Attention: do not let property market overheat – MCESD board

The annual report compiled by the National Productivity Board, an arm of the MCESD, spoke of the need to improve educational attainment through more intensified efforts to reduce the early school leaving rate. In analysing the situation on human capital, the report spoke of the need to encourage the social inclusion of migrants within the education system as well as further encourage apprenticeships. This would, in turn, ensure that young people, especially low achievers, have the opportunity to obtain the necessary qualifications while applying the skills acquired in practice with the assistance of experts.

Invest more in Research & Innovation

The report focused on Research and Innovation (R&I) as “key towards enhanced productivity and competitiveness”. The analysis identified that local framework conditions for R&I investment “need to be strengthened further to overcome local specific challenges and facilitate investment that would yield strong competitiveness benefits over the longer term”. The report recommended that a greater leadership role is taken by the Government in promoting R&I via institutional reforms, as well as increased investment in the field.

The challenges of resource management

Malta’s performance within the sustainable competitiveness concept was analysed in relation to two key factors – the infrastructure and real estate markets. The results of the 2017 Global Sustainable Competitiveness Index indicated that natural capital and resource management were the strongest challenges for Malta in ensuring competitiveness sustainability. “The country has significant gaps in key infrastructures, in terms of both quantity and quality. These gaps need to be closed in a responsible manner that considers the ramifications on all the dimensions of sustainable competitiveness” said the report.

With regards to the real estate market, the report recommended continuous monitoring of the alignment of property prices with market fundamentals. The report recommended the collection of more detailed property market data to support policy. It added, “Furthermore, measures that safeguard against property market overheating, address social affordability issues and promote environmentally sustainable construction activities are encouraged”.

What is the National Productivity Board’s remit?

The NPB was set up in 2019 “to diagnose and analyse productivity and competitiveness in Malta.  The analysis takes into account euro area and EU aspects and addresses the long-term drivers and enablers of productivity and competitiveness, including innovation, and the capacity to attract investment, businesses and human capital. It also addresses cost and non-cost factors that can affect prices and quality content of goods and services including those relative to global competitors in the short term. Such an analysis is based on transparent and comparable indicators. The Board will engage in the independent analysis of policy challenges in the field of productivity and competitiveness and assess the effects of policy options, making trade-offs of policy explicit.

Who is the National Productivity Board?

The Board is composed of 11 members, comprising of a Chairperson and 10 other members.

The Chairperson of the Malta Council for Economic and Social Development (MCESD) is ex officio and acts as the Chairperson of the Board.

The other 10 members comprise of :

  • a senior official nominated by the Minister for Finance,
  • a member nominated by the Governor of the Central Bank of Malta,
  • four members nominated by the workers’ organisations constituted bodies sitting in the Council,
  • four members nominated by constituted bodies representing national employers’ organisations forming part of the Council.