The Economic Update Jan 2013 by Adrian Friggieri

Cover Story Vision And Strategy

pg 4

An interview with Marthese Portelli, President of the PN Executive Committee

From War to Peace: A European Tale pg 6

An exclusive contribution by Herman Van Rompuy and JosĂŠ Manuel DurĂŁo Barroso

Main FeatUre Libya

pg 9

We analyse Maltese Libyan business relations and opportunities

SpeCial FeatUre Leading Women

pg 33

An exceptional feature about leading women in politics and business

Vision and Strategy

contents 04 | Covery Story

06 | EU

Marthese Portelli, President of the PN Executive Committee, shares her personal experiences

From War to Peace: A European Tale

A special contribution by Herman Van Rompuy and José Manuel Durão Barroso, Presidents of the EU Council and the EU Commission respectively

Malta/Libya Relations

Victor Camilleri, Malta’s seasoned Ambassador to Libya writes about Maltese/Libyan affairs

09 | Libya

Facing Up to New Markets

Big Exhibit’s Jean Pierre Mizzi discusses his international campaign and marketing the LIBYA EXPO

Special Feature LEADING WOMEN

An outstanding feature bringing together some of Malta’s leading women politicians and female entrepreneurs

33 | Leading Women

Integrity & Honesty

Our Interview of the Month with Maurice Mizzi – a frank dialogue with an accomplished businessman

Shared Values

The Executive Interview of the Month features the founding Partner of Trust Alliance Dr. Tonio Fenech

Raising the Temp

A dual interview with Rachel Balzan Demajo and Mark J Galea on their latest joint venture

The Economics of Bubbles

A unique dual contribution by KPMG Associates Jonathan Dingli and Steve Stivala about the economic bubble

26 | Corporate Business

Publisher Editor

John Formosa Martin Vella

Journalist

Roslyn Schembri

Sales & Publication Manager

Margaret Brincat

Art Director Graphic Designer Printing

58 | Shared Values

A Note from the editor Martin Vella For a business publication to succeed, it needs to act as a medium through which the business community’s concerns, hopes and aspirations, problems and controversies, are not just merely reported on, but discussed, analysed, argued over and thought about.

John Mizzi Jessica Camilleri Progress Press

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: Joe Aquilian; Victor Camilleri; Simon Calleja Urry; George Carol; Adrian Coleiro; Gareth Colesmith; Jonathan Dingli; Jeffery Farrugia; Jean Mizzi; Cliff Pace; John Schembri; Steve Stivala; Fabian Weil; Victor Zammit McKeon; 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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All rights reserved. Reproduction in whole or in part is strictly prohibited without written permission. Opinions expressed in The Economic Update are not necessarily those of the editor or publishers. All reasonable care is taken to ensure truth and accuracy, but the editor and publishers cannot be held responsible for errors or omissions in articles, advertising, photographs or illustrations. The Economic Update is printed by Progress Press and distributed free with The Business Weekly.

editor’s note

“In the business world, the rearview mirror is always clearer than the windshield.” Warren Buffet

The magazine has changed hands many times, and countless people have contributed. This is my second term as editor, and I intend make it the best. For those of us entrusted with The Economic Update now, the challenges and the opportunities include extending our reach into digital editions for the web, social media, notebooks and sister publications (yes, we do them all). I think one of the hardest parts of this new reality is retaining that reflective, introspective quality that people look for from quality publications. My editorial policy demands that we write the best articles and interview high profile personalities that you will want to read. The magazine is a monthly forum for a broad spectrum of business minded individuals who, by their executive positions of management and headship, exercise inherent influence and authority over the allocation of human and material resources. We want to continue to deliver a circulation without waste; because we do not want to dilute the power that our reach delivers; and because our readers are special, and they have told us what they want to see. The Economic Update delivers a pure power base within its circulation and our readers are the most influential, powerful, and affluent readers in the business community. All the team involved have a little something they can be proud of this month. You have kept a magazine going. The Economic Update is the only local magazine that brings a broad range of leadership thoughts and visions from top Maltese and foremost distinguished international business people. For example, in this issue, you will find a unique dual contribution by EU President Jose Manuel Barroso and EC President Herman Van Rompuy. We want our readers to learn about the real persons behind the news stories. It is these kind of article and the high profile interviews that magazines really pioneered, and that is what we excel at today, making us the best of breed. Following on the heels of the Italy-Libya Economic Forum in Rome two weeks ago, we also dedicate our main focus on Libya to glance at the latest developments, including security, and investment. Then we invite you to enjoy our unique 16-page pull-out with full-length interviews and special stories that make up our special feature titled ‘Leading Women’. Well done to all at The Economic Update. And to all of you who read us, and who have advertised with us over the years, thank you for making this publication possible.

COVER STORY INTERVIEW

JANUARY 2013 | THE ECONOMIC UPDATE

Vision and strategy by Martin Vella

She is a lawyer by profession, works as a Business Development Manager and she is the President of the PN Executive Committee. In this exceptional interview Marthese Portelli opens up about how she seeks to make a difference by encouraging direction through exemplary values, raising the visibility of women leaders and bringing more women to the fore by empowering them to use personality and intelligence for positive social change.

BACKGROUND Marthese Portelli has occupied the post of Vice President of the University Student Council (KSU), and was also a member of the Gender Issues Committee of the University of Malta. She was also the Ministry for Justice and Home Affairs representative on the Council for Children. Since 2008, Marthese has served as President of the PN Executive Committee. She was also directly involved in the 2008 General Election Campaign, the 2008 and 2012 Local Council Election Campaigns, and the 2009 European Parliament Election Campaign. Marthese graduated as a lawyer from the University of Malta in 2002 and has gone on to specialise in Commercial and IT Law. Through her 11 years in business, she has quickly moved up the ranking ladder from Legal Officer to Operations Manager to Project Manager to Commercial and Legal Compliance Manager and now to her current position, that of Business Development Manager of a group of companies specialising in IT and Marketing.

TEU: What is the link between your legal profession and your role of Business Development Manager and what made you feel that studying law was the right fit? MP: As you rightly pointed out, I am a lawyer by profession. Way back then, I took a conscious decision and opted to focus on IT and Commercial Law. IT law was still in its infancy at that time, and there were a number of people who tried to convince me to do otherwise. However, I believed that the IT sector would flourish and that it would open up a lot of opportunities, even to the legal eagles. My determination was primarily influenced by the fact that the Nationalist Party had committed itself to push forward the IT sector as well as by the fact that I come from a self-employed family. I was proved 04 |

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right and since then I have occupied several managerial posts – Operations Manager, Projects Manager, as well as Commercial and Legal Compliance Manager. At present I am the Business Development Manager to a Group of Companies specialising in IT and Marketing. As a child, I was more inclined towards science, but as I grew up I felt that studying law was a good fit for my personality and habits.

My goal is to raise the visibility of women leaders because these women, with few exceptions, are relatively unknown. TEU: What is your role as PN Executive Committee President and how does your job as a Business Development Manager and the role of Executive Committee President correspond to one another? MP: The Executive Committee has a very important role within the Party structure. Apart from responsibilities of an administrative nature, the Executive Committee is also the body entrusted with policy formulation. As President of the Executive Committee I have the responsibility of giving direction not only in the formulation of PN’s policy but also in the drawing up of electoral programmes. In addition there is also the responsibility of approval of the candidates – candidates for the Local Council elections, for the European Parliament elections, as well as for the General Elections.

There is a lot of similarity between my job and politics – Politics is all about thinking deep, thinking long term and being creative. It is about meeting and discussing with people to formulate policies and ideas that will help better their quality of life. This is very similar to what I do on a day-to-day basis at my office. As the Business Development Manager of a Group of Companies, I have the responsibility of keeping up with the achievements that the Group has accomplished so far, and to go beyond. I have to find ways how to penetrate into markets that the Group has not yet tapped, as well as identify new niches and future potential markets. It is a very challenging job and it requires commitment, but I love it. The same can be said for politics. Politics is all about commitment, dedication and persistence. This is what induced me to take an active role in politics. And I have never regretted it. MARTHESE PORTELLI Personal high – An unexpected kiss and a hug from my son. Sometimes, I am working at my laptop while my son is absorbed in painting, playing, watching tv, etc. He gets up and comes up to me and gives me that loving kiss and hug of his. It’s beyond words! Professional high – Every time I manage to take on a new client or conclude a new deal. Everytime a job is closed off successfully with the client thanking us for our services. For example, a couple of weeks ago I was ecstatic when I got to know that an internationally renowned company has selected us as their preferred partner in an overseas project.

COVER STORY INTERVIEW

JANUARY 2013 | THE ECONOMIC UPDATE

TEU: Can entrepreneurship be taught or is one born with it? MP: Whereas there are some skills that can be taught such as setting one’s goals, I think that there are some basic characteristics that one is born with, such as the eagerness to succeed, the willingness to take risks, as well as perseverance in the face of uncertainty or failure. I am very process-oriented - I focus intently on quality in all our business processes; I am constantly focused on how I can add value to clients.. I believe that entrepreneurs are a particular breed; they have a great desire to succeed. It is this drive that pushes them forward every day to meet their goals. It’s like a pianist who says he cannot breathe unless he plays the piano. An entrepreneurial spirit cannot be stopped and it has everything to do with success.

TEU: A good number of politicians come from the legal profession. Did you choose law with the aim of entering politics at some point in your life?

TEU: Do you have any role-model?

of my sex.

MP: I do not have one particular role model. Many people have inspired me at various stages of my life, helping mould me into what I am today, a person with my own values, with my own ideas and with my own character. I would say that on the international front, I consider both Mahatma Ghandi and Steve Jobs to be role models, albeit for different reasons, while in the field of national politics, Eddie Fenech Adami remains for me the standard against which all of us should be measured.

TEU: The number of women in the last Cabinet was alarmingly low. What are your views about the representation of women in local politics?

I admire those who are resilient in the face of difficulties. A particular person comes to mind immediately. I am in contact with her through Facebook, and if she happens to be reading this interview she will immediately discern that I am referring to her. Though she is not involved in politics, her positive attitude towards life, her stamina, and her ‘Can Do’ attitude are definitely characteristics that inspire me.

I am who I am, and my capabilities are what they are. I expect to be assessed on those criteria, and not on the basis of my sex. MP: No, though I must say I always possessed a keen interest in politics, as it is ultimately politics that determines our way of life, present and future. On the other hand, it was student politics that gave me the first taste of being in the front line of political activity. I remember the healthy and vibrant discussions that we used to have, especially during the stipends issue. I remember the hours that I spent with my other student colleagues, forging our political personalities in heated debates. I remember the days and nights spent at the KSU office – as KSU Vice-President, where I represented the SDM. This also brings to mind a particular criminal law lecture, during which Profs Guido DeMarco pointed toward me and said - “Int ghad tkun fil-politika.” Well, he was proved right. HIGHS AND LOWS Personal low – There are times when I feel that my job and politics are encroaching upon the time that I could otherwise spend with my family. And yes, I do get that guilty feeling. A ‘funny’ personal low is when we were living in our house while renovations were taking place – it was a living nightmare! Professional low – I hate back-stabbing especially when it comes from colleagues. However, when this happens, I have learnt to push it aside and move on.

TEU: Politics is male-dominated. How do you feel as a woman in a male-dominated field? MP: I work in the ICT sector and it is a known fact that ICT is an intensely male-dominated industry. The same can be said for the managerial positions that I have occupied. Over the past years, I have sat down and took decisions in boardrooms with other managers where the male to female ratio was quite high in favour of males. My goal is to raise the visibility of women leaders because these women, with few exceptions, are relatively unknown. I am also hopeful that we will be able to increase visibility for important issues. On the other hand, we must not forget that there are women who have crossed this bridge with success. At the end of the day, I am who I am, and my capabilities are what they are. I expect to be assessed on those criteria, and not on the basis

MP: There is also another dimension to your statement. The two women elected on the PN ticket were both entrusted with a Ministry. Having said that, I do acknowledge that, as a society, we are still lingering on the full development of women’s roles in our society. The number of women in politics, as well as in the higher roles in business and the public service is still far from satisfactory. This is reflective also of the realities in the working population. It’s a mentality issue. For many years, we had generations used to what were perceived as traditional female roles and traditional male roles. That is changing, albeit slowly. We have created a culture around diversity, which we now call inclusion because it’s much broader. Inclusion is what we are: we live it; it’s not an agenda item. We embrace people of all backgrounds and we should be colour blind when it comes to determining who can best lead us. Once our society continues to grow and develop more acceptance of the principle, this should also transfer into the political realm. The gender balance of our student population also augurs well for the future and hopefully we will develop into a political line up which is more truly representative of our gender balance. It is true that there is as yet a certain inertia, and there might be the need for some nudging or possibly some corrective measures to start the (snow)ball rolling. However, many sectors have seen this acceptance already – medicine, law, judiciary, administration, diplomacy. Hopefully politics will be the next frontier.

TEU: What are you most focused on for the future? MP: Right now we are in the middle of an electoral campaign. I strongly believe that the Nationalist Party has always been, and will remain the party with the best policies and systems of government that contribute to an environment which is healthy for entrepreneurship to flourish and grow. It is my responsibility as President of the Executive Committee and as a candidate for the general election to explain our policies to the electorate – this is what I am doing and this is what I will continue doing. My style is collaborative and without a doubt, it is about the team that ultimately delivers a lot more to our society than any of us would individually. TEU

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JANUARY 2013 | THE ECONOMIC UPDATE

“From

War to Peace:

a EuropEan talE” By Herman Van Rompuy and José Manuel Durão Barroso

War is as old as Europe. Our continent bears the scars of spears and swords, canons and guns, trenches and tanks, and more. Yet after two terrible wars engulfed the continent and the world with it, peace came to Europe.

Herman Van Rompuy is the current, and first, full time President of the European Council. He served as Prime Minister of Belgium in 2008-2009.

Europe must keep its promise of peace.But it can no longer rely on this promise to inspire citizens.

In the grey post-war days, the hearts of many were still simmering with mourning and resentment. So what a bold bet it was, for Europe’s Founders, to say, yes, we can break this endless cycle of violence, we can stop the logic of vengeance and build a brighter future, together. Of course, peace might have come to Europe without the Union. Maybe. But it would never have been of the same quality. A lasting peace, not a frosty cease-fire. Reconciliation is what makes this peace so special. It goes beyond forgiving and forgetting, or simply turning the page. Adenauer and De

06 |

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Gaulle in the Cathedral of Reims: it is one of those stirring images that healed post-war Europe. Other images too come to mind. Six States assembled to open a new future in Rome. Willy Brandt kneeling down in Warsaw. The dockers of Gdansk, gathering in protest. Mitterrand and Kohl hand in hand. Rostropovich playing Bach at the fallen Wall in Berlin. But symbolic gestures alone cannot cement peace. This is where the European Union’s “secret weapon” comes into play: an unrivalled way of binding our interests so tightly that war becomes materially impossible. Through constant negotiations, on ever more topics, between ever more countries.

JANUARY 2013 | THE ECONOMIC UPDATE

EU Admittedly, some aspects can be puzzling. Ministers from landlocked countries passionately discussing fish-quota. Europarlementarians from Scandinavia debating the price of olive oil. The Union has perfected the art of compromise. No drama of victory or defeat, but ensuring all countries emerge victorious from talks. It worked. Peace is now self-evident. War has become inconceivable. Yet ‘inconceivable’ does not mean ‘impossible’. And that is why we are in Oslo today. Europe must keep its promise of peace. But it can no longer rely on this promise to inspire citizens. This couldn’t be more clear than it is today, when we are hit by the worst economic crisis in two generations, causing great hardship among our people, and putting the political bonds of our Union to the test. Parents struggling to make ends meet, workers recently laid off, students who fear that, however hard they try, they won’t get that first job: when they think about Europe, peace is not the first thing that comes to mind… we are working hard to overcome the difficulties, to restore growth and jobs. We are confident we will succeed. The European Union is not only about peace among nations. As a political project it incarnates – in Spinoza’s definition of peace – “a state of mind, a disposition for benevolence, confidence, justice”.

The uniqueness of the European project is to have combined the legitimacy of democratic States with the legitimacy of supranational institutions Other historic moments underlined this. The people of Portugal, Spain and Greece celebrating the democratic revolution and freedom. This same joy was experienced later in Central and Eastern Europe and in the Baltic States. The quest for freedom and democracy made possible the reunification of the continent. The European Union has become our common house. The “homeland of our homelands”, as Vaclav Havel called it. The founding fathers understood that to guarantee peace in the 20th century nations needed to think beyond the nation-state. The uniqueness of the European project is to have combined the legitimacy of democratic States with the legitimacy of supranational institutions that protect the general European interest.

José Manuel Barroso is the President of the European Commission. He served as Prime Minister of Portugal from 2002 to 2004.

Our quest for European unity is not an end in itself, but a means to higher ends. It attests to the quest for a cosmopolitan order. Despite its imperfections, the European Union is a powerful inspiration for many around the world. Beyond our nation, beyond our continent, we are all part of one mankind. The concrete engagement of the European Union in the world is marked by our continent’s tragic experience of extreme nationalism, wars and the absolute evil of the Shoah. It is inspired by our desire to avoid the same mistakes being made again. That is the foundation of our multilateral approachand our relations with international partners; defining our stance against the death penalty and our support for international justice; our leadership in the fight against climate change and for food and energy security, and our policies on disarmament and against nuclear proliferation. As a continent that went from devastation to become one of the world’s strongest economies, we have a special responsibility to millions of people in need. As a community of nations that has fought totalitarianism, we will always stand by those who are in pursuit of peace and justice, democracy and human dignity. Our thoughts go to the human rights’ defenders all over the world who put their lives at risk to defend the

values that we cherish. No prison wall can silence their voice. As a Union built on the founding value of equality between women and men, we are committed to protecting women’s rights all over the world. We cherish the fundamental rights the most vulnerable: the children of this world. The “pacification of Europe” was at the heart of Alfred Nobel’s concerns. In an early version of his will, he even equated it to international peace. Over the past sixty years, the European Union has shown that it is possible for peoples and nations to come together across borders. Our continent, risen from the ashes after 1945 and united in 1989, has a great capacity to reinvent itself. It is to the next generations to take this common adventure further. We hope they will seize this responsibility with pride. And that they will be able to say, as we in Oslo: I am proud to be European. Editor’s Note This is an abridged contribution of the Nobel Lecture that Herman Van Rompuy and José Manuel Durão Barroso, Presidents of the European Council and the European Commission, delivered in Oslo on behalf of the European Union at the Nobel Peace Prize ceremony courtesy of the European Parliament Office In Malta. TEU

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JANUARY 2013 | THE ECONOMIC UPDATE

LIBYA

Maltese/Libyan relations by Victor Camilleri

We scrutinise Matese/Libyan relations through the eyes of seasoned Ambassador from the ground in Tripoli. proximity as well as from the accommodating framework provided by a carefully nurtured political relationship. In the Malta/Libya relationship, the effects of proximity are not simply a function of distance but also, and more especially, of location and of relative size. Much more than in a geographical sense Malta provides a stepping stone for Libya towards Europe, and the rest of the world. And the relative size between the two countries, on the one hand a vast, sparsely populated territory rich in natural resources and a still unexploited huge economic potential, and on the other a small over-populated resource-poor country which is however well inserted in the global industrialised economy provides, under the right conditions, the essential pre-requisites of complementarity and trust.

Victor Camilleri

One important dimension of Maltese/Libyan relations stems from the fact that the Libyan market offers a solid potential for Malta to export services and knowhow. Maltese entrepreneurs have a long established foothold in the country, acting as intermediaries or middlemen introducing and applying to the Libyan market products, equipment and technology available on the international market. The intermediary role of the Maltese middleman is distinguished by the added value he can bring to the transactions between the Libyan and international markets. This added value lies in the combination of knowhow related to the identification and procurement of suitable products on the international market with the

capacity to provide the ancillary services which assist in the distribution and use of these products on the Libyan market. The niche created by this type of business relationship is a product of a number of unique factors which, from the point of view of the Maltese entrepreneurs, are not readily reproducible elsewhere. It also generates diverse forms of economic activity, resulting in increased employment and income, whose benefits are only partly or indirectly reflected in the official statistics of either country. The factors contributing towards this active and fruitful business relationship arise both from the natural effects of geographical

The right conditions are rooted in a political relationship which, over the years, has steadfastly focused on the positive aspects, and the human dimension, of neighbourliness. Maltaâ&#x20AC;&#x2122;s regional policy aimed at radiating a message of peaceful intent and mutually beneficial cooperation has served to reinforce the elements of trust and understanding with all its neighbours, and especially Libya, also during episodes of the highest sensitivity. Such episodes include bilateral issues which could have the potential of causing friction between the two countries. Even the issue of illegal immigration and the issue of maritime delimitation, in spite of their special sensitivity for Malta, thus are encompassed within this neighbourly approach. cont pg 15 www.maltaeconomicupdate.com

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JANUARY 2013 | THE ECONOMIC UPDATE

LIBYA

The ‘Spirit of Corinthia’ by Salvinu Farrell

With its welcoming charm, fascinating archeological remains and, above all, the magic of the desert, Libya reveals her treasures without pretension or eccentricity - a mosaic full of beauty and charm.

Already well established as a business destination, Libya is gradually but steadily coming to terms with its recent turmoil and can now aspire to become a tourist destination as well. Can aspire to become a favourite tourist destination. Libya is a precious stone that is being finely honed by the ambitions and ‘Craftsmanship of Care’ skills and services of Corinthia Hotels, a luxury brand that had the vision to exploit the potential for both business and holiday travel in this country. The pioneer amongst 5-star hotels in Libya, the Corinthia Hotel Tripoli is a formidable hotel complex that has gained a reputation as the stand out hotel for dignitaries in Tripoli. This ambition has been fortified by the vision and perseverance of the Corinthia Hotels group, when it stood by the people in their recent turmoil and kept the hotel open throughout the conflict, thus earning the respect of all and sundry. The two majestic towers of the Corinthia Hotel Tripoli reach into the sky in the heart of the city - a landmark at which feet stretch the medieval stone walls of the Medina that have stood for centuries. At the hotel entrance, a splendid arch heralds the doorway to Africa. Inside, the lobby is vast and airy with comfortable armchairs, a coffee bar and mosaic fountains. Large staircases climb to the upper floors and give a majestic allure. The Corinthia Hotel Tripoli offers 300 rooms including 34 suites, equipped with everything that you would expect in this type of establishment. They are spacious, pleasant and functional and the refined luxury immediately catches the eye, harmoniously blending contemporary design with traditional touches. All rooms offer an uninterrupted spectacular view of the Mediterranean. One hundred Executive rooms and suites are dedicated to business travellers, providing the perfect workspace. The Executive Lounge provides peace to recharge your batteries and allows for the organisation of small meetings. For conferences and banquets, the Corinthia Hotel Tripoli has four halls and meeting rooms around its business centre and is spacious enough to host receptions for up to 500 people. The Lebdah

Salvinu Farrell, Vice-President of Corinthia Hotels for the EMEA Region

Ballroom is the place to host stand-up weddings whilst Shahhat Hall can be partitioned and can host a banquet of up to 300 guests. Sabratha and Ghadames rooms are ideal for board meetings. A hotel of this standing can rely on its restaurants to impress guests; the restaurants in the hotel are highly regarded in the Libyan capital. Situated on the top floor of the high tower, the Fes Restaurant serves sumptuous Moroccan cuisine and affords guests a magnificent view over Tripoli. Pizza and pasta are the usual fare of the Venezia Italian restaurant, whilst the Valette Restaurant offers incredible lunch and dinner buffets. Quick snacks, pastries and coffees are available all day long at the welcoming Tripoli Café. The Hotel is ideally situated for exploring the country; historical Tripoli is just a footstep away. The Souks conceal a labyrinth of alleyways in which you never tire of wandering; the many mosques show that the refinement is without limit; the people are friendly and welcoming, making you immediately feel at ease. Those who are interested in Roman remains will find a real treat to the west of Tripoli, where the site of Sabratha lies and in the east Leptis Magna unveils its magic. The business traveller is captured by the charms of a country that reveals itself slowly to the world; the Corinthia Hotel Tripoli is a haven of peace and luxury in a delightful city that is poised for rapid development. What could be more pleasant after a hard day’s work than a moment of relaxation at the Athenaeum Spa. Its beautiful outdoor and indoor pools, Turkish and Moroccan baths and a fitness centre will soothe the most stressed

businessman or weary traveller - reminder of the facilities that the Corinthia Hotel offers in order to satisfy all the needs of their clients - but beneath these lies the kindness of the staff, a kindness born in the true ‘Spirit of Corinthia’ and of Libya, a twin pleasure indeed. TEU

Salvinu Farrell joined Corinthia Hotels as an Accountant with the Jerma Palace Hotel in 1989. Later on held the positions Accounts Manager at Swan Laundry and Finance Director / Assistant General Manager at Corinthia Palace Hotel in Attard. In 2000, Salvinu was appointed General Manager of the Corinthia Atlantic Hotel in Banjul, Gambia. He was responsible with opening of the Hotel 2 Fevrier in Lome, Togo and in 2004 he was appointed General Manager of the Corinthia Hotel’s flagship hotel in Tripoli and has been directing this hotel ever since. In 2008 Salvinu was promoted to the position of Vice-President of Corinthia Hotels for the EMEA Region.

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JANUARY 2013 | THE ECONOMIC UPDATE

LIBYA

MANAGING RISK IN VOLATILE TIMES by Major John Schembri

Safety, security, and environmental risk in energy management

Resiliance, crisis management and emergency planning

In over a decade of direct professional involvement in operational risk management I have learnt an unalienable fact â&#x20AC;&#x201C; while the consequences of risk are directly related to policy, risk itself knows no politics. Contradictory as the statement may sound, reality shows clearly that while the decisions taken at organisational level will affect to some degree the risk exposures, when hazards strike their consequences will be felt regardless of any political system, ideology, belief or system of governance.

In a two-part article, I shall explore this statement share some possible ideas regarding the most reliable approach. As if to reinforce my earlier point, even as I write, the oil and gas industry is undergoing a severe security crisis in Algeria. Security threats hardly discriminate between governments. The consequences of major accident hazards on public safety and their impact on the business community can be catastrophic regardless. Business impact resulting from denial of service attacks on critical infrastructures will be keenly felt primarily by afflicted businesses and the community. Severe weather and natural hazards, regional instabilities and catastrophic

failures in operationally critical supply chains all carry vast potential for inflicting massive material losses, business disruption and impact on economic performance. There is no doubting that we live and operate in a volatile era, characterised by significant risk as well as unprecedented opportunities. This aspect of the argument is frequently and amply documented within the contemporary debates and is not the focus of this discussion. We are concerned, however, with exploring what it takes to manage risk in the face of potential adversity or unfavourable environments. In order to survive and thrive, businesses must acquire the capacity to both manage risk and manage in conditions of risk. It is my belief, based on years of personal experience, insights, field study and observation, that such capacity building requires modern day companies to acquire six key organisational attributes. These are: 1. Accepting the Leadership Challenge; 2. Re-learning the value of Planning; 3. Embedding Risk Management into mainstream management; 4. Embracing technology; 5. Work with Social Media; 6. Generate Resilience across the organisation. Leadership is fundamental to effective risk management. Top management simply have to lead by example in setting the correct tone across the company. Key responsibilities include

establishing an effective risk management policy, ensuring that risk fully and effectively evaluated, setting reasonable management objectives, providing the necessary resources and generally balancing resilience with cost-effectiveness and sustainability. A common mistake we come across time and again involves line managers and their subordinates receiving training or consultancy advice well ahead of key decision and policy-makers in the organisation. This sort of attitude is wrong and sends out inappropriate signals to the rest of the organisation which often result in deficient cultures.

Leadership is fundamental to effective risk management. The value of planning is often underestimated. Certainly as a term it tends to be overused, frequently abused and regularly just paid lipservice. Planning lies at the very heart of quality management and certainly when treating risk, an organisationâ&#x20AC;&#x2122;s ability to utilise active foresight in anticipating future events is a vital element of successful strategy. Think about it: when is it the right time to plan for emergencies? Well ahead of time or when disaster actually strikes? What appears to be a no-brainer actually very real implications for good risk management. Environmental management; occupational health and safety; security risks and business continuity management all depend on effective planning in order to succeed. TEU

For more info please visit our website

http://www.shield.com.mt/media.php

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LIBYA

cont from pg 9pg

One of the more noticeable and beneficial consequences of this state of affairs is the space which it has permitted for Maltese and Libyan businessmen to develop close and intimate ties of friendship and cooperation at both personal as well as professional levels. The recent events related to the Libyan revolution have created the conditions for these ties to be further strengthened and enlarged. The genuinely humanitarian, and bold political manner, in which Malta responded to the needs of the Libyan people in their hour of struggle has reinforced the goodwill and respect that exits between the two people at

both official as well as popular levels. In the post-conflict environment that Libya now faces, major tasks related to governance, security and reconstruction need to be tackled. This presents huge challenges as well as exciting opportunities both for the still emerging leadership of the country, as well as for its friends and neighbours who are keen to help it re-establish itself as an active member of the international community. For over a year after the end of the conflict the emerging Libyan leadership has proceeded prudently and cautiously in its efforts to tackle the serious challenges facing the country. While

these challenges remain, the pace of action and reform is now accelerating. This is therefore the time for Malta to intensify its efforts to exploit the accumulated experience, and the fund of goodwill, which characterize its relationship with Libya. On the side of the business community existing ties are being re-worked and expanded. On the official side former structures of cooperation and consultation are being updated and revitalized. Having worked together so closely and so well in times of trial and difficulty, the two countries can now look forward to a new era of mutually beneficial cooperation. TEU

Ambassador Victor Camilleri is currently serving as Malta’s Ambassador in Tripoli. He previously served as Malta’s Permanent Representative to the United Nations in Geneva. In his forty-year career at the Maltese Ministry of Foreign Affairs he has occupied a number of senior administrative and diplomatic posts including that of Permanent Secretary. As Ambassador in Brussels he formed part of the Maltese team which negotiated Malta’s membership of the EU. Amb. Camilleri was chef de cabinet to Maltese Foreign Minister Prof. G. de Marco during his Presidency of the 45th Session of the UN General Assembly. He has extensive experience in multilateral affairs. He is actively interested in the promotion of IT as a tool of diplomacy and for some years served as Chairman of the Working Group on Informatics at the UN in New York. He is also President of the DiploFoundation.

MARSAXLOKK SFAX

BENGHAZI AL KHOMS

MISURATAH

Malta to Libya Direct WEEKLY DEPARTURES

With our Libya direct routes, you can enjoy the benefit of two services leaving weekly to Benghazi and Misuratah in addition to the largest and most efficient shipping line in the world, opening up a whole new horizon of opportunity for your business. Whether you need global reach via transhipments, or a better, simple and direct connection, we’ve been making sure that our clients’ cargo arrives on schedule and within budget, for over 160 years.

Thomas Smith Shipping 1, War Victims Square, Luqa LQA1010.

Start your conversation with the world today, call 2205 8148

www.tcsmith.com www.maltaeconomicupdate.com

| 15

Ready steady

go...

Welcome to Libya & New Business Discover the new Libyan market opportunities at the 4th Libya Food Expo, which is devoted to the sectors of Food & Drink, Hotel and Catering Technology, Retail, Service Suppliers to the Food & Drink trade Agencies. This event is for the decision-makers (management, purchasing, sales and marketing) from all the sectors of food and drink. Retail and wholesale trade, health food stores, trade representatives, import and export, manufacturers and suppliers to the industry. Companies engaged in the food service and catering industry, such as the hotel and catering trade, system/brand-name catering, industrial, as well as contract catering. BigExhibits is your perfect partner. Our team will ensure you have a smooth journey from stand booking, concept to delivery. All you need to do is SHOW UP and STAND OUT. We will take care of every aspect of your stand, organise your flights, hotels and transport, giving you the time to concentrate on what matters to you.

For Exhibition Information and Stand Reservations please contact:

Big Exhibits on 2131 8885 / 9933 8820 or email: naomi@bigexhibits.com.mt

www.bigexhibits.com.mt

JANUARY 2013 | THE ECONOMIC UPDATE

LIBYA

Facing Up To New Markets Big Exhibits have launched a campaign in an international exhibition directory; featuring their new venture, which includes marketing the LIBYA FOOD EXPO. The live events industry is all about face-to-face – it’s fun, exciting, interactive, informative and memorable for visitors. It also provides a personal touch for exhibitors by showcasing the products and services in front of existing and potential customers. That’s what we have always believed. Exhibitions provide the most effective one-toone communication tool of the marketing mix. Exhibitions bring together suppliers, buyers, purchase influencers, consultants and the media, providing the platform to launch new products, generate media coverage, build brand awareness, generate leads and retain existing customers. Big Exhibits understands the importance of each individual exhibitor participating in International Events and have recently ventured in Event Management, which we call Service Partner. From enhancing a shell scheme to creating a concept for client space only area, Big Exhibits has the right turnkey solution for each exhibitor, tailored to meet every budget and for each space

size. Our Exhibitor Services Team is dedicated to provide the best possible solution. The design department creates fully unique stand designs from concept to execution. Striking, functional and communicative, these are always based upon the principle that your investment must yield as much return as possible. Modular Stand Design is combining our custom stand design and expertise with the cost effective use of shell scheme. Even for the tightest of budgets we can transform each shell scheme stand into a unique environment for your exhibitors. Our exhibitor service team is specialised in providing A-Z solutions for each individual exhibitor. Transforming stands with colours, specialty furniture, branded graphics or custom printed panels. The design team will work directly with you to create the ideal platform to help you showcase your products or services. The possibilities are endless. The results are stunning.

Benjamin Mangion & Jean Pierre Mizzi

Big Exhibits have teamed up with Almutwaset Expo, one of Libya’s leading companies well experienced in organising events and providing exhibition services, promotional projects, event management and related activities. Exhibition will be held at the Tripoli International Fair, Omar Mukhtar Street, Tripoli. Date: 16 - 19 June.

TEU

Big Exhibits have been appointed as exclusive representatives for LIBYA FOOD EXPO, for Malta & the UK.

LIBYA FOOD EXPO 2013 Discover the new Libyan market opportunities at the 4th Libya Food Expo, which is devoted to the sectors of : Food & Drink, Hotel and Catering Technology, Retail, Service Suppliers to the Food & Drink trade, Trade Agencies. There will be an extra service to encourage the national development of these sectors by making available bank guidance and advice to new businesses. Libya Food Expo is for the decision-makers (management, purchasing, sales and marketing) from all the sectors of food and drink, i.e. retail and wholesale trade, health food stores, trade representatives, import and export, manufacturers and suppliers to the industry. Companies engaged in the food service and catering industry, such as the hotel and catering trade, system/brand-name catering, industrial, as well as contract catering.

MAnufAcTurErs, IMporTErs And WholEsAlErs of : • • • • • • • • • •

Halal Food Health Food Canned and Processed Foods Bakery and Confectionery Products Bakery and Confectionery Machinery Coffee and Tea Beverages (non-alcoholic) Dairy Products Food Ingredients Meat and Poultry

• • • • • • • • •

Organic and Fresh Produce Frozen and Chilled Foods Seafood Snacks and Fast Food Speciality and Fine Foods Foodservices Food Related Retail Equipment Food Packaging and Labeling Catering Equipment

Companies whose services include the supply and installation of technical facilities and equipment, planning of large-scale catering establishments, as well as the provision of technology for large scale catering.

For further Exhibition Information and stand design please contact us on 2131 8885 / 9933 8820 or email us on

naomi@bigexhibits.com.mt Exhibitor sErvicEs: • Booth concept and design • Modular and custom stand design • (Shell scheme) stand construction • Design, signage and graphics • Furniture and decorations • Floor coverings • Floral and rental greenery • WiFi, Internet and data services • Audio-visual rentals and services • Catering • Stand cleaning • Rigging • Water and electricity • Travel and transport • Visa assistance • Hotel Bookings • Freight handling and customs • Marketing and communication support www.maltaeconomicupdate.com

| 17

JANUARY 2013 | THE ECONOMIC UPDATE

LIBYA

Country Report: Libya by George Carol

more sectoral delegations to Libya. All constituted bodies, such as the Chamber of Commerce, Industry and Enterprise, Malta Enterprise, the Libyan-Maltese Chamber of Commerce, Libya-Maltese Holdings and government ministries from both parts should strive more to provide opportunities particularly for those Maltese companies with established links to international co-investors, collaborators and principals. Following coordinated attacks against the US Embassy and also the latest attempt on the life of the Italian Consul in Benghazi, there is still a degree of uncertainty and it will take some time until opportunities become clearer. Notwithstanding, it is time for Maltese businesses to start exploring such opportunities.

Ruins of Leptis Magna in Khoms, Libya

Libya had a very successful election of a parliament (the General National Congress), which was able to agree on an executive cabinet. We look at how businesses between Libya and Malta can be enlightened, fostering ways of cultural dialogue and broker business opportunities. Of all the protagonists of the Arab Spring, Libya has undergone the most remarkable regime change. In retrospect, Libya has a longer road ahead to build a modern state, consolidate its democracy, and liberalize its economy. Increasing business opportunities and forging new trade relationships to regenerate LibyanMaltese relations are fundamental to the way forward. Confidence, trust and sincerity should remain the basis of any future relations between Malta and Libya and the need for the right interlocutors, as well as engaging people who are presently amongst the top decision makers in that country focusing on the ports and maritime services, thus providing companies operating in this industry the opportunity to explore the business and investment opportunities that post-revolution Libya is offering. At an institutional level Malta Enterprise has already visited Libya and, in tandem with the Malta Enterprise Commercial Office in Tripoli, strived to establish the formal structures so that it could offer local enterprises a good launching pad to do business in Libya, whilst also facilitating the process for Libyan enterprises looking at trade and investment opportunities in Malta. The work Malta Enterprise have done in the background in the past was crucial to ensure

that any imitative they undertake can have a successful outcome, given that practically all institutions and business support organisations in Libya underwent radical reforms. In this sense, the partnership agreement Malta Enterprise has signed with the General Board for Ownership and Investment within the Libyan Ministry for Economy should have paved the way for Malta Enterprise initiatives. However, it seems that the situation has remained muted.

While illegal immigration and visa related issues remain important, we cannot limit ourselves to this one dimensional approach. While illegal immigration and visa related issues remain important, we cannot limit ourselves to this one dimensional approach, since our relations must develop pro-actively into more of a two way affair. Maltese imports from Libya are negligible while we do not source oil from Libya, preferring to source it mainly from the international markets Now that the situation has somewhat stabilised, we should seek to build bridges and organise

Organising economic forums, such as the one coordinated in November by the Malta Institute of Management entitled “MIM Mediterranean Economic Forum 2012”, highlights why security in Libya is essential to future Maltese investment in the country, as well as converging on job creation and unemployment in the Mediterranean. Also taking into consideration past Libyan authorities’ recommendations, a further number of exploratory business delegations should be organised and pursued. More needs to be done to tap into business opportunities such as those operating in the marine engineering, construction and technical services; ship repair, port management and other services; industrial fish processing and farming; yacht marina development and management; as well as maritime training and value adding services. Libya offers numerous opportunities to further enhance Maltese businesses’ reputation as suppliers of value-for-money products and services. Libya is a value partner and so joint endeavours between Libyan and Maltese interests and entrepreneurs should be pursued particularly in third countries like Africa, as well as in neighbouring North African countries like Egypt and Tunisia, provided there is the right political stability in order enable Libya continue its build institutions and liberalize its economy. Libya needs a lot of rebuilding and within this context we should create the environment for local business and invite over Libyan officials involved in regulating these sectors with the aim of providing training and assistance to these public bodies based on Malta’s expertise in these fields. TEU

www.maltaeconomicupdate.com

| 19

Style & Design Windmill Ltd. has gained expertise in the production of aluminium, offering: Apertures, Railing, Balconies, Insect Screens and Security Doors. Windmill Ltd. also specialises in iron works and stainless steel works like: Railings, Valconies, Security Windows, Garage doors, Rooler Shutter, Up and Overs and Sectional Doors. Also Windmill Lt. provides proffesionally customised Laser Cutting due to all machinery, which are CNC providing the best quality finish that one can dream of! Windmill Ltd. Valletta Road, Marsa, MRA 053, Malta Tel: 2182 2143/4 | Fax: 2182 2147 Email: info@windmillmalta.com Web: www.windmillmalta.com

The Motherwell Bridge Group in Malta offers a complete service from initial design to engineering, project management, fabrication, testing and NDT and painting and site installation.

Products include:

• Storage Tanks • Structures and Steel Buildings • Custom Fabrications

Services include:

• NDT Services • Mechanical & Electrical Installations

Quality Management Systems in according to ISO 9001-2008 Facilities: Workshop space of 5,470 square metres with 15 metres clear height. Contact: Motherwell Bridge Limited Hal-Far Industrial Estate Hal-Far BBG 3000 Tel (+ 356)2165 7800 Fax: (+356) 2165 7801 E-mail: sales@mbmalta.com (Fabrication & NDT) servies@mbmalta.com (Services) Website: www.mbmalta.com

JANUARY 2013 | THE ECONOMIC UPDATE

LIBYA

General information: Capital: Surface Area: Official language: Population: Exchange rate:

FACT SHEET Head of State: HE Mr Mohammed el-Magarief

Tripoli 1,760 thousand sq km Arabic 6.5 million (2011) A$1 = 1.2783 Dinars (31 Dec2011)

Recent economic indicators: GDP (US$bn) (current prices): GDP PPP (Int’l $bn) (c): GDP per capita (US$): GDP per capita PPP (Int’l $) (c): Real GDP growth (% change yoy): Current account balance (US$m): Current account balance (% GDP): Goods & services exports (% GDP): Inflation (% change yoy):

Head of Government: Prime Minister Mr Ali Zidan

2007

2008

2009

2010

2011 (a)

2012 (b)

68.2 86.5 11,048 14.022 6.4 29,825 43.8 69.0 6.2

87.8 90.5 13,943 14,386 2.4 37,083 42.3 70.8 10.4

63.6 90.1 9,912 14,034 -1.4 9,380 14.7 58.8 2.4

73.6 94.7 11,239 14,460 3.7 14,578 19.8 67.0 2.5

35.7 39.0 5,510 6,017 -59.7 470 1.3 42.9 15.9

85.1 87.9 12,879 13,303 121.9 18,557 21.8 61.7 10.0

(a) All recent data subject to revision; (b) IMF/EIU forecast

Libya’s global merchandise trade relationships Libya’s principal export destinations, 2011: 1 2 3

Italy Germany France

Libya’s principal import sources, 2011: 21.5% 13.5% 13.4%

1 2 3

Egypt Tunisia Turkey

15.5% 11.9% 8.1%

Malta-Libya trade exchanges top €120m

Malta Gets EU Funds to Strengthen Libya Presence

• While the immediate impact of the current unrest in Libya is likely to be an influx of migrants, the situation could also be damaging to Malta’s external trade. • Official figures show that Malta imported €34 million worth of products from Libya in 2010, while Maltese exports totalled €85 million. • The number of companies with Libyan shareholding in Malta stood at 310 in 2011. • Trade exchanges have been on the rise, increasing by a third in 2010 on 2009 on the back of a 50% rise in 2009 from the previous year. • Imports from Libya are mainly in mineral fuels (70%), fish and crustaceans (20%) and electrical machinery (9.6%). • Exports consist mostly of electrical machinery (55.5%), machinery and mechanical appliances (5%), textiles (4%), precious metals and jewellery (4%), essential oils (4%), and tobacco (6%). • Maltese companies also have considerable investments in Libya in tourist accommodation, construction companies and the medical sector. Some 300 Maltese are employed there.

• The Times of Malta reported toward end of 2012 that Malta has been given more than €1 million in EU funding to boost its diplomatic and consular presence in Libya. • The country is to have three representative and consular offices in Libya. • In addition to the head office in Tripoli and the more recent temporary office in Benghazi, Malta is planning to open a new office in Misurata to issue visas and offer other consular services. • The European Commission has approved a Maltese application for assistance under the European Border Fund specifically for this project, with a second application currently being evaluated. • “Brussels has acknowledged Malta’s role to act as a bridge between the EU and Libya and has already given the green light for this plan to materialise,” sources close to the Commission said. • Malta was one of the first European countries to resume offering diplomatic and consular services from Libya after the civil war. • The plan should also facilitate business contacts between Malta and Libya, which are picking up considerably.

Source: Times of Malta

(a) All recent data subject to revision; (b) IMF/EIU forecast; (c) PPP is purchasing power parity; (d) Total may not add due to rounding; (e) Stock, as at 31 December. Released annually by the ABS. na Data not available. np Data not published. .. Data not meaningful. www.maltaeconomicupdate.com

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JANUARY 2013 | THE ECONOMIC UPDATE

LIBYA

Information Systems Ltd. IT Solutions that suit your business Authors: Joe Aquilina - Business Development Director; Simon Calleja Urry – Director of Research and Development; Adrian Coleiro – Operations Director

BACKGROUND Launched in 1994, ISL is a provider of comprehensive, cost-effective and innovative business software solutions that meet every business need. These solutions are currently used by business organisations in Europe, North Africa and the Middle East and are backed up by a unique commitment to customer satisfaction. ISL has developed professional bespoke business solutions for a variety of satisfied customers in diverse industries, some of them industry leaders in their own right. This has enabled them to broaden their knowledge and to gain a wealth of experience & expertise. ISL’s strength lies in their ability to understand customer requirements and to tailor their products to the customer’s specific business needs without compromising quality.

PRODUCTS ISL’s Eyesel Business Suite (EBS) includes an advanced Sales & Distribution system that helps some of Malta’s largest distributors to efficiently and effectively distribute multi-warehouse, multi-truck, multi-temperature regime products on time and perform instantaneous Monetary & Stock Reconciliations. ISL have successfully integrated increasingly affordable mobile technology such as handhelds, tablets & smartphones into their systems. Some of the sectors in which EBS has been implemented include : Import/Export, Wholesale/Retail, Insurance, Distribution, Financial services (Auditors, Accountants), Legal, Gaming, Transportation, Engineering, Electrical, Construction, Manufacturing, Hospitality, Pharmaceuticals and Food & Beverage. Both locally and overseas, ISL is very strong in the automotive sector with their DMS product called Autoline Dealer Management System. Autoline is a fully integrated dealer management system for the retail and commercial automotive industries, which brings dealers, manufacturers and importers together with its various modules that cover not only Vehicles and Finance, but also Parts, 22 |

www.maltaeconomicupdate.com

Warranties and Service. The system helps to streamline customer service operations with a noticeable improvement in speed and efficiency for both single and multi-franchise dealers with multiple locations and warehouses.

CUSTOMISED SOFTWARE SOLUTIONS In terms of customised software development, ISL is well-positioned and equipped to meet individual client needs. ISL have gained a reputation for the delivery of bespoke customised solutions on time, with an aim of ensuring that clients achieve a fast return on investment and gain a competitive advantage. ISL is aware that every company is unique in one way or another and that the key to successful projects is to understand deeply the exact needs and expectations of a client at an early stage. A clear segregation is made between clients’ needs that can be satisfied through system configuration/parameterisation and needs that can be fulfilled only through customization. With their team of experts, ISL is totally committed to applying best industry practices to deliver best of breed solutions to their esteemed clients.

THE FUTURE The outlook for ISL seems very positive. From the solutions point of view, they will be releasing further upgrades of existing products as well as introducing new products to an increasing number of customers in Malta. Furthermore, they are strengthening their team of specialists to provide a better service. Their overseas clients have increased over the past two years, and they have been successful in winning more projects in the MENA region. This has resulted in their appointment by a leading UK company to take on all Sales, Support and Installation responsibilities for their product in the Middle East and North Africa regions. ISL will also be launching their Eyesel Business Suite (EBS) solution in these markets through the appointment of a number of distributors.

CORPORATE BRIEF With a diverse range of products and services aimed at providing bespoke business solutions in the Maltese market and in the MENA region, Information Systems Ltd. have grown systematically over the last 19 years to become a leading IT solutions provider. To learn more about our products and services, visit us at www.isl.com.mt or call us on 21315001. TEU

‫‪JANUARY 2013 | THE ECONOMIC UPDATE‬‬

‫‪LIBYA‬‬

‫‪Information Systems Ltd.‬‬ ‫‪IT Solutions that suit your business‬‬ ‫‪Authors: Joe Aquilina - Business Development Director; Simon Calleja Urry – Director of Research and Development; Adrian Coleiro – Operations Director‬‬

‫‪:‬ةيفلخلا‬ ‫و تايجمربلل ةركتبم لولح نع ةرابع يه ‪ 1994، ISL‬ماع يف تقلطأ‬ ‫ةجاح يبلت يتلا و ةفلكتلا ثيح نم لاعفو لماش ريفوت ربتعت‬ ‫يف لامعألا تامظنم لبق نم لولحلا هذه ايلاح مدختستو ‪.‬لامعألا لك‬ ‫ديرفلا اهمازتلا ربتعيو طسوألا قرشلاو ايقيرفأ لامشو ابوروأ‬ ‫‪.‬لوألا اهمعد ءالمعلا ءاضرال‬ ‫كوبسيب لامعأب ةصاخ ةيفارتحإ لولح ريوطتب لإ سإ ىأ تماق‬ ‫ىلع زاح امم تاعانصلا نم ةفلتخم تالاجم ىف نئابزلا نم ددعل‬ ‫‪,‬اهلمع لاجم ىف ةدئارلا تاكرشلا نم نئابزلا ءالؤه ضعبو ‪,‬مهاضر‬ ‫ةربخلا نم ةورث باستكإو مهفراعم ةرئاد عيسوت نم كلذ مهنكم دقلو‬ ‫تابلطتم مهف ىلع مهتردق ىف لإ سإ ىأ ةوق لثمتتو ‪ .‬تاربخلا &‬ ‫لامعا طاشن تابلطتمل اقفو مهتاجتنم ميمصتب مايقلاو نوبزلا‬ ‫‪ .‬ةدوجلا ىوتسم ىلع ريثأتلا نودبو نوبزلا‬

‫ديازتم ددعل ةديدج تاجتنم حرط كلذكو ةيلاحلا‬ ‫يهف ‪،‬كلذ ىلع ةوالعو ‪.‬اطلام يف ءالمعلا نم‬ ‫ميدقتل نيصصختملا قيرف ززعت روطت‬ ‫دق جراخلا يف ءالمعلا ددع نأ امك ‪.‬لضفأ ةمدخ‬ ‫تحجن و ‪.‬نييضاملا نيماعلا ىدم ىلع دادزا‬ ‫ةقطنم يف عيراشملا نم ديزملا بسك يف اضيأ‬ ‫مهنييعت ىلإ كلذ ىدأ دقو ‪.‬طسوألا قرشلا‬ ‫ةدحتملا ةكلمملا يف ةدئارلا ةكرش لبق نم‬ ‫معدلاو تاعيبملا تايلوؤسملا عيمج يلوتل‬ ‫قرشلا ةقطنم يف اهتاجتنمل تيبثتلاو‬ ‫اضيأ ‪ ISL‬قلطت فوس ‪.‬ايقيرفأ لامشو طسوألا‬ ‫ددع نييعت لالخ نم قاوسألا يف )‪(EBS‬ـلا ماظن‬ ‫‪.‬نيعزوملا نم‬ ‫‪:‬زجوملا‬

‫يددعتم راجتلاو يدرفلا رجاتلا ةءافكو ةعرس‬ ‫‪.‬تاعدوتسملاو عقاوملا‬ ‫‪:‬ةصصخملا تايجمربلا لولح‬ ‫‪، ISL‬بلطلا بسح جماربلا ريوطت ثيح نم‬ ‫تاجايتحا ةيبلتل ةزهجمو ديج عضو يف يه‬ ‫ميدقتل ةعمس تبستكا دقو ‪.‬ةيدرفلا ءالمعلا‬ ‫‪،‬ددحملا تقولا يف بلطلا بسح ةصصخم لولح‬ ‫عيرس ءالمع دئاع قيقحت نامض فدهب كلذو‬ ‫‪. ISL‬ةيسفانت ةزيم باستكاو رامثتسالا ىلع‬ ‫وا لكش يف اهعون نم ةديرف ةكرش لك نأ كردت‬ ‫مهفلا وه عيراشملا حاجن حاتفم نأو ‪،‬رخآ يف‬ ‫ةلحرم يف ليمعلا تاعقوتو تاجايتحال قيمعلا‬ ‫تاجايتحا نيب حضاو لصف ءارجإ متي ‪.‬ةركبم‬ ‫ماظن قيرط نع ىبلت نأ نكمي يتلا ءالمعلا‬ ‫يتلا تاجايتحالاو حيلصتلا ‪ /‬تارتمارابلا‬ ‫عم ‪.‬صيصختلا لالخ نم طقف ققحتت نأ نكمي‬ ‫مزتلت ‪ ISL‬ناف ‪،‬صصختملا ءاربحلا قيرف‬ ‫ةيعانصلا تاسرامملا لضفأ قيبطتب ًامامت‬ ‫‪.‬ماركلا اهئالمعل لولحلا لضفأ ميدقتل‬

‫تامدخلاو تاجتنملا نم ةعونتملا ةعومجملا عم‬ ‫ةلصفملا لامعألا لولح ريفوت ىلإ فدهت يتلا‬ ‫‪،‬طسوألا قرشلا ةقطنم يفو ةيطلاملا قوسلا يف‬ ‫ىلع تمن دق ةدودحملا تامولعملا مظن تمن دقو‬ ‫ىدحإ حبصتل ةيضاملا ‪ 19‬لا تاونسلا ىدم‬ ‫ايجولونكت لولح ريفوت يف ةدئارلا تاكرشلا‬ ‫انتاجتنم نع ديزملا ةفرعمل ‪.‬تامولعملا‬ ‫‪ www.isl.com.‬يف انترايز مكنكمي ‪،‬انتامدخو‬ ‫‪ 21315001.‬ىلع انب لاصتالا وأ ‪mt‬‬

‫‪:‬لبقتسملا‬

‫؛لامعألا ريوطت ريدم ‪ -‬انيليوكا وج ‪:‬فلؤملا‬ ‫؛ريوطتلاو ثحبلا ريدم ‪ -‬يرأ اخيلاك نوميس‬ ‫تايلمعلا ريدم ‪ -‬وريلوك نايردأ‬

‫ةيباجيإ ودبت اهيلا حمطت يتلا ‪ ISL‬قافآ‬ ‫كانه نوكيس هنإف ‪،‬لولحلا رظن ةهجو نم ‪.‬ةياغلل‬ ‫تاجتنملل تايقرتلاو تانيسحتلا نم ديزملا‬

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‫‪www.maltaeconomicupdate.com‬‬

‫‪:‬تاجتنملا‬ ‫ــل ةعباتلا )‪ (EBS‬توس سينزيب ليزيالا‬ ‫مدقتم عيزوتو تاعيبم ماظن نمضتت ‪ISL‬‬ ‫يف ربكألا نيعزوملا ضعب دعاسي يذلا و‬ ‫‪،‬تانحاشلاو ةددعتملا نزاخملا عيزوتل اطلام‬ ‫تقولا يف ةرارحلا تاجرد ددعتم ماظن تاجتنمو‬ ‫ةيدأت كلذكو ‪.‬ةيلاعفو ةءافكب و ددحملا‬ ‫‪.‬مهسألا ةيوستو ةيدقنلا تالماعملل ةيروف‬ ‫ايجولونكت اهتمظنأ يف حاجنب تجمد ‪ISL‬‬ ‫‪،‬صارقألا لثم ةرثكب ةرفوتملا لاقنلا فتاهلا‬ ‫ضعب هذه ‪.‬ةيكذلا فتاوهلاو ‪ ،‬ةلومحملا ةزهجألاو‬ ‫ام اهيف ‪ EBS‬ليغشت مت يتلا تاعاطقلا‬ ‫ةلمجلا نوناق ‪،‬ريدصتلا ‪ /‬داريتسالا ‪:‬يلي‬ ‫تامدخلاو ‪،‬عيزوتلا ‪،‬نيمأتلا ‪،‬ةئزجتلا ‪/‬‬ ‫‪،‬باعلألا ‪)،‬نوبساحملا ‪،‬تاباسحلا( ةيلاملا‬ ‫عينصتلاو ءانبلا ‪،‬ءابرهكلا ‪،‬ةسدنهلا ‪،‬لقنلا‬ ‫‪.‬تابورشملاو تالوكأملاو ةلديصلاو ‪،‬ةفايضلاو‬ ‫ةيوق ‪، ISL‬يجراخلاو يلحملا نيديعصلا ىلع‬ ‫جتنملا عم مهب ةصاخلا تارايسلا عاطق يف ادج‬ ‫متسيس تنمجنام نيالوتوا ىمسي يذلا ‪DMS‬‬ ‫تاعانصلل لماكتم ةرادإ ماظن وه )‪. (Autoline‬‬ ‫عمجت يتلا ‪،‬ةيراجتلا تارايسلاو ةيئيزجتلا‬ ‫تادحو عم اعم نيدروتسملاو نيعنصملاو راجتلا‬ ‫تابكرملا طقف سيل يطغت يتلا ةفلتخم‬ ‫‪،‬رايغلا عطق اضيأ نكلو ‪،‬يلاملا عاطقلاو‬ ‫طيسبت ىلع دعاسي ماظنلا ‪.‬ةمدخلاو تانامضلا‬ ‫يف ظوحلم نسحت عم ءالمعلا ةمدخو تايلمعلا‬

‫‪ GPS‬عبتت ‪ -‬لوطسألا ةرادإ ‪ -‬ةيتاميلتلا‬

INTERVIEW OF THE MONTH

Integrity & Honesty Martin Vella talks to Mizzi Organisation’s president Chev. Maurice Mizzi, one of Malta’s largest privately owned groups. Chev. Mizzi is the sole representative of the second generation which had been handed the reins by founder Spiro Mizzi. In this interview we go personal and find out more about the values that drive this honourable gentleman.

TEU: As one of the most recognizable local brands what does the Mizzi brand stand for and what makes it so special? MM: Our business has been built on integrity in business ethics, hard work and serious investment. We have always been honest and fair in our dealings with our partners and with our thousands of customers. Whenever we had any divergence of opinion we sat down together and in a calm, cool manner sorted out the matter. We try to give the benefit of the doubt to the customer whilst providing good service in the process. Mizzi Organization has been and still is a good employer as otherwise a lot of our workers would not have been giving loyal service to our company for over forty five years. The distinct difference feature which distinguishes our company from many others is its diverse operations. The multiplicity of our companies provides strength in depth, since the synergies work well.

“To your enemy do not wish him ill health but many employees!” Mizzi Organization is one of the largest organizations in Malta. It is active in a diversity of sectors which include car importation and servicing, car leasing, beverage production, importation and distribution of domestic appliances at Zanussi Center, fashion retailers, tourism, real estate, as well as mechanical and electrical contracting which is being carried out by Titan. 26 |

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JANUARY 2013 | THE ECONOMIC UPDATE

INTERVIEW OF THE MONTH

JANUARY 2013 | THE ECONOMIC UPDATE

The company owns the Waterfront Hotel and has substantial shareholdings in two other hotels. It also owns Arcadia shopping center in Gozo as well as Arcadia food store in Porto Maso.

Our systems are identical to a VW car outlet in Germany. The only difference lies in our much lower charges to our customers. Together with other partners it is involved also in gaming, yacht repair and storage, insurance, cab service and in a language school. Furthermore Mizzi Organisation over the years has accumulated a substantial property portfolio, some of which are surplus to the Organisation’s requirements and which are earmarked for potential sale or development. The latest development which has come on stream and is for sale is Viani flats, a complex of 26 flats and seventy garages. These are situated in Viani Street Sliema, a site which is within walking distance of Sliema ferries. Mizzi Organisation is committed to its customers, its 1000 employees and Malta’s development. It continues to build on its core strengths and gradually and wisely is expanding its business portfolio.

TEU: You have been outspoken on what needs to be done to get business moving ahead. How challenging is the automotive market today? MM: The market has changed significantly since I started in business over 55 years ago. Now there is more competition. In days gone by customers were not as demanding as they are today. Nowadays it’s easier to start a business with all the schemes and subsidies offered by the

Chev. Mizzi greeted by H.E. President Abela and the former Chinese Ambassador of Malta

government and the EU. It is interesting to note that the company or person employing just two people will get the funding and tax credits one needs, while in our case, being a conglomerate, we get nothing of this sort, even though we employ over a thousand people. If we were to divide the companies separately we would be entitled to funds, but since we are housed under holding companies, we are not eligible for many benefits. Although this is EU regulated, I find this a trifle unfair. Concerning the motor sector in our islands situations have evolved where the new car importers are penalized since the registration tax being worked out is incorrect and depreciation on imported second hand cars is being calculated on UK depreciation values which are higher than those in Malta. Furthermore, optional extras on imported cars are not being charged tax while new cars are charged for each extra option. This again is unfair.

Biography Maurice was born in 1936 and was educated at St. Aloysius College, Malta and read law at the University of Malta where he obtained a Diploma of Legal Procurator. He joined the family business in 1957 and was appointed on the board of a number of Mizzi Organisations as well as on some parastatal companies including Car Assembly Ltd as managing director. He is currently managing director of Continental Cars Limited, Mizzi Limited and Titan International Limited. In the past, Maurice has held a number of chairmanships for the government including Mediterranean Film Studios (1984-1990) and the Malta Development Corporation (1997-1998). He has been the Honorary Consul of Iceland since 1978. He also served as a director on the Board of Plaza Centres plc, Allcom Limited, Technical and Management Services Limited, Datatrak Holdings plc, Datatrak Systems Limited, Datastream Limited, and MaltaCom plc. He is currently also inter alia director of Mizzi Associated Enterprises and Banif Bank (Malta) plc.

Finally, the unfairness of our situation becomes clearer when we have to carry out guarantee work on second hand cars and while the car owner naturally does not pay for the work, sometimes for one reason or for another the manufacturers do not refund all our expenses. Thus we are in actual fact subsidizing the second hand cars.

TEU: Do you find such a situation will diminish your competitive edge or advantage? MM: Naturally, in the car industry we face a challenging situation, yet it is exciting at the same time. With competition there is much more street fighting and more challenges, so it’s more exciting in business now than in past years. The market also is larger. TEU: How is your group broadly embracing innovation and how has delivery of service changed? MM: Firstly, we have always insisted on giving good service. We believe that to be successful in the marketplace, and particularly in the car business, one needs to have not only excellent products but the importer must be able to provide excellent service. I am glad that for the past sixty years we have had an excellent relationship with our German car manufacturers and this has helped us to provide our customers with the good service that they deserve. cont pg 31

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BANKING

WHY EURO INTEREST RATES ARE SO LOW.... Healthy competition in the banking sector means that customers have a wider choice than ever of financial products. This also applies for deposit accounts where banks come to the market with products which meet the different needs of customers, whilst also attracting customers to leave their monies with them for a return – the interest rate. There are a number of variables which influence the setting of rates by banks. In the euro area, the most important aspect is the link between the interest rates set by the European Central Bank (ECB) and commercial banks. Prior to the demise of Lehman Brothers, the ECB’s refinancing rate and the Euro interbank rates moved in almost perfect synchronization. In the run up to European Union membership and the subsequent adoption of the Euro, local deposit rates were to a large extent benchmarked against these rates. To give an example, in the beginning of 2008, the ECB refinancing rate was at 4.25%, whereas the 12-month Euribor was 4.74% - BOV was offering a 12-month fixed rate of around 4 per cent. However, following large scale interventions by the ECB and eurozone governments, interest rates in euro followed a steep downward trend. In 2009, local interest rates decoupled from those in the euro area and have remained stable since then. Local rates are currently much higher than the ECB official rates – such decision was taken to maintain a prudent rate of return on deposits, although on the other side of the balance sheet, borrowing rates also had to remain higher. The ECB refinancing rate continued to decline and as at the time of writing stands at 0.75% (in 2009 it was 2.50%), whereas the ECB deposit facility is 0%. There is also talk that with further ECNB rate cuts, the ECB deposit rate may in fact turn negative.

Operating within such a low interest rate scenario, the challenge for banks is to offer an interest rate attractive enough to entice customers to put their money on deposit. At the moment, BOV’s 12-month fixed-term deposit rate is 2%, based on the overall return on euro-denominated assets. Bank of Valletta’s business model is based on maintaining a comfortable loan to deposit ratio, currently 65%. This conservative approach to banking explains the resiliency of the bank during the crisis. The funds not lent are mostly invested in the international bond market and local government stocks. The Bank strives to maintain a high quality investment portfolio and thus, in the current international low interest rate scenario, it is very difficult to offer higher interest rates without jeopardizing the quality of the investment portfolio.

the challenge for banks is to offer an interest rate attractive enough to entice customers to put their money on deposit Bank of Valletta has always pursued a prudent risk management approach, which has served it well, particularly during the volatility of the past few years, when it was able to take decisions in the best interests of its stakeholders without the pressure of having to pay higher rates for its funding.

At this point, it might be useful to remind ourselves what are the factors that drive the ECB’s interest rates policy. Interest rates are the main monetary policy tool used by central banks to keep inflation in check. The ECB’s mandate is to use monetary policy to curb inflation and aim to maintain it around 2%. As it decreases interest rates, it would be increasing money supply, thereby making cheaper money available to borrowers (and vice versa). However, since 2008 interest rates were mostly used to stimulate and encourage economic growth. In addition, the ECB has been increasing the money supply through special lending operations, i.e. making more money available for banks to lend. The problem is that most European banks are scaling down their operations and money transmission from the ECB to the real economy is not working as it should. To make matters worse, a number of countries in the Euro area have to shore up their finances and thus, monetary policy remains the only available tool to spur economic growth. As a consequence, the prevailing low interest rate scenario in the euro area is expected to persist in the near future. We are indeed living in “interesting” times…

TEU

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INTERVIEW OF THE MONTH

JANUARY 2013 | THE ECONOMIC UPDATE

cont from pg 27pg

Our technicians visit regularly Volkswagen headquarters in Wolfsburg in order to keep up to date with the latest car technologies on all VW Group’s cars which includes Audi Seat and recently Porsche. Continental Cars is regarded as an extension of the German factory. We have direct links to the German engineers in order to solve those rare cases which baffle our technicians. Our systems are identical to a VW car outlet in Germany. The only difference lies in our much lower charges to our customers.

TEU: You have been an outspoken leader with regard to the present economic and political challenges facing Malta. What needs to be done to ensure that Malta maintains its strong economic position within the EU? MM: Malta is surrounded by problem countries such as Greece in the East, Italy in the north, Spain in the west and Libya in the south. I spend my summer holidays in Greece and I see whole streets with shops which have closed permanently their shutters. Obviously, a visitor immediately feels the crisis in that country. The main problem is the eventual repayment of Greece’s huge international debt. Instead of the Greek Government boosting the economy and creating incentives to revive the economy, it is implementing austerity measures. In this case companies are not registering much profit, and eventually will be forced to close down. This in turn will mean less revenue for the State making it practically impossible to repay all of its loans. Whenever I suggest to my friends that the only way for Greece to get out of this mess is to sell some beaches in their many islands to foreign investors their reaction is not encouraging. No one likes to sell the family jewels. Malta should see what our neighbors did wrong and refrain from copying them. Working in Malta carries many advantages. It is a joy for foreigners to work in our warm climate and foreign companies are finding excellent ready made material in the many young students who are graduating from our University as well as from MCAST.

TEU: You have been described as a private diplomat. How do you combine entrepreneurship with diplomacy? MM: I am the Consul General of Iceland. It is a wonderful country full of interesting features such as waterfalls, geysers and glaciers.

Promotional Conference for the 111th Session of China Import & Export Fair

I manage to find time to fit in the diplomatic work in my schedule together with my other commitments.

TEU: What are you more focused for the future in your life? MM: I am involved in too many activities and I have realised that I must slow down. Presently I am writing a book on gardening in the Mediterranean. I am also recording a CD. Both will be sold and the proceeds will go to my foundation – ‘Spiro Mizzi Foundation’. I am supportive of deserving causes, such as the ‘Spiro Mizzi Foundation’ which I set up four years ago and which is helping children in the Three Cities by providing them with computers and teachers. Basically my life is very much concentrated on my business. I am in my office everyday. I have meetings galore and seek to bring to fruition positive solutions. TEU

One of the largest privately owned organisations in Malta, the Mizzi Organisation is active in a wide diversity of sectors which include automotive sales and service, oils and lubricants, beverage manufacturing and importation, retail, mechanical and electrical contracting, real estate, and tourism Together with other partners it is also involved in gaming, insurance and educational tourism. With almost a century of experience coupled with the visionary leadership of its Directors and top management, with the aid of its dedicated and skilled staff, the Mizzi Organisation continues to build on its core strengths and expand its portfolio of offerings, thereby playing an active role in Malta’s growth and development.

ERC FUNDING OF €680 MILLION TO 302 TOP RESEARCHERS The European Research Council (ERC) is awarding €680 million to 302 senior research leaders in 24 different countries across Europe in the latest competition for its prestigious ‘Advanced Grants’. With up to €2.5 million per project, the funding allows these scientists to pursue their most ground-breaking ideas at the frontiers of knowledge together with their own teams. The projects selected cover a wide range of topics, such as the development of new models to explain certain physical phenomena like superconductivity, assessment of the advantages and limits of quantum devices, or exploring how economic actors form and change their beliefs about their environment and about each other by adding emotional and psychological features to existing models. Commissioner for Research, Innovation and Science, Máire Geoghegan-Quinn said: “The ERC continues to identify the very best researchers. ERC funding is leading to an increasing number of scientific breakthroughs and discoveries, as well as more publications in recognised scientific journals.” In this Advanced Grant competition, some 2,300 applications were submitted to the ERC, which is a slight rise from that of the last year (4.5%). The number of researchers selected for funding rose slightly, from 294 to 302. Just over 15% of selected researchers are women, which is a rise from last year’s 12%. The average age of the researchers to be funded is 51 years. www.maltaeconomicupdate.com

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WWW.VASCAS.COM.MT

NAXXAR / VALLETTA / MELLIEHA / SLIEMA / VICTORIA (GOZO)

FOR HER

Special Feature

Leading Women

Marlene FaRRUgia

Living the Present to the FuLL

JANUARY 2013 | THE ECONOMIC UPDATE

Leading Women

Living the Present to the FuLL by Martin Vella

She is acknowledged as transforming ideas and beliefs into a ‘Driving force of the Business’. Her enthusiasm seems to have a spill over effect and she strives to let her innate positivity win out the difficulties. Undoubtedly she is focussed on her objectives. Let’s find out more about Dr Marlene Farrugia’s willpower in this one-to-one take.

Family celebrating Jenny’s success at UCL

TEU: How would some of the people closest to you describe you and your Management Style? MP: My management style is defined by obtaining the best results when you have all stakeholders on board. Team building and strengthening is crucial and indispensable to good management. Active participation of stakeholders in establishing best ways to operate under different circumstances is tantamount to successful management. At the same time, discipline, loyalty and honesty are not to be compromised at any point. TEU: What are your main challenges and motivation(s) and what is your great interest for what is next? MP: I have a habit of living ‘what is now’ to the full, while dreaming of what can be next. My ultimate challenge is to remain like this - living the present to the full, never forfeiting the present for an unknown future and simultaneously striving to make the future take the shape of my dreams. TEU: What do you believe are your strengths and weaknesses? MP: My strengths: I try to see and bring out the good in everything, I am very positive and perseverant. My weakness: Too sensitive. Too blunt. 34 |

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TEU: Are your views parallel with the identity changes in the PL? MP: I identify with the evolving identity of the PL. Having rejoined PL following the electoral defeat of 2004, after serving as a councillor with PN, and lobbied for full EU membership, I felt the great need to contribute towards bridging the political divide which was a tangible obstacle to my country reaching its full potential. I believed that this was attainable within a Labour party which was hungry for renewal and resolved to adopt the politics of unity rather than a divisive partisan approach.

I felt the great need to contribute towards bridging the political divide TEU: Why do subsidies of any kind look like Medicine, and why do they work wonders if given in the right dosage? MP: Medicine can be life saving when prescribed properly and at the appropriate time. It can be lethal or detrimental if consumed in too big a dose, or if one becomes dependant on it. Subsidies work in the same manner. They

can serve a good purpose if used sparingly, cautiously, appropriately and only until they are actually required. They can be grossly detrimental when applied unnecessarily or in inappropriate doses/ times.

TEU: How sustainable are renewable energy resources and what’s the Multiplier Effect here? MP: Renewable energy resources like solar, wind, geothermal, wave energy, etc, require a substantial initial investment to acquire the technology to harvest energy and transfer it into the form required of electricity or heat, and distribute it. Technology also requires regular maintenance and possible upgrading to improve and retain its efficiency. The source of the energy to be transformed may be found in varying amounts at the source, unlike fossil fuels similar to heavy fuel oil which has to be secured, refined and transported from huge distances. The combustion of heavy fuels produces emissions and greenhouse gases which have a detrimental effect on the environment, health and not to mention climate change, whereas clean alternative sources produce energy without the unsustainable consequence of fossil fuels. The creation of ‘green’ jobs to support and improve the exploitation of these renewable sources (research, construction of the required

JANUARY 2013 | THE ECONOMIC UPDATE

Leading Women

plants , maintenance) can augment job creation at the source, slowing down the haemorrhage of funds which go to purchasing oil and gas, very often from regions of political instability and volatility. Thus, the use of clean renewable sources is necessary for the environment, but also for economic reasons when viewed as a medium to long term investment.

TEU: What legacy would you wish to leave as a woman politician? MP: I will eradicate confrontational politics and replace it with a politics of consensus, saving all the energy and push to implement policies swiftly, cleanly and effectively. I will strive to restore pride in our Maltese identity and dedicate all my energy to restore, conserve and encourage, as the case may be, any of the elements that make us and our country unique. TEU: What period in your life do you consider to be the peak of your career? MP: It depends which career you are referring to. After I started my private practice twenty six years ago my professional career as a dentist peaked relatively quickly, and remained at a peak ever since. My career as a mother of three has its highs and lows everyday. My political career is a different story since it depends on the perception of the people who vote me in and out, as well as to other stakeholders in the political party I appertain to. In contrast to a professional career, advancement in politics does not depend solely on the performance and ability of an individual. A vast array of circumstances interacting in different ways at different times can dictate the path of one’s political career.

I will eradicate confrontational politics and replace it with a politics of consensus TEU: What do your children and the family mean to you? MP: My children and my family mean everything to me. My emotional anima, living in harmony with the people closest to me are my source of strength and energy. TEU: Will Labour break the PN’s grip on Power in March? MP: The Maltese people can break the PN’s grip or power in March. The Labour movement is all about having all on board in its quest for a united Malta where each one of us can aspire and actually reach one’s full potential and use it in synergy with everyone else to create a better way of life for all.

There’s no place like home

TEU: You have set up your business. As a female entrepreneur, how important are the business value as opposed to the values of the family? MP: Sound values are a way of life, be it within the family circle or without. Good, honest business based on sound values is certainly profitable and not just from a financial perspective. TEU: What are the new facets of the PL which you are currently finding most valuable? MP: These consist of uniting the country, a serious attempt to harnessing the full potential of our human resources, and converging our energies in synergy to achieve excellence for our nation. TEU: When you start a project, what are the responsibilities hovering over your shoulder?

MP: When I start a project there is no turning back; it has to come to its proper conclusion. I abhor unfinished business and I am far too aware of time frames and deadlines for my own good. TEU

After graduating in dentistry from the University of Malta when she was 20 years old, Marlene Farrugia started practising her profession and never looked back ever since. While raising her three children and operating two clinics in Siggiewi and Zebbug, this determined dentist explored with success the possibility of contributing actively to the local political and business scene. She served as Member of Parliament in the last legislature and is the PL’s Spokesperson for Utilities. Marlene has fostered a passion for safeguarding and restoring Maltese houses of character.

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JANUARY 2013 | THE ECONOMIC UPDATE

Leading Women

ImprovIng QualIty of lIfe TEU: How critical has it been to engage political decision making units? How have you built positive relationships through your engagements? GD: The Ministry’s complex role entails planning and decisions that generally necessitate the use of expert advice and guidance, in order that the respective decisions would be taken in the best interest of the island and its people. The restructuring of resources within the Ministry for Gozo, especially during the past two legislatures, were highly instrumental for us to be able to coordinate the various infrastructural and other important projects carried out on the island. Projects that have seen millions of euro invested in both EU and national funded projects that have made significant changes on Gozo.

Giovanna Debono

We talk with the Minister for Gozo to find out more how she coordinates the general affairs of Gozo and how she manages to focus on the quality of life, leadership, culture and the general development.

TEU: Political leaders talk about the pendulum of regulation. In your tenure as Minister have you ever needed to take drastic measures and what is your strategy for doing so? GD: The role of Minister for Gozo encompasses the overseeing of matters related to various socio-economic sectors that affect life on the island. Very often you find yourself faced with decisions that resemble a double-edged sword. A decision in favour of one sector would sometimes have negative implications on another. Therefore more than once I was confronted with situations that necessitated drastic decisions both on an individual as well as on a sectorial basis. I manage to retain composure as well as clarity of mind even when I am very stressed or irate. This serves me in good stead and allows for more rationality necessary for a better strategic action. 36 |

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The Ministry’s directorates, continuous consultation with representative bodies of the commercial and tourism sectors, as well as the continued support to Local Councils are all crucial factors that have been incorporated within the decision making process of the Ministry. Throughout my tenure as Minister for Gozo I have had the opportunity to build strong working relationships with various people occupying various roles. I am very grateful to all of these persons from whom I have learned much and without whose support we wouldn’t have been able to do all that we have managed to achieve for our island.

Five years down the line this vision has also become a People’s vision and a People’s project. TEU: Do you define the Government’s eco-island vision for the island of Gozo as your main challenge and aim to attain this ambitious objective? GD: The eco-island vision proposes the attainment of sustainable development for Gozo in four main socio-economic pillars: economy, environment, society, culture and identity. These sectors affect the quality of life of all those residing on Gozo as well as visitors. Our objectives for sustainable development are based on a holistic approach that seeks to achieve an enduring environmental improvement while at the same time, fostering economic development and social progress on the island.

Thus our challenges within this vision do not only relate to environment protection, but they are more widely spread, implying a thriving economy and a society at peace with itself and its environment. Five years down the line this vision has also become a People’s vision and a People’s project.

TEU: How critical is having a diverse workforce and how successful have you been in growing the Gozitan female workforce? GD: Women represent more or less 50% of the potential workforce. The economy would be losing part of this potential if it does not include women in its workforce. Malta has made considerable inroads with regards to the increase of women who further their education to higher levels. This also relates to the situation in Gozo. Today we have also registered significant increases in the participation of women in the job market. We are committed to continue to work upon these achievements in order to maximise Gozo’s potential in this regard.

TEU: What do you find most fulfilling about your leadership role? GD: Contact with people. This relates to both people at work as well as those outside. It is fulfilling when people appreciate what has been done but most of all it is fulfilling to hear them praising improved services and how these have affected their lives positively. A few examples relate to improved health services, additional assistance to Gozitan students, new roadworks, intensive restoration projects and other projects that are indeed making a difference in Gozo. TEU

Giovanna Debono graduated from the University of Malta, working as a teacher with the Education Department. Mrs. Debono has been re-elected since she contested the general elections for the first time on behalf of the Nationalist Party in 1987. She was then assigned as Parliamentary Secretary for Family Affairs within the Ministry for Social Policy. In 1998 she was appointed Minister for Gozo and is also a member of the Political Bureau of the Conference of Peripheral Maritime Regions of Europe (CPMR) as well as Vice-President of the CPMR Islands Commission. Giovanna has worked tirelessly to improve the economic, social and cultural development of Gozo, valorising the cultural identity of the island.

JANUARY 2013 | THE ECONOMIC UPDATE

Leading Women

Awareness and Vision

by Martin Vella

Nicola Paris encapsulates the meaning of commitment, hard work and passion in continuously delivering excellent products and service. Together with the Infinitely Xara team, de Mondion Restaurant scooped the Best Dining Boutique Hotel in the World runner-up award at the Boutique Hotel Awards at Hempel Hotel in London, showcasing the world’s most prestigious boutique establishments. Here she speaks of her unique experiences in a united spirit as a family. It has been an amazing and exciting year for all of us, as over the past year we have expanded our brand with the opening of The Xara Lodge and Palazzo de Piro. Two diverse projects, The Xara Lodge designed as a unique multi-purpose building catering for groups between 60 to 800 people, the venue is set in the countryside with amazing views and a short distance from Mdina. TEU: How critical to your family business is a diverse workforce?

Mrs Nicola Paris with her brother Justin Zammit Tabona and her mother Mrs Susan Zammit Tabona

TEU: Can you find ways to show what makes your views unique as a successful woman entreprenuer? NP: I have been involved in The Xara Palace Relais & Chateaux since 1999. Four years ago my father was given the great opportunity to move to the UK as the Malta High Commissioner and therefore it was only natural that I replaced my mother from her duties and took on a more active role as Operations Director. This was a tremendous opportunity for me to become more involved in a wonderful family business, working closely with my brother, Justin Zammit Tabona, sharing the vision to continue to promote our luxury brand “Infinitely Xara” Finer Hospitality, and the Catering & Events. We are priviliged to have a rich, diverse history and culture, striving to promote the Maltese Islands on these criteria. We ensure that our guests enjoy a memorable experience of calm, courtesy, cuisine as well as the warm hospitality of the Maltese people. TEU: Would you talk about your qualities and risk agenda and some of the key issues you are focused on? NP: Initially I was involved in back of house operations, mainly in the accounting and controls of the company and therefore this has helped me to develop a systematic approach. I also firmly believe that my qualities as a mother and a wife, ensure that I am organised and forward thinking.

NP: It is imperative to have a diverse workforce. Each person is unique in what he or she can bring to the team and the business. We are lucky enough to have a dedicated team behind us who share our vision and passion for the industry. We have a number of women working within our Management team. Women are intuitive, multi tasking, approachable and have an eye for detail; qualities which are imperative in offering a unique and memorable experience.

An association of individually owned boutique hotels “All around the world, Unique in the world”. Standards must always be consistent but we also strive to improve upon them. The team are customer focused, ensuring that the customer’s needs are met. Our Mission Statement is “To provide an unforgettable journey by meeting or exceeding our customers’expectations, ensuring excellence in products and service at all times”. We maintain this consistency because we are a united family all sharing the same vision –to ensure that we deliver an unforgettable journey to our guests. Our success is not only measured by sales, guest counts and numbers but by the way we achieve our goals. TEU

We are lucky enough to have a dedicated team behind us who share our vision and passion for the industry TEU: What are some of the projects you are working on and the impact you have had on these projects? NP: I am extremely involved in the operation of Palazzo de Piro, creating a varied cultural programme, including local and foreign Art Exhibitions, classical recitals and jazz concerts. The Metropolitan Cathedral Chapter also organise a series of Exhibitions throughout the year. We also operate Xpresso Café which has spectacular views, a mouth-watering array of desserts prepared by our in house Pâtissier. Mdina is a magical venue and ideal backdrop for these events. TEU: How have you ensured consistency year after year and how much control do you have over it? NP: The Xara Palace is privileged to be part of the prestigious association Relais & Chateaux –

Nicola Paris is the Director at The Xara Palace Relais & Chateaux, distinguished for her determination to deliver excellent service and standards. At Xara she worked in administration, marketing and finance. Nicola is known for her commitment to offer world-class service with a warm Maltese smile. She was also involved in the launch, marketing and development of Palazzo de Piro Cultural Centre in Mdina.

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Leading Women

JANUARY 2013 | THE ECONOMIC UPDATE

Delivering excellence by Martin Vella

TEU: In light of present and political economic challenges, is this a time of opportunity or is your outlook more reserved? SG: Every dent in market or economic conditions is an opportunity, but knowing where to invest is crucial, we are paying for years of governments’ mal gestio and financial markets’ greed, austerity is needed but must be balanced with promoting growth, we cannot remedy overnight what took years if not decades to accumulate. The markets may have staged a strong recovery in 2012 but the sustainability of that run remains in doubt, and within much of the property industry, the mood remains much less positive. Conventional wisdom is that it may stay that way for a while longer… and for many it will. The anticipated growth didn’t materialise, consumer and business activity mostly failed to recover, legislators and regulators were unable to deliver much-needed clarity and consistency and public perception of banks remained resolutely negative in many markets. Those that work with this in mind create opportunities where others fail to see it clearly.

The property industry has suffered from a reducing number of foreign investments due to the rigid regulations implemented. TEU: Is there a good understanding of the opportunities for foreign investment in Malta?

More than just an entrepreneur, Honorary Consul General Sara Grech is also a real estate and property consultant, business management strategist and diplomat. She is the prime example of a successful woman, and I was lucky enough to have her success story and a word of wisdom with The Economic Update readers. Whatever your career path is – ICT, business, banking, whatever - we can all look to Sara for inspiration to live a successful life. 38 |

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SG: I don’t think so, and government policy such as that on inward real-estate investment does not help. There is so much potential in Malta if only the government knew how to run this island as a business. If and when you look at Malta and take into consideration the islands potential and an ideal destination to invest in, you are not alone. With millennia of history, the country could play a pivotal role internationally due to its location, right in the heart of the Mediterranean. Developing and leveraging a well-educated labour force, together with good governance standards, the island is able to achieve success in diversifying its production and export structure towards higher value added sector and creating a strong knowledge based economy. The property industry has suffered from a reducing number of foreign investments due to the rigid regulations implemented. This turn in a change approach to foreigners buying and investing in Malta will help the economy rise.

JANUARY 2013 | THE ECONOMIC UPDATE

Leading Women

TEU: For your businesses, do you see growth coming mainly from within Malta or from international markets? SG: Both are suffering from a shortage of cash; cash was always king although realisation of this took long to come. Malta is a micro-market with an oversupply of bad quality properties. This has to change and most buyers today value quality work. Today we only sell good quality properties and properties that need refurbishment which is reflected in the price. We target both local and overseas buyers but the latter need to be incentivised and the country’s many attractions need to be sold better. We have changed our business model and have added a new service to our portfolio. We have also changed our outlook on the business as a whole and have revised our target market and our procedures and we are confident that this will help the property market improve. Our focus on taking on properties that offer value and our opening hours (360 days a year and an 80 hour week) has differenciated us from others. TEU: You are known as one of the most philanthropic people in Malta. Where did that focus stem from? SG: Philanthropy should be a natural thing for every human being, as one’s financial wellbeing grows, one should look at how to share some of it, giving is not only altruistic but provides enormous personal satisfaction. Joseph Stafrace who turned blind at the age of seven is an inspiration to us all. Today he has become a dear friend who I enjoy spending time with.

From left: Semira Tabone Grech, Comm. Raymond Bugeja, Honorary Consul General Sara Grech and Benjamin Tabone Grech

better person on a daily basis. I also believe that patience is a necessity for a happy existence. Waiting to see results might be daunting for some, however, the wait gives me a constant feeling of excitement and the end result, an indescribable satisfaction.

life is about future achievements, comforted by past ones which are however historic and no guarantee for the future.

TEU: With so much need at Sara Grech and also with the TheArt of Food, how do you decide which areas to support?

TEU: With all of your successes, did you experience tough times as well?

SG: With prioritisation and detailed planning, I am able to manage the businesses. The saying goes, give a busy person a task to do and you are sure it will be done and done on time. My love of homes and my love of food give me the energy to contribute effortlessly. The diversity of businesses gives you also the advantage of cross business. Assisting clients to captivate their ideas and growing them into more than they ever imagined is what helps me work long hours. I start at ground level and provide creative input and ultimately can produce astounding results. It’s such a pleasure.

SG: No success comes free unless one takes over a successful business and then it needs to be sustained, it takes a toll on quality time with family and friends, on finances, on stamina and determination, not; and at times, even when one does most things right, external factors outside one’s control have their own say. I feel I have been blessed with the right qualities and thanks to my mother, who I miss dearly, I have grown to be a self-motivated person who never gives up. The harder the task the more attractive it looks to me.

TEU: While Sara Grech is making major impact with expansion and diversification, it takes time to see results. Is it tough to be patient?

TEU: What impact did your fiancé Ray Bugeja have on your life?

SG: Patience is a virtue I have. The phrase is just a way of expressing the importance of being patient. A virtue is a trait or quality deemed to be morally excellent and thus is valued as a foundation of principle and good moral being. I feel that having this quality improves my quality of life and helps me be a

SG: It is difficult to adequately describe things which uniquely impact one’s life, we are of one mind on values, business and lifestyle, we have both worked very hard to be where we are today and that has given us individual strengths in leadership, planning, marketing, human skills, finance and so on, the personal and business synergies are extraordinary and therefore I am grateful to have met Raymond.

TEU: Do you take interest in the recognition you receive on various awards, like those for top real estate female entrepreneur? SG: I seek successful outcomes to my endeavours, not recognition per se, but if and when recognition arrives, it is of course gratifying. TEU: Do you reflect on how much you have achieved? SG: Not at all, there is little time for that, life is about future achievements, comforted by past ones which are however historic and no guarantee for the future. Reflecting on your day-to-day practice enables you to analyse why and how you do things, and to consider whether other approaches might have benefited. My reflective practice is about further developing my skills and making sense of the work I do by listening openly to the ideas of others. TEU: Is slowing down just not in your nature? SG: Not at all, although my rare moments of leisure, relaxation and reflection are extremely precious, there is too much I want to do before even thinking of slowing down. I always try to find a balance to give as much quality time to my work and have my moments of enjoyment. Life is too short to think any other way. TEU

Honorary Consul General Sara Grech has a robust background in real estate spanning the past 25 years, and started her own company in 1989. It is now a top residential and commercial sale and letting company in Malta with an emphasis on patience, innovation and growth; she’s even launched her own PR conference, LA KROSSE PREMIERE DMC.

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JANUARY 2013 | THE ECONOMIC UPDATE

Leading Women

To many business people, marketing = promotion. Most still gloss over Marketing as Strategy, Emma Diacono, Director of emmadiacono Ltd, tells The Economic Update in a rare interview. So let’s find out why customers are poised to benefit from distinctive marketing services.

THE PERSONAL TOUCH TEU: What did you see in the market that made you feel there was a need for emmadiacono in management and PR?

ED: I believe that although most companies

recognise the need to be market lead, many companies locally do not have a business case for employing a full time, experienced marketer. Also, in most cases companies typically tend to focus their ‘marketing’ efforts solely on advertising whereas in my opinion it is really and truly perception management that we should be looking at.

TEU: How strong of a leader is the emmadiacono brand in the market? ED: That’s a little hard for me to say. However I am extremely proud that the brand is now gaining recognition and we have earned ourselves a reputation for hard work and commitment to our clients. I have to thank my team for this! TEU: emmadiacono ltd provides Marketing Services and Corporate Concierge, can you tell us a little about the Corporate Concierge? ED: Corporate concierge is a term we coined to simply mean that we will take on any task that is not core to your business. This came about as over the years, any activity be it an event, annual reports that needed compiling, AGMs or an important company visit that needed to be organised and so on, always fell on our plate, probably due to the fact that our ethos is to simply roll-up our sleeves and get things done, professionally! We therefore turned this into a service in itself and today take on a number of tasks that clients need to get done but either don’t have the skills or the available resource in-house to do it, or simply would rather ‘pass on the headache’. 40 |

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TEU: Can entrepreneurship be taught or is one born with it?

need to be an Einstein to satisfy your clients but you do have to offer an impeccable service.

ED: In my opinion one does not have to be a “born entrepreneur”– there are skills that can be learnt, picked up on the way depending on what we are exposed to. But it certainly helps to have certain innate tendencies that seem to make some people more likely to take risks, to stick their heads out, to be able to identify and act on promising opportunities, and more open to new experiences.

TEU: What kind of challenges do you face when trying to get the importance of your services across to institutions?

I believe that entrepreneurship is not necessarily synonymous with a business owner. I believe an entrepreneur is simply someone enterprising. In my opinion it’s more about someone’s approach and attitude towards work. Somebody who takes initiative, somebody who goes above and beyond their simple call of duty. Someone who dares without being a loose cannon!

It certainly helps to have certain innate tendencies that seem to make some people more likely to take risks. TEU: Have clients’ needs evolved? Is the need generally more complex today? ED: I would not necessarily say more complex, but I would say more demanding. There is much more pressure today. Pressure to deliver quickly, pressure to deliver more with less. Technology has been a blessing and allows us greater flexibility however it also means that we are always a simple click away. There is no more ‘time out’! Clients’ expectations are higher and good service is definitely key. I don’t think you

ED: I believe in Malta we still tend to pockethole marketing to be synonymous with advertising. Many companies also tend to separate different aspects of marketing, and for example, treat advertising, pr and online and social media as separate entities whereas really and truly these all need to sing off the same hymn book and work together towards a single goal. Companies also tend to confuse what we do with the services provided by an advertising agency. We are not an agency, we provide marketing services, strategy and consultancy. We act as an integral extension to our clients’ team – we are typically the ones that deal with our client’s respective advertising agency. TEU

Emma Diacono is founder and director at emmadiacono Ltd. Backed by over 10 years of experience in marketing she set up emmadiacono ltd in 2009.The company was set up to provide professional Marketing and Corporate Concierge Services allowing companies access to a flexible and experienced marketing team without the cost of taking on such a team on a full-time basis. They specialise in strategic marketing, planning and implementation of integrated marketing and communications strategy including online and social media.

JANUARY 2013 | THE ECONOMIC UPDATE

Leading Women With the different areas that she is involved in from business to beauty pageants, from fashion to cosmetics, Sue explains that beauty pageants are totally different from the fashion runway. “The beauty pageants such as Miss World are known for participants that have great personalities and good posture. You can carry yourself well to represent Malta amongst other countries. The fashion runway is something else, you see a tall model with fantastic figure to carry the clothes on her and sell. I am not against cosmetic, if you can look better and be happy with yourself, yes go ahead,” states Sue.

Fresh with the Times As MD and founder of Modelle International, Sue Rossi has created memorable moments in the history of beauty pageants in Malta. Also working in the celebrity world, Sue has worked with some of the world’s most famous fashion photographers such as Tim Page, Brian Rossen and Terry O’Neil. Featured on the cover of Camera Magazine, we find out why Sue is also recognised for her planning excellence.

So what makes the Sue Rossi brand special? “Through my experiences, since I used to model myself during my early career and passed through all different modelling assignments locally and internationally, my name has been branded with the fashion industry for so many years. I will keep as much as I can to carry this with responsibility for all the upcoming models. My satisfaction is that I look back and think of a number of models who have made it to the top and about others who gained something else to be successful through their career,” she says. Sue believes that it is always important to teach what you have taught and keep on learning.

Efforts are always important to maintain, no matter how much time you are working, and equally important that you will do the job well. Ms Rossi continues that, “Opportunities are always there for you once you put your mind into your sector. It is about how you carry your projects, how to deal and keep clients happy. This is part of the success. I can say that during these 26 years of business I always moved forward with my ability. Our job is characterised by the depth in strength to take decisions and then proceed. “It is important to think before you act,” says Sue, “Sometimes it’s hard which decision you should take, and there is always a risk whether its’ good or bad. But we see life as risk all the time, so go ahead and move forward.” TEU

Sue Rossi is Director of the renowned modelling agency Modelle International. She has been into the business of the Modelling World for the past 26 years. Miss World Malta, is one of the prestige annual event that she organises. Sue is acknowledged as encourage young people to take bold steps in modelling.

modelling courses starting soon by Modelle International directed by Sue Rossi

basic modelling & photo modelling males & females from 12 years up For more information & bookings please contact us

on 9949 4817 or 2131 6304 www.maltaeconomicupdate.com

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Leaders in care

Years

Leading with care careMalta is the largest and the leading care provider for older persons in Malta. it operates 8 renowned homes for older persons in various towns and villages, conveniently located to suit the needs of our older population and those of their relatives and friends. careMalta employs a strong team of around 700 highly dedicated and well trained personnel focused on providing quality care services and facilities management. careMalta successfully runs: • Casa Arkati (Mosta) • Villa Messina (Rabat) • Roseville (Attard) • Prince of Wales Apartments (Sliema)

• • • •

Zejtun Home Cospicua Home Dar il-Madonna tal-Mellieha Zammit Clapp Hospital Residential Home

Tel: 2258 4200 Email: info@caremalta.com Part of the Vassallo Group of Companies

www.caremalta.com

If you would like to enquire about CareMalta’s affordable rates at our private homes please call on: Casa Arkati: 2143 4342, Villa Messina: 2145 4889, Roseville: 2256 0000, Prince of Wales: 2132 2766

JANUARY 2013 | THE ECONOMIC UPDATE

Leading Women

A Shared Set of Values by Martin Vella

Seeing beyond people who are frail and dependent requires intense commitment, effective leadership and virtuous relationships with your employees. Natalie Briffa Farrugia’s accomplishments have been built on integrity and personal dedication. Through the first success of CareMalta’s pilot Private Public Partnership projects, we appreciate how she has moved efficiently after building a reputation in the healthcare sector.

TEU: Does it bother you that at EU levels the female participation is acceptable, while in Malta this is meager?

NBF: On different occasions, the fact

that you are a woman you face additional challenges. I don’t discriminate between male or female employees, even though my workforce consists of 80% female. However, I strongly do believe in equality and in empowering women, even though in Malta we find very few women occupying executive boardroom positions. I sit on the board of The European Association for Homes and Services for the Ageing (EAHSA). I was appointed its President last September following an anonymous agreement by the board voting in my favour. One of the reasons for this was the fact that they do believe in women leadership. They believe that women have unique qualities which contribute to effective leadership. Women leaders are more assertive and persuasive, have a stronger need to get things done and are more willing to take risks. I look forward to see more and more women in Malta having the opportunity to rise to such occasions. In order to survive in top executive places, I believe that in the case of a woman it is essential to have a solid support network to back her up from home.

TEU: Is this due to lack of strong leadership?

NBF: Having a strong leadership in certain key positions is essential and one can be a catalyst to change. However, I think that another important factor is to be empathic and flexible with the workforce. Interpersonal

skills are important as these enable the leader to read situations more accurately and take the necessary informed decisions. Genuine understanding and care in people do make miracles in people’s lives as employees feel more supported and valued. My motivation comes knowing that our service is critical in giving quality of life to our clients. It gives me great satisfaction to know that we can improve the well being of people including our employees. I seem to have a natural ability to see potential in people and as a company we try to create possibilities for people to continue to develop. I do believe that this aspect together with strong leadership skills are the backbone for the Company’s future growth. People’s success is our success. My role gives me the opportunity to make a difference in the world by being principled about values that really matter.

in the market and quality services. We are celebrating our 20th anniversary introducing five corporate values that incorporate our past and what we want to retain in the future. These corporate values are Dignity, Integrity, Quality, Safety and Development. We also aspire to achieve international recognition of quality management systems in our service provision which can continue to enhance our leadership in this sector. TEU

My motivation comes knowing that our service is critical in giving quality of life to our clients. TEU: Looking back to the past 20 years how would you summarise what these years have brought to you, your family, to the people working with you and what do they reflect in terms of the present and the future?

NBF: First and foremost, the introduction of our services has provided many possibilities of employment, particularly for women. The care industry attracts more female workers as these find great benefits and in providing tender loving care to older persons. This is an area which has grown and today we have 700 employees, when initially we started with 6. Care Malta is also a City & Guilds certified centre so today we offer training in care services and dementia care offering an international qualification. Secondly, we have definitely contributed to raise the level of the standard of service to older persons and the healthcare sector in general. When we opened Casa Arkati twenty years ago, people considered this to be a 5 star hotel. Over the years we have raised the bar on nursing care and all the healthcare services in general. With over twenty years experience we want to retain our leadership in this sector maintaining the highest standards

Natalie’s extensive experience in the industry together with her strong involvement in missionary work and academic credentials in psychology, management and gerontology has strengthened the care philosophy and enhanced the group’s commitment to achieve the highest quality of service and encouraging further development of its workforce. Natalie Briffa Farrugia joined CareMalta group in June 2006 as Director of Operations where she has assumed leadership in the operations of all the homes working in close collaboration with all the Facility Managers of all the facilities. After four years in this post, she was appointed Chief Executive Officer of CareMalta Ltd. in 2010.

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JANUARY 2013 | THE ECONOMIC UPDATE

Leading Women

Know the Industry, Know Your Product Debbie Schembri’s plan is to equip the public with information to help them make a sound investment. Promoting alternative energy is her way of giving back to a world which gave her so much, Electrofix Director tells The Economic Update.

It was always about energy efficiency for us and it’s going to be even more important going forward.

TEU: As the alternative energy market becomes more competitive, what have you implemented to set ElectroFix apart?

DS: We focus on quality. Our products are

all best of breed. Sometimes that might mean that they come at a slightly higher initial price but at the end of the day it actually turns out to be a cheaper or more cost effective solution as the return on investment is better. The solutions deliver more for longer and without any trouble! Alternative energy is a financial investment- it gives you money. Who would invest in risky shares? Obviously a quality product is going to give you a much better return on investment, and essentially more money! In this industry, going for cheap is expensive!

TEU: One could say you ‘Make a Living, Making a Difference’, why is alternative and renewable energy so important to you? DS: I believe in the future and I believe that something needs to be done to contribute to our climate! Promoting alternative energy is my way of giving back to a world which gives me so much. I wish everyone could just understand that alternative energy is no alternative but a pressing necessity. It was always about energy efficiency for us and it’s going to be even more important going forward.

TEU: Selling alternative energy systems is pretty complex. In the commercial sector engineers deal with the details, yet in the domestic scenario homeowners are expected to understand the complexities. How do you tackle this issue to ensure a consistent customer experience? DS: There are a number of questions that someone needs to ask when investing in an alternative energy system. We have done quite a bit to try and get the message out in order to equip the public with the information they need in order to make a sound investment. It is easy to mislead a homeowner who does not know what to look out for and unfortunately we have come across a few clients who have been given conflicting advice. However the most important thing is to speak my client’s language. We focus on delivering a quality product with the best price possible. A client actually came to us as we are apparently the only supplier who does not have a complaint filed against them with the consumer affairs office. We are incredibly proud of that! TEU: Has it been difficult to be a woman in a predominately male oriented industry? DS: I have never had an issue. I know the industry, I know my products. I am professional in my approach and therefore gender does not come into play.

TEU: What can be done to encourage more women to go after leadership roles in this industry? DS: Don’t believe it is a question of women getting into the industry. You have to have a passion for the subject to join the industry. The alternative energy industry is a relatively new industry in Malta, I believethe industry will definitely grow and naturally women will be part of it. I keep my eye on the product because that is the most important thing in my leadership capacity – it’s what is going to sell, and you will suffer less in a down market if your product is good. TEU

Debbie Schembri is a director at ElectroFix. ElectroFix has established itself as one of the leaders in the energy efficiency market in Malta, representing leading global brands including Solahart solar water heaters, Conergy PV Systems, Stiebel Eltron and eBox. Their best of breed products have been installed in some of the largest private enterprises as well as government organisations in Malta.

www.maltaeconomicupdate.com

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JANUARY 2013 | THE ECONOMIC UPDATE

Leading Women

Dynamic, Competitive & Innovative TEU: As the new insurance company on the island, what do you intend to set in place to set Allcare apart and to continue to build on the brand’s reputation to date. JG: As an agency, Allcare, had a very successful track record and achieved a steady and healthy rate of growth over the years. The fact that the agency was representing local insurers posed a limitation to our operation. The main objective behind this exciting step is that we are now in a better position to service the needs of our policy holders by having full control over the insurance products we may offer, the ability to introduce innovative products and tailor-make solutions. Our leading reinsurer is one of the three largest reinsurers in the world, having a financial strength rating of AA security.

Judith Galea CEO of Allcare Insurance Ltd, believes that the experience Allcare Insurance Agency has gained in the insurance industry over the last 20 years, has provided them with the tools necessary for a new insurance player to enter the market and thrive

TEU: What challenges do you face and what tools do you take to the table as the newly appointed CEO?

JG: The setting up and authorisation of

Allcare brings about a wealth of opportunities since it enables us to tap into new markets and consolidate our client base. Risks are constantly changing around us, and therefore it is crucial to be dynamic, competitive and innovative by offering solutions that fit the requirements of our clients, offering a personalised service, which has grown to be a strong and distinctive characteristic of Allcare.

TEU: What is your vision on women’s role and how tough was it to manage work and family? JG: I do not believe that there should be any distinction between women’s role and men’s role in business.Society places a greater degree of pressure on women having to juggle between career and family which makes it more difficult for a woman to pursue a career. However, with dedication and hard work anything is possible. Managing to achieve the right commitment to one’s work and family successfully is no easy task. it is important to strike a balance between work and family. The support of my family was definitely a key contributor to my success. I am the proud mother of two teenage boys and I have always worked as hard as I could, yet I always managed to dedicate quality time to my family. I believe that perseverance has always been one of my strongest character traits.

TEU: Which key areas should advocates for women entrepreneurs be addressing? JG: There needs to be a lot more support on issues of having a proper life-work balance and more gender equality in the workplace. A lot has been done in this regard since the days when I embarked on my career, but there is more that can be done to encourage women to take a more active role. The necessary culture change in our own country particularly, must be pursued further and obviously, more women themselves would have to take up the challenge if they are to succeed.

TEU: What makes for a successful woman CEO? JG: I would not make a distinction between a female CEO and a male CEO as for me there should be no distinction. A successful CEO would be likely to be one that fully understands the overall operation and does not try to manage from a distance. I am a firm believer in a hands-on approach being easily available to both staff and customers. The core principles of good leadership are dedication, flexibility, having the right attitude and communication skills. It is also very much about being able to motivate staff in order to achieve desired objectives. TEU

Judith Galea has been with the Allcare Group for fourteen years and has experience in all classes of Insurance business. Presently pursuing an Associateship with the Chartered Insurance Institute UK . Previously managed the Underwriting Department of the Company for seven years. Specialised in Underwriting Personal Lines and General Insurance Business.

Society places a greater degree of pressure on women having to juggle between career and family. I have been part of the Allcare team for the past 20 years, with the last nine years as CEO of the Agency. I worked my way through the ranks and having worked in all the departments of the agency, I have been able to gain ‘handson’experience and knowledge of the overall operation. Over the years, I have built a very good relationship with many of our clients and I consider this to be crucial given that insurance is very much about understanding the client’s very own needs.

Judith Galea in boardroom meeting with Allcare Insurance associates.

www.maltaeconomicupdate.com

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TOP ENTREPRENUER AWARDS 2013

JANUARY 2013 | THE ECONOMIC UPDATE

The BOV-Economic Update Top Entrepreneur of the Year 2013. As we begin our 2013 search for the Malta’s most innovative entrepreneurs, we hope you will share the vision and nominate someone from your company or the business community, or even yourself, to be named among the next generation of business leaders. The BOV-Economic Update Top Entrepreneur of the Year Award is considered Malta’s most prestigious business award bringing together the finest business people competing for one coveted title. Following on the success of last year’s edition of The Economic Update Top Entrepreneur of the Year Award, the programme returns for the 2nd edition this year with bigger ambitions. Themed “Innovate & Inspire”, the Top Entrepreneur Awards 2013 programme seeks to recognise the achievements of outstanding entrepreneurs in the emerging, technology, woman, finance, banking, corporate, industrial and commercial business categories. This year we are dedicating the special focus on The Economic Update’s pages spreading the feature over four months aimed to capture those honorees, who not only create and build market-leading businesses, but also help take the standard of excellence to new heights, transform the face of industry, create jobs and contribute to the vibrancy of our economy. Our programme aims to acclaim the entrepreneurial camaraderie and enhance the standards of local corporate management. Voting will be carried out online throughout the course of this project and also through a panel of distinguished judges who carry 50 percent of the total votes. We will be teaming up with the Employer’s Association. Contestants will be judged on values, strategy, innovation, ethics, achievments, and of course, entrepreneurship. Awards will be presented by John Formosa,

Rachel Balzan Demajo

Maurice Mizzi

Managing Director, Network Publications and Charles Borg, CEO, Bank of Valletta, who are the main sponsors for this event. “We are looking for individuals who have the ability to ignite ideas, to innovate, to drive a business along the difficult journey from startup to market leadership, and ultimately, inspire others with their achievements and success,” said John Formosa, Director of Network Publications and Publisher of The Economic Update and Sunday Circle.

We have started the nomination process for this year’s prestigious event, and together with The Economic Update magazine and Bank of Valletta, we will be dedicating a special monthly pull out for the next four months profiling and showcasing all the nominees and participants for the prestigious annual event. This year we will be adding new award ratings and event entertainment concepts, as well as inviting the media for full coverage of the award ceremony, which will be screened on TVM.v TEU

We will categorise nominees as follows: Category A

Category B

Top Female Entrepreneur of the Year 2013

Top Young Female Entrepreneur of the Year 2013

Top Male Entrepreneur of the Year 2013

Top Young Male Entrepreneur of the Year 2013

Nominees must own and manage a privately-held company, or are the founders of a listed company or organisation with significant stake and active in middle to top management.

For further information and participation details please contact Margaret Brincat on 99406743 and Gunther Micallef Decesare on 99950205. www.maltaeconomicupdate.com

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Wa lke rL ine -Up Th eN ew Joh nn ie

www.demajowinesandspirits.com

JANUARY 2013 | THE ECONOMIC UPDATE

EVENTS

A Masked Carnival Ball Saturday 9 February, at 8pm in the Sala Grande of the Palazzo. This unique and enjoyable event is going to boast of a thrilling and extravagant Carnival atmosphere. The guests are invited to attend in a classical carnival costume and a mask and to enjoy themselves to dancing and listening to the good music, as a string quartet will perform music from various musical eras and composers, which will include a number of genres between Classical music, Waltzes and Polkas. The Arco String Quartet will perform works by composers such as Handel, Bach, Strauss, Mozart, and Tchaikovsky. The eclectic repertoire will include works such as Once Upon A Dream by Tchaikovsky; Annen Polka by Strauss and a classical genre which will have selections from Mozart’s Eine Kleine Nacht Muzik and selections from Handel’s Water Music and various minuets. The Arco String Quartet has featured in a number of performances, performing in concerts as well as providing live music for weddings and corporate events, with a repertoire ranging from classical, opera, folk as well as pop. Arco String Quartet’s vibrant members, namely Gilmour Peplow (cello), Joseph Mallia (viola), Alex Abela and Odile Micallef (violins) all have extensive experiences playing in various events, concerts and performances both as soloists as well as in other chamber ensembles in Malta and Gozo. They have formed part of various orchestras and are also substitute musicians with the Malta Philharmonic Orchestra. There will be seating facilities for guests who wish to enjoy the Palazzo de Piro’s culinary delights during the Ball. The event is being organized by Barocco Foundation in collaboration with Palazzo de Piro, with the kind support of Bank of Valletta. The tickets are on sale for €25 per person. Please note that food and beverages which can be purchased on the night, are not included in the ticket price. TEU

Masks will be mandatory, guests will be incognito, and intrigue will be inevitable when Palazzo de Piro hosts a Masked Carnival Ball!

Barocco Foundation is organizing a Masked Carnival Ball at the fascinating Palazzo de Piro in Mdina, one of the most exclusive venues in Malta. The Ball will be held on

Bookings are available at Palazzo de Piro and The Xara Palace Relais & Chateaux or by phoning 21 450560 or e-mailing info@xarapalace.com.mt www.maltaeconomicupdate.com

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JANUARY 2013 | THE ECONOMIC UPDATE OPINION

Eurozone: from Crisis to Stasis by Gareth Colesmith

The Eurozone crisis has been a case study of how far disconnected politics can become from financial markets. Banking union, greater fiscal coordination and the European Central Bank (ECB) operating as a lender of last resort are policy prescriptions that have been widely called for by market participants. But political progress has been painfully slow. In recent months, however, politics and markets have finally started to align. Is this perhaps the end of the beginning for the eurozone crisis? The most feared outcome, the disorderly default of a peripheral sovereign borrower, in our view, has almost certainly been discounted. ECB president Mario Draghi’s declaration that his institution would do whatever it takes to save the euro over the summer has been backed by the promise of purchases of member states’ bonds via so-called ‘Outright Monetary Transactions (OMT). This programme will swing into action once a distressed eurozone member requests help from the eurozone’s bailout fund, the European Stability Mechanism (ESM). It will allow the ECB to buy bonds of up to three years maturity in the secondary market in unlimited size. The goal is to restore the monetary transmission mechanism across the eurozone and reduce bond yields for peripheral governments. The extent of the conditions inherent in a government obtaining help from help from the ESM provides the ECB with a degree of fiscal control. In addition, the establishment of a single eurozone banking regulator over the course of 2013 should also help to stabilise the financial system. The prospect of a euro area deposit guarantee system and ‘burden sharing’ in bank bailouts should also provide comfort. 52 |

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Yet questions remain. The level of yields that the ECB consider to be ‘reasonable’ has still to be established. The threat of ECB action may be enough to tame the speculators, but how would it act in practice in the event of a sharp sell-off of bonds in peripheral markets? This is uncertain. The ESM still looks short of firepower and further fiscal integration will take time to unfold. Some countries will be more enthusiastic than others. But in spite of these uncertainties, the establishment of the bailout schemes and progress toward banking union are credible enough to substantially reduce the risks of either default or euro exit. This has effectively capped bond yields in peripheral markets. Although yields can remain relatively high, they should be more range-bound in the future. The cycle of crisis leading to ever-higher yields has been stopped and has even been reversed. We are already seeing the effects of this in Spain. As a result of the OMT announcement, yields have fallen. Market pressure for the Spanish government to personally request aid from the ESM has also reduced, leading to a stalemate. We expect market pressure to return at some point, perhaps in early 2013 with increased issuance, which could push Spain into an aid request. But OMT bond purchases should push yields lower again. Effectively this shifts the crisis from an acute phase, driven primarily by pressure from the bond market, to a chronic phase, where yields are more rangebound and pressure for progress comes instead from weak economic growth and high unemployment. These issues seem intractable. The underlying problems of lack of competitiveness, indebtedness and high unemployment will take many years to resolve.

JANUARY 2013 | THE ECONOMIC UPDATE OPINION

Political Outlook The pace of political progress may actually slow because the ECB has effectively neutered the bond ‘problem’. However, it is unlikely that the pro-euro political consensus will change. The large majority of established European political parties remain pro the euro and in favour of eventual further integration. Although politicians from different countries may disagree about the nature and pace of that integration, the ultimate direction is clear. Bailout fatigue in the core countries, and reform fatigue in the peripheral countries, means that the political debate will remain heated. However, German leader Angela Merkel has reined in certain sections of her party and seems committed to keeping Greece in the Eurozone, not least because of the likely negative impact of a Greek exit in the run up to the German elections next autumn. The ECB’s unveiling of new euro banknotes featuring Europa, the character from Greek mythology who gave her name to the continent, is a subtle reminder of the nation’s importance to the European project. Europe’s political elite and mainstream parties remain committed to greater union. While long-term, rising unemployment may shift voters towards fringe parties; mainstream politicians are aware of this risk and will collectively try to make the reforms work. TEU

Gareth joined the fixed income team at Insight Investment (Insight) in April 2003 following the acquisition of Rothschild Asset Management (RAM), as a European fixed income Portfolio Manager. He joined RAM in 1998 as a graduate and assisted in the management of continental European bonds. Gareth is a senior government bond Portfolio Manager and the lead fund manager of Insight’s Euro government bond portfolios. Gareth holds a BA honours degree in Mathematics from Jesus College, Oxford University and is an Associate of the CFA Society of the UK. Together with the respective fund manager, Gareth is also responsible for the La Valette Monthly Income Fund, La Valette Euro Income Fund, La Valette Sterling Income Fund and the La Valette High Yield Fund which are managed by Valletta Fund Management Limited (VFM).

Some of the opinions expressed herein may be of a forward looking nature and should not be interpreted as investment advice. The value of the investment may fall as well as rise and any initial charges may lower the amount invested and the amount received upon redemptions. Investments should be based on the full details of the Prospectus, which may be obtained from VFM, Bank of Valletta plc Branches and other licensed financial intermediaries. VFM is licensed to provide Investment Services in Malta by the MFSA. The La Valette Funds SICAV plc is licensed by the MFSA. Issued by VFM, TG Complex, Suite 2, Level 3, Brewery Street, Mriehel BKR 3000.Tel: 21227311, Fax: 22755661, Email: infovfm@bov.com, Website: www.vfm.com.mt. Source: Insight Investment Management (Global) Limited. Data is as at 30 Nov 2012.

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JANUARY 2013 | THE ECONOMIC UPDATE

FINANCIAL FOCUS

The

Economics of BuBBles by Jonathan Dingli & Steve Stivala

An economic bubble is the commonly used term for an economic cycle that is characterised by a rapid expansion followed by a contraction, often times in a dramatic fashion. Accomplished accountants Jonathan Dingli and economist Steve Stivala discuss their field of study underlining that the cause of bubbles remains a challenge to those who are convinced that asset prices often deviate strongly from intrinsic values.

As its aptly poised analogy suggests, the fragile economic bubble is inflated by thin air, usually in the form of speculative pressures which have no solid foundations. When the tension becomes too great to bear, the bubble bursts leaving a mess behind. Economic history has been dotted with such speculative bubbles which cause systemic economic malaise to varying extents. It would seem that no commodity is safe from being caught in the bubbly frenzy, from 17th Century Dutch tulips and chemical elements (rhodium in 2008 and uranium in 2007) to currencies, stocks and real estate.

Jonathan Dingli is an Associate Director at KPMG’s Accounting Advisory Unit, providing an array of services in connection with financial accounting and reporting. The range of services provided by the Unit includes assistance and advice on the preparation of separate and consolidated financial statements, a Rapid Response IFRS Helpdesk, financial reporting process optimisation and technical advice and memoranda on the adoption of new and extant standards.

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By definition, an economic bubble is created when the exchange value of the commodity in question significantly exceeds the intrinsic or fundamental value. Alas, economists disagree on what the real fundamental value of a commodity is, which is why bubbles are always identified in retrospect. The causes of the bubble are various and typically depend on a set of variables which, when taken together, create the perfect environment for excessive asset inflation beyond market equilibrium.

Economists disagree on what the real fundamental value of a commodity is, which is why bubbles are always identified in retrospect Although no single theory can explain the cause of bubbles, there is considerable consensus on the major factors at play. Exogenous factors might include a loose monetary policy, financial institution deregulation and excessive bank leverage in the financial system, which allows lenders to extend cheap credit, thus further fuelling the bubble. As has happened countless times, this would be exacerbated by ‘herding behaviour’ or, to borrow Greenspan’s phrase, “irrational exuberance ” which self-reinforces the trend in asset prices beyond their real value. However, probably the most dangerous characteristic in bubbles, and one which was prevalent in the U.S. housing bubble leading

JANUARY 2013 | THE ECONOMIC UPDATE

to the 2008 financial crisis, is mispriced risk creating distorted incentives. Once the risk from lending was eliminated via complicated financial derivatives (Collateralised Debt Obligations and Credit Default Swaps), lenders could then easily, and often encouraged to, provide credit to risky borrowers (sub-prime mortgages) at very high interest rates, even though such loans were unlikely to be paid back. This concocted a scenario where financial institutions were making enormous profits in the short run, and borrowers could buy homes beyond their means, thus sending house prices soaring. When eventually the housing market crashed and the securitisation web imploded and unravelled, it created a systemwide financial shock with the eradication of billions in balance sheet wealth, banking distress, bankruptcies and several bailouts. Evidently, this permeated in the real economy causing hardship, unemployment and negative economic growth throughout the world.

When eventually the housing market crashed and the securitisation web imploded and unravelled, it created a system-wide financial shock In accounting terms, the product of the above factors was being transposed onto financial institutions’ and other intermediaries’ balance sheets in the form of fair values. Fair value was defined as the price that two knowledgeable willing parties (a buyer and a seller) would agree to in an arm’s length transaction. Accounting standards mandate or allow the use of fair values for various assets and, to a limited extent, to certain financial liabilities. Assets that could or have to be fair valued include property, intangible assets, biological assets and, of course, financial instruments. The role of fair values in fuelling the causes of the crises was the subject of endless debates from which one can draw a number of interesting points, amongst which the following: 1. Fair values are typically determined by or for the holder of the underlying assets. Fair values will stand the reliability test only when the underlying asset hits the market and realises the expected values. If that is not the case, fair values would have overshot the asset’s exchange value. This may be proven or otherwise only after going to market. Hence why bubbles are always identified in retrospect. 2. While US GAAP has had its very own SFAS 157 since 2006, there was no equivalent standard in the International Financial Reporting Standards (“IFRS”) suite of standards. The requirements for measuring fair value and for

FINANCIAL FOCUS disclosing information about fair values under IFRS were therefore dispersed across many standards and in many cases those standards did not articulate a clear measurement or disclosure objective.

3. The extent of information provided by way of disclosures in the notes to the financial statements was perhaps not commensurate with the extent of reliance that users of financial statements placed on those fair values.

The International Accounting Standards Board (“IASB”) addressed such concerns by issuing IFRS 13 Fair Value Measurement in May 2011. The global financial crisis emphasised the importance of having common fair value measurement and disclosure requirements. IFRS 13 provides clear and consistent guidance for measuring fair value and addressing valuation uncertainty in markets that are no longer active. It also increases the transparency of fair value measurements by requiring detailed disclosures about fair values derived using models. At a very high level, IFRS 13 has: 1. Changed the focus and re-defined fair value as an exit price. IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 2. Increased consistency and comparability in fair value measurements and related disclosures, by establishing the following fair value hierarchy that categorises into three levels the inputs to valuation techniques used to measure fair value: Level 1 Quoted prices in active markets for identical assets and liabilities. Level 1 inputs must be used without adjustment whenever available.

Level 2 Inputs within Level observable for liability, either indirectly.

not included 1 that are the asset or directly or

Level 3 Unobservable inputs, including the entity’s own data, which are adjusted if necessary to reflect market participants’ assumptions.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). 3. Increased the transparency of fair value measurements by requiring entities to disclose information about the valuation techniques and inputs used to measure fair value, as well as information about the uncertainty inherent in fair value measurements (which was of particular concern during the global financial crisis). IFRS 13 is applicable for annual periods beginning on or after 1 January 2013.

TEU

1 This phrase marks Alan Greenspan’s infamous stern warning, albeit artfully inveigled, that asset prices were overvalued during the Dotcom bubble in the 1990s. Speech given at the American Enterprise Institute by the then Federal Reserve Chairman, December 5th 1996. 2

The IASB is an independent standard-setting body that is responsible for the development and publication of IFRSs.

Steve Stivala is an Assistant Manager at KPMG’s Management Consulting department. Steve is an economist by profession, providing the specialist knowledge required in a multi-disciplinary team working on a variety of engagements for both private and public sector clients. The team specialises in, inter alia, financial feasibility studies, policy appraisal, cost benefit analyses, evaluations of EU funded Programmes, and the drafting of national policy documents.

www.maltaeconomicupdate.com

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JANUARY 2013 | THE ECONOMIC UPDATE

AUTO REVIEW

● Over 100,000 orders across Europe for the new Golf ● Serial winner in major comparison tests

New Golf enjoys perfect launch: Mk 7 continues great story of success by Fabian Weil Background The Golf is and remains the most successful car in Europe. The launch of the new Golf is exceeding all expectations. Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG: “Since the launch of the Mk 7, our dealers have already taken over 100,000 orders for the new Golf. Despite the changeover from the Mk 6 to the Mk 7 and the associated production line adjustments, we have once again shipped more than 800,000 units this year. No other European car enjoys such success.” Nor has any other car been number 1 for so long: the Golf has topped the list of best-selling cars in Europe continuously for nine years, while it has been market leader for no less than 37 years in Germany! In 2013, Volkswagen will further cement and build on this position, not least with the incarnation of the new Golf estate, which will be celebrating its world premiere in early March at the Geneva Motor Show. Like its predecessors, the new Golf too is coming through the major car magazines’ comparison tests as a serial winner. In tests run by German magazines ‘auto motor und sport’, ‘Auto Bild’, ‘Auto Zeitung’ and ‘Auto Straßenverkehr’ the Golf Mk 7 beat all key competitors hands down. The Volkswagen scores here not only with its quality, comfort, lowest fuel consumption and emission levels

and good powertrain characteristics, but also in the most important of all ratings: safety. In a comparative test that the Volkswagen won in November against twelve core rivals one of the magazines, for example, gave the following verdict: “Thanks not least to its sensational braking figures (warm: 33 metres), the Volkswagen is at super sports car level in terms of handling, at the front of the field.” The new Mk 7 Golf Volkswagen features safety technologies such as ABS, airbags and Electronic Stability Control (ESC). Now on board the new Golf comes a whole series of further driver assistance systems. These include multi-collision braking as standard, the proactive driver and passenger protection system (including automatic tautening of seatbelts and closing of windows), the XDS transverse differential lock, also fitted as standard, ACC adaptive cruise control plus Front Assist inclusive of city emergency brake function, Lane Assist, fatigue detection, the latest generation of the Park Assist system and of the Dynamic Light Assist function (automated Xenon full beam). In this case too Volkswagen is with the Golf once again a pioneer in matters of safety. And that registers with car drivers: they make the Golf number 1 not only in new car registration statistics, but also when it comes to the major awards. Outside of Germany too the new Golf has been very well received by motoring experts: ‘Top Gear’ magazine gave it the 2012 ‘All-thecar-you’ll-ever-need’ Award in December, calling it the right car for every occasion. TEU VERDICT: It might not break the mould, but the a winning combination of classy looks,

efficient engines and good build quality will mean the new Golf will no doubt find many happy owners. The latest Golf is one of those cars that you struggle to form much of an opinion about, other than to say it’s good. TEU

THE FACTS

Volkswagen Golf 1.2 TSI 105 Tested: 1,198cc four-cylinder petrol engine, six-speed manual gearbox, front-wheel drive Price/on sale: €19,990/now Power/torque: 105bhp @ 4,500-6,000rpm/ 184lb ft @ 1,500-3,500rpm Top speed: 192mph Acceleration: 0-62mph in 10.2sec Fuel economy: 4.9 l/100km (EU Combined) CO2 emissions: 114g/km Euro 5 engine Sales: Continental Cars Ltd. T: +356 23476315 - M: +356 9943330 Email: vw@ccl.mizzi.com.mt

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JANUARY 2013 | THE ECONOMIC UPDATE

CORPORATE

BUSINESS

Executive Interview of the Month

Integrated Professional Services: A question of Shared Values by Martin Vella

The term “professional services” covers a wide range of activity, from advisory to management support to broker to financial planner, and many more. Both providers and consumers of financial advisory services are well advised to get some perspective about this business. To help, I chose to interview Dr. Tonio Fenech, a well-respected member of the legal and professional services industry in Malta. Hearing Tonio speak I was impressed with the breadth and common sense nature of his perspective. With no shortage of issues, I tried to keep the big picture focused.

TEU: You developed this project out of personal experience and need. What was your vision and could you have imagined it would have developed as it has? TF: We started by identifying and developing our common vision. Very often professionals are very clear on what and how they want to do things together, but not quite clear about why, beyond financial success. We got together in mid-career, and were therefore quite comfortable from this angle. Were we going to be yet another law firm, or did we have something particular to contribute? To understand that, we needed to start with issues of identity as a group, which led us to see legal services as a discipline within a broader context. We adopted a systems approach, nurturing structured relationships with professionals from other disciplines with a view to creating a multi-disciplinary offering which was not built on ‘command and control’ structures, but rather on collaborative lines and strategies, in line with how we saw the so-called new economy is developing. This view has attracted other like-minded operators in what has been termed the borderless knowledge economy, and a core group of us have a couple of years ago embarked on a project, which we have called 58 |

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Dr. Tonio Fenech

the Trust Alliance Project (TAP), with a view to developing a sustainable working system, built around a structured collaboration among independent centres of expertise, providing for enhanced integrated solution capabilities, while at the same time alleviating the cost-driven pressures on fees normally entailed by the overhead that large organisations are susceptible to.

TEU: You have therefore created what you have called the TAP-Knowledge system. Can you explain what this is all about? TF: The TAP-K system provides a platform for individual centres of expertise to tap into, and be enriched in perspective, by and through multidisciplinary inter-action. It represents a shared support infrastructure for independent knowledge-based organisations through mutual harnessing of individual specialisations and resource sharing. It operates along four successive layers of engagement, and celebrates and builds upon the so-called ‘power of weak links’, where people who are autonomous have a structured way of working together. What makes this possible and brings people together are shared values.

TEU: What approach propels you forward? TF: We are developing a narrative that identifies us as operators in the developing knowledge-based economy, which in effect is borderless and global. Knowledge development, as well as knowledge offerings in any given discipline, are enriched by structured inter-action with other disciplines, which makes us as much an educational establishment, in the wider sense, as a professional services undertaking.

Encourages operators to team up in the context of projects requiring diversified knowledge. The values which inform our aspirations can be encapsulated as the development of a common work-ethic. The platform under development provides for regular round-tables, seminars and other initiatives for knowledge and experience sharing, which in itself encourages operators

JANUARY 2013 | THE ECONOMIC UPDATE

CORPORATE

BUSINESS

to team up in the context of projects requiring diversified knowledge. The values which inform our aspirations can be encapsulated as the development of a common work-ethic which is centred around the importance of developing: •

Fiduciary relationship-driven approaches to professional services;

•

A view of outsourcing that goes beyond mere cost-driven considerations;

•

Technology, not merely as a tool, but as part of the core identity and approach of a professional services organization;

•

Integration as being itself a specific centre of expertise;

•

Open architecture collaborative centres of expertise;

TEU: How do these values differentiate your group from others? TF: Professional services providers should be trusted advisors to their clients. This is of course also our aspiration, but we further aspire to going beyond acting as advisors, and actually become part of the management thought-processes and implementation action of clients who require this. Hence a wider perspective is required. This in turn requires not only collaboration which is multi-disciplinary, but also structured collaboration with other members of the same profession. This form of collaboration has

traditionally been seen as counter-intuitive in our mediterranean environment, but as the economy gets ever-more global, more knowledge-based initiatives are crossing traditional lines of separation, and finding new ways to provide more comprehensive offerings. Furthermore, this view favours approaches which are not only trans-sectoral in terms of the professional disciplines involved, but also layered, in terms of depth of approach and intervention.

TEU: How do you harness ‘best of breed’ expertise and how are TAP knowledge members introduced? TF: Our open architecture structure and borderless aspirations have allowed us to develop collaborative action not only with other disciplines, but also within our own profession. Maltese firms can never have the scale of global players organised along traditional command-control principles. Therefore, if one wants to contribute to a global economic reality, the traditional view was that one must form part of a large global brand, which in itself has large advantages but also significant limitations on the development of flexible, creative approaches to professional services, particularly if one wants to remain based in Malta. The other approach is to learn how to collaborate with other players, because there is no single firm that will have “best of class” expertise in all areas of knowledge. Thus our law firm is presented as a full service law firm, not because we are experts in all aspects of the law, but because of our approach. We

believe that this model creates an effective basis for Maltese professionals to become active in their disciplines beyond Maltese shores. This approach was one of the basic hallmarks that led to the development of the TAP-K working system, particularly for interdisciplinary collaboration, making the system fractal in form. Fractals are encountered in geometry, but the term is also used to describe all systems that replicate in scale. Different TAPK members will naturally team up on particular projects, and mutual referral of clients is also a natural feature of the system, but this is by no means central. Wherever multi-disciplinary professional services are required by or indicated for any particular client, the relevant other TAP-K members will be introduced as a preferred partner, but only if considered an optimal choice for the purposes at hand, and only if the client does not have other preferences.

There is no single firm that will have “best of class” expertise in all areas of knowledge. In short, the TAP Knowledge members’ vision is that of taking an integrated view to issues, favouring approaches which are not only transsectoral in terms of the professional disciplines involved, but also layered, in terms of depth of approach and intervention.

TEU: Is your particular view of outsourcing central to this? TF: Clearly. In the past, outsourcing was viewed as a mere cost-driven measure. Nowadays, however, it is becoming far more driven by knoweldge value-add considerations, coupled with the all-important cost issue. Respected international surveys conducted in 2011 showed that such motivations as access to specialist expertise, flexibility, new business requirements, service improvements, access to new technologies and business transformation, were key issues driving organizations to include out-sourcing as part of their strategy, world-wide. Of course, this means that the outsourcing partners themselves, cannot stick to age-old approaches to their relationships, hence the need for a fidiuciary approach, and other clearly identified measures that would ensure longterm succesful relationships.

Dr. Tonio Fenech delivering his address in a corporate conference

As operators in the developing knowledgeeconomy, the members of the TAP-K system, www.maltaeconomicupdate.com

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JANUARY 2013 | THE ECONOMIC UPDATE

CORPORATE

BUSINESS

aspire to be such partners, also because they are leading by example, having adopted such a system themselves.

TEU: you talk of different centres of expertise. Which areas of knowledge do you presently represent? TF: We started off from the law firm in 2009, but because of the history and experience of the founding partners, Dr. Christian Farrugia, Dr. Antoine Fiott, dr. Damien Fiott and myself, it was clear to us that inter-action with fiduciary and tax-driven corporate services providers was key. The need for systemic inter-action with accounting services providers was also obvious, but this thought process took on its own momentum, with both chance as well as planned encounters giving rise to new opportunities. The initial TAP-K core group consists of ten members representing expert knowledge along streams that can be loosely grouped as follows: 1. Legal & tax; 2. Accounting & finance; 3. Project management & management consulting; 4. Estate planning & asset management; and 5. Assurance. We see this system as capable of further development as well as export, clearly being capable of replication and development abroad. We hope to focus on such development after we get formally launched later this year, always giving priority to commonality of values and world-views.

TEU: What future do you see for this activity, which is really an export activity, in Malta? TF: A timely question indeed. I think that this is an area where policy considerations are key, and it is a clear manifestation as to how a whole sector of a Nationâ&#x20AC;&#x2122;s economy can be nurtured and developed directly as a result of policy decisions, and legislative action. The knowledge economy as an export industry has developed in Malta specifically as a result of consistent and well-planned decision-taking by Government over the last 25 years. I applaud the Government in office on this, because it has shown not only pragmatic realism, but also wise foresight as to where the global economy is going, and how Malta has to invest in its knowledge capabilities to remain a relevant contributor to the international community. This also fills me with hope and confidence in the future, because in fact the party in Opposition has also acted consistently in most areas requiring legislation pertinent to financial services and

The TAP-K working system

the knowledge economy, particularly since EU accession. By way of example, the fact that there has been consensus on most legislative action in the financial services industry, making parliamentary voting (as opposed to debate) practically superfluous in this area, speaks volumes.

The professions should strive to break new barriers in the pursuit of innovative solutions for the development of society.

In the past 50 years, the trend has been for evermore specialisation. This in itself is necessary, but also presents clear drawbacks, in that it can lead to a form of â&#x20AC;&#x2DC;tunnel visionâ&#x20AC;&#x2122;. An ability to integrate knowledge and action is therefore increasingly being seen as a skill and centre of expertise in its own right. Now, the manner in which centres of knowledge and expertise are organized is clearly a factor that helps foster, or alternatively can inhibit, comprehensive integrated action across different disciplines. The TAP-K system, which will hopefully develop into a fully-fledged knowledge organization in the coming months, is our contribution towards this objective. TEU

TEU:

Any closing remarks?

Ultimately, the professions should strive TF: to break new barriers in the pursuit of innovative solutions for the development of society as a whole, and we aspire to contribute by facilitating knowledge exchange and development, true catalysts of creativity, hence the importance that professionals work and congregate in a creative context. After all, a systems view of life leads to seeing a fundamental unity of all knowledge.

Dr. Fenech has forged a legal career specializing in commercial law, seeing the law as the architecture of relationships, to be designed for long-term success. He has taken an entrepreneurial approach in building a professional services infrastructure that allows Malta-based professionals to actively assist in bringing to fruition large complex transactions in a borderless global economy.

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JANUARY 2013 | THE ECONOMIC UPDATE

HR &

RECRUITMENT

Raising the Temp by Martin Vella

In situations where there is slow labour turnover, or an aging workforce or very specialised and niche posts, it becomes difficult for new openings to emerge. The Economic Update speaks with Rachel Balzan Demajo and Mark J Galea about their latest staffing & outsourcing services to offer a timely review of ‘Temping’ and provide information to those looking to temp.

Mark J Galea and Rachel Balzan Demajo

TEU: What defines temp working? RBD: Temp work is determined by a contract, with a start and an end date. ‘Temping’ is another word for contract jobs or definite jobs. In some cases, temping may involve the outsourcing of employees from the agency to a client. This means that the employees will be employed by the temping agency, but they will be working at the premises of a specific client. Temping has been around for many years, although recently it has flourished in a number of industries, primarily those that are susceptible to fluctuation of sales, due to volatility of the market or seasonal circumstances. In the more recent economic crisis, organisations are seeking ways and means to minimise their fixed costs and opt for a more variable cost model, so as to positively influence their bottom line. 62 |

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In Malta, temping is still quite a new concept, however it has the ability to greatly assist organisations, maximise opportunities for interested candidates in a number of positions and help to achieve the ideal work/life balance we all crave. TEU: What roles does it pertain to? MJG: In the past, temping might have been associated with secretarial posts and admin. Today temp roles are vast and extensive and cover anything from consultancy, project management, event organising, IT, sales and marketing, finance, operations, and also management. Since the time period (start and end) is what defines a temp job, often there is need for an extra pair of hands, or for an expert to join the team on a particular subject for a period of time, which could be a few weeks, a few

months or even a few years. This is becoming increasingly popular with companies that work on specific projects that stop on the completion date. TEU: Why would someone wish to apply for a temp role and not an indefinite role? RBD: Traditionally indefinite jobs would be the ultimate objective for candidates seeking to find work or start their career. However, in a fast paced and dynamic business environment, nothing can really be considered indefinite or guaranteed. In certain industries, there is an obvious saturation of posts. The job market is dictated by the demand and supply of labour, and this is constantly evolving. Many University graduates are finding it hard to find indefinite jobs in the positions they are interested in.

JANUARY 2013 | THE ECONOMIC UPDATE

HR &

RECRUITMENT

In situations where there is slow labour turnover, or an aging workforce, or very specialised and niche posts, it becomes difficult for new openings to emerge. Those looking to temp, could also be people who have some free time on their hands such as teachers who wish to make some extra money during the summer months, or pensioners who wish to do the odd job on the side. It could also be the case of new mothers, who wish to allocate a few hours of work a week, without giving the full time commitment required from permanent jobs. Furthermore, a temp role could be the ideal stepping stone for someone wishing to learn more about a particular industry without committing for the long haul. It also serves as the ideal time for candidates to prove their worth, encouraging organizations to then take them on indefinitely once the temp contract expires. TEU: Are there any differing rights between an indefinite contract and a definite contract? MJG: All statutory rights for temp workers are given pro rata, based on the number of hours they will work. This means that temp workers and indefinite workers have the same rights and responsibilities, including income tax, government bonus, leave and sick leave. In a nutshell, nowadays there is absolutely no difference (where statutory rights and obligations are concerned) between full time employment and temping. TEU: Who is tempsinmalta.com? RBD: tempsinmalta.com is a recently launched specialist agency, whose primary objective is to bridge the gap between the supply and demand of temp work in Malta. On the 1st of February, a state-of-theart website will go live reaching out to organisations enabling them to upload their temp vacancies free of charge, and at the same time to candidates to upload their CVs onto

the system. With this information, the system will generate automated ‘matches’ to both parties, instantly generating leads to entice the users. These matches will be followed up personally by our consultant, who will verify the validity of these matches and proceed to set up interviews and secure placement accordingly. tempsinmalta.com will offer expert advice in the selection and recruitment process, as well as offering additional services over and above the typical recruiter. Such services include, for example, the hiring of the temp worker on behalf of the organisation, with subsequent handling of payroll and other employee duties. In these cases, the organisation simply enjoys the placing of the temp workers as per their needs, and our agency will also provide replacements should the need arise. Additional services include remote office set-up, should the employee be asked to work off site for a particular reason or from home. tempsinmalta. com is a partnership between M. Demajo Group and Quad Consultancy. TEU: As an individual, how can I apply? RBD: As an indivdual interested to temp, simply submit your CV for work via email to info@tempsinmalta.com, and as soon as an opportunity arises that matches your criteria, we will be in touch. Once the site will be live, you will be given your own personal credentials to go into the site and upload your availability as the need arises.

Rachel Balzan Demajo is Group Marketing Director at M. Demajo Group, and also Senior Partner of Tempsinmalta. com. Rachel has extensive experience at managerial level across a number of industries, with specific expertise on marketing and communications. An affiliated member of the Chartered Institute of Marketing, she is a B.Comm graduate, as well as a Henley MBA graduate, with ongoing CPE in her area of expertise. A regular contributor in a variety of business publications, Rachel brings topical subjects in the field of Communications to the heart of business decisions.

TEU: As an organisation, how will it work? MJG: As an organisation that is considering hiring temps for particular roles, simply submit a vacancy with all pertinent information about the position and the period required, and we will endeavour to match your vacancy with a candidate from our ever-growing database of temp workers. Our marketing campaigns aimed at the public have extensive reach, especially on social media. TEU

For further details contact tempsinmalta.com 210/2 Manwel Dimech Street, Sliema SLM 1050 Tel: (+356) 2010 1115 Email: info@tempsinmalta.com

Mark J Galea is a qualified HR professional with over 15 years’ experience in a number of leading Maltese & international organisations. He then moved on to set up Quad Consultancy in 2010 to provide a myriad of bespoke and personalised of HR services. Mark has had a number of articles published in the local and international media, and is also a speaker on HR and people-related matters, submitting presentations in public fora and conferences.

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JANUARY 2013 | THE ECONOMIC UPDATE

FINANCIAL FOCUS

The Mechanics of the Malta Stock Exchange by Cliff Pace | compiled and edited by Roslyn Schembri The capital markets have been developing significantly ever since the Malta Stock Exchange (MSE) started its trading operations 21 years ago. In spite of the size of our domestic market, a significant 72,000 investors and 39 companies are listed with the MSE. Roslyn Schembri peers into what makes the MSE tick.

Despite the recent international economic crises and difficulties encountered in the financial sectors, the MSE’s success can be measured by its sustained and efficient level of trading and the level of confidence in the market. Cliff Pace, Business and Product Development Manager at the MSE, explains that the three main functions of the Exchange are Admissions to Listing, Trading, and Depository Services. The MSE provides a regulated structure for admission of financial instruments to its recognised lists, which may subsequently be traded on its transparent and orderly secondary market place. On these grounds, Mr. Pace states that at present the MSE has equities, corporate and government bonds, and treasury bills listed and traded on the market. “Additionally, the Central Securities Depository offers a comprehensive range of services to the 72,000+ investors, as well as to the listed and unlisted companies, including maintenance of share and bond registers in a dematerialised environment, handling corporate actions, clearing and settlement and custodial services,” adds Mr. Pace. Regardless of this, the MSE still has a relatively small market due to its predominantly domestic nature. “Furthermore, the long term attitude adopted by many of our personal investors towards investment has created a certain lack of liquidity in the market; this could be considered to be a weakness when comparing our operations to other exchanges, however this is not necessarily bad since it contributes to stability” highlights Mr. Pace. 64 |

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For a country the size of Malta, the figures show that the MSE has a significant impact on the local economy; the Exchange has processed the issue of over €15 billion worth of financial instruments that have been sold predominantly to the domestic market. Mr. Pace feels that there is scope to attract further listings from the local business environment, but one must acknowledge that first, the predominantly family owned companies must prepare themselves, and recognise the benefits of opening their shareholding to the public through a listing. The issues of succession planning, liquidity for current shareholders and the increased brand awareness of being a listed company are just a few. One must have an open view, and also acknowledge the effect this would have on transparency, operations and corporate governance. “We register an annual turnover of over €500 million in the trade of financial instruments on our platform, and as at the end of September 2012, we have already reached the total turnover registered for all of 2011. The current market capitalisation of listed instruments stands at over €8.6 billion, not including funds, but which includes virtually all Malta’s sovereign debt,” explains Mr. Pace.

INTERNATIONAL SCENE Whilst the MSE has been significantly successful in developing the capital markets within the financial services sector, Mr. Pace explains that the Exchange is relatively small and it is developing a specialist niche that will give it a competitive advantage. “Right now, we are promoting ourselves on the strength of our robust regulatory framework, reputation and EU passport ability, accessibility, speed of service and overall cost-effectiveness. However, whilst these factors are very attractive to companies seeking a listing venue within the EU or interested in our depository services, the trading arm of our operations will remain relatively unattractive until we evolve further.” Tackling the issue of foreign competitiveness, the MSE is in the process of developing the MSE brand awareness internationally, and networking with partners in the financial services sector in order to better identify the opportunities that exist and to attract these to Malta, for the benefit of all related support services providers.

Malta Stock Exchange

“Our international connectivity, through the new Xetra trading platform and the Clearstream link in respect of our custodial depository services, are critical to the successful attraction of international business for the benefit of the Exchange and of course the rest of Malta’s financial services sector,” adds Mr. Pace. With regards to keeping abreast with developments on the international front, as well as to create networking opportunities, the MSE is a member of the Federation of European Securities Exchanges, the International Organisation of Securities Commission, the European Central Securities Depositories Association and the Association of National Numbering Agencies, amongst others.

The Exchange has processed the issue of over €15 billion worth of financial instruments Regardless of the MSE’s favourable rates on local turf, many companies still have doubts about choosing to go public. To explicate this matter, Vincent E. Rizzo, Director at Rizzo Farrugia & Co (Stockbrokers) Ltd. reveals that any company considering taking the public route must first consider its longer term vision and objectives very carefully. Its benefits of listing are varied. An enhanced status, access to more diverse and improved funding options for further growth and development,

JANUARY 2013 | THE ECONOMIC UPDATE

FINANCIAL FOCUS

Malta Stock Exchange Interior

and facilitation of shareholder changes and succession are amongst the main benefits.

CASE STUDY

“Despite these benefits, it is highly advisable for every company to plan well in advance so as to ensure that the proper structures and systems/ processes are in place and fully functional in order to obtain the best results and ensure that the transition is successful.”

RS2 Software p.l.c. is a company that specialises in card-management system software, enabling global processes and flows of authorisation and transactions, that allows consumers to pay quickly, smoothly and securely.

“Obtaining professional legal and financial/ tax advice is strongly advised. Finally it is very important to ensure that a company management team as directed by its board of directors aligns its objectives with that of the company’s shareholders and the creation of shareholder value should therefore rank as the company’s foremost objective,” Mr. Rizzo details.

The company’s chief clients are banks that have their own card centres, and service providers that use RS2’s service platform to complete card authorisations.

Considering the current economic climate, companies might hesitate and are less reluctant to float on the stock exchange. “There is never a right or wrong time to go public. In my opinion, the primary consideration is the offering. If the creation of sustainable longterm shareholder value is the company’s main objective and the offer is appropriately positioned to achieve this goal, then I firmly believe a flotation will be successful. Having said this, the general market and economic conditions will undoubtedly have a bearing on the ultimate appetite for the ‘opportunity’ that the listing may provide, however, if value takes precedence over price in a company’s decision making process, then the success rate improves substantially,” explains Mr. Rizzo.

Fiona Ciappara Cascun, Chief Financial Officer at RS2, explains that the advantages of the company going public included the additional worth of the company’s profile within the local market and amongst competitors.

RS2 has been operating for 25 years and listed as an Initial Public Offering (IPO) on the MSE since 2008.

“One of the main reasons for RS2 to become a listed company was to raise the profile of the company from that of a private company. This was considered to be an important step in our growth strategy particularly in light of the nature and size of clients the company wanted to pursue. In addition, we felt that the cash injection from the new share issue would enable the company to take advantage of growth opportunities requiring

substantial investment such as continuing research and development and enhancing our footprint worldwide.” The main challenges of being listed as a public company is managing the balance between keeping the market informed of developments and progress within the company, whilst protecting confidential and sensitive information, which may at time be restricted by client requirements or competitive implications. Another reality that is faced by listed companies is the limited local share market. “Trades in small volumes of shares are common however they may still have significant effects on share values.” With regards to advice to anyone who is considering following in RS2’s footsteps, Ms. Ciappara Cascun explains that the reasons for going public vary from one company to the next, mostly however depending on what the company is essentially after by floating. “A company might choose to do so to boost one’s profile, investors, or perhaps the cash flow. However, before going public, one needs to know what they are getting themselves into, be very much aware of the listing regulations and the additional governance requirements, while keeping in mind that the listing process is the beginning as the real work starts from there.”

TEU

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Vilhena Mediterranean riM Fund a unique investment opportunity in Malta, giving you access to the Mediterranean region. aims to deliver both income* and capital growth. investment from a low minimum of € 4,000 or uS$ 5,000.

an investment composition of income and growth In principle, sound can easily be produced from any musical instrument. However, composing and performing melodies from musical instruments requires specialist skills and talent. This analogy applies to the Vilhena Mediterranean Rim Fund where the Fund’s Advisor aims to use their investment talent to deliver a combination of income and growth for investors by investing in a diversified portfolio of bonds and equities issued by organisations primarily but not exclusively located or operating in the Mediterranean region but excluding Portugal, Spain, France, Italy and Greece.

80072344 I www.vfm.com.mt BOV Branches in Malta & Gozo & Licensed Financial Intermediaries *The income that the assets of the Fund generate in relation to their value or market, and the frequency of payment may vary and are not guaranteed. Past performance is not a guarantee to future performance. The value of the investment may fall as well as rise and currency fluctuations and any initial charges may lower the amount invested and the amount received upon redemptions. Investments should be based on the full details of the Prospectus and the Key Investor Information Document, which may be obtained from Valletta Fund Management Limited (“VFM”), Bank of Valletta Branches and other Licensed Financial Intermediaries. The Fund invests in emerging markets and is thus subject to the risks inherent in such markets such as the instability of emerging markets’ economies, political uncertainties and, in some cases, the illiquidity of such markets. Investment in this Fund is only suitable to investors who are willing to accept such risk. VFM is licensed to provide Investment Services in Malta by the MFSA. The Vilhena Funds SICAV plc is licensed by the MFSA and qualifies as a UCITS. Issued by VFM, TG Complex, Suite 2, Level 3, Brewery Street, Mriehel BKR 3000. Tel: 21227311, Fax: 22755661, Email: infovfm@bov.com, Website: www.vfm.com.mt. Source: VFM

JANUARY 2013 | THE ECONOMIC UPDATE

TAKING The LEAD ADVANTAGE

MICE

The Economic Update caught up with James Grech, who has attracted a small complement of people forming a dynamic team of highly-motivated individuals at LEAD Training Services.

Background James Grech inspires the people around him to be fully committed, creatively inspired lateral thinkers who willingly tag themselves to their clients’ operations and immerse themselves in the assignments they have. As you probably know, James has been actively organising conferences in Malta for the past couple of years — and he has had tremendous success doing it. We wanted to know the story behind James’s move into conference organisation and why he has been so successful with it.

TEU: Giving us an overview of your service offerings, can you discuss around which needs these programmes have been created?

JG: We are a team of specialists passionate

about our work and with a common ambition to share learning experiences with people in the business community as well as the general public. Under the brand name LEAD Training Services, our team has attracted an impressive pool of professional speakers from different areas of business and different geographical locations. This makes us the only professional training organisation in Malta that can offer cutting edge training programmes across a broad spectrum of topics. We do not believe in onesize-fits-all training programmes and tailor each product to suite customer needs and wants. We take a more holistic view of training, being able to start from a thorough training needs analysis all the way to learning styles assessments. In collaboration with Equinox Advisory, we also assist organisations in the application for funding of training courses from sources available at that point in time.

TEU: How challenging is today’s corporate environment and how do your training programmes seek to counterbalance this?

JG: Without a doubt, today’s corporate

environment is extremely challenging. One only needs to mention the prolonged economic and financial crisis which has plagued the global economy for the past few years. We believe that

James Grech addressing a Lead Event business seminar

the key for businesses to survive and even emerge stronger is to maintain a healthy workforce. Our vast programme of training services will serve to arm employees with the necessary tools to remain updated and relevant at their workplace.

We believe that the key for businesses to survive and even emerge stronger is to maintain a healthy workforce. TEU: How do you differentiate Lead Training programmes in such a competitive industry?

JG: LEAD Training programmes are designed

with business in mind. They do not focus solely on the academic side of the subject at hand but seek to provide trainees, and ultimately the business with a practical mindset for dealing with the various issues and challenges that each position invariably faces. We believe that it is easy to teach but it is much more beneficial to train people and empower them to be more productive and efficient, thus creating a winwin situation – for the business, the employees and the customers. We are also proud to be pioneers in many areas of HR development, especially with our Creativity and Innovation in Business Training Category. Apart from individual training programmes, we have also developed more holistic training and development products in

this respect, namely Creativity Week or Month.

TEU: How critical are training programmes in today’s corporate environment?

JG: Training programmes are an important

factor for business at any time. It is important for the health of the business and for employee satisfaction as well. We feel that it is essential to nurture an environment of learning in the workplace and to invest in any business’ greatest asset – its workforce. It is a well-known fact that it is far cheaper to retain an existing employee than to recruit and retrain a new one. Those businesses which recognise this fact and actively support it will be the ones who to emerge as sound and solid exemplaries.

TEU: How do you quantify your success?

JG: LEAD training programmes serve a

number of purposes and their benefits are many. Their primary aim is to provide employees with a learning experience, to train them and to update their existing knowledge. As a result of this, employees feel empowered to work more efficiently and productively as they put theory into practice. The business will benefit from such an attitude as customers are provided with a superior service. Ultimately an environment of success is created, instigating further success. Our aim is to ingrain in people the need to continually better themselves for their own and the business’s benefit. TEU

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JANUARY 2013 | THE ECONOMIC UPDATE

EMERGING MARKETS

Emerging Markets Index Q4 2012

Emerging markets end 2012 with encouraging manufacturing-led bounce in economic growth as a “Great Rotation” towards a China-led global economy gathers pace

Key points

• Q4 HSBC Emerging Markets Index rose to 52.9 from 52.2 in Q3 but remains below series average • Manufacturing output rises modestly across emerging markets following Q3 decline • New order growth in manufacturing accelerates at fastest rate since Q2 2011 but exports weak • Expansion across BRIC markets, with Russian growth fastest since Q2 2010 • Service sector output rose although outlook remains weak

Summary

Emerging markets ended 2012 with a slight acceleration in economic growth as goods producers posted the fastest increase in new orders since Q2 2011. This represented the first upward movement since Q1 2012, although the overall pace of expansion was still weaker than the first half of the year, the HSBC Emerging Markets Index (EMI) shows. The EMI climbed to 52.9, from 52.2 in the third quarter, but was still below the average shown over the four years since the 2008 financial crisis. The mild rebound was led by an expansion from the manufacturing sector but despite service sector performance improving on the previous quarter, its outlook remains below-par. The combined manufacturing and service sectors of the major BRIC economies all registered expansion in Q4. Among the four largest emerging economies, Brazil posted a return to growth following the previous quarter’s stagnation, while Russia overtook India to post the best rate of output growth since Q2 2010. China saw its growth improve, but remain relatively weak, while India posted a solid rate of expansion. Chinese goods producers registered higher output for the first time in a year-and-a-half, while Brazilian manufacturing production increased for the first time since Q1, expanding

at the fastest rate since the first quarter of 2011. Manufacturing output growth accelerated in India and remained broadly stable at a solid pace in Russia. Service sector output rose during Q4 at a fractionally faster pace than Q3’s four-quarter low, while the outlook amongst the BRIC economies remained positive and marked an improvement on Q3. Stephen King, HSBC’s Chief Economist, said: “Although hardly buoyant economic growth, recent improvements are encouraging, especially as complemented by encouraging signs for the early months of 2013. Much of the growth is domestic as export orders are still contracting, although not at the worrying pace seen mid-year. While China has yet to resume the pace of growth it once enjoyed, it is now a much bigger economy and as a result, its contribution to global growth continues to rise. This enhanced gravitational pull is driving a “Great Rotation” of economic activity from the deleveraging old world to the dynamic new world. So far, the benefits have accrued mostly to those markets either geographically close to China or important in satisfying China’s insatiable demand for commodities. The old world has yet to catch the China express with US exports a mere 0.7% of its GDP to China and the UK’s GDP exposure to China barely a rounding error. It’s no surprise that economies which have increased their exports to China – typically at the expense of exposure to the old world – have mostly enjoyed rapid gains in economic activity over the last decade. In contrast, those economies which have shunned China’s advances have mostly found themselves suffering from persistently disappointing GDP growth. The Emerging Markets Index may not be particularly strong at the moment but China is set to have a bigger influence than either the US or Europe on the economic destiny of emerging markets.” New export orders for emerging markets manufacturers fell for a fourth consecutive quarter, reflecting weak demand from advanced economies, notably those in the Eurozone. However, total new orders in emerging economies increased in the final quarter of

2012 at the fastest rate since Q1, and the second fastest since Q2 2011. This rise largely reflected an increase in incoming new business for service providers, although manufacturers reported the strongest rate of growth since Q2 2011. Looking ahead, the 12 month outlook for service providers across the BRIC economies improved slightly on the previous quarter but the strength of sentiment was still at its fourth weakest of any quarter since the series began in 2005. Optimism was led by Brazil’s service providers, followed by India. Meanwhile, Russian and Chinese service providers remained relatively subdued in their expectations for the coming year. The latest quarterly EMI revealed a rise in input cost inflation on the particularly weak third quarter, although it remained below the longrun average. Input prices for China’s combined manufacturing and services economy rose after falling for two consecutive quarters, although the sharpest increase was experienced in Russia out of the BRIC economies. The average cost of components to manufacturers rose with the rate of inflation the quickest since Q3 2011. Meanwhile, in the service sector, input cost inflation remained similar to Q3, posting the second weakest rate of any quarter in the last three years. Acceleration in economic growth across the emerging world provided the impetus for a rise in employment levels at manufacturing and service sector firms, as the rate of job creation accelerated from Q3 to the quickest since Q2 2011, led by service sector firms. In contrast, manufacturers trimmed their workforces for the fifth consecutive quarter. The HSBC EMI is calculated using the longestablished PMI data produced by global financial information services company Markit. HSBC announced a partnership in 2009 with Markit to sponsor and produce a number of emerging market PMIs. TEU

The HSBC EMI is released quarterly and is available via: www.hsbc.com/emergingmarketsindex www.maltaeconomicupdate.com

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JANUARY 2013 | THE ECONOMIC UPDATE

ICT

Good News for Businesses:

Golden Gate launches new eStore powered by Shireburn Software Golden Gate, Stationers and Printers, launch their new eStore powered by Shireburn Software – a faster, easier and far more cost effective way of doing business. Today, the good news for businesses in Malta is that they can source all their office supplies, printing requirements, and self-inking stamps from an e-store that has been built and designed with the end user in mind, backed by a company with over 60 years of experience in B2B stationery and powered by the latest software on the market. Golden Gate have in fact been offering online shopping since 2007. As part of its 60 year celebrations, the company embarked on a re-branding exercise that included the development of its ‘2nd generation’ e-store. Having recognised the importance of technological advances, Golden Gate continued

to invest heavily in providing its customers with the latest technology available in order to continuously provide a better service. In order to maximise the e-store’s potential, the company’s IT system was completely re-built, enabling the direct and automated link between the estore, inventory and accounting systems. Shireburn Software, a Maltese company established since 1983 that today consists of a team of 30+ professionals, were awarded the project of developing the new estore, utilising their state-of-the-art eStore Software fully integrated with Shireburn Inventory Management System (SIMS) and Shireburn Financial Manager (SFM). TEU

Log on to www.goldengate.com.mt today. It’s Fast, Easy and Saves You Money

visit our new e-store 70 |

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fast | easy | saves you money www.goldengate.com.mt

WWW.VASCAS.COM.MT

NAXXAR / VALLETTA / MELLIEHA / SLIEMA / VICTORIA (GOZO)

FOR HIM

JANUARY 2013 | THE ECONOMIC UPDATE

AUTO REVIEW

Motion and Emotion by George Carol

We explore the incomparable style of the Peugeot 508 sedan. Its dynamic silhouette, its bodywork extensions and its raised ground clearance conjure up a born adventurer style. Sturdy and elegant, it breathes new life into the all-road world.

OVERVIEW Automobiles Peugeot maintained a rapid pace of product launches in 2012, with five major launches and several models launched in overseas markets. The new 508 sedan is notable for a number of reasons. The handsome looking 508 features a sleek and free-flowing design that has a sense of forward motion. This flagship Peugeot 508 sedan model ranges from €26,600. On the inside, the quality and layout is every bit as fantastic. Once alive, this deisel powerplant gets you going with a silent unmistakable roar. The sound, typical of any vehicle that runs on diesel, is merely secondary because the classleading torque that the turbocharged HDi engine produces is immediately noticeable once behind the wheel. While the car can cruise at slow speeds with ease, a heavier touch on the pedal produces an exciting rush of torque resulting in impressive acceleration which justifies Peugeot’s claim that the car can do 0-100km/h in 8.4 seconds. On a whole, the 508 is a very well rounded car which fits into the D-segment nicely in all key areas while boasting impressive performance

for a car of that category. This is one car that we need to sample urgently on Malta’s typically rutted roads and which Peugeot should have tested more for such road network. TEU

FEEL

Explore incomparable style

Its dynamic silhouette, its bodywork extensions and its raised ground clearance conjure up a born adventurer style. Sturdy and elegant, it breathes new life into the all-road world.

WATCH

Unmatchable driving

Focus on-board is given to comfort and simplicity. The car’s myriad of fittings are designed to give absolute driving pleasure and incomparable passenger relaxation. For Peugeot, this engine’s credibility goes far beyond the realms of eco-efficiency: it must procure as-yetunknown sensations for the driver and renewed driving pleasure.

EXTEND

the 508 sedan experience

Peugeot’s sturdy and elegant 508 sedan breathes new life into the all-road world. It integrates all the qualities of a sedan vehicle: distinctive style and elegant interior.

Peugeot 508 Sedan Statistics Price: €26,600 petrol ; 28,200 diesel ; 0-62mph: 8.8sec; Top speed: 132mph; Economy: 68.9mpg (combined); CO2: from 104g/km; Kerb weight: 1525kg; Engine: 4 cyls, 1997cc, turbodiesel, plus electric motor; Power: 161bhp plus 36bhp; Torque: 148lb ft plus 111lb ft; Gearbox: 6-spd automated manual

Fuel Economy Information Star Rating: 5.0 Fuel Economy: 5.70 LITRES PER 100KM

Peugeot 508 Sedan Main Points • 1,700 ,000 vehicles sold in 2012 • Peugeot 4th marque (Cars + LCVs) in Europe • 208 : 221,000 worldwide sales, leader in the French market in December • Sales outside Europe : 44 % of total sales

Peugeot Distributor Michael Attard Ltd., National Road, Blata L-Bajda, HMR9010 Telephone: +356 2123 8854 | Mobile: + 356 7940 6607 Email: sales@michaelattard.com.mt

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JANUARY 2013 | THE ECONOMIC UPDATE

Air Maltaâ&#x20AC;&#x2122;s Travel Arrangements for Maltese Abroad - Extra Flights Announced, Call Centre Opening Hours Extended As announced, Air Malta is making travel arrangements for eligible Maltese voters currently abroad to travel on its services to enable them to vote in the forthcoming General Election of the 9th March 2013. Apart from offering seats on its scheduled services, the airline has also announced it will be operating 6 extra flights on Luxemburg, Dublin and Manchester as per the following schedule: (All times local)

Luxemburg Thursday 7 March KM3427 Saturday 9 March KM3426

Dep

Arr

Luxemburg 1630hrs 1910hrs Malta 1700hrs 1950hrs

Malta Luxemburg

Dublin Malta

Malta Dublin

Dublin Thursday 7 March KM3217 Sunday 10 March KM3216

0305hrs 0750hrs 2120hrs 0005hrs

Manchester Thursday 7 March KM3143 Saturday 9 March KM3142

Manchester 0120hrs 0555hrs Malta 2200hrs 0035hrs

Malta Manchester

As it did yesterday to facilitate the reservations process, Air Maltaâ&#x20AC;&#x2122;s call centre will today also extend its call centre opening hours till midnight. The airline will review these opening hours if and when the need arises. As announced these travel arrangements are available for: (a) eligible voters including those married to foreigners, studying, working or undergoing medical treatment abroad; and (b) dependents of the persons referred to in (a) above. Inbound travel to Malta is possible from 27th February to 9th March 2013 and return travel is from 9th March to 17th March 2013. Those persons who will opt for early voting on the 2nd March 2013 can travel to Malta from 27th February and may return as of the 2nd March and not later than 17th March 2013. Those voting early have to apply at the Electoral Commission by latest noon on Friday 1st March 2013.

JANUARY 2013 | THE ECONOMIC UPDATE

SOCIAL

The Broken Birds Of Society Mgr Victor Zammit McKeon Very serious neglect, abuse, rejection, grave parental sickness or misconduct and abandonment are the main factors that lead children aged 0 to even over 18 to be admitted to out-of-home shelters, including Fra Diego Home in Hamrun, where we have one flat and hope that in the very near future, through the comanagement exercise that is being set-up with the Foundation for Social Services, two others will be opened. These, so to speak, are almost the lucky ones, when you compare them to others on a list, waiting to be accommodated while they can be roaming the streets or living in a negative home environment These are our Maltese society’s broken birds. They are a shocking reality albeit unknown for many Maltese. A reality so shocking, it shies and hides away, transparent even from the media’s inquisitive attention. I call for these children to be noticed. The media is needed to bring their reality to those who can help our Homes, including church entities, make ends meet for these children to live the decent and dignified life they were created for, in a unit that feels like home and family. Anyone running a home, albeit a domestic one, knows the sums needed to live on. We cannot quantify the expenditure one would incur to run our Homes. Most of what we have is provided for by religious sisters and fathers who do not earn a salary for their 24/7 work and benefactors, from our daily bread, to physical, psychological and emotional support services, education, extra curricular activities and the environment we live in. Our (Church Agency) organisation, Ejjew Ghandi, more commonly referred to as

Children’s Homes, runs five child day-care centres, assisting families afflicted by social problems mostly living below the poverty line. One of them is in Fra Diego Home. Here, children are looked after while the parent/s go/es to work, or receive therapy for a situation they are in. We have two shelters for domestic violence victims, securing protection for both mother and children, and 11 residential homes. Although we do our best to help these children either find their place back with their families or move on for fostering or adoption, working very closely with the state agency APPOGG, some of them are forced to stay on. In each and every case, our carers treat every child as their own, sharing the love of a family, empowering them for life, softening the skin which despite the tender age might have become too thick for comfort. Every child has a right for a secure future and cannot wait. I admit we have our weaknesses but we are striving hard not to betray these children along the way. This is made possible through the support of our many benefactors and I feel it my duty to name them: the Archdiocesan Office of Administration, the College of Parish priests, the Ministry for Justice, Public Dialogue and the Family, other Government Ministries and Agencies, the National Lottery Good Causes Fund, the Malta Community Chest Fund, Strina, The Malta Financial Services Authority, Banks, Vodaphone Foundation for Children, companies and individual benefactors.

Sisters’ quarters, the area for the elderly ladies who have lived and worked all their lives in Fra Diego Home, the children’s flats and the child day-care centre area, (50 including lay-staff but excluding the staff and resident compliments of the new co-management exercise). Mention should be made of the therapy aspects of our social and charitable work etc. I wish my appeal reaches far and wide enough to lengthen this list. The number of children with challenging behaviour, fighting traumas

We do our best to help these children either find their place back with their families or move on for fostering or adoption. outside structures to contain their frustrations is increasing and resources are needed to address these realities. Voluntary work is not enough. We need funds to guarantee continuity in the care we give these children. I hope and pray that this out of season marathon generously and professional organised by Calypso Media Communications Ltd will prove to be a another great help in raising the much needed funds. Help us give these broken birds a set of wings to fly. Mgr Zammit McKeon is Director, Central Office, Ejjew Ghandi (Children’s Homes). TEU

Now Calypso Music TV and Calypso Radio are joining this special generous family through the organisation of this January 2013 Marathon – Maratona Dar Fra Diego. Its proceeds will directly go towards the day-today operational aspect of our work: salaries for the lay staff, paying some of our bills, most of all the utilities ones, carrying out maintenance and refurbishment tasks in the www.maltaeconomicupdate.com

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BANKING & FINANCE

La Valette Multi Manager Property Fund – Independent review of investor files On Friday 4th January 2013 the Malta Financial Services Authority (the ‘MFSA’) sent to Bank of Valletta (the ‘Bank’) the list of those investors who, according to the Independent Expert Report compiled by Mazars and confirmed by the MFSA, are eligible for additional compensation from the Bank. This list includes those investors whose complaint with the MFSA was upheld by the Bank as eligible for additional compensation. The Bank has been instructed to process and to effect the payment of the additional compensation as soon as possible. This additional payment should be received by all eligible investors free of any charges or deductions.

Mazars commenced the independent file review in early September 2012, and submitted its Independent Expert’s Report to the MFSA on the 21st December 2012. In its Report, Mazars obtained and considered relevant information provided by the Bank on the sale of units in the Fund by the Bank to investors. Mazars reviewed all advisory client transactions and those execution only transactions where the documentation was not correctly completed. Mazars reviewed the circumstances of these transactions in order to substantiate which investors fell under the criteria of an “experienced investor”, as defined in the terms of the Fund’s supplementary prospectus, and drew-up a list of investors who did not qualify as experienced investors.

due compensation has been passed to the Bank. The Bank will now calculate the final payment due and make arrangements for those payments to be made without delay. There will be a short reconciliation exercise to ensure that all relevant investors have been considered and assessed correctly, but payments due will be made during that exercise. The MFSA continues to monitor the finalisation of this investigation process. The MFSA is updating the Question and Answer Guide regarding the investigation into the selling of the La Valette Multi Manager Property Fund, which can be viewed at www.mfsa.com.mt/pages/announcements. aspx?id=1. TEU

A few investors have contacted the MFSA to enquire whether they are due additional compensation. As set out in the MFSA statement of 4th June 2012, the list of investors

FinanceMalta to host luncheon at Captive Live UK in London as part of the jurisdiction’s global outreach programme. FinanceMalta, the public-private partnership set up to promote Malta’s financial services sector, is attending Captive Live in the UK on February 12 and 13 as the organisation seeks to kick-start 2013, seeking to capitalise on the positive growth of Malta’s financial services industry during 2012. The Maltese Islands cover an area of just 122 square miles in the Mediterranean Sea, but, together, they punch well above their weight in terms of their importance to the global financial system. Malta has one of the world’s most secure EU onshore financial jurisdictions, and during 2011 and 2012, the Maltese Islands have emerged as one of the primary routes for financial flows into and out of the Mediterranean basin. Insurance is one of the pillars of the wider Maltese financial services industry. Captive Live UK is the UK’s leading captive insurance conference and exhibition, attracting over 600 delegates including 150 captive owners. Malta is the only full EU Member State to offer Protected Cell Company (PCC) legislation, giving it additional appeal to captive managers looking at sharing the higher capital and

management costs excepted from Solvency II rules. Malta’s captive sector includes a number of Fortune 100 companies and blue-chip multinationals such as BMW, Peugeot, Citroen and Vodafone. FinanceMalta’s stand at Captive Live is aiming to educate visitors about the legal, regulatory and licensing regime in place, as well as ensuring that FinanceMalta members who attend have as many opportunities as possible to meet with potential clients. FinanceMalta’s participation in Captive Live UK increases Malta’s visibility as a European Financial Centre (EFC) amongst the captive insurance market reinforcing Malta’s presence as a European domicile attracting a number of enquiries from interested insurance entities seeking to set up their operations in Malta; a market that is growing in Malta with total premia written by Malta-based insurance companies passing well beyond the €1bn mark.

Key players at Captive Live UK include existing and prospective captive owners like risk managers, CFOs, treasurers, captive managers, brokers, regulators, insurers and re-insurers. Head of Business Development at the Public-Private Partnership Bruno L’ecuyer states, “FinanceMalta continues to define its role as increasing the visibility of Malta’s International Financial Centre, enhancing business opportunities for overseas corporations. FinanceMalta continues to heighten Malta’s visibility and credibility in the sector’s international markets with this ‘Captive Live’ presence’. TEU

For further information or to join the delegation visit www.financemalta.org

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JANUARY 2013 | THE ECONOMIC UPDATE

BUSINESS

OPPORTUNITIES

ME entrusted with Erasmus for Young Entrepreneurs programme Malta Enterprise in collaboration with Stiftelsen Europa Institutet in Sweden will be working to facilitate exchanges for entrepreneurs between Malta and Sweden within the framework of the Erasmus for Young Entrepreneurs programme.

succeed in todayâ&#x20AC;&#x2122;s highly competitive markets, as well as the fact that the vast majority of SMEs operate only in one country with limited possibilities for growth.

Partly funded by the European Commission, which gave its green light to the collaboration between the organisations in Malta and Sweden, the Erasmus for Young Entrepreneurs exchange programme offers new entrepreneurs the possibility to work for up to six months with an experienced entrepreneur in another EU country.

Erasmus for Young Entrepreneurs is a winwin collaboration, whereby both new and experienced entrepreneurs can discover new European markets or business partners, different ways of doing business, as well as opportunities for networking. The entrepreneurs may also decide to pursue their collaboration on a longer term by becoming business partners after the end of the exchange period. In this manner, the programme stimulates entrepreneurship, competitiveness, internationalisation and growth of start-ups and established SMEs in the EU. It also contributes to the transfer of knowhow and building of management skills essential for the running of an SME.

The exchange programme is particularly beneficial for those individuals who are thinking of starting or have just set up their own business, who are given the opportunity to acquire relevant skills whilst working with experienced owners of small and medium enterprises across Europe. On their part, the experienced entrepreneurs participating in the programme and hosting the budding entrepreneurs would benefit from fresh perspectives on their own business whilst also getting the opportunity to cooperate with foreign partners or learn about new markets. The programme acknowledges the fact that many founders of SMEs lack management, experience and other key skills required to 78 |

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Recognising the importance of entrepreneurship for economic growth and job creation, it thus seeks to help new entrepreneurs acquire the relevant skills, whilst both new and experienced entrepreneurs would be expanding their European outreach.

New entrepreneurs eligible to participate in the programme are those who firmly plan to start a business or otherwise have an existing business that is not older than three years, irrespective of their personal age or the sector in which they operate. A host entrepreneur can participate in the programme if he or she is the owner or manager of an SME or directly involved in

entrepreneurship at SME board level; has experience running a company for several years; and is willing to act as a mentor by sharing knowledge and experience with a new entrepreneur from a different European state.

The programme stimulates entrepreneurship, competitiveness, internationalisation and growth of start-ups and established SMEs in the EU. As a local contact point in Malta, Malta Enterprise will guide interested entrepreneurs throughout the exchange programme: helping with the application process, helping with finding and establishing a successful relationship with a suitable entrepreneur, as well as answering any questions. Malta Enterprise will also provide financial support to new entrepreneurs participating in the programme, covering travel costs to and from the country of the stay and subsistence costs during the visit, which may last between one and six months. More information may be viewed on www. erasmus-entrepreneurs.eu or by contacting Malta Enterprise on 2542 0000 or info@ maltaenterprise.com. TEU

JANUARY 2013 | THE ECONOMIC UPDATE

FOREIGN EXCHANGE

A NEW ERA FOR FOREIGN EXCHANGE: HSBC Global Head of FX leads business event in malta HSBC Global Head of Foreign Exchange Strategy David Bloom addressed business delegates and traders during a business event entitled ‘A new era for FX’, held recently at the Hilton Portomaso.

Mr Bloom said that the constant stream of political structural events facing the world economy has defined a new era for foreign exchange (FX) in which forecasting and decision-making are increasingly challenging. “The foreign exchange market is no longer the best trading instrument for the post-2007 financial market,” explained David Bloom. “In the past, the differential in growth between one country and another would be reflected in interest rates differentials and these were best traded by foreign exchange. Today, however, it is the structure of economies that really matter.” Talking about the high deficits and the sovereign debt crisis, Mr Bloom said that the last generations and the current one have outspent their future. He added that the solution is slow growth over a very long period and that the world must learn that the levels of growth and wealth will be different to what everyone had got used to in the past.

HSBC’s David Bloom presented new HSBC Global Research entitled ‘A new era for FX’ at the Hilton Portomaso.

The world must learn that the levels of growth and wealth will be different to what everyone had got used to in the past. During the event, HSBC Malta’s Head of Global Banking & Markets Chris Bond gave insights into Malta’s economy, which, in terms of GDP growth and other key economic indicators, has

consistently averaged above EU levels for the last 4 years. “It is largely the collective thrift of the people of Malta, their strong work ethic, and their propensity for saving, which have seen Malta weather the international financial crisis so well. One must also note the strong performance of the banking system in Malta which has continued to lend and support the economy thanks to traditional banking models and high levels of liquidity.” TEU

Editor’s Note David Bloom is the Global Head of FX Strategy and has been now working with HSBC for 20 years. Before taking up his current post, specialising in currencies and global themes, David was an international economist within the Group. He has also gained experience in equity strategy, equity sales and equity analysis. David arrived in London in 1988 after completing an honours degree from Wits University, Johannesburg. He then worked his way through his Masters degree in economics at Birkbeck College London.

David Bloom, HSBC Group of Foreign Exchange (FX) Strategy, recently addressed business delegates and traders at the Hilton Portomaso.

In 1992, following his MSc, David joined James Capel, now HSBC, through the graduate programme. During his time at HSBC, he has also taken up various roles, including that of UK Economist, and US and Canadian Economist.

www.maltaeconomicupdate.com

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NEWS MAKERS

Maltese business delegation in China with HSBC’s support Some 25 Maltese companies joined companies in Shanghai and Hong Kong for a business forum organised by Malta Enterprise with the support of HSBC Bank Malta.

Fexserv travel money has been introduced to help lower the costs for Maltese travelers taking a winter holiday.

Fexserv Travel Money rates help cut the cost of winter holidays. Checking exchange rates is less fun than packing your suitcase, but making sure you get a good deal on your travel money before you jet off for your winter holiday could buy a couple of extra cocktails on the ski slopes! Fexserv make sure the Maltese traveler gets the best deal on winter holiday cash through their Travel Money product, which puts extra money in your pocket to spend abroad. Fexserv Travel Money can be ordered online and you can arrange to pick it up from one of four Fexserv branches, Valletta, St. Julians, San Gwann or Gozo. Fexserv exchange rates are competitive and are normally better than those of high street banks. The exchange rates are available on the company’s website at www.fexserv.com, or at any branch or by calling 2576 2576. In addition to providing better rates than local banks, Fexserv guarantee to buy back any unused currency at the same rate within 30 days from purchase even if rates have changed in the meantime. Fexserv holds a wider range of currencies in stock than any other provider in Malta. Over 100 currencies are available, including South African Rand, Vietnamese Dong, Mauritius Rupee, Malyasian Ringgit, Argentine Peso, Brazilian Real, Chilean Peso, Indonesian Rupiah and the Thai Baht, amongst others. 80 |

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The companies from Malta represented a range of different industries, including alternative energy, engineering, travel and financial services, beverages and construction. In Shanghai more than 65 Chinese companies participated in the forum which placed an emphasis on the unique advantages Malta offers to Chinese companies looking to invest and gain access to European and North African markets. Presentations were delivered by Malta Enterprise’s Chief Officer for Trade, Investment and Enterprise Support Joe Schembri, HSBC Bank Malta’s Head of Commercial Banking Michel Cordina, as well as the Malta Chamber of Commerce, Enterprise and Industry’s representative Anton Borg. A series of oneto-one meetings were held between Maltese and Chinese delegates. Organised with HSBC’s support. A similar programme was also carried out in in Hong Kong. “HSBC Malta’s support for these trade missions provides a direct means of attracting investment in Malta. HSBC’s position as a leading international bank, combined with its strong presence on the ground in China and Hong Kong, offer Maltese businesses the global connections and business opportunities to expand their operations far beyond our borders,” said Mr Cordina. For more information about HSBC’s commercial activities, products, and services customers are encouraged to contact their Relationship Manager or call Business Banking Centre on 23808000. Information may also be accessed from HSBC Malta’s website at www.hsbc.com.mt/commercialbanking or by visiting any HSBC branch in Malta and Gozo.

Laferla Insurance Agency Ltd. unveils new mascot “Ferlu” is a character that has been designed for Laferla Insurance Agency Ltd. The idea of having a bird as a mascot was to tie in the mascot with the company’s logo. This character is a symbol of the fresh approach which the company is taking. As a colour, yellow was chosen as this matches aesthetically with our corporate colour scheme. One notices also that his eyes are green, tying the character in even further with the company’s logo.

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