Feb 2013 Economic Update by Adrian Friggieri

www.maltaeconomicupdate.com

FEBRUARY 2013

t Kris y DEBONO cover Story Defining Values & Priorities pg 6

An interview with myChoice candidate Kristy Debono

IntervIew of the Month Appraisal & Strategy

pg 9

An exclusive interview with Maltaâ&#x20AC;&#x2122;s most prolific architect Edwin Mintoff

SpecIal feature

Elections 2013

pg 29

Publication debate between PM Dr L Gonzi and Opposition Leader Dr J Muscat as the print event of great national importance

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Defining Values & Priorities

contents 04 | Covery Story

08 | Architecture

Kristy Debono the youngest female candidate and only economist on the PN ticket, discusses her values and visions

Appraisal & Strategy

An exclusive head-to-head interview with Architect Edwin Mintoff, Malta’s most prolific architect and urban designer

MAIN FEATURE

12 | Elections 2013

Election 2013 Special

12 | Leaders Debate

The Economic Update Presents:

The Leaders Debate

A debate between the leaders of the two main parties contesting the 2013 Maltese general election

Community Focused

Dr. Stephen Spiteri talks about what it means to work and be close with the people

Knocking Down Barriers

The Editor talks with this charming lawyer about her aspirations to work for the country’s interests

32 | Top Entrepreneur of the Year Awards 2013

The Economic Update Top Entrepreneur of the Year Awards 2103 We feature the first nominees vying for the prestigious business awards bringing together some of Malta’s leading entrepreneurs, innovators and role models

HSBC Global Research: The Great Rotation

A unique contribution by HSBC’s Chief Economist Stephen King and Global Economist Madhur Jha

Malta’s Opportunity

A fantastic Opinion piece by our special contributor and co-founder of the Competence Centre for Economic Development (CCED) in San Gwann, Werner E. Jung

50 | Banking

Publisher Editor Journalist

John Formosa

Margaret Brincat

Art Director

Jessica Camilleri

Printing

A NOte frOm the editOr

Martin Vella George Carol

Sales & Publication Manager Graphic Designer

54 | Opinion

Martin Vella Together with Italy and Germany Malta is one of the countries holding elections and now entering into final campaign mode. Elections tend to create market uncertainty and hold back much-needed political decisionmaking. This year’s election is important because of its potential impact on economic growth in the wake of a slowdown in world economies generated by the recession triggered by the financial crisis.

Sarah Scicluna Union Print

For magazine and website advertising enquiries please contact: margaret@networkpublications.com.mt or call on (+356) 9940 6743 For editorial enquiries please contact: martin.vella@networkpublications.com.mt The Economic Update is published by: Network Publications Ltd., Angelica Court, Giuseppi Cali Str., Ta’ Xbiex, XBX1425, Malta Tel: +356 2131 6326/7/8 Fax: +356 2132 3432

Contributers: Emma Camilleri; Graziella Demanuele Bianco; Charles Falzon; David Fleri Soler; Richard Geres, Madhur Jha; Werner E. Jung; Stephen King; Jeffery Pullicino Orlando; Dion B. Said, Edward Scicluna; Djordje Vukelic. Please feel free to email us with your viewpoint, whether you agree or disagree with the standpoint of the personalities we interview or the topics we focus on. Your opinion, contribution, concern and feedback on our articles and interviews are welcome. Please include full name, contact details

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editor’s note

“There are no secrets to success. It is the result of preparation, hard work and learning from failure” Colin Powell

In deciding to focus on elections for this month’s main feature, I had to think of their political implications and the relative uncertainty they occasion. Many business deals, projects and investments are on hold as a result of election-year ambiguity. The future is, as ever, unknowable. It’s impossible to forecast political risk with complete certainty. But businesses can look at potential scenarios and plan according to what politicians say, as ultimately it is what politicians say which determines the way we vote. The Economic Update is proud to present for the first time a publication first: The Leaders Debate, whereby we feature a headto-head print debate between the two leaders of the main political parties, Prime Minister Lawrence Gonzi and Opposition leader Joseph Muscat. We have thoroughly researched our questions to cover topics ranging from strategy to energy, from income tax to education, analysing differences and highlighting achievements. Who will be the next tenant at Castille matters not just for the political implications but also for its impact on future finance, economic policies and business. We have also invited a cross section of candidates to participate in this feature, providing them with the opportunity to express their visions, ideas, and explain policies, which we trust will enable voters make an informed choice at the polls come next March. Our cover story deals with one of the upcoming and promising candidates, who encapsulates the essence of intelligence, vigour, performance management and beauty. As we look to the future it is this young idealistic and potential talent that we augur the spirit of the elections should positively embody. Which brings me to my next thought I want to share with you through a quote by Peter Drucker, “Most of what we call management consists of making it difficult for people to get their work done.” There are many notions, assumptions and beliefs surrounding performance management. The full scope of wrong headed ideas is too vast to get into here, but suffice to say the prevailing mindset. So why do we Maltese tend to make it difficult for ourselves? If we want to get our work done, we must embrace change. Bloggist Kevin Elkenberry writes that “There is always an emotional component to change.” Personal experience will tell anyone this is true. Yet generally speaking, companies act as if the data and facts will rule the day without any change. You can recognise, value and manage the emotions related to change. It might not be easy, but it will be worthwhile, even during the height of an election. The choice is in your hands.

TOP ENTREPRENUER AWARDS 2012

FEBRUARY 2013 | THE ECONOMIC UPDATE

INNOVATION & INSPIRE Following the success of last year’s edition of the Entrepreneur Of the Year, we have officially launched the Entrepreneur of the Year Award 2013. These prestigious awards acknowledge the vital contributions made by business executives and companies to our economy at both local and international levels. A Gala Dinner Event will be held at The Westin Dragonara Resort on Friday May 10th 2013. The aim of the award is to publically recognise all entrepreneurs within our shores whilst highlighting the exceptional contribution done by specific individuals via Category Award winners and Grand Award winner. As we begin our 2013 quest for the Malta’s most innovative entrepreneurs, we hope you will share the vision and nominate someone in your place of work, or even yourself, to be included among the next generation of business leaders.

Mr & Mrs Angelo Xuereb

ENTRY PROCESS, VOTING AND JUDGING From February through April nominee profiles and pictures will be published on the Economic Update Top Entrepreneur of the Year Awards monthly Special Editions.

CATEGORIES

Voting for nominees is done via The Economic Update readers through www.economicupdate.com accounting for 40% of the voting weight, whilst an appointed panel of judges will account for the other 60%.

1. 2. 3. 4. 5. 6.

Top Female Entrepreneur of the Year 2013 Top Male Entrepreneur of the Year 2013 Top Young Female Entrepreneur of the Year 2013 Top Young Male Entrepreneur of the Year 2013 Award for Excellence (NEW) The Grand Award Winner

Guests attending the Gala dinner held at the Grand Hotel Excelsiour 2012

(‘Young’ category indicates any individual below the age of 30)

ROCS Group Directors Colin Aquilina and Rachel Vella together with ROCS Group staff

Alexander Bonello and partner Joe Cutajar and Ruth Vella

GALA DINNER EVENT Venue: The Westin Dragonara Resort Malta Date and Time: Friday 10th May 2013 From 19.30hrs – 23.00hrs

All nominees will be seated on tables of eight which would include the nominee together with his/her business partners, colleagues, family and friends. During the four course plated dinner, entertainment will be provided via stand-up comedian Geoff Whiting, the show’s compere, and will feature international choreography dance, including a hair and fashion show with evening gowns. Sponsors will then assign the awards to the category winners with BOV providing the climax of the evening through the presentation of The Economic Update Top Entrepreneur of the Year – Grand Award Winner 2013. Alfred Attard and Kenneth Micallef together with partners and VIP guest

For further details please contact: Margaret Brincat | M: 9940 6743 | E: margaret@networkpublications. com.mt or Gunther Micallef Decesare | M: 9995 0205 | E: gunther@circleeventsmalta.com www.maltaeconomicupdate.com

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COVER STORY INTERVIEW

FEBRUARY 2013 | THE ECONOMIC UPDATE

Defining VALUeS & PRiORiTieS by Martin Vella

What you see is what you get! Meet the first PN Female Economist candidate, the youngest on the 9th district and the ONLY economist on the PN ticket. Let’s find out what’s the prime mover behind this very determined young politician who has dedicated her energy to set her life according to her beliefs and priorities.

BACKGROUND

An economist by profession, Kristy Debono has been involved in politics for the last four years and has held the post of International Secretary within the Movement Żgħażagħ Partit Nazzjonalista (MŻPN). She is also a member of the Nationalist Party Executive Committee and will be contesting the general election for the first time. Kristy currently works within a public authority as Manager of Information Analysis, PR and Marketing. Since 2005, she had also occupied the position of News Caster on Net Television. Kristy is also active, on a voluntary basis, within the Electoral Committee and the Assistant General Secretary’s Office of the Nationalist Party.

TEU: How do you and your work as an economist intrinsically function?

TEU: What was your biggest business error of judgement?

KD: My work basically involves market research and analysis, report writing, interpretation of the latest market trends and verifying the impact on the local markets. At the same time, I actively participated in investment missions to attract FDI in the ‘new economy’ to foster further employment and high-end jobs with the best possible pay. In order to juggle my career and family, since my husband as the Assistant Secretary General of the Nationalist Party is heavily involved in politics, we both need to organise our life, family time and commitments in a very structured manner. Occasionally, we find ourselves in difficulty to define a clear line between work and free time. However, I strive hard to be creative and make the best use of my limited free time to find the necessary space for good quality time with my family.

KD: Being an economist in a pro-business environment, experience in my line of work taught me that the visionary, the do-ers, the entrepreneurial spirits, the achievers and those who excel are normally appreciated and eventually get rewarded. At the end of the day common sense prevails. And so when judging the local political scenario, I assumed that the electorate would recognise and acknowledge the Government’s accomplishments in our economy when against all odds our country achieved the theoretically impossible. Having no natural resources, except for the human resource, our country amidst waves of international financial crisis, managed to sail through. We have left no stone unturned, our economy continued to grow at a rate higher than EU average, continued to attract FDI and break our own records in the tourism sector. When analysing all this I erroneously judged that the electorate would react in a positive manner. Being the underdogs, despite these economic achievements, convinced me to accept the Prime Minister’s request to contest for the General Election on the 9th district to be the voice of the Nationalist Party and convince the electorate what is at stake should the Party not be re-elected in the forthcoming General Election.

TEU: How do you take and go about a mistake? KD: My philosophy is that if one is pro-active in life, along the way one tends to make mistakes. As a person I welcome constructive criticisms and when mistakes happen, I learn from them. Furthermore, I am a firm believer of the ability to change threats to opportunities and thus when mistakes do happen, I try to find the light at the end of the tunnel to convert the mistake to a challenge.

COVER STORY INTERVIEW

TEU: There are issues you have strong opinions on, some with which you may not. Can you tell us more about these concerns (green economy, energy, work? KD: I believe in the three main pillars of our society. The sustainability of our high quality free health care remains of paramount importance and this should be guaranteed by all political parties. Health care should be extended to more awareness of healthy lifestyle, the importance of a clean environment and thus the Party’s commitment towards a cleaner environment. Having a healthy nation is essential to ensure that one can continue to educate oneself and eventually contribute to our society by joining the workforce. Thus another major issue is the strengthening of our high level education sector and the assurance that this will remain free for all. The government should be avant-garde in finding new niches of study to educate our students to join the ‘new’ economy. Our economy depends on the creation of jobs and thus this brings me to my third and most important issue. We must continue to create new high quality jobs, entice more women to join the labour force, be more creative to allow pensioners to remain working and attract more FDI which eventually will lead to the generation of more employment.

I am a firm believer of the ability to change threats to opportunities and thus when mistakes do happen, I try to find the light at the end of the tunnel TEU: The economy, equality, solidarity and community involvement have always been important aspects of the PN’s culture. How important is it to drive those initiatives through and what would be your commitment in this regard if elected as an MP? KD: The Nationalist Party’s flag ship has always been a strong and healthy economy with a social conscience. Economy is the Party’s underlying foundation and which without it we could not have showed solidarity to other nations, created probusiness initiatives, being vociferous about gender equality through more participation of women in the work force, equal opportunities in the labour market through a fair economic environment, balanced governance and being the Party which fosters inclusivity in our job, education and health sector throughout. Thus my mission would be to consolidate on what we built and strive to eliminate all types of discrimination. Furthermore, I am committed to encourage and promote more participation of women and youths in the labour market, in the political arena and in our communities.

TESTIMONIALS

FEBRUARY 2013 | THE ECONOMIC UPDATE

I believe that Malta needs to move forward and do politics in the manner fitting a country striving to be amongst the best in Europe. For this quality change to happen we need people in parliament with competence and vision. Kirsty has these qualities and more and will bring new ideas to parliament which will benefit the country. Tony Zahra, CEO Alpine Holdings Ltd Kristy is a young economist and a fine representative of the newer generation of politicians; I have had the opportunity to work with her in the gaming sector and can attest to her vision, competence and ability. Wither her insight on important sectors of the economy, such as financial services, Kristy can indeed continue to provide an fruitful contribution to Malta’s success in these fields. Tonio Fenech, Minister of Finance, Investments & Economy Kristy is one of the youngest professionals whom together we have built a new economy in Malta in recent years. Now Kristy is offering her energy and enthusiasm so that together we continue to jointly create opportunities for young people. Kristy represents the future, commitment and energy. Simon Busuttil, PN Deputy Leader, MEP

bring about is to open further opportunities for everybody in the new economy sector. Being the only economist amongst the PN candidates I will work on being more proactive and innovative to find the right niches for further investment and job opportunities. I believe that the government should provide more training and educational courses in the financial sector, research and development, concept development and other relatively new sectors to equip the young with the expertise to contribute in these sectors. Furthermore, as the youngest candidate on the 9th district and one of the youngest amongst all the candidates I intend to push forward these opportunities with stronger incentives to provide more employment opportunities for youths, students, unemployed workers, more incentives for women and even pensioners to remain active in the workforce. TEU

I don’t believe that the end justifies the means, no matter what.

TEU: What do you hope to accomplish as a female politician in a male dominated landscape? KD: Coming from an economic background growing in my profession taught me to overcome the barriers of all forms of gender stereotypes. As a female politician, I don’t feel disadvantaged because of my gender because it is the ability, vision and commitment of one’s person that will make a successful politician. So as the only economist on the PN ticket and the youngest on my district, I intend to focus on the economy, youths and the importance of the female participation in the work force through fresh and innovative perspectives on forwardlooking policies. Having been involved in the iGaming sector since its inception, I believe I have the vision to recognise a sector with potential, analyse it and covert threats to opportunities to eventually reap its economic benefits. TEU: What impact does Kristy Debono want to have on local politics? KD: I want to stand for what I believe with honesty and transparency. I do not have any hidden agenda and thus I will ensure that the hard workers and achievers are duly rewarded. Working in one of the most flourishing industries, the stark difference I aim to www.maltaeconomicupdate.com

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INTERVIEW OF THE MONTH

FEBRUARY 2013 | THE ECONOMIC UPDATE

APPRAISAL & STRATEGY by Martin Vella Dr. Edwin Mintoff has become known as one of the most prolific local architects through his practice both in Malta and overseas, and has proven himself capable of achieving a masterful balance between art, architecture and engineering. In this exclusive interview he maintains that the most important factor to consider when designing any building is the quality of the life of the people who will be living in or utilising the building and therefore the main challenge of any project is to understand its requirements and translate them into architecture.

Skyparks Malta

TEU: I wonder if you could talk about what architecture means to you generally. Apart from it being the noble act of building and the responsibility that comes with it, what does this mean to you and how does this affect your architecture?

EM: First and foremost, architecture is my life,

my pride and joy, not only my bread and butter but also my hobby and my means of relaxation. I have absolutely no regrets in choosing architecture as a profession; it is continually on my mind and I enjoy every single minute of it. If I had to live another life, I would certainly choose the same profession. Just as artists may use a painting or a sculpture to express themselves, I use my architecture. Whilst paintings and sculptures have a tendency to be more static, I find architecture to be alive, organic and responsive. Some examples of this can be seen in the way light reflects differently on buildings depending upon the season, the way that people interact in different spaces and the influence of continually emerging technologies. With regards to the noble act of building and the responsibility that comes with it, we are blessed in Malta to have an amazingly rich architectural heritage and I have been fortunate to be involved in the restoration and repurposing of a number of buildings. Unfortunately I feel that there is not as much respect as there should be towards our heritage in order to protect it for the future.

08 |

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TEU: What do you think of the role of the architect in today’s world? EM: In my opinion, the primary and most important role of an architect is to improve people’s quality of life; a statement that is very much at odds with what most people’s current perception may be. Most would say that the architect’s main role is to design buildings and structures without ever making any connection to the quality of life of the people who are the end users. I believe that architects need to show due diligence and great responsibility because their intervention ultimately greatly impacts on quality of life. The only way that this can be achieved is by understanding people’s requirements, their aspirations, what is currently missing and what they hope to achieve, with the challenge then being to translate all this into architecture.

I am completely open to any form of constructive criticism. I enjoy it, when it is well meant and can improve performance Unfortunately architecture is often viewed only from an aesthetic point of view. Whilst aesthetics play a very important role in the success of architecture and the integration of the building within the surrounding environment, as a living activity it must transcend aesthetics. It also has to successfully function from the

point of view of the number of people affected, from a comfort point of view, from the activities point of view and also from the interaction point of view. This is why I believe that respect towards the human scale and the incorporation of ways to improve the quality of life should be the primary role of architects in general.

TEU: What is your recognisable style of architecture in respect to (i) people recognising Edwin Mintoff ’s design and (ii) the reaching of a sustainable environment vis-a-vis energy efficient buildings?

EM: It is not important to me to have people see a building and put my name to it. I measure the success of my architecture not through a particular recognizable style, but through the measure of comfort that people feel when using the building. If one were to take a look at the buildings of some of the great architects of the past one can note that very often they too have nothing in common. I believe that style should be dictated by the particular environment and location. I have a long-standing belief in the creation of a sustainable environment through energy efficient buildings and green architecture. We may take as an example the Bay Street Shopping Complex, for which we won the Urban Design Planning Award from the Malta Environment

INTERVIEW OF THE MONTH

FEBRUARY 2013 | THE ECONOMIC UPDATE

and Planning Authority (MEPA) and which is to date the only complex in Malta to have done so. Bay Street incorporates conscientious sustainable development and green architecture. Even though at times it was challenging to convince clients that it should be an open building with a roofless structure, this has resulted in a building that is responsive to the environment and much more energy efficient. The amount of cooling has been reduced through the use of shaded open walkways and less artificial lighting is required; both of which greatly impact on energy use and emissions.

The primary and most important role of an architect is to improve people’s quality of life TEU: In that particular case, what were the main sustainable energy challenges? EM: The challenge in Bay Street was to take advantage of the mild local climate through the use of open air features which also incorporate horizontal shading devices that shelter parts of the building from the sun and the rain. The award also recognized that the physical construction, through the employment of certain materials, as well as the adoption of good urban design principles contributed to the enhancement of a public open space or streetscape. If you were to take a look at one of our latest projects namely Skyparks, this building is the first structure in Malta to obtain BREEAM certification. BREEAM is the world’s foremost environmental assessment method and rating system for buildings. It sets the standard for best practice in sustainable building design, construction and operation, and has become one of the most comprehensive and widely recognised measures of a building’s environmental performance. While this classification forms part of a ‘Standard Vocabulary’ in most countries in Northern Europe, it is as yet an unfamiliar term for local projects, and we are therefore very proud to have pioneered its introduction in Malta.

TEU: Your work often centres on complex issues. Can you explain your approach to design and how may criticism affect you? EM: I think every architect has his own approach, my priority however is to have an in-depth understanding of the requirements of the user for that particular project. Even in large-scale projects I always insist on the starting point being an extremely intensive and detailed phase. A case in point is when I was given the unparalleled opportunity to actually design a whole town from inception – basically, urban planning at its best.

Corinthia Hotel Sudan

This included looking at the topography of the landscape, the demographics, land use, energy and water generation and consumption, transport requirements and many other factors both for current and future use. Construction was actually in full swing when the civil war broke out in Libya with some of the buildings already completed, and I believe that works will resume in the near future. Here in Malta, for example, we often speak about abandoned and disused buildings, and most people consider these as problems. To my mind, rather than problems, they are opportunities. Within each building there is a certain energy which may be transformed

into an emerging activity with its own financial rewards, and ultimately contribute to the strengthening of our heritage. I also like to view challenges as opportunities, and this is my attitude towards criticism. One must however make a very strong distinction between constructive criticism and destructive criticism. I am completely open to any form of constructive criticism. I enjoy it when it is well meant and can improve performance . However since architecture is also an art form, it will always remain subjective to one’s personal views and tastes. TEU

The firm of Dr. Edwin Mintoff Associates was set up some twenty-eight years ago by Dr. Edwin Mintoff, an architect and civil engineer who became one of the first Maltese architects to obtain a doctorate Ph.D. in the field of architecture and urban design. It has since expanded to one of the largest, architectural and civil engineering firms on the island and now offers a wide range of services including land use and environmental planning, urban design, architectural and interior design, civil, road and structural engineering, land and quantity surveying, as well as cost consultancy both in Malta and overseas.

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FEBRUARY 2013 | THE ECONOMIC UPDATE

Special Feature: Elections 2013

The local general election’s date with destiny set for 9th March. The Economic Update is proud to bring you an exclusive publication debate between the leaders of the two main parties contesting the 2013 Maltese general election:

THE LEADERS

Q & A Dr. L. Gonzi

German Chancellor Angela Merkel and PM Lawrence Gonzi in Brussels last month

TEU: Apart from the fact that your campaign have agreed to certain rules, would you agree that you must have an all-the-above strategy to win this election? PM: Our strategy for this election is clear we need to explain to the people what Malta has managed to achieve throughout the past five years during these turbulent times and that our successes are not to be taken for granted. Throughout these past five years, Malta risked losing thousands of jobs like other European countries. In addition, we increased our investment in both education and health and continued to invest in our families and children. All this was done without introducing austerity measures but actually managing to reduce our fiscal deficit. We have achieved what other countries did not manage. We performed when the external economic environment was not in our favour and this confirms our leadership credentials. We believe in the potential of the Maltese and throughout our investments in education we are giving them the key to their future. 12 |

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Our strategy for education is designed for children to grasp technology and our tablet proposal is aimed at precisely that. We believe in the potential of our economy to continue generating jobs not only in already established economic sectors but we want to sow the seeds of new sectors such as life sciences and digital gaming. We want our businessmen and small sized business owners to continue building our economy through their investments. We are ambitious for this country because our strategy is anchored firmly in the belief of our children and in our youths.

TEU: Minister Tonio Fenech has now been on record three times stating it’s impossible and not feasible for the PL’s policy to help lower gas prices. Do you share Minister Fenech’s views about this? And, is it within the interest of the government of the day to bring those prices down, or are we looking at the new normal of high frequency bills, yet average-to-lower salaries within the EU? PM: Our criticism to the proposals put forward by the Malta Labour Party are based

on studies and views shared by experts. Even the consultants that were engaged by the Malta Labour Party, DMV Keema, also show in their presentation that the proposal put forward is more expensive than the Nationalist Party’s proposal. Apart from the financials, there are logistical and safety concerns which cast serious doubts on the proposal put forward by the Malta Labour Party. My Government’s policy is and has always been clear in this regard. We have invested in the extension to the Delimara plant in parallel with connecting to the European grid through the interconnector project. These two projects are able to supply Malta with the needed electricity. In addition, through the interconnector we are able to connect to the European energy grid and buy clean energy at competitive prices. In fact, the night tariffs we will be introducing confirms the benefits of this investment as lower energy prices will be directly passed on to the consumers. Following our success in negotiating a €1,128 million financial package from the European Union, Malta is now in a position to invest in a gas pipeline which will allow the Delimara power station to run on gas. We are also committed to continue offering support to families and businesses to invest in alternative energy through grants and other schemes which will come on stream in the coming months. Our strategy is clear, feasible, doable and works in progress.

Malta’s employment rate had the biggest increase among European states whereas on average, Europe experienced a fall in employment rates. TEU: For people who voted for you in 2008 and are not that optimistic as they were then, with most things they need for everyday living becoming more expensive, what have you done or accomplished to earn their vote in 2012? PM: Any analysis of this legislature needs to be done within the international context we operated in during these past five years. Many

FEBRUARY 2013 | THE ECONOMIC UPDATE

Special Feature: Elections 2013

DEBATE 2013

Lawrence Gonzi, Prime Minister and leader of the Opposition and Labour Party; Joseph Muscat. This is the first such debate to be published on a business magazine in the run-up to the Maltese elections. by Martin Vella

Q & A Dr. J. Muscat TEU: Apart from the fact that your campaigns have agreed to certain rules, would you agree that you must have an allthe-above strategy to win this election? JM: The overarching strategy I am presenting is frank and direct. I believe that our country deserves better. I believe that our country deserves a change. We are presenting the Maltese and Gozitan electorate with a clear roadmap of where we are heading, with a clear direction for this country and its people. I never believed in presenting a whole list of promises. We are presenting realistic projects based on our vision that we can be the best country within the European family. I met hundreds, if not thousands of people who provided me with extremely valuable insights on what we need to do to improve. These suggestions now are part and parcel of my long term vision of where we want this country to go. I dream of the day when everyone feels that they are all contributing to this country’s success. Malta belongs to all of us, not to some select few and this is my over arching vision. I don’t look at political or other backgrounds. As far as I am concerned it does not matter who you are, who your parents are or what connections you have. I believe that we can all contribute to this country’s progress, and all of us can and should reap the benefit of the successes of our own hard work in our own country.

TEU: Your energy spokesperson, Konrad Mizzi, has now been on record various times stating it’s the PL’s policy to help lower energy prices. Do you agree with Minister Tonio Fenech that this is impossible and not feasible? If your energy policy does not work, the price of electricity and water bills would not be what they are. Is that true? JM: We have been planning our energy policy in great detail for the past years. This is not a plan we came up with on the spur of the moment, but a detailed plan which has been methodically costed and where all particulars have been thoroughly looked into. I am personally committed to lower the current electricity tariffs by 25% and the water tariffs by 5% for all and I am so confident that this plan will

PL Leader, Dr. Joseph Muscat during a meeting with workers

work out that I am personally responsible for its implementation. We will do things differently, we will be more efficient and we will stick to the time schedule and targets put forward.

I am so confident that this plan will work out that I am personally responsible for its implementation. Our country has major challenges to face in the energy sector. In Malta, families, businesses and industries are paying among the highest energy bills in Europe. Energy poverty is now becoming an ever-present reality for families whilst businesses’ and industry’s competitiveness are being undermined. We need to remove the heavy burden that families and businesses are facing by lowering energy bills for all.

fuel oil, and our move to a policy where we generate clean energy, based on natural gas. We are committed to generate cheaper, more efficient, sustainable, secure and cleaner energy that is far more efficient than what we have today. This will result in a cleaner environment from which we all will benefit.

TEU: For people who voted for the PN in 2008 and are not that optimistic as they were then, with most things they need for everyday living being very expensive, what have you done or accomplished to earn their vote in 2012?

We are totally dependent on oil and on inefficient power stations that work with old technology. Furthermore, the fact that our country bought a power station that works with heavy fuel oil continued to make matters worse. Our country is way behind where it should be when it comes to generating energy from alternative cleaner sources, and from reaching the energy targets by 2020.

JM: We are close to the people, to their needs and their aspirations. We have been listening to everyone’s problems, challenges and dreams. In September 2012 we organised the PL’s national congress where all those interested came forward to share their thoughts, their ideas and suggestions and share with us the things that matter most to them. Our roadmap is based on what people said, on the issues that are truly important for our families, our young people, our elderly and our children. This is the roadmap I am presenting to the Maltese and Gozitan people.

Hence our commitment to change the current policy which is completely dependent on heavy

I know that a number of genuine persons who were PN voters back in 2008 have lost trust in www.maltaeconomicupdate.com

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FEBRUARY 2013 | THE ECONOMIC UPDATE

Special Feature: Elections 2013 Leaders Debate, Q & A Dr. L. Gonzi European countries underwent deep economic problems with thousands of people losing their jobs, wages, social benefits pensions being frozen or cut and a general reduction in Government expenditure and investment. The austerity measures that were introduced hit hard. On the contrary, my Government intervened directly to save jobs and bring in more investment. We saved 5,000 jobs and created more than 20,000. Malta’s employment rate had the biggest increase among European states whereas on average, Europe experienced a fall in employment rates. On the contrary, we continued lowering taxes and investing more in social benefits. We continued investing heavily in education, health and the environment. Government commenced a number of infrastructural projects which are not only investments in the long run but helped to create thousands of jobs in the process. Our investments will enhance the quality of life in years to come with investments such as the new campus of MCAST and the new oncology centre. We have invested in our children by building a new school every year and we have invested heavily in our families through the embellishment of new open spaces and parks. When you see all this together, Malta contrasts sharply to the rest of Europe and this did not happen by chance or by coincidence. They are the result of responsible and mature decisions and should not be taken for granted. We are facing the electorate with these results in hand which signal our competence in bread and butter issues including the economy, education, health and job creation. TEU: How will you get middle-income taxpayers to have lower taxes and when are middle-income people going to get a tax break? PM: My Government has throughout these past five years continued with its policy of reducing taxes- 25 taxes were lowered or removed including income tax. Apart from lowering the tax bands, we also introduced a new way of imputation for parents. We have also introduced numerous tax credits particularly for women and for our small and medium sized enterprise owners who invest or employ more. This particular measure will be made available to those SMEs that employ up to 30 people. In the budget presented for 2013 and which will be implemented by my Government after the election, we are committing ourselves to gradually lower income tax from 35% to 25% for income earners below €60,000 over a period of three years. The international economic situation did not allow us to the implement it before because it would have jeopardized 14 |

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PM Lawrence Gonzi in one of his recent visits in the manufacturing sector

our economy. Today, we have a healthy fiscal situation and an economy that is growing and creating jobs. This responsibility is allowing us to talk about and implement tax cuts whilst other countries are introducing tax increases. Malta has the lowest implicit income tax rate in Europe and we will still continue with our policy of reducing income tax.

We are committing ourselves to gradually lower income tax from 35% to 25% for income earners below €60,000 over a period of three years. TEU: In what new ways do you intend to rectify the inequalities, discrimination and injustices in the workplace and the bureaucracy that employees still face when they are randomly fired from workplaces, most having to wait years, undergoing Tribunal proceedings to win damages? PM: My Government is committed to continue strengthening the judiciary. In our electoral programme, particularly proposal 102, we are committed to continue reforming the judiciary system in Malta. In particular we want to increase the use of mediation and arbitrage and this will therefore relieve the courts from a lot of pressure. We believe that arbitrage and mediation services can be much more effective and efficient for

people to seek redress and we are committed to strengthening this area. In addition, we are proposing to continue strengthening the local courts so as to improve the current system.

TEU: School leavers and university graduates hear from teachers, colleagues and others that they will have little chance to get employment when they finish their studies. What can you say to reassure students, but more importantly parents, that they will be able to sufficiently support themselves after leaving school? PM: Statistics show that Malta is the European country where graduates take least time to find a job after graduation. Throughout these five years over 25,000 students graduated from our higher educational institutions and over 20,000 jobs were created. Our success lies in creating job opportunities and we are succeeding with Malta registering the biggest increase in employment rate in the European Union. Malta is managing to generate jobs for our youth in a number of sectors including financial services, ICT and other economic sectors. Our ability to continue attracting investment in these and other sectors depends on our capacity to continue providing trained human resources. My Government is committed to continue investing in Malta’s industry and economy in order to create over 25,000 jobs over the next five years. Our performance throughout the past five years should encourage us.

FEBRUARY 2013 | THE ECONOMIC UPDATE

Special Feature: Elections 2013

Leaders Debate, Q & A Dr. J. Muscat remedies exist and who can provide assistance when the need arises. We are also committed to adjourn the wage regulations orders so that they will truly reflect today’s realities and any existent anomalies will be removed. Furthermore, our commitment is for the Small Claims Tribunal to be made more efficient, by reducing waiting times so that hearings in front of this Tribunal will be decided in no more than two sittings. What I consider of utmost importance is the eradication of precarious work which is seriously undermining workers’ rights particularly their right to fair pay and their right to decent working conditions. Precarious work strips employees of their dignity, most especially when working conditions and practices border on, or areillegal.

PL Leader, Dr. Joseph Muscat with Hannes Swoboda

GonziPN. They have found out that the PN they believed in did not maintain its promises. They found out that the party they voted for no longer represents their values, is no longer interested in their well-being and this is painful for any genuine voter, whatever the political persuasion. The movement we are bringing together is interested in the well-being of all. This is our main priority and this is what I am ultimately interested in and what I will strive for.

TEU: How will you get middle-income taxpayers to have lower taxes and when are middle-income people going to get a tax break? JM: Middle-income taxpayers are vital for our economy’s growth. I believe in a middle-class that once again aspires to a better future not a middle-class that is sacrificed or looked upon as a class that can be exploited. We are committed to responsibly reduce the current tax burden. I believe that by reducing taxes we can stimulate the economy and help families, particularly middle-class and vulnerable families to have more money in their pockets. We are also giving anassurance that there will be no tax increases for families and businesses. To further help middle-income taxpayers we are introducing start-up tax credits, we are proposing more favourable tax rates for first time home buyers and people who want to transfer a first residence which is left as part of an inheritance or given as a donation by parents to their children.

We want to provide the right incentives to people who work part-time. We will increase the 15% tax bracket on part-time work from €7,000 to €10,000 and we will increase to €12,000 the 15% taxable amount for full-time employees who have a part-time business when they employ two people or more. All these incentives will give middle-class families and middle-income taxpayers a much needed boost and will in turn help our economy to grow and flourish.

TEU: In what new ways do you intend to rectify the inequalities, discrimination and injustices in the workplace and the bureaucracy that employees still face when they are randomly fired from workplaces, most having to wait years, undergoing Tribunal proceedings to win damages? JM: The rights and dignity of all working people are of paramount importance to myself and to the Labour Party. It is my mission to make sure that workers’ rights are truly respected. I will not tolerate situations where workers will be discriminated against or situations where unjust actions are committed against workers. To fulfil this aim we will be constantly consulting workers’ Unions and employers’ associations so that together we will draft a Charter on Workers’ Rights. This charter will list the main principles laid down in the Employment Act and it will be distributed to all citizens, so that everyone will be knowledgeable about workers’ rights, what

I will not tolerate situations where workers will be discriminated against or situations where unjust actions are committed against workers. A very innovative proposal in this regard is the guarantee we are giving to every youth that if after they attain the age of sixteen they will not be studying or do not have a job they will be provided with training. We want to encourage the number of young people who further their education after the age of sixteen and we want to make sure that each and every youth will be able to have better opportunities in life. That’s also why we have listened to business, small, medium and large and addressed their needs too, because they also need support to then help to create the jobs we need. www.maltaeconomicupdate.com

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Special Feature: Elections 2013 Leaders Debate, Q & A Dr. L. Gonzi TEU: What is the biggest difference between your party and the PL? What differentiates you from Dr Muscat? PM: There are a key of fundamental differences between the Nationalist Party and the Malta Labour Party. I think the main one centres around the weighting we give to work and employment. For the Nationalist Party, the core issue which transcends all other issues is employment. All our policies are interwoven around the need to continue creating jobs. Our commitment of 25,000 jobs is based on what the country needs in the coming five years. More than 25,000 students are expected to graduate and this means that the labour market needs to absorb them. On the contrary, the Malta Labour Party does not place so much importance to creating jobs and the electoral programme the Malta Labour Party released does not have at its core the importance of work. If our economy does not create these jobs then we will not be able to finance our health, education and social investments. The policies needed to create these jobs cannot be short term but long term. This remains the biggest and most serious difference between us and our parties. TEU

TESTIMONIALS

LAWRENCE GONZI - ACHIEVEMENTS

EURO ADOPTION - One of the first decisions taken by Prime Minister Lawrence Gonzi when he took office in 2004 was to embark on a strategy, which involved fiscal consolidation and reaching the Maastricht criteria, leading to the adoption of the Euro as our national currency on January 1, 2008. Malta also became more attractive to foreign investment, allowing Malta to weather the economic storm.

ENSURING ECONOMIC STABILITY - In the face of international economic crises, PM Gonzi and his Government adopted sound economic policies that ensured stability for investors and employees alike. Dr Gonzi’s Government launched a number of targeted support schemes, including the approval of 160 industrial projects with a combined investment of over €355 million, together with incentive programmes for industry representing an investment of €42 million. Specific schemes for SMEs such as MicroInvest and MicroCredit have generated over €90 million in private investment. All these schemes have translated into job creation. FOREIGN INVESTMENT - This Government has worked to attract foreign investment to Malta, which has significantly increased in a number of sectors. The aviation maintenance sector has grown, whilst established companies continue to expand including in the pharmaceutical, IT and manufacturing sectors. ECONOMIC RESULTS AND JOB CREATION – Malta has remained one of best performing EU member states during a period characterised by economic and financial crisis. Malta has successfully retained higher growth than the EU average, experienced faster employment growth and job creation, whilst maintaining low unemployment levels, together with a low deficit. RECORD TOURISM - Tourism remains one of the central pillars on which our economy depends. Under Prime Minister Lawrence Gonzi’s leadership, Malta has experienced 4 record years in five years. Prime Minister Gonzi’s Government has

INVESTMENTS IN CAPITAL PROJECTS – The Government has embarked on a significant public investment programme, resulting in numerous capital projects, which have resulted in an improved infrastructure and environment, whilst also generating employment, commerce and tourism. EDUCATION – PM Gonzi’s Government has opened a new school every year, started works a new MCAST campus, continued to invest heavily in University and will be developing a new ITS campus. In addition, over 2,000 students have been awarded scholarships for undergraduate and postgraduate studies, at an investment of over €19 million. HEALTH – More operations are being done and more medicines are being given for free. An oncology hospital is being built; screening and preventive services have been increased, whilst private-public partnerships have been entered into so as to provide a better service. HANDLING THE LIBYA CRISIS – In 2011, our neighbouring countries and the Mediterranean region were overcome by unprecedented change as the Arab Spring spread across North Africa. PM Gonzi realised the importance of standing behind the will of the people and being on the right side of history. Malta’s crucial and decisive role resulted in praise and gratitude from international leaders across the globe. HOSTING THE 5+5 SUMMIT – PM Gonzi hosted the second 5 + 5 West Mediterranean Forum Heads of State summit. The gathering of leaders from Malta, France, Italy, Spain and Portugal together with those from Libya, Tunisia, Algeria, Morocco and Mauritania IN 2012 was the first regional Mediterranean meeting of its kind since the historic transformation of the Mediterranean.

“The reality is that Malta is doing better than most European Union, this is reality.” Jose Manuel Barroso, President of the European Commission, 6 October 2012 “Malta indeed is a very positive case in point. The economic data of Malta are excellent and I think that Malta has proved, amply proved that even though the environment economically may be difficult, one is able to read very positive results.” Angela Merkel, Chancellor of the Federal Republic of Germany, 9 January 2013 “Your Prime Minister who is really a man whose advice is of particular and great importance for any European Nation, Country or Leader.” Antonis Samaras, Prime Minister of Greece, 15 November 2012

PM Lawrence Gonzi sharing a light moment with students at MCAST

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invested over €10 million in co-financing schemes and projects aimed at promoting sustainable tourism. The increase in bed nights as well as expenditure by tourists benefits not just the tourism industry, but our economy as a whole.

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FEBRUARY 2013 | THE ECONOMIC UPDATE

Special Feature: Elections 2013

Leaders Debate, Q & A Dr. J. Muscat

JOSEPH MUSCAT - ACHIEVEMENTS BACKGROUND – Joseph Muscat’s career commenced as a journalist and proceeded assistant head of news and editor within the PL’s media branches. He was actively involved in the Labour Youth Forum, and the National Commission for Fiscal Morality. Academic Credentials – Joseph Muscat achieved a Masters in European Studies and a PhD in Management. EU – Although at the time a fierce opponent to Malta’s accession bid with the EU, Joseph Muscat was the first Labour candidate to be elected MEP Tto the European Parliament in 2004. EU HIGHLIGHTS – Joseph Muscat was a member of the Committee for Economic and Monetary Affairs of the European Parliament and the Committee for Internal Market and Consumer Protection. In 2007 he was elected as Vice-President of the Committee for Economic and Monetary Affairs of the European Parliament, the first Maltese to be elected to serve in this role. Moreover, he was the youngest person ever elected as an official of this important committee.

TESTIMONIALS

EU CONTRIBUTIONS – As an MEP Joseph Muscat was responsible for a report on roaming charges and also a report on the sale of banks. Joseph Muscat achieved concrete results in protecting customers, particularly as regards the Satellite television tax

reduction, customers’ rights to watch sport events for free and a solution to the medicine registration issue. As an MEP he was actively involved in issues related to the protection of the environment including the St Luke’s hospital incinerator, the Marsa and Delimara Power Station and the Sant’Antnin recycling plant amongst others. WORKERS RIGHTS – Joseph Muscat worked actively in favour of workers’ rights by ensuring the protection of workers’ rights in the Services Directive, and he took a number of initiatives related to Health and Safety at the workplace. Furthermore, he was instrumental in the safeguarding of the employment of port workers. SOCIAL JUSTICE – On the social affairs side, Joseph Muscat was actively involved in the Parliamentary intergroup which discussed disability issues. He won the Outstanding Young Person of the Year award in recognition of his political work during 2006. REFORM – Joseph Muscat was elected as Leader of the Labour Party in June 2008 and he immediately started enacting a number of reforms within the Labour Party. These reforms led to a wider movement which now embraces moderates and progressives who are all working tirelessly to create a new, and more inclusive way of doing politics.

TEU: What is the biggest difference between your party and the PN? What differentiates you from the Dr Gonzi? JM: Our overwhelming message is one of positivity. Unfortunately GonziPN campaign’s message is one of negativity. Honesty is the best policy. That has always been my guiding principle. I want to have an honest relationship with our citizens where I am honest about our performance and about the government’s performance. The recent independent announcement by Standard & Poor’s which downgraded our economy is the result of the fact that Dr Gonzi and his government underperformed in three important areas. These are, excessive government debt and deficits, lack of reform of our public utilities (Enemalta) and our country’s low female work participation rate. I believe that leadership is about taking responsibility. My commitment is to reform our politics, restructure our economy and renew democracy so that we will be living in a country which is more competitive and more at ease with itself. A country where each and every one of us deserves the best. A country where we all truly belong. TEU

“We hope that the Maltese Labour Party with his leader Joseph Muscat who is a well known figure in the European scene will win this election to bring in new ideas and a new style of leadership in the European scene. Malta is in a difficult situation in many respects, and it needs a strong leader who is well respected in the European Union and Joseph Muscat is one of them. He was a member of the European Parliament, he has many friends and he has many supporters, not only in Malta but all over Europe. Malta needs a change, a change that will introduce more social-democratic policies, and I look forward to Joseph Muscat being the new prime minister and a strong leader not only in Malta itself but in Europe too.”

Hannes Swoboda – Austrian MEP and President of S&D Group at the European Parliament.

“As the President of the PES women organization I have had the chance to collaborate with Joseph Muscat and I personally know his commitment towards gender equality and social progress. He has been a great colleague in the parliament. The proposals of the Labour Party in Malta on free child care, incentives for women to join the workforce or open a business and the support for women in key positions and boardrooms will give Malta the most feminist government in its history. The Maltese people have an important choice to make on the direction they would like Malta to take. The choice is between the status-quo and the strengthening of the positive achievements reached whilst fostering fundamental rights for women. I believe that Malta deserves better than the status-quo. Maltese citizens, women, mothers and daughters deserve better and should not miss this opportunity to support genuine change.”

Zita Gurmai – Hungarian MEP and President of the European Socialist Party Women Organisation

PL Leader, Dr. Joseph Muscat

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Special Feature: Elections 2013

Listen, Assess and Decide

by Martin Vella

TEU: What was your vision with the PL and what are you trying to accomplish through your efforts? EM: My vision with the Labour Movement is of a fairer, cleaner and more citizen oriented society. The Malta Tagħna Lkoll rallying call is a cry from the heart of a population who is fed up of circles within circles controlling our country. We want to be for the people and not from the people.

Public perception is the smoke indicating that here is probably a fire. Dr Manuel Mallia addressing the PL Extraordinary General Conference

His background as a criminal lawyer is well known. Since he first started practising law many years ago, Dr Manuel Mallia has had the occasion to meet and communicate with people from all walks of life. In this interview we learn why, very often, Dr Mallia the lawyer assumes a role far beyond that of the court room, and comes face to face with the real problems families travail against on a day to day basis, giving him a sensibility that translates very well into his communication with all the various components of our society.

TEU: You are quoted as stating that, “I have at heart the national interest. The country gave me a lot and I believe it is now time to give something back.” What are you prepared to give back?

EM: I am a firm believer that politicians are at the

service of the citizens who have trusted them. So the answer to your question is quite simple really, I am offering myself and my abilities, to serve the national interest. The national interest is not some vague cliché, but is all about having at heart the interest of our citizens, at the individual level, the family level and the community level, all summed up as the national interest.

TEU: Even though many politicians put a major emphasis on giving back, public perception of them is not always favourable. Does that ever frustrate you? EM: It is what I hope to contribute to change. Public perception is the smoke indicating that here is probably a fire. Unless politicians lead by example, and ensure that their behaviour is always strictly above board, and truly in a spirit of service, then perceptions will remain negative. It can be frustrating when all politicians are lumped 18 |

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together in one amorphous mass. We should be judged individually on our own merits, and that is why I have high hopes in being able to contribute to dispelling negative public perceptions.

TEU: You chose the Labour Party because you saw in Joseph Muscat the same principles and values you hold. What are these fundamental values and principles, and aren’t these the same you believed in when you were a member of the PN? EM: My fundamental values and principles have always been the same. I believe in justice and all that stems from it. A social justice where all our families are rewarded for their work fairly and in a way that gives them the ability to support themselves with at least a basic level of decency. A justice where we don’t have the few scrounging off the many, with corruption becoming the order of the day, always at the expense of the man in the street who is far removed from the inner circles of influence and affluence. A justice where nobody is left outside. These, my principles, match those of the Labour Movement, but not anymore those of the Nationalist Party. TEU: Do you deem it acceptable, or see any conflict of interest when lawyer-politicians defend people accused with corruption, yet at the same time speak against corruption? EM: It is not only acceptable but is a must. We live under the principle that all are innocent until proven guilty. If we were to introduce the idea that lawyerpoliticians should not defend people accused of corruption, we would be tampering with the course of justice. All accused are presumed innocent, and all accused have a right to choose a lawyer. Allowing political perceptions and political manipulation of the professional aspect of lawyers to enter the judicial process would be a travesty of the system, by assuming that accused are immediately guilty. Due process of law must be observed for the scales of justice to function freely.

TEU: In law, you were known as somebody who got things done. Many today suggest there is a lack of that kind of leadership. What makes a successful leader today and how were you able to bring people together and make an impact with PL? EM: Ideology has taken a step back in politics, mainly due to the progress we have enjoyed under successive governments since Independence. It has been replaced gradually by principles of good management, governance, and over all, honesty. The successful leader is the one who is able to listen, assess and decide, keeping those principles very much at the forefront of his psyche. Joseph is that leader, and I am proud to be part of the team which will be implementing this new way of doing politics and government if elected after the 9th March. TEU

Dr Mallia is the founder member and the senior managing partner of the law firm Dr. Manuel Mallia & Associates, and holds posts as legal advisor to a number of Companies and Employers’ Associations. He has served as president of the Casino Maltese, Vice President to the Malta Red Cross and sat on committees set up under the auspices of the Council of Europe. Dr Mallia was also a member of the Executive Committee, Council of the Malta Football Association, the Car Racing Association, and President of the Pembroke Basketball Club. Dr Mallia is regarded as one of Malta’s top lawyers practising Criminal Law. Dr. Mallia has also formed part of defence teams in international criminal trials held in the United Kingdom, the Netherlands and Italy, foremost the Lockerbie Trial. Dr Mallia is a member of the Camera degli’Avvocati, the International Bar Association and the American Bar Association. Dr. Mallia will be contesting the Maltese General Elections on the Labour Party ticket (9th and 10th Districts).

FEBRUARY 2013 | THE ECONOMIC UPDATE

Special Feature: Elections 2013

COMMUNITY FOCUSED In fact, there are social problems in this demographic part of the country, where one has to admit we have extremely friendly people, who understand and also show a lot of respect and it is precisely this background that has moulded my experiences and helped my practice. So yes I am proud and thankful for the trust shown by these good natured citiziens.

TEU: Is there something you think the PN should be doing or doing differently – doing that it isn’t doing, or doing differently ensure that voters make the right choices and decisions in short order for the final run-up to the 2013 elections?

Dr. Stephen Spiteri TEU

First and foremost a politician has to understand his role and be hands-on. Dr Stephen Spiteri prides himself in having succeeded to build a bridge that has brought him closer to the people he treasures and works most in his life. In this encounter Dr Spiteri shows why he has become capable to listen, understand and be of assistance. Having had the privilege to serve and be functional with a mega-ministry such as the Minister of Education, Employment and the Family, Dr Spiteri maintains that vocational education is key to our economy.

TEU: You are a medical doctor by profession, politician by choice and wellknown for your strong views and good humour. From your experiences, how critical has this been helping you solve political and business issues?

SS: Naturally, there is no doubt about the fact that as a medical professional involved in the political landscape this has been of great advantage to me. Before I became a politician, I practiced medicine and became very mindful of the social needs of my patients and clients. Even though I was not in politics, I felt the need to serve the citizens who have trusted me, offering myself and my abilities, to serve those in need. Having been borne and bred in the Cottonera, as you may be aware in the South we are overwhelmed with persons who have particular needs, whereas in certain other areas such problems are not acute. I was raised in this social order and I am proud to say I have this at heart both at individual level, as well as at the community level.

SS: I believe that the PN in government has led this country in the right direction vis-a-vis fundamental pillars such as education, health, employment, and also social services. An election campaign should be conducted close to the people and I believe in direct contact with the grassroots is an essential element of that campaign. I believe that the perspectives of party politics should include a collective organised effort syndicating the whole five years and not just seek to influence the decision making process in the decisive two months once the whistle blows for the final countdown. We should not come across as though we feel we have been resurrected and fire away empty promises which cannot be delivered. Politics should be people-friendly and close as possible during the whole legislature. This is something I have done my best during the past five years and has given me the opportunity to unite and bond with the people.

I have done my best during the past five years and this has given me the opportunity to unite and bond with the people. TEU: You came from a very successful private life and decided to go into politics. What appealed to you about the opportunity, and why should young people consider making that sacrifice? Ss: Many times one is pushed into politics. In Malta the tendency is for political parties to identify candidates who enjoy certain popularity and have been successful in their career, so they view these as potential assets. I was one of these persons who the party identified way back in 2003. In fact President Emeritus Eddie Fenech Adami sent for me several times and to be honest with you I offered some resistance initially. As you know this is not an easy decision to take. In the

course of my career, having gained the trust of a large part of my constituents, and for me this is the most precious thing, I opted to enter politics to continue serving and giving value-added benefits to the most people in need.

TEU: What is the best part of your job as a Parliamentary Assistant, and what have you found to be the most surprising thing about it and in what ways have your decisions influenced and impacted positively? SS: During the course of the past five years as a MP, and also with the Minister for Education, Youth and Employment, this has given me vast experience and maturity in the political field. Minister Dolores Cristina gave me more than enough space and trust to conduct my work as Parliamentary Assistant within the Ministry of Education, Employment and the Family. This also gave me the chance to learn more about the importance of the role of education in our country. Above and beyond, it gave me the opportunity to associate myself with youth, whom I relate and always ask for their feedback when it comes to legislating reforms in education. I also experienced the new phenomenon of child care centres which this government implemented, enabling women who want to work and study, and I also had the privilage to involve myself in sports sector, were we have successfully achieved different milestones such as Skola Sport, turf pitches, sports complexes and also ensure sports education. TEU

“Stephen was an asset to the Ministry in his role as Parliamentary Assistant. I could depend on him to step in, even at very short notice, at seminars and other events, when it was not possible for me or the Parliamentary Secretary to be there. He diligently acquired an in-depth knowledge of the myriad corners of a very large Ministry. Nothing phased him and he worked very hard in his role.” Dolores Cristina, Minister of Education, Employment and the Family. Stephen Spiteri graduated as a medical doctor and went on to specialise in family medicine. He enjoys a private practice whilst also remaining actively engaged in further research on various aspects of his profession. He is an active and energetic person who enjoys the sea, fishing and diving. He is committed to assisting those in need and is active in the voluntary sector. Having been elected to parliment he was appointed Parliamentary Assistant within the Ministry of Education in 2010. Employment and the Family. He is a member of the Parliamentary Standing Committee on Social Affairs and a member of the Maltese delegation to the Parliamentary Assembly of the Mediterranean. He will be contesting the second and third districts on the PN ticket.

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THE ECONOMY, PUBLIC FINANCE AND THE ELECTIONS By Prof Edward Scicluna MEP (PL candidate on the 5th and 8th districts)

One tends to recall that the economy and elections are very much related. The famous statement “the economy stupid” was coined with this in mind. Leaders of contesting political parties can only ignore the economy at their own peril argues Profs Edward Scicluna. Let’s unearth why... Incumbent governments know how important it is to face an election at a time when the economy is doing well. And so one cannot be surprised that an election programme would promise economic growth, full employment and low inflation. For the record these economic targets which also include price stability, equitable distribution and balance of payments equilibrium have been on the electoral platform in many countries since the early 40s. So it is no surprise that so called electoral proposals, promises or measures regarding the economic growth and employment would find a prominent place in the electoral programme of the two leading political parties. Which then begs the questions which of the two is the more credible? The issue of credibility may be addressed with the credentials of the owner of the programme in mind. In which case one seeks to judge its past record or its team make-up and thus the past record of each individual team member. Credibility may also be addressed through the studies or presentations attached to the promises or proposals themselves.

In spite of these big changes the deficit would still turn into a surplus in 2016 and the debt ratio would reverse towards the 60% eurozone “holy grail”. The 2013 general election has seen for the first time the valuation or costing of the major quantifiable measures suggested by the two leading political parties. It originated with the PL’s energy proposal which promised significant cuts in the electricity and water tariffs. Sceptics of this proposal at the time wanted to know where a future PL government would find the 20 |

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money to pay for this presumable subsidy. The response was that any announced proposal would be costed so that information would be given as to how much it would cost, when it will be introduced and how the proposal can be achieved. This was done with regards to the PL energy plan and the successive measures announced subsequently on a daily basis. The PN programme came out at one go with the measures listed and costed. The response from the public to the two parties’ proposals was more of an alarm that such promises looked so expensive that they either could not be kept, or else would bankrupt the country. The PN gave a presentation showing that in spite of an additional recurrent expenditure of €120 million each year the budget would not be affected since it is assumed that most of those moneys would come out of savings and efficiency made on tax collection and government expenditure. Furthermore assuming a significantly higher rate of economic growth it was shown that in spite of these big changes the deficit would still turn into a surplus in 2016 and the debt ratio would reverse towards the 60% eurozone “holy grail”. The PL presentation split the problem of economic and financial projections into two. One presentation shows the results of an econometric model exercise based on the growth and employment proposals. This shows the economic effect of a supply shock to the economy where it is expected to expand its real growth potential up to the 3.6% mark. In a separate financial exercise projections of the additional estimated annual €80 million expenditure are examined as to their impact on Malta’s public finances. This is done on the basis of a purposely chosen lacklustre economic growth scenario as projected by the European Commission and the International Monetary Fund. The projections shows that while the surplus and debt targets will not be reached in the next five years, the more modest PL additional expenditure figures would at least see the lowest deficit ever by 2017. Come April Malta would be faced by a more official set of projections due to the submission and approval of this year’s Budget in Parliament. TEU

Prof Edward Scicluna

Prof Edward Scicluna is a member of the European Parliament and Vice-Chairman of the Economic and Monetary Affairs Committee in the European Parliament. He is also the representative of the European Parliament on the European Statistical Advisory Committee (ESAC). Prof Scicluna was Head of the Department of Economics at the University of Malta; Chairman of the Malta Council of Economic and Social Development (MCESD), Chairman of the Malta Financial Services Authority (MFSA), Electoral Commissioner, Central Bank Director, MIB Ltd director, Chairman of Political Discussion Programmes organised by the Malta Broadcasting Authority (MBA),Chairman of the HSBC’s Malta FundsSicav plc and Structured Funds Sicav plc, Chairman of CWG plc and board member of the National Euro Changeover Committee (NECC). Internationally he carried out consultancy work for the EU Commission, UNESCO, the United Nations Environmental Programme (UNEP), and for the governments of Albania, Croatia, Libya and Turkey; served on the Council of Europe Development Bank Auditing Committee. He acts as economic advisor to the IMF delegation and the following Rating Agencies – FitchIbca, Standard & Poor’s, and Moody’s and was appointed as a Euro expert by the EU Commission prior to Malta’s entry into the Eurozone.

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Special Feature: Elections 2013

Knocking Down Barriers by Martin Vella

I believe in efficiency. Our public entities need to be restructured to eliminate bureaucracy besides having better accountability and transparency. The health sector, the environment sector and transportation are in dire need of an overhaul.

Dr Rachel Tua addressing the Partit Laburista’s Kungress

Her passion for politics was undoubtedly influenced by her role model and granduncle Eddie Fenech Adami – through who Rachel Tua distinguishes a great statesman, who genuinely worked for the benefit of his country. Our Editor gets the chance to talk with this charming lawyer about her aspirations to work for the country’s interests by participating in the development of strategies and policies. However she says that life is a box of chocolates – you never know what you are going to get!

conduct; it does not come as naturally to most women. One of the challenges faced in such a field is making my values known. Nevertheless I believe that in grim circumstances, there must be incitement rather than deterrence. Most women keep their distance from political positions as they do not share the theoretical belief that they are harsh enough to endure such duress.

Education is the best weapon which you can use to change the world

RT: I was only four years of age when my late

As a woman politician I will prioritise and enforce the concept of equal opportunities and equal rights for all especially where women are involved. I hope to attain the elimination of poverty among women, who are more at an economic disadvantage when compared to men in general. The empowerment of woman is the empowerment of life. Furthermore several careers open to woman such as carers of the elderly are underpaid. In addition, I would like all parents to have equal opportunities in providing their offspring with the best education possible. In the words of Nelson Mandela, “Education is the best weapon which you can use to change the world.” It is also high time to abolish barriers hindering a woman from achieving her goals. This can be done by supporting women from workshop to executive positions. Free childcare is the key to even more women being able to take up jobs, and recognize their career drives; motivating the economic drive.

TEU: How do you feel as a woman in a maledominated field and what do you hope to achieve as a woman politician?

TEU: How do you visualise a future under PL Governance? RT: I look forward to see this country more accountable, transparent and competitive. We want to improve the quality of life by creating better jobs and reduce the financial burdens through good governance. I had the opportunity to work within the gaming sector in Malta and appreciate that our country has a potential to be among the best countries in terms of regulation, resources and skilled people in this age of digital economies. This is where our future lies and we must be prepared to embrace it.

TEU: What is the link between your legal profession and role as PL’s Equal Opportunities Officer, and what made you feel that studying law was the right fit for you? grandfather Advocate Joseph Fenech Adami introduced me to the Courts of Malta. I still recall his smile and tender words, “Someday you will make a fine lawyer with that character of yours. You are so tiring and incapable of keeping quiet for just a few minutes.” I trust he was right; it was my destiny to shadow his footpath. My role as an Equal Opportunities Officer within the Labour Party encapsulates the principles I sturdily believe in; which places me in a stronger position whereby owing to my Legal Profession, I am able to unceasingly combat discrimination and social segregation by also making use of Legislative Policies and Directives.

RT: At times it can be tough particularly when there is an attempt to underestimate a candidate of female gender. There is no reality, only perception. Whilst males tend to instinctively portrait such

TEU:What kind of challenges do you face when trying to get the importance of your message across to the people? RT: One of the prime challenges is trying to convince people to stand up for their rights and to voice their politics and views overtly. Despite advanced systems of education and a modern technocratic world where much information can be derived as to how one should address an aggrieved state of affairs, hitherto many people are still passive to higher authorities due to fear of being discriminated or rejected. This being said, the inclusive perception of Equality is still idle. TEU

ACHIEVEMENTS AND RECOGNITION IN RACHEL TUA’S CAREER √

Mediator’s Course

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Diploma of Notary Public

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Doctor of Laws

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Legal Advisor to IGaming Companies

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Tribunal Prosecutor

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Member of the Labour Party’s Executive

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Equal Opportunities Officer of the Labour Party

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Local Councillor within the Locality of Mosta

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Specialises in Criminal , Civil and Family Litigiation.

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FEBRUARY 2013 | THE ECONOMIC UPDATE

Special Feature: Elections 2013

BUILDING ON THE PRESENT STRENGTHS by George Carol

Marion Mizzi is renowned as an entrepreneur in the industry of wellbeing, slimming clubs and spas. She maintains that the nationalist government gave the southern regions of Malta a lower level of importance in relation to the north, creating a high degree of discrimination and unjustified regional unemployment. Through the Malta Taghna Lkoll approach she wants to ensure that this discrimination and short sighted approach is drastically eroded.

TEU: What is your viewpoint of politics?

MM: I have always entertained a grass root contact with Maltese and Gozitan citizens throughout my profession, which I have been practising for 35 years. I have nourished experience with both clients and employers from practically all walks of life. Politics in my definition entails a chess game of constructive ideas. The goal is to select the best alternative which the Maltese and Gozitan people earnestly deserve. Politics is essentially an exercise in effectively contributing and being personally responsible to welfare of others. It is the duty to serve the art of understanding social issues and actively responding to them.

The PN is entrapped in a political bubble, attached blindly to the synthetic belief that the party has a superior ego in relation to the Labour movement. TEU: Why did you join the labour movement? MM: I choose to participate within the labour movement since this movement has evolved throughout the years along its own innovative ways. It succeeded in attracting non-politically aligned citizens and former nationalists. TEU: It is prudent to question why has the Labour movement been so successful? MM: The experience of the labour movement in opposition has been totally constructive, in reshaping and redesigning itself, of referring a better quality of life to all participative citizens, who have the interest of the nation at heart. This 22 |

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can be best appreciated in the 2013 electoral manifesto (Contract) of the labour movement. This in a nutshell represents feedbacks generated from all section of the Maltese society based of facts, statistics and scientific benchmarks.

cases concerns the introduction of interactive electronic participation with the citizens and recent rejuvenation process. This is for the interest of each and every one, thus sustaining the slogan of the movement- Malta Taghna Lkoll.

TEU: What about other critical issues generated by the PN administration?

TEU: What is your final word to the Electorate?

MM: Throughout the past five years, in particular the PN has lost contact with the people, becoming more concerned with domestic party issues. I am persistently being approached by former nationalist supporters within the labour movement who enjoy constructive ideas, yet have been granted undue attention by the PN. The PN is entrapped in a political bubble, attached blindly to the synthetic belief that the party has a superior ego in relation to the Labour movement. TEU: What is new about the labour movement in relation to the former Labour Party? MM: I am motivated by the political vision that this labour movements headed by Dr Joseph Muscat is essentially a movement and not strictly a political party like the traditional PN. Here one is free to deliver his own opinion and not just to adhere to strict and hard rules. Thus guidelines within the labour movement are to facilitate communication and a synergy of constructive ideas and not to ensure strict party loyalty. The labour movement is inspiring since it is highly innovative in its approaches. Typical

MM: In the eventuality that the political experience of the past five year track record of the PN has not been to your liking, a further five year dose of PN administration will simply aggravate it further. The government has unclear priorities. A typical case in point is the Valletta project, which apart from the grievances of the Maltese as regards a â&#x20AC;&#x153;topless opera houseâ&#x20AC;?, the project has been over budgeted. What about the vulnerable position of pensioners, who cannot cope with the merge basics? One need to question- is the PN administration committed to invest in stone rather than priorities? The government repeatedly praised the physical infrastructures of the Mater Dei hospital and public schools, over budgeting in the process, at the expense of the taxpayer and vulnerable groups. Dr Joseph Muscat is highly open to ideas irrespective of political shades. It is already high time to allow Malta the opportunities to address its social and economic ills in the forthcoming elections. New Government cleans page! TEU

Marion Mizzi is a well known television presenter, nutritionist, entrepreneur, and humanitarian. During the past 38 years she successfully transformed herself from a TV personality to an entrepreneur by creating the Marion Mizzi Wellbeing. She also created a lifestyle diet, spreading the knowledge of beauty, etiquette, health, and success among Maltese. She helped raise funds for the well-being of women and children. Marion is recognised as encouraging young people in particular to be charitable, educate them about exemplary values, and create a positive image and celebrate women by empowering them to use beauty for positive social change, and believe in themselves. She is contesting the 3rd & 5th electoral districts.

FEBRUARY 2013 | THE ECONOMIC UPDATE

MALTA GENERAL ELECTION 2013

Special Feature: Elections 2013

by George Carol

On the 9th of March 2013, Malta will go to the polls for its 23rd general election since the start of the electoral system in 1921. Malta is divided into 13 electoral districts, and for every district, five members are elected to the House of Representatives through the STV system, the single transferable vote. The general elections are known for their high attendance, and in fact, Malta has the highest non-compulsory General Election turnout throughout the world. The polling stations close at 10pm and the votes are immediately taken to the counting hall; the General Election result is normally known within the next 24 hours after the closing of the polls. What election data cannot reveal, public opinion surveys might. The surveys we are highlighting are sourced from Malta-Surveys, a new online forum to monitor Malta’s mood related to politics, economy, society, sports and other fields which are of national interest and of the people’s concern. Unfortunately, there are no systematic and reliable survey data on voting intentions and behavior and this survey research may shed light on voting pattern behaviour. This survey may indicate something more than a merely marginal shift of loyalties, considering the long-standing and deep divisions between the two main political parties and, presumably, between their supporters. When one assumes the widespread occurrence of such dramatic switches it is reasonable to look for firm and persuasive evidence. According to a survey commissioned by The Sunday Times in January 2013, the Labour Party was shown as leading the polls by six points, enjoying a net swing of 11.7 per cent from the 2008 election. At the time, the lead shot up to 10 points if the undecided (22 per cent) are removed from the result, meaning that based on declared voter intention, Labour commanded 54 per cent of the vote, ahead of the Nationalists at 44 per cent, while Alternattiva Demokratika garners one per cent. However, following the latest revelations on oil corruption and allegations made against PL Deputy Leader Toni Abela, particularly the drug scandal, Labour’s lead has suffered and the lead has been reduced. The cost of living, energy bills and corruption emerged as the two topmost issues that will dictate how people vote in the next election. These issues are followed by the economy, education, employment and the need for a change in government. Sources: Malta-Surveys | info@malta-surveys.com; Wikipedia; Maltadata; Election Resources on the Internet: Parliamentary Elections in Malta - Elections to the House of Representatives by Manuel Álvarez-Rivera.

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FEBRUARY 2013 | THE ECONOMIC UPDATE

IT & NEW ECONOMY

Knowledge and Creativity By Djordje Vukelic

Background Mr. Vukelic has over 20 years experience in the field of IT, having key roles in several national and international projects. Former Lecturer of University of Belgrade and University of Malta, whereby he published a number of research papers and a book on software programming. His current role is CTO (Chief Technology Officer) of iPro Solutions Ltd. iPro Solutions is a company specialised in software development having its operations spread in five continents.

Information technology has shifted the paradigm of the economy. In a macroeconomic sense, information technology affects the patterns of production, investment and employment. In a microeconomic sense, information technology changes business activities. Thanks to advanced information technology, knowledge-based workers, who create and utilise information, play a key role in economic activities. The world is now in a paradigm shift from the industrial age to the information age. As a result, there is a growing demand in the service fields that require expert knowledge and information.

is a stage someone completes before moving on to writing code. ‘Design’ produces some form of specification, which is sufficient for a ‘generic code monkey’ to implement. The truth is very different. Programming—the act of writing code—is a design activity. The act of programming verifies the initial design decisions and performs the remaining design work.

Modules/components - The architectural subsystems are usually too large to directly implement in code, so the next step is to break each one down into comprehensible modules. Module may mean something different depending on the design approach; it might be a logical clump of code, perhaps some physical unit like a Java package, C++/C# namespace, or a reusable library.

Software development in the new economy is amplifying human intelligence.

Classes and data types - Next, we break a module into bite-sized chunks. Interface design tends to be less formal and easier to change behind the module. The tendency is to do this micro design at the keyboard.

The importance of software emerges from its being the digital brainpower of information technology. Just like earlier industrial revolutions replaced and amplified the impact of other human attributes - software development in the new economy is amplifying human intelligence. IT, particularly software, is characterised by a unique cost structure that is peculiar to information: expensive to produce, but inexpensive to reproduce. With the growth and expansion of the Internet, digital information can be reproduced and transmitted across the globe almost instantly. IT could be described as the most powerful economies of scale known to date, which has implications for potentially high returns to investment in software development.

Does this mean that there is no need to think before starting to code? Not at all! Deep inside a text editor is not the place to plan what is writing. That’s like trying to drive from Berlin to Rome without deciding a route first. It will end up in Moscow before it mapped out which way is north. By definition, design is something to be done first.

Functions/Procedures - This may be the lowest design level in the food chain, but it’s of no less importance. A program is built from routines: If the routines are poorly designed, then the entire system will suffer. This is usually a mental exercise rather than a documented procedure, but a diligent design is essential.

Therefore a new approach to software development needs to be taken to reflect the new economy. It is a popular belief that ‘design’

Programmers design code structures, obviously. But this means different things at different stages of the development process. At each stage, design is a process of decomposing the task into its constituent parts and figuring out how each part works. These levels of software design are: The system architecture - Here we look at the system as a whole, identify the main subsystems, and work out how they communicate. It is the most important design act.

Can one adopt a practical methodology that addresses and embraces the above-described findings and concepts and which also takes into consideration international standards that ensure quality products and service delivery? The answer is Yes. It’s about blending the popular Agile Methodology with the ISO 9001 Standard for Quality Management. This is the way iPro approaches software development. TEU

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FEBRUARY 2013 | THE ECONOMIC UPDATE

Give the Taxman a Hug! By Emma Camilleri, Cloud Account & Cloud Keeper

Whether you’re a large organisation, small business or sole trader, the tax man will come knocking at your door, which is why it’s essential to keep your finances up to date.

Keeping accounts isn’t only a legal obligation, keeping up-to-date and accurate records is the key to running your business efficiently and effectively. The financial information provides a dashboard for your company, helping you understand how your business is really operating, so that you can make strategic and sometimes critical decisions for the future of the business. As the saying goes, “knowledge is power”! If you know about a problem, at least you have the opportunity to fix it, and the sooner you know about it, the better.

You really should thank him for forcing you to maintain accurate financial records!

Cloud Keeper can offer you a rare opportunity to reduce your workload and free up your time to focus on other core roles of the business.

Don’t think of your accounts as something you do at the end of the year, stay on top of receipts and invoices on a monthly basis.

Cloud Keeper is a complete bookkeeping service that exclusively uses the popular Cloud Account software system.

Admittedly, you didn’t start your business to become a bookkeeper or accountant. Yet most small business owners often wear many hats − HR, sales, accounting. No matter how much you enjoy running your company, you probably never feel like you have enough time to do the things you want to do.

Cloud Keeper can do all of your financial accounting or just parts of it, such as the VAT returns or the salaries. You decide which aspects you want Cloud Keeper to attend to on your behalf.

As with most business owners, you’ll know everything about your product or service, yet when it comes to accounting, you may feel slightly overwhelmed with the complexity and the time it takes up.

Just send all your invoices, receipts and paperwork to Cloud Keeper

We’ll put all that paperwork in order and input the data into the Cloud Account financial system.

At any time, from any place, you can then access your up-to-date financial information and business reports via your secure, personalised, Cloud Account portal.

Hiring a professional to do your bookkeeping and end of year filing means you don’t have to worry about arbitrary government rules or missing out on tax allowances and you can concentrate on doing what you do best: running a successful business.

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FEBRUARY 2013 | THE ECONOMIC UPDATE

BRANDING & IT

Focusing on Results by Martin Vella

Any CEO needs to attract talented people but that is only part of the story – you then have to get them to work together. Ray de Bono views the business through the eyes of his clients. Talking with Ray we learn why the goal is to align your workforce to your strategy and then motivate them to achieve success.

TEU: Dmax is probably one of the most successful Maltese branding house on the international market and has been a leader in its field in Malta for many years. What has enabled the success year after year and what makes Dmax brand so special?

RdB: I would prefer to say that Dmax has set for

Ray de Bono is the CEO and for dmax tv, a German-Maltese firm specialising in Online Business Solutions & International Corporate Branding. Since its launch in 2006, under the direction of Ray de Bono and his partner Uwe Schoenfeld, this small firm has established itself as a leading player in its sector, serving an increasing number of top clients in Germany, the UK, US, Ghana and South Africa. To-date, the Dmax team was involved with the likes of Microsoft, AON, Spuetz AG, Coca Cola and the British Commonwealth, amongst others.

itself a number of ambitious targets, has achieved good results and is very much a works-in-progress operation; what distinguishes this firm from local players is definitely the fact that it has in-house skills at both analytical, IT and the ‘creativity’ level. It is this combination of attributes, coupled by our international experience and shareholding that gives its clients the advantages they look for. We have carved our own brand in our sector, i.e. the ‘Dmax brand’ – which is a brand that excels on its own steam, not under the umbrella of some international chain - which seems to have been the local business trend for some time. This is a German-Maltese firm with a positive pro-business, go-get-it attitude.

TEU: Would you provide an overview of the products and services that Dmax offer and are there opportunities to add to your portfolio in this regard? RdB: We offer Business Solutions, meeting the needs of clients seeking distinction in both their identity development and business processes, dedicated corporate branding services serving local as well as international companies but that is only the tip of the iceberg. To achieve its aims Dmax markets a host of online top-end solutions, namely Dmaxepaper.com, a business grade email marketing and business intelligence tool, Dmaxapps.com, an up-and-coming platform offering a number of readyto-use Smart Aps for Social Media and Smartphones; Dmaxflip.com, a flip-book creation platform, and Dmaxpedia – a knowledge share solution that is perfect for forward looking SME’s who are always on the move.

TEU: How are you able to maintain the entrepreneurial focus and how critical is this to your success? RdB:Dmaxisstillamicro-entity,averysmallcompany albeit this is not immediately clear if one considers the amount of output this company generates annually. It is not always easy to work and succeed within a multi-disciplinary team of business analysts, software engineers, social media gurus and creative artists – all under one roof. Artists and IT developers are not necessarily always totally compatible in their approach to a given challenge, designers and software analysts may not be the best duo, yet we somehow managed to merge the two departments together, forging a healthy and dynamic working environment. My business partner, Uwe Schoenfeld, and I, know where we want this company to be and work hard to ensure that targets are met. Without the loyal team behind us, we could not have achieved anything; although this is not a fait accompli; we have still a long way to go with our Dmax project. So look out for more news from our company in the near future.

HR management and particularly the grooming of potential management and leaders is a talent and a blessing TEU: How do you groom the next generation of leaders at Dmax and would you highlight the strength of your management team? RdB: I trust that time has taught me a lot more than university ever did on this subject. HR management and particularly the grooming of potential management and leaders is a talent and a blessing to have if you are born bestowed with the right charisma to do it naturally. I had to learn the hard way, and yes - after also losing some good people to competition -I can say it’s a lesson I learned also at my expense. After 15 years in business, naturally you learn how to avoid the board room challenges and staff management hurdles, enabling you to spot (and encourage) rising stars within your team. At Dmax we keep our staff abreast with business targets and strategies, we are clear about our targets. Our staff shares with us their ideas, which we very often take on board; altogether, irrespective of rank, we work hard, and the fact we are all close to one another (notwithstanding the fact we have people across three countries) is very encouraging and proves to be a worthy experience. TEU

www.maltaeconomicupdate.com

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FEBRUARY 2013 | THE ECONOMIC UPDATE

RESEARCH & DEVELOPMENT

The Secret to Growth in the Manufacturing Sector By Dr. Jeffrey Pullicino Orlando

The National Research Strategy for Manufacturing in Malta, which was launched on the 30th January during a business lunch organised by the Malta Council for Science and Technology, is an important step towards strengthening the manufacturing sector in Malta. Its aim is: • To transform the Maltese Manufacturing Industrial sector into a centre of excellence for research, development and testing facilities, • To strengthen the Manufacturing Base in Malta by investing in resources and competencies that position it at the forefront of selected high technology manufacturing niche markets, whilst retaining flexibility to continuously adapt its focus to emerging technologies and applications. The strategy was commissioned as part of ERDF 083 – Manufacturing Research Platform, a project partfinanced by the European Regional Development Fund, which saw its completion in December 2012. Dr. Jeffrey Pullicino Orlando

Background Dr. Jeffrey Pullicino Orlando has been a member of parliament for the past seventeen years. He has held the posts of shadow minister for telecommunications, head of delegation of the Maltese parliamentary delegation to the Parliamentary Assembly of the Council of Europe, Vice-President of the Assembly and is currently Chairman of the Malta Council for Science and Technology. Under his stewardship the Council has seen a fourfold increase in its staff compliment and has been entrusted with the administration of a budget available for its research and innovation fund which has been increased substantially. It has achieved notable successes when it comes to increasing Malta’s participation in the research sphere on an international level, particularly in the European Co-Operation in Science and Technology programme (COST) and the Seventh Framework Programme (FP7) which is the main financial tool through which the EU supports research and development activities covering almost all scientific and technological disciplines. The Council has also been entrusted with the biggest project it has ever been involved in – The National Interactive Science Centre - which will aim at popularising science in Malta and increasing take up of science subjects by Maltese students.

Research is vital for the local manufacturing sector to survive and flourish. The manufacturing tradition in Malta traces its origins to low cost, low value added activities, which during the 1960s provided good employment prospects for the population in the wake of independence in 1964. Local manufacturing adapted along the years as it focused on sectors such as Electronics and Precision Engineering, which play a crucial role in the economy today. Despite this, the local manufacturing sector gradually deteriorated as manufacturing firms face lower employment levels and declining profits.

Research is vital for the local manufacturing sector to survive and flourish. The manufacturing strategy has 3 major objectives: 1. To identify ways in which research and innovation can contribute to the growth in the manufacturing sector 2. Increase the availability of resources and put them to maximum effect 3. Identify actions that would enable the growth of research within the manufacturing industry In fact, this strategy recommends the setting up of at least two Science and Technology parks of around 100,000 square meters. These parks would host internationally accredited labs, academia and test factories. The strategy

suggests that one of these would be placed in Gozo to boost this island’s manufacturing sector. Developing these parks through publicprivate partnerships would be ideal, though EU Funding is also an option. Currently research and development activities in the manufacturing industry amount to only 0.2% of GDP. The strategy sets 1% as a long-term target. As a result of this, it is predicted that the profit generated would be three times as much. It is important that Malta becomes a leader in niche areas such as research, development and testing. Moreover, the strategy makes it clear that Malta’s education and research structures should be flexible enough to enable the country to adapt to changing and emerging trends. Students must be encouraged to develop an active interest in science and technology. Furthermore, those thinking of pursuing such subjects at graduate and post-graduate levels should be encouraged to do so. The Strategy seeks to follow the example of Singapore, Denmark and Finland – that are ranked among the highest in the World Economic Forum Index – in pushing towards knowledge-intensive activities. Knowledge intensive industries are no longer characterised by scale and scope economies. Knowledge has become more important than size. Finland and Denmark are also small countries positioned on the periphery of the European Union. Hence, Malta can also focus on encouraging the manufacturing sector to focus more on research, development and innovation activities. There are a number of research areas, which are identified by the strategy, that provide the best potential for the Maltese manufacturing sector. One field is Food Research which would certainly benefit from Malta’s strong local food and beverage industry. Advanced Engineering chemicals are also a good option especially due to the proximity of European and North African markets. Other fields include renewable energy, pharmaceuticals and also electronics. The National Research Strategy for Manufacturing in Malta indicates that research could contribute to the local manufacturing sector’s growth and competitiveness. In the long-term this would position Malta to exploit emerging technologies such as nanotechnology in manufacturing and medicine. TEU

The Strategy can be accessed through the following URL: http://www.mcst.gov.mt/erdf/erdf-083 www.maltaeconomicupdate.com

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TOP ENTREPRENUER AWARDS 2013

FEBRUARY 2013 | THE ECONOMIC UPDATE

MAKING A James Abela

Company: NIU Ltd. / Institute of Computer Education Ltd. Job title/description: Director (Business Development) / Director Professional Expertise: IT graduate and Business Management and Development Quote: If opportunity doesn’t knock, build a door. - Milton Berle Matthew and James have been nominated together as a team on behalf of NIU Ltd. / Institute of Computer Education Ltd. Margaret Thatcher, Helmut Kohl, Golda Meir, and Lee Kuan Yew are leaders that had a vision and made a difference. James Abela believes that if you don’t have someone with a vision who is prepared to lead and inspire, you’re not going to get far.

TEU: How do you inspire others with your achievements and success?

JA: Firstly we make it our top priority to inspire

TESTIMONIALS

ourselves and to celebrate our own success. This should not be overlooked. We feel that being business partners is a great advantage as we get the opportunity to focus on what we consider ourselves to be our forte and to share both the challenging and positive experiences we encounter. We understand that a major part of our success is our team and therefore we strive to have a strong internal communication channel and an open door policy. As ICT graduates truly enjoying the adventure of business success, we enjoy sharing our story and our plans with individuals who we feel have potential to be essential players in the ICT world. Business may not always be a ‘bed of roses’ but with the right

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Testimonials: NIU have created a virtual home for KDM group which is very much in line with our corporate visual identity. We are thrilled with the result. The NIU team are extremely co-operative and pleasant to work with and they have a positive approach to all requests – nothing is ever too much trouble. Mrs. Madeleine De Martino – Director Marketing and PR www.maltaeconomicupdate.com

drive, ambition and positive outlook together with a strong dynamic team success is practically guaranteed.

TEU: Support and tolerance lead to growth and success. Do you agree? JA: Support and tolerance are relevant and do lead to growth and success. Having a positive outlook is also essential. We are well aware of what our competitors are doing but we do not amend our business model based on other people’s plans – we have our own plan, our own milestones and we know where we want to take both NIU and ICE Malta and are enjoying every minute of turning both businesses into intriguing stories we will one day look back upon and smile. TEU: Should more be done to build an understanding of the value business networking brings to the world we live in today? JA: Most people don’t understand how networking helps them. Business, corporate, and financial leaders have had to learn to act and think globally, which has created a gap between them and their local communities at home. Business entrepreneurs still care deeply about their home bases and the domestic economy. We need to understand the value of business networking when it comes to managing key accounts and has been an inspiration to other business entrepreneurs to demonstrate their concern for the issues facing local business.

TEU: With the different areas you are involved in business, how do you define yourself?

JA: It’s always been a problem defining myself because I have numerous interests but they’re all interrelated. At the same time, I have always felt you have to give back. I grew up with a strong work ethic that made success easier but I was also taught that you shared. Whether it’s working or giving back, I always try to make a difference. I have a responsibility to step up and do what I can to make this a better world. I want to succeed at everything I do. I am someone who feels comfortable in my own skin, which is why people cannot define me; I am not out there trying to be someone or something. I just want to do well in what I do. TEU

FEBRUARY 2013 | THE ECONOMIC UPDATE

DIFFERENCE Matthew Sammut

Company: NIU Ltd. / Institute of Computer Education Ltd. Job title/description: Creative Director / Director Professional Expertise: ICT graduate in Computer Science and Artificial Intelligence. Quote: Design is not just what it looks like and feels like. Design is how it works - Steve Jobs

Entrepreneurs must be inventive; they must have a fresh take on the business model and recognise a winning idea or innovation when they see it. There has to be enthusiasm for innovation within the company stresses ICEMALTA’s Matthew Sammut.

TEU: Can you offer a few key lessons that any business owner can -- and perhaps should -take to heart?

MS: As young entrepreneurs constantly seeking

TESTIMONIALS

advice from our mentors, we enjoy sharing our exciting business story with young budding enthusiasts who have the same agility, passion and drive we had when we took the bold step of launching both ICT companies. During the last years we’ve realized that the word ‘Enterpreneur’ is sometimes underestimated and mixed up with the term business person. We strive to be enterpreneurs and create innovative business models which best suite our islands. We feel that young budding career driven individuals should study the market in detail and must realize that business is not a 9-5 job but is a commitment, a lifestyle. We constantly create our own milestones and benchmarks keeping in mind that quality and professionalism can make us more distinctive. We put ourselves in the heart of the operation and Matthew and all the team at NIU offer a first class service. No request is too large and their efficiency is exceptional!! The site is userfriendly, informative, compact and fresh. New photographs were key to the new look we have managed to achieve with the expertise of NIU. A job indeed well done! Director Mrs. Maryse Gatt (Inlingua Malta)

while we have a dedicated team of professions we are involved in the running of the institute and business on a day to day basis. We have a three year strategy plan for ICE Malta and NIU and we intend to see both businesses evolve step by step.

TEU: The founders of some socially-oriented start-ups have begun focusing on helping fellow entrepreneurs, while creating new business opportunities for themselves. What are your views on this as a computer education company? MS: The ICT industry is highly active and evolving constantly, possibly more than any other industry, and partnerships and business to business cooperation is essential. The launch of new technologies makes every day in the ICT arena exciting and sometimes admittedly stressful. From our own business model both NIU and ICE Malta assist each other in the creation of new business. In this way, while each business has its own direction and its own team, both businesses have an undeniable synergy. This same synergy is created with other dynamic companies and entrepreneurs who like us, give the same importance to quality, professionalism and passion. Our aim is to position Malta as an ICT hub of excellence, and give meaning to the title ‘SMART island’ and we feel that this can only be achieved if professionals with different skill sets work together in one direction. TEU: Failure is inevitable, but is there a right way to go wrong, and is an open mindset and a willingness to learn from mistakes the way forward? MS: Failure and not succeeding are harsh realities which at one point or another everyone faces. The trick is to learn how to handle failure and how to use it to your own advantage. Of

TOP ENTREPRENUER AWARDS 2013

course, understanding that failure is a possibility makes you realize that business should not be an ongoing gamble. We believe in calculated risks, project assessment, research and studies of all possible scenarios prior to making our next business step no matter how small it may be. While we include failure in our margin of error formula we believe that entrepreneurship also means that we must take failure in our stride and continue to move forward and learn. When we look back, certainly, there are things that we might have done differently but at the end of the day business is undeniably an exciting part of our life. Finally, ‘action’ is great but the ‘thinking’ process is the basis of true success

TEU: You have always been engaged in the community and a leader in philanthropic efforts. With so much need, how do you decide where to focus your efforts? MS: Many people in business are fortunate to have resources to give back. In Malta, there are a number of great organisations that need support and I believe in strong CSR ethics. It’s an important thing to do for our society. These organisations are also socially oriented so our efforts support longterm activities. It’s the right thing to do. TEU

ENTREPRENEUR DETAILS Profit 2012: Undisclosed Past Achievements: • WEB Design Index awarded NIU the Best 1000 websites for 2010 award for Tat-Tarag.com • DesignFirms awarded NIU a Web Award 2009 – 2010 for Casanova. com.mt • DesignFirms awarded NIU a Web Award 2008 – 2009 for Blog.com.mt • CoolWebAwards awarded NIU a Web Award 2008 – 2009 for our old website • ‘Award of Malta Internet Foundation 2010 Prize’ for his project entitled “Location-Based Advertising” Inspiration: Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma - which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition.” Steve Jobs www.maltaeconomicupdate.com

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TOP ENTREPRENUER AWARDS 2012

FEBRUARY 2013 | THE ECONOMIC UPDATE

EMBRACING CHANGE

by George Carol

Jo Debono

Company: Studioseven Job title/description: Founder and Chairman for the past 35 years. Professional Expertise: Audio Engineer Quote: No matter how good a job is, it can always be better!

Like an orchestra conductor that knows his score by heart, so is Jo Debono able to direct each and every member at the right feeling required to render the whole performance extraordinary.

TEU: Can you offer a few key lessons that any business owner can, and perhaps should, take to heart?

JD: Any business man should have a vision at

heart. One must believe in achieving that vision. In my humble opinion one should always go step by step towards a goal, even if sometimes that goal is not very visible. For example, when I started my small business in 1978, it was not the best of times to talk about making Malta a conference venue. Now, after 35 years, everyone is convinced about the conference industry on the island.

TEU: The founders of some sociallyoriented start-ups have begun focusing on helping fellow entrepreneurs, while creating new business opportunities for themselves. What are your views on this?

TESTIMONIALS

JD: In our age of electronic media and all the social networks around, we tend to rely too much on them, forgetting that people want to do business with people and socially-orientated business groups have never stopped getting “We could not have been more pleased to have Studioseven as our partners. They not only delivered an excellent service in the past 6 years when it came to broadcasting our live draws Super5 and Lotto, but they have also been there to improve our image when building the new TV Studio sets within an extremely short turnaround time. Studioseven has also been key suppliers when launching all our products on the market”. Vasileios Kasiotakis – General Director, Maltco. 34 |

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together to share information to one another. I was the President of the World Congress Rental Network between 2007 and 2011, where we shared, not only information but also created a synergy across the globe.

TEU: Failure is inevitable, but is there a right way to go wrong, and is an open mindset and a willingness to learn from mistakes the way forward? JD: When one is moving slowly, one can be more in control of something going wrong. Keep calm – that is the best way to tackle it. Then assess the situation and alter, or if need stop the bleeding. I urge young entrepreneurs not to get disheartened because one has made a mistake. We all do mistakes in life.

An AV technician should be like a musician in an orchestra playing his part to the best of his abilities. TEU: How do you inspire others with your achievements and success? JD: I am still inspired by the success of knowledgeable individuals to learn more and keep up with what is going on. I have been through a wide spectrum of experiences in the audiovisual field. In my childhood, I was surrounded with 35mm film projectors, valve amplifiers, microphones, speakers, the lot. Then barely finished school, I was called on by the MADC to prepare music and effects for the Merchant of Venice in 1963. Thereafter I spent 13 years doing stage experiences of the highest degree. So all this experience, I try to pass over to my team, enthuse in them the passion that one has to have to succeed. An AV technician should be like a musician in an orchestra playing his part to the best of his abilities. I am a great believer that the experience we have within us

is a great motivator to others, to play within that orchestra con gusto.

TEU: Support and tolerance lead to growth and success. Do you agree? JD: I carry quite a chequered baggage. Nowadays, as Chairman of Studioseven, and having more than 60 employees, I keep in mind the many instances that I was instigated to create something new. This experience has taught me to support each and every member of the team. Even though now I am 68 years, I am still a dreamer and ready to embrace change. TEU

ENTREPRENEUR DETAILS Profit 2012: 10% of Turnover Past Achievements: • Design, supply and setting up all the audio equipment at the House of Representatives at the Grand Master’s Palace – 1988. • Organising and Leading the technical requirements for the press centre during the Bush – Gorbachev Meeting in Malta in 1989. • Setting up the press centre during 1990’s Pope John Paul II visit in Malta. • President of the World Congress Rental Network between 2007 and 2011 Awards: World Congress Rental Network Agent of the Year 2004 & 2005. Inspiration: Classical Music.

FEBRUARY 2013 | THE ECONOMIC UPDATE

Generating Success

TOP ENTREPRENUER AWARDS 2013

Sarah Young

Company: Y Plan Events Ltd Job title/description: Wedding Planner Professional Expertise: Wedding & Events Planning Quote: I believe firmly that we who have been in business for a while have a responsibility to pass on our skills to the next generation of entrepreneurs.

For Sarah Young the most important thing is to come through as being a genuine person. As a wedding planner Sarah keeps a positive open attitude, believing that understanding others empathically and empowering people generates success.

order to learn how to run a business. I get students from all over Europe and I try to train about two or three students a year. Concurrently I create business relationships with the agencies that send these students to train at my office. I believe that the more interconnected we are the more cross fertilisation of ideas there is. That way we broaden our outlook on life and consequently we have more to offer to our clients.

TEU: Can you offer a few key lessons that any business owner can -- and perhaps should -take to heart?

TEU: Failure is inevitable, but is there a right way to go wrong, and is an open mindset and a willingness to learn from mistakes the way forward?

SY: Believe in yourself and in your project!...

Have a good supporting team... have a solid family to go back to... Never lose hope ... keep believing in yourself... I can! I will! Do not be afraid to risk.

TEU: The founders of some socially-oriented start-ups have begun focusing on helping fellow entrepreneurs, while creating new business opportunities for themselves. What are your views on this?

TESTIMONIALS

SY: I believe firmly in helping other young entrepreneurs. My conviction motivated me to offer placements at my office to students who are willing to spend seven months at the office in Wedding Date : September 15, 2005 I cannot recommend Sarah highly enough to anyone who wants to get married in Malta. Cecile & Derrick Sasu – Norway / Britian (Croydon) Wedding Date : October 17, 2012 It was absolutely fantastic, and all our guests are talking about “the best wedding they have been to”. Audrey Reibel & Shane Lambert – French/ Irish

SY: Absolutely! I am super-organised. I am a perfectionist and therefore there is always a little something that is not up to my standards. I have learned to live with that and I keep saying to myself, “It’s not perfect but good enough!” It helps me to keep things in perspective. For me, learning from mistakes is one of several learning methods. The novelist J.K. Rowling, author of the Harry Potter series, said: “It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all, in which case, you fail by default.” (Harvard 2008). TEU: How do you inspire others with your achievements and success? SY: I think that having risked a lot and having achieved good results, I am now in a position to say that I have established a good reputation and that, in itself, is bound to inspire others who are aspiring to take the plunge and start a business. TEU: Support and tolerance lead to growth and success. Do you agree? SY: Yes definitely. I am of the opinion that no entrepreneur works alone. In any group there are

tensions and I have learned to be tolerant of persons and situations. A wedding can be a very stressful event. Success depends on the ability to tolerate frustration and the ability to support all persons involved in the event. It is always very encouraging for me to get positive feedback from my clients after the event. Success generates more success. TEU

ENTREPRENEUR DETAILS Profit 2012: A great sense of achievement. Past Achievements: • Over a period of six months I organised a National Students’ Conference in Germany for more than 800 students who came from all over Germany. • I have worked full time in the business of organising weddings for local couples and for couples from other European countries and beyond. I organised more than 600 weddings. Some of these have featured in various magazines. • Member of AIESEC. Organised several conferences. • I did research on the Digital Camera. My MA thesis focussed on the psychology and philosophy of photography. Inspiration: Martha Stewart; The pioneer in the field of planning weddings www.maltaeconomicupdate.com

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TOP ENTREPRENUER AWARDS 2013

FEBRUARY 2013 | THE ECONOMIC UPDATE

The Learning Curve Consideration

by George Carol to learn from what I work on, and it is this Ryan Azzopardi fact, that a learning curve consideration with fellow entrepreneurs and business investors is what I often put forward. Explaining to others how I achieved certain objectives or overcame Company: Progetta, Capital Alliance certain hurdles is always enlightening to them yet helping others develop comes about also Job title/description: CEO through coaching, and a little direction when needed. I feel that when a person is shown that Professional Expertise: Management & achievements are possible and the way they Business Development, Airline Industry reach these goals is mostly through their own drive, it empowers them even more than just Professional simply showing what I have done.

Quote: Success does not come easy, it takes time, effort and hard work!

Progetta are well-positioned for growth and success because they know what consumers want – recognition and customised service –Ryan Azzopardi says that we can deliver on better than anyone else because we are serious about innovation and are continually evolving on our products and services

TEU: Can you offer a few key lessons that any business owner can -- and perhaps should -take to heart?

RA: Taking a business to a level of success in my

opinion should include the following key tools:

TESTIMONIALS

• Have a vision • Be innovative • Don’t give up but know when a project is unsustainable and therefore not bring it to life

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“It is a great experience to work with Ryan, who is very enterprising, innovative and offers a good problem solving in order to carry out the business in hand. He enjoys a strong business acumen, commitment to detail, quality and delivers on time. His communications skills are excellent and manages to grasp the situation from both the principal and the customer side, creating a synergy for both sides. In view of my experience with Ryan, I have no difficulty in commending him to present and future business proposals.” Joseph Cortis - Cortis Group www.maltaeconomicupdate.com

TEU: The founders of some socially-oriented start-ups have begun focusing on helping fellow entrepreneurs, while creating new business opportunities for themselves. What are your views on this? RA: As the market evolves it is natural that new opportunities are created. Having services which enhance entrepreneurship as in fact is a recent driver for promotion from the EU, I believe is important for this country to evolve and continue to create economic growth. TEU: Failure is inevitable, but is there a right way to go wrong, and is an open mindset and a willingness to learn from mistakes the way forward? RA: Failure certainly is inevitable and it is one of the ways we all learn. Failure in business unfortunately may be very costly, both financially and motivationally yet with every step or project one undertakes, if well planned for, may minimise the impact. Knowing or attempting to understand what the context is, the market demand, having a clear vision of where the company is to be and an understanding of financial statements are some of the ingredients to come up with what is known as the business case. Having said that, certain outcomes such as the recent events in Libya may be unpredictable, yet having a willingness to get back on your feet could result in a stronger and better prepared position. TEU: How do you inspire others with your achievements and success? RA: I believe that what a person considers to be an achievement is dependent on the personal objectives one sets. I have learnt and continue

TEU: Support and tolerance lead to growth and success. Do you agree? RA: Support may come in many forms and from various individuals and it is inevitable that in business creation there are times when this may be an essential part of one’s own growth and personal development. On the other hand having support from within an enterprise, I believe, is of great importance as it leads to effective use of collaborative decision making and optimal outcomes of the performance management system. TEU

ENTREPRENEUR DETAILS Profit 2012: Undisclosed Past Achievements: • Introduced the Indian Beer niche market in Malta • Introduced for the first time Low Carbohydrate/Calorie Beer to Malta • First major Fit Out contractor at Smart City • Setup of office and operations in Libya for Design and Build taking on refurbishment of St James Hospital in Tripoli and opening of new Clinic in Janzour Libya • CEO of the Progetta Group multinational enterprise in Design Build and Fit-out Inspiration: A person who offers inspiration would be Sir Richard Branson, Virgin Group, however I mostly find inspiration from my own achievements and ambitious goals

FEBRUARY 2013 | THE ECONOMIC UPDATE

Sharing a Vision of a Brighter Future Sandra Zammit

Company: Totallyfresh Ltd Job title/description: Founder & CEO Professional Expertise: Healthy food and drinks Quote: “I love my work because i don’t do it for the money - I do it because I truly believe in it.”

When you really believe in something, you become almost obsessed with it, that it becomes like a psychopathology, crazy and what is worse is that if your vision is innovative is not usually shared by others. For Sandra Zammit however, the biggest test is juggling family and a challenging entrepreneurial career.

TEU: You have had a short and successful career, with Smoothes bringing you to the bigger stage. How did you develop your vision from that day forward?

SZ: It’s something I have thought about for some time – I was always into creating nice tasting healthy foods and lovely fruit smoothes for friends and family. Like many other westernised countries, in Malta we have a population with high obesity levels, fast foods and unhealthy drinks are on the rise mainly because they are convenient. Busy people do not have the time to shop around for fruit and vegetables and peel and prepare wholesome meals and drinks

TESTIMONIALS

In the UK, USA and Australia, bottled smoothes had just started to appear and that’s when the big idea struck. I never set out to be an entrepreneur, but the vision of something new that could possibly make lt easier for others to do themselves some good , yet at the same time be fun to make and market, seemed rather attractive. “Sandra is an amazing person, an example of how to combine family and work with great success.” - November 21, 2011 Roberto Vezzosi, ICT-Multilingual Operator, ITS Ltd “Mrs Zammit’s story was a clear example that the government was offering concrete help to encourage initiative.” Dr Jason Azzopardi, Ministry for Fair Competition, Small Business and Consumers

I could prepare healthy fruit drinks for everyone and make them available in the supermarkets and coffeeshops...Fast forward a few years and I came across a billboard offering the possibility of some EU funding. I applied, was chosen, did intensive research and approached a bank for a, loan of 250,000 euro, putting my house as collateral. The rest is history.

TEU: Many young people suggest it’s tough to be optimistic today. What advice would you offer them? SZ: If you really believe in something and you are prepared to work hard and focus on your goalssuccess is bound to follow. One of an entrepreneur’s most effective tools in life is realistic optimism. It’s not wishful thinking; it’s having a long view and knowing that, based upon reality and actual skills and abilities backed by hard work, we will ultimately succeed. But that can be used as a motivation to get to where we need to go – by creating and sharing a vision of a brighter future. That is in essence what entrepreneurs do: they have core values and personally live by them, and they have a vision that they are able to effectively share with others who will help create it. And one other thing: don’t do it only for the money, money is a necessary evil because you have to pay your bills, but do it for the passion and because you enjoy every moment of it. TEU: How important is it to lend support to minority- and women-owned businesses? SZ: Sometimes we have no idea what we are capable of. We possess all the tools required for entrepreneurship, we manage a household and sometimes even two, take care of the accounts, deal with the bank, do all the shopping and manage to secure the best deals, and we can calm two toddlers fighting over the last biscuit and believe me if we can sort that out, then we are capable of dealing with any sort of negotiations! I feel that it is my duty as an entrepreneur and as a woman and mother, to recount how I managed to

TOP ENTREPRENUER AWARDS 2013

create a brand out of nothing except lots of fruit, an innovative idea, a good strategy and a finger on the pulse of the latest trends. If I manage to convince a handful of women throughout my career to pluck up courage and follow their dreams, then I would have done my job.

TEU: What is your leadership style? SZ: Listening is one of the most important things I have to do as an entrepreneur and because I am a mother and totally understand how difficult it is to juggle family and work, I make it a priority to understand the needs of the members of my team. I know what it means not to want to miss a parent’s day or a sport’s day for that matter, and how difficult it can be to go to work when you child is unwell. By working as a team we have managed to create a family friendly business with flexi hours and also a little playroom for emergencies. I also try to encourage respect for the environment, as otherwise it would not make sense to produce a healthy product but then ignore the rest. Last but now least I hope to transmit the passion and love for the work that goes in to produce smoochies. Utimately the merit goes to all the members of my team because no matter what I say and do, Smoochies would not be a success without them. TEU

ENTREPRENEUR DETAILS Profit 2012: Founded in 2007; launched in June 2008. Just as planned. Its taken the best part of 5year for Smoochie to travel from the point of concept to break even. Past Achievements: • Smoochie is the first fresh, bottled, smoothie maker in the Mediterranean. • After two-and-a-half of SME operations Smoothies doubled its workforce following a capital investment of around €300,000. • Becoming Malta’s fastest growing supplier of real fresh fruit bottled smoothies with no sugars or additives available in over 250 outlets including many of the leading cafes, coffee shops, restaurants, airport, supermarkets, confectioneries, university, and tourist locations on both Malta and Gozo. Awards: Female Entrepreneurship Ambassador Inspiration: Steve Jobs (challenging the status quo) Anita Roddick `(social entrepreneurship). www.maltaeconomicupdate.com

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FEBRUARY 2013 | THE ECONOMIC UPDATE

CORPORATE INTERVIEW

Trustworthiness, Stability, and Integrity Calamatta Cuschieri & Co Ltd is one of Maltaâ&#x20AC;&#x2122;s largest financial services pioneers. We talk with Alan Cuschieri, the Director of Operations & Business Development about the companyâ&#x20AC;&#x2122;s perspectives and philosophy, and why the firm has moved from strength to strength gaining an excellent reputation along the way.

TEU: Looking back at your first ten years with Calamatta Cuschieri, what have been the most significant developments? AC: Having been established way back in 1972, I believe that the Company has been successful in transforming itself from a small, family-run stockbroking business into one of the leading financial services firms in Malta. One of the main factors that contributed to this growth was undoubtedly the fact that the Company has managed to earn a good reputation by providing independent and unbiased investment advice to its clients throughout the years. The last ten years have seen considerable development within the Group with the Company embarking on numerous projects aimed at raising the profile and service offering of Calamatta Cuschieri. In 2004 we initiated a modernisation project that also involved the development of a proprietary investment management system which completely revolutionised our internal processes and contributed immensely to making our offering more efficient. In 2006 the corporate structure of the Company was reorganised and we rebranded for the first time in 34 years. The company also revamped its entire IT infrastructure.

our online trading platform CC WebTraderâ&#x201E;˘ was launched allowing investors to trade and monitor their investments in realtime online. In 2008 Calamatta Cuschieri upgraded its license to a Category 3, a first for local stockbrokers at the time, which essentially allows us to deal directly in the bond markets as opposed to relying on third party brokers 38 |

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FEBRUARY 2013 | THE ECONOMIC UPDATE

CORPORATE INTERVIEW

our online clients and the feedback so far has been extremely encouraging. We have also been approached by other independent investment firms and are currently discussing the possibility of distributing the platform.

TEU: What segment of your business has done surprisingly well last year?

for market access. The advantages for us and our clients are many; most importantly that we have direct lines of business with the major players in the international bond markets allowing us to lever on their market knowledge and expertise in a timely manner, something which has become of paramount importance in today’s highly volatile markets. Calamatta Cuschieri Fund Services, an-MFSA recognised Fund Administrator was also established in the same year as a result of the growing interest in Malta as a domicile for the setting up and administration of collective investment schemes.

What we deem important though is that Malta continues to adopt a proactive approach to promoting our industry internationally In early 2009 we heeded our clients’ needs and opened a new branch in the heart of Qormi. We believed that retaining our head office in Valletta was paramount butalso that an office in a central locationwould facilitate client access for our services. In 2011 our online trading platform CC WebTrader™ was launched allowing investors to trade and monitor their investments in real-

Biography Alan Cuschieri is the Director of Operations & Business Development at Calamatta Cuschieri. Mr. Cuschieri is responsible for the managementof the company’s operations as well as the development of the firm’s on-going projects.Mr. Cuschieri graduated from the University of Bournemouth (UK) and holds a Bachelor of Arts (Hons.) in Financial Services and an ICMQ from the London Securities Institute.

In 2012 Calamatta Cuschieri Investment Management was launched, the company expanded its offices in Valletta, CC WebTrader™ won best E-commerce site of the year and a new corporate website was launched.

AC: In the past Calamatta Cuschieri was renowned for being a leader in the retail segment of our business. Over the course of the last few years however we have witnessed a substantial increase in demand for our services from corporate and professional clients. We responded to this by setting up a fully-owned subsidiary, Calamatta Cuschieri Investment Management that specialises in servicing the particular needs of professional clients including treasury departments of local corporations, insurance companies, collective investment schemes, trusts, and other license holders. Mr. Michael Galea who heads the subsidiary has been instrumental to itssuccess.

TEU: Do you think that the status of technology and financial operation issues has changed within the industry?

TEU: As a financial services provider, how did you position yourself in this electoral year? Do you foresee an opportunity in this?

AC: The use of technology in our industry is no longer an option but a must for any financial services business to survive in the long term. We are increasing our reliance on technology to help us be more efficient. Additionally compliance regulations nowadays necessitate complex processes and rigorous controls that are hard to achieve without systems that facilitate such processes and ensure adequate monitoring on an on-going basis.

AC: When setting our goals for this year, we did not give excessive importance to the fact that it is an electoral year neither did we view it as an opportunity. What we deem important though is that Malta continues to adopt a proactive approach to promoting our industry internationally as a center for financial services excellence.

time online. Another milestone was achieved in September 2011 with the setting up of the Calamatta Cuschieri Funds SICAV plc and the subsequent launch of two high income bond funds in Euro and US Dollar.

Allowing clients to access their investment portfolio securely online has become essential nowadays, in our case CC WebTrader™ has helped those clients wishing to trade in real-time online but also those who require instant access to simply view all their account information whenever they require.

TEU: In business, aiming big, is aiming high. One factor to aim high is to attract attention. What is the biggest deal you have done and how do you assess the early results of this tie up? AC: We have achieved a great deal over the past decade however the biggest breakthrough is probably the development of our very own investment management system. This is a system which we have been developing since 2004 and which has been evolving ever since. This system has now also been extended to

TEU: What are CC’s aspirations for expansion in both local and global industries? AC: Malta’s accession to the EU has undoubtedly raised our profile as a country with the financial services sector in particular enjoying significant prominence. At CC we are benefitting from this increased awareness as enquiries for our services from international clients have shot up dramatically. Our aim is to continue to grow in this area and be part of the drive that attracts investors to the Maltese islands. Locally our main aspiration is to retain our current position as market leaders within the industry by continuing to diversify into new areas and to increase our service offering to clients, while preserving our core values and striving to continue to offer the best possible service to clients. TEU

www.maltaeconomicupdate.com

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FEBRUARY 2013 | THE ECONOMIC UPDATE

TRANSPORT & LOGISTICS

THIRD PARTY LOGISTICS – THE WAY FORWARD FOR EXPRESS GROUP the highest health and safety specifications also carry a seal of approval by the Malta Medical Authority and are a great asset for all those who operate in the pharma industry. “Express Group also has a customs bonded private warehouse licensed to store goods awaiting payment of duties or in transit. This effectively means that we have all the required resources, the know how, the experience and most importantly all the infrastructure in place to become the extended arm of the client’s supply chain, as would be required from a professional Third Party Logistics operator,” added Mr Fleri Soler.

One of Express Group’s two climate-controlled warehouses located adjacent to the company’s Head Office

INTERVIEW WITH DAVID FLERI SOLER

In a business environment that is constantly becoming even more competitive and price-dictated, the supply chain that delivers raw materials and finished products to their respective destinations is a must that has to be accounted for. This too comes at a price and has to be carried out as effeciently as possible. This is when the concept of Third Party Logistics, that is, the management of part or all of a client’s supply chain, starts making more sense. Third Party Logistics includes the integration of most operations in the supply chain such as handling and administration of cargo, warehousing and transportation services that can be scaled and customized down to a customer’s particular needs. Often, these services go beyond logistics and include valueadded services related to the production or procurement of goods, namely services that integrate various stages in the supply chain. When a logistics company like Express Group reaches a point where it can offer all possible logistical support to its clients through a fullyfledged operational set-up, the next natural thing to do is move into the area known as Third Party Logistics and this is a new direction

that the company can now start to pursue,” explains David Fleri Soler, Sales and Business Development Manager at Express Group.

This fleet is managed through a tracking management system which includes a live temperature-reading facility “It is an undisputed fact that Express Group has been in this business for over 50 years and over these years, we have developed a full infrastructure that includes an international and domestic fleet of which among others we have over 40 temperature-controlled trailers that travel to and from Malta across a network that spans all of Europe. This fleet is managed through a tracking management system which includes a live temperature-reading facility available to the client whilst the cargo is in transit to final destination. Our expert human recesources handles all stages of the logistical operation and we store and handle cargo on our premises adjacent to the Head Office. The Express Group has not only invested in the warehousing and distribution aspects but also in a modern and fully-fledged warehouse management system.”

Toly Products Ltd, a leading manufacturing company in the luxury packaging industry has been serviced by Express Group for a number of years. “In our opinion, what best distinguishes Express Group’s service is their professional conduct, resources and their extremely helpful staff,” states Clint Farrugia, Group Logistics Manager at Toly Products. “We are delighted with having Express Group handling our logistic requirements because when running a global supply chain a third party logistics partner that is reliable and which can offer excellent service with competitive rates is needed in order to guarantee the success of the supply chain,” added Mr Farrugia. “Besides acting as a consolidation point for high profile brands trading into North Africa, Express Group is also active in the cross-docking sector, handling cargo from non-EU countries, keeping it in bonding till re-exportation avoiding clients unnecessary duty-related administration and costs, putting cargo in free circulation in Malta and re-distributing the cargo all over Europe,” concluded Mr Fleri Soler. TEU

Express Group also owns and operates two climate-controlled warehouses located next to its premises that can potentially store a total of 1600 pallets. These two warehouses, finished to www.maltaeconomicupdate.com

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FEBRUARY 2013 | THE ECONOMIC UPDATE

TRANSPORT & LOGISTICS

...FOR ALL YOUR LOGISTICS REQUIREMENTS UNDER ONE ROOF In 1996 SMS was one of the first companies in Malta to be ISO certified within the freight forwarding realm and to further strengthen its position locally and internationally SMS also achieved the status of ‘Authorised Economic Operator (AEO)’. SMS Logistics is part of S. Mifsud & Sons Ltd or simply SMS as it is most commonly known. The Logistics division falls directly under the control of Simon Mifsud who is assisted by a dynamic, experienced and qualified team all specializing in their own field. Our culture at SMS is to ensure professional advice and personalized service to each and every customer. These aspects are guaranteed every time to the extent that customers keep seeking the SMS effective way of doing business. For customers both large and small, our market leading services enhance both competitive and commercial advantage and with the ability to think globally and act locally customers can always benefit from an exceptional service.

by Dion Buhagiar Said At SMS we always ensure flexibility to meet today’s business demands, and this is achieved by offering services for commercial and private customers through our full range of international transport solutions including transportation by air, ocean, and road or even a combination of either service where transit time is of essence yet cost being a crucial factor in the equation. Additionally SMS Logistics is also capable of offering transport services using temperature controlled vehicles as well as standard vehicles catering for every type of cargo and of any size. Combined with this service swift yet accurate customs brokerage services is also available for both inbound and outbound consignments. SMS Logistics is accredited by the International Air Transport Association (IATA) therefore enabling the company to operate with the appropriate licenses and complying with the necessary legal requirements to ensure cargo is transported safely, securely, efficiently and economically under clearly defined rules whilst ensuring the safety of cargo and the

environment. As an IATA accredited forwarder SMS Logistics is competent to handle any type of cargo whether it is Hazardous material, Valuables, Pharmaceuticals, or Live animals. In 1996 SMS was one of the first companies in Malta to be ISO certified within the freight forwarding realm and to further strengthen its position locally and internationally SMS also achieved the status of ‘Authorized Economic Operator (AEO)’. This certificate was granted to SMS by the Malta Customs authorities and having this quality seal means that SMS meets the specific and stringent requirements of customs authorities as laid down by the European Union. TEU

TEU

FOR ALL YOUR LOGISTICS REQUIREMENTS UNDER ONE ROOF • Air • Ocean • Road • Door to Door Service • Liner Freight Sales for Container, Roro and Conventional Cargo • Customs Brokerage Services • Warehousing

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TOPIC OF

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FEBRUARY 2013 | THE ECONOMIC UPDATE

TOPIC OF

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CONSTRUCTION

CONSTRUCTION MATERIALS

FINISHING

JOINERY

HARD LANDSCAPING

DEVELOPMENT

Building & Construction

YOUR RELIABLE PARTNER by Martin Vella

In an interview with Mr Carl Attard, Managing Director of Attard Brothers Group, The Economic Update finds out more how the Group is providing a total solution with superior and value-added products for their projects, combined with the advantage of synergy between the units and high level project management expertise. There is “more than meets the eye” to Attard Brothers Group than just construction experts

TEU: Earlier this month you held an event marking your 36th year of operation. What was the scope of the event, apart from obviously celebrating your anniversary? CA: We took the opportunity of the occasion to create a strong emphasis on the multiple capabilities of the Group, stressing that Attard Bros is not only a construction and civil engineering company, or a manufacturer of construction related products. It is the vision of many organisations to be in a position to be a total solution provider in their respective industries. Attard Brothers Group is one such enterprise that delivers across all construction related sectors, and we decided it was opportune to project the multiple capabilities of our business in a new light and create higher awareness of what we offer to the industry. TEU: How did you go about driving this message home? CA: We delivered this message with a refreshed Group branding presentation that gives individual identity to these specialised Business Units. Over the years Attard Brothers have made it a priority to increasingly become a total solution provider in commercial or private premises development, providing full fit-out services that go from finishing and turnkey projects, custom made joinery projects through Eurocraft Ltd , Real Estate Developments and Hard Landscaping through the, newly formed E-Scape Total Landscaping Solutions . TEU: Your father, current Chairman and CEO, Michael Attard, founded the company in 1977 and has never looked back. How do you plan to capitalise on such a solid heritage for the future? CA: Today the group seeks to build the future on a strong platform that has so much wealth of knowledge and experience. To make this

Attard Brothers Group Chairman & CEO Michael Attard and his sons Carl and Noel during the event with His Excellency Dr George Abela, President of Malta.

possible Attard Bros recognised the need to strengthen their vision to be the preferred supplier for customers seeking the best value products and services while reflecting a keen awareness that it needs to be done in a market that increasingly demands quality and cost effective execution. Our mission statement emphasises that we exist to provide superior materials and value-added services that build sustainable customer relationships in the construction and related industries.

We are at our best in constructing difficult and complex projects that demand constant monitoring and a deep level of planning. TEU: Success comes at a cost and an empowered management team that delivers under pressure. Is this the case for Attard Brothers Group? CA: Over the last five years Attard Bros has invested over €14 million in plant, machinery and equipment to stay at the forefront of the industry in Malta and has been entrusted with a number of prestigious projects ranging from 5-star hotels to factory complexes to luxury residential blocks. We are at our best in constructing difficult and complex projects that demand constant monitoring and a deep level of

planning. Such projects demand teamwork and partnering with our clients, project’s architects, designers and specialist contractors. TEU: Giving customers fresh product and service solutions is critical in today’s market. How does your Group position itself to meet such expectations? CA: Investment in Research & Development has always been a priority at Attard Bros and we constantly search for innovative initiatives. One such innovation has been AB ThermaBlock which addresses environmental and construction economic needs on several fronts, providing an in-built insulation solution. Major developers are now using this concrete block to give better building solutions to their clients. TEU: What do you consider to be the critical success factors needed to meet the challenges ahead in the future for Attard Brothers Group? CA: We believe that in our industry exceeding our customers’ expectations on a repeated basis is the only way to survive and prosper. This is critical for continued success. One may say that the reputation enjoyed in the industry shows that this objective is being achieved. To ensure we keep on achieving this, we set very high standards for ourselves and our employees. After all we have to live by our corporate message, “Your reliable partner”. TEU

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PRODUCT OF THE MONTH

FEBRUARY 2013 | THE ECONOMIC UPDATE

FOSTER

Office, Archive & Library Shelving Solutions. by Charles Falzon

From compact office systems to large installations, FORSTER offer the best solutions in mobile and static solutions tailored to your particular requirements.

Mobile shelving systems offer compact, neat, organised, practical and secure storage at maximum cost and space efficiencies. Systems are designed and configured to suit your particular needs.

FORSTER recently introduced innovative design concepts whereby storage systems integrate with the office or shop decor - improving aesthetics, efficient retrieval to stored media, security, practicality and fast customer service. This offers savings in operator costs, an improved working and shop environment and less staff fatigue.Files and products are neatly stacked for easy access with the entire system safely locked up at the end of the working day. Access to selected sections can also be restricted to authorised staff.

Files and products are neatly stacked for easy access with the entire system safely locked up at the end of the working day. Access to selected sections can also be restricted to authorised staff. Single or multiple carriage movement is generated through a hand-crank fitted to mobile units with geared sprockets that run on a chain embedded in the rails. This chain/sprocket system offers smooth, noiseless movement of the mobile units. This quality feature avoids slipping and distorted movement common with friction-driven systems.

FORSTER standard systems have been tested to last for up to 120 years of normal use. Systems can be partially or totally relocated, barring space restrictions. For larger systems, FORSTER offer optional electronic systems with extensive features.

Filing and Digital Track & Trace Systems are also available to complement Archive solutions. For further details and information contact Charles Falzon at Shaker Ltd on Mobile 00356 7988 1390 www.maltaeconomicupdate.com

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FEBRUARY 2013 | THE ECONOMIC UPDATE

TOPIC OF

THE MONTH

HSBC Global Research: The Great Rotation

By HSBC’s Chief Economist Stephen King and Global Economist Madhur Jha

Forget the West, focus on China

With all the worries over the US fiscal position, the eurozone’s future and the stimulus-versusausterity debate, it’s all too easy to lose sight of the momentous shifts taking place in the global economy. We are rapidly moving away from an “old world” dominated by Europe, the US and Japan to a “new world” led by China. Admittedly, with its thousands of years of civilisation, the “new world” moniker might seem inappropriate for the Middle Kingdom but China’s impact on the rest of the world in recent years has been revolutionary. No longer is it possible to understand the behaviour of 50 |

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the global economy without acknowledging the gravitational pull of China. We are living through the Great Rotation. Led by China, the “new world” has dominated the global economy over the last decade. Even as the contributions to global growth from the “old world” have shrivelled, so global growth has re-accelerated. Over the last decade, per capita incomes have barely risen in the “old world” whereas in China, per capita incomes have risen at a faster rate than in any other decade in the post-war period. Other major emerging nations have also offered impressive performances but none of them comes close to matching China’s electric pace. Admittedly, China is, like other nations, exposed to the ups and downs of the global economic cycle. In 2012, for example, Chinese

exports softened thanks primarily to eurozoneled “old world” weakness. Yet, unlike India and Brazil, where slower growth owed a lot to domestic disappointments, the Chinese economy was eventually able to shrug off its external difficulties thanks, in part, to a reacceleration in infrastructure spending. As 2012 came to an end, it seemed as though the Chinese economy was staging a mini-revival, a theme reflected in our latest forecasts: after a modest 7.8% gain in 2012, we expect Chinese GDP to deliver an increase of 8.6% in 2013. Although this may still seem like a low number by Chinese standards, China is now a much bigger economy than it used to be: on our forecasts, China will add more to global growth in 2014 than ever before.

FEBRUARY 2013 | THE ECONOMIC UPDATE

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The Great Rotation How does a China-led world differ from a USor Europe-led world? So far, the benefits of the Great Rotation have accrued mostly to those countries either geographically close to China or important in satisfying China’s insatiable demand for commodities. One way to measure this is to look at the overall increase in exports to China as a share of a country’s GDP since the beginning of the 21st century. The results are striking. South Korea’s exports to China now amount to 12% of South Korea’s GDP whereas in 2000 they accounted for a more modest 3.5%. Likewise, Malaysia and Singapore have experienced big increases in their export exposure to China. Commodity producers – including Australia, Chile, Kazakhstan and Saudi Arabia – have also shared in the spoils. And, demonstrating China’s ever-increasing connections with Africa, Angola is now China’s 14th most important source of imports, ahead of India, France, Canada, Italy and the UK.

On our forecasts, China will add more to global growth in 2014 than ever before. The “old world” has yet to catch the China express. The US exports a mere 0.7% of its GDP to China. Canada, France and Italy are more or less the same. The UK’s exposure to China is lamentable: exports to China account for only 0.4% of UK GDP, not much more than a rounding error. Japan and Germany do a lot better yet their higher exposures can’t hide underlying weaknesses. In Japan’s case, its uneasy political relationship with its mainland rival – exemplified in an unresolved island dispute – led to a collapse in exports from Japan to China in the second half of 2012. Meanwhile, Germany’s heightened trade relationship with China has been absolutely swamped by an even bigger increase in its dependency on the rest of Europe, one reason why, despite its competitive advantages, Germany found itself succumbing in the second half of 2012 to a crisis which had already engulfed other parts of the eurozone.

Making the connection There can be no doubt that a stronger China connection pays dividends. Those countries which have increased their trade exposure to China – typically at the expense of their

exposures to the “old world” – have mostly enjoyed rapid gains in economic activity over the last decade or so. In contrast, those countries which have shunned China’s advances have mostly found themselves suffering from persistently disappointing GDP growth. Worse, China’s success has, indirectly, imposed costs on the “old world”: higher commodity prices and, thanks to outsourcing, lower wages have hardly helped the “old world” to cope with the debt excesses of recent years. This, combined with traumas closer to home, has left “old world” economic recoveries seriously off the pace, undermining medium-term fiscal outlooks. Official forecasters, however, have yet to recalibrate their models, continuing to believe that sustained recovery lies just around the corner. Capital spending provides the perfect example of the forecaster’s problem. Many “old world” companies – at least the big multinationals – are cash-rich yet “old world” investment volumes remain very low. Countless explanations have been offered for this apparent anomaly, ranging from political uncertainty through to the impact of the iPad on the need to replace costly – and bulky – mainframe computers. Yet looking at the problem through a global lens, it’s easier to understand what has been going on. Those companies with funds are investing, but they’re doing so primarily in the emerging world.

Forecasts and implications Our China forecasts remain relatively upbeat compared with consensus, but other parts of the world are not looking quite as impressive. This quarter, we have made major cuts to our growth forecasts for Japan, India and Brazil. We remain cautious on the outlook for the eurozone, even though the break-up fears which dominated

sentiment over the summer have thankfully faded. We assume that the fiscal cliff talks will reach some kind of constructive conclusion, thus preventing a US economic collapse at the beginning of 2013. Nevertheless, we believe the pace of US economic recovery will remain poor relative to previous episodes. Policy-wise, we think 2013 will be a year where unconventional policies will increasingly become part of the conventional mainstream and where central banks and governments will be on the look-out for alternatives to inflation-targeting: already, the Federal Reserve has shifted the emphasis towards unemployment while Mark Carney, the Governor-elect of the Bank of England, has expressed an interest in nominal GDP targeting.

Those companies with funds are investing, but they’re doing so primarily in the emerging world. In terms of asset allocation, we prefer equities over bonds at the beginning of 2013 as uncertainties over the fiscal cliff and the eurozone’s future ease. Opportunities to buy bonds should re-present themselves later on, however. With the pursuit of evermore unconventional polices, it’s plausible to argue that long-dated index-linked bonds will continue to find favour. In the emerging world, we favour exposure to consumer themes in those markets where growth is likely to re-accelerate. And, given the UK’s ongoing economic problems, sterling may end up proving to be the weakest of the major currencies in 2013. The full report including key forecasts for over 40 countries across the world, monetary and fiscal policy assumptions, emerging market setbacks, identifying what shareholders want, and global economic forecasts related to GDP, consumer prices, exchange rates, investment spending and exports among others, is available at www.research.hsbc.com TEU

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PROPERTY & REAL ESTATE

FEBRUARY 2013 | THE ECONOMIC UPDATE

A Vision for More

Comm. Raymond Bugeja, Hannah Grech, Benjamin Grech, Hon. Prime Minster Lawrence Gonzi, Semira Grech, Hon. Consul General Sara Grech

Iconic real estate company Sara Grech has joined forces with an international real-estate Hamburg based company Engel & Völkers. Martin Vella reports the recent bold and exciting venture.

based in Hamburg. The company boasts of a large IT system set-up providing a competitive and leading edge where first-class property and client portfolio is concerned. Last year the company registered profits of €6 billion on sales amounting to €35 billion.

As of 2nd February, Sara Grech a leading broker of property in the residential and commercial sectors joins forces with a formidable and world-renowned real-estate leader - ENGEL & VÖLKERS – to become in Malta and Gozo ENGEL & VÖLKERS SARA GRECH. This cobranding is a first in the history of Engel & Völkers. a globally established company specialised in the brokerage of premium property and yachts. Engel & Völkers is operational in a total of 35 countries over five continents with over 520 operational property shops. The first for a property agent in the industry, Sara Grech’s innovative approach is clearly leading the way. Engel & Völkers is the world’s largest Real estate Premium brand and is

It has long been a vision of mine to partner with an internationally-acclaimed and like-minded real-estate brand, and that ambition is now a reality. Engel & Völkers is one of the most respected names in this business worldwide, and I believe it is an important achievement for us to have gained their trust as we move forward together with the co-brand. The move will put our beloved islands further afield on the global map, as we seek to continue to attract buyers from around the world. We all know what a great place the Maltese Islands are to live in, and we want to take that message ever further afar. Ms Grech said.The tie-in with Sara Grech is a pioneering move for Engel & Völkers in that the Sara Grech model of assembling all agents in

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The move will put our beloved islands further afield on the global map, as we seek to continue to attract buyers from around the world. one site, a market centre, with outlying exclusive property lounges across the islands, which is being replicated thorughout the Engel & Völkers network in metropolitan cities around the world. “We have secured the ENGEL & VOLKERS franchises for residential and commercial properties across Malta and Gozo, and I am absolutely thrilled to announce that we shall operate under the co-brand ENGEL & VOLKERS SARA GRECH,” Ms Grech said, announcing the exciting news at a press lunch held at Don Serafino Al Molo in Portomaso Marina, in the distinguished presence of Her Highness Princess Bettina Wittgenstein; Engel & Völkers Managing Director for Global Corporate Communication.

PROPERTY & REAL ESTATE

FEBRUARY 2013 | THE ECONOMIC UPDATE

Hon. Consul General Sara Grech delivering the welcome speach during the Gala event held at Western Draguana. Sara Grech began its operations in 1987 and has recently moved into one large space in Msida where the market centre is situated. The company has now launched four purposely designed ENGEL & VOLKERS SARA GRECH lounges in Sliema, Attard, Fgura and St Paul’s Bay. “Our existing offices have undergone extensive renovation and extension as part of the Co-Branding initiative. They take the needs of our clients and staff into consideration in a very efficient way, offering them an exclusive ambience, privacy and discretion,” Sara Grech stressed. “The market centre allows our talented team to pool their resources and knowledge together, and all that is Sara Grech is now housed under one roof. This means that, even more than before, we are able to serve our clients in a formidable, unique and dynamic way. These lounges will give us the ideal space to interact with those interested in buying, selling and renting residential or commercial property, as well as yachts, in elegant and stunning surroundings, designed specifically for this purpose. They are all very private and extremely welcoming, and we know that they can only facilitate us to go that extra mile for our clients.”

specialises in offering prestige and high quality residences uniquely in up-market locations. Sara Grech said that, in general terms, the real estate market has recovered over the past year from the slowdown it had experienced in 2011. Like anywhere else, the upmarket segments of the property sector have kept going strong, even in the years of recession. With this major move to its new market centre in Msida, ENGEL & VOLKERS SARA GRECH will attract investment from around the world, thus contributing to the Maltese economy. Ms Grech and Comm. Bugeja have decided to bring together their experiences, skills and resources in establishing family businesses in real estate, yachting, catering and retail. They plan to do this both in Malta where they mostly reside, and possibly in London, where they plan to have a second home. Their shared passion is

Christian Voelkers, CEO of Engel & Volkers to offer high-quality brands and products in family- and lifestyle-related customer segments. A mild Mediterranean climate all year round, a stable political and economic situation and very convenient accessibility are leading to a continuous rise in international demand for premium property on Malta. National debt crises and anxiety about monetary stability are resulting in additional impulses on the Malta property market at present – the investment in “concrete gold” is regarded amongst domestic and foreign buyers alike as a safe haven for their wealth. “Malta is an important market for Engel & Völkers in strategic terms and I am confident that we have entered into an ideal partnership with Sara Grech & her children, Benjamin and Semira. Her experience and crossindustry expertise are of considerable advantage for this joint venture,” said Sven Odia, Member of the Board of Engel & Völkers AG. TEU

“I am also excited to announce that Raymond Bugeja and I have secured the ENGEL & VÖLKERS YACHTING franchise for Malta and Gozo. This will be a new area for the business but not for us personally. We look forward with great enthusiasm to operating the yachting-brokerage franchise from the new Portomaso lounge, secure in the knowledge that we have and shall further strengthen the expertise to advise people from all over the world about how best to buy, charter, enjoy or sell a yacht in Malta or around the world.” Bettina Prinzessin Wittgenstein, from Engel & Völkers international said the company

Press Launch Benjamin Grech, Hon. Consul General Sara Grech, Semira Grech www.maltaeconomicupdate.com

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FEBRUARY 2013 | THE ECONOMIC UPDATE

OPINION

MALTAâ&#x20AC;&#x2122;S BIG OPPORTUNITY By Werner E. Jung

The political and socio-economic instability in the southern Mediterranean neighbourhood countries provides a unique opportunity for Malta to permanently establish itself as the European Hub for commerce between the EU and the MENA region and as a facilitator for socio-economic development in the area. History has taught us that relations between different cultures across the globe mostly started through commerce and trade inspired by explorers like Marco Polo, Vasco da Gama, James Cook and many more. Social, cultural and political exchanges usually followed these initial commercial contacts; although these were not always in a peaceful manner, history also tells us. What we are currently seeing in some Arab countries as a sequence to the Arab Spring has been witnessed repeatedly in the past when the pendulum swings from one apex to the other. Although this is not uncommon, nevertheless these unstable conditions are very detrimental for the economic development of these emerging and developing countries and the markets in the whole region. The stream of refugees and irregular migration around the Mediterranean rim is an important socio-economic issue which is being addressed bilaterally between the MENA countries and the European Union for several years already. The progress has not been overwhelming so far and the burden is particularly heavy on EU countries in the immediate neighbourhood, like Malta. The current political developments in the region will not help to alleviate the problem. While the world is watching the developments anxiously and the business community is holding back and getting more sceptical as time goes on, there is a huge opportunity arising for Malta! During this time while the MENA region is characterised by political and social transition and instability, the time has come for Malta to exploit her strategic position economically, as the key link pin between the EU market and the southern Mediterranean region. Throughout the world small and medium sized enterprises (SME) provide the most jobs and are the greatest contributors to GNP and exports. Globalisation has brought about winners and losers by region and by industry. Winners have been the large corporations; losers come mostly from SMEs. They do not have the resources of large corporations who can get their products 54 |

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worldwide from the cheapest sources and finance large lot sizes and long lead times. Compared to large corporations SMEs have the inherent advantages of flexibility, speed and short innovation implementation. And many of them throughout Europe have been looking with great expectations at the Arab Spring; in order to compete effectively and to apply their strengths, they need flexible suppliers with short lead times and reasonable lot sizes. The MENA countries / region have this strategic advantage in the supply chain in terms of speed and flexibility vs. suppliers from the Far East. Whereas there are lead times from 45 days upwards for goods from the Far East, goods from Cairo or Tunis can be in Frankfurt or Lille within 5 days! There is a large labour force available in the MENA countries at very competitive labour rates. At this point what is missing in many cases is skilled labour and the proper methods and attitudes for quality assurance. This can be changed through education and training. Many of us still remember when â&#x20AC;&#x153;Made in Japanâ&#x20AC;? stood for cheap and junk! People do learn.

Globalisation has brought about winners and losers by region and by industry. Winners have been the large corporations; losers come mostly from SMEs. There are many private companies in these countries which still work in spite of current politically and economically unstable conditions. As these unfavourable circumstances drag on, their position weakens progressively. At this point in time, it would be very optimistic to find SMEs in Europe who would be willing to have their supply chain dependent upon suppliers in the southern Mediterranean countries. SMEs typically are rather risk adverse and want to rely on a functioning supply chain with reliable deliveries on time and in the desired quality and quantity. This is where the strategic position of Malta comes in; not only geographically, but also for the availability of skilled labour, logistics, service, educational and financial institutions. These strengths should be exploited now to permanently establish Malta as the Hub of the EU

FEBRUARY 2013 | THE ECONOMIC UPDATE

OPINION for commerce with its southern Mediterranean neighbours, not only for exports into these countries. Malta has a long tradition in trade and service industries, as well as an excellent infrastructure for logistics, communication and education. Exactly these strengths are of value and advantage at this time. As mentioned above, what a typical SME in Europe expects of its suppliers consists of reliability, on-time deliveries, good quality and flexibility. This is where the opportunity for intermediaries in Malta arises: what if an intermediary in Malta would offer this to a European SME? The level of confidence certainly would rise considerably. The SME would have one partner based in Malta and would not have to deal with perceived risky situations. Through the bundling of efforts in one strategic location the greatest efficiency for the SMEs in the MENA region and Europe can be achieved. In a publication by the european commission from march 2011 on “ a partnership for democracy and shared prosperity with the southern mediterranean” * it is stated as one of the three key elements of the action plan: “sustainable and inclusive growth and economic development especially support to small and medium enterprises, vocational and educational training…….” This is exactly what should be done now with a very pragmatic approach, not necessarily waiting for brussels to get their act together: 1. Set up a platform for trade and technical know-how exchange between European and MENA SMEs. There are competent institutions established in Malta to assist in this venue; the Malta Chamber of Commerce, Enterprise and Industry has a long standing tradition of cooperation with institutions in the region and Malta Enterprise is an established institution to promote cooperation with EU partners, just to mention a few. The objective is to provide services to bring suppliers from MENA and customers from Europe together. 2. Set up a centre for Logistics, Quality Assurance and potentially assembly of components in Malta in close cooperation with Maltese companies. The idea is to provide a “one stop” service centre for European customers. The buyer will have one point of contact in Malta. This should also involve financing institutions from Malta to possibly finance necessary buffer stock or the supply of raw materials in order to ensure a reliable supply chain for

the customers. Initially the products will not be very sophisticated in most cases and will mainly be in the prefabrication stage. In many areas of MENA skill and quality levels will have to be brought up to internationally competitive standards so that also more complex products can substitute imports from Far East over time.

When will such an opportunity come up again where there are only winners? TEU

References:

European Union; High Representative of the Union for Foreign Affairs and Security Policy; Joint Communication to the European Council, the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions; Brussels, 8.3.2011:

3. Teaching of modern management methods, specifically Lean Manufacturing, Quality Assurance and Production Logistics. For this purpose the Competence Center for Economic Development (CCED) has been founded as a joint venture between the EIE-Group of San Gwann and the FlexibleFactory Group of Germany. 4. “Train the Trainer” workshops and pilot projects in the various regions in cooperation with the local Chambers of Commerce. These trained people should then act as multipliers in their own countries and set up local support centres of the CCED to train personnel from SMEs in the area in the local language. This will lay the foundation for an internationally competitive industry in parallel to, or even ahead of, the development of a sustainable political and macro economic infrastructure in the region.

The SME would have one partner based in Malta and would not have to deal with perceived risky situations. In this type of scenario there will be only be winners: SMEs in Europe have a fast and flexible source for supplies of components and potentially subassemblies. • SMEs in the southern Mediterranean will be able to establish a solid export base and will become internationally competitive through the exchange of know-how and good manufacturing practices. • The big winner is Malta through providing services for logistics, quality assurance, potentially final assembly, finance, training and education. • And, last but not least, by generating jobs through vocational training and education in the region, the pressure on the EU through illegal migration will ease as the economic welfare in these countries will improve.

Werner E. Jung has a long experience in management positions in international companies, such as Mercedes Benz, Sony, Eli Lilly, Vishay Intertechnology, Siemens Building Technologies etc. working in many countries around the world. Since 1997 W. Jung has concentrated on Lean Manufacturing and Logistics. He developed the methodology of “The Flexible Factory” which concentrates on the core issues and takes up minimal resources for implementation. In 1999 Mr. Jung founded his own consulting company, with clients all over Europe. Over the years Mr. Jung has assisted a wide spectrum of manufacturing companies to become more competitive in the world markets through speed, flexibility, quality and cost control. He has a broad international experience in many industries. Lately he has been involved as a consultant, trainer and speaker in several developing and emerging markets, such as Bulgaria, Turkey, Kazakhstan and Egypt. He is the co-founder of the Competence Center for Economic Development (CCED) in San Gwann, Malta. Mr. Jung holds a Masters Degree in Industrial Engineering from the Swiss Federal Institute of Technology and a Master of Science in Management from the Massachusetts Institute of Technology.

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FEBRUARY 2013 | THE ECONOMIC UPDATE

TAX

A less favourable VAT cash accounting scheme by Graziella Demanuele Bianco

credit periods, the move was in general a positive one. However, the effect of introducing the turnover cap makes it less favourable to Maltese enterprises.

Graziella Demanuele Bianco is a Senior Manager in the Tax Services team at KPMG in Malta.

VAT is normally accounted for by businesses on an accruals basis whereby VAT is paid to the tax authorities on invoices issued irrespective of whether and when payment is made by customers. With the aim of easing the pressures on the cash flow of European SMEs with an annual turnover of less than EUR2 million, the EU VAT Invoicing Directive 2010/45 introduced new cash accounting provisions. Let’s find out more with Graziella Demanuele Bianco.

These provisions allow EU Member States the option to adopt a receipt basis of VAT accounting, thus permitting SMEs to defer the remittance of VAT until it is received. In the midst of difficult economic times and longer

Until the end of 2012, by derogation to the standard invoice accounting, a cash-based scheme already existed in Malta allowing retailers, civil, mechanical and electrical engineering contractors and certain professional service providers to opt to declare and pay the output VAT once the invoices were settled. This scheme applied irrespective of the size of the business. The introduction of the EUR2 million turnover cap as from 1st January 2013 means that such businesses are forced out of the scheme if the turnover threshold is exceeded and will have to start declaring VAT on the same base as other ineligible businesses. This will put VAT cashflow management and VAT optimisation within these businesses high on their agenda particularly because, in larger organisations the pre-funding of output VAT could have a significant impact on their working capital. The pre-funding period could be weeks, months or possibly even years from the date when VAT is paid to the tax authorities, generally within a month and a half from the end of the VAT period, until payment is received from customers. This is in addition to the complexities on these businesses of having to reconfigure their accounting software to capture VAT on an invoice basis and to adjust their invoicing methodologies. Until all supplies made by such businesses pre-2013 are settled, proper records must be kept distinguishing between payments made and credit notes issued in 2013 and thereafter in respect of pre-2013 supplies on which the cash accounting scheme applied, and payments made and credit notes issued for supplies made after 31st December 2012 on which the accruals basis of VAT accounting applies. On top of that, in the absence of appropriate directives on how relief for VAT on bad debts applies, one cannot neglect the risk of such businesses ending up out of pocket on the VAT element due by defaulting debtors.

Customers of SMEs applying the cash accounting scheme must also watch out. Their right to deduct VAT has been postponed to the point of settlement of the tax to the SME supplier. In order for the customers to know when their VAT becomes deductible the new rules require SME suppliers availing themselves of the cash accounting scheme to mention the term “Cash accounting” on their invoices. Accordingly, whereas businesses applying the cash accounting scheme must apply the scheme on both the output and input VAT side of their transactions, except on cross-border supplies of services in respect of which the tax is payable by the customer and intra-EU supplies or transfer of goods, all other businesses must account for VAT on a hybrid system i.e. paying output VAT on an invoice basis and claiming input VAT on a receipt or invoice basis, depending on the method of accounting of the supplier. The bookkeeping of larger businesses must consequently also be adapted to ensure that no claim for input VAT charged by SME suppliers accounting for VAT on a cash basis is made ahead of its payment.

This will put VAT cashflow management and VAT optimisation within these businesses high on their agenda Although the idea behind the EU move was to assist the backbone of the European economy, i.e. SMEs, in Malta it is not anticipated that the change will pump in the flow of oxygen possibly needed by Maltese SMEs. One questions why the cash accounting option in Malta was not extended to all types of SMEs when the EU VAT Directive allows Member States to make it available to micro enterprises with an annual turnover of not higher than EUR500,000, or EUR2 million after consultation with the EU VAT Committee. On the flip side of the coin, the restricted cash accounting scheme should leave a positive impact on the country’s coffers, at least by the funding cost on the prepayments of VAT made by larger businesses that are now forced out of the scheme. TEU

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FEBRUARY 2013 | THE ECONOMIC UPDATE

NEWS MAKERS

Central Bank Governor announces formation of Joint Financial Stability Board for Malta at Institute of Directors’ Conference

AIR MALTA CONTINUES TO MAKE STEADY FINANCIAL PROGRESS Following a Board of Directors meeting held yesterday 24th January 2013, Air Malta today announced its 3rd quarter (Oct-Dec 2012) results that confirm steady financial progress. During this period the airline has halved its operating loss, increased its revenue, seat load factor and passenger figures over the same period last year.

IoD Chairman James Satariano. Institute of Directors Chairman James Satariano speaking to the 160 international and local delegates attending IoD’s Conference on “The changing nature of Corporate Governance following the Eurozone crisis.”

Governor of the Central Bank of Malta (CBM), Professor Josef Bonnici, announced during the Institute of Directors Conference held at the Malta Financial Services Authority (MFSA) on January 17 that the CBM, in its capacity as the macro-prudential authority, has agreed with the MFSA to establish a Joint Financial Stability Board ( JFSB) within a few days . The new Board will provide a mechanism to enhance the cooperation between the CBM and the MFSA for the assurance of financial stability in Malta. The objective is to strengthen the resilience of the financial system and to mitigate the build-up of systemic risk. The new Board will be made up of senior personnel from the MFSA and the CBM, and will mirror the model adopted by the European Systemic Risk Board (ESRB). The ESRB is an independent body of the European Union and is part of the European System of Financial Supervision (ESFS), the purpose of which is to ensure the supervision of the Union’s financial system. The ESRB is hosted and supported by the European Central Bank in response to the ongoing financial crisis. It is tasked with the macro-prudential oversight of the financial system within the Union in order to contribute to the prevention or mitigation of systemic risks to financial stability in the Union and to ensure a sustainable contribution of the financial sector to economic growth. Malta’s JFSB will have a similar function in the local context. Speakers at the joint IoD/MFSA conference apart from Central Bank Governor Professor Josef Bonnici, and Chairman of Bank of Valletta plc. Mr Frederick Mifsud Bonnici, were Dr. Michael Xuereb, Director, MFSA Regulatory Development Unit and Dr. Anton Bartolo, Director of the MFSA’s Enforcement Unit. The conference was moderated by Mr. Peter Barrett, who introduced the Conference themes and explained the context for the development of Corporate Governance within the jurisdiction to the 160 international and local delegates.

The National Airline has reduced the operating loss for the quarter to €4.8 million (Q3 2011: €9.8 million loss). The net result position after restructuring costs (largely one-time charges) and interest costs is a loss f €8.5 million (Q3 2011: €11.9 million loss), as anticipated in the Restructuring Plan approved by the Commission. These figures continue to build on the progress registered in the first two quarters of the financial year and show that the airline is on track to achieve its stated milestone of halving last year’s €30 million operating loss in the current financial year. These positive interim 3rd quarter results were driven by constant improvements of the airline’s revenue (+9.7% to €47.7million), passengers numbers (+3.5% to 377,951 passengers) and seat load factor (+1.0% to 75.1%). (See table 1) Commenting on these figures Chief Executive Peter Davies said, “Despite this being a lean period of the year these results continue to confirm that the airline is on its way to recovery. Each and every action we have taken over the past two years was aimed to increase revenue and reduce costs. We are substantially on track in our revenue targets but much more needs to be done to reduce supplier costs. Peter Davies added, “Our stronger financial platform now allows the company to enter into its second phase of development which includes a significant overhaul of business processes in our Finance, Cabin and Ground Services divisions. This is aimed at developing a more customercentric experience that will require the vital and responsible role of our employee unions as well as a change in management structure which will be announced next week. “The challenges for Air Malta are still significant and we must succeed, together with all our stakeholders, to achieve our targeted operating break-even figure in the next Financial Year”, concluded Mr Davies. TEU

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JANUARY 2013 | THE ECONOMIC UPDATE

LITERATURE

CENTRAL PARK A literary excerpt from writing by John Updike

On the afternoon of the first day of spring, when the gutters were still heaped high with Monday’s snow but the sky itself was swept clean, we put on our galoshes and walked up the sunny side of Fifth Avenue to Central Park. There we saw: Great black rocks emerging from the melting drifts, their craggy skins glistening like the backs of resurrected brontosaurs. A pigeon on the half-frozen pond strutting to the edge of the ice and looking a duck in the face. A policeman getting his shoe wet testing the ice. Three elderly relatives trying to coax a little boy to accompany his father on a sled ride down a short but steep slope. After much balking, the boy did, and sure enough, the sled tiopped over and the father got his collar full of snow. Everybody laughed except the boy, who sniffled. Four boys in black leather jackets throwing snowballs at each other. (The snow was ideally soggy, and packed hard with one squeeze.) Seven men without hats. Twelve snowmen, none of them intact. Two men listening to the radio in a car parked outside the Zoo; Mel Allen was broadcasting the Yanks-Cardinals game from St. Petersburg. A tahr (Hernitragus jemlaicus) pleasantly

squinting in the sunlight. An aoudad absently pawing the mud and chewing A yak with it’s bak turned. Empty cages labelled “Coati”, “Orang-outang”, “Ocelot.” A father saying to his little boy, who was annoying almost to tears by the inactivity of the seals, “Father [Father Seal, we assumed] is very tired; he worked hard all day.” Most of the cafeteria’s out-of-doors tables occupied. A pretty girl in black pants falling on them at the Wollman Memorial Rink “Bill and Doris” carved on a tree. “Rex and Rita” written in the snow. Two old men playing, and six supervising, a checkers game. The Micheal Friedsam Foundation Merry-GoRound, nearly empty of children but overflowing with calliope music. A man on a bench near the carousel reading, through sun-glasses, a book on economics. Crews of shinglers repairing the roof of the Tavern-on-the-Green. A woman dropping a camera she was trying to load, the film unrolling in the slush and exposing itself.

A little colored boy in aviator goggles rubbing his ears and saying, “He really hurt me.” “No he didn’t,” his nursemaid told him. The green head of Giuseppe Mazzini staring across the white softball field, unblinking, though the sun was in its eyes. Water murmuring down the walks and rocks and steps. A grown man trying to block one rivulet with snow. Things like brown sticks nosing through a plot of cleared soil. A tire track in a piece of mud far removed from where any automobiles could be. Footprints around a KEEP OFF sign. Two pigeons feeding each other. Two showgirls, whose faces had not yet thawed the frost of their makeup, treading indignantly through the slush. A plump old man saying “Chick, chick” and feeding peanuts to squirrels. Many solitary men throwing snowballs at tree trunks. Many birds calling to each other about how little the Ramble has changed. One red mitten lying lost under a poplar tree. An airplane, very bright and distant, slowly moving through the branches of a sycamore.

John Hoyer Updike (18 March 1932 – 27 January 2009) was an American novelist, poet, short story writer, art critic, and literary critic. Updike's most famous work is his Harry "Rabbit" Angstrom series (the novels Rabbit, Run; Rabbit Redux; Rabbit Is Rich; Rabbit At Rest; and the novella "Rabbit Remembered"), which chronicles Rabbit's life over the course of several decades, from young adulthood to his death. John Updike wrote thousands of words about the New York city during his New Yorker years. In the introduction to the collection “Assorted Prose,” he writes that the Architectural Digest magazine (who commissioned short pieces from established writers such as John Updike for a collectors’ issue called “Inside New York), “paid me to gad about, to interview tertiary celebrities, to peek into armories, and to write accounts of my mild adventures for its insatiable department ‘The Talk of the Town.’ ” These short pieces date from March 1956. This piece lists what Mr. Updike sees in the park, depicting the joyous energy of the New Yorkers during the first day of spring in Central Park. References: M. D’Argy Smith; Wikipedia; ‘New York Observed’ B. Cohen; S. Chwast; S. Heller

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FEBRUARY 2013 | THE ECONOMIC UPDATE

NEWS MAKERS

THE FUTURE OF MALTA’S INDUSTRIAL HERITAGE DISCUSSED The Farsons Foundation in collaboration with the Department of Built Heritage, Faculty for the Built Environment at the University of Malta.

International heritage and museums advisor Mr Tim Ambrose addressing the participants during the conference on Malta’s industrial heritage and its future.

A conference on how Malta’s industrial heritage can add value to the islands’ cultural tourism was held today at The Brewery of Simonds Farsons Cisk plc in Mriehel. Entitled: “Approaches to Industrial Heritage in Malta: What works?”, the one-day conference aimed to highlight important aspects of Malta’s industrial past, its general appreciation and its significance for future generations. The conference was organised by

In his opening address, the Farsons Foundation’s Chairman Mr Bryan A. Gera said: “Industrial heritage existed in all phases of human development from the time of the Industrial Revolution – in mid 18th century. The achievements and grandiose constructions which started off in that era set off a momentum which carries on unabated to this day.” The keynote speaker was Mr Timothy Ambrose, an international specialist in cultural destination development and cultural heritage management, who outlined a range of factors that create value from industrial heritage assets. He said that the future of our historical and economic heritage depends on a number of factors, such as securing funds for sustainable preservation, reviewing existing policies and priorities for the care and conservation, and improving public understanding of the value of historical heritage. The Dean of the Faculty for the Built Environment at the University of Malta Professor Alex Torpiano thanked the Farsons Foundation for taking the leading role in organising this conference – a first in Malta. The conference was also addressed by the Minister for Tourism, Culture and the Environment Dr Mario de Marco, Simonds Farsons Cisk plc, Chairman Mr Louis A. Farrugia, Simonds Farsons Cisk plc Director Mr Michael Farrugia, and Dr Reuben Grima from the University’s Faculty for the Built Environment. TEU

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FEBRUARY 2013 | THE ECONOMIC UPDATE

HEALTH & FITNESS

Obesity in the Workplace: Obesity and Job Performance by Richard Geres TACKLING OBESITY IN THE WORKPLACE For most employers, the best way to tackle obesity is to encourage a healthy diet and active lifestyle among employees. Below are some suggestions. • • • • • • • •

Background Richard Geres is an internationally certified Personal Trainer and Nutrition Specialist specialising in weightmanagement and functional fitness. Over the last 18 years he has helped thousands of individuals achieve slimmer, fitter and healthier bodies through lifestyle modifications and personalised exercise programmes. He can be contacted for seminars and individual consultations through his website on www.richardgeres.com.

According to studies, physical fitness significantly positively affects work performance whereas obesity negatively affects attendance and as a result, overall performance. There are studies that suggest that chronic stress and lack of physical activity in the workplace contribute to obesity in employees. There are also studies that suggest that physical fitness positively affects the quality and quantity of work performed. The same studies suggest that obesity has a significant negative impact on work performance.

Introduce policies that encourage physical activity. Ensure all employees get a chance to take their break and eat their lunch. Encourage staff to walk over and speak to their colleagues face to face rather than phoning or emailing. Encourage cycling or walking to work by providing showers for employees and secure parking spaces for bicycles. Support and encourage lunchtime walks and local leisure activities, such as swimming. Improve meal quality in canteens and vending machines in the workplace. Provide fruit, either for free or for purchase. Provide gym facilities, or contribute towards gym membership.

How the Workplace Can Contribute to Obesity According to an article posted on Science Daily (March 25, 2010), there is a new study that provides a picture of the typical (American) workplace. The study observed that job stress and lack of on-the-job physical activity contribute to obesity in employees. Researchers from the University of Rochester Medical Center, led by Diana Fernandez, MD, PhD, MPH, conducted a study of 2,782 employees at a manufacturing business in upstate New York. According to Fernandez, her study is one of many that associate high job stress with cardiovascular disease, elevated blood pressure, exhaustion, depression, anxiety and weight gain. Fernandez said, “It’s time to improve corporate policies that better protect the health of workers. It is important to focus on strengthening wellness programmes to provide good nutrition, ways to deal with job demands, and more opportunities for physical activity that are built into the regular workday without penalty.” How Obesity Affects Job Performance A study led by Nicholaas P. Pronk of Health Partners, Minneapolis, observed that employees’ level of activity and physical fitness had a major impact on their work performance. More physically active workers reported better job performance and better work attendance. Obesity had a significant negative impact on work performance and work attendance.

Lack of physical activity and obesity are commonly known to have a negative impact on health and the cost of health care. Poor health contributes to increased health costs. Dr. Pronk concludes, “Workers who are at least moderately fit and more physically active have higher work quality and better overall job performance. In contrast, obesity may affect relationships in the workplace while severe obesity leads to excess absences from work.” The rise in obesity levels can cause a number of problems for employers. Being obese can contribute to back problems - a major cause of absence from work. Obesity-related illnesses such as this can reduce the productivity of your workforce. Obesity is also linked to sleeping problems which can leave employees feeling tired, leading to lower productivity levels. This can even be dangerous if your employees are driving or operating heavy machinery. Employers may also need to take steps to prevent obese staff being bullied or discriminated against in the workplace, as this can sometimes lead to low self-esteem and depression. In conclusion, it would seem that if one wants to maintain health and have good work performance and better attendance on the job, one should maintain a normal, healthy weight. Employers can have a significant impact on the employees’ ability to control their weight by offering wellness incentives and lifestyle improvement initiatives. TEU

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FEBRUARY 2013 | THE ECONOMIC UPDATE

NEWS MAKERS

HSBC Malta special offers on home loans and life assurance HSBC Malta is offering a special 2.7% rate on the first year of home loans. This special offer is available to first-time buyers as well as customers looking to buy another home. In addition to this, HSBC Life Assurance is offering three months’ worth of free premiums on Life Assurance Protection Policies. Both offers close on 30 March 2013. “This campaign provides customers a great opportunity to make significant immediate savings” explained HSBC’s Head of Retail Banking & Wealth Management Paul Steel. “Through the home loan offer, our customers can save up to €575 in the first year, while customers benefitting from the HSBC Life Protection offer will receive a refund equivalent to three months’ worth of premiums.” During the campaign period, customers taking out a new HSBC Malta Classic Home Loan may benefit from the special interest rate of 2.7% per annum for 1 year on a maximum loan amount of €150,000. All HSBC Bank Malta plc customers, including commercial customers, who apply for any new HSBC protection policies or increase the premium for an existing plan, will benefit from 3 months’ worth of free life protection irrespective of taking out a home loan. HSBC’s special offers include an interest rate of 2.7% on the first year of Classic Home Loans and 3 free monthly premiums on Life Assurance Protection Policies.

More information about HSBC Malta’s offers, products, and services may be obtained online at www.hsbc.com.mt; by calling HSBC’s Customer Service on 2380 2380; or by visiting any of HSBC’s branches in Malta and Gozo. TEU

COSMOPROF Trade Show in Bologna, Italy The U.S. Embassy invites Maltese companies to attend the 2013 COSMOPROF trade show in Bologna, Italy between March 8 and 11, 2013. COSMOPROF attracts over 170,000 visitors and is the most popular European trade show in the beauty sector, featuring 2,300 exhibitors from 70 countries. This year, COSMOPROF will feature 100 American professional companies in the sectors of beauty and cosmetics and in the wellness industry. A stand dedicated to Californian products will showcase the products of 20 different companies all seeking international partnerships to expand operations across the globe. It is a golden opportunity to attract foreign investment to Malta. Visitors to COSMOPROF who register with the U.S. Embassy will be granted free entrance for the duration of the trade show and will receive assistance to organize meetings with American companies prior to arrival in Bologna. Access to the International Buyer Lounge, where officials gather for refreshments and access to internet facilities, will also be available. The U.S. Embassy will provide invitations to registered officials for VIP/special events and receptions being held during the event. Officials from the U.S. Embassy in Rome will be available to provide assistance. For more information and to register, please contact the Ms. Vinnie Camilleri at the U.S. Embassy – camilleriv@ state.gov. Please access COSMOPROF’s website for information on the 2013 trade show – www.cosmoprof.com 64 |

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AIR MALTA ANNOUNCES ORGANISATIONAL SHAKEUP Air Malta has announced the re-organisation of its senior management structure, aimed to enable the airline to move to its second phase of development. In his message the airline’s CEO said that Air Malta has been through a momentous time as for the first time since it commenced operations in 1974 it undertook a major overhaul. He said that the restructuring process, managed in a relatively short period of time, started showing results and everyone’s efforts are now beginning to bear fruit. To date Air Malta’s organisational structure has reflected the first phase of its turnaround - the creation of a company that is focussed on delivering profits and to secure an improved balance and cash flow. “We need to consolidate the gains we have achieved and begin to map out our future. A future that will be determined as much by our capacity for change as it will be for our intellect in developing the right strategy for the airline. That has a bearing not just for us as professional airline employees but for the country. We must get it right”, commented the airline’s Chief Executive. Mr Davies announced that the airline is entering a critical period of fine tuning through the intellectual application of Business Process Reengineering (BPR). He said that Air Malta needs to improve its efficiency and take advantage of new technology. This is not only required since customers are expecting more but also since the airline now needs to make a profit. To enable and facilitate this new focus as from 1st March Air Malta will operate through five main organisational business streams. TEU

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