Maltas Record Surge in Foreign Worker Permits and Population Growth in 2023

September 17 2024 07:05:49 by PCLMedia

In 2023, Malta set a new record for issuing foreign worker permits, with an unprecedented number of third-country nationals (TCNs) arriving to fill jobs across various sectors. According to Eurostat data, the country issued 41,927 new residence permits to non-EU citizens, surpassing the previous record of 2022 by more than 4,000. This marks a dramatic shift in Malta’s demographic and economic landscape, with foreign residents now accounting for 28.1% of the total population.

The number of residence permits issued per capita in Malta far exceeds the European average. At 76 new permits per 1,000 people, Malta issued more than double the rate of its closest European counterpart, Cyprus, which issued 37 per 1,000. The majority of these permits were employment-related, as Identity Malta processed around 115 permits daily. Indian nationals made up the largest group of new workers, contributing an additional 11,000 people, followed by Nepalese (6,515) and Colombians (3,648).

This influx of foreign workers has had a profound effect on Malta’s demographics. By the end of 2023, the foreign population reached 158,368, a 15.3% increase from 2022, while Malta’s native population grew by a mere 0.1%. Foreign residents now comprise a significant portion of the population, and their median age, at 32 years, is more than a decade younger than the native median of 43. This younger workforce has helped mitigate Malta's aging population and stabilize the country's old-age dependency ratio. While the old-age dependency ratio for Maltese citizens has risen from 28.2 in 2012 to 41.8 in 2023, the ratio for foreign nationals has dropped significantly, from 17.0 to 4.4.

However, this rapid growth is not without challenges. The surge in population, driven by foreign workers, has placed enormous pressure on Malta’s infrastructure. Roads, housing, and public services are straining to accommodate the expanding population. The Malta Chamber of Commerce recently voiced concerns about the sustainability of adding 20,000 workers annually, warning that such growth risks overwhelming the country's resources.

Despite these pressures, foreign workers make substantial contributions to Malta's economy. Finance Minister Clyde Caruana reported that in 2023, the government collected over €85 million in taxes from TCNs, with significant revenue coming from sectors like hospitality, construction, and administrative support services. Nevertheless, many of these workers face hardships, including exploitation, lack of access to basic rights such as residency and welfare, and living under the constant threat of deportation, despite their regular employment.

The rapid increase in foreign workers has also sparked political debate. Prime Minister Robert Abela has responded to public concern by promising to address the impact of population growth on infrastructure, wages, and the labor market. In particular, the government has targeted the influx of workers in the transport and food delivery sectors, pledging to limit permits in these areas. Additionally, the prime minister has hinted at moving away from Malta's labor-intensive economic model and focusing on higher-value industries, although specific policies to achieve this have yet to be implemented.

At the same time, Malta faces a critical issue with its native population’s long-term sustainability. With a fertility rate of just 1.1—the lowest in the world—the native population is expected to decline sharply, falling below 400,000 by 2040. Experts warn that without continued reliance on foreign labor, Malta’s economy could face significant challenges in the future.

In summary, Malta’s record-setting issuance of foreign worker permits in 2023 has reshaped the country’s demographics and economy. While foreign workers have helped offset aging trends and contributed significantly to tax revenues, the rapid population growth has raised concerns about the sustainability of the country's infrastructure and its labor-driven economic model. The government faces the dual challenge of managing this growth while ensuring long-term economic and demographic stability.