Economic Vision for Malta 2014-2020 by Content House

NEWSPAPER POST. A SPECIAL EDITION OF THE COMMERCIAL COURIER

ECONOMIC VISION FOR MALTA 20142020 THE WAY FORWARD

Signatories A group of 20 chairpersons/CEOs of leading companies in Malta, together with the Rector of the University of Malta, contributed towards and served as the signatories of the Economic Vision 2014-2020.

Anton Borg

Charles Borg

Prof. Juanito Camilleri

David G. Curmi

Louis A. Farrugia

Matthias Fauser

Victor A. Galea

Andy Gatesy

Margarith LutschgEmmenegger

John Magro

Christine Pace

Alfred Pisani

Joaquim Silva Pinto

Balesh Sharma

Jonathan Shaw

Ernest Sullivan

Kevin Valenzia

Sergio Vella

Winston J. Zahra

Adrianna Zammit

ECONOMIC VISION 2014-2020: THE WAY FORWARD

CONTENTS 19 40

Foreword by the Malta Chamber President David G. Curmi

Shadow Minister for the Economy Mario de Marco

“Our Vision is for Malta to have a focused and diversified successful economy underpinned by a high quality, dynamic, productive and innovative private sector”

“Generally, the Opposition is in tune with the Malta Chamber’s propositions regarding economic growth”

Highlights of the Economic Vision

Prime Minister Joseph Muscat

Leader of the Opposition Simon Busuttil

Minister for the Economy Chris Cardona

“Our efforts to attract Foreign Direct Investment from the United States, China, India, Singapore and South Korea offer very exciting prospects and are beginning to bear fruit”

“The Government’s role is not to engage in economic activity but to favour a climate that unleashes the country’s economic potential”

“Securing and maximising economic prosperity for our people is an integral part of this Government’s vision”

ECONOMIC VISION 2014-2020: THE WAY FORWARD

Central Bank Governor Josef Bonnici

Malta Enterprise Chairman Mario Vella

University Rector Juanito Camilleri

MCESD Chairman John Bencini

“Against this still fragile environment, the Maltese economy continued to outperform the Euro area average”

“Never before has Malta Enterprise and the Malta Chamber cooperated so closely”

“As we project Malta on the global arena, it is crucial that our workforce and our society become more global in outlook”

“Malta definitely needs an Economic Vision which is shared by all stakeholders, if it is to achieve the targets set within the Europe 2020 strategy”

Publisher

Louis A. Farrugia and Winston J. Zahra

Mark Watkinson and David Spiteri Gingell

A word from five members of the think tank

Louis A. Farrugia, Chairman of Simonds Farsons Cisk and Winston J. Zahra, Chief Executive Officer of Island Hotels Group, discuss how Maltaâ&#x20AC;&#x2122;s economy and industries can flourish.

Mark Watkinson, CEO of HSBC Malta and leading management consultant David Spiteri Gingell share their thoughts on the compilation and the aspirations of the Economic Vision.

Five contributors share their thoughts on the current status and future of their industries, and how they stand to be improved by the Economic Vision.

Executive Summary & Recommendations

Content House Group Mallia Building, 3, Level 2, Triq in-Negozju, Mriehel QRM3000 Tel: +356 2132 0713 Fax: +356 2132 0714 info@contenthouse.com.mt www.contenthouse.com.mt In conjunction with the Malta Chamber of Commerce, Enterprise & Industry, the organisation behind the Economic Vision 2014-2020

The Malta Chamber of Commerce, Enterprise & Industry The Exchange, Republic Street, Valletta VLT1117 Tel: +356 2123 3873 Fax: +356 2124 5223 info@maltachamber.org.mt www.maltachamber.org.mt Editor Kevin J. Borg Contributors Joseph Muscat, Simon Busuttil, Josef Bonnici, David G. Curmi, Chris Cardona, Mario de Marco, Juanito Camilleri, Mario Vella, John Bencini, Louis Farrugia, Winston J Zahra, Mark Watkinson, David Spiteri Gingell, Charles Borg, Christine Pace, Margrith Lutschg-Emmenegger, Kevin Valenzia, Matthias Fauser Editorial Coordinators Edward Bonello Martina Said Advertising Sales Manager Petra Urso Advertising coordinator Lindsey Ciantar Creative Director and Design Nicholas Cutajar Printing Progress Press

Content House Ltd and the Malta Chamber of Commerce, Enterprise & Industry would like to thank all the protagonists, contributors, advertisers and the project team at Content House and at the Malta Chamber that have made this publication a success. Articles appearing in this publication do not necessarily reflect the views of Content House Ltd or those of The Malta Chamber of Commerce, Enterprise and Industry. All rights reserved. Reproduction in whole or in part without written permission of the publishers is strictly prohibited. The publication is being distributed to all leading businesses members of the Malta Chamber of Commerce, Enterprise and Industry by the Malta Chamber.

ECONOMIC VISION 2014-2020: THE WAY FORWARD

WEL COME ECONOMIC VISION 2014-2020: THE WAY FORWARD

Foreword by the President of the Malta Chamber of Commerce, Enterprise and Industry David G. Curmi

A business agenda to Government In economic terms, Malta is at a very important crossroads. The Malta Chamber looks positively to the country’s path towards future prosperity, but for this to materialise a series of important decisions need to be taken collectively in order to safeguard Malta’s competitiveness. The Malta Chamber has always championed the cause

Our Chamber is indebted to the group of Chairpersons

for competitiveness and has endeavoured to raise it

and CEOs of leading companies in Malta and to

higher on the national agenda. This year we have gone

the Rector of the University who contributed to

a step further and we took the proactive initiative

the articulation of this Vision and who serve as its

to propose an Economic Vision to Government – a

signatories. Personally I would like to express my

business agenda to Government, rather than wait for a

gratitude to them for their invaluable input – Anton

Government agenda for business.

Borg, Charles Borg, Prof. Juanito Camilleri, Louis A. Farrugia, Matthias Fauser, Victor A. Galea, Andy Gatesy,

Our Vision is for Malta to have a focused and diversified

Margarith Lutschg-Emmenegger, John Magro, Christine

successful economy underpinned by a high quality,

Pace, Alfred Pisani, Joaquim Silva Pinto, Balesh Sharma,

dynamic, productive and innovative private sector

Jonathan Shaw, Ernest Sullivan, Kevin Valenzia, Sergio

that positions Malta as a global hub for business and

Vella, Winston J. Zahra, and Adrianna Zammit.

investment leading to increased prosperity by 2020. A word of thanks is also due to MHRA and HSBC Bank Our document is intended to serve as a blueprint

(Malta) for their contribution.

to guide all stakeholders in the allocation of scarce resources. It will support us – the business community –

In conclusion we are proud that the Economic Vision

in maximising our contribution to the country in terms

has been endorsed by both the Prime Minister and

of wealth creation through our risk and through our

the Leader of the Opposition who expressed their full

endeavours.

support as they welcomed the document. We look forward to seeing its recommendations being

The document articulates an Economic Vision that

taken on board by the authorities.

is based on 7 key aspects. It is built around targets and opportunities for growth in 11 Economic Sectors,

The economic future of this country can be secured

it is underpinned by 6 Policy Fundamentals required

by working together towards an ultimate coherent

to secure successful growth in the sectors identified

Economic Vision for Malta that promises the growth and

and proposes 52 concrete recommendations to drive

prosperity that our people deserve.

sectorial growth.

20 ECONOMIC VISION 2014-2020: THE WAY FORWARD

HIGHLIGHTS

Economic Vision 2014-2020:

THE HIGH LIGHTS 22

ECONOMIC VISION 2014-2020: THE WAY FORWARD

Around 18 months ago the Malta Chamber of Commerce, Enterprise and Industry together with 20 Chairpersons/CEOs of leading companies in Malta and the Rector of the University of Malta initiated a process to articulate an Economic Vision for Malta. The Malta Chamber believes that the timing for the

and new. The focus must be directed towards Malta’s

articulation of such a vision for Malta is apt. A new

comparative advantages – those in place today as well as

programming period for the European Structural and

those that will arise over time.

Investments Funds for the period 2014-2020 will soon come into play while Malta, through the National Reform

The Vision identifies the following 11 target economic

Programme is and will continue to implement Malta’s

sectors that provide the best opportunities and

targets as established under Europe 2020. The Economic

diversification benefits for Malta:

Vision for Malta spans between 2014 and 2020 – a timeframe purposely chosen to correspond with these

• Financial Services, ICT (Including Digital Gaming)

important events. Through this Vision, the Malta Chamber

• Filming, Life Sciences

also seeks to secure continuity in policy and strategy design

• Maritime Transportation and

and implementation as this period spans a subsequent electoral term.

Advanced Logistics • Aviation and Advanced Logistics • Tourism

Within the prevailing global economic scenario, the group

• Green and Low Carbon

of 20 CEOs took stock of Malta’s limited resources, its

• Health Services

strengths and its weaknesses, and recommended a way

• Education Services and

forward that – in their view – maximises prosperity for our

• Manufacturing

people. This way forward is for Malta to be “a focused and diversified successful economy underpinned by a high

One of the 11 identified sectors is Manufacturing and the

quality, dynamic, productive and innovative private sector

Economic Vision document should be read in conjunction

that positions Malta as a global hub for business and

with another important document which the Malta Chamber

investment leading to increased prosperity.”

has launched recently namely, An Industrial Policy for Malta. The ‘Industrial Policy’ fits squarely into the Economic Vision

The Vision suggests that Malta must focus its resources

but was published separately because of the special role

towards those productive and economic sectors that will

which the Malta Chamber attributes to Manufacturing as a

optimally leverage opportunities – existing, emerging

key pillar in a balanced economy for Malta.

ECONOMIC VISION 2014-2020: THE WAY FORWARD

HIGHLIGHTS

Another innovative aspect of this document – besides being

Ensure more effective contribution by irregular

formulated by business people – is that the Economic Vision

immigrants

Supporting the Further Development of

Business and Enterprise

is underpinned by six policy fundamentals that are required to secure successful growth in the sectors identified. The six policy fundamentals are: • Securing Economic Prosperity • Fostering Human Development • Supporting the further Development of Business and Enterprise • Building an Innovative Infrastructure • Investing in Infrastructure and the Environment, and • Government Partnership with Business and Enterprise

Inculcating a Culture of Excellence 16

Social Partners should inculcate a culture of

excellence

Nationally-funded institutions should support

business to acquire internationally recognised

quality standards

18 Government departments should be tasked with

KPIs

19 Government should give greater importance to

quality criteria in its purchasing

proposes 52 tangible recommendations on how to channel

Achieving a Flexible Labour Market

resources to achieve long-term economic growth in the

Reform COLA to include productivity measure

country. The 52 recommendations are listed below and are

besides inflation

grouped under the relevant policy fundamentals:

Avoid unjustified increases in Minimum Wage

Ensure flexible labour laws

Ensure a fair and proportionate enforcement of

labour laws

Improve World Bank Ease of Doing Business

rankings

Under each of the above fundamentals, the document

Securing Economic Prosperity

Enhance bi-partisan approach to matters of

economic priority

Strengthen MCESD

Increase value for money from public expenditure

Ensure fair-level playing field in business

Managing the Energy Challenge

Implement reforms for sustainability in health and

Address inefficiency in Enemalta. Inefficiencies

education

should not be passed on to business

Enhance public sector investment in infrastructure,

Lower electricity prices for business to levels

technology and public administration

comparable to applicable rates in the EU

Focus on productivity-driven growth

Ensure a cost-competitive share for interconnector

Strengthen imputation-tax framework

in the country’s energy mix

Fostering Human Development

Use ERDF funds to support energy efficiency and

Upgrade education system to provide deeper skills

renewable energy measures

Link academia/education system to the needs of

Address water sustainability issue

industry and the labour market

Enabling Access to Finance to SMEs and the

Social Partners should incentivise low-skilled

Knowledge Economy Sectors

workers to invest in upgrading their skills

Introduce more schemes for collateral free loans

Reform the stipend system

Introduce export credit guarantee schemes

Link stipend system with the needs of the labour

market and the employability index

Revisit immigration policies to attract required

talent

24 ECONOMIC VISION 2014-2020: THE WAY FORWARD

HIGHLIGHTS

Strengthening Business’s and Enterprises’

Ecosystem for Overseas Growth

GDP ratio

Partner with Chamber to establish a PPP to promote

external business

Energy Infrastructure

Positioning Malta as a Premium Global Brand

Investment in energy infrastructure must be planned

Other PPPs should be set up to assist in other

ahead of demand to ensure energy stability

economic sectors

Urban Regeneration

Minimise the need for development in green field

sites through an urban regeneration programme

Restructure the Grand Harbour Regeneration Corp.

into a Malta Urban Development Corp.

Unleashing Malta’s Green Credentials

Present decisions must reflect the welfare of future

generations

Building an Innovation Infrastructure

Incentivising Innovation in Productivity Improvement in Business and Enterprise 34

Create a Research and Innovation hub for applied

research on innovation and productivity

Establishing Malta as a Leading ‘Living Lab’ Centre

Establish Malta as a Living Lab centre

Stimulating Innovation and Research

Create innovative financing vehicles to complement

traditional channels

Complement innovation infrastructure with formal

business angel network, equity financing and

innovate fiscal instruments

sustainable and does not lead to increases in debt/

48 Government must cease to act as an economic

operator in the Green Sector

Government Partnering with Business and

Enterprise

Undertake a manpower survey of skills in the public

service (to use evidence-based decision-making in

resource allocation)

Reform of Public Service to complement the

Innovation Hub

country’s competitive base and ensure public services

Establish research hubs to build indigenous research

are affordable

communities

Public Service must become a partner to business

and enterprise

Setting Up a Post-Doctoral Research and

Encouraging Entrepreneurship

Reform the judicial system to ensure it is

Encourage Entrepreneurship through overhaul of

complementary to business.

National Curricular Framework

Partner with Chamber to establish a PPP to

The Economic future of this country can only be secured by

support SMEs

working together towards an ultimate coherent Economic

5) Investing in Infrastructure and the

Vision for Malta that promises the growth and prosperity that

Environment

our people deserve.

Prioritising and Financing Investment in

Infrastructure 41

Draw up 2030 infrastructure strategy

Ensure public investment is truly productive and

contributes to expanding the country’s productive

base

Ensure public investment in infrastructure is

26 ECONOMIC VISION 2014-2020: THE WAY FORWARD

PRIME MINISTER

VISION Prime Minister Joseph Muscat

ECONOMIC VISION 2014-2020: THE WAY FORWARD

‘We share a common vision on our economy’ Prime Minister Joseph Muscat believes that the Government and the Malta Chamber share the same vision on the future of our economy. Speaking at the Malta Chamber headquarters in Valletta

thereby objectively making our economy less diversified,

on the Economic Vision document launched by the Malta

we now feel vindicated by the European Commission’s call

Chamber, Dr Muscat said he felt at home at the Malta

on Member States at the beginning of this year to recognise

Chamber: “it is good to be here. If home is where one

‘the central importance of industry for creating jobs and

shares the fundamentals of a common vision of what is

growth, and to mainstream industry-related competitiveness

good and what is not, of what needs to be done and what

concerns across all policy areas’.”

should not be done, then this is home for me.” The Prime Minister also stressed on the importance of The Prime Minister said that the Chamber and the

creating a more business friendly environment across the

Government do indeed share the fundamentals of a

European continent: “therefore Malta supports and will

common Economic Vision for Malta for the period 2014 to

continue to support measures to build a more business-

2020 and, it would be safe to say, beyond that increasingly

friendly Europe through actions to promote industrial

near horizon.

modernisation, to simplify the legislative framework and improve the efficiency of public administration at all levels.

“We certainly share the vision that the way forward for

Europe is nowhere near the 20 per cent target of industry’s

Malta, one that maximises prosperity for our people, is,

share in Europe’s GDP by 2020 and it will not be unless it

I quote, a ‘focused and diversified successful economy

adopts a bold new approach to the problem.”

underpinned by a high quality, dynamic, productive and innovative private sector that positions Malta as a global

Dr Muscat also reaffirmed the importance that the public

hub for business and investment’.”

and private sectors work in tandem and in complementary roles: “there should not be the slightest doubt as regards

Dr Muscat stressed on the importance of having a versatile

our absolute agreement with the Chamber’s Economic

economy that focuses on various critical sectors, including

Vision regarding the distinct but complementary roles of

industry: “we certainly share your concerns regarding

the public and private sectors. Government is there to make

the critical importance of focusing resources on sectors

it possible for private enterprise to fulfil its potential and to

that optimally leverage opportunities without, however,

be the motor of national economic growth. Government is

sacrificing the diversified structure of our economy. In fact,

not there to shackle private enterprise with over-regulation,

permit me to state and not without pride, that after having

bureaucracy and additional costs (first and foremost the

for so long resisted the short-sighted and delusional mantra

cost of utilities especially energy). When necessary and

that industry is an obsolete economic activity and how

appropriate, public and private may become partners.”

Malta should focus exclusively on more glamorous activities,

ECONOMIC VISION 2014-2020: THE WAY FORWARD

“Our efforts to attract Foreign Direct Investment from the United States, China, India, Singapore and South Korea offer very exciting prospects and are beginning to bear fruit.”

The Prime Minister stressed that he believes Malta can

Dr Muscat also announced that there are positive indicators

become a global Mediterranean hub: “the last and

in relation to the Government drive to attract global

conclusive objective of the Chamber’s Vision document is

investment towards Malta: “our efforts to attract Foreign

namely that Malta should become the ‘Global-Mediterranean

Direct Investment from the United States, China, India,

hub and the preferred home for business’. I think we are

Singapore and South Korea offer very exciting prospects

showing with facts and achievements that this is where we

and are beginning to bear fruit. We will also continue

want to go and this is where we are going. The Chamber

to work on niches where the competitive advantage

is in a privileged position in this regard. Its presence on

of a presence in Malta for direct investors is not driven

the Board of Malta Enterprise, together with the General

mainly or at all by cost considerations but by specific

Retailers and Traders Union, enables it to have a steady

opportunities that impact on efficiency and the quest for

stream of grounded insights into the efforts, achievements

international markets. Opportunities don’t fall from the

as well as the difficulties we face on this country’s journey

sky. Opportunities are the result of navigating smartly in

of transformation. We agree with the Chamber that this

an uncertain international environment and to identify

journey is a process that ‘demands a planned, sustained

situations created by uncertainty itself. This is precisely how

and managed’ effort. Together, I have no doubt that we will

we are optimising our location advantages in a broad range

make it.”

of engineering-based niches, in the life sciences (where we successfully re-invented an expensive project that was

He made a strong appeal not to take anything for granted:

set on a deadly collision course with the real world), in the

“the journey is tough and the result is not guaranteed. We

more creative niches of information and communications

are, however, realistically optimistic, and with good reason.

technology (including synergies between ICT and the life

The European Commission’s 2014 Autumn Economic

sciences), in internet based services, in financial services, in

Forecast, published only three days ago, had this to say

higher education and training for the regional and European

about Malta: ‘economic activity in Malta continued to

markets, in innovative niches within aviation services, in the

outperform the weak growth in the EU in the first half

creative industries generally and the long neglected field

of 2014’. The report confirms that the Maltese economy

of international logistics where we cannot simply satisfy

‘continued expanding at a robust rate in the first half of

ourselves with having a vibrant marine Freeport.”

2014’. ‘Annual real GDP’, it states, ‘surprised positively and reached 3.2 per cent, up from 2.5 per cent for 2013 as a

The Prime Minister concluded his speech by asserting that

whole’. Moody’s, in its latest credit rating release, awarded

his Government “looks forward to continue working in

Malta an A3 status with a stable outlook. The agency also

synergy with the Chamber in the months to come”.

predicts that this sustained growth will continue to manifest itself throughout 2015.” 30 ECONOMIC VISION 2014-2020: THE WAY FORWARD

LEADER OF THE OPPOSITION

INTER VIEW Opposition Leader Simon Busuttil

ECONOMIC VISION 2014-2020: THE WAY FORWARD

‘We’re in favour of a liberal orientation towards business regulation’ The Economic Vision published by the Malta Chamber received a warm welcome from the public, and no less from the leading political powers of the country. Talking about Malta’s Economic Vision, the Leader of the Opposition Simon Busuttil declares himself in full agreement with the contents of the Economic Vision document, and says that the recommendations within it are consonant with those of the Nationalist Party’s economic policy. Nationalist Party Leader Simon Busuttil asserts that the

When asked which elements from the Vision he thinks

economic blueprint of the Nationalist Party will be based

Government should prioritise over others, Dr Busuttil says

on a set of core principles, namely a leaner, open and

that Government needs to demonstrate a more proactive

effective public sector imbued with professionalism rather

commitment because the economy of a small island-

than nepotism; a commitment to fiscal sustainability; a

state does not just run on its own and needs a proactive

liberal orientation towards business regulation coupled

Government to unleash its full potential.

with a stronger emphasis on the enforcement of a level playing field; investment in our fellow Maltese: their quality

“The Government’s

education, training, health and social safety net; a diversified

role is not to

investment policy with the European Union as core partner;

engage in economic

a renewed focus on the enhancement of product Malta;

activity,” Dr Busuttil

attracting foreign direct investment in areas where we have

warns “but to

a comparative advantage, and enabling Maltese-owned

favour a climate

enterprises to flourish and access new export markets.

that unleashes the country’s economic potential.”

ECONOMIC VISION 2014-2020: THE WAY FORWARD

“The Government’s role is not to engage in economic activity, but to favour a climate that unleashes the country’s economic potential.” Moreover, he argues, Government needs to curtail its shortcomings, most notably on political patronage leading to higher public sector wage bills and public debt; its inability to stick to committed timeframes and to a minimum of transparency in respect of its own energy plan; the loss of confidence in the manufacturing sector; as well as the causes of the sustained declines in imports, exports and industrial production that we have witnessed over the past 20 months. Asked whether he agrees with the analysis of business observers that the Chamber has put its finger on the right weaknesses, picking those particular areas in which the country is losing its competitive advantage – human resource capital, English and multilingual skills base, and agility through smallness, Dr Busuttil declares his agreement emphatically. “Malta needs to widen its educational and training services reach, while ensuring quality education and improving standards.” The Leader of the Opposition continues that Malta needs to improve its unique selling proposition to become more attractive for foreign investment while creating the best environment to enable indigenous, Maltese-owned enterprises to develop and access new markets. “Many of our enterprises are by their nature small or medium-sized and they do have nimbleness as a characteristic that they can use to flourish,” Dr Busuttil concludes.

34 ECONOMIC VISION 2014-2020: THE WAY FORWARD

INTERVIEW

INTER VIEW Economy Minister Chris Cardona

36 ECONOMIC VISION 2014-2020: THE WAY FORWARD

‘Sharing the vision that drives us forward to achieve economic growth’ The Minister for the Economy, Investment and Small Business Chris Cardona stresses that the Malta Chamber is a very important stakeholder for the growth of the Maltese economy: “the fact that the Chamber is being pro-active and coming out with its own recommendations is indeed something to be commended. This Government is very much in favour of the Chamber of Commerce and other stakeholders engaging with public policy and coming up with their own vision for the Maltese economy.” Economy Minister

says. “Hence, securing and maximising economic prosperity

Chris Cardona

for our people is an integral part of this Government’s vision

moves on to

– in fact, the policies we are developing are clearly driven by

analyse the

this Vision.”

recommendations made by the Malta

The Economy Minister also refers to the specific sectors

Chamber in the

mentioned in the Vision to achieve economic growth

Economic Vision

and agrees that financial services, ICT (Including digital

and says that

gaming), life sciences, maritime transportation and

overall they are

advanced logistics, aviation and advanced logistics and

very relevant to the present Maltese economic climate, as

manufacturing, among others, are all areas that should be

the main policy fundamentals on which the Economic Vision

developed to achieve economic growth.

is based are clearly shared by the Government. Government, Dr Cardona says, has been working on the “We definitely share the Vision that drives us forward to

development of an Integrated Maritime Policy, a National

achieve economic growth for all,” the Economy Minister

Logistics Policy and a National Digital Strategy aimed

ECONOMIC VISION 2014-2020: THE WAY FORWARD

at ensuring that Government, business and citizens are all seizing the opportunities of the digital age. “The Government’s role should be that of a facilitator and regulator, and in light of this we need to develop the right resources and environment to empower citizens so that they can be protagonists in our strategy to achieve economic growth for all.” While acknowledging that the recommendations within the Economic Vision will need to be discussed

FDIs to Malta, Dr Cardona states. Clusters are also being

with other stakeholders, Minister Cardona says that

encouraged whereby Maltese businesses and industry can

any recommendations which promote the country’s

eventually become service providers to the FDIs investing

competitiveness and growth will certainly be adopted to

here. This would enable them to expand operations and to

become an integral part of national policy.

reach out to new markets.

“This Government is very much in favour of the Chamber of Commerce and other stakeholders engaging with public policy and coming up with their own vision for the Maltese economy.”

With ‘access to finance’ in mind, Government is also supporting initiatives that provide alternative ways of finance by supporting enterprises both through new financial instruments and EU funds. Government is also taking on board another recommendation by the Malta Chamber which is one of the fundamental pillars of its pre-budget proposals for 2015. “The need for fiscal prudence,” the Minister says “is

Going into the specifics of the recommendations

of course essential, as the sustainability of the public debt

themselves, Dr Cardona says that Government is committed

directly impinges on the country’s competitiveness.”

towards strengthening Malta’s economy by seeking new

Minister Cardona also notes the importance of the

markets for business and industry while consolidating and

knowledge base of the economy, and clearly acknowledges

promoting those that are already in existence.

the need for investment directed towards education and training of the workforce. In the same vein he says that

“One area where we seek growth is exports. We are

suggestions with regard to the innovation infrastructure

conscious that this would include attracting new FDI

sector, such as establishing Malta as a Leading ‘Living Lab’

towards Malta, from Europe but also beyond. We are fully

Centre; stimulating innovation and research and; setting up

aware, as the European Commission forecast for autumn

a post-doctoral Research and Innovation Hub, are positive

2014 just confirmed, that the European markets are facing

and should be considered further.

troubled growth and thus, if we want to sustain our own growth and keep the levels that we have managed to obtain

“Any of the recommendations that would lead to the

thus far, we need to look towards markets beyond Europe,

enhancement of the Government’s strategy, as well as

in Asia and the United States in particular,” the Minister

those that encourage better performance, more efficiency,

claims.

less bureaucracy and increase the attractiveness of the country are certainly most welcome by this Government,”

The Government’s commitment goes beyond attracting

ECONOMIC VISION 2014-2020: THE WAY FORWARD

Dr Cardona claims.

INTERVIEW

INTER VIEW Shadow Minister for the Economy Mario de Marco

40 ECONOMIC VISION 2014-2020: THE WAY FORWARD

‘Private sector has to be the key driver of economic growth’ The Shadow Minister for the Economy Mario de Marco describes the efforts of the Malta Chamber at initiating a critical debate on Malta’s economic vision as commendable. Dr de Marco said that an Economic Vision for Malta 2014-2020 is made more relevant at a time when “despite a number of positive economic initiatives, our country seems to be suffering from a lack of concerted vision, a target of what we want to become as a nation, of the targets we seek to reach.” The Opposition Shadow Minister for the Economy Mario de

Dr de Marco, who has served as a minister responsible

Marco stresses that the country needs to ensure that the

for tourism and the environment in the last legislature,

private sector remains the key driver of growth. The days

believes that the Opposition is clearly in full accord with the

of Government-dependency are over. Government, through

Chamber’s Economic Vision with regards to need to further

the public sector, can provide the right incentives and

embrace fiscal prudence. A lesson learnt by many countries,

opportunities to facilitate this growth.

unfortunately in a very harsh manner, during the crisis is that financial stability is indeed essential to consistent

“Generally, the Opposition is in tune with the Chamber’s

economic performance.

propositions regarding economic growth,” Dr de Marco notes. “We are all in favour of initiatives which stimulate the

“Businesses are drifting away from countries which are

private productive sector through an economic stimulus

not financially sustainable,” Dr de Marco warns. “A sound

programme to generate growth and jobs. In particular, we

financial infrastructure is crucial not only to easing recovery

fully support the proposals which seek to increase support,

but also to instil confidence in the potential investor.

particularly through EU funds, to the private businesses

Stability and resilience have allowed the Maltese economy

in terms of access to finance, investment in research and

to continue to flourish despite the international financial

innovation, as well as investment in energy efficient or

crisis.”

energy producing technology.”

ECONOMIC VISION 2014-2020: THE WAY FORWARD

Photo: DOI - Clifton Fenech

Dr de Marco insists that human capital development

“Therefore, we support initiatives which foster human

remains of crucial importance to achieving objectives

development, coupled with incentives which encourage in

tied to economic growth. The results being reaped today

particular young people to cherish the possibility to move

in areas such as the pharmaceutical, the aviation and

up the value chain, thus being able to enjoy the better

the financial industries are all a direct result of years of

opportunities which our country is creating,” Dr de Marco

investment in education and training.

affirms.

“Generally, the Opposition is in tune with the Chamber’s propositions regarding economic growth.”

42 ECONOMIC VISION 2014-2020: THE WAY FORWARD

INTERVIEW

Positive local economic indicators despite fragile global economic recovery – Central Bank Governor Josef Bonnici The Governor of the Central Bank Josef Bonnici has words of caution on the present global economic situation. “The global economic recovery continues,” he says, “but it remains fragile and uneven. Lower potential growth in both developed and emerging countries – as well as the worsening of geopolitical tensions – has been weighing on the speed of economic recovery. Although six years have passed since the start of the crisis, there still remains the need for monetary accommodation. Central Bank Governor Josef Bonnici goes on to express

The Governor of the Central Bank states that this positive

his opinion on the economic situation in Malta, in view of

performance was also reflected in the latest labour market

the recommendations made by the Malta Chamber in its

data, which show that private sector employment in Malta

Economic Vision 2014-2020.

grew by around 3.1 per cent on an annual basis as at May 2014, one of the highest rates among the Member States

“Against this still fragile environment, the Maltese economy

in the Euro area. Domestic demand is the main factor

continued to outperform the Euro area average in the

contributing to the growth of the economy, largely due to

second quarter of 2014,” Professor Bonnici explains, “with

higher private consumption.

a real GDP growth of 2.7 per cent, against a 0.7 per cent growth for the Euro area as a whole.”

Professor Bonnici affirms that the Maltese banking sector is a major contributor to macro-economic stability and financial sector resilience. “Maltese banks remain among the

“Further reform is also necessary to improve the business environment in Malta and to promote business start-ups.”

most profitable and liquid in the Euro area. New measures to strengthen provisioning were introduced over the course of 2013 and these are expected to further strengthen banks’ balance sheets. Latest results from the Comprehensive Assessment exercise carried out by the European Central

ECONOMIC VISION 2014-2020: THE WAY FORWARD

“The alignment of wage growth with productivity growth is crucial for the economy’s competitiveness.” Bank have reaffirmed the soundness of assessed Maltese

and in particular with the recently adopted active ageing

banks,” he says.

strategy.

With regard to the fiscal aspect, Professor Bonnici quotes

However, quoting from the Malta Chamber’s Economic

the Economic Vision 2014-2020 of the Malta Chamber that

Vision 2014-2020, he says that in order to ensure the

claims that the long-term sustainability of Maltese public

long-term sustainability of public finances, Malta needs

finances is of great importance. As the debt-to-GDP ratio

to continue the ongoing pension reform, such as by

remains above the 60 per cent threshold, he claims, there is

introducing measures to support the ‘third pillar’, so that

currently limited room for countercyclical fiscal manoeuvres

the state pension is supplemented by private retirement

if they are needed.

funds. The sustainability of the healthcare system adds to the challenge in view of a projected increase in age-related expenditure. The public health system needs to be reformed so as to achieve a cost-effective and efficient use of available resources, including reinforcing primary care. “Moreover, given the relevance of education and training needs for the labour market, reform of the apprenticeship system is necessary. Early school leaving and basic skills improvement should also be considered, by implementing

“Although the level of public sector indebtedness is

the national literacy strategy. Continued efforts in

high, the risks appear contained,” he notes. “Exposure to

augmenting flexibility in working arrangements should be

international market volatility is very limited since public

pursued, so as to incentivise women to return to the labour

debt is almost entirely funded by local sources.”

market,” Professor Bonnici points out.

Professor Bonnici says that the Fiscal Responsibility Act, in

The Governor of the Central Bank once again expresses his

addition, introduced a balanced-budget rule in structural

agreement with the Economic Vision 2014-2020 published

terms, a debt rule, a three-year rolling budgetary framework

by the Malta Chamber, that further reform is also necessary

and the gradual establishment of a Fiscal Council. This

to improve the business environment in Malta and to

Council is charged with the oversight of the official

promote business start-ups, as indicated in the World Bank

macroeconomic and fiscal forecasts of the Government as

Report ‘Doing Business 2015’.

well as with the monitoring of the sustainability of public finances.

A number of stressed countries have gone through an internal devaluation that strengthened their external

The fiscal situation, however, remains exposed to

competitiveness and as a result they have already

vulnerabilities related to the slow pace of pension reform

experienced a modest export-led recovery. “Going forward,”

and the sustainability of healthcare.

he argues, “the Maltese economy needs to retain its competitive edge by further diversification into high value-

On the subject of pensions, the Governor of the Central

added economic activities. The alignment of wage growth

Bank says that shortcomings in the pension system are

with productivity growth is crucial for the economy’s

currently being addressed with labour market measures

competitiveness.”

46 ECONOMIC VISION 2014-2020: THE WAY FORWARD

INTERVIEW

‘Convergence with the Malta Chamber on economic growth priorities’ – Malta Enterprise Chairman Mario Vella Malta Enterprise Chairman Mario Vella has expressed his satisfaction that Malta Enterprise and the Malta Chamber are converging when it comes to Malta’s strategy on economic growth: “we are delighted that the 11 areas of potential growth, identified by the Chamber’s Economic Vision for Malta 2014-2010 coincide with those sectors and niches that Malta Enterprise has been actively and energetically promoting.” Dr Vella further illustrates Malta Enterprise’s views on each of the areas identified in the Economic Vision, starting with manufacturing saying that the Government’s commitment towards the sector has been renewed with unprecedented vigour. “In this regard, we take our advocacy role very seriously indeed,” he says. “We are for whatever can reasonably and sustainably be done to contain costs for industry with a view to preserve and to improve the cost competitiveness of Malta-based industry. Cutting energy costs for industry in March of this year will contribute significantly to this aim.” The Malta Enterprise Chairman says that the organisation is committed to playing a very significant role in the design and implementation of a national logistics plan, because this will contribute decisively to reducing costs for industry. “We are, in this field, already poised to promote whatever private investment will be required for the infrastructure of a bold integrated intermodal logistics upgrade of this country.” Protecting and enhancing the cost competitiveness of industry is only part of what needs to be done Dr Vella warns. “Not only do we advocate whatever measures and investment are needed to stimulate industry to undertake the Research and Development without which innovation is mere rhetoric. Unless we can compete also in terms of quality and innovation we will not last beyond 2020.”

With regard to financial services, Dr Vella says that although this sector is the remit of Finance Malta, the two organisations work and continue to work closely together when promoting Malta as a stable and profitable investment location. “More specifically we are eager to attract to Malta private equity funds with the means and the appetite to invest in feasible industrial projects in Malta especially those oriented towards regional markets. Access to finance is of strategic importance to industrial development and growth, and we are passionately engaged on this front.” Filming also has its own specifically dedicated Government organisation – the Malta Film Commission – however Dr Vella points out that Malta Enterprise is and will continue to be committed to support whatever it takes to enhance Malta’s capability as a filming centre together with capacity, up and downstream including the promotion of investment in post-production, sound studios and related education and training. “Our engagement with the promotion of Information and Communications Technology needs no introduction,” Dr Vella notes. “We are especially keen to promote direct investment in the more creative streams of ICT including the production of digital games, although we have learnt from costly decisions taken before my watch, which decisions could have been wiser if they had relied on deeper due diligence and closer monitoring. We are putting a lot of energy in promoting bio-informatics especially in view of the synergies that can be achieved with operators in the Life Sciences Park. The Digital Creativity Hub, is, in fact, located within the life sciences complex in San Gwann. We are also working closely with the institutions of higher education and training to ensure that investors in these fields will find suitable qualified resources.”

ECONOMIC VISION 2014-2020: THE WAY FORWARD

Focusing on the Life Sciences Park itself, Dr Vella says that the building is practically complete and will shortly begin to welcome the first occupiers. The complex is set to host a healthy mix of operators, from important global players to examples of Maltese excellence in a variety of specialisations.

of transforming Malta into the Mediterranean region’s premier logistics hub and, finally, because the infrastructural development required to turn this national project into reality will act as a tremendous multiplier for industry and services in Malta, including state-of-the-art knowledge based activities.”

“Never before has Malta Enterprise and the Malta Chamber cooperated so closely.”

Malta Enterprise will also continue to support the consolidation and further development of MRO aviation services. The already impressive national capability in the maintenance, repair of large aircraft and overhaul repair and testing of helicopter engines, can be further developed. Forty years of experience in this field is a great foundation in a very competitive field where quality matters absolutely.

Most of the operations at the Life Sciences Park will synergise with the health services sector, an area that sees Malta Enterprise cooperating very closely with the Ministry and the Parliamentary Secretariat for Health. Malta Enterprise, Dr Vella explains, has been entrusted with a leading role in the effort to develop Gozo into an international hub for medical and health services including medical education. An excellent relationship with the Bart School of Medicine and Dentistry at Queen Mary University London has been established, and their involvement in this project is soon to be finalised. On the maritime sector Dr Vella says that Malta Enterprise is in the advanced planning stage of an investment promotion campaign aimed at northern Germany and focused on engineering industries providing industrial products and services to the marine industry. “We think it is time we moved forward to a series of intimately related niches in a sector that we seem to have thrown away with the bath water (and indeed the bath tub too) with the end of the Dockyard. It is an area where high value added, research and development, and technological innovation are the rules of the game.” “Logistics is one of our major focal points for the next five years at least,” Dr Vella remarks. “I have already spoken of our active support for a path breaking national multimodal and integrated logistics plan. Our interest is driven by the absolute imperative of providing industry and services with first class logistics solutions, by the objective

50 ECONOMIC VISION 2014-2020: THE WAY FORWARD

Dr Vella also pledges Malta Enterprise will work even more closely with MTA to support the tourism industry in any way it can. The organisation’s role is especially important in the case of promoting investment in projects that will generate medical tourism. “Malta Enterprise’s menu of investment promotion targets has been enriched to include top foreign institutions of higher learning and research with an interest in operating in large markets,” Dr Vella states. Malta is well placed, geographically and culturally, to penetrate the Mediterranean regional market for advanced education and training in areas such as medical and health care, business education and engineering and infrastructure. The whole region (North and South) accounts for around 450 million persons of which 150 million are in the South where populations are young. Results so far are more than encouraging. In conclusion, Dr Vella notes the excellent relationship between Malta Enterprise and the Malta Chamber of Commerce, Enterprise and Industry, and that actions speak louder than words when it comes to cooperation between the two. Specifically referring to recommendation 32 of the Malta Chamber’s Economic Vision, he says “the two sides have been working to set up Trade Malta and will soon see it come on stream. Never before have Malta Enterprise and Chamber cooperated so closely,” Dr Vella concludes.

INTERVIEW

‘Malta has grown in stature’

– University Rector Juanito Camilleri

I am grateful that the Malta Chamber of Commerce, Enterprise and Industry gave me the opportunity to participate and contribute in the discussions that led to the formulation of the Economic Vision for Malta 2014-2020. Above all, I believe Malta must remain a safe and attractive

economically; in the wake, becoming more relevant and

place to visit, live and educate our children in, and work

visible on the global stage. Although ‘European’ is who we

from. If we lose that on the altar of economic growth, we

are, and ‘Mediterranean’ is where we physically live and

lose the plot!

work, our vision must be global, our standards world-class. From our European and Mediterranean vantage, it is crucial

A decade after Malta’s membership in the European Union,

that Malta continues to project itself globally, providing

it is undeniable that our country has grown in stature and

a key into this region for those outside, being a trusted

has benefitted tremendously, both culturally as well as

neighbour and business partner for those within.

ECONOMIC VISION 2014-2020: THE WAY FORWARD

We live in a world undergoing profound change: global

mechanical systems will yield the proliferation of minute

demographics and economic developments are shifting

devices capable of computing, telemetry, control and

market foci eastwards towards Asia. The recent economic

communication. The sheer wave of innovation that is in

crisis has left its dent on the European psyche, not to

store, in all spheres of life, but particularly in the life and

mention its coffers. Our Mediterranean remains politically

health sciences sector will be staggering. Malta must invest

charged, our neighbours to the south remain in turmoil.

much more in Research and Innovation, much more in its

The impact of climate change in the next two decades

emerging research community, much more in knowledge-

will exacerbate migration patterns; much effort must

based entrepreneurship. Failure to do so now will cripple

be invested to help us adjust to the inevitable wave of

our economic prospects.

multiculturalism. Our economic positioning will depend on our ability to read the tea-leaves of our time, in a timely

As we project Malta on the global arena, it is crucial that

fashion. With foresight and flexibility we can mitigate risk

our workforce and our society become more global in

and create opportunities.

outlook. We should never shy away from attracting the very best talents to our islands, but in tandem, we should

Maintaining an adequate and affordable infrastructure for

make sure that our local talent becomes more world-savvy,

energy, water and transportation as well as preserving our

more proficient in other languages, and conversant with

environment – both urban as well as rural – remain a matter

other cultures. Our youth must travel more, and must get

of priority for a small island which is increasingly challenged

to know the world first-hand. We need to foster in them

by population density and lack of space. Managing our

an optimistic world-view of our little islands, rather than, a

physical resources – eg our coast, ports, land, roads,

little-island view of the world!

ecology, heritage – in an integrated and coordinated fashion is crucial. Our connectivity and accessibility by land and

In this context, perhaps more so than a redrafting of its

by sea are of utmost importance. The creation of extensive

curriculum, our education system needs a fresh outlook,

‘value-added warehousing’ services in a zone encompassing

an overhaul of its underlying value-set. Our youth must

the Freeport and air-cargo terminals is a prospect that

measure up – not only academically, or skills-wise, but, also

should be pursued now, as we should seek to further

in terms of work-ethic, aptitude and attitude – with their

enhance Malta’s relevance as a regional trade and logistics

counterparts around the globe. I believe we must stop

centre.

pandering to a culture of entitlement. Instead, we must promote a system of meritocracy and create a climate of

“As we project Malta on the global arena, it is crucial that our workforce and our society become more global in outlook.”

empowerment.

In the next decade, the digital economy will continue to grow, computation power will continue to double every 18 months or so, access to gigabit internet connectivity will become a commodity, and more and more of our daily activity will shift online. This, together with the rapid advancement of nanotechnology and micro electro-

ECONOMIC VISION 2014-2020: THE WAY FORWARD

INTERVIEW

‘Social partners are instrumental for securing Malta’s Economic Vision’ – MCESD Chairman John Bencini The Chairman of the Malta Council for Economic and Social Development (MCESD) John Bencini believes that the Economic Vision document produced by the Malta Chamber has achieved a high degree of credibility since it is the product of the work of 20 leading Chairpersons and CEOs in the country, and the Rector of the University, adding that “these people know what they are talking about,” as they are experts in the field. “Malta definitely needs an economic vision which is shared

recommendations covering a wide range of sectors require

by all stakeholders, if it is to achieve the targets set within

further discussion.

the Europe 2020 strategy,” Mr Bencini asserts, and “this is the overall message of this Economic Vision.”

Referring to it as an important and practical document, the Chairman of the MCESD expresses his certainty that social

More specifically about the role of the social partners within

partners, that have all supported the Chamber’s Vision,

the MCESD, Mr Benicini says that they have indicated that

would continue to give their valid contribution and it is

they are willing to contribute towards the success of this

envisaged that technical working groups will be established

Vision.

to discuss the six fundamentals and recommendations within it.

“In fact, the Malta Chamber had the opportunity to present its Economic Vision to all the social partners at an MCESD Council meeting held on 1st September, 2014, during which it was evident that all the social partners, employers, unions, the civil society and the Gozo Regional Committee expressed general agreement.” Mr Bencini continues that

“It was evident that all the social partners, employers, unions, the civil society expressed general agreement.”

it is also clear that the Economic Vision and its 52 practical

ECONOMIC VISION 2014-2020: THE WAY FORWARD

INTERVIEW

INTER VIEW MARKET LEADERS

ECONOMIC VISION 2014-2020: THE WAY FORWARD

INTERVIEW

Imperative that Malta maintains economic growth and curbs public debt Leading business personalities Louis A. Farrugia and Winston J. Zahra were among the signatories of and contributors towards the Economic Vision 2014-2020. They share their thoughts on how Maltaâ&#x20AC;&#x2122;s economy and industries can thrive and flourish if the correct long-term goals are in place and set in motion.

Photo: www.viewingmalta.com

ECONOMIC VISION 2014-2020: THE WAY FORWARD

INTERVIEW

Louis A. Farrugia is Chairman of Simonds Farsons Cisk plc. He previously occupied the role of Chairman of Air Malta and the Malta Tourism Authority. He has an active role in business and product innovation and growth opportunities both in Malta as well as overseas.

“Malta’s long-term economic vision should aim to continue expanding our economy within the strategic objective of having a diversified economy with a number of pillar sectors, namely tourism, manufacturing and service sectors including financial, gaming, maritime and aviation. In addition, Malta should increase its role as a logistical hub for both sea freight and air cargo by encouraging further air links to North Africa and the Middle East. It is imperative that Malta maintains its growth rate and controls its debt levels to ensure a robust economy that allows Government to maintain its social responsibilities towards the health and educational sectors, as well as to support the lower paid citizens and the growing numbers of the elderly. Malta must also increase its credentials as a ‘good place to conduct business’ by addressing the less business friendly restrictive requirements as well as by maintaining its important strength as a ‘safe place to live’. The Chamber should continue to advocate Government measures which will result in making Malta more competitive. Private initiative should be encouraged as the engine of economic growth.”

ECONOMIC VISION 2014-2020: THE WAY FORWARD

INTERVIEW

Winston J. Zahra is Chief Executive Officer of Island Hotels Group Holdings Plc. He has occupied various posts on national and private boards over the years, including the HCEB – the main board of the Malta Tourism Association, Malta International Airport plc and the Malta Transport Authority. He is a past President of the Malta Hotels and Restaurants Association.

“A clear, long -term vision is critical for the Island. It is only by having this in place that everyone, and most especially private industry, can take better decisions which fit into the overall direction being taken by the country. However, a stated vision in itself is not enough. What is needed is full political consensus on the long-term vision and a clear commitment to action plans that ultimately lead to the achievement of that vision. I believe Malta is very well positioned to take a quality leap in the tourism industry. We have a jewel of an island but we need to ensure that we put the right master plan in place for the overall development of our product and create a clear brand around it. Malta can be a centre of excellence in tourism as long as there is a clear strategy for moving forward and everyone makes the necessary effort to raise the bar on the overall product and service offering. If we do that within the next few years, we can be an island destination that rivals the very best. I think that the Chamber’s Economic Vision is a step in the right direction. What we need to see now is a determined effort from all parties concerned to implement a clear plan of action to ensure that this vision is brought to fruition.”

62 ECONOMIC VISION 2014-2020: THE WAY FORWARD

INTERVIEW

Mark Watkinson, CEO HSBC

â&#x20AC;&#x2DC;We now have a blueprint for implementing a long term planâ&#x20AC;&#x2122; Mark Watkinson, the Chief Executive Officer of HSBC Malta and leading management consultant David Spiteri Gingell share their thoughts on the process, compilation and forward-thinking aspirations of the Economic Vision for Malta 2014-2020. ECONOMIC VISION 2014-2020: THE WAY FORWARD

Mark Watkinson, the

Leading management consultant David Spiteri Gingell

Chief Executive Officer

believes that every country should have an economic

of HSBC Bank Malta

focus and vision, and this is exceptionally significant for

who has over 30 years’

Malta given our limited resources. “Malta cannot afford to

experience in financial

adopt a ‘scatter gun’ approach, but rather must determine

services with HSBC,

where it wants to be and position itself accordingly. Malta

believes that bringing

is rightly recognised as a knowledge economy, and did not

together key industry

achieve this by default. It was a 20-year journey based on a

leaders and stakeholders

vision set in 1989, which demanded major transformation in

to develop an economic

legislation, technology, communications and mind set.”

vision for Malta was an excellent achievement

To his belief, Malta is at a critical juncture both in its

by the Chamber team

economic and social development. “The Euro crisis will

under the leadership of

result in a far more competitive southern European

David Curmi. “From the

zone. Ironically, I believe the fact that Malta successfully

outset, HSBC was keen to contribute to the venture and to

weathered this crisis has done us a disservice and created a

help look for opportunities that could be leveraged to drive

sense of belief that we can continue the way we are. It is my

economic performance,” says Mr Watkinson.

considered opinion that this would be a strategic error,” he affirms. “For far too long, Malta has shied away from taking

“The Economic Vision is a blueprint for implementing

decisive actions – whether these relate to competitivity,

a long-term plan towards achieving greater economic

productivity, research and innovation, or looming ghosts of

prosperity in a sustainable manner. To truly be successful

Christmas past such as pensions and long-term health care.”

and achieve this, it is necessary to ascertain where we can succeed by developing a distinct competitive advantage

Together with the then Federation of Industry, Mr Spiteri

and adding most value. The plan seeks to achieve this by

Gingell led the design of the 2007-2010 National Strategy

not just identifying the key focus areas, but also by putting

for Industry, as well as other national strategic reforms

forward concrete recommendations and proposals on

in various sectors namely IT, research, innovation, and

what needs to be done,” he says. “One of the most exciting

pensions, among others. “I therefore felt I could add value

opportunities, and an idea strongly supported by HSBC, is

to this important initiative. It was a privilege to be invited

to make the most of Malta’s geographic position, a bridge

by the President of the Chamber of Commerce, Enterprise

between Europe and North Africa and only six miles away

and Industry to play a role in the shaping of the Chamber’s

from one of the world’s busiest trading routes linking

Economic Vision.”

Asia, the Middle East and Africa, and to develop Malta as a trading and logistics hub. This idea was adopted in the

Throughout the process of debating and compiling the

recommendations.”

Economic Vision, Mr Spiteri Gingell explains that the macroeconomic challenges and fundamentals were, more or

Mr Watkinson adds that HSBC remains committed to

less, consistent among all economic groups – though there

working with all stakeholders in a coordinated manner for

may have been different biases between the needs of each

the benefit of Malta’s future, “and we see our involvement

group.

and contribution towards developing the Economic Vision as an important part of this journey.”

“Malta’s economic and social prosperity demands that we excel in what we do, that there is a level playing field, that

66 ECONOMIC VISION 2014-2020: THE WAY FORWARD

David Spiteri Gingell, Leading Management Consultant

productivity increases, that we continuously up-skill human

were focus groups with each economic sector represented

talent, that we are competitive, that we remove bottlenecks

by the Chamber and one-to-one meetings which led to

in the economy, that we fester with long-standing macro

the drawing up of a ‘straw man’ document as a baseline

challenges such as health, pensions and long-term care, that

document to focus subsequent discussions on. A series of

we foster a culture of work ethic and that we have a public

workshops were held with all of the Chief Executive Officers

administration that is pro-business and able to provide

and the Chamber which resulted in what I believe to be a

leadership to the country,” says Mr Spiteri Gingell. “To a

forwarded-looking and balanced strategic vision.”

large extent, this is what the Economic Vision sets out to do. It establishes the direction of how we seek our economy to

Mr Spiteri Gingell concludes that Malta needs a vision

evolve by 2020, and the fundamental changes that Malta

and, equally important, needs the undertaking of

must courageously and unwaveringly adopt.”

strategic reforms to ensure that that vision is attained. “The Economic Vision provides for the first prerogative.

Asked to comment about the process of managing to

Government, the Opposition, society and business must

successfully reconcile everyone’s contributions and put

now get together and establish a consensus for the

the final document together, Mr Spiteri Gingell says “the

strategic reforms necessary, and embark upon them

process the Chamber adopted was an iterative one. There

accordingly.”

ECONOMIC VISION 2014-2020: THE WAY FORWARD

INTERVIEW

THINK TANK Photo: www.viewingmalta.com - Malcolm Debono

70 ECONOMIC VISION 2014-2020: THE WAY FORWARD

Implementation of the Economic Vision can boost Malta’s international status, rank and weight Five contributors share their thoughts on the current status and future of their industries, and how they stand to be improved by the Economic Vision. Playmobil Malta’s Chief Operations

required to ascertain the present and future of the

Officer, Matthias Fauser, says the

manufacturing industry in Malta – which the Economic

Economic Vision came at a very

Vision recognises as a key economic pillar for Malta in the

appropriate time for Malta as well

years to come.”

as the manufacturing industry. Mr Fauser is also head of the

Mr Fauser says that the Industrial Policy stems from

Manufacturing Economic Group

the need for Malta to dedicate more attention to the

within the Chamber of Commerce,

needs of manufacturing, to ensure its competitiveness

which was responsible for the

and the country’s attractiveness for investment in this

launch of the Chamber’s Industrial Policy, which forms part

area. “Manufacturing, though still strong, is facing

of the Economic Vision.

structural challenges when compared to other sectors in the economy,” he asserts. “While prospects are still

“It was my role to ensure that the Industrial Policy and the

moderately good, the industry needs to urgently address

Economic Vision documents were perfectly in tune,” says

some fundamental structural issues which neighbouring

Mr Fauser. “The Economic Vision is aimed at providing the

countries such as Spain and Greece have been dealing with

necessary blue-print for public and private sector decision-

successfully, and will eventually pose a competitive threat if

makers to take on board when planning their investments

nothing is done from our side.”

and resource allocation, while the Industrial Policy establishes a timetable to set in place the fundamentals

ECONOMIC VISION 2014-2020: THE WAY FORWARD

Chief Executive Officer of Bank of

interpretation of new rules and regulations for the financial

Valletta plc, Charles Borg, speaking

sector. In conclusion many areas raised in the Economic

on behalf of his contribution to

Vision are most critical for Malta to improve its status, rank

the Economic Vision, says that

and weight internationally.”

looking back, the Maltese economy was successful and remained

Kevin Valenzia, Territory Senior

resilient because the policy makers,

Partner at PwC Malta, says that

regulators, financial institutions

having a common vision agreed to

and the industry itself managed to

by all the relevant stakeholders is a

identify the key areas of growth and invested in them. “At

critical element for the continued

the same time, we nursed very carefully those sectors that

success of Malta’s economy. “We

were going through a difficult period. However, in order

have always taken advantage of the

to move forward we have to identify those sectors that

flexibility and nimbleness that our

will be relevant for our economic growth, which need not

size gives us, and need to continue

necessarily be the ones that we have today.”

to do so. The international arena is fiercely competitive, and we need to make good for our

Mr Borg believes that this exercise was important, because

relatively smaller resources, through increased cooperation

the analysis and recommendations made came directly

and communality of purpose,” he explains. “Implementation

from the people on the ground and those that are directly

of the recommendations in the Economic Vision for Malta

involved in the day-to-day operations. “We have to ask the

2014-2020 is not something for the Government to do alone

important question ‘where does Malta want to be in 5 to 10

– it requires as much commitment and effort, if not more,

years time and how best to get there’. The secret of success

from the private sector and other interested parties.”

is always in the implementation of some or all of these recommendations. The financial sector continues to play

As one of the members of the think tank set up to assist

a very important role in shaping the Maltese economy and

the Chamber in drawing up an economic vision for Malta,

therefore it has to remain on the Government’s agenda for

Mr Valenzia says “I found it to be a very interesting process,

the years to come.”

with very little divergence in the views of those taking part in the process.”

Having been involved predominantly in the development of the financial

Similar sentiments are echoed by Christine Pace, Director

sector, Margrith Lütschg-Emmenegger,

of Dorkins Ltd and Fashions Ltd, who says that her

President of FIMBank Group, asserts

contribution to the Economic Vision was a very positive one.

“it is most critical to understand that

“We discussed the current situation in the retail industry –

unless many areas of concern are

we are close to saturation point and so need to work hard

addressed, the financial sector will also

to keep this going while also leaving room for newness by

not be able to grow and increase its

always improving on what we have already, and by making

reputation, visibility and significance.”

sure that we improve the quality in new commercially-

The areas which need to be addressed most urgently,

priced retail.”

she believes, are “education, meaning more international awareness and expertise; environment, therefore

Mrs Pace adds that it is crucial that Government works hand

addressing roads and their cleanliness, air connections and

in hand with retailers to propel businesses forward, “and

unfinished buildings among others; and regulations, that is,

to make sure we are all working and competing on even

ECONOMIC VISION 2014-2020: THE WAY FORWARD

ground. Liberal trading is important,

impact assessments of all newly introduced measures. The

but being such a small market,

National Competitiveness watchdog would ensure that

we also need to find some sort of

the productive portion of the economy is not hampered

common ‘discipline’ to protect our

by new measures, regulations and taxes that impact on

investment, and the large numbers

competitiveness.”

of employees working in this sector.” Photo: www.viewingmalta.com - Pauline Dingli

In relation to his expertise on the manufacturing industry, Mr Fauser highlights the most urgent and important recommendations made by the Malta Chamber in its Industrial Policy. “Top of the list is Investment Support in relation to investment tax credit which will be phased out for large enterprises. This risks making investment in Malta unattractive. Practical solutions, not subsidies, are urgently needed that will keep Malta attractive for investment. These may possibly include a review and update of the Malta Enterprise Act and Business Promotion Act.” Secondly, he says transport and logistics to and from Malta are becoming among the most significant challenges for the economy. “Our geographical position at the outermost region of Europe poses a permanent handicap on our industry. This reality imposes a strain on our competitiveness and therefore we need to ensure that our logistics costs are kept in check and sustainable to compete with mainland Europe. This situation is further compounded as the attempted port reform of a while ago did not make the desired impact on the cost of production and this continues to aggravate the uneven playing field for Maltese manufacturing in comparison to other countries in the internal market. An international benchmarking exercise should bring this issue to the surface.” The third priority for industry is the reform in the Cost Of Living Adjustment (COLA). “There also exists an urgent need for a clear definition of the term ‘Exceptional Circumstances’ which is already contemplated in the law. The definition would allow an automatic triggering of mitigating factors for COLA, should the need arise. Lastly, the Malta Chamber is proposing that a National Competitiveness Watchdog be installed to ensure economic

ECONOMIC VISION 2014-2020: THE WAY FORWARD

BUSINESS UPDATE

– Vodafone CEO Amanda Nelson

Photo: Rene Rossignaud

Economic growth needs to be supported by a strong communications sector Vodafone Malta CEO Amanda Nelson, previously commercial director of Vodafone The Netherlands, shares her views on Malta’s Economic Vision. In an interview, Ms Nelson asserts that it is critical for the communications sector and the development of Malta’s economy to work in tandem.

On a macro level, what is your vision for Malta’s economy in the medium to long term? It is clear that over the last couple of decades Malta’s economy has been transformed from a traditional and closed economy heavily reliant on manufacturing and sun and sea tourism into a more open economy that has carved out successful niches in new sectors, particularly financial services, ICT and gaming. Going by the FDI that has been attracted to Malta in these sectors this transformation has taken root and Malta can and does compete well with other markets in these areas. As in everything else, however, complacency can spell disaster and in a world where economies are increasingly driven by technology that changes at the speed of light I believe that the key to Malta’s economic growth over the next five years will be to remain as agile and innovative as possible. These are both attributes where the island’s size can be an advantage rather than a disadvantage. Focusing specifically on the communications sector, what are your thoughts on the evolution of such a vital sector in Malta? How do you see the communications sector further evolving over the coming years? Quite frankly I do not see how the transformation I just mentioned could have taken place at all if a strong telecommunications infrastructure had not first been established in Malta, and if this infrastructure had not evolved pretty much in line with the technological advances in this sector in other developed economies. I think that on the whole telecommunications in Malta has managed to keep abreast of the fast-moving developments in mobile technology. As CEO of Vodafone Malta I am very proud that Vodafone was instrumental in this process and we are responsible for all the key milestones in the evolution of Malta’s telecommunications capability, from the very first GSM call made in Malta in the 1990s up to our launch of 4G in 2014. 76

ECONOMIC VISION 2014-2020: THE WAY FORWARD

How can the communications sector on one hand and macro economy on the other work in tandem i.e. can economic growth accelerate further advances in the communications sector and on the other hand can further advances in the communications sector facilitate economic growth? It is critical that they work in tandem. Mobile technology has clearly become a cornerstone of the global economy, not only as an industry in its own right but also as a driver of ongoing diversification and development in every other sector. Let me put it this way. In this competitive global economy, practically every business with very few exceptions must join the digital economy to some degree or face extinction. Economic growth will therefore depend on being supported by a strong communications sector that can provide the necessary infrastructure to drive digitisation. It is vital that policy makers recognise this crucial link and ensure that the right conditions are in place to allow the local communications sector to consistently reach its full potential. In your opinion which are the critical sectors that Malta should focus on to accelerate and consolidate our economic growth for the years to come? In my view there should be a sustained focus on the sectors that have grown so successfully over the last decade, including financial services and ICT, where the next step should be to tap into opportunities to export services to the international market. This expansion overseas will be highly dependent on achieving the right levels of innovation, which also means supporting entrepreneurship in a direct and tangible way. With very high speed data communication and advances in Cloud computing at our disposal, policy makers should be doing their utmost to maximise the potential of the Internet which has so effectively removed Malta’s physical barriers. But we have to start now to encourage today’s entrepreneurs to think big – this needs to be embedded into the education system from primary right through to tertiary levels.

BUSINESS UPDATE

Microsoft – a partner to Malta for over a decade

Adrianna Zammit, Country Manager, Microsoft Malta & Cyprus

Since 2003, Microsoft has been a partner to Malta, supporting its strategy in IT and contributing towards making Malta a regional centre of excellence. This was done through a number of initiatives but most importantly it leads with a primary foundation to attract, invest in and develop the best people in the market, supporting them to grow exponentially as individuals and within the company.

Though Malta might be small in size compared to other EU countries, it comes with its opportunities to serve as a lighthouse country for various nationwide initiatives that impact the lives of its people. Within the last year various education programmes, donated software and trainings have been carried out across the country, giving each student the tools they need to be competitive as they enter the workforce.

Nearly two years ago, the Microsoft Innovation Centre (MIC) was also launched. This was a sizeable investment by the company and local partners. This innovation centre is one of 120 around the world and it has had a pivotal role in the local community. The MIC has been very active through countless events with students, teachers, entrepreneurs, developers and innovators. Since its opening, it has trained over 2,000 teachers and nearly 1,500 students, helping to bridge the digital divide between our students and the workforce. It has driven awareness and education in cloud technology, bringing the latest technologies to the country. In addition, the MIC is currently supporting over 50 startups, bringing innovative ideas to the market. Moving forward, Microsoft Malta will be focused on continuing to enable our youth for success, driving economic growth, and on being leaders in the EU for hybrid cloud environments, both in the government and commercial sectors.

Your unique event at award-winning Valletta Waterfront Old Power House: The original building was built during the construction of Floriana’s fortifications in the 1700s. This building offers a fascinating layering of spaces and reflects the multiplicity of activities forming part of Malta’s Grand Harbour over the centuries. Under the Stars: The possibilities are endless – the open-air venue is an artistic blank canvas with the Grand Harbour as a backdrop on one side and the Valletta Waterfront buildings on the other. Whether it is for a wedding or a concert, the location is breath-taking.

Located centrally within walking distance from Valletta and a 15 minute drive from the airport, Valletta Waterfront offers the perfect backdrop for a wide variety of events, with flexible indoor and outdoor options. The Promenade: A 275-metre strolling promenade, a favourite site for promotional launches and cultural events, offers the perfect staging for corporate and private events. Magazino Hall: Renowned for its versatility, Magazino Hall proudly displays its historical features from a glorious past. There is an impressive arched ceiling and the yellow limestone glistens with the cast of soft lighting. An adjoining outdoor courtyard is convenient for use as a breakout area or as a stand-alone venue. The venue can comfortably accommodate 500 persons.

Under the Marquee: Located on the Valletta Waterfront quays, the marquee offers protective cover for up to 1,430 persons in a uniquely magical location. The Sagrestia Vault: Annexed to the 17th-century vault, the Sagrestia Vault is a small but beautifully-detailed chapel dedicated to the Flight of the Holy Family to Egypt. In combination with the Sagrestia Vault, the Chapel can be utilised as a receiving area. Parking for coaches, minibuses and private cars is readily available for all venues. For further details or to view any of the venues contact Anna Maria Cardona Schranz on T: 2567 3114 or E: amcardonaschranz@vallettacruiseport.com

ECONOMIC VISION 2014-2020: THE WAY FORWARD

BUSINESS UPDATE

Helping local companies expand their international business Malta is at the crossroads of contrasting economies, cultures and natural environments. Its strategic location on the cusp of Europe and Africa has attracted visitors for years. Building on this unique geographical advantage, we launched the Malta Trade for Growth (MTFG) initiative to encourage Malta-based companies to expand their international business. Through the initiative, we have offered a range of incentives specifically designed to help companies bolster their international portfolio. HSBC Maltaâ&#x20AC;&#x2122;s drive to encourage and support international trade continues and we are actively considering a further multi-million injection to the initial Â¤50 million MTFG fund. Additionally, as an emerging markets-led and financingfocused business that provides tailored financial solutions

to government, corporate and institutional clients worldwide, we at HSBC Global Banking and Markets serve our clients by teams that bring together relationship managers and product specialists to develop financial solutions that meet individual client needs. Malta today is ranked as one of the most stable economies in the region. This is a result of prudent, long-term vision of transforming the destiny of the country. Importantly, this vision has allowed Malta to serve as a reliable and trusted centre of excellence on the international stage for years to come.

Get me out of this traffic jam! By Mark Bamber, KPMG Partner One of the visible burdens on our mobility is clearly the prevailing extent of traffic congestion. In itself, traffic reflects both good and bad realities: it makes us arrive late at work, and stresses us out before we even get there. Deliveries do not arrive on time, and the higher consumption of fuel costs money. However, to a certain extent, congestion is an indicator that a lot of people have jobs to travel to, that consumers are buying goods that require delivery, itâ&#x20AC;&#x2122;s also a direct consequence of multiple road works, which are a visible investment in upgrading our road network. While gridlock is clearly an irritant in our daily lives, our Minister of Finance has rightly pointed out that traffic congestion exerts an impact on our economic prosperity. The economic costs of traffic are obvious: travel delays imply monetary costs, and increased impact on our environment. Vehicle running costs increase as a result of travel delays (driving in slow traffic leads to increases in fuel consumption), and the aggregate cost of small collisions, minor scrapes and scratches adds up. Traffic jams reduce the commercial speed of public transport, making it less efficient and thus less attractive. These are physical costs, but we also need to take into account that when we are stuck in traffic, there is less time for us to do something productive, resulting in an opportunity cost.

ECONOMIC VISION 2014-2020: THE WAY FORWARD

Studies in the USA have found that traffic congestion slows the rate of job growth in urban regions, while there may be a more tenuous relationship to productivity growth. An assessment in continental Western Europe has also attributed an increase in particulate matter to traffic, leading to respiratory and cardiovascular hospital admissions, and a higher incidence of bronchitis and asthma attacks. The public health consequences were found to be considerable. The environmental costs are also material. The potential solutions are varied, and range from measures requiring additional investment in transportation infrastructure, to initiatives to induce greater adoption of public transport, to measures (whether motivational or fiscal instruments) aimed at reducing private car utilisation. Additional investment is always a difficult challenge to a Minister of Finance, but there can be solutions using Private Public Partnerships and Private Financing Initiatives that alleviate the burden on the public debt. Efficiency is often seen as a corporate concern, but in truth, small efficiency gains in mobility would be of benefit to the whole of society.

BUSINESS UPDATE

Hilton Malta – the island’s ultimate hotel venue

Distinctly Mediterranean, with a strikingly modern twist, Hilton Malta offers style, comfort and hospitality for which the Hilton brand is renowned. With remarkable views of the Mediterranean, the 410 rooms and suites available offer the discerning guest unrivalled relaxation and luxury. And with no less than four outdoor swimming pools, two paddle pools for children, an outdoor Jacuzzi, private beach club, water sports facilities, diving centre, the LivingWell Health and Fitness centre, and casino next door to the hotel, there is much to entice all manner of guests. Hilton Malta offers a range of different meeting and event options supported by the hotel’s highly trained events team. ‘Hilton Meetings’, the company’s branded meeting standard guarantees assistance and that full support services are always close at hand. The fully equipped Business Centre and Portomaso Suite offer an extensive range of meeting options and are ideal for any meeting capacity from 2 to 1,330 delegates, whilst the Hilton Malta Conference Centre is a first-class, state-of-the-art venue capable of hosting much larger events.

Is your Business READY? By Heidi Jensen As Vittorio Colao, Chief Executive of Vodafone, has remarked “technology is changing the way we do business”. Our businesses are constantly being challenged by this rapid change and we can find it hard to keep up with systems that are forever improving and changing the way we work. The truth is that continuous transformation is today the new normal. With 50 per cent of decision-makers considering making a flexible workforce a high priority and 75 per cent stating that data security will be a high priority within the next three years, 82 per cent are already searching for solutions that prioritise data security for remote workers. These are the challenges that businesses must face to get their business ready for the challenges of today’s market place.

The Grandmaster’s Suite in the Hilton Malta Conference Centre is extremely versatile and multi-functional. This imposing suite can take up to 1,330 seated in theatre-style and has a tiered balcony with 230 seats. The magnificent stage is ideal for a wide range of presentations and also has a lift, which can carry heavy equipment, including a car, at just the touch of a button.

Vodafone has risen to this challenge by ensuring that its workforce is not only connected and flexible but also secure. The technologies that have been implemented companywide have ensured operational agility as well as better connected employees. This is resulting in a better overall customer experience. The internet speeds reached on 4G together with the right security systems have allowed for such a flexible and secure working space.

The Centre also offers a multi-purpose hall and eight syndicate rooms. There is extensive pre-function space and ancillary space for exhibitions and catering for all sizes of event.

Through its own experience, Vodafone has set up a new site www.readybusiness.com.mt that provides businesses with the opportunity to transform their business into one that is ready to embrace new technologies.

Whether for business of pleasure; meetings or conferences – Hilton Malta is the island’s ultimate hotel venue that blends impeccable service and hospitality with every kind of comfort and modern facility in the luxurious Portomaso development on the beautiful island of Malta.

Our expertise in the area will guide your business in order to find the right solutions for your particular business, ensuring the best technologies on the most secure and reliable network. For more information visit www.readybusiness.com.mt

ECONOMIC VISION 2014-2020: THE WAY FORWARD

BUSINESS UPDATE

Presenting the Premier Cut Diamond Collection Buying a diamond is an exciting step in life, especially if you are presenting this precious stone to a loved one. With Christmas just around the corner, Vascas Jewellers are proud to present ‘The Premier Cut Diamond Collection’, featuring classical diamond jewellery composed of superior IGI certified diamond stones that weigh between 0.20ct and 5.00ct. Through extensive research as well as thorough testing and development, these round brilliant cut diamonds have been designed in a unique way to sparkle with fire and brilliance from every angle and every facet. Unlike any other brilliant cut diamond known to have a total of 52 facets, the Premier Cut Diamond has been created to have 82 facets, each reflecting its own light and creating that magical sparkle for which diamonds are known. Premier Cut Diamonds have the powerful ability to transform the finest brilliant cut diamond into a masterpiece of fiery reflections, thanks to their newly modified patented cut as well as their stunning design. One may purchase these diamond stones on their own, or

have them incorporated into beautifully designed jewellery pieces, that may also be tailor-made depending on their unique needs and style. Once purchased, these diamond stones can then be upgraded over time into bigger, better and more beautiful diamond stones. Vascas Jewellers are Malta’s exclusive jewellery retailer offering these superior quality diamonds, making Vascas Malta’s leading jeweller for diamonds and precious stones. The Premier Cut Diamond Collection available at Vascas is the perfect gift of love this Christmas, and will surely be a gift to remember. For more information about The Premier Cut Diamond, visit one of our outlets, or contact our diamond professionals on T: 2258 9200. Make this Christmas one to remember!

Mediterranean Bank Group continues to grow After the successful acquisition of Volksbank Malta in 2014, Mediterranean Bank plc has become the third largest bank in Malta when measured by assets and equity. The equity base now stands in excess of ¤170 million. The acquired bank has now been renamed Mediterranean Corporate Bank Limited and has become Malta’s first dedicated corporate bank specialising in multiple corporate services and corporate lending. In the future, Mediterranean Corporate Bank will leverage the resources of the parent group to provide innovative financing solutions to local medium-sized and large 80 ECONOMIC VISION 2014-2020: THE WAY FORWARD

companies, using both its balance sheet and capital market solutions. Mediterranean Corporate Bank has appointed Charles Cini as the CEO, who will focus on combining the corporate activities of Mediterranean Bank with those of the new entity. This represents another positive step forward in the growth of the Mediterranean Bank Group, coming on the back of the successful opening of the Belgian bank MeDirect, which is supported and functions through its Maltese workforce and resources. Mediterranean Bank was originally established almost 10 years ago and was acquired in 2009 by Anacap. From this point the staff complement has grown to over 250 employees from just six at the time of the acquisition. For more information visit www.medbank.com.mt or www.medcorpbank.com.mt

BUSINESS UPDATE

Digital Malta – the nation’s digital strategy for 2014-2020 With a vision that ‘Malta will prosper as a digitally-enabled nation in all sectors of society’ the Digital Malta Strategy was launched in March 2014 by the Prime Minister. The strategy puts forward 71 actions under six strategic themes, namely Digital Business, Digital Government and Digital Citizen as the vertical themes which are supported by Regulation and Legislation, Infrastructure and Human Capital. In October 2014 the Digital Malta Governing Body was set up in order to provide leadership, mentorship and support to stakeholders in understanding and implementing the Strategy. It will also bring about a coordinated effort across all stakeholders, address any issues, mitigate risks, capitalise on opportunities and overcome the challenges ahead. Work has already started on 52 per cent of the actions. The opening of the MITA Innovation Hub at SmartCity, the launch of the eCommerce National Strategy, simplification for the marriage grant application, a new mobile application for the Majjistral Park, a new ICT programme for senior citizens, the MCA-TAKEOFF Innovation Award, the distribution of tablets in primary schools as part of the pilot project, and the improvements to the servizz.gov.mt are some of the recently implemented initiatives contributing to the attainment of the Digital Malta targets.

R LIVING… let us furnish your apartment! Furnishing an apartment, whether it’s your own home or even an investment, can be a seemingly extra and timeconsuming job. R Living are offering a one-stop-shop concept, an all-inclusive furniture package, including the kitchen appliances, planning of furniture layout, planning of electric/plumbing points and also an onsite visit, at just one all-inclusive price. R Living have also prepared a show flat, which enables customers to experience the finished product in the ambient of a real modern apartment. R Living Showroom, Mriehel By Pass, Qormi. T: 2149 9699; E: info@rliving.com.mt; W: www.rliving.com.mt

A palazzo with a difference If you haven’t yet been to Palazzo Castelletti then you’re missing something… Situated in the heart of Rabat, Palazzo Castelletti has been recently converted and is the latest addition to the list of high profile venues and dining destinations in Malta. Constructed in the 17th century, the palace has a historical legacy of over 2,000 years. It is a landmark in the Maltese cultural heritage for not only does it boast features ranging from the Roman civilisation up to WW2 but was also the site for the handing of the keys to the city of Mdina in the times of the Knights of St John. It is also a place of religious devotion since the palazzo once served as the residence of the recently beatified Adeodata Pisani.

It now houses three impeccably finished outlets; namely San Andrea Restaurant as the key flagship restaurant, REDWHITE as the ideal place for pizza and pasta lovers, and Castelletti Salumeria & Patisserie as that nice and homely eatery where everyone would like to chill. Food and service coupled with the unique setting which only a historic palazzo can offer promise an intimate and relaxed dining experience for patrons. As a matter of fact the level of skill and art involved in the food preparation at Palazzo Casteletti is simply unrivalled. Likewise is the high quality service. It is a memorable pleasant experience each and every time, different from the ordinary. Palazzo Castelletti is open every day and booking is recommended. Palazzo Castelletti, St Paul’s Street, Rabat. T: 2145 2562; M: 9910 9911; E: info@palazzocastelletti.com; W: www. palazzocastelletti.com

ECONOMIC VISION 2014-2020: THE WAY FORWARD

EXECUTIVE SUMMARY

EXEC UTIVE SUM MARY 82

ECONOMIC VISION 2014-2020: THE WAY FORWARD

The Malta Chamber of Commerce, Enterprise and Industry, together with 20 Chairpersons/CEOs of leading companies in Malta and the Rector of the University of Malta, in early summer 2013, initiated a process to articulate an Economic Vision for Malta. The Chamber believes that the timing for the articulation of such a Vision for Malta is apt. ‘Vision 2015 and Beyond’ which sets out a strategic pathway to the development of a knowledge-based economy is coming to the end of its life term. A new programming period for the European Structural and Investments Funds for the period 2014-2020 will soon come into play. Malta, through the National Reform Programme is and will continue to implement Malta’s targets as established under Europe 2020. Europe is aiming to raise the direct contribution of industry

Malta’s current vision is Vision 2015 – which establishes

to GDP from 15.3 to 20 per cent by 2020 in order to place

‘a path to a knowledge-based economy’. The Chamber

industry on the path of growth: in Malta it currently stands

recommends that Malta’s long term economic vision is that

at 13 per cent, less than the current average. The Economic

of:

Vision for Malta is for the period 2014- 2020: thereby, synchronising with these important events. Through this Vision, the Malta Chamber also seeks to secure continuity in policy and strategy design and implementation as this period spans a subsequent electoral term.

ECONOMIC VISION 2014-2020: THE WAY FORWARD

EXECUTIVE SUMMARY

The new Economic Vision is based on important policy

Most of the recommendations presented in this

fundamentals which are:

Economic Vision with regard to its underpinning policy

Securing Economic Prosperity

fundamentals are not new. Indeed, a good number of similar

Fostering Human Development

recommendations were presented by the Malta Chamber

Supporting the further Development of Business and Enterprise Building an Innovative Infrastructure Investing in Infrastructure and the Environment Government Partnership with Business and Enterprise

in different national policy and strategy documents over the past decade or so. The fact that they are, once again, presented in this Economic Vision underlines the urgency of addressing such policy weaknesses. Malta, the Government, civil society, trade unions and business and enterprise, cannot allow such policy procrastination to continue. There is no reason why today, in

It also recommends that Malta should target its resources

2014, as a country we are still talking about market failures,

to achieve medium to long term economic growth in the

to mention an example, in providing access to equity and

following specific sectors:

forms of financing to knowledge-based enterprises or SMEs

Financial Services

which constitute the backbone of our economy. If Malta is

ICT (Including Digital Gaming)

to secure its economic and social gains, let alone continue

Filming Life Sciences Maritime Transportation and Advanced Logistics Aviation and Advanced Logistics Tourism Green and Low Carbon Health Services Education Services Manufacturing Malta is at a crossroads. Much has been achieved and the Chamber recognises this. The fact that Malta has achieved so much over the years does not mean that Malta has done enough and should hold still. Malta needs to move forward to address weaknesses that continue to limit its potential for growth, global changes and new challenges which, if they are not addressed, will threaten Maltaâ&#x20AC;&#x2122;s future wealth and prosperity; and to actively address areas wherein Malta is in fact regressing.

84 ECONOMIC VISION 2014-2020: THE WAY FORWARD

EXECUTIVE SUMMARY

added manufacturing with Eastern European Member States given that the local structured cost base has yearon-year been increasing. Moreover, in a post-crisis global and European economy, Malta risks struggling to compete with a streamlined Southern Mediterranean in tourism and knowledgebased service sectors. The economic, financial and social environments that Malta operates in today are very different from those that were in place only five years ago.

to build on them, it has to be agile in taking the appropriate action to address policy weaknesses by taking bold and decisive decisions. Although the Eurozone crisis has ravaged a number of economies, the Malta Chamber is convinced that the restructuring underway in certain countries to bring the annual deficits and debt structures under control will see these countries emerge onto the post-crisis world economy stronger and far more competitive. On the other hand countries such as Romania, Bulgaria and other Eastern European Member States, renowned for their strong technical workforce, are creating a business environment that is ‘lean and mean’, and pro-business friendly. Malta, similarly to Spain, Portugal, Ireland and Greece, is today struggling to compete, for example, in high value

86 ECONOMIC VISION 2014-2020: THE WAY FORWARD

Malta must take heed of the evolving competitive dynamics, particularly in neighbouring South European and Central European countries. Malta ignores them at its peril as noone owes it a living. Enterprise, and particularly foreign investment enterprises, will only invest if the returns make economic sense. The moment they fail to do so, the companies will uproot and relocate at the expense of Malta’s economic fundamentals in terms of employment, exports and capital formation. There is no ‘business as usual’. To survive, let alone to continue to grow economically, Malta must break away from traditional restrictive practices, whether these relate to labour regulation or otherwise, that in today’s environment render Malta uncompetitive. Put differently, it needs to get real! Otherwise, it cannot guarantee the economic and social development which the Maltese people have become accustomed to and which they so rightly deserve.

EXECUTIVE SUMMARY

The country has no choice but to undertake such change, difficult as it may be in the immediate and short term. These new challenges require different strategic approaches. As with any enterprise, a nation must take stock of where it stands, consolidate where appropriate, retrench where necessary, and take the difficult but necessary decisions that will allow it to move to its next stage of growth. This is action that Malta must undertake if it is to secure the well-being of currents as well as future generations. The Chamber believes that there is today a unique opportunity. For the first time in Maltaâ&#x20AC;&#x2122;s political history there is a party in Government with an overwhelming majority of seats in Parliament. This must be used as an opportunity for Government to take timely and decisive policy action which has otherwise not always been possible to date. The Malta Chamber will work with the Government and the leadership of civil society, including those of trade unions, to ensure that the decisions that need to be taken today to further increase economic and social development, and hence generate and distribute more wealth, are taken. Attached to this Executive Summary is a list of the recommendations of the Chamberâ&#x20AC;&#x2122;s Economic Vision, categorised under the main policy fundamentals referred to above.

ECONOMIC VISION 2014-2020: THE WAY FORWARD

RECOMMENDATIONS

RECO MMEN DATIO NS

of the Chamber’s Economic Vision categorised under the main policy fundamentals

ECONOMIC VISION 2014-2020: THE WAY FORWARD

Credit: www.viewingmalta.com

RECOMMENDATIONS

Malta’s Long Term Economic Vision The Chamber recommends that Malta’s long term Economic Vision is that of:

“A focused and diversified successful economy underpinned by a high quality, dynamic, productive and innovative private sector that positions Malta as a global hub for business and investment leading to increased prosperity.” This Economic Vision should be monitored on an annual rolling basis and reviewed every 3 years to ensure that progress is met and that the Vision is calibrated as circumstances change.

ECONOMIC VISION 2014-2020: THE WAY FORWARD

RECOMMENDATIONS

Targeting Economic Growth through Investment This Economic Vision recommends that Malta should target its resources to achieve medium to long term economic growth in the following sectors: Sector

Target

Opportunities

Financial Services

Position the sector for the local Pensions Market

Introduction of Third Pillar Pensions Introduction of Second Pillar Pensions

Extend the sector to embrace a Regional Financial District

Establish a regional district with exclusive jurisdiction over all civil and commercial disputes within the district

Extend the sector into soft intellectual property schemes

Royalties for films, licenses, etc.

ICT Sector (Including Digital Gaming)

Enable a transition towards productisation

Build IP Value of ICT companies

Stimulate further competitiveness and growth

Establish the necessary prerequisites including skills to ensure that the sector continues to grow

Filming

Enable Malta to become the end to end production (including aspects of film shooting) destination of choice

Move up the value chain

Life Sciences

Establish a new economic sector

New bio-park infrastructure is being set up

Maritime Transportation and Advanced Logistics

Re-position Malta as a global and regional hub

Move up the value chain

Aviation and Advanced Logistics

Expand Malta as a global location of excellence for aviation maintenance

Establish the necessary prerequisites to ensure that the sector continues to grow

Expand Maltaâ&#x20AC;&#x2122;s Aircraft Register Re-position Malta as a global and regional hub for General and Business Aviation

92 ECONOMIC VISION 2014-2020: THE WAY FORWARD

Replicate successful model for maritime sector

ECONOMIC VISION 2014-2020: THE WAY FORWARD

94 ECONOMIC VISION 2014-2020: THE WAY FORWARD

RECOMMENDATIONS

Sector

Target

Opportunities

Tourism

Establish Malta as a Distinctive Global â&#x20AC;&#x153;Cityâ&#x20AC;? for Tourists and Corporate Offices

Move up the value chain

Increase awareness of Malta as a premier tourist destination in the Mediterranean region

Encourage product development and investments in Maltese tourism assets and products

Instil a better service culture

Foster an adequate supply of skills and labour

Green and Low Carbon

Establish Malta as a Smart Energy Island

Create a new economic sector whilst replicating international best practice.

Health Services

Establish Malta as a global and regional Health Care provider of excellence

Create a new economic sector

Education Services

Establish Malta as a global and regional Education provider of excellence

Create a new economic sector

Manufacturing

Stimulate further competitiveness and growth

Establish the necessary prerequisites to ensure that the sector continues to grow

ECONOMIC VISION 2014-2020: THE WAY FORWARD

RECOMMENDATIONS

Recommendations – Policy Fundamentals Underpinning Malta’s Economic Vision Securing Economic Prosperity 1. Malta’s continued economic success and social development depend on its ability to achieve bi-partisan, constancy of purpose and a culture of cooperation within society as well as an ability to recognise and establish national priorities and to undertake economic and social measures that are both remedial and proactive, and that require time and a national concerted effort to come to fruition. 2. The Malta Council for Economic and Social Development, if well equipped, resourced, and directed, is an essential institution for the attainment of a non-partisan approach to economic and social development.

Embracing Fiscal Prudence 3. Malta has to do far more than has been achieved to date to manage government expenditure more effectively: productivity and the quality of public services must be translated into outputs of increased value for money and improved public service performance underpinned by a Government-wide Performance Budgeting system. 4. At the same time Government must ensure a fair market ‘playing field’ between all market operators 96 ECONOMIC VISION 2014-2020: THE WAY FORWARD

by, once and for all, proactively enforcing taxes, laws and regulations on those that operate below the compliance radar and beyond the knowledge of any authority including fiscal. 5. Governments for far too long have prevaricated to secure political consensus on reforms required to pensions, long term care, health and education on a far more sustainable basis – a state of play that must be addressed if Malta is to avoid a destabilisation of its economic and social model.

ECONOMIC VISION 2014-2020: THE WAY FORWARD

RECOMMENDATIONS

Expanding Economic Growth through Increased Productivity 6. Government should support the private sector by addressing inefficiency in technology, physical infrastructure, public administration and processes in order to achieve improved resource use over time and hence seek to meet productivity growth underway in competitor countries. 7. Malta must undergo a shift to productivity driven growth which requires a deepening of skills and expertise within every sector of the economy so that Malta’s workforce can perform more dynamic and higher value added jobs.

Securing Malta’s Taxation Framework for International Business 8. Government must continue to strengthen the imputation corporation tax framework, complemented by a number of pro-employment, pro-training initiatives and pro-research and innovation policies, which are key drivers of economic advancement rendering Malta an attractive destination for Foreign Direct Investment. In this regard, Malta must ensure that permanent compensatory measures are allowed to neutralise its permanent physical disadvantages which translate into relatively higher operating costs. Such compensatory measures are not to be allowed on the basis of fluctuating measures such as GDP averages.

Fostering Human Development 9. Malta’s continued economic growth depends on upgrading and deepening the education, knowledge and skills of Maltese workers. Human capital is a key factor in the adoption of new technologies, the introduction of innovative practices and in securing growth in multifactor productivity arising from improvements in managerial practices, organisational change and inventions.

10. Education and training must establish stronger links with Malta’s labour market given that quality intelligence on labour supply and demand dynamics are critical in ensuring outcomes that address the needs of current and future labour markets. 11. Enterprise, trade unions and Government should invest more in incentivising low-wage workers to participate in training, which is a springboard for them to upgrade their skills and justify better salaries. 12. Stipends in higher and further education should be reformed and should not be provided gratuitously: in the event that they are to be provided at the first instance students should be assigned to compulsory internship schemes which would serve to instil a work ethic value system among students whilst giving them invaluable exposure to the real world. 13. The stipend system must also be linked to an Employability Index indicating the possibilities of employment and potential income on completion of a chosen study path. These measures are crucial in ensuring the availability of the skills required for the country to pursue its chosen economic path. 14. For Malta to compete globally, it must also be able to attract global talent and should revisit its current

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RECOMMENDATIONS

immigration and residency policy wherein it should adopt a

18. Government departments should be tasked to establish

selective policy directed at targeting persons who have the

Key Performance Indicators and to draw up widely

appropriate skills levels that the local economy is not in a

applicable Quality Service Agreements on the quality and

position to provide in order to sustain continued economic

timeliness of the service they provide to the citizen and/or

growth.

entrepreneur.

15. Malta must ensure a more effective contribution by

19. Government should leverage its purchasing power to

irregular immigrants wherein they are encouraged to take

reward, in the most demonstrative manner, quality and

up legal employment which will allow them to contribute to

excellence when securing goods and services for its use.

their well-being and to productively contribute to Maltaâ&#x20AC;&#x2122;s economy.

Supporting the Further Development of Business and Enterprise Inculcating a Culture of Excellence 16. Excellence must become the hallmark of Maltaâ&#x20AC;&#x2122;s businesses and enterprises irrespective of the economic sector they are operating in. At the national level, an emphasis on Quality is to be driven by all social partners who together must inculcate a culture of excellence across

Achieving a Flexible Competitive Labour Market

the entire population. 20. Malta must take heed of evolving competitive dynamics, 17. Business and enterprise should be supported by

particularly in neighbouring South European and Central

institutions such as Malta Enterprise to transform

European countries. There is a need for urgent realisation by

themselves through the implementation of international

the Government and the trade unions of the consequences

standards and accreditation in order to improve the quality

which will arise if a reform of the COLA mechanism, that

and standard of the goods and services they provide.

reflects productivity as well as inflation, is not carried out in the immediate term.

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21. Wage is a function of productivity and not spending

23. A call for a less inflexible labour environment demands

power, and appeals for unjustified increases in the minimum

a beefing up of the Government competent authorities to

wage across-the-board must not be entertained until Malta

regulate employment practices and to sanction employers

registers sustainable and significant rates of economic

who carry out such abuses and thus ensure the adoption of

growth. Otherwise, the measure would further negatively

fair and proportionate enforcement among all enterprises.

impact Malta’s competitiveness. 24. Tangible measures must be taken to enable Malta 22. The unintended consequences of Malta’s labour law

to move up the World Bank rankings for ease of doing

environment are starting to hit home as Malta’s competitors

business. Malta ranked in the 103rd place out of 189

are seeking to ease restrictive laws to support more people

surveyed economies – slipping from the 100th position in

in entering the labour market. Removing the ability of a

2013. In this context, Malta is the lowest ranking EU Member

business to employ persons on temporary and flexible

State. Improvement definitely requires a sharp focus on

arrangements will result in businesses not investing in Malta

smart regulation to cut red tape and on competitiveness-

or employers preferring not to employ in the absence of the

enhancing public policies. Business and the country will

necessary flexibility to contract out on the basis of business

benefit from a renewed entrepreneurial spirit.

needs and market performance.

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104 ECONOMIC VISION 2014-2020: THE WAY FORWARD

Managing the Energy Challenge

• allowing business and enterprise to undertake bulk buying and joint purchasing;

25. The Chamber strongly emphasises that the cost of

• allowing bulk consumers to opt for fixed or variable tariff;

Enemalta Corporation’s inefficiency; inflated headcount;

• allowing privately managed energy distribution grids and

inability to manage theft and administrative errors which

substations in Industrial parks;

constitute 8 per cent of all electricity generated; and

• considering the introduction of energy vouchers to

high losses in generation due to obsolete use of steam

incentivise private investment in alternative sources of

technology, etc, should not be passed on to the productive

energy and in increased efficiency of energy.

sector. 27. At the same time, it is crucial for the country to maintain 26. Government should introduce measures that would

flexibility to increase the share of energy sourced via the

lower domestic energy prices for industry and business

interconnector in the overall energy mix should it be more

to levels comparable to those applicable in the rest of the

advantageous from a cost perspective to source energy for

EU. This could be achieved through a number of measures

the private sector from Sicily or eventually mainland Europe.

including:

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28. In the 2014-2020 EU financing period, Government

31. The Government is encouraged to work with the

must channel more funds from the ERDF and other EU

Chamber to introduce export finance support schemes to

financing instruments to support business and enterprise to

facilitate the provision of export finance to viable SMEs to

undertake critical investments in Renewable Energy Sources

supplement similar initiatives provided by financial services

and Energy Efficiency technologies.

intermediaries such as invoice financing and factoring.

29. The over-exploitation of the water table cannot continue

Strengthening Businessâ&#x20AC;&#x2122;s and Enterprisesâ&#x20AC;&#x2122; Ecosystem for Overseas Growth

forever as the sustainability of the water table is in danger and its collapse will have dire consequences on business and enterprise. Government must ensure that it introduces schemes under the 2014-2020 programming period that

32. Given that internationalisation assumes greater

will incentivise business and enterprise to invest in water

importance for companies in a small island economy,

conservation projects.

Government should partner with the Malta Chamber through the appropriate authorities and assume a far more focused approach directed at increasing successful export market entry by undertaking actions for business enterprises to ensure that they (i) have access to expert advice and support on global expansions; (ii) have access to a pool of expertise particularly in emerging markets; (iii) are assisted in raising their level of international marketing and export competencies; (iv) are assisted to exploit the information economy through overcoming obstacles with regard to trade cross-border and in making full use of the internet and associated activities such as e-commerce; (v) are assisted in selling innovative goods and services; and (vi) are supported in export orientation through increased higher and further education of international trade,

Enabling Access to Finance to SMEs and the Knowledge Economy Sectors

traditional marketing, digital marketing, etc.

Positioning Malta as a Premium Global Brand

30. Government is encouraged to work with the Chamber and other stakeholders to create collateral-free loans

33. The FinanceMalta public private partnership model

under a form of credit guarantee fund trust schemes,

should be replicated in other economic sectors where

structured access to equity, structured information on

Government and the private sector work together not

access to financing, etc, directed to promulgate increased

only to be charged with the mission to promote Malta as

entrepreneurship in the new knowledge economy as well as

a premium destination internationally but also to further

to assist start-ups to access early state capital during the

develop the enabling framework that will allow each such

early years of an enterpriseâ&#x20AC;&#x2122;s life cycle.

economic sector and its respective value chain to grow.

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Building an Innovation Infrastructure Incentivising Innovation in Productivity Improvement in Business and Enterprise 34. Business and enterprise in Malta must be in a position to raise their levels of productivity if they are to remain competitive and Government, University of Malta, business and enterprise should come together to create a Research and Innovation Hub that will conduct applied research on productivity and innovation for enterprise to tap.

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Establishing Malta as a Leading ‘Living Lab’ Centre 35. Malta is an ideal ‘living lab’ grounded on the ability to pilot with speed and scale within a compact urban environment for controlled experimentation, testing and lead adoption. Government and the private sector should partner to invest in a living laboratories infrastructure that would allow companies to test technologies, product and process standards as well as to showcase their products.

Stimulating Innovation and Research

finance, business transfer, internationalisation, EU regulatory and funding opportunities.

36. Malta cannot afford a continued institutional paralysis in rendering available financing for innovation and if this long outstanding market failure cannot be addressed in the short term, then Malta must start looking at innovative solutions, other than the traditional innovation vehicles, such as the creation of a Malta Development Bank or an Enterprise Bank. 37. The progress being achieved in the development of incubation infrastructure needs to be complemented by a formal business angelâ&#x20AC;&#x2122;s infrastructure as a vehicle for equity financing for start-ups and SMEs which could be encouraged through the innovative use of fiscal instruments.

Setting Up a Post- Doctoral Research and Innovation Hub 38. The setting up of research hubs underpinned by researchers with post-doctoral fellowships is a significant and important priority for Malta to build indigenous research communities based on past and ongoing human capital investment through Government scholarship programmes in doctoral studies.

Encouraging Entrepreneurship 39. Boosting economic growth requires the presence of a large group of individuals who are actively thinking about starting a business and have the attributes and skills to achieve their ambitions. A radical overhaul of the enabling environment building on the new National Curriculum Framework must be embarked upon. 40. Government should partner with the Malta Chamber to create a partnership to deliver support and mentoring services to SMEs, micro-enterprises and start-ups. The partnership should be private sector driven and will provide competitiveness-enhancing and capacity building services in areas such as corporate governance, access to

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RECOMMENDATIONS

Investing in Infrastructure and the Environment Prioritising and Financing Investment in Infrastructure

42. Investment that is to be undertaken between 2014 and 2030 must be truly ‘genuine’ productive investment – that is investment that will truly contribute to the long term economic and social development of Malta as well as the expansion of Malta’s productive base and not ‘pet’ white elephant projects.

41. Malta faces considerable physical infrastructure

Such productive investment shall include (i) Digital

bottlenecks which, if not addressed in a structured and

Infrastructure for telecommunications; (ii) E-Infrastructure

planned manner, will negatively impact Malta’s future

for Bioscience; (iii) Infrastructure in port, freight capacity

economic and social prosperity. Government should draw

and logistics management; (iv) Innovation Campus

up a long term national infrastructure strategy – up to 2030

development aligned to national strategic research and

– that articulates and prioritises the investment required

innovation strategic focus; (v) Distributary and arterial

both with regard to new physical infrastructure as well as

network; (vi) Infrastructure for water management; (vii)

the retrofitting/upgrading/technology refreshing of existing

Infrastructure for energy generation, distribution and

physical infrastructures.

efficiency and (viii) Health disease and ageing.

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RECOMMENDATIONS

43. Investment in infrastructure must be sustainable and should not result in increases in the debt to national GDP levels of Malta. Government must consider more extensive use of private investment financing (PIF), public private financing (PPP) or foreign financing in infrastructure projects.

Energy Infrastructure 44. Malta must adopt the strategic approach to invest in critical energy infrastructure sufficiently ahead of demand in order to always ensure stability and certainty in the generation and provision of electricity.

Urban Regeneration 45. The undertaking of an urban generation programme should become Maltaâ&#x20AC;&#x2122;s strategic focus towards which the building and construction sector should be directed, channelling investment in regeneration as against the continued, and unnecessary development of green field sites.

46. In designing and adopting a strategic approach to urban generation, Government should take the central leading role through the restructuring of the Grand Harbour Regeneration Corporation into a Malta Urban Development Corporation that would also incorporate the private sector and potentially public shareholding, and in such a way as to ensure improved balance between retro-fitting and new buildings, and between open spaces and built up areas.

Unleashing Maltaâ&#x20AC;&#x2122;s Green Credentials 47. It is imperative that as decisions are made today the welfare of future generations is taken into account. 48. A vibrant green economic sector will only emerge once the Government stops acting as the economic operator and assumes the proper role that it should hold: that of the regulatory authority in waste management, etc, with the private sector becoming the economic operator.

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Government Partnering with Business and Enterprise 49. Government must adopt a culture of evidence-based policy-making that is backed by information and thus ensure that informed decisions are reached at the outset. Moreover, a continuous monitoring framework is required to guarantee performance output and, over time, measure impact. Greater discipline and accountability must be instilled in those departments which are found to perform inefficiently.

51. The Public Service must become a partner to business and enterprise: a relationship that is underpinned by the right regulatory framework that supports business creation and growth, and avoids unnecessary burdens which adversely impact Maltaâ&#x20AC;&#x2122;s competitiveness; where new regulation is introduced to address market failures; that regulation is applied universally and across all market operators and in doing so create an economic level playing field. 52. The current judicial process is now a liability to Maltaâ&#x20AC;&#x2122;s continued economic growth. Business and enterprise flourish in an environment where the judicial system is

The Malta Chamber suggests the carrying out of a manpower survey and a gap analysis so as to take stock of the exact manpower skills available in the public services. This will enable Government to deploy its present and future resources more efficiently into productive activities. 50. Incremental improvements to the public service have proven to be inadequate: fundamental reform is now unavoidable. Aggressive action is required to (i) address inefficiency in human capital, physical infrastructure, public organisations and processes; (ii) create and capture value, preserve and expand the productive base and release resources which would enable the private sector to develop in order to expand the economy; (iii) introduce an outcomes-focused approach to performance so that Malta ensures that it has a public service that is fit for purpose, and that public services are affordable.

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swift, and therefore effective; and one that provides fair judgement thereby building confidence in it.