. However, we also know that a centrally planned economy is no guarantee of social justice.
As a result, the idea of economic planning received a lot of bad publicity, from which, in my opinion, it is still suffering.
Today, we speak of a new economic model for our country because we have simply relied on milking our past successes
Malta used to have economic development plans to provide a direction to the economy, and things did not always work out the way they were intended. The notion of planning was abhorred in Malta at one stage.
Those of us who are old enough would remember the reaction from a number of quarters when the Planning Authority was being set up in the early 1990s because they were against the concept of development planning. They claimed it would stifle private enterprise.
Eventually, as a country we got a 10-year Structure Plan. Today we wish it had been a 50-year Structure Plan as it could have avoided a great deal of the irreparable damage which has been done to the environment in our country.
The question I wish to pose is whether Malta needs an economic plan. I put my hand up as I am one of those who have converted from being totally against economic planning in the country to someone who believes that the country is in dire need of an economic plan.
An economic plan does not guarantee prosperity and wealth. Neither does it guarantee employment. Nor should it be treated as a dogma. However, an economic plan provides a sense of direction. It is difficult to anticipate what the future holds for us all, and anyone involved in business planning and business strategy knows this.
However, as an economy, we need to start managing our future. We are in the mess we are in terms of overpopulation, of reliance on cheap labour for some economic activities, of the fixation which some have to continue growing the construction sector, of the strategy to grow tourism numbers without any idea of capacity limitations, and other things, because we have not sought to give direction to our economy.
Today, we speak of a new economic model for our country because we have simply relied on milking our past successes.
We live for today as if there were no tomorrow, and we refuse to manage our future. Future generations will condemn us for this.
Malta does not need invasive economic planning, but it does need a plan which provides a clear path as to which direction our economy should take. Hopefully we learn from our own mistakes.
