Malta Business Review Issue 4 by Adrian Friggieri

Issue 4 – December 2014

tUrning relatiOnShipS intO partnerShipS

COver StOry

exClUSive interview

FOCUS

SpeCial FeatUre

Cultivating Relationships An extraordinary interview with Olga Finkel, Partner with WH Partners - p.06

Building From the Inside Out A rare interview with building and construction magnate Charles Polidano - p.12

The Industrious Home Office Archi + Architects’ Studio’s unique project and design concept for AAT Research - p.18

Building the Extraordinary Infinite Possibilities with Angelo Dalli, CEO of Bit8 - p.32

Issue 4 – December 2014

tUrning relatiOnShipS intO partnerShipS

06 COver StOry

exClUSive interview

FOCUS

SpeCial FeatUre

Cultivating Relationships An extraordinary interview with Olga Finkel, Partner with WH Partners - p.06

Building From the Inside Out A rare interview with building and construction magnate Charles Polidano - p.12

The Industrious Home Office Archi + Architects’ Studio’s unique project and design concept for AAT Research - p.18

Building the Extraordinary Infinite Possibilities with Angelo Dalli, CEO of Bit8 - p.32

puBlisheR MBR Publications Limited MBR Publications Limited

editoR Martin Vella teChniCal advisoR Marcelle D’Argy Smith sales diReCtoR Margaret Brincat

aRt design Melanie Mifsud adveRtising 9940 6743 / 9926 0162; Email: margaret@mbrpublications.net; martin@mbrpublications.net

CoveR stoRy

ContRiButoRs

Anatole Baldacchino; George Carol; Neil Camilleri; Joe Cauchi; Dan McCarthy; Judith Galea; Noel Grima; Werner E Jung; Leon LaBrecque; Eileen V Muscat; Marcia Reynolds; Steve Tendon; Astrid Veld; Eberhard Vollmer

speCial thanks

Bit8; BICC; Burmarrad Commercials Ltd; DOI; Eurostat News; Forestals Group of Companies; HSBC; Middlesea Insurance plc; Minister for Tourism; Lotteries & Gaming Authority; Polidano Group; WH Partners

pRint pRoduCtion Printit oFFiCes 41B, Wayne, Triq il-Herba, Birkirkara, BKR 2322 telephone +356 2149 7814 quote oF the month “All our dreams can come true if we have the courage to pursue them” - Walt Disney Walter Elias “Walt” Disney was an American business magnate, cartoonist, animator, filmmaker, philanthropist, and voice actor.

Disclaimer All rights reserved. No part of this work covered by copyright may be reproduced or copied and reproduction in whole or part is strictly prohibited without written permission of the publisher. All content material available on this publication is duly protected by Maltese and International Law. No person, organisation, other publisher or online web content manager should rely, or on any way act upon any part of the contents of this publication, whether that information is sourced from the website, magazine or related product without first obtaining the publisher’s consent. The opinions expressed in the Malta Business Review are those of the authors or contributors, and are not necessarily those of the editor or publisher.

Cultivating Relationships An extraordinary interview with IT specialist, iGaming lawyer and technology expert Olga Finkel, Partner with WH Partners

speCial ContRiButions

Building FRom the inside out A rare interview with building and construction magnate Charles Polidano, who willingly talks about Polidano Group projects and other burning issues

the malta gReen management ConFeRenCe & B2B netwoRking FoRum A double-page spread with the main photos of the highly successful Green Management Conference held at The Palace Hotel and organised by MBR Publications Ltd.

the industRious home oFFiCe Archi + Architects’ Studio present the state-of-the-art project and design concept for AAT Research

FoCus

geneRating positive Change MBR interviews Architect Charles Buhagiar, Chairman of the Buidling Industry Consultative Council (BICC)

a small Business in a small CountRy An interesting article by Steve Tendon, founder of TameFlow Consulting Ltd. and an expert and innovator in Organisational Performance for Knowledge Work Management

HSBC LAunCHES MALtA’S FIrSt rEAL-tIME FOrEIgn exhange seRviCes A special HSBC Trade Report and focus on the world’s fastest growing exporter

CONTENTS speCial FeatuRe on igaming 32

Building the extRaoRdinaRy Infinite Possibilities with Angelo Dalli, CEO of Bit8, who is looking forward to oversee Bit8’s global expansion

speCial FeatuRes

seminaR: implementing Cloud seRviCes A collaboration between Forestals Limited and HP Interview with Gordon Dimech, COO of Forestals Group of Companies

the dRiveRs oF Change in the maltese Capital maRket Elieen V Muscat, Chairman of Malta Stock Exchange writes about SMEs and Capital Markets

WHy LEADErS DOn’t LIStEn 1st Class contribution by Dan McCarthy, guest-post by Marcia Reynolds on leadership decisions and values

KnOWLEDgE, HArD WOrK & peRseveRanCe An interview with Patrick-John Mifsud, Director with Shield Consultants Limited

Budget 2015: is the Budget still so impoRtant?

A budgetary review by Noel Grima

Malta Business Review

editorial ven if you are not a native of the USA, it’s hard to miss that in the USA they celebrate Thanksgiving Day during last week of November. Meanwhile, locally, many seem to be writing about the power of gratitude and why we should all take the time to be grateful that our economy is doing so well. I strongly agree that gratitude makes our lives richer and helps us acknowledge the abundance of goodness that we would otherwise miss. Still, for some, despite their desire to find gratitude, it doesn’t come easily. It’s not because they are scrooges, it’s because they have cornered themselves in the darkness and are struggling to see the light. I live with a desire to lead with gratitude but sometimes I screw up, fall flat and have a pity party. It’s human and it happens to the best of us. For example, the rest of what was once my family will be gathering together this Christmas with all nephews and nieces hanging out for the day and eating what might qualify as an amazing home cooking. Together, they will take part in the Christmas tradition of cooking for hours, eating too much, and passing out in front of the TV. Don’t judge until you have tried it. Conspicuous by my absence, whether willing or forced exile, I will be celebrating Christmas in downtown Paris and the New Year in suburban London. So when my soul-mate asked me if we were going to enjoy Christmas, I told her it will be just as good, if not better! When I was young I learned that to put out a fire you need to immediately stop, drop and roll. I would like to propose that when you are falling into the belief that gratitude is for only for the Pollyanna (Pollyanna is a best-selling 1913 novel by Eleanor H. Porter that is now considered a classic of children’s literature with the title character’s name becoming a popular term for someone with the same optimistic outlook), you need to immediately freeze, flip and flap. Do what it takes to freeze even if you need to look in the mirror and say aloud to yourself, “stop it!” I not only told myself to stop it, but also threw in a few expletives for good measure. Whatever story we are telling ourselves has a flip side- you just need to be intentional with the flip. In my case, I’m lamenting absence of malice! If this is true, when I flip it, what else is true? In my case, my friends and family will have a meal made with love from scratch. I have learnt how to feel the love without falling into any old patterns that lead to inevitable arguments. I shall also get to give thanks for new friends and enjoy sharing my traditions with them. That is how to let yourself embrace the flip-side perspective, lean into it, and enroll others. I won’t be making a turkey this Christmas but I will freeze, and embrace love to reconnect with my gratitude for this life that I’m lucky to lead. Enjoy the read!

49 MARTIN VeLLA www.maltabusinessreview.net

Cultivating Relationships

by Martin Vella

In recent articles MBR has examined local gambling trends and assessed the impact of iGaming events. I was therefore honoured to have the opportunity to interview IT, entertainment and technology expert Olga Finkel, Partner with WH Partners. Ranked by Chambers & Partners Global as a Band 1 Gaming & Gambling lawyer, she weighs in her insights on the iGaming industry issues and gives us her take on the future of online gambling landscape

COVER STORY

Malta Business Review

entry strategy, conducting due diligence on a target asset in an acquisition, or putting forward alternatives for the structuring of a portfolio of intellectual property rights. The above approach is practised by every member of our team, and I believe this is one of the reasons why we have consistently achieved top rankings in the past years as one of the leading specialists including in gambling and technology law. MBR: Why is mobile gaming expected to become the new frontier of the gaming industry and what are the implications here? OF: Rapid developments in technology are changing the way we communicate, share information, purchase goods, access entertainment, driven by consumers’ desire to have instant access to everything, MBR: As a lawyer, how did you become interested in high-tech everywhere. Gaming service is no exception. Mobile, as a channel and the gaming industry? of service consumption, accounts nowadays for almost 40% of OF: Prior to studying law, I completed a Master’s degree in IT and revenue for many forward looking online gaming operators and this Economics and for almost 10 years worked in the IT industry, as is expected to grow even higher. As gaming is a regulated industry, well as lectured Computer Science. Remote gaming, as other regulatory frameworks should ideally facilitate, but at least not e-commerce businesses, is an IT-intensive industry, so upon hinder, this technological and market development. A technologygraduating as a lawyer, my keen interest in, and understanding neutral regulatory framework which sets the compliance goals of IT naturally led me to focus more on legal areas that leverage without limiting their implementation to any particular technology my unique skillset as a lawyer with an IT background. My in-depth would achieve this aim. The Maltese legal framework, for instance, background in IT and economics is invaluable up to this day, as I has a few provisions that work well for the web, but not for mobile can understand not only the legal, but also the channel and to my mind, should be amended. underlying technical aspects behind complex Just to give one example, the law currently It was always and and often technology-intensive issues and requires that a player’s contact details must be will remain key for grasp their business implications. verified. In web environment, this can take form of email verification, in mobile – mobile number us to thoroughly MBR: You are listed by Who’s Who Legal verification, for example, by SMS. The law, as a leading global IT lawyer, top-ranked understand and take however, only allows email verification. Often, it by Chambers & Partners as global gaming keen interest in our is such fine grain details that need to be looked lawyer, and widely regarded as an expert in at to optimise the regulatory framework for new clients’ business, gambling and technology law. Can you tell us channels. To be fair, our legal framework for about how all this came into being together dedicating our time gaming has been around for ten years and it was with WH Partners? to fully comprehend difficult to envisage back then how technology OF: I firmly believe that the only way to do anything would develop. The Lotteries and Gaming their needs is to do it well; and this can only be achieved if you Authority has announced that it is embarking on do things that you enjoy with dedication, passion an exercise to ‘refresh’ the current framework to and competence. So when I set about founding WH Partners, I wanted ‘future-proof’ it, which is very welcome news indeed. to develop a boutique firm that would focus on industries which are MBR: Can you tell me how responsible gaming issues are ICT-intensive, that are dynamic and creative. Even more importantly, addressed by operators? my goal was to develop a firm that would not just provide sound legal advice to clients in our focus industries, but also assist them in OF: One of the main pillars of any proper gaming regulatory navigating complex issues in the ever-changing business environment regime is the protection of players. Responsible gaming features and support them in their decision making process. It was always, and are an essential part of this protection, and the Maltese will remain, key for us to thoroughly understand and take keen interest regulations address these issues aptly. Gaming operators must in our clients’ business, dedicating our time to fully comprehend have in place wagering and financial loss limits, self-exclusion their needs, which help us ensure that our clients achieve their goals. mechanisms and other various means that enable operators to We have built our approach on our values, which place the client’s provide a safe and fun experience to players. Sometimes, I hear business at the centre. Our approach combines an in-depth grasp of comments that operators, in principle, are against such measures our clients’ business with a result-oriented focus and a strong dose of as inhibitors of higher revenues. In reality, nothing can be further enthusiasm and perseverance. We believe that the quality of our work from the truth. Operators fully embrace and support responsible reflects our values, whether in advice on the legal aspects of a market gaming measures, as not only they protect players, but also help www.maltabusinessreview.net

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COVER STORY

operators. Operators want to have players who play responsibly and treat gaming as entertainment, which translates into longerlasting customer relationships and, therefore, higher benefit for players and operators alike. As a firm, we guide operators towards the correct implementation of responsible gaming features. MBR: What impact do iGaming events such as MIGS and SIGMA have on the local industry? OF: I think that the renewed interest in having top-quality iGaming events based in Malta has a very positive multiplier effect on the local gaming industry and all supporting services offered in Malta to the gaming industry, as well as making the local population more aware of the industry’s needs and benefits, achieving a tighter integration of existing companies with their host country. MBR: What are the challenges for online gaming in Europe? How does the fragmentation of the European market affect Malta-based operators? OF: The fragmentation of the European market, in the sense that operators must obtain multiple licences in various European countries to be able to service those geographical markets, poses a number of challenges to all online gaming operators as they face multiple and sometimes conflicting compliance issues on legal, technical and financial fronts. Certain quota mechanisms and restrictive conditions that are being imposed by some Member States go against the EU law principles. Some countries have chosen to use technical, legal and responsible gaming concerns as justification, where in reality increasing tax revenues is the real driver. Multiple and disjoint compliance requirements drive up the costs significantly, thus squeezing the margins. Competition from unauthorised out-of-EU based operators who are not subject to these increased costs and requirements, while often being inferior on player protection measures, also affect the EU-based businesses.

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MBR: What are WH Partner’s objectives for 2015 and the near future? OF: WH Partners is set to continue expanding organically as we add a wider range of expertise to our team. We expect to be involved in more M&A and FDI deals, and advise a wider range of high technology companies who share our entrepreneurial mindset. Our advice is well suited towards innovative companies and individuals who appreciate the fact that they can rely on our team to deliver practical solutions to their needs, which may be unique and truly cutting edge. To support this expansion we continue to add high-level expertise to our current 18-strong team. MBR: How do you see the local gaming industry evolve in 2015 and beyond? OF: We see the local gaming industry being more grown-up and main-stream. It is no longer niche, home-grown and frowned upon. The industry is a strong economic force, making a very significant contribution to this country, and must be respected and protected. Having a combination of various benefits and incentives provided to them in Malta, I believe remote gaming operators will continue to re-affirm their choice of Malta as their home base, despite the pressures from other jurisdictions. I envisage a wave of new companies to grow, as well as a new wave of mergers and consolidation, especially amongst the larger players. MBR All Rights Reserved | Copyright 2014

EDITOR’S NOTE Olga Finkel is an expert in the gaming and technology fields. Her expertise extends to e-payments, crypto-currency, e-commerce, software licensing, data security, IP, and cross-border M&A. She is ranked globally by Chambers & Partners as a top-tier gaming lawyer, and by Who’s Who Legal as a leading internet and technology lawyer, and lectures gaming law at the University of Malta.

COMPAnY BACkGROund WH Partners is a Malta-based law firm with a business focus – their understanding of business needs and their team of seasoned experts together with their long history of working with a range of companies, including some of the largest in the industry, has made WH Partners stand out. The company strength is in their expertise in regulatory matters and understanding the business drivers of the industry. They also specialise in e-payments, taxation, digital content and intellectual property, as well as employment and investment vehicles, all being areas that interface with and are of interest to the gaming industry, and this allows them to provide 360 degree view on all relevant issues to the gaming industry. WH Partners have built their business approach on two fundamental pillars: expertise and top quality service. WH Partners team of dynamic professionals adds value to clients by providing clear and straight-to-the-point advice while focusing on developments in the industry. They spend a lot of effort keeping themselves informed and involved in the developments concerning the industry, be it legal, regulatory, technological or market-driven, so that they are always one step ahead. In turn, they share their knowledge with their clients to ensure that they reach their goals, and that their business is always forward looking and well-anchored. The drive, competence and attitude of the members of the WH Partners team, individually and collectively, are their best differentiating factors and the source of their success!

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Making a Broad i M pa c t Part 2 by Martin Vella

Malta is continuing its push to promote tourism, with a brand-new marketing campaign and a focus on positioning the country as a forefront of tourist destination. Like the rest of its Mediterranean counterparts, Malta is trying to make headway in an increasingly competitive global sector. To learn more about the state of tourism in the country, we feature the second part of our engaging interview with Tourism Minister Dr Edward Zammit Lewis

MBR: Can you outline your strategy focus on specific segments which are related to tourism and do you envisage that the budget will give you enough finance to boost the tourism structure that is required at the moment? EZL: As Minister for Tourism, my aim is to have an adequate financial allocation to plan ahead for marketing strategies to promote Malta in various destinations and especially within new markets. That is why we have to adopt what we term as the ‘sniper approach’,meaning that the Ministry in conjunction with MTA focus on different and pre-identified niches that are relevant in each respective country to attract tourists to visit our Maltese Island. What we are doing for budgetary purposes is to increase our selling in specific areas and to work on specific market segments that make a lot of sense for us, such as for example diving. Mentioning diving, it is pertinent to note that we were rated by an international diving magazine as one of the first three best destinations in the world, and Gozo is actually ahead of Malta in that respect. 10

Therefore, we work continuously in developing, for example, the conventions market that will help us achieve more tourism in the off-peak season. In my opinion, we are making a breakthrough in this market and adding value on the quality side of tourism, besides the quantity that is obviously also very important. We are slowly, but steadily, achieving this objective as when you see the hotel occupancy levels in October, these are full - and this is in itself already very significant given we associate October as the typical start of the shoulder months and we continue to achieve same results during the most vulnerable months, going into November to February MBR: You recently mentioned that the country is now looking into attractive markets such as that of the Far East, particularly China and that you are cooperating with China in this respect. How are you promoting Malta in this region, especially with China? EZL: Let me clear, at the moment we are not only actively promoting Malta in China but also other within other ‘new’ countries.

But first we also need to do a lot of spade work because, as I explained earlier, we first need to work on our product. Having more attractive markets and a good brand destination, especially for students, attracts a lot of attention. We have also been getting positive feedback from different airlines in these new markets and we are working on this front also. I am aware that the private sector is presently very excited in the potential of attracting ‘new’ tourists from the Far East. At this stage all that I can say is that we are working very hard towards creating a niche region, and the idea is to also create a product that is specifically attractive for the prospective tourists from the Far East. MBR: What do you say to the charge that the Government fails to recognise the economic importance of tourism when setting policy? EZL: I think the Opposition, from whom this criticism hails, missed totally the argument. There is a policy, a tourism policy, that was devised by the Opposition when in was in office and that expires in 2016. This policy

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Therefore, I am developing a vision up to 2030. What do we want out of tourism in the long-term? How are we going to achieve and coordinate it? How do we want to see Malta? How do we want to project it? These are the underlying issues which we are working on and we will have a document in this sense by April 2015. With regards to sustainability, that is a very big issue. It is a priority that is also being tackled by the Italian EU presidency. I think we have much more work to do with regards to sustainable tourism and it is an even bigger challenge for a small country like ours, and it is also another reason why one of my main priorities is the ongoing focus on quality tourism. MBR: Do you have any specifics regarding the Cruise liner industry. How it is fairing and do you wish to see an improvement? EZL: Firstly, let us speak about the numbers. During 2014 we have registered a remarkable increase in the Cruise liner industry and statistics for the first quarter of 2014, with respect to 2013, show a 68% increase in the Cruise Liner industry. We are doing very well, but at the moment we are already actually planning for 2016. There is a big interest in this sector and I take a personal interest in meeting all the major stakeholders in the cruise line industry given their very particular requirements. What we are focusing on is ‘home porting’ or ‘cruise and stay’ that obviously will leave more money in our economy than simply being a port of call along a cruise itinerary. I am pleased to note that we are making considerable progress on this front.

During 2014 we have registered a remarkable increase in the Cruise liner industry and statistics for the first quarter of 2014, with respect to 2013, show a 68% increase in the Cruise Liner industry gave us the numbers which, as I have already reiterated many times, is positive, and which marked the start of a positive momentum sinvce 2010. As this Administration took office, we immediately increased that momentum and in fact we achieved the record numbers seen in 2014. Now, what are we doing at the moment is to gather all the stake holders, Government and non, to renew this Tourism policy . This is not a question where we don’t have a policy; we maintained a policy that we found under the previous administration. And I have no problem in saying it because I am also proud of belonging to

a Government that recognises positive actions. There is no debate about this today may I add. But the policy badly needs updating and further fine-tuning to be aligned with today’s and tomorrow’s tourism realities. We are doing exactly this. However, what is more important, is to actually have a vision for tourism to ensure the broad coordination of all the Ministries, since the Ministry for Tourism faces many, what is called, horizontal issues. It is involved with the Ministry for Energy, it is involved with the Infrastructure Ministry, the Home Affairs Ministry, and these are all then in turn related with the overall economy.

We are looking at all these scenarios. We are working for example on different solutions for Gozo, not only on the cruise liner alternative, but also other options we are working on decreasing the dependency of our sister island on day-trippers. We inherited a situation from the previous administration where three top hotels in Gozo had closed down and they were turned into real estate projects which obviously are of no real use for tourism purposes. Secondly, we had a more than 80% dependency on day trippers that we deem excessive and therefore we are working on attracting longer stays for tourists that will directly positively affect the Gozitan economy. In this sense, we are seeking more investment from the private sector for more hotels in Gozo and I am confident that until 2016 we will reach this aim also. MBR All Rights Reserved | Copyright 2014

EDITOR’S NOTE Hon. Dr. Edward Zammit Lewis was appointed Minister for Tourism, in the Government of Malta, in April 2014. He was first elected to Parliament in 2013, Hon. Dr. Edward Zammit Lewis was immediately appointed as Parliamentary Secretary for Competitiveness and Economic Growth by the Prime Minister. Dr Zammit Lewis graduated in BA European Studies and International relations and subsequently obtained a Doctorate of Laws. He practiced as a lawyer in the Maltese law courts for 13 years. He is married to Notary Public Elena Farrugia and have one daughter Lucia.

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Building from the inside out by Martin Vella

Charles Polidano must be one of the wealthiest men in Malta. Having made his name in building and construction, notably major building projects, he has successfully branched out the Group into healthcare gases, leisure, hospitality, beverages and industrial development. A man famed for looking after his workers, Polidano is now looking after an estate covering an area of approximately 300,000 sqm, including a controversial animal park MBR: What led to the creation of Polidano Group, and what are your current areas of focus? CP: Polidano Group was created over the last 30 years and today comprises a diversified group of companies with interests in construction, property development, landscaping embellishment, hospitality, leisure, industrial & healthcare gases and beverages. The group through its subsidiaries, associated companies and dedicated sub-contractors provides employment for approximately three thousand personnel. The group’s focus remains grounded in its core construction business as we want to continue to play a leading role in all major infrastructure projects and developments.

including the Mgarr Road, Marfa Road and the St.Paul’s Bay bypass, Malta’s and real landmark projects like the Westin Dragonara, the Hilton, Le Merdien and the Intercontinental as well as the mixed-use developments of Portomaso and Tigne’ Point.

The investment made by the group in plant and human resources has certainly contributed to the development of the country’s infrastructure

MBR: What was your vision when you founded what is now considered the largest, single, construction firm in Malta?

MBR: How has the PG brand evolved over the years and do you consider the Group at the forefront of introducing cutting-edge technology to our industry in Malta?

CP: The vision is based on innovation and a commitment to continue investing in the latest equipment and human resources. As a result over the past three decades we have been entrusted with the construction of major infrastructural projects like Malta Freeport, Malta International Airport, Lufthansa Technik, the Delimara Power Station, the sea passenger terminals at Cirkewwa and Mgarr, major roads

CP: We have always strived to be at the forefront of introducing cutting edge technology within the construction sector. Today we operate unrivalled fully automated production facilities with the ability to produce all construction materials (concrete, asphalt, pre stressed and pre cast concrete elements, bricks, interlocking paving, expanded polystyrene and steel rebar/ reinforced mesh) in house.

Apart from production facilities the group has often been the first to introduce job specific plant to Malta. As an example in the early 1990’s we were the first to acquire a trenching machine which was employed to excavate a trench for the cables linking the Marsa power station to the Delimara power station and more recently we were the first to acquire a tunnel boring machine (TBM), at a cost of €2.8 million, employed to bore the 4.5 km interconnector tunnel between Maghtab and Pembroke. MBR: Who are PG, what’s the rationale, and how has your work been a catalyst helping improve social, public and commercial infrastructure? CP: The investment made by the group in plant and human resources has certainly contributed to the development of the country’s infrastructure. As a contractor we work closely with our clients in order to identify the best work methods to be adopted in order to efficiently complete the works in a timely manner. MBR: How does an ordinary man with an ordinary background get to command a sprawling business empire? CP: Although the activities of the group are diversified my effort remains focused on the core activity of the group and I make an effort to visit each construction site on a daily basis.

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MBR: Charles Polidano is known for setting the construction industry some stretching targets to deliver against. Now, with a mix of interest in various projects, do you hope there will be closer collaboration between client, consultants and contractors and do you foresee the year will be an acid test of that philosophy? CP: Competition within the construction industry remains fierce and this is what ensures that we continue to innovate and improve our work methods. Prior to nominating a contractor the client and his consultants are bound to do everything within their power to negotiate the best deal. However, once the contract is awarded we have always worked closely with the client and the project consultants to ensure that decisions are taken in the best interest of the project. MBR: ‘Business ventures are risky by nature, but PG’s story shows that persistence, intelligence, and guts can pay off’. Do you agree with this statement and can you give us your piece of mind about the building and construction industry’s state of affairs? CP: I agree at the beginning as the activities of the group expanded we stretched our resources and took a number of decisions based on gut feeling.

I make an effort to visit each construction site on a daily basis The state of affairs of the construction sector is dependent on infrastructural works which are mainly carried out by Government as well as private sector developments. Although activity in the construction sector is currently subdued this is expected to change during 2015 as a number of major projects are scheduled to commence including the development of the new power station, the construction of the Kappara flyover and a number of major residential developments funded by the private sector. Furthermore, Government has introduced a number of initiatives and projects which are expected to further stimulate private sector development during the next five years. MBR: As a leading contractor with vested interests, now also in the hotel industry, perhaps you may tell us about your vision for the development Montekristo Estates s an entertainment hub and also as an exotic animal centre? CP: MonteKristo was created from a vision to convert a large disused area of land, which included a number of quarries and agricultural land not being worked, into an Estate which will be accessible to the general public. Over the years we purchased the site plot by plot and today the estate

From Left: Gordon Polidano (General Manager), Dr. Jean Paul Sammut (Group Legal Advisor), Charles Polidano, Minister Conrad Mizzi and Salvator Insigne (Project Manager) celebrating the completion of the Interconnector Tunnel between Maghtab and Pembroke

covers an area of approximately 300,000 sqm. The vision of the estate contemplates a mix of leisure and agricultural activities which includes vineyards for our winery, multipurpose venues for conferences, weddings and receptions and the animal park. My aim is to complete the work we have started on the Chateau (a plus 1,000 sqm venue), to build a Chapel which can be used for weddings and eventually to build a small agriturismo hotel and possibly a retirement home for the elderly. MBR: Do you think you will be judged, in part, on the Group’s ability to actually improve its operation - not just their performance on an individual project, but also on improving animal welfare, protection and being committed to the management of waste, the prevention of pollution, and compliance with relevant environmental legislation? CP: We will be judged on our ability to deliver as a contractor and to continue to provide innovative civil engineering solutions. In terms of adopting procedures as a company we were the first construction company to be ISO 9001 accredited in 1997 and the only construction company which is ISO14001 accredited since 2013. MBR: How did your venture into animals and establishing a zoo come about? CP: My passion for animals started as a child as I was brought up in a rural environment in the village of Hal Safi. The idea of the animal park started with keeping farm animals and as the idea developed the idea of keeping more exotic animals evolved. Today the zoo is home to more than 3,000 animals, from 135 different breeds, providing an environment which respects the welfare of the animals and landscaped with endemic flora and fauna. The animal farm is a unique attraction for families providing entertainment for adults and children in a healthy outdoor environment attracting many visitors on weekly basi. Today, at the animal park employs 71 employees, including full time vets, an animal welfare director and assistants. Eventually, I would like to expand the activities to include an educational aspect for children.

MBR: Challenging the contracting sector, in particular, to deliver the efficiencies on cost and value that firms often claim they can if given a solid pipeline of work, but rarely have the chance to prove, how do you consider that sustainable development lies at the core of the Group’s values? CP: Despite the size of the market the group has always benefited from a steady pipeline of work. Inevitably we have to adapt and be prepared to carry out a wide range of jobs. If we take this year as an example the jobs we have been engaged on, range from complex civil engineering works like the reinstatement of Deep Water Quay for TM to delicate renovation works like the reconstruction of the House of Four Winds for BOV. MBR: Does brand building for the Group matter to you or is it more about being known in the areas in which you do business? CP: The Polidano Group brand and the core construction business go hand in hand. MBR: What is Charles Polidano’s focus on the next five years? CP: My focus remains on the core constriction activities of the group and during the next five years I plan to continue consolidating the noncore activities which includes the completion of works at the MonteKristo Estate. MBR All Rights Reserved | Copyright 2014

EDITOR’S NOTE Charles Polidano is the founding member of the Group. Charles was at the forefront of innovation in the construction industry in Malta – he was a protagonist in shaping competences and methodologies and people’s aptitude for the sector and inspired many young entrepreneurs in the industry. Over the years, he has spearheaded the diversification strategy of the Group gradually developing the Property and Hospitality and Leisure business segments into main economic pillars of the Group.

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Celebration

Malta Business Review

Martinstag – night of the Children and the epiCures by Werner E Jung

Hardly any other festive day is more ordained and intertwined with facts, myths, ancient customs and tradition. Even looking up Google and Wikipedia will only result in being more confused. In Germany and many other countries of central Europe on November 11 is “Martinstag” or St. Martins’ Day which is a special day for children, epicures and, of all things, also a carnival celebration

Background In southern Germany Martinstag is a big day. The kids go through the streets with lanterns and sing. Xillions of geese lose their lives because they are on the table as “Martinsgans”. At the same time Carnival starts in the die hard centres like Koeln, Duesseldorf, Mainz etc. It starts exactly at 11.11 11:11 hrs. Fact is that the day dates back to the burial of The Holy Martin of Tours on November 11. 397. He was a Roman legionary who later converted to Christianity. According to lore, he was a modest and altruistic man. The legend about his saving a beggar from freezing to death by cutting his red cloak in half with his sword and wrapping it around the beggar is known to children in all parts of Germany, Austria and Switzerland. Martin of Tours later became Bishop of Tours. Although originally a strictly catholic holiday, it has also spread to the protestant population. Martin Luther was baptised on “Martinstag”, aka his name, which is a still a little needle in the Vatican’s side. Coincidentally, on “Martinstag” or “Martini” in Austria, Xillions of geese get devoured, well roasted, together with red cabbage and dumplings. Why that is so depends on whom you ask. November 11 was also the day to pay taxes, of which most were paid to the landlord

in kind. At that time the geese and poultry had been fattened and were used as payment. When the story is told to children then some more romantic versions are used like he was hiding in a goose pen when the people of Tour were looking for him to be ordained as bishop, which as a modest man, who believed in poverty, he did not want. The cackling of the geese gave him away. The other story has it that a gaggle of geese interrupted one of Bishop Martin’s sermons. In both cases it appears that revenge is the ultimate kick out of this one. So much for benevolence and altruism! I, myself being an avowed glutton – I really do not care so much for any kind of reasoning – the seasoning of the goose and the gravy takes definite priority. Historically, until the late Middle Ages, much of Europe, including the UK, engaged in a period of fasting beginning on the day after St. Martin’s Day, November 11. This fast period lasted 40 days, and was therefore, called “Quadragesima Sancti Martini”, Latin for “the forty days of St. Martin.” Sundays were not counted as part of the fasting period. So it was the day of feast before the fasting time. At some point in history this period turned into Advent. Now it might seem a little strange that some areas in Germany, the traditional carnival centres like Cologne, Mainz, Rottenburg etc. November 11 at 11:11 am also marks the

beginning of the carnival season. One can try to find reasoning behind such etymological definitions like that the word comes from the Latin expression carne vale, which means “farewell to meat”, signifying that those were the last days when one could eat meat before the fasting. It is however no coincidence that these centres are also being called the “black” centres of Germany, in this case referring to political and religious synonyms…. Catholics always had the better parties and more fun – I know, I grew up in a Protestant / Catholic mixed family. As a child growing up in southern Germany, I never had any deeper philosophical thoughts about Martinstag. I looked forward to walking through town after dusk with my lantern and singing “Laterne, Laterne, Sonne, Mond und Sterne…..” then walking to peoples’ doorsteps and singing our songs and getting sweets. I cannot remember that we had goose at home that day. Goose was a Christmas feast in our family in those days. Nowadays “Martinstag” is not the day before fasting but instead it is the first day where typically goose roast is served for the “goose season” which lasts until Christmas. It is also the day where all the “Martins” pay for a round in the pub. This year unfortunately only one of the three regulars appeared – I wonder why? MBR www.maltabusinessreview.net

MALTA GREEN MANAGEMENT & ALTERNATIVE ENERGY B2B SUMMIT Royal Hall, The Palace Hotel 28-10-2014

Prosit to you and your staff for the very well organised Conference and for the respective presentations. -

Raymond F. CamilleRi, Chief accountant, Global Sun ltd- malta, a member of the Pillar Group 16

Thank you for the invitation to the conference. It was very informative and practical and the networking sessions were just right. -

PeteR GRima, Chief engineer, tHe WeStin dRaGonaRa ReSoRt

First of all I would like to congratulate you and your team for the well organised and highly interesting “Malta Green Management & Alternative Energy B2B Networking Forum”. -

inG GodWin CaRuana, Acting Deputy Director, Institute of Building and Construction Engineering, mCaSt Campus naxxar

EvEnt of thE Month

First of all many thanks for the event and all that goes with it. I am very glad to have sponsored the event and can confirm that I have a lot of interest and a lot to follow up in terms of business. Bottom line come next year and you do one specifically on Energy Efficiency will sponsor again. -

maRtin de Bono, Business Development Director, CD Power Solutions Co. ltd.

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I would like to say well done for the â&#x20AC;&#x2DC;Green Management and Alternative Energy B2B networking conference, I made quite a few interesting contacts and Iâ&#x20AC;&#x2122;m looking forward to the next event on the 28th November as I am involved in the setting up of two new start-ups companies. -

melanie Vella, monjin www.maltabusinessreview.net

One of the latest commissions of local architecture firm Archi+ Architects’ Studio was to design and manage bespoke interiors for AAT Research: an avant-garde company dedicated to the exploration and production of cutting-edge medical technologies that provide patients with the chance of leading a better life. Owing to the exponential growth of its endeavor, the company has outgrown its current quarters in Marsa and now plans to move to the Life Sciences Park in San Gwann. Currently in its shell form, the concrete structure of the new premises dominates the space alongside extended apertures and columned intervals. The design team at Archi+ was encouraged to exploit the relationship between openplan offices and fixed spaces for testing and research. At AAT, such spaces incorporate labs dedicated to gait analysis, MRI, virtual reality, high density EEG, FNIRS and more. This made it immediately clear that the main challenge of the project was to reconcile the clinical laboratory, the productive office and the comfortable living space. By considering the company’s cognitive 18

research in line with contemporary studies about office environment, the industrious home office was derived as a guiding design philosophy throughout the project.

The main challenge of the project was to reconcile the clinical laboratory, the productive office and the comfortable living space This resulted in a sharp reception area upon entrance within reach of the director’s office and flanked by the boardroom and filming lab on either side. A continuous application of a seamless blue surface isolates the first spread of functions from the neighbouring IT open plan. A steel mesh wraps around the latter to add privacy to the open plan whilst introducing a more industrial palette of materials that complements the exposed concrete ceilings and services. Suspended furniture, soft furnishings and light fittings

are amongst the elements used to soften the mood projected by their industrial counterparts. The AAT Research corporate identity was abstracted into a geometric pattern and applied to surfaces and screens that take the users of the space from the corporate blue of the entrance, to a warm colour progression along the more in-house areas. From red to orange to yellow, vibrant colours not usually associated with the workspace, dissolve needless formality. In the industrious home office, spaces for leisure do not compete with spaces for productivity, but rather meld with them. The mix of private versus open offices prevails throughout the layout, enhanced by interior gardens, light wells and space intermissions between offices. This will permit the company to pursue its research and create innovative medical devices such as its award-winning Mente™, a groundbreaking FDA-registered EEG device that uses neuro-feedback technology to help relax the minds of autistic children, enabling them to focus better and engage positively with their environment.

ReseaRch & Development

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AAT Research also looks to expand its neuromarketing wing, which conducts advanced sensory testing using physiological tools to examine test subjectsâ&#x20AC;&#x2122; true response to a vast range of stimuli. Archi+ ensured that the layout of these offices would accommodate for any future growth of the company, where tasks vary from deskwork to videoconference meetings. On this note, the AAT Research project also encourages a way forward in the local context of the office environment, where design is not regarded as a superfluous exercise but as a necessity to better the day-to-day doings of employees. MBR Archi+ Architectsâ&#x20AC;&#x2122; Studio is a young firm that was set up in 2009 by three professionals who shared a common need to work in a system which breaks the modus operandi of the average local architectural practice. Today, Archi+ consists of twelve young and ambitious individuals who collectively embody substantial experience in the industry, pursuing its practice in new-builds, conservation, interior architecture and project management. www.archiplus-studio.com info@archiplus-studio.com www.maltabusinessreview.net

GeneratinG

Positive

ChanGe by Martin Vella

Interviewing Architect Charles Buhagiar, Chairman of the Building Industry Consultative Council (BICC), I cannot help but observe his focus on increasing the BICC’s awareness of the Maltese property and development market and exploring opportunities for improvement within the BICC structures to outline its needs and look at ways in which the stakeholders come together, especially in the construction industry, to ensure better regulation of construction trades to support better workmanship and ultimately better quality in the buildings being constructed

MBR: Can you begin by telling us about the BICC? CB: The BICC was a set up in 1997, and the purpose was to provide a forum to meet and discuss issues with stakeholders on a regular basis. At the time it was envisaged that any decision that was made, together with proposals and suggestions had to be also made to the government of the day to consider them and perhaps act upon those propositions. The BICC has the support of all the major stockholders and this mean that all operators, the Federation of Building Contractors, the Malta Association of Developers, Real Estates Agency Federation, the Chamber of Commerce who are also representing the importers and distributors, and to some extent the GRTU who also represent a section of SME’s. Those are the private operators. As public operators we have the Department of Works who act as, government contractor, the Lands Department, which is the largest owner of property in Malta and the Housing Authority. The Financial Institutions also checked with this structure, together with the Central Bank and insurance operators, including the Malta Insurance Association. Then 20

we have the professional bodies, such as the KTP- Kamra tal-Periti, The Chamber of Architects, engineers, and the planners. In this organisation we also have educational institutions, such as MCAST, the University, the ETC also acting as an educational facility and then we have the workers representatives- the GWU, UHM and Forum and last but not least we have the regulators of the industry, MEPA, BRO, OSHA MRA and other operators, for a total of 24 stakeholders who are the main members of BICC. NGO’s fall outside jurisdiction because the law stipulates that member of BICC are specific. Those corporations that want to become members and can become members solely on an observer basis. Malta Business Network in London are also with us, in particular the property and construction division. Then we have ISBE, an association focused on sustainability. These members form the Advisory Board of BICC and basically those are the members of the BICC. Since it is a very large institution, all stakeholders prefer to work in a working group system, with members choosing their own themes and working group they want to participate in. Obviously, there are those who participate in more than one work group.

MBR: When you refer to the working groups does this imply that they consign their work and consult with the Advisory Board? CB: The working group then tackles their issues and submits the proposals to the Advisory Board, who informs all the stakeholders involved, even those who may not be present in the working group. Then from there the proposals flow to the government of the day or the ministry to be. From there the proposals are presented to the Government of the day or the Minister responsible. MBR: What is the difference between the Advisory and the Executive Board? CB: The Advisory Board discuss the issues and make recomandations to Government. The Executive Board of the BICC is made up of the co-ordinators of the different working groups , a representative of the Advisory Board a reputable architect and the executive secretary of the BICC. The Executive board takes care of the day-to-day management, that is, to supervise daily routine functions. The Advisory Board does not work on the issues. There are five working groups and the themes upon which they work consist of a working group that toils on the free market, we have a working group that is focused on regeneration

Building & ConstruCtion

of property and restoration, then we have a working group on education and training, another working group engaged on regulations in building, redirected to address EU Directives, and we have a working group on research and innovation. There are also working groups who work co-jointly on the same issues affecting both. BICC operates within this framework and although it may sound complex, it is clustered. Presently we have particular working issues which we are coordinating together with other Ministries, such as the property market campaign, so that we may come up with a Property Price Index in Malta- something which we never had before. This is a big issue because other institutions want it for themselves. For example, the Minister of Finance is working with us on it because when you sell property an architect from the department of Inland Revenue values the property and you pay more tax if he finds out that it is under-valued. With the Property Price Index there will be no need to send architects regularly to sellers. Even the Housing Authority wanted the PPI, even the Real Estate Agents, the Central Bank, who are required by the EU laws to have a PPI, NSOsince EU regulations decree that every country should have something in common on this. We had situations whereby the Central Bank, the NSO, the Minister for Justice, Housing Authority all working separately on this PPI. We have managed to bring them together and we are trying to work on one common PPI. One such exercise is being carried by the Central Bank and the other by the Minister of Finance. Ultimately, we are hoping that everyone joins in and we come up with one national PPI. That is what the property market is trying to achieve. We are striving to redress the oversupply of property, the overdevelopment of the island and the need for Maltese developers to understand the market they are building for and identify ways by which they can differentiate their offering in the marketplace. Then we have property rehabilitation and restoration. Again we know from the results of the surveys carried by NSO that there is an amount of property on the market which from analyses is vacant we need to identify, what are the reasons and how to bring this back on the market. A large amount of property is id at a standstill- you have a high amount of money and investment capital dormant. The biggest working group with most workload is the education and training since this sector is working on the introduction of the skill cards. Skill cards, which is an idea wherein anyone who works in the industry has to show competency in the work that he does. If you had to get someone to paint your house, what do you do? You ask someone to recommend a painter. We have lots of foreigners that carry out works in Malta and are not skilled, so they do not do a good job and legal issues arise. Therefore, with the introduction of the skill card, you will

immediately know whether the person/s you are employing have the necessary skills for that particular job in the construction industry. We already have some certified skills, including health and safety, masons that are licensed, electricians who are meant to have a licence, and so the idea is to have this skill card, so that we will be able to reduce abuses and also minimize the risk of having unqualified persons doing the wrong job. Together with this initiative, we are also working on a safety card, another big issue we are grappling with, since from NSO statistics we can easily surmise that most work accidents occur on construction sites.

The misfortune was that after 1998, following a change in government, the new administration did not recognise what the right scope of it was and so this initiative was not developed Recently we have had another mortal accident on a building site and the reason is that on many instances there is a lack of information about the risk factors on construction sites and a lack of health and safety measures. Therefore, we are doing something which is being done everywhere- any person that goes into a construction site, be it an architect, or a labourer, they need to have a safety card to access. Basically, this means one is aware about the risks that he faces on the site, is trained to meet these risks, since there needs to be a period of induction and training for the work being carried on the site. We are working together with the OHSA to find a system that allows workers to qualify for this safety card and we hope that with this system in place we can limit and reduce the accidents on the workplace. Our country has few building regulations that will apply and be beneficial to our country. And here you bring me to a very important point; frequently, to construction site workers, the perception is that the industry creates a lot of dust, worry and inconvenience to the public. The primary task of the BICC as I see it is that we need to change this perception.

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First and foremost you have to bear in mind that the construction industry contributes 9.3% of the value added, and 11.1 gross value added, since it has a lot of local value added as an industry. Therefore, it is a main contributor of the economy. It accounts for 11,000 direct jobs, and so it is a very important industry in Malta. While other industries are regularised and co-ordinated in one way or another, such as the MTA in tourism sector, iGaming, MFSA, and also Malta Enterprise, in the construction industry there is no one to represent you holistically. As a matter of fact, it is fragmented and our idea is to bring it together and manage it better. However, as I said, there are many risks in the industry and our work within BICC is to listen and find out ways how to make this industry stand on its own feet and since it perceive paying low wages, youths tend to shy away from going into the construction jobs and resources are depleted. Other than architects, the only people who take construction jobs are those who by necessity have to work in it because they do not have any other choice. MBR: How would you define your role? CB: I was the architect behind the inception of BICC and set it up when I was appointed as Minister for Public Works. The misfortune was that after 1998, following a change in government, the new administration did not recognise what the right scope of it was and so this initiative was not developed. When I set up the BICC in 1997, we had a budget of approximately 230,000 Euros. When I returned back in 2013 I found a budget of 80,000 Euros. Today, we have increased this to 210,000 Euros, as it was not functioning without the adequate budget, there was no real understanding of the reasons why the BICC was crucial and so my role is to explain to my colleagues on the executive about the significance of this organisation and its role within the industry. Today, we don’t have a Minister responsible for construction and we never had one. So now we have the opportunity to change things, act as a platform for all the stakeholders and ensure that human lives are not put at risk, but have a skilled workforce in the construction business. We try always to “do the right thing.” This is embedded in our culture within BICC. MBR All Rights Reserved | Copyright 2014

EDITOR’S NOTE Perit Charles Buhagiar studied at the University of Malta where he graduated in 1979, but he continued to further his studies at Harry Stranger Institute of Materials. In 1983 he set up the Med Design and throught these years it was responsible for such projects like the Embassy Complex and the Centru Nazzjonali Laburista. Between 1996 and 1998 served as a minister for public works and construction in these years Perit Buhagiar was responsible for upgrading tourist areas and major roads. Perit Charles Buhagiar was elected first in parliament in 1987 and continued to be elected until 2013. Perit Buhagiar is a personal advisor for the Prime Minister on capital projects and Executive Chairman of the Building Industry Consultative Council.

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Great SateSmen

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Sir Edward HEatH & CHina - Sowing tHE SEEdS for diplomatiC rElationS bEtwEEn tHE UK and CHina by Anatole Baldacchino

Vice Premier Deng Xiaoping meets former Prime Minister Edward Heath in Beijing 1975

Globally, early 70’s were very difficult years, however this did not deter Heath to look for innovative ways when dealing with the outside world. In 1974 he visited first time China at his capacity as a Prime Minister and soon fell in love with China . He managed to build up a very strong relationship with the Chinese leaders Mao and Deng at these turbulent years of the cold war which was looming in every corner around the world. Heath could talk for many hours with the Chinese leaders and a meeting which was scheduled to finish in two hours would continue for several hours. Subjects discussed included economic cooperation and the increase in bi-lateral ties for cultural activities between the two countries. Sir Edward was in fact responsable to establish the first full diplomatic relations between China and the UK in 1974. Heath visited China 26 times in 27 years and in 1974. His arrival to China was being watched on television by Chairman Mao, who asked Deng as to why Sir Edward Heath was not given a head of state welcome when he arrived to China in 1974. Deng replied that Sir Edward Heath had just lost the UK election to Harold Wilson and so he was no longer a head of State. However, Chairman Mao replied that when Heath departs China, he should be treated as a head of state . This shows the great respect being enjoyed by Heath from the Chinese leaders and how much he was valued and respected in China. Many

question why Sir Edward became so much attached to China and how this seed of love actually evolved.

His arrival to China was being watched on television by Chairman Mao, who asked Deng as to why Sir Edward Heath was not given a head of state welcome when he arrived to China in 1974 Some political analysts state that Douglas Hurd was the person responsible who initiated this love of Heath for China. Hurd was one of the private secretaries of Heath who was employed previously as a Charges des affairs for the UK Embassy in Beijing . Besides being a Prime Minister Heath had another side which made him more popular with the Chinese leaders. He was in fact a fine yachtsman and also an acclaimed musician. He also managed to conduct the China Philharmonic Orchestra at the People’s Great Hall of China, where he captivated millions of Chinese viewers on TV during his show. He managed also to raise millions of dollars during this musical event, all money which went for charities and to build the National Center for the blind in China.

Sir Edward Heath spent the last years of his life at the Arundel’s, a beautiful Georgian House next to Salisbury Cathedral at Wiltshire and his legacy can still be enjoyed today at his home. Most of his personal gifts he collected and bought from China can still be seen today at his home (The Arundel’s) which was turned as a museum for visitors. MBR Edward Heath’s Foreign Policy Upon entering office in June 1970, Heath immediately set about trying to reverse Wilson’s policy of ending Britain’s military presence East of Suez. Heath took the United Kingdom into the European Community in October 1972 (21 Eliz. II c.68). He publicly supported the massive US bombing of Hanoi and Haiphong in April 1972. In October 1973, he placed a British arms embargo on all combatants in the Arab-Israeli Yom Kippur war, which mostly affected the Israelis by preventing them obtaining spares for their Centurion tanks. Heath refused to allow US intelligence gathering from British bases in Cyprus, resulting in a temporary halt in the US signals intelligence tap. He also refused permission for the US to use any British bases for resupply. He favoured links with the China, visiting Mao Zedong in Beijing in 1974 and 1975 and remaining an honoured guest in China on frequent visits thereafter and forming a close relationship with Mao’s successor Deng Xiaoping. Heath also maintained a good relationship with US President Richard Nixon and figures in the Iraqi Ba’ath Party.

EDITOR’S NOTE Anatole Baldacchino started his professional career with KPMG. As a Certified Public Accountant he moved into the Private Industry and consequently set up his own Consultancy base in Malta. Today he advises Asian companies on matters relating to Foreign Direct Investments and Venture Capital Investments to Major European countries and North Africa.

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Professional Indemnity

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Contact us on 21246262, visit www.middlesea.com or contact any of our authorised intermediaries. Find us on Middlesea Insurance p.l.c. (C-5553) is authorised by the Malta Financial Services Authority to carry on both Long Term and General Business under the Insurance Business Act, 1998

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PROFESSIONAL INDEMNITY INSURANCE by Judith Galea, ACII

As a professional, you owe a duty of care to your clients who might reasonably rely upon the service or advice you have provided. Therefore, you can be held legally liable to provide compensation if a third party suffers a loss as a result of any professional negligence

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Here’s a look at how Professional Indemnity Insurance may protect you and your livelihood. A Professional Indemnity Insurance policy protects insured professionals against claims made against them by third parties for injury, loss or damage as a result of any negligent act, error or omission whilst carrying out their professional services. Apart from the compensation payable, the policy also covers claimants’ costs and legal expenses incurred in the investigation, defense and/or settlement of a claim. Middlesea Insurance p.l.c offers tailor-made Professional Indemnity Insurance for a number of professionals who provide a service such as: medical practitioners, accountants and auditors, lawyers and notaries, architects and civil engineers and electrical and mechanical engineers. The cover includes: Any negligent act, negligent error or negligent omission; with the option to also include Libel and slander (including malicious falsehood); Loss or damage to documents; Dishonesty of employees; Prior acts; and extended reporting. As a professional it’s important to assess your risk and consider coverage, because as an independent, you don’t have the financial resources of a big company to back you up in

Even if the lawsuit is completely baseless, a professional could suffer large financial losses to defend against claims

the event of a client lawsuit. Remember that whilst you may be satisfied with your work, if you do not meet client expectations, your business could face sizeable claims for compensation and legal defense costs. Even if the lawsuit is completely baseless, a professional could suffer large financial losses to defend against claims. Therefore, professional indemnity insurance that defends you from disastrous financial loss, in this light is more of a necessity. When choosing an insurer, it is important to choose one that is financially secure and able to meet claims in the long term. Middlesea Insurance is a leading provider of insurance in Malta, employing more than 100 insurance professionals. Middlesea Group generated profits before tax of €17.3million in 2013. Middlesea is also a member of global insurance group MAPFRE, which employs 36,600 people around the world and generated total revenue in excess of 25.88 billion euros and posted net income of more than 790 million euros in 2013. Middlesea Insurance p.l.c. (C-5553) is authorised by the Malta Financial Services Authority to carry on both Long Term and General Business under the Insurance Business Act, 1998. COM 19112014 868. MBR www.maltabusinessreview.net

A SmAll BuSineSS in A SmAll Country How to compete in a global market wHen size is your constraint by Steve Tendon

A small business in a small country like Malta faces formidable challenges; even more so if it is competing in the global market. The constraint of smallness is restrictive not only for the lack of space, but also for the scarcity of skills, talent, and know how; which becomes even more critical considering that contemporary growth businesses are inevitably knowledgebased. While it is possible to compete through product and service innovations, an often ignored opportunity is process innovation. Process innovation in knowledge work is truly challenging. When all assets and goods are intangible because they are ideas in peopleâ&#x20AC;&#x2122;s brains it becomes hard to even recognize that there is a governing process at all, let alone innovate it. Those companies that can increase the performance of their processes will be those who are positioned for success. Especially on a small island like Malta SmaLL buT wiTh a STing After World War II, Japan was a ruined country. It had to rebuild everything, from scratch. In the automotive industry, Taiichi Ohno, the leader of Toyota, was disconcerted to discover that it took nine Japanese workers to deliver the work of a single American worker. He understood that if he wanted to compete, he would have to deliver the output of 100 workers with only 10. He had to improve productivity by one order of magnitude just to match the output of the American automotive industry. History tells us that Ohno succeeded in doing that, and then he managed to surpass the American automotive industry. 26

Ohon was truly a brilliant innovator in the automotive manufacturing process. Maltaâ&#x20AC;&#x2122;s own history tells the extraordinary example of the Great Siege. It was one of the bloodiest episodes of history. Between May and September 1565, the island of Malta was the stage of one of the most amazing feats of warfare: the 700 Knights of Malta with a couple of thousands soldiers, fought off the attacks of an invading Turkish fleet over forty thousand men strong. One reason for this success was the leader of the Knights of Malta: Grand Master Jean Parisot de la Valette who exercised great leadership. Another, more important reason was the ingenuity

of his people, who invented new, more effective ways to defend the island. They were innovators in the process of warfare. In recent times, during the first years of the Personal Computer revolution (1983 1995), an equally cutthroat (but luckily not as bloody) battle was engaged. It was the battle for becoming a software superpower. At the time a small company, Borland International, was competing with the likes of Microsoft and Lotus Corporation for the top spot. Microsoft was five times bigger than Borland. Borlandâ&#x20AC;&#x2122;s CEO, Philippe Kahn, understood that if he wanted to compete, he had no choice than becoming better, leaner and faster than Microsoft. Under his leadership,

SMES - KnowlEdgE worK

the company attained remarkable feats. One secret ingredient was the sheer performance of Borland’s software engineering teams: one Borland programmer was as productive as 52 Microsoft programmers. Borland could churn out more products, faster and with better quality than Microsoft. They were innovators in the process of making software. Apple computer is nowadays acclaimed as an exceptionally innovative company, having brought to market a series of products with groundbreaking features and stylish designs. Steve Jobs, Apple’s founder, was undoubtedly a key force. It is remarkable that Steve Jobs actually left the company (1985) to found NeXT Computers, which then Apple reacquired (1996) allowing Steve Jobs to return to the company. This is when all breakthrough innovations started to happen at Apple. However, what is often forgotten, is that when Steve Jobs returned to the company, his main concern was about efficiency and operations, and not product innovation. He cut expenses from $8.1 billion in 1997 to $5.7 billion in 1999. Manufacturing was outsourced, inventories trimmed, sales shifted by 25% to Apple’s online store, and the number of distributors were cut in half. The increased capacity was what allowed Steve Jobs to actually have the horsepower to pursue product innovations. It was the innovations in the process that gave Steve Jobs the funds and resources to bring to market exceptionally innovative products. This is what allowed Apple, which was a nonexistent player on the global telephony market, to redefine the rules of the games and completely defeat giants like Nokia, Siemens, Ericsson, Sony and others. Steve Jobs was first an innovator in how to run a technology company, and secondly a product and design innovator. The Leverage of Superior performance What do these examples have in common. Naturally, they are all instances of exceptional leaders. Ohno, la Valette, Kahn and Jobs were all exceptional people. These leaders are often cited and admired for their legacies. Yet, what is often overlooked, is that these are all examples of organizations that were entirely outperforming their competitors, primarily by employing different, innovative and superior processes. In particular, the superior performance was made possible by the organization’s ability to improve its core processes, whether it was building cars, fighting off invaders, coding software or running a technology company. They are all examples of companies that arrived at a state of hyperperformance, whereby they could effectively compete with competitors many times their own size.

Superior performance is a strategy that can be actively pursued. It is all about the rate at which you are able to deliver whatever it is your clients value most. It is about the speed of value creation. With that speed comes an invaluable gift: extra capacity. The deeper insight is that the excess capacity will allow you to improve your performance even more, and even to pursue product and service innovation. Most companies will myopically take advantage of any excess capacity they might have by cutting it off in order to save costs. Reducing cost is limited. If instead the company will learn to channel the excess capacity towards creating even more competitive advantages, the company will be starting a on a journey of continuous improvement. An excessive focus on cost reduction will inevitably jeopardize the company’s ability to improve, and eventually even the company’s ability to deliver what is its business as usual.

Yet, what is often overlooked, is that these are all examples of organizations that were entirely outperforming their competitors, primarily by employing different, innovative and superior processes

Superior performance will enable business agility. Agility is about being able to react quickly, take advantage of unexpected opportunities, and dodge emergent competitive threats; it is all about changing direction at high speed. Speed is the key. Are you agile if you are slow? No! Are you successful if you deliver value slower than your competitors? No! If you are not productive enough, you simply will not have the speed to exercise agility. Anybody can change direction at low speed; but being able to change direction at high speed is much harder. Therefore, those organizations that learn how to change direction at high speed gain a huge advantage over their competitors. When you gain agility and excess capacity, you will also see a boost in the exchange of ideas, information, coordination, and inspiration. All of which leads to an increase of flow of information inside the company, and that is what will eventually enable product and service innovation. performance in KnowLedge worK Performance in the manufacturing world is easy to see and manage. It is all about productivity about how many widgets

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a factory can produce per unit of time. In the service economy, contemporary businesses are becoming ever more knowledge intensive. Thus the key challenge is how to measure, manage and improve performance of knowledge work. Knowledge work is intangible. The way to deal with performance in knowledgeintensive organizations needs to become more sophisticated, taking into account different dimensions that determine such performance. Knowledge based organizations that have shown superior performance give strong attention to the concept of flow. Flow is considered from many viewpoints. Operational flow measures how value is being created within the organization’s value chain. Information flow measures how information circulates within the organization. It determines the company’s culture, values, principles; and feeds its collective intelligence and ability to learn and adapt. Financial flow is about the economic impact of knowledge creation, measured as the rate at which the organization turns its ideas into profit. Psychological flow is about how individuals and teams can reach their own maximum levels of performance, with a profound and purposeful focus of thought and action towards well identified and clear goals. Focusing on flow is the secret sauce for arriving at superior performance in knowledge work. Focusing on flow is easy to pursue, but the ways might not be self evident. That is why it remains one of the best kept secrets of the industry, and a key lever available even to small companies in a small country! MBR EDITOR’S NOTE Steve Tendon, creator of the TameFlow management approach, is a senior, multilingual, executive management consultant, experienced at leading and directing multi-national and distributed knowledge-work organizations. He is an expert in organisational performance transformation programs. A sought-after adviser, coach, mentor and consultant, as well as author and speaker, he specializes in organizational productivity, organizational design, process excellence and process innovation, helping businesses to create high-performance organisations and teams. Steve is also author of “HyperProductive Knowledge Work Performance, The TameFlow Approach and Its Application to Scrum and Kanban”

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opinion

Why We are rebalancing noW by Leon LaBrecque

Unless you’ve been on a beach without cell phone service (in which case, I envy you), the market is exhibiting a vast amount of volatility and uncertainty. In today’s world, we can find explanations for everything. Amongst those is how the drop in oil prices and strong dollar are hurting the market, or that Europe is slowing (I hate to tell Europe, but they have been slow). We see the glass half-full, and not half-empty. Here’s why: Oil Oil prices have “tanked” (down over 20%), which is bad for oil companies and good for everyone else (OK, it’s bad for ISIS, Iran, Iraq and most of the Middle East, but I’m not overly concerned with their financial well-being). Low crude is a stimulant for the consumer and for profits. My family spends about $10,000 a year on gas; so a 20% drop in oil prices is like $2,000 in my pocket, taxfree. Low oil prices are good for consumers and corporate profits. EurOpE Most of the volatility centers around the inaction of Mario Draghi and the European Central Bank (ECB). The ECB has been too tame in monetary policy, despite many verbal pledges to do whatever it takes. This may be sending Germany into a recession, and Germany is the strongest EU member. Greece suffered under the assumption that they may default on their debt. Not a big surprise since Greece was the first sovereign nation to ever default on their debt in 377 BC and has five debt defaults modern times. Spain has defaulted 13 times. 28

Talk is chEap The ECB has been talking but not doing. This leaves two options: they can keep doing nothing (which lets the economic march continue), or they can do something (like Quantitative Easing). A QE type move would probably be good for stocks in Europe. I’d predict the pressure is on the ECB (and the Chinese Central Bank) to do something, and rather quick. us EcOnOmy The budget is being cut, unemployment is down, and sentiment is up. Profits are not terrible, and consumer spending is up along with industrial production. sTrOng dOllar The dollar is strong against other currencies. Why? Because we are improving our account deficit, booming energy production (hence low crude prices), and reduced unemployment. Because we are growing, we look good, and it shows. It also makes imports cheaper, and hurts foreign companies who sell in dollars, but build in other currencies (like Airbus or Swatch).

FacTOid On ElEcTiOns Interesting fact on mid-terms: since 1950, there have been 6 calendar years when a Democrat was in the White House and the Republicans controlled the House and the Senate. The average gain on the S&P 500 during those 6sixyears was 21.3%. What’s our prognosis? Low oil is good. Strong dollar is good. Fundamentals for the US look good. We believe in capitalism and free enterprise. If you think owning businesses (stocks) is way to increase wealth, you are right. So volatility like this requires us to look at the big picture and see if equities are actually vastly worse than they were a month ago, or whether they are merely on sale. It’s like a big rain storm. Eventually the sun comes back out. We are choosing to rebalance and take advantage of the opportunity. MBR EDITOR’S NOTE

sO why ThE vOlaTiliTy? I think a bunch of this is the market looking for an excuse. A few days ago, I joked that the S&P 500 was about to break its 200 day moving average and that it would tank when the program trades kicked in. It did. EbOla Scary stuff. It’s a horrible disease. Right now one person has died and two have it in the United States. So that’s 3 out of 330 million. In 2010, 53,826 people died of influenza and pneumonia, 576,691 died of cancer and 1 in 700,000 people were struck by lightning. I offer this as perspective.

Leon LaBrecque is a true visionary who brings the experience of many different fields to the table, he has provided integrated, comprehensive financial advisory services to thousands of people for over two decades. He regularly appears on television and radio programs nationwide, as well as in national publications, presenting on various economic and financial topics.

Foreign exchange

Malta Business Review

HSBC launCHeS Malta’S firSt real-tiMe online foreign exCHange ServiCe

Commercial customers of HSBC Bank Malta have more reasons than ever to conduct their electronic banking on HSBCnet [www.hsbcnet.com] thanks to the addition of a new foreign exchange service, Get Rate. In a first for banking in Malta, thousands of the Bank’s customers are now enjoying an enhanced user experience when making foreign exchange payments, as Get Rate provides real-time exchange rates straight from the heart of the Bank’s global trading floors in London, Dubai, New York and Hong Kong

ith the fully-optimised Get Rate service, customers no longer need to call at the Bank for exchange rates to conclude the transaction before the day’s close. Get Rate presents live rates from 02.00hrs Monday to 23.00hrs Friday, in line with global markets’ opening hours. HSBC Head of Payments & Cash Management Gordon Scicluna said: “Get Rate is an important new tool for our business customers and will change the way customers carry out foreign exchange transactions as they are now empowered to receive real-time rates, for longer hours, while authorising their payments.” Michel Cordina, Head of Commercial Banking added that “A key objective of HSBC is to stimulate greater awareness of international trade opportunities with a view to increase the volume of international trade carried out by Maltese businesses. This increased functionality is another step to support our customers trading internationally”.

The Bank also launched HSBCnet Mobile for commercial customers, which is now available for download from the Apple App store for the iPhone and Google Play StoreTM for Android smartphones. HSBCnet Mobile gives business customers the ability to view account balances as well as prepare and authorise transactions while on-the-move. The app also supports the booking of foreign exchange rates using Get Rate. Meanwhile HSBC has also improved the way it processes foreign currency payments. Payments in the major currencies, Euro, Sterling, as well as US and Canadian Dollars will now be processed on the same day with no extra cost. All other currencies will be processed on the next working day. “This is another first for HSBC in Malta and coupled with Get Rate makes us the payment provider of choice on the island,” concluded Mr Scicluna. MBR www.maltabusinessreview.net

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ProPerty Valuation

Government reducinG bureaucracy on property valuations The Minister for Finance Prof. Edward Scicluna announced a new property valuation system on Tuesday 11 November 2014 which will reduce bureaucracy on property valuations Minister Scicluna explained how the present architectâ&#x20AC;&#x2122;s valuation system is bureaucratic and a source of harassment for ordinary citizens who happen to be buying, selling, or inheriting properties. It is for this reason that in the Electoral Manifesto there was the commitment to review this system and to introduce safeguards against the current abuse. Minister Scicluna noted that excessive bureaucracy and red tape is one of the factors that are adversely affecting Maltaâ&#x20AC;&#x2122;s competitiveness, adding that the Government is determined to address it across all sectors. He explains that it is for this reason that the Government is introducing an option, for those transferring property, of appointing an independent architect to draw up a valuation report of the property to be transferred. This is to facilitate the process and reduce unnecessary red tape. He noted that while in some instances flagrant abuse was uncovered, such as gross undervaluation of properties, in the vast majority of instances it was innocent individuals who were caught in this bureaucratic net. Prof. Scicluna explained that by means of the new system, individuals will have the option to appoint a warranted architect to carry out a private

valuation, and submit a report which outlines value and characteristics of the property. In this way, the Minister said, the tax authorities can properly assess the declared value of the property. This property valuation system will be applicable to every transfer of any immovable or any real right over an immovable property, whether inter vivos or causa mortis. Prof. Scicluna also explained that the new system will be backed up by an internal mechanism based on a number of property characteristics, which will allow tax authorities to review valuations submitted, and approve them once they fall within acceptable benchmarks. The Minister also explained that the new system is a voluntary one that will work alongside the existing system. Minister Scicluna underlined that this is another measure aimed at reducing costs and administrative burdens, while at the same time shows the Governmentâ&#x20AC;&#x2122;s determination to tackle bureaucracy in a lasting and tangible manner. MBR

igaming SPECiaL FEaTURE

Infinite Possibilities

Building the extraordinary by Martin Vella

MBR: Angelo, as Bit8’s CEO, you are responsible for leading the company’s product development, business and technology strategy. With over sixteen years of experience in various executive positions in technology, entertainment and gaming companies, and having published over 23 publications in Europe and the US since 2001, what are do you bring to Bit8 which you haven’t so far? AD: In my role as Bit8’s CEO, I focus on the company’s strategy and maintaining the overall product development in line with our long-term vision. Naturally, such a role requires regular decision making that maintains flexibility and quick response when needed. The business and technical experience built over the years, together with public speaking engagements, help hone the functioning of the executive management team, which I head. Bit8 is at a phase where it will soon be raising a second round of external investment, which requires me to use more of my past experience related to investments and dealing with multi-national entities and venture capital funds. Additionally, the experience gained during the listing processes on different stock exchanges with two listed companies in the past, also helps guide the overall financial strategy at Bit8, which has always aimed to become a global player – and hence the need to think and act like a global player, ensuring that all the company’s financial and commercial goals are met. As Bit8 grows, the team will need to grow even more aggressively – the experience of dealing with large teams in the past is invaluable as we have prepared a structure that can scale up without introducing excessive management overhead and retaining the nimbleness of a smaller company. So in a nutshell – as the company matures – my past experience within companies that have exited or became publicly listed, becomes ever more relevant. MBR: How does your experience in technology and consumer brands relate to your position as CEO of Bit8? AD: Bit8 is an innovative company with an ambitious vision – of creating the world’s best online gaming platform – that needs to ensure that both the underlying technology and the commercial strategy are best in class to match these ambitions with real world performance and delivery. Our disruptive innovations in using Artificial Intelligence and technology adapted from the High Frequency Trading and Financial Services industry are unprecedented and ground-breaking for the gaming industry.

Malta Business Review speaks with Angelo Dalli, CEO, Bit8, who is looking forward to see Bit8’s operations team grow and expand highly significantly in size, as they enter new markets and product verticals. Angelo is keen to close off their second round of external investment successfully, also hopes that in 2015 the industry prospers in a positive and responsible manner – while enjoying a few well-deserved breaks to keep a good work-life balance with that fun element that is necessary to achieve constant high performance 32

Many of these innovative ideas come from applying ideas and concepts in other industries, together with a deep understanding of what is possible from a development point of view to come up with an ambitious strategy that constantly pushes the envelope of what is possible. The customer’s point of view is ever important – in Bit8’s case, we need to consider the immediate needs of our own customers – i.e. the online gaming operators, together with the needs of our customer’s customers – i.e. the players, who need to have an awesome experience that is powered by the innovations in our platform. In this

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In their product roadmap discussions, Bit8 always keeps the needs of the operators and also the consumers within close consideration, as technology development for development’s sake itself is not the way that successful companies work. Note that this is different from R&D, as Bit8 does perform directed R&D, but in a manner that is better posed to lead to commercial benefits, rather than blue sky R&D for research’s sake. To this end, Bit8 has funded a number of research initiatives, especially in the field of Software Quality Assurance, in conjunction with the University of Malta’s RIDT programme.

manner, operators who use Bit8 can succeed better as a consumer brand, and hence contribute to Bit8’s own success as an exclusively business to business brand. MBR: What do you think have been Bit8’s biggest accomplishments in its first four and a half years of existence? AD: Bit8 has been established since 2010 and has attracted an ever growing number of operators using its platform and modules, ranging from new operators to large established operators, including five of the top 50 casinos in the world as clients including one of the top 10 global casinos. Bit8 has also recently concluded technology licensing deals with some of the largest casino suppliers in the world. Additionally, we have built up a stellar team of around 40 developers, analysts and industry experts, which positions ourselves well to offer the best-in-class platform solution in the industry. Bit8 has over 25 integrations with third parties, with an estimated 20 more integrations currently slated for 2014, making us one of the most connected platforms in the industry. Bit8 has also successfully closed its first external round of investment in 2013, getting a venture capital investment injection that provided the resources needed for our marketing and sales expansion. Bit8 has also recently concluded technology licensing deals with some of the largest casino suppliers in the world. In the past year Bit8 have also been nominated for the ‘Innovator of the Year’ award by the International Gaming Awards, and as ‘Platform of the Year’, and ‘Software Rising Star’ in the EGR B2B Awards. MBR: What does Bit8 offer as gaming platform company? AD: Bit8 has developed one of the most advanced gaming platforms in the industry, with a disruptive set of innovations that give our operators an inbuilt, almost unfair, competitive advantage. The inspiration behind Bit 8 stemmed from the realisation that when it comes to platforms, the gaming industry was in dire need of an innovative infusion. The superiority of our solutions has been confirmed by our larger operators in various

igaming special feature

gap analysis exercises that have compared the Bit8 platform with other existing competing platforms. The Bit8 platform consistently wins the top spot in terms of functionality, modularity, scaleability and flexibility. Operators that do not use the Bit8 platform need to employ a significantly large amount of people to match the same offering and service that operators using the Bit8 platform can achieve automatically using our AI technology. The bonusing and promotions, recommendations and data mining modules enable our operators to increase revenue significantly with intelligent targeting of marketing campaigns and by providing an awesome experience to their players. Bit8 has also positioned itself as one of the only pure play platform providers in the industry. We enable operators to host the platform on their own infrastructure, do not participate in any deal that gives rise to conflict of interest and empower them by reducing their independence on any particular content provider or payment method. The Bit8 platform automates a wide variety of laborious manual work, from marketing campaign setup and targeting, identification of revenue optimisation opportunities, automatic data drilldowns and the latest adaptive user interface that shave off hours of work, while making operations less dependent on specialised skills and making the whole process more efficient.

Our disruptive innovations in using Artificial Intelligence and technology adapted from the High Frequency Trading and Financial Services industry are unprecedented Bit8’s modern design also enables us to offer functionality, like multiple jurisdiction support, geofencing and real-time bonus offers that is almost impossible to offer on older platforms that have not been designed from the ground up to support such business needs. Our continuous improvement process takes input from our clients and relentlessly drives us towards an ever perfect platform that has the potential to disrupt the entire online gaming industry.

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organised locally, including the EGR Malta Briefing, SIGMA and MIGS, which have seen the quality of local events increase measurably and visibly. There is no reason why Malta should not be one of the main destinations for online gaming events, given that around 12% of the island’s GDP is generated from online gaming activities and our strong existing hospitality traditions and fine venues that are readily available. Different type of events attract different types of crowds, giving you different insights – for example, EIG normally gives an insight into top level executives’ needs, while the Maltese events has a number of interesting startups that are being formed. The next event where Bit8 will be participating, ICE 2015 in London, is the industry’s most popular event in terms of visitors, and we expect to get a very comprehensive overview of the industry’s trends as a whole after that event. MBR: What are your views on where the local gaming industry is heading? AD: The local gaming industry is headed towards more professionally managed companies with a mature and stable workforce that is based locally, with a healthy mix of foreign people and local Maltese talent. The LGA in Malta is also driving a series of reforms, including its rebranding as the Malta Gaming Authority, and upcoming changes in the licensing models that are updating Malta’s role as an attractive jurisdiction. Other new initiatives like the founding of the Responsible Gaming Foundation and certification standards are also very positive, as they will increase Malta’s reputation as a country where online gaming operators can do business within a friendly yet responsible legal, taxation and commercial framework. Bit8, as the only fully fledged online gaming platform that has been developed wholly in Malta, is well positioned to continue taking advantage of the positive trends that are being experienced locally. MBR: What is your strategy going forward with mobile platforms, like the iPad?

MBR: What experience and insight have you gained from your recent exhibit and participation in EIG 2014, EGR Malta Briefing, SIGMA and MIGS?

AD: Bit8 has always supported mobile platforms from its very beginning, as we have always felt that mobile and tablet devices are going to be increasingly one of the main channels chosen by consumers to interact with operators. Statistics have clearly shown that players that use mobile devices tend to be players that are more valuable, especially those that use particular combinations, for example, players who like sports and use a tablet tend to be more engaged, as they can follow the game on a TV while interacting with the operator’s website in realtime.

AD: Bit8 participates in various industry events that traditionally are largely based internationally. We were very pleasantly surprised to see more quality events being

The Bit8 mobile platform is complimented with a range of professional services and a full-service HTML5 mobile and tablet client solution with an intelligent middle layer that www.maltabusinessreview.net

Malta Business Review

igaming special feature

Bit8, is the only fully fledged online gaming platform that has been wholly developed in Malta

speeds up mobile and client facing applications. The mobile middle layer has been designed with data intensive applications such as sportsbook in mind. Using our innovative solutions in mobile, our mobile and tablet applications have been measured to load up to four times faster than comparable competing applications. Our innovative pre-rendering system also speeds up the mobile apps, resulting in a more efficient use of the mobile devices and a significant reduction in bandwidth and network costs. Additionally, Bit8 also offers a comprehensive integrated mobile compatible CMS that allows operators to manage their player facing websites with direct integration to the Bit8 platform, although operators are still free to use their own existing CMS. MBR: What should we expect to see coming from Bit8 in the next few years? Can you give us any hints about your upcoming projects? AD: Bit8 is going places â&#x20AC;&#x201C; in just under four years, we have acquired 5% of the top casinos as clients and we are changing the landscape growing really fast thanks to our innovative, intelligent platform. Our current focus is predominantly on the remote online gaming industry and the European market. We do expect that we will be gaining a foothold in the fledging North American market and the Latin American market. Our upcoming projects will see more support for product verticals such as lotteries, bingo and land-based gaming tie-ins. We also foresee that we will be adding more professional services to the mix, and are excited to launch our new hosted services, which came about as a result of a slight re-focusing of our sales strategy. With hosted services, operators will be able to launch operations even more quickly and efficiently, taking advantage of our expanding service and operations team. Bit8 is also currently on a path that will likely see it take on more business to government deals, which will further strengthen the companyâ&#x20AC;&#x2122;s financial standing and that represents a significant milestone for any major platform company to achieve. MBR: Bit8 has been recently selected to represent Malta in the European Business Awards 2015. What are the key factors that drive your innovation and contributed to your success so far? AD: The key factors driving our success have been the simple values of Bit8: to provide operators with the tools needed to maximise player 34

lifetime value, coupled with a relentless drive towards continuous improvement. Apart from technology development, Bit8 has a dedicated customer service team that responds to the technical and operational needs of our operators while ensuring that SLA parameters are met. We also place a lot of importance on the understanding of customer needs, with a dedicated team of business analysts who ensure that the customer business, financial and operational needs are documented properly in a specification document that serves all the relevant stakeholders in the process. We are also expanding our range of professional services to include consultancy and bespoke custom development on top of our core platform. Since the technology is modular and scaleable, it affords our operators flexibility when it comes to adding specific custom features and custom integrations with existing internal systems. This flexibility also cuts down the time needed for data and account migration from existing platforms to the Bit8 platform, with well documented procedures that give peace of mind to operators switching platforms. The team at Bit8 is also a very important factor contributing to our success â&#x20AC;&#x201C; our growth gives us the necessary manpower to handle large operators while retaining nimble reaction time to market challenges and new requests. We have attracted top people from leading companies in the gaming, financial services and enterprise software industries to join our team, enhancing our service delivery, sales, quality assurance, business analysis and operational processes. We believe in empowering our employees giving them adequate ownership that results in pride and satisfaction. We always choose quality over quantity in our recruitment, in the belief that good quality employees treat Bit8 as a long-term career choice and strive to be the best without needing to be constantly micro-managed. At Bit8 we operate in an ethical and principled manner that brings about a positive effect in the community, supporting various outreach programmes suggested by our own employees, and also sponsor student internship programmes in collaboration with the University of Malta and MCAST. MBR All Rights Reserved | Copyright 2014

iGaminG Special RepoRt

The LoTTeries and GaminG auThoriTy issues a consuLTaTion documenT for cLoud soLuTions for The remoTe GaminG The remote gaming sector is the most dynamic and the fastest growing gaming sector in Malta. It is regulated under the provisions of the Remote Gaming Regulations (L.N. 176/04). The sector dynamics of remote gaming coupled with the technological convergence created the need for a remodelled regulatory framework. The first on-line betting in Malta in the 2000, was established under the Public Lotto Ordinance (L.N. 34 of 2000), to regulate offshore betting offices. Since then LGA has developed its methodologies to regulate the procedures of remote gaming operations, and in April 2004, revamped Remote Gaming Regulations were published. Malta became the first EU member state to regulate Remote Gaming. The LGA regulatory regime aims to be both technology neutral and game neutral – encompassing any type of gaming using a

The Lotteries and Gaming Authority Malta (LGA), having recognised the interest shown by a number of remote gaming operators which have or are considering leveraging the opportunities offered by the adoption of Cloud Computing Solutions, and the advantages that Cloud Computing provides to licensees, has issued a consultation document that is proposing a sharper focus on long-standing principles with a clearer explanation of why they are important from a policy and regulatory perspective. “Cloud computing offers great advantages and options to remote gaming operators including better management and allocation of IT resources, flexibility, scalability and cost savings, but we are also aware of the fact that changing from one environment to another presents new challenges which operators and regulators alike are doing their best to address,” said LGA’s Executive Chairman, Joseph Cuschieri. “It is our intention to release guidelines for the Remote Gaming operators making use of cloud solutions and these guidelines will serve as

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a clear sign that the LGA wants to be a prime mover in innovation and policy and is well positioned to react to trends.” The LGA has already received submissions on Cloud Solutions for the Remote Gaming Industry from the Malta Remote Gaming Council Working Group and the Malta Chamber Remote Gaming Business Sections and has taken this into consideration in arriving at its position and in compiling the consultation paper. The LGA asks the gambling industry and wider interest groups to engage constructively by visiting the News section on www.lga.org.mt and searching for the consultation document with any queries or requests to be sent to cloud.lga@lga. org.mt. Contributions should include the originator, contact information and clear statement on the interest they represent. The consultation period was launched on October 31, and will end at noon on December 12.

means of distance communication (including internet, digital TV, mobile phone technology, telephone and fax). Any remote game which can be securely managed under LGA regulations will be considered for licensing. Under the Remote Gaming Regulations, 2004 there are four classes by which an operator may be licensed. In March 2005, the Malta Remote Gaming Council was launched. This Council brings together all our remote gaming licensees, giving them a great opportunity to meet new challenges backed by the inherent advantages of collective effort. LGA also launched an on-line forum aiming to create an on going discussion between all stakeholders, ISP providers, legal and financial representatives in the Malta remote gaming industry. For more information kindly visit the website www.mrgc.org.mt MBR Source: LGA www.maltabusinessreview.net

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iGaminG Special RepoRt

Government MP Silvio Schembri, the Chairman of the Foundation presented a four-year action plan and a report drafted by the Responsible Gaming Foundation to the Parliamentary Secretary for Parliamentary Secretary for Competitiveness and Economic Growth, Jose Herrera. Present also, were PN MP Kristy Debono and the Lotteries and Gaming Authority’s Executive Chairman Joseph Cuschieri

Malta will soon have “the best iGaming structure in the EU,” which will include an action plan to tackle gaming addiction, a new agency to promote Malta as a gaming jurisdiction and a Gaming Academy

he proposals were announced at a press conference during which a fouryear action plan and a report drafted by the Responsible Gaming Foundation, was presented to the Parliamentary Secretary for Parliamentary Secretary for Competitiveness and Economic Growth, Jose Herrera. Government MP Silvio Schembri, the Chairman of the Foundation, said the report found that there are no studies about gambling and its effects in Malta whereas several countries have conducted in-depth studies and surveys on the topic. At EU level it is estimated that between 0.5% to 2% of those who make use of gaming services end up with some sort of addiction. Mr Schembri said, however, that these figures may not reflect the true picture due to lack of research. The report says gambling can affect a person’s health, employment, finances and interpersonal relationships. Gambling prevalence among adolescents is at least four to five times higher than the adult population. Problem gamblers are most likely to be using electronic gaming machines. It also found that Maltese people tend to play digital and video games about once a day for an average of one hour. The people who tend to play several times in a day also play for greater amounts of hours. Players tend to play alone or online with friends rather than with family and the lack of interaction that results from obsessive gaming could have long-term social consequences, like a lack of social skills. The social awkwardness created by the isolation of gaming addiction, unfortunately feeds this addiction. The government MP said the foundation had studied best in class practices from

several countries, including the UK, Australia and Canada before drawing up its own business plan. There are several objectives, including carrying out an in-depth study, the promotion of responsible marketing of gaming activities, research on responsible and problem gaming, educational campaigns for youngsters, gaming addicts and their families and support services, including a support line and rehabilitation services. PN MP Kristy Debono said the gaming industry has been a big success because there was always a balance between the economic benefits of the industry and the social aspect. The Opposition fully supports the Responsible Gaming Foundation, which had been a proposal of its own. It has also presented a number of proposals to be included in the action plan, including the introduction of a responsible gaming code of ethics and the segregation of rehabilitation patients. Mrs Debono noted that, currently, drug, alcohol and gambling addicts are all treated together. The MP also said Malta has always been a leader in the iGaming sector and should also be a leader in promoting responsible gaming. Lotteries and Gaming Authority Executive Chairman, Joseph Cuschieri said that the next step in creating a unique ecosystem is to share responsibilities and have the authority focusing on being the regulator hence policy formulation, compliance, licensing etc and create separate entities that can focus on certain sectors. The Responsible Gaming Foundation is one of these. It will work hand in hand with the authority to promote responsible gaming. In the coming months a new entity, called Gaming Malta, will be set up with the specific role to promote Malta as an iGaming jurisdiction similar to what Finance Malta does for the financial services sector. A Gaming Academy is also being planned to address skill and competency development on an international scale and standard. Mr Cuschieri said the problem is that the sector is not finding enough Maltese to take up its vacancies. In fact, only a third of iGaming employees in Malta are actually Maltese. While a number of jobs, including foreign language speakers at call centres, will always be taken up

Malta Business Review

Increased promotIon, traInIng and responsIbIlItIes as IgamIng lIcences Increase by 25% by Neil Camilleri, TMID by foreigners, there are a significant amount of jobs that can be taken up by the Maltese if properly trained. Parliamentary Secretary Jose Herrera thanked the Opposition for showing maturity and cooperating fully on the responsible gaming

At EU level it is estimated that between 0.5% to 2% of those who make use of gaming services end up with some sort of addiction work plan. He noted that the gaming industry makes up 12% of the Maltese economy and employees some 9,000 people. It is the second largest sector in Malta. “We want this industry to flourish but at the same time to be responsible. Only a small percentage of players are addicts but we have to act, however small the number,” he said. Dr Herrera said the government is handling the sector “very well” and noted that the time for hearing complaints was halved to 45 days and the time taken to process new licences decreased from six months to less than two months. “Our gaming economy has grown despite the added competition and regulations from the EU.” The LGA Executive Chairman added that new licences have increased by 25% from January to November over the same period last year and new companies increased by 17%. There are currently some 260 companies and 430 licences issued by the LGA. Mr Cuschieri noted that, apart from direct jobs, the gaming sector also has a spill over effect on several other sectors, including property, IT, lawyers and accountants. Mr Cuschieri noted that, apart from direct jobs, the gaming sector also has a spill over effect on several other sectors, including property, IT, lawyers and accountants. MBR www.maltabusinessreview.net

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Cloud Computing

Malta Business Review

Seminar: implementing Cloud ServiCeS A collaboration between Forestals Ltd and HP by Astrid Veld

Forestals has just been named HP accredited Gold Cloud Builder Specialist in Malta. Gordon Dimech, Chief Operations Officer at Forestals Group of Companies, hailed this achievement as a milestone during an international seminar entitled â&#x20AC;&#x153;How Can Cloud Transform your Business?â&#x20AC;?

BACKGROUND Forestals, HP accredited Gold Cloud Builder Specialist in Malta, in collaboration with HP, organised a one-day seminar on Cloud Computing on Tuesday 18th November 2014 at the Portomaso Suite, Hilton Malta. The seminar provided an insight into the evolving Cloud technologies and demonstrated how Cloud Solutions are revolutionising the way businesses organise their IT infrastructure, and specifically how this could be relevant to particular business. The seminar was addressed by the Hon. Christian Cardona, Minister for the Economy, Investment and Small Business, followed by presentations from HP experts in Cloud technology together with a live Cloud demo presented by Forestals. During the afternoon session, delegates were also able to book a private session with HP representatives who were present at the event, to discuss their particular requirements in more detail and understand how they could benefit by moving to the Cloud. MBR: How significant is the seminar being organised by Forestals in collaboration with HP on cloud computing and what does it mean to you personally? GD: Todayâ&#x20AC;&#x2122;s seminar is a milestone for Forestals because we have managed to achieve accreditation in a very interesting and exciting area, one which is challenging and is changing the IT world as we know it: Cloud Computing. Wherever you turn and look, people are talking about the cloud and thinking of implementing cloud services. People are asking themselves if this applies to them. We are very proud to have achieved accreditation at a very early state of this development to be able to assist customers and enable them to

harness the cloud. The accreditation means that that we have achieved a level of knowledge that enables us to provide consultation and advise potential customers on the best strategy and solution- one that is tailored to their requirements. Companies who have an idea of what they would like to do but require assistance to implement the cloud, can come to Forestals and we can advise them on the best strategy for their business. MBR: How important is the HP brand to Forestals? How does the Cloud accreditation change the Forestals portfolio? GD: There is a long standing association between Forestals and HP. It has always been a very important brand in our portfolio, not only because of the quality of the hardware, but also because of the quality of the services they provide. HP have always be innovation leaders and they have continued to build on this reputation with their cloud solutions. Nowadays companies like HP are giving more importance to solutions rather than just the box itself and that is exactly the same as what we are doing. We embarked on a journey to start providing solutions. The technology HP is presenting is seen as the de facto industry leader. We value our relationship and association with HP. The team has worked very hard to achieve this HP accreditation which continues to build on our relationship with HP. MBR For more information visit www.forestals.com/cloud or send an email to sales@fglit.com. Tel: 23436000 All Rights Reserved | Copyright 2014 www.maltabusinessreview.net

Education

Malta Business Review

Erasmus+ EnablEs GErman studEnts to tastE businEss lifE in malta by Joe Cauchi and Eberhard Vollmer

For the past three years German students in international business administration have visited our islands to develop their business skills. Twenty students from Kaufmännische Schule in Bad Mergentheim, located between Stuttgart and Frankfurt have been offered internships in Maltese companies. These internships last 4 weeks preceded by a one-week intensive English language course at the European School of English (ESE) at Paceville. ESE is also providing accommodation in self-catering apartments. The scheme has been so successful that the number of participants has increased every year for the past three years and it is expected that even more students will be here next year. Erasmust + offers apprentices in International business the chance to develop their English language skills in an English language business environment and, far more important, the chance to experience a new environment and develop intercultural awareness, absolutely necessary in an increasingly globalised world economy, where it is said that all business is local but also that all business has an international dimension. Fourteen companies in Malta, ranging from world-wide operating companies to

SME’s have participated in the scheme. Spokesmen from these companies have said that they are impressed by the motivation, reliability and loyalty of the German students from the well-known German dual system of professional education.

I found it incredible that buses were normally five to ten minutes late and nobody seemed to bother.’ said one bewildered girl Mr. Joseph Mangion from Farsons said that the apprentices worked in a very efficient way and integrated perfectly with the local teams. Ms. Angela Zammit of Würth Malta pointed out that the trainees placed in her company managed to get a fairly good overview of the business of the company and the local specifics. The twenty students who have been here for the past weeks say that they found the experience interesting and enriching enabling them to gain insights into how

other business cultures work as well as to enjoy the climate and the Mediterranean life-style so different from their own. On a personal level, students also had to live and work autonomously for quite a stretch of time ‘without mummy’. Students made friends with other young people of various nationalities which is important for intercultural understanding. The Maltese companies involved found the presence of young people from Germany stimulating and helpful in their offices. All of them, in fact, say they are ready to accept further trainees next year. ‘It is a matter of corporate social responsibility’ said one company manager. Students felt themselves safe in Malta and were struck by the different pace of life. ‘I found it incredible that buses were normally five to ten minutes late and nobody seemed to bother.’ said one bewildered girl But the most important fact as result from this experience was put in a nutshell by one of the students who said ‘ If my company sends me to work in another country I will now do it without any hesitation. If I could do it here, I could do it anywhere.’ MBR www.maltabusinessreview.net

Malta Business Review

Car Leasing

Vehicle

leasing by George Carol In view of its several advantages, car leasing is fast becoming a popular title under which to hold a car, and Meli Car Rentals Limited provides an excellent service in this respect. In fact various Government Departments, Parastatal Bodies and Private Firms lease a variety of vehicles from Meli Car Rentals Limited. There is no restriction or limitation on what kind of vehicle may be leased from Meli Car Rentals Limited which decision depends entirely on the client. Vehicles may also be customized to tailor the lessees’ particular needs. Meli Car Rentals use their years of experience in vehicle purchase to advise lessees on which vehicle would best suit their particular needs. At present Meli Car Rentals Limited has a large fleet of vehicles leased to clients from all walks of life and commercial fields. The monthly payment for the lease of a vehicle depends

on the vehicle requested by the client but Meli Car Rentals can guarantee the most competitive prices available on the market. Above all Meli Car Rentals ensures full client satisfaction with an excellent leasing package that includes the following benefits: •

All on the road maintenance costs, such as regular services and upkeep

•

A complete free car wash once a week

•

Personalized number plates (on request) and road licenses

•

All vehicles are insured on a fully comprehensive basis

•

All vehicles are provided with 24 hour breakdown service

Where the leased car is off the road, whether due to accident or repairs, the lessee will be immediately provided a replacement vehicle. MBR

Car Hire

Car Leasing

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Meli Car Rentals Ltd. 90, Fremond Street Qormi, QRM 2379 T: 79 03 10 10 E: contactus@meligroup.com 42

IIP

Malta Business Review

by George Carol

While laying flat in bed and playing around (no, not with myself), I came across an interesting piece of news. This is really interesting- I am still a little soggy of mind and body but some really cool ideas come up in the back of that grey hemisphere.... I did not have a chance to think that stuff to the end. I do not want to go into detail about the options this could possibly offer – putting the IIP scheme to shame Now, this is a real BIG BRAINER! Estonia has made tremendous progress in becoming the Numero Uno digital society in Europe. It appears that they have actually done what Malta once set out to do (under the PN government). Unfortunately the Maltese were satisfied to have the gaming industry, which incidentally proved to be very complimentary to Luxembourg model …… It seems like the German speaking media is a little bit more on the ball on this one, but you get a lot of info on Google if you search Estonia e-citizen. Some of the stuff follows

Estonia to offEr E-citizEnship to foreign investors and businesses With this digital Estonian ID you could open a bank account in the country or even incorporate a legal entity without ever having set foot on Estonian soil First published: Thu, May 29, 2014, 01:00 The Estonian government is already one of the most tech savvy in the world; all citizens over 15 have microchipped ID cards linked to their employment, tax, banking, health details etc. Going one step further, the Estonian government’s chief information officer Taavi Kotka has announced that it will soon begin issuing ID cards to nonresidents. With this digital Estonian ID you could open a bank account in the country or even incorporate a legal entity without ever having set foot on Estonian soil. Target e-citizens include foreign investors, business people, scientists and similar. Source: http://iti.ms/1h9ksuc

a national idEntity schEmE goEs global

Jun 28th 2014 | From the print edition The Economist THE founders of the internet were academics who took users’ identities on trust. When only research co-operation was at stake, this was reasonable. But the lack of secure identification is now hampering the development of e-commerce and the provision of public services online. In day-to-day life, from banking to dating, if you don’t know who you are dealing with, you are vulnerable to fraud or deceit, or will have to submit to cumbersome procedures such as scanning and uploading documents to prove who you are. Much work has gone into making systems that can recognise and verify digital IDs. A standard called OpenID Connect, organised by an international nonprofit foundation, was launched this year. Mobilephone operators have started a complementary service, Mobile Connect, which allows identities of all kinds to be authenticated from smartphones. But providing a digital ID that will be widely used and trusted is far harder. Businesses can check their employees rigorously, and issue credentials for gaining access to buildings, computers and the like. But what about outside the workplace? Facebook, Google and Twitter are all trying to make their accounts a form of ID. But these are issued without verification, so pseudonyms are rife and impersonation easy. Private providers are offering their own schemes; miiCard, for example, uses bank accounts as a way of issuing a verified online identity. But these fall short of the reliability of a state-backed identity, issued by a government official, checked against other databases, using biometric data (such as fingerprints and retinal

below. In German media it sounded like it was a fact as of this weekend. In Malta, the media went apparently dead silent, perhaps having swallowed the Budget malaise day-after pill. I have not had enough time to really get into this, but this looks like a grand scheme to attract investment in future industries. It does not offer real citizenship but it offers you all the opportunities to do business in a hassle free way. Our PM went straight for the cash in the pocket, whereas Estonia goes for the future of the county. CHAPEAU! MBR

scans) and backed by law—in effect an electronic passport. There is one place where this cyberdream is already reality. Secure, authenticated identity is the birthright of every Estonian: before a newborn even arrives home, the hospital will have issued a digital birth certificate and his health insurance will have been started automatically. All residents of the small Baltic state aged 15 or over have electronic ID cards, which are used in health care, electronic banking and shopping, to sign contracts and encrypt e-mail, as tram tickets, and much more besides—even to vote. Estonia’s approach makes life efficient: taxes take less than an hour to file, and refunds are paid within 48 hours. By law, the state may not ask for any piece of information more than once, people have the right to know what data are held on them and all government databases must be compatible, a system known as the X-road. In all, the Estonian state offers 600 e-services to its citizens and 2,400 to businesses. Estonia’s system uses suitably hefty encryption. Only a minimum of private data are kept on the ID card itself. Lost cards can simply be cancelled. And in over a decade, no security breaches have been reported. Also issued are two PIN codes, one for authentication (proving who the holder is) and one for authorisation (signing documents or making payments). Asked to authenticate a user, the service concerned queries a central database to check that the card and relevant code match. It also asks for only the minimum information needed: to check a customer’s age, for example, it does not ask, “How old is this person?” but merely, “Is this person over 18?” Other governments have tried to issue electronic identity cards. But costs have been high and public resistance strong. Some have proved careless custodians of their citizens’ data. There are fears of snooping. Britain had spent £257m ($370m) of a planned £4.5 billion on a much-criticised ID card scheme by the time the current coalition government scrapped it after coming to office in 2010. That has left a gap in the global market—one that Estonia hopes to fill. Starting later this year, it will issue ID cards to non-resident “satellite Estonians”, thereby creating a global, government-standard digital identity. Applicants will pay a small fee, probably around €30-50 ($41-68), and provide the same biometric data and documents as Estonian residents. If all is in order, a card will be issued, or its virtual equivalent on a smartphone (held on a special secure module in the SIM card). Some good ideas never take off because too few people embrace them. And with just 1.3m residents, Estonia is a tiddler—even with the 10m satellite Estonians the government hopes to add over the next decade. What may provide the necessary scale is a

European Union rule soon to come into force that will require member states to accept each others’ digital IDs. That means non-resident holders of Estonian IDs, wherever they are, will be able not only to send each other encrypted e-mail and to prove their identity to web-service providers who accept government-issued identities, but also to do business with governments anywhere in the EU. Estonia is being “very clever”, says Stéphanie de Labriolle of the Secure Identity Alliance, an international working group. Marie Austenaa of the GSMA, a global association of mobile-phone firms, praises it too. Allan Foster of ForgeRock, a firm that is working on government ID schemes in Belgium, New Zealand and elsewhere, thinks that the new satellite Estonians will help change attitudes to secure digital identities in their own countries, too. The scheme’s advantages for Estonia are multiple. It will help it shed the detested “ex-Soviet” tag and promote itself as a paragon of good government and innovation. It will attract investment: once you have an Estonian ID, setting up a company there takes only a few minutes. And it will create an electronic diaspora all over the world with a stake in the country’s survival—no small matter at a time when the threat from Russia is keenly felt. (Estonia is also planning to back up all its national data to secure “digital embassies” in friendly foreign countries.) Struck by the X-road’s scalability and security, and the fact that it has already worked well for over a decade, Finland and other countries are adopting the Estonian system in whole or in part. But for foreign individuals, perhaps its greatest appeal is that it is optional. Those who like the system’s convenience, security and flexibility can apply (though Estonia’s chief information officer, Taavi Kotka, who is taking time away from his real-life job running an IT company, stresses that the ID is a privilege, not a right). Those who feel queasy about a foreign state having access to their personal data can steer clear. Mr Kotka says that Estonia aims to do for identity what American Express cards did for international travel in the 1960s: to simplify life. But the bigger point is that government-verified identity has been divorced from location. If Estonia’s scheme takes off some other countries may well decide to follow its lead. Some may aim at volume; others, to target the top end, as with the market in non-resident investors’ passports. Soon, multiple satellite citizenship may even become the norm. Source:http://taavikotka.wordpress. com/2014/05/...s-by-2025/ http://www.irishtimes.com/business/sectors/ technology/estonia- to-offer-e-citizenship-to-foreigninvestors-and-businesses-1.1812438

www.maltabusinessreview.net

The Drivers of Change in The MalTese CapiTal MarkeT by Eileen V Muscat

The economic growth and the overall state of the economic well-being that today is synonymous with Malta is no coincidence, but the result of a number of key strategic decisions taken over the years that have contributed to the development and stability of our island republic. Political, economic, social, and educational leaders have significantly influenced the way Malta has grown, and continues to grow, in spite of the turbulent circumstances that have hit our shores

ver the years, the country managed to successfully find a balanced economy by moving away from the relatively low value-added manufacturing sectors to much higher value-added services sectors, with emphasis on the financial services sector and a more focused export-oriented and high value-added manufacturing industry. These strategies resulted in Malta being able to retain its economic development, in spite of a severe European recession, mostly because of a resilient export sector, a professional and cost-effective services sector supported by the strong tourism sector, and the many ancillary services that are required to support this. The economy was also kept buoyant by relatively regular private consumption. In fact, this ensured that the island economy would be built around a myriad of family-run businesses in the form of small traders, importers, distributors, retailers, IT, legal and other professional service providers, all operating hand in hand with a well-structured and wellregulated financial services sector. The thriving economic development led to the creation of a company registry that numbers in excess of 60,000 companies – mostly family-owned and run – besides quite a number of sole traders. It is no secret that we are a predominantly SMEdriven economy. Indeed, over 99% of these companies are classed to fall with the definition 44

of an SME. At the risk of generalising, SMEs are driven by certain characteristics that are quite unique – they tend to be family owned, and comprise of hard working entrepreneurs who are focus on the operations and the dealings of their business. They invest their own funds into the development of the business, but also rely on external finance for the capital investment that is often critical for the business to move forward and develop further. On the other hand, they have relatively little time, or patience, for the administration of the business, and tend to prefer the confidentiality and ‘closeness’ of a family run unit. Issues such as corporate governance and succession planning tend to be low on the list of their priorities, and their planning horizon is relatively short term – up to three to four years. This is because they tend to operate in an intensely competitive environment, and often do not have the resources, or access to the resources required to expand and develop. Indeed, surveys have shown that SMEs are particularly sensitive to high operating costs, such as transport costs and marketing, have difficulty in recruiting the right personnel, and managing them, and most importantly, rely heavily on access to bank finance. This latter issue, and the limited ability to raise the required or desired financing is one that impedes their growth. It should be pointed out that in an SME driven economy

The thriving economic development led to the creation of a company registry that numbers in excess of 60,000 companies like ours, the growth of the SMEs is critical to the continued development and growth of our economy, employment opportunities and overall well-being. There is a lot to be said in favour of traditional banking services built on cautious and solid foundations which make the banking system very resilient as well as the level of access to finance that companies have as a result of a well-developed and solid banking infrastructure. Indeed, the recent positive European Central Bank stress test result on the two most significant Maltese banks is confirmation of this. It is safe to say that over the years, banks have clearly supported the economy by providing that much needed level of liquidity, flexibility and mobility of depositor funds that invariably create the domino and multiplier effect of generating income through money supply and turnover, creating value, wealth and economic growth. The Malta Stock

SME & Capital MarkEtS

Malta Business Review

This has been a successful growth phase that has seen the listing of over 40 companies, through equity and bond issues, and the issuance of over €15 billion in equity are just a few of these benefits. One cannot underestimate the value of being a listed company when seeking international markets, since this gives the company additional credibility when marketing itself overseas. Of course, the listing of equity of family run businesses would also create the additional benefit of creating an exit route for existing shareholders, who may have a relatively diluted stake in the business. Incredibly, 30% of family owned business do not survive and for one reason or another, do not make it to the 3rd generation. This is quite an alarming statistic. Succession planning is something that is often overlooked, and it is clear that businesses need to prepare for when they move into 2nd and 3rd generation levels of ownership.

Exchange has, on its part, been a catalyst to establish and develop the Maltese capital market by creating the circumstances for issuers, as seekers of capital, and, on the other side, investors as providers of capital, to meet at a well regulated, transparent and efficient marketplace, creating a more direct efficient interaction between investors and listed companies that goes back just 23 years. During this period, the Exchange has appropriately focused its main efforts on the operations that surround its primary function- the trading of listed financial instruments, together with the necessary clearing and settlement processes and management of the post-trading infrastructure. This has been a successful growth phase that has seen the listing of over 40 companies, through equity and bond issues, and the issuance of over €15 billion in equity, corporate and government bonds and treasury bills. This success must be equated to the fact that this activity took place on a developing island economy with a GDP of €6.5 billion and a population of just over 400,000. One should also appreciate that a significant level of this investment mostly came from Maltese private as well as institutional investors. The critical mass of market capitalisation today stands at over €10 billion and there is an appetite for new opportunities for investment amongst a very ‘retail’ investor base ensuring that subsequent

issues are likely to be consistently successful. This level of confidence in the market by investors combined with the increasingly entrepreneurial private sector has created an environment that allows the capital market to co-exist with the traditional banking sector, and ensures a fairly regular supply of new listings and related investment opportunities coming to market. The Malta Stock Exchange is still growing. There were key strategic changes that were instigated to increase the level of international exposure and create networking opportunities. These, together with the EU regulatory framework, resulted in higher international visibility, access to new markets, and the possibility to develop products that cater to the domestic, as well as international market needs. Furthermore, in our SME driven economy, which is mostly built on family-run businesses, we feel that there are the right circumstances to attract privately owned, family-run companies to the capital market. This could be through the sale or issue of new equity, or the issue of corporate bonds. The benefits of seeking a listing are clear – access to new capital in a cost-effective manner, without the need to put up collateral, the branding and corporate identity of being a listed company, and the valuation and visibility of the business on a very well monitored market

SMEs will remain the backbone of our economy. They are key to sustaining economic growth, employment, creating opportunities as well as providing goods and services. By continuing to focus on SME development as well as developing other networking and structural opportunities, the Exchange will continue to grow the domestic market whilst implementing the vision of the Exchange’s executive management to develop the international capital market in Malta. We have all the right ingredients - the connectivity and technology, the professionalism and skills, the regulatory framework, and the infrastructure. Together, they make a compelling argument to ensure that the Maltese capital market will continue to develop in interesting ways in the years to come. MBR All Rights Reserved / Copyright 2014

EDITOR’S NOTE

Eileen V Muscat is a keynote speaker during the SME B2B Networking Summit www.maltabusinessreview.net

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ManageMent

Malta Business Review

Why Leaders don’t Listen by Dan McCarthy, guest post by Marcia Reynolds, PsyD

“Leaders boldly go where no one has ever gone before.” Is this true? Rarely. The more successful a leader becomes, the less likely he or she chooses to step into the unknown. Although I have seen the words, “Embracing ambiguity,” on the list of leadership competencies for many companies worldwide, I have never met an executive who loves not knowing the answers

he problem is related to biology, not personality. The brain’s primary function is to protect you, but your brain doesn’t differentiate external things from internal ego. Whatever has helped you create your success – your business savvy, your great ideas, your broad knowledge of the marketplace – is what you will dearly protect from threats. You may have started your career happily fumbling up the ladder, but the more recognition and successes you gain, the more you have to lose by accepting that other ideas could be better today. As Steve Tobak says in the post , “…those who have the greatest impact on corporate performance – not to mention the livelihoods and investment portfolios of millions of employees and shareholders – are the most resistant to feedback and change.” Nobel laureate Daniel Kahneman explains in his book, , we don’t embrace ambiguity because of “…our excessive confidence in what we believe we know, and our apparent inability to acknowledge the full extent of our ignorance and the uncertainty of the world we live in.” Leaders want to feel confident about their choices, to have the answers under pressure, and to rightly respond to adversity. Most leaders want to be boldly decisive. This desire To feel confidenT in whaT you know makes iT harder To lisTen To oThers and accepT new ideas Having a sense of confidence in who you are is good for yourself and others around you. Feeling absolute confidence in what you know is risky. In this crazy, complex, fast changing, and full-of-surprises world, it is impossible to have all the answers. In fact, the best answers are around you, in the minds of others and in the collective conversations, not inside of you in your limited memory. As a human, your brain cannot see all possibilities. Your experience is deficient, your intuition is fallible, and your intelligence is victim to your unreliable emotions and instincts.

leaders have To have The courage To feel vacanT and vulnerable An open mind is willing to listen, learn, and grow. As Malcolm Gladwell said in , “We need to accept our ignorance and say ‘I don’t know’ more often.” The more you feel confident saying, “I don’t know, let’s talk about it,” the more clarity you will gain about the best options for moving forward in the future.

Those who have the greatest impact on corporate performance – not to mention the livelihoods and investment portfolios of millions of employees and shareholders – are the most resistant to feedback and change your besT decisions will be made in conversaTions No matter how smart you are, thinking through a complex issue can rarely be done well in isolated analysis. As described in , for the same reason you can’t tickle yourself, you can’t fully explore your own thoughts and attack your own ideas. Your brain will block and desensitize you to self-imposed exploration. When someone else adeptly challenges your reasoning and dares to ask you a question that penetrates your protective frames, your consciousness can go to new depths. You might get defensive, but if you take in the challenge your brain will synthesize the new insight into a new awareness for you. You might even laugh at seeing what you should have known all along. In other words, you need others to initiate the interaction that reveals your blind spots and helps you recognize the value of completely new ideas. The brain needs to be surprised. The greater the surprise you feel when you discover a blind spot or new idea, the more likely you will have a breakthrough in perception. You have had these surprises before when you experienced an “Aha” moment.

Blind spots hurt you when you don’t consider their existence when making an important decision or taking an action that will impact others. You instinctively know this because after you make a mistake, you admit you should have known better. Or you blame something else. The most long lasting changes in your thinking occur when you allow others to help you explore your thought processes and you trust them enough to feel uncomfortable with their questions. Do you have a friend you respect and trust enough to allow him or her to question your judgment? Do you know someone who will be honest and straight with you? If not, you need to find someone. In the meantime, hire a qualified coach. This deep, enlightening and gratifying conversation is coaching at its best. find good ideas and energize people by building on whaT They know insTead of exhausTing Them wiTh whaT you know If you are a leader looking to empower and develop others, spend more time asking questions than giving advice. A good question can help both them and you make the right decisions for the right reasons. Listen so you get good ideas to build on. Listen so people feel cared for and respected, which inspires them to learn, grow, and commit to you and the company. If you want to grow your mind and the minds of the people who look up to you, embrace the mystery of not knowing. MBR EDITOR’S NOTE Dan is the Director of Executive Development Programs (EDP) at the Whittemore School of Business and Economics.

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SHIELD CONSULTANTS

Your preferred QHSSET Specialists, Oil & Gas

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Risk ManageMent

Malta Business Review

Knowledge, Hard worK and Perseverance by Martin Vella

Recently appointed as a Director with leading Risk Management specialists Shield Consultants Limited, PatrickJohn Mifsud sits down for an interview with MBR. Patrick-John says that Shield Consultants have a very unique Risk Management platform, STORM, which is now quite popular within their client base. The same platform is used in house by our consultants and enables them to collaborate with each other and the clients in real time. He also shares his views on his important appointment and the values he brings to the company

MBR: How would you describe SHIELD and how is it different to other Risk Management companies? PJM: Formed in 1999, SHIELD was built on 5 core values – people, talent and hard work, ethics, ideas and standards – which still form the foundations of the company and are reflected in our daily operations. SHIELD employees embrace our 5 core values and demonstrate it in their duties. This is why we have all been hand-picked by the company’s senior directors after they were quite confident in our capabilities and work ethics. That is what makes us different to other Risk Management companies – that is what makes us unique! When new clients come on board, they understand that they are not simply getting the services of a single consultant – instead, they get a team of qualified, experienced, hardworking individuals. It is quite common for us to ask each other for guidance on our different areas of expertise. MBR: How does the acquisition of PJ Mifsud enhance the capabilities of SHIELD Consultants? PJM: I met John Schembri, SHIELD’s founding member and Managing Director, back in 2008 when I had just finished my Masters Degree in Information Security. We had both agreed that my addition

to the team would further enhance the Business Continuity portfolio and also give SHIELD added capabilities in Information Security. This gives more assurance to our clients that we can understand their Operational Risk from the different aspects of the business, including Information Technology. That is why I had joined SHIELD as a full time consultant in 2010 and never looked back.

Being a key member of the team that has enabled SHIELD to become a service provider of a multi-national Oil and Gas company is definitely my greatest achievement MBR: What value do you bring as a Director with SHIELD and what are your “new propositions” which you are offering customers? PJM: I would like to take this opportunity to thank the board of directors for trusting me with such responsibility. I have already been involved with various strategic decisions lately due to the introduction of our bespoke Operational Risk Management online platform and its deployment within the International Oil and Gas industry. Therefore I think that appointing me as a Director was quite a “natural” move for the board.

My intention is to take on this new challenge with the same passion that kept me going these past four years working with SHIELD. The synergy within the team is second to none and we have some very interesting services ready to be launched very soon – watch this space! MBR: What would you say are the biggest challenges for you at present? PJM: The biggest challenge at the moment is to demonstrate SHIELD’s capabilities to very large International organisations. We are now competing with very large international companies who are well-known in the industry. We are very confident that we can deliver a superior service to them but it is not easy to convince major Oil and Gas companies to dump a service provider for a small Maltese company. A personal challenge I have is the balance between my work life and family – thankfully I have a very understanding wife who supports me all the way. MBR: What is your greatest achievement and what made it so special? PJM: Being a key member of the team that has enabled SHIELD to become a service provider of a multi-national Oil and Gas company is definitely my greatest achievement. We have proved to ourselves and to the industry that our way of managing risk is truly unique and definitely more sustainable than the traditional approach that is still being promoted by the major players in the industry. MBR: What do you feel it takes to be successful in the industry? PJM: There are four main ingredients for success in this industry- Knowledge, hard work, perseverance and team loyalty. MBR

EDITOR’S NOTE Ing. Patrick John Mifsud is an IT engineer by profession with 20 years of experience in IT Infrastructure Management and Information Security. Patrick obtained an M.Sc in Information Security from the University of London in 2007 and then moved into Risk Management with further specialisation in Business Continuity Management. He joined SHIELD Consultants Ltd. as a full-time BCM consultant in 2010 and has now been appointed as Director. He is married to Charlotte Bonavia and is the father of Martha and Elisa. www.maltabusinessreview.net

InternatIonal DIplomacy

Malta Business Review

amBaSSaDor oF polanD payS a FareWel call on tHe mInISter For ForeIGn aFFaIrS

Minister for Foreign Affairs Dr George W. Vella with the Ambassador for Poland HE Mr Wojciech Ponikiewski

The Ambassador of the Republic of Poland to Malta, Mr Wojciech Ponikiewski paid a farewell call on the Minister for Foreign Affairs of the Republic of Malta, Dr George W. Vella, at the Ministry for Foreign Affairs, Palazzo Parisio, Valletta. Minister Vella thanked the Ambassador for all his efforts in further consolidating Malta-Poland ties during his term and expressed his conviction that relations would continue to flourish. The situation in Ukraine and Libya also featured during the discussions.

mInISter For ForeIGn aFFaIrS meetS tHree neW amBaSSaDorS accreDIteD to malta

Minister for Foreign Affairs Dr George W. Vella with the new Swiss Ambassador HE Giancarlo Kessler

Minister for Foreign Affairs Dr George W. Vella with the new Estonian Ambassador HE Celia Kuningas-Saagpakk

The Minister for Foreign Affairs, Dr George W. Vella, met three new Ambassadors accredited to Malta. They presented their Copie d’Usage to the Minister, before presenting their credentials to the President of the Republic. During the meeting with the new Ambassador of Switzerland to Malta, Giancarlo Kessler, Minister Vella referred to his recent fruitful visit to Switzerland where he had talks with the President of the Swiss Confederation and Head of the Federal Department of Foreign Affairs (FDFA), Mr Didier Burkhalter and the signing of a Memorandum of Understanding between the respective Foreign Ministries. The Minister noted Switzerland’s support to the Mediterranean Academy for Diplomatic Studies (MEDAC), the DIPLO Foundation and IMLI which are widely recognised centres of excellence in their respective fields. Dr Vella expressed his appreciation for Switzerland’s chairmanship of the Organisation for Security and Co-operation in Europe (OSCE). The Minister for Foreign Affairs also received the copies of letters of credence from the new Ambassador of Estonia to Malta, Celia

amBaSSaDor oF SWItZerlanD preSentS HIS creDentIalS to tHe preSIDent oF malta marIeloUISe coleIro preca

H.E. Mr. Giancarlo Kessler - Ambassador of Switzerland entering the Presidential Palace, Valletta

On the 13th November, at the Presidential Palace in Valletta, H.E. Mr. Giancarlo Kessler- Ambassador of Switzerland presented his credentials to the President of Malta, Marie-Louise Coleiro Preca. During the ceremony, the President of Malta and the Ambassador discussed bilateral relations.

Minister for Foreign Affairs Dr George W. Vella with the new Latvian Ambassador HE Artis Bertulis

Kuningas-Saagpakk. Diplomatic relations between Malta and Estonia were established in 1992 and both acceded to the EU in 2004. Dr. George Vella, also met Artis Bertulis, the new Ambassador of Latvia on the occasion of presenting copies of his credentials. During the meeting Minister Vella and the Latvian Ambassador discussed matters concerning Latvia’s upcoming Presidency of the Council of the European Union which will commence in January 2015 and possible cooperation between both countries also in view of Malta’s Presidency in 2017. Discussions also focused on the situation in Libya, Ukraine and the Middle East Peace process. Regarding ties in the economic field, Minister Vella referred to the notable Maltese investment in Latvia and welcomed the interest by Latvian businesses to operate in Malta. Incidentally, Riga is currently the European Capital of Culture and in this regard mention was also made of possible synergies between the two capitals in view of Valletta 2018.

amBaSSaDor oF tHe repUBlIc oF latVIa preSentS HIS creDentIalS to tHe preSIDent oF malta marIeloUISe coleIro preca

amBaSSaDor oF tHe repUBlIc oF eStonIa preSentS Her creDentIalS to tHe preSIDent oF malta marIe-loUISe coleIro preca

H.E. Mr. Artis Bertulis - Ambassador of the Republic of Latvia signing the diplomatic book

Presidential Palace in Valletta, H.E. Mrs Celia Kuningas-Saagpakk during the presentation

On the 13th November, at the Presidential Palace in Valletta, H.E. Mr. Artis Bertulis - Ambassador of the Republic of Latvia, presented his credentials to the President of Malta Marie-Louise Coleiro Preca.

On the 13th November, at the Presidential Palace in Valletta, H.E. Mrs Celia KuningasSaagpakk - Ambassador of the Republic of Estonia presented her credentials to the President of Malta Marie-Louise Coleiro Preca. www.maltabusinessreview.net

Malta Business Review

VAT

MALTA’S VAT MECHANISM AMONGST THE MOST EFFICIENT The Ministry for Finance considers Malta’s VAT mechanism as one of the most efficient among the EU’s 28 member states. This goes completely contrary to what was reported by the European Commission in its recently published report for 2012. While the Commission estimates some €241 million were lost to tax evasion in 2012, the Ministry’s own estimates point to a loss of €34 million in 2012, and less than €11 million in 2013. The reason for this large discrepancy is that, from this year’s report for 2012, the Commission has included all the exported services supplied by the online gaming industry as non-recoverable VAT, while in practice, this industry is, up to now, exempted from charging VAT. The Ministry for Finance will be communicating this clarification to the European Commission.

This places Malta at the top end of the list among the most efficient collectors of VAT. In 2013, Malta collected 8.1 percent of GDP in VAT revenues, a record percentage, in spite of how VAT rates have remained stable at 18 percent (see chart above). This is also corroborated by the Commission’s previous report. This high level performance does not mean that tax evasion does not exist. In fact, various administrative and regulatory measures are being introduced so that tax evasion is minimised further. MBR

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Budget 2015

Malta Business Review

Is the Budget stIll so Important?

by Noel Grima

Not so many years ago, the approach of Budget Day used to be accompanied by a collective heightening of tension and expectation as people waited with bated breath to find out what the new price of basic food such as tinned tuna would be Maybe, we still have somewhere that old heightening of importance given to Budget Day, the sight of the minister with his box ascending the Palace steps, going to the President to give the incumbent a sneak preview. And then solemnly ascending the few steps to the Chamber flanked by flunkies of all sorts. And then the speech on televised country-wide coverage. You cannot get away from Budget Day unless you switch to a foreign TV station. Who knows how they will manage when they move to the new Parliament? No doubt, more ceremonies will be added and more media attention will focus. Then, in recent years, after the Budget Speech was read, a whole new ball game was created - the minister gave interview after interview, so did the prime minister and not to be outdone the Leader of the Opposition. The media circus became so huge that the heads of the constituted bodies soon gave up on giving a joint press conference. The accent today may not be on the price of tinned tuna any more but Budget Day remains a focal point in the parliamentary and political year.

The Budget Speech itself is turgid, full of abstruse words which go over, also thanks to bad delivery from an over-taxed minister, the heads of many people. So at the end what matters is the spin given by either side, which is then amplified and extended through the entire Budget debate which will occupy the House for the next three weeks or so. The real reason of Budget Day is for the country to learn how has its economy been doing. But today we have a plethora of sources which tell us the same in even more detail. There are the rating agencies, the European Commission, and what have you which all tell us, impartially, the state of our State. Budget Day is important because in it the government outlines its plans for the economy, but even that today is being whittled down especially by the Dual Pack of governance in the EU and euro area which insist on pre-vetting the Budgetâ&#x20AC;&#x2122;s main lines with the proviso they can force a change of direction. In short, Budget Day is an enormous spin-fest but the real decisions are taken elsewhere. Nor are there any of what used

to be the excitement of the past - the price increases of things like petrol, alcohol, etc with the media locked in until the minister finishes his speech so that no one would benefit from insider trading and rush to eg fill up his car. The political and media machine still goes into overdrive on Budget Day but the excitement is wrongly-placed. In our small, Byzantine, world, Budget Day is a day to be seen but it is increasingly devoid of content. The first impressions after the reading of the Budget Speech are many times misleading, and that is what usually the government spin-machine aims at. But give it a few hours and some dispassionate analysis and unnoticed holes and gaps start to appear. No other country, to the best of our knowledge, treats the Budget like this, not even the Queenâ&#x20AC;&#x2122;s speech in the Commons. At least there, they have the pageantry and the colour to mask what the entire country would have long known - the governmentâ&#x20AC;&#x2122;s plans for the economy. MBR www.maltabusinessreview.net

MOTOrinG

Malta Business Review

200,000th PEUGEOT 2008 PrOdUcEd by ThE MUlhOUsE PlanT The success of the 2008 urban crossover cannot be denied: the Mulhouse plant has just celebrated the 200,000th example produced, the vehicle being certified “Origine France Garantie” since its launch in 2013. The PEUGEOT 2008’s momentum is also confirmed in overseas markets, notably in China

With 2008, PEUGEOT has capitalised on the experience with the 3008 crossover to create an original automobile offer in the B segment, and so win new customers. An innovative concept, the 2008 crossover combines strong styling and a unique driving experience.

Garantie” (Guaranteed Made in France), awarded to vehicles for which final assembly takes place in France, with more than 50% of their value also produced in France. For the PEUGEOT 2008, the value of the content produced in France is 73%.

And the rapid success of the PEUGEOT 2008 confirms how right the brand’s vision was, with production being regularly increased to meet the demand from customers. Daily production at the Mulhouse plant, initially set at 310 vehicles, was raised to 460 vehicles at the end of May 2013, then to 680 vehicles at the end of January 2014.

The success of the PEUGEOT 2008 is also accompanied by a very high trim level mix that has been maintained since launch, evidence of PEUGEOT’s move up-market: two thirds of customers opt for the upper trim levels (Allure and Féline). The new generation of 3-cylinder petrol engines, represented by the Puretech 1.2 litre 82, has been chosen by more than 20% of customers.

This success allows the Mulhouse plant to celebrate today the production of the 200,000th unit. At the same, time, the rate of production has been increased again, to 860 vehicles a day, with two day shifts and a half night shift. All PEUGEOT 2008 vehicles produced at Mulhouse are certified “Origine France

As regards its markets in Europe since launch, France is the leader with 62,000 sales, followed by Italy, United Kingdom, Germany and Spain. The PEUGEOT 2008 is also nearly 10 awards, won in Ireland, Italy, Spain, France, Poland and Turkey. Certified 5 stars by the

EuroNCAP organisation, the 2008 urban crossover is the only model in its segment to offer five traction modes, via the Grip Control technology. This enhanced drive control system associates traction control with Mud& Snow tyres intended for winter use (3PMSF : 3 Peaks Mountain Snow Flake). An international dimension was included in the specification for 2008 from the start; it is the brand’s first vehicle to be designed simultaneously by and for several geographic areas. Produced also at Wuhan in China and recently launched in this country, The PEUGEOT 2008 has already recorded more than 22,000 orders. This international momentum will be completed in 2015 by the production of the PEUGEOT 2008 at the Porto Real plant in Brazil, while its big sister, the PEUGEOT 2008 DKR will make its assault on the Dakar Rally in January as part of Team Peugeot Total. MBR

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Malta Business Review

imports

ImportatIon of goods EuropEan countrIEs With the vast information available on the world-wide-web about importation of goods, people have become sharply knowledgeable about the market as well as the competition in the field. Indeed, the public demand has become more sophisticated and advanced

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homas Smith Freight Forwarding division can move cargo to Malta swiftly, efficiently and cost-effectively, be it by trailer or container. This service has been offered in its enhanced and evolving stages since the early days of Thomas Smith Group, now in its 166th year. The shipping section of the group has in fact represented world leaders in the field. Thomas Smith Freight Forwarding acts as an independent broker, such that it chooses the best modes of transport based on the clients’ requests and cargo specifications. Cargo can, as a matter of fact, be transported in refrigerated trailers or containers. Whereas in the past Thomas Smith’s trailer service was a result of the representation of a trucking company, Thomas Smith now improved considerably its control on the product and the service, by having partnered with one of Europe’s leading logistics service company, Rhenus Logistics. Rhenus boasts years of experience and presence in international markets with more than 390 locations worldwide, and offering complete geographic coverage of Europe. The company handles groupage freight and part or complete loads, standard or oversize goods, regular or express services, domestic traffic or multinational procurement and distribution logistics. 7,000 trucks take to the road every day on behalf of Rhenus, with pre-set regular departures from the respective depots across Europe. Thus, given such a working agreement with Rhenus Logistics, Thomas Smith is able to provide you with a major service upgrade, which also includes a consignment tracking system and insurance. All mainland European hubs are linked to Italy’s hustling hubs in Milan, where the cargo – be it from Italy or any other location in Europe, Far East or North America – is consolidated and loaded onto the Malta destined consolidated trailer. MBR Contact us to find out more about Thomas Smith’s improved trailer service by emailing our sales team on trailer@tcsmith.com

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Thomas Smith Group is one of the longest established service group of companies on the island, specialising in international shipping services and insurance. The Group holds a leading market position in most shipping-related services, namely port agency, freight forwarding, project cargo, logistics, reefer cargo, airfreight, groupage, trailers and full load containers.

Corporate GovernanCe

Malta Business Review

Dr.roger Barker the Director of corporate governance anD professional stanDarDs at the institute of Directors uk keynote speaker During Mfsa workshop on coMpany services proviDers In conjunction with the Malta Financial Services Authority (MFSA) and the Malta Institute of Management (MIM), the Institute of Director’s Malta Branch (IoD) held a workshop on November 13th at the MFSA on “Why Corporate Service Providers have no choice but to raise their standards in Malta”. Dr. Roger Barker the Director of Corporate Governance and Professional Standards at the Institute of Directors UK will be the keynote speaker for the event and his delivery will focus on a topic of national importance, namely; ‘Transparency and Trust: Maintaining confidence in the integrity of companies in the UK and Malta’

Chairman James Satariano said, “Malta’s reputation as an international financial centre has been assisted by being a well-regulated jurisdiction under the exemplary Chairmanship of Professor Joseph Bannister which applies global standards upon which clients and investors alike can rely. Malta has been independently assessed by a number of supranational bodies, including the IMF, which concluded that Malta’s financial sector regulation and supervision are of a high standard and comply well with international standards. Other assessments have placed Malta in the top-tier of onshore EU finance centres, and on the international “white list” of jurisdictions maintained by the OECD. We have to ensure that proper standards are maintained, our reputation depends upon it, as does our economy.” The workshop held at the MFSA in Mriehel will focus on how CSP’s can meet the requirements of recent legislation and the working practices acceptable to the primary stakeholders. Keynote speaker Dr. Roger Barker was followed by Dr. Michelle Buontempo, Deputy Director of the Securities and Markets Supervision Unit at the MFSA who provided an overview of the regulation of CSP’s in Malta, and by Dr.

Anthony Cremona who leads the Trusts and Foundations team at Ganado & Associates gave a rendition on how the CSP regime arose as a result of article 36 of the 3rd EU anti-money laundering directive. Mr. Edwin Ward, CEO of Ogilvy & Mather Malta moderated the event. Dr. Roger Barker is Senior Advisor to the Board of ecoDa (European Confederation of Directors’ Associations) and Chairman of the ecoDa education committee. He is a board member of European Women on Boards ASBL. He sits on several corporate governance advisory boards, including those of the Institute of Chartered Accountants in England and Wales (ICAEW) and ISS European Governance Exchange. Dr. Barker is a visiting lecturer at the Said Business School (University of Oxford), ESSEC (Paris), UCL (London), Birkbeck (London) and the Ministry of Defence (UK). Dr. Barker’s book ‘Corporate Governance, Competition, and Political Parties: Explaining Corporate Governance Change in Europe’ was published by Oxford University Press in 2010. He is also the author of the IoD’s main guide to the role of the board, ‘The Effective Board: Building Individual and Board Success’ (Kogan Page, 2010). MBR www.maltabusinessreview.net

Malta Business Review

F&B Launch

Cleland & SouChet openS a C&S WIne CaFÉ at MIa Cleland & Souchet, the leading lifestyle retailer and wine merchants, have opened their second C&S WINE CAFÉ outlet in the departure lounge of the Malta International airport to rave reviews. They have designed their area with the same distinctive orange umbrellas and stylish bar counter as their original outlet in Portomaso, and they offer an incredible selection of their quality wines and tasty light meals. “We have tried to remain as close to our original C&S WINE CAFÉ concept as possible and we are delighted

The official open CEO of Maling of C&S WINE C AFÉ ta Internat ional Airpo at MIA, Richard C lela rt, Alan Bor g and Mar nd accompanied by kus Klausho th fer respec e COO and tively

with the positive response from both local and foreign travellers at the airport” declares Richard Cleland with a beaming smile. “Over the coming weeks, we shall be introducing a new range of healthy meals and non-alcoholic drinks in both outlets and we are looking forward to the feedback of our clients”. With over 20 quality wines and Champagnes available by the glass and delicious fresh sushi and sashimi on their menu, the C&S WINE CAFÉ has certainly introduced an exciting new dimension

to the catering available at the airport. Richard plans to open a third outlet next year in yet another prime location on the island which will make it easier for us to experience the flavours and service that are the trademark of the Cleland & Souchet brand. MBR

Eurostat NEws

Malta Business Review

Second eStimate for the Second quarter of 2014 EU28 cUrrEnt accoUnt sUrplUs €32.6 billion €41.5 bn SurpluS for trade in ServiceS

he EU281 seasonally adjusted external current account2 recorded a surplus of €32.6 billion (1.0% of GDP) in the second quarter of 2014, up from a surplus of €8.1 bn (0.2% of GDP) in the first quarter of 2014 and down from a surplus of €40.9 bn (1.3% of GDP) in the second quarter of 2013, according to a second

estimate3 released by Eurostat, the statistical office of the European Union. In the second quarter of 2014 compared with the first quarter of 2014, based on seasonally adjusted data, the deficits of the goods account (from-€9.4 bn to -€7.6 bn) and secondary income account

(from -€19.3 bn to -€18.8 bn) both decreased, while the deficit of the primary income account moved to surplus (from -€5.9 bn to +€17.5 bn). The surplus of the services account fell slightly (from +€42.8 bn to +€41.5 bn). Source: Eurostat for EU28 data, ECB4 for euro area

Balance of payments euro-indicators for the Eu28 and the euro area (Ea18), seasonally adjusted (in bn euro)

EU28 Current account balance Balance of trade in goods Balance of trade in services Current account balance as % of GDP EA18 Current account balance Balance of trade in goods Balance of trade in services Current account balance as % of GDP

Q2/2013 40.9 3.5 38.7 1.3%

Q3/2013 3.1 -9.7 25.9 0.1%

Q4/2013 20.2 1.3 34.3 0.6%

Q1/2014 8.1 -9.4 42.8 0.2%

Q2/2014 32.6 -7.6 41.5 1.0%

59.7 60.1 17.0 2.5%

43.2 51.8 19.7 1.8%

52.4 54.0 19.8 2.2%

55.8 48.8 24.6 2.3%

60.5 60.1 23.4 2.5%

Eu current account balance, seasonally adjusted, as % of GDP

1. The European Union (EU28) includes Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom. The euro area (EA18) includes Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. 2. The balance of payments is based on a double entry system, therefore the sum of the balances of the current account, the capital account and the financial account is in principle equal to zero, any discrepancy being due to statistical errors. The current account covers all transactions occurring between resident and non-resident entities, and refers to international trade in goods and services, as well as primary and secondary income. The capital account comprises capital transfers, which involve the transfer of ownership of fixed assets, and the acquisition and disposal of non-produced, non-financial assets, which include tangible assets that are not produced (such as subsoil assets) as well as intangible assets (patents, copyrights, trademarks, etc). The financial account records transactions that involve

financial assets and liabilities, and take place between residents and non-residents and is further subdivided into direct investment, portfolio investment, other investment, financial derivatives and reserve assets (for which the EU aggregate is not compiled, as the European Union is not a monetary union). International investment position statistics record the financial assets and liabilities position of a country vis-à-vis the rest of the world. Data cover stocks of direct and portfolio investments, financial derivatives and other investment and reserve assets. Further details of the statistical concepts and definitions used can be found on the Eurostat website at: http://epp.eurostat.ec.europa.eu/cache/ITY_SDDS/en/ bop_q_esms.htm 3. Up to September 2014 European Union balance of payments data were compiled according to international standards set out in the fifth edition of IMF Manual on Balance of Payments (BPM5). Starting from October 2014, Eurostat and ECB begin publication of balance of payments and international investment position data following the guidelines included in the sixth edition of IMF Manual on Balance of Payments and International Investment Position (BPM6). Information about the changeover to BPM6 can be found on the Eurostat website at: http://epp.eurostat.ec.europa.eu/portal/page/portal/ balance_of_payments/introduction

4. In line with the agreed allocation of responsibility, the European Central Bank (ECB) (www.ecb.int, section statistics/statistical press releases) is in charge of compiling and disseminating monthly and quarterly balance of payments statistics for the euro area, whereas the European Commission (Eurostat) focuses on monthly, quarterly and annual aggregates of the EU. The aggregates for the euro area and the EU are compiled consistently on the basis of Member States’ transactions with residents of countries outside the euro area and the European Union respectively. 5. Due to the limited coverage of data compiled according to the new methodology, financial account items other than direct investment and portfolio investment assets, as well as the geographical breakdown of the EU balance of payments are not available for this News Release. 6. All the figures, including data for individual Member States and detailed breakdowns of non-seasonally adjusted data, can be downloaded free of charge from the balance of payments section of the Eurostat web site http://ec.europa.eu/eurostat. Sums of components and data of different periodicity may not add up due to rounding. Please note that data for the individual Member States include all transactions with other countries (both intra-EU and extra-EU), while data published for the EU and euro area include only extra-EU and extra-euro area transactions respectively.

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AnniversAry

Mario Gauci, Jr., Sharon Camilleri, Maria Gauci, H.E. The President of Malta, Marie-Louise Coleiro Preca, Mario Gauci & Josephine Gauci

Luke Attard, Andrea Attard & Michael Attard

H.E, The President of Malta, Marie – Louise Coleiro Preca & Mario Gauci, Jr.

The iconic Burmarrad Commercials premises in Burmarrad came alive for a dazzling party on the evening of Friday 31st October, at an event to celebrate the company’s 30th anniversary

Charles Borg, Maria Gauci, Sharon Camilleri & Ron Van Maarschalkerweerd

Duncan Barbaro Sant, Mario Gauci, Jr., Liz Barbaro Sant, Andre Sciberras, Laura Barbaro Sant & Stephen Place

E The President of Malta, Marie-Louise Coleiro Preca, was the guest of honour at the event, which was hosted by the company’s charismatic CEO Mario Gauci and his family. As part of the proceedings, Mr Gauci gave an impassioned speech about his long journey with Burmarrad Commercials – a company he started in 1984. Mr. Gauci continues to run this well-established business today, along with his three adult children, Maria Gauci, Sharon Camilleri and Mario Gauci Jr., who are now also company directors. Today Mr Gauci, along with his family and colleagues, has built Burmarrad Commercials to be Malta’s largest supplier of new and used vehicles, warehouse equipment and industrial machinery. It is also the official distributor and service partner of renowned brands such as Carrier Transicold, Schmitz CargoBull and Dhollandia, together with a successful rental and leasing arm with fully fledged in-house aftersales services. Born out of a passion for the automotive world, Burmarrad Commercials is a family-run business operated by two generations of the Gauci family, still based in the family’s hometown of Burmarrad. The 30th anniversary celebrations featured a special video presentation highlighting the company’s humble beginnings when Mr Gauci worked in his father’s farming business, through later trials as a continental truck driver, to the founding of the company and three decades of commitment, challenge and expansion. The video also focused on the visionary decisions made early in the company’s

Malta Business Review

Mario Gauci & Noel Gauci

Ramon Vella, Blodwen Vella Spiteri, Andre Sciberras & Mario Gauci, Jr

history that, today, have turned it into a hugely successful family corporation with deep roots in one of Malta’s oldest communities. As a way of reflecting the company’s family values and sharing its success with less fortunate families within that community, Burmarrad Commercials chose to donate three vehicles, with a total value of €30,000, to The Malta Community Chest Fund. The donation includes a 15-seater mini bus with a ramp for wheelchair access, as well as two other vehicles designed for those with special needs. HE Marie-Louise Coleiro Preca accepted the donations on behalf of the charity, and was visually moved by the company’s dedication to helping the Maltese community. Speaking at the event, Mr Gauci, who was surrounded by friends, family and clients, enthused, “It is an incredible feeling to look back on all that has been achieved by the company over the last 30 years and to see the fruit of our hard work. Of course, a huge amount of thanks goes to my family, as well as to our extended team. It has been a wonderful journey so far and I look forward to what the future has to bring for Burmarrad Commercials in the years to come.” Firmly established as one of Malta’s top corporations, Burmarrad Commercials will use this 30 milestone to reaffirm its commitment to customer service and quality. The company’s objective to offer an unrivalled one-stop service that exceeds expectations, meets the highest service standards, and offers value for money, remains proof that this is a company driven by passion for the family, business and the community. MBR www.maltabusinessreview.net

Malta Business Review

EU AnAlysEs

EU FORECAST FOR MALTA IN 2015 VERY POSITIVE The European Commission is very optimistic about Malta’s economic performance in 2015. A forecast report published by the Commission today looks favourably at the prospect of the Maltese economy continuing to outperform the general EU trends in the coming year

noted the ‘favourable labour market developments and growing disposable income’ which will continue to spur private consumption in the coming year.

The Commission report comments about the ‘improving business sentiment’ in Malta and is expecting Malta’s ‘strong investment profile’ to further strengthen itself in 2015. The Commission also

The lowering of the electricity tariffs during 2014 has had a significant impact on Malta’s competitiveness and performance. “Lowering the energy tariffs was strategically important to give a new lease of life to the country’s economic competitiveness; an electoral pledge that this government has kept,” said Minister Cardona, “During 2015, the energy tariffs

eacting to the report, Minister for the Economy, Industry and Small Business, Dr Chris Cardona, said that “this a very welcome confirmation that this government’s economic strategy is yielding positive results. The European Commission is confirming that this strategy is stimulating business and creating wealth.”

will also be lowered for businesses and industry. We are optimistic that will give a further boost to the economy.” “The Commission is also positive about foreign direct investment in the energy sector and foresees that this would protract the boost to the economy well into 2016. While, as a government we are optimistic and welcome the fact that the European Commission shares in this optimism, we are adamant to keep on working hard to improve on what has already been achieved.” MBR

at the Pergola Club Hotel & Spa CHRISTMAS ACCOMMODATION RATES 2-Night Packages

ADDITIONAL NIGHTS

€ 70.00 per person on Bed & Breakfast Basis

€ 25.00 per night on Bed & Breakfast Basis

€ 112.00 per person on Half-Board Basis (inclusive of Christmas Eve Buffet Dinner)

€ 156.00 per person on Full-Board Basis

€ 37.00 per night on Half-Board Basis

(inclusive of Christmas Eve Buffet Dinner & Christmas Day Lunch)

1-Night Packages € 35.00 per person on Bed & Breakfast Basis € 65.00 per person on Half-Board Basis (inclusive of Christmas Eve Buffet Dinner)

CHRISTMAS EVE BUFFET DINNER Adults €30.00

Ernest will be keeping you entertained with various all time hits at the Bonaventura Bar

CHRISTMAS DAY BUFFET LUNCH Adults €32.00

Tony Camilleri, one of Malta’s best folk singers will keep you company on Christmas Day at the Bonaventura

LIVE ENTERTAINMENT IN ATTENDANCE

Children aged 5-10: 50% discount For menus and full festive programmes please visit our website

www.pergolahotel.com.mt

NEW YEAR’S EVE BUFFET DINNER Children aged 5-10: 50% discount when sharing with a minimum of 2 adults. Single Rooms at a supplement of € 15.00 per night. Terms & Conditions Apply. Rates apply for Standard Rooms. Apartments are available on request.

Adults €53.50

All Time Hits to welcome 2015 by Malta’s most popular composer, Philip Vella

ALSO AVAILABLE

NEW YEAR’S DAY BUFFET LUNCH Adults €30.00

Triccas will entertain you on the first lunch of the year, at the Bonaventura Restaurant

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gaming

Malta Business Review

THE LOTTERiES anD gaming aUTHORiTY iSSUES iTS inTERim PERFORmanCE RESULTS

Dr Joe Cuschieri, LGA Executive Chairman

The Lotteries and Gaming Authority (LGA) has announced its interim results covering the six months ended 30 June 2014, during a Press Conference held at the Hilton Hotel

Dr Joe Cuschieri, LGA Executive Chairman

he LGA announced that the number of licences issued in 2014 went up by 25% to 401 when compared to 321 in 2013. The number of registered companies also went up by 17% to 258 when compared to 220 in 2013, whilst total revenue went up by 1.3% when compared to same period of last year. At the same time license processing time has been reduced by 50%, from an average of 5 months to an average of 2.5 months. “I am satisfied with what the LGA has achieved so far both in terms of financial and regulatory performance,” said Joseph Cuschieri, Executive Chairman of the Lotteries and Gaming Authority. “Malta is a major player in the global remote gaming industry and our solid reputation was instrumental for our growth trajectory. Having said this, what got us here won’t take us there hence the importance of innovation and reform in order to maintain a competitive edge and stay ahead of other jurisdictions. This, coupled with the support of a business friendly government which strongly believes in the gaming industry is crucial in our efforts to future proof this industry for the next decade.” Mr. Cuschieri continued his address by highlighting other initiatives taking place at

the LGA, with major focus on the regulatory overhaul which will see the launch of a new innovative and cutting edge legal framework, towards the end of next year. He also underscored the Authority’s office relocation to Smart City Malta, the market repositioning program and also other activities related to the EU and international fora. Finally LGA’s Executive Chairman also highlighted LGA’s latest consultation document on Cloud Solutions, which is available online on www.lga.org.mt. Dr Herrera was next to address the press, and he spoke about the importance of having a skilled labour force. “We need to be more competitive and have a stronger workforce” he said, and stressed the need for more people to widen their technical knowledge and be employed within the gaming industry. “A survey carried out in 2013 shows that 77% of foreign companies do not find enough Maltese workers that have the necessary skills to work in this sector.” Dr Herrera explained how the launch of the Gaming Academy in the first quarter of next year, is set to be one of the steps taken by the Authority that will help to increase employment rates in Malta in this sector. MBR www.maltabusinessreview.net

Malta Business Review

industrial production

Malta suffers largest annual decrease in industrial production in european union

alta saw a 7.4% decrease in industrial production in the EU on an annualised basis, Eurostat said yesterday. At the same time, industrial production was up both in the euro area and in the EU. In September 2014 compared with August 2014, seasonally adjusted industrial production1 rose by 0.6% in both the euro area2 (EA18) and the EU28 In August industrial production fell by 1.4% and 1.2% respectively. In September compared with September 2013, industrial production increased by 0.6% in both the euro area and the EU28.

In September in the EU28, the increase of 0.6% was due to production of capital goods rising by 2.4% and energy by 0.3%, while intermediate goods fell by 0.4%, non-durable consumer goods by 0.9% and durable consumer goods by 1.7%. The highest increases in industrial production were registered in Croatia (+4.6%), the Czech Republic (+4.5%) and Ireland (+4.1%), and the largest decreases in Denmark (-5.6%), Portugal (-4.1%) and the Netherlands (-2.0%). The increase of 0.6% in industrial production in the euro area in September, compared with September 2013, is due to production of capital goods and non-

durable consumer goods both rising by 2.0%. Intermediate goods remained stable, while energy fell by 2.5% and durable consumer goods by 3.3%. In the EU28, the increase of 0.6% is due to production of capital goods rising by 2.1%, non-durable consumer goods by 1.2% and intermediate goods by 0.5%, while durable consumer goods fell by 0.7% and energy by 2.2%. The highest increases in industrial production were registered in Ireland (+22.1%), the Czech Republic (+5.6%) and Hungary (+5.1%), and the largest decreases in Malta (-7.4%), Sweden (-4.1%) and Greece (-3.5%). MBR

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NEWSMAKERS

The Parliamentary Secretary for Health, Chris Fearne, says the government has boosted the support it gives to young diabetics. In a meeting with Diabetes Young Advocates Europe, Dr Fearne said that action has been taken in the past few months to increase the availability of HGT strips, used in blood sugar tests. This means that young diabetics under the age of 18 can more effectively control their condition.

EMPOWERING YOUNG DIABETICS TO MASTER THEIR DIABETES

“This is an example of our commitment to ensure better living standards for diabetics. It is a small decision but one which makes a difference in the lives of many young diabetics, showing them that they can master their diabetes and lead a normal life,” said Dr

Fearne, who lauded the work being carried out by Diabetes Young Advocates Europe. Diabetes Young Advocates Europe is a community of people from across Europe who have come together to leverage knowledge and experience to support all people with type 1 diabetes. It aims to reduce the financial burden on families and ensure that affected children keep their glucose in control as much as possible. It has launched the #Special1s initiative to show the range of emotions and challenges people with diabetes face, and reassure young people with diabetes that there is a community there to support them. MBR Project #Special1s can be viewed on https://www.youtube. com/watch?v=WFoU3vzVdcM

Also present was Ms Charlina Vitcheva, Director at the Directorate for Regional and Urban Policy, who thanked and congratulated Dr. Borg following the successful conclusion and the approval by the EU Commission. She remarked on the importance of remaining accountable every step of the way as every Euro spent has to be spent well and expressed her confidence that Malta will also be reaching its set targets. This document had been drafted following an extensive consultation process which had started in 2012 and involved line Ministries as well as all economic and social partners and civil society including environmental partners, non-governmental organisations and the general public.

MALTA’S PARTNERSHIP AGREEMENT OFFICIALLY LAUNCHED Parliamentary Secretary for EU Funds, Dr. Ian Borg said that we needed to start focusing on quality and on a clear strategic direction, in order to achieve our EU 2020 targets. This was expressed whilst addressing the EU Funds Monitoring Committee at the MCC in Valletta during the formal launch of Malta’s Partnership Agreement with the EU Commission.

Both Dr. Borg and Vitechva emphasised on the importance of encouraging investment and on creating jobs. They added that fostering competitiveness through innovation and sustaining an environmentally friendly and resource efficient economy remained key targets as we look ahead at the forthcoming financial period. Amongst other measures, Dr. Borg outlined projects such as the upgrading of the Kappara Junctions as the ideal example aimed at the decarbonisation of the transport sector. Vitcheva also highlighted the fact Malta was the only country actively pursuing the SME initiative which will also encourage further investment. MBR

COMMISSION AUTUMN FORECAST FOR MALTA: SMOOTH SAILING IN CHOPPY WATERS Deficit under control, Economic growth higher than anticipated and expected to remain strong The Ministry for Finance welcomes the European Commission’s positive appraisal of the Maltese economy in its 2014 Autumn Forecast, wherein it recognises the robust performance to date, and for the coming two years. “What I liked most from the various comments was the reference to Malta’s ‘smooth sailing’. It makes me proud to be part of the team under an able skipper,” said the Minister for Finance Prof. Edward Scicluna. The Ministry welcomes the Commission’s remarks that “the Maltese economy continued expanding at a robust rate in the first half of 2014”and that “annual real GDP growth surprised positively and reached 3.2%, up from 2.5% for 2013 as a whole.” The Commission also expects that “real GDP growth is projected to reach 3% in 2014 and to moderate gradually to 2.9% in 2015 and 2.7% in 2016. The Commission confirms that this encouraging growth was driven by buoyant domestic demand partly stemming from an increase in additional disposable income to Maltese families due to the reduction in energy tariffs. This refutes the argument repeatedly made by the Opposition that the retails 66

trade is declining due to lower disposable income. The Commission is also foreseeing a positive contribution to growth due to the reforms in the energy sector, improving financing conditions and improving business sentiment. The Commission notes that the lowering of electricity tariffs for industry in 2015 “is projected to keep input costs contained and, in turn, inflation stable, thereby offsetting upward pressure from households’ growing disposable income.” This again confirms Government efforts to make Malta’s industry more price competitive. The Commission also confirms the strong employment growth registered in the past year coupled with a low unemployment rate for the same period while it expects this positive trend to persist in the coming two years. With regards to public finances, the Ministry for Finance notes with satisfaction the Commission’s forecast that the deficit is “under control,” and that it is “expected to improve marginally in 2014 to 2.5% of GDP, from 2.7% in the previous year.” It is also to be noted that these projections were based on a no-policy change scenario given that the Budget for 2015 was not taken in consideration. Nonetheless, the Government remains committed to keep its fiscal targets as outlined in its 2015 Draft Budget.` MBR

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