Alarm bells are being raised this week, after it was revealed that the national debt of the Republic of Malta has risen to €9.2bn, and is increasing at such a rapid rate that it is predicted to hit the ten billion Euro mark in 2024. Fueled by systemic corruption, no-show government jobs being handed out to the children of Labour Party leaders, but who are unqualified for the offices given to them, consulting fees and personal services contracts used to line the pockets of loyal party members, dozens of public contracts approved at rates higher than the norm, and a runaway budget swollen by nepotism and corrupt conduct, fiscal disaster appears to be imminent. The debt is rising by €2m a day, according to reliable reports.
By way of illustration, the cost of weekly debt service is about to reach €4m. Under the current Labour government of PM Robert Abela, the debt has increased by €3.5bn. Given the present decreases in foreign investment, and tax revenues, insolvency, the failure to meet debts as they come due, is a real possibility. Given the current domination of the political scene by the Labour Party, which deploys a number of illicit financial incentives to insure that voters remain loyal to them, irrespective of the economic reality the country is facing, a change in government is unlikely for the near future, which is extremely disturbing. Young Maltese are choosing to leave their country of birth in record numbers not seen since the 1970s, in part due to their perception of corruption and its likely effects upon their future.
Compliance officers who are responsible for assessing and calculating Country Risk should examine all the factors they assemble in their computation of risk, and make an educated decision on increasing Country Risk to an extremely elevated level.
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