Business Agenda Issue 09 by Malta Business Bureau

BUSINESS AGENDA | Dec - Feb 2012

THIS ISSUE

Interview Tomasz Korczynski discusses the concept of Public-Private Partnership and how Malta can learn from Poland’s experience in the area.

page 15

business agenda

NEWSPAPER POST

Wage trends in EUrope The current debates surrounding wage trends in Europe and how they are linked to sustainable employment and economic growth.

page 27

THE Official Business publication of the Malta business Bureau

AVoice for Malta

EESC Stefano Mallia discusses his recent Opinion on Online Gaming, a report drafted for the European Commission, which was widely endorsed by the EESC

page 16

eu policy Discussions on the feasibility of a European financial transaction tax have been ongoing. How will this impact Maltese business?

page 19

Gender Despite favourable legislation, gender inequality in the labour market is still evident.

page 36

Head of the European Commission Representation in Malta, Martin Bugelli, speaks to Business Agenda about how the Commission is work ing towards overcoming the chal lenges currently being faced in the euro area. He states that the Com mission is working on introduc ing measures and safeguards to ensure major financial imbalances at a national level are avoided.

He further expresses that the Commission Representation makes sure that the European Union is well aware of local reali ties and concerns, and European messages are easily understood on a national level. As a result,

the Representation works con tinuously to ensure that the right message is being communicated to the general public.

Mr Bugelli maintains that the Maltese population is “generally receptive and very much aware of our presence in the EU,” and adds that “Maltese people are willing to accept a European message for what it is, without prejudice.” How ever, Mr Bugelli feels that the Mal tese have yet to absorb the concept that “Malta is part of Europe and Europe is us”, and that Malta’s voice is at the table and it is being heard. See full story on page 9.

WHERE MALTA STANDS IN CURRENT GLOBAL CRISIS In comments given to Business Agenda, renowned Maltese econo mists Prof Edward Scicluna, MEP, and Mr Lawrence Zammit, Direc tor at MISCO International, have warned that the current difficul ties pounding the euro zone will need to be monitored closely as any developments in other mem ber states may have a negative impact on Malta. Nonetheless, the situation in Malta is considered to be different to the

rest of the euro zone at the present time, with indications being that Malta’s banking system is solid and local banks have not been involved in investment activities that could jeopardise their existence. This, coupled with a strong effort towards achieving fiscal consoli dation, while sustaining economic growth, would help to ensure that Malta strengthens its economic standing in the next year. See full story on page 5.

Benchmarking Malta’s international competitiveness Malta’s GDP per capita is below the euro area average, but its growth rate over the past 10 years has exceeded that of its neighbours, leading to impressive gains in many economic and social fields. Also, according to a recent Eurostat and National Statistics Office survey, Malta’s economy powered ahead in 2011’s second quarter, record ing the fastest growth in the euro zone at 2.8 per cent. In this respect,

Malta may be small in size but appears to punch above its weight. However to what extent can this be true? Business Agenda takes a look at the various facets of the Maltese economy and its performance in the past year in comparison to other foreign economies, whilst looking at the specific attributes that give Malta its competitive potential. See full story on page 12.

BUSINESS AGENDA | Dec - Feb 2012

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BUSINESS AGENDA | Dec - Feb 2012

editorial

A year in the making. What beckons for business in 2012? By Joe Tanti, Chief Executive Officer, MBB Europe is navigating through rough seas. According to the European Commissioner responsible for economic and financial affairs, Olli Rehn, Europe will be facing a new recession next year. To stand a chance in avoiding a double-dip recession, member state governments need to ensure an “unwavering implementation” of reforms. Then again the EU must work primarily on initiatives that promote competitiveness and drive recovery towards a sustainable future. Some of the proposals set out by the Commission Work Programme for 2012 are of particular importance and should command greater priority – in particular, proposals which can have a swift impact on growth and jobs, and make a real contribution to recovery. However one needs to analyse how these actions are going to impact on enterprise and industry. In a climate characterised by the swift growth of foreign competition by emerging economies, Europe cannot afford to aim to secure financial stability at the

expense of economic competitiveness. For this reason it is of utmost importance to ensure the solid implementation of single market proposals, which have now been debated for long enough to remain shelved in Brussels. In this respect, Maltese business has repeatedly called for a stronger EU, with a clear collective capacity of the institutions – European Commission, Parliament and Council – to show that they share a common understanding of where action is most urgent, if the EU is to be taken seriously about its drive to tackle the crisis and restore growth. This is not the right time to jeopardise competitiveness, growth and employment by invoking further burdens on business in respect to Europe’s Social Agenda. Indeed, the EU has to maximise on providing further opportunities to business, if we are to see a re-birth of economic activity to reach the levels experienced before the crisis. From a business perspective, respective

entrepreneurs and business managers are also called to take an optimistic approach by focusing on opportunities. For instance, among others, the concepts of Innovation Union and the Digital Agenda present exciting prospects in this regard. Malta Business Bureau looks ahead towards 2012 Organisations representing businesses need to also be proactive during these difficult times. In recent years, the Malta Business Bureau has been active in promoting sustainable business by participating in a number of EU funded projects for the benefit of the Maltese economy and the local private sector. The EU Life+ Investing in Water and the Leonardo Mobility SHIFT projects, both coordinated by the MBB, consist of proactive initiatives by business in the environment and employment areas. The first project, which will be implemented over the next two years, aims to raise aware-

ness about water scarcity in Malta and develop best practice solutions to increase efficiency in water consumption among businesses. Secondly, the Leonardo Mobility SHIFT project aims to expose a number of local HR executives to international best practices in adopting familyfriendly measures and flexible work arrangements; clearly an incentive that benefits both employers and employees in terms of business environment and productivity. At the same time the MBB aims to remain active in national and international debates to safeguard the interests of Maltese business. One means to achieve this end is through the conducting of economic impact assessments in order to scientifically quantify the impact of directives decided upon at an EU level on our economy. At the time of writing, the first economic impact

assessment is being carried out on the Commission’s proposals for a Common Consolidated Corporate Tax Base (CCCTB) – the results of which we will be communicating early next year. During the next year the MBB also intends to keep a close eye on the developing discussions that have kicked off in relation to the new EU budget covering the period from 2014 to 2020. This is a strategic subject that will shape the forthcoming EU policy, regulatory and funding portfolio available for business over the next seven year period. It is the MBB’s intention to take the lead on such a critical debate on behalf of the local private sector for the longterm development of the country. In conclusion, may I take this opportunity to wish all our readers a merry festive season!

COLLABORATING PARTNERS:

The Malta Business Bureau is a non-profit making organisation acting as the European Advisory and Support Office of the Malta Chamber of Commerce, Enterprise and Industry and the Malta Hotels and Restaurants Association. The MBB has two offices, the Head Office in Malta and the Representation Office in Brussels. Publisher Content House Ltd Mallia Buildings 3, Level 2 Triq in-Negozju Mriehel QRM3000

Malta Business Bureau Casa Leone Pjazza Robert Samut Floriana

Tel: 00356 2132 0713 Email: info@contenthouse.com.mt www.contenthouse.com.mt

Tel: 00356 2125 1719 (Malta Office) Tel: 0032 4859 81124 (Brussels Office) Email: info@mbb.org.mt infobrussels@mbb.org.mt www.mbb.org.mt

Editor: Joe Tanti Deputy Editor: Yolande Spiteri

Editorial Team: Omar Cutajar, Daniel Debono, Mariella Scicluna

Business Agenda is the quarterly publication of the Malta Business Bureau. It is distributed to all members of the Malta Chamber of Commerce, Enterprise & Industry, all the members of the Malta Hotels & Restaurants Association, and to all other leading businesses by Mailbox Distribution Services, part of Mailbox Group. Business Agenda is also distributed by the Malta Business Bureau to leading European and business institutions in Brussels.

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BUSINESS AGENDA | Dec - Feb 2012

cover story

“ MANAGING A SERIOUS CRISIS BY A TEAM OF 17 POLITICIANS FROM DIFFERENT COUNTRIES IS NEARLY IMPOSSIBLE...” – Prof Edward Scicluna, MEP The recent decisions taken in the Euro Summit in relation to the euro area crisis have been hailed as being a solid way forward by European Commission President, Barroso. But many still believe that they are still just a form of crisis management. BUSINESS AGENDA takes a look at what likely scenarios might unfold in the future. “Doing politics in one country is difficult enough, but managing a serious crisis by a team of 17 politicians from different countries is nearly impossible,” states Prof Edward Scicluna, renowned Maltese economist and Member of the European Parliament. “That is why both the Commission and the European Parliament do not want this situation to continue. Barroso is trying to show a solid front which will have little or no effect unless it is backed by a convincing watertight solution,” he continues. “Furthermore, within the Council there are only two voices heard, representing the creditor countries: Germany and France. This is a far cry from the Community method, which every-

“ Euro zone countries that want to remain members of the euro will have to give up a sizeable chunk of their sovereignty. Malta will come at an important crossroad for which we have to be informed and prepared.” – MEP, Prof Scicluna one in the EU was convinced was the accepted way.” Lawrence Zammit, a Director and founding member of MISCO International, is of the opinion that the measures taken by the EU so far are more like crisis management.

“There are still no clear rules on how to combat speculation in the financial markets. We also require clear and binding rules on the fiscal policies adopted by the members of the euro zone and the 27 member states in general,” he states.

Prof Scicluna and Mr Zammit are certainly correct in their observations that finding a solution to the euro crisis is proving to be a very hard nut to crack, with the political uproar that wreaked havoc in Greece being just one clear example of how solving the euro crisis

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is often akin to navigating an economic and political minefield. Nonetheless, the decisions taken at the Euro Summit last October were very much needed, yet whether these measures will place the euro area on more stable ground has yet to be seen, especially with major players like Italy and Spain flirting dangerously with the need to be rescued, and Greece needing specific measures that included writing off a sizeable portion of its debt. “One thing is for sure,” states Prof Scicluna. “While the assistance given by the liquidity provided by the European Central Bank and the European Financial Stability Fund gives Greece some breathing space, it does not restructure its economy to make it competitive. That has to be done by the country itself. Lack of social cohesion makes it more difficult for this restructuring to take place.” The current situation is in fact a valuable lesson for other euro area countries. Economic restructuring is needed in the long term if sound economies and a strong single currency are to be secured in the long term, with European Heads of State reiterating their commitment to ensuring fiscal discipline and structural reforms, aimed at resolving the crisis and returning to economic growth.

BUSINESS AGENDA | Dec - Feb 2012

cover story “ Developments elsewhere in the euro zone may create further problems, which would almost certainly have a spill over effect on Malta. We have practically no control over such developments but they would definitely have a negative impact on us.” – Director MISCO International, Lawrence Zammit

“Fiscal discipline and close budgetary surveillance, which we have not seen anything like so far, will be aimed at crises prevention,” states Prof Scicluna. “Moreover, euro zone countries that want to remain members of the euro will have to give up a sizeable chunk of their sovereignty. Malta will come at an important crossroad for which we have to be informed and prepared.”

“However, in the European Parliament, we have passed massive pieces of legislation to ensure that they will never again be caught in this embarrassing situation which imperilled the world’s economies and harmed its societies. They will not expect to get any understanding from an angry public in the future if they continue in their old ways,” he warns.

According to Mr Zammit, “developments elsewhere in the euro zone may create further problems, which would almost certainly have a spill over effect on Malta. We have practically no control over such developments but they would definitely have a negative impact on us,” he says.

Looking towards 2012, Mr Zammit believes that the situation in Malta is somewhat different to many other countries in the euro zone. He points out that locally, the indications so far are that our banking system is very solid and our banks have not been involved in investment activities that could jeopardise their existence.

Furthermore, matters have been complicated somewhat by the loss of confidence in European banks. The Euro Summit addressed these issues by agreeing on a number of measures to strengthen confidence in European banks, including the increase of capital ratios to nine per cent of the highest quality capital.

Mr Zammit believes that there needs to be a strong effort towards achieving fiscal consolidation, while sustaining economic growth. “This may seem as an impossibility, as traditional economic thinking has been that if one wants to stimulate economic growth, then one needs to run a fiscal deficit,” he explains.

“So far governments have been very generous with the banks, providing them with needed liquidity and capital to shore them up, and they intend to continue to do this for the foreseeable future,” states Prof Scicluna.

“But we can achieve a balance between fiscal consolidation and economic growth if we ensure that labour markets and product markets function effectively, while simplifying government regulations as much as possible,” he concludes.

BUSINESS AGENDA | Dec - Feb 2012

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BUSINESS AGENDA | Dec - Feb 2012

INTERVIEW

“COMMUNICATING” THE RIGHT MESSAGE

The recently appointed Head of the European Commission Representation in Malta, Martin Bugelli, discusses his new role, Malta in the EU and how the Commission is working towards overcoming the challenges currently being faced in the euro area, with Krista Micallef Trigona.

Martin Bugelli’s extensive experience in the Maltese Government’s communication sphere serves him well in the role he undertook last May as Head of the European Commission Representation, where communicating with the Maltese public is key. While it is certainly a high-pressure job, he simplifies the remit and role of an EU Representation in a straightforward phrase: “it is simply an ear and a mouth,” Mr Bugelli begins. “Our role, among other things, is to listen and report back, making sure that the European Union knows and is aware of our concerns and what is happening on the local scene, whilst the mouth passes on European messages, translating them into a local context, in a suitable language for everybody. A simple illustration such as a house, for example, needs to be identified as flat-roofed in Malta, as opposed to slanted

elsewhere in Europe – we need the public to identify with the message. Furthermore, the communicating process varies according to the nature of the matter involved, thus we communicate differently according to the interlocutor, whether it is government, social partners, specific sectors, and so on.”

receptive and very much aware of our presence in the EU, especially when compared to other populations where there is an element of negativity and hostility to European issues. Maltese people on the other hand, are more willing to accept a European message for what it is, without prejudice,” he maintains.

But despite the Representation’s continuous efforts to inform the general public on EU-related matters, Mr Bugelli stresses that “you can never communicate enough. The effort is big and multilayered – we communicate through television, newspapers and through small groups, engaging in a plethora of activities to draw people to the Representation. And even if people walk away knowing one more thing than when they walked in, I am happy.”

“Still, we have yet to fully absorb the concept, as the Maltese still have subconscious limits which come from being islanders, and from our history of being defined by how we have been ruled. Then we joined the European Union and now that is viewed as the power. But, we are at the table and our voice is being heard, even if it is not the loudest. We are part of Europe and Europe is us,” Mr Bugelli stresses.

As Mr Bugelli points out, “overall, the Maltese population is generally

Whatever outlook the locals may currently have on the EU, it is clear that Malta has gained and has improved since its accession. “Just

“Overall, the Maltese population is generally receptive and very much aware of our presence in the EU, especially when compared to other populations where there is an element of negativity and hostility to European issues. Maltese people on the other hand, are more willing to accept a European message for what it is, without prejudice.” – Head of the European Commission Representation in Malta, Martin Bugelli

BUSINESS AGENDA | Dec - Feb 2012

interview take a look at all the projects... there is a list of them! But let’s look at it from a single market perspective. The geographical barriers immediately come to mind, and they are daunting to say the least. As an island, although on the periphery of the EU, we are part of the largest single market in the world, which brings with it huge opportunities. “The second barrier is our market size – it is small. So, when purchasing, we do not get the best price possible because we are not purchasing in the same quantity as other countries. Businesses do not have the economies of scale. However, upon joining this huge market, accession has enabled business to just deal with the geographical barriers. Thus, having removed the economical and trade barriers, businesses have a greater possibility to grow and to expand.” Without a doubt, EU membership is proving to be very beneficial to Maltese businesses on a number of lev-

“The second barrier is our market size. So, when purchasing, we do not get the best price possible because we are not purchasing in the same quantity as other countries. Businesses do not have the economies of scale. However, upon joining this huge market, accession has enabled business to just deal with the geographical barriers. Thus, having removed the economical and trade barriers, businesses have a greater possibility to grow and to expand.”

els giving them grants to invest in or upgrade their business, opportunities to penetrate the single market, access to European workforce, harmonisation of currency and so on. But are businesses exploiting these benefits enough? “The opportunities for businesses are so large and so wide, but I still think that more can be done. Small businesses, for example, might have the misconception that the procedures involved in having access to funds are difficult, that co-financing might be difficult, so it is not worth it. However, these issues are being addressed for further simplification in order to make funds more accessible. Exploiting the benefits, such as in the case of funds, also depends on the entrepreneurs themselves, as it depends on their drive and spirit,” Mr Bugelli states. At this point in time though, times in Europe are turbulent, particularly in the euro area. However, as Mr Bugelli maintains, the EU and the Commission in particular have been working hard to ensure that the European project is retained and that it stays strong. “Consider the problems in Greece. Have these problems arisen because Greece is part of the euro area? And isn't it in everyone's interest to help Greece since it is part of the euro zone? Take, for example, the case of Lehman Brothers. When they went bust in 2008, there was a ripple effect on a global scale. The difference is that with Greece being in the

euro area and in the EU, measures can be taken to prevent Greece from defaulting and affecting all of us.” In the midst of all the challenges that lie ahead, the European Commission is “working hard to introduce measures and safeguards to make sure that financial stability is maintained and that major financial imbalances at national level are avoided. Moreover, the European Commission tries to push forward rational policies intended to make sure that ultimately we achieve further growth. But there are also political considerations at national level and balances that need to be struck. The institution we represent strives to lead the way with initiatives which are purely in the interest of Europe as a whole. Our role is to see that our colleagues in Brussels are kept aware of local realities while ensuring that any measures proposed by the European Commission are known to and grasped by Maltese stakeholders. Therefore, communicating the right message is very important, and so, I am very grateful to the Maltese media community for transmitting these priorities to the Maltese public and specific stakeholders. The Representation's work is very media dependent and we are very fortunate to have the media community that we have, with their understanding of issues and the need for their communication” Mr Bugelli concludes.

BUSINESS AGENDA | Dec - Feb 2012

economy

Malta’s Competitiveness: Potential for growth in niche markets – Clear shift in direction from manufacturing to knowledge based economy Malta is a small EU member state but in political terms it has been said that it punches above its weight. Is this the case when it comes to the economy? Yolande Spiteri takes a look at how Malta compares on competitive levels, both within Europe as well as globally. In the latest Global Competitiveness Report for 2011-2012 Malta placed 51st out of a total of 142 countries. The report, published by the World Economic Forum, gave Malta an overall score of 4.3 when the highest-ranked country, Switzerland obtained 5.7. The report, which is based on the Global Competitiveness Index, provides an indication of the country’s performance in 12 main areas. Malta ranked highly in categories such as institutions, health and primary education, higher education and training as well as financial market development. It did however lag behind in labour market efficiency and market size, due to obvious circumstances linked to the size of our country. Malta’s GDP per capita is below the euro area average, but its growth rate over the past 10 years has exceeded that of its neighbours, leading to impressive gains in many economic and social fields. Significantly so, following a 1.2 per cent contraction in 2009, Malta’s GDP grew by 2 per cent in 2010. Also, according to a recent Eurostat and National Statistics Office (NSO) survey, Malta’s economy powered ahead in 2011’s second quarter, recording the fastest growth in the euro zone at 2.8 per cent. Tourism maintains steady momentum When speaking to Business Agenda, The Malta Hotels and Restaurant Association (MHRA) President George Micallef, explains that notwithstanding the economic recession, one of Malta’s major industries, tourism, managed to retain a steady momentum of tourist arrivals. This year Malta will be exceeding the 1.3 million tourist arrivals mark, which should translate into circa 11.5 million bed nights by the end of the year. However when it comes to foreign investment within the Maltese tourism industry, the scenario is quite different, “practically all tourism related investment, be it accommodation, restaurant or otherwise, is local, and all the international brands of hotel chains we have in Malta are owned by local investors,” claims Mr Micallef.

He goes on to explain that we have recently welcomed some foreign investment within the aviation industry for the servicing of aircrafts, however more can be done as a lot of potential rests in this area. This industry, together with other niche markets such as the gaming industry, has managed to attract foreign investments which have generated employment and significant economic value. When discussing the number of factors that contribute to Malta’s attractiveness, the President of the Malta Chamber of Commerce, Enterprise & Industry, Tancred Tabone, explains how these may include “favourable legislation for particular sectors, as well as the country’s rapid adaptability to new trends and industries”. He also claims that “besides legislation, Malta’s educational institutions, which are looking to supply these sectors and keep up with the necessary demand, also work in our favour.” The potential of niche markets According to the Global Competitiveness Report for 2011-2012 Malta occupied the 15th place visa-vis its financial market development, surpassing robust countries such as Germany. Mr Tabone explains how Malta has proven time and time again that it can excel beyond expectations, however “due to its small size and limited resources, the country is in a better situation to serve specialised areas rather than cater for the mass market. In this regard, our size offers us the advantage of being able to adapt and respond to changing market conditions”. Consequently, Malta has excelled more when it focused on serving niche markets with quality products or services. This has happened in agri-food, tourism, and financial services, which has bridged out into fund management, captive insurance, trustee services and general trading activity, all areas where Malta has established a significant international presence, most notably in the aircraft maintenance industry. Apart from the success reaped through mainstream tourism, Malta has also over the years managed to

“ Due to its small size and limited resources, the country is in a better situation to serve specialised areas rather than cater for the mass market. In this regard, our size offers us the advantage of being able to adapt and respond to changing market conditions” – President of the Malta Chamber of Commerce, Enterprise & Industry, Tancred Tabone compete very well as a popular destination within the Meetings, Incentives, Conferences and Exhibitions (MICE) niche sector, which drew a number of large scale high profile conferences, involving various international blue chip companies and political world leaders to the island. As described by Mr Micallef, the benefits of the MICE market are widespread; not only in terms of the per capita high earnings they generate, which is estimated to be at least three times the average, but also because of the high profile exposure this segment gives our country. Malta’s technological readiness Malta’s technological readiness has also made the island extremely attractive for investors to set up business here. The Report classified Malta in the 26th place in relation to its technological readiness and availability, setting it ahead of neighbouring Mediterranean coun-

tries such as Cyprus and Spain, and other small EU member states including Slovenia. Here Malta has also ranked better than larger countries such as Italy and China, and just one place short of Japan. When commenting about these results, Alan Camilleri, Chairman of Malta Enterprise explains how the technological developments that Malta has made in recent years was a key component that enabled such sectors to flourish, “indeed, amongst others, these technological developments helped Malta bridge the natural disadvantages posed by it being an island and also served to attract foreign investors to our shores, where they were also able to benefit from the multitude of other advantages Malta offers.” Malta has shifted from a low-cost manufacturing base to a knowledge-based economy with high emphasis on value added. “Con-

sequently, our technological readiness has become an even more important element when making our business case, as it would be a crucial requirement for the type of foreign investment Malta Enterprise seeks to attract towards Malta,” adds Mr Camilleri. While investors do value this highly, Malta provides an entire package such as the availability of highlyskilled human resources as well as the myriad fiscal, financial and other assistance provided by Malta to those setting up or operating in the country. The Malta Information Technology Agency (MITA) Chairman, Claudio Grech, explains how MITA’s Strategic Plan is specifically geared towards sustaining growth in the ICT sector and in Malta’s e-skills capacity. Among the various programmes lies the eSkills Alliance which seeks to align the e-skills demand and supply of competen-

BUSINESS AGENDA | Dec - Feb 2012

economy cies and ropes in the various players within industry, Government, private education institutions and stakeholders. As to the Maltese society in general, “MITA has worked to widen ICT education and collaborated with ICT multinationals to increase the diversity of technologies and ICT skills in Malta,” explains Mr Grech. In 2012 MITA will also seek to open the first centre in the world to focus on Cloud Computing. “This centre will particularly promote local ICT skills and develop the cloud computing skills base in Malta, as well as promote Malta as a go-to location for cloud computing knowledge sharing and expertise.” This not only highlights Malta’s technological readiness but also sets the country in the forefront ahead of competition within the ICT industry.

A dynamic new look for MHRA The Malta Hotels and Restaurants Association (MHRA) has undergone a dynamic rebranding exercise which was unveiled during their 53rd Annual General Meeting ‘Beyond the Next Wave’ held last month. Earlier this year the MHRA embarked upon a restructuring programme that aims to better resource its secretariat to meet new challenges emanating from an increasingly dynamic tourism

industry. To mark these changes it was also decided to adopt a new identity. The new logo, while different from the previous one, aims to capture the main characteristics that define the MHRA – sophisticated, credible yet dynamic and forward looking. The chosen icon – a square – is a strong symbol that symbolises the MHRA’s own strong standing among relevant stakeholders. The icon also houses the main MHRA acronym, which subtly builds upon the

organisation’s heritage. Indeed, the new identity is memorable and immediately recognisable –

in this way it will help build upon the MHRA’s deep-rooted heritage whilst projecting a fresh outlook.

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What lies ahead? However, in spite of Malta’s excellent performance in 2011’s second quarter, the countries it depends on for its exports, tourism and services such as Italy, Germany, France and the UK have registered a very poor or negligible growth. Malta produces only 20 per cent of its food needs and has limited natural resources and domestic energy sources. Therefore its economy depends a lot on other countries for its livelihood. This is highlighted by Mr Micallef when he claims that “any substantial drops in tourist arrivals next year will have devastating effects that are worse that those registered in 2009, given the substantial increase in operating costs since.” In this respect, Mr Micallef believes that Malta needs to place clear targets and policies that will help the tourism industry sustain existing figures and possibly even register growth. The overall tourism industry has been affected by the recent economic crisis, and Malta “has seen a drop since 2008-9 against stiffer competition”. In order to maximise gains and beat competition Mr Micallef, believes that Malta needs to analyse whether it is giving the sufficient and right mix of products and services to stimulate a higher spend when tourists are in Malta. “Higher spending is clearly determined by the quality of products and services Malta offers to its visitors and therefore we must ensure that we are sufficiently geared up in offering value for money services and products”. This in turn, could contribute to increasing the per capita revenue even with the same profile of visitors. Adding to this, Mr Tabone states that when looking ahead it is critical that we continue to earn our success and improve on Malta’s competitiveness. In this regard he believes that we should “continue to maximise our strengths of adaptability and flexibility as well as our resourceful entrepreneurs and hardworking human resources.” In order to achieve this, he believes it is necessary that the right business environment is nurtured, and this will allow businesses to continue to develop and flourish.

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business

PPP: A WIN-WIN SITUATION FOR THE PUBLIC AND PRIVATE SECTORS Public-Private Partnerships have become an effective way for Government to raise finances for large infrastructural projects, especially considering the current situation of most public coffers. business agenda speaks to TOMASZ KORCZYNSKI about how Malta can learn from Poland’s experience when it comes to the management of Public-Private Partnerships (PPPs). “The current economic and financial instability is just one of the many reasons why governments are increasingly looking towards Public-Private Partnerships,” states Tomasz Korczynski, Senior Associate of Wierzbowski Eversheds in Poland. “I think that in the current situation, PPPs may even reach more of their potential and prove how this business solution is really a sustainable and efficient one, no matter the economic climate.”

tic perspective. “PPPs are not just about a business deal between Government and a private service supplier,” he states.

Mr Korczynski should certainly know what he is talking about. As an attorney at law at Wierzbowski Eversheds, he specialises in commercial, business law and PPPs, and has over 10 years experience in providing legal advice to public and private entities, both in his native Poland as well as on an international level.

“In Poland, PPPs are a relatively new way of managing large projects and we have been through a number of upheavals when it came to implementing PPPs. The first legal Act that catered for PPPs in Poland was passed in 2005 and was replaced by the new Act just three years later, in 2008,” he explains.

However, while Mr Korczynski certainly believes that PPPs offer a number of benefits to all parties involved, he explains that it is essential that PPPs are managed extremely well and from a holis-

“The partnership must provide some form of benefit to the general public and to society as a whole. In this respect, it is absolutely essential that the legal framework that enables PPPs to function in the first place is conducive towards this type of business plan,” explains Mr Korczynski.

“I believe that Malta is now in the same position that Poland was in just a few short years ago and as such, both the public and private sector in Malta could learn from the Polish experience,” Mr Korczynski observes.

He continues to explain that one of the main challenges that Poland had was a lack of transparency and trust. “The perception that the Government’s public procurement practices left much to be desired, had a negative impact on PPPs,” Mr Korczynski explains. “However, with the implementation of a clear legal framework that governed PPPs, the situation has improved considerably.” He maintains that while PPPs should have a clearly established framework in order to ensure transparency and improve trust between those involved, the legal Act that was implemented in Poland in 2005 was almost too rigid. “In hindsight, we learned that while legislation is needed to ensure easy, clear and fair procedures, it should not stifle the development of PPPs... and this is almost what happened in Poland,” he explains. “In fact, it was previously too restrictive as it actually defined what projects could and could not be carried out as a PPP. But we are

currently working on yet another revision as there are still too many provisions within the current Act that can render a PPP inefficient.” According to Mr Korczynski, another issue that parties interested in embarking on a PPP should be aware of is the question of risk division. “Initially, private companies in Poland that were exploring the possibility of becoming involved in a PPP tended to be unwilling to accept the fact that the venture included an element of risk,” he explains. “But the fact of the matter is that PPPs are a way of doing business. Businesses need to take some risk and the reward is their profits. That formula does not change just because the other partner is the Government,” he states. Mr Korczynski continues to explain that the reward for the private partner is opportunity and profits – but this means that the project needs to be managed effectively and efficiently. This formula also means that society on the whole will stand

to gain from high quality projects as substandard products or services would in the long run jeopardise the project or have a negative effect on profits. In conclusion, Mr Korczynski expresses his belief that while Poland is still in the process of perfecting the way in which its PPPs are managed, Malta can still learn from its experience and avoid certain mistakes. He explains that, primarily, it would be essential to build a relationship based on trust and transparency. Secondly, the legal framework needs to be conducive towards PPPs – so it should be there to provide a framework and recourse to prosecution, if necessary, but it should not stifle potential and growth. Thirdly, the division of risk must be balanced enough to offer a strong enough incentive for both Government as well as the private sector to opt for this way of doing business. “PPPs have enormous potential and this business format can be used within practically any sector – healthcare, sports industry, transportation, education and even correctional facilities. With careful planning and the right legal framework, Malta can stand to benefit tremendously from investing in PPPs, but the future will tell to what extent this potential will be realised,” Mr Korczynski concludes.

Mr Korczynski was a key-note speaker at a Conference on Public Private Partnerships jointlyorganised by MBB and MEUSAC.

BUSINESS AGENDA | Dec - Feb 2012

EESC Update

online gambling:

Striking a balance between consumer protection and allowing industry to grow The European Economic and Social Committee (EESC) is steadily becoming more relevant to the EU decision-making process. BUSINESS AGENDA talks to STEFANO MALLIA on how the EESC works and about his recent Opinion on Online Gambling, a report drafted for the European Commission, which was widely endorsed by the EESC.

“ Drafting a report on online gambling was very complex for the reason that to date, there is absolutely no EU-wide regulation, as this is still exclusively governed by national law. The approach to online gambling varies across the EU with some countries imposing a total ban, others pushing monopolies and others opening their markets through national licenses.”

Stefano Mallia has been appointed as an employers’ representative to the EESC just over a year ago. One of the first remarks he makes when asked about the commitment of members within this institution is that “it is truly up to individual members to be active or non-active in the EESC.” Mr Mallia has in fact spared no time, and immediately focused his energy to participate as actively as possible in a number of fields deemed as most relevant to Malta and SMEs. Mr Mallia is an active member on the internal market, economic and social affairs, the environment and agriculture sections; all considered as heavyweights under

EU policy. During the past year he was involved in more depth within study groups that discussed specific themes that include the next EU Budget, the Small Business Act, the Common Agricultural Policy (CAP) reform and tuna quotas, among others. The role of rapporteur in any EU institution brings with it huge responsibilities. Mr Mallia describes this experience as “very hectic, intense and exhausting!” Most recently he was chosen as the rapporteur responsible for drafting the EESC Opinion in response to the European Commission’s ‘Green Paper on online gambling in the Internal Market’.

When asked about the motives why he showed interest in this subject matter Mr Mallia claims that, “one of the things I do when choosing which study groups to get involved in is to opt for issues that are of importance to Malta. Given the importance of online gambling for Malta, it was natural for me to accept the invitation by the EESC.” However, he acknowledges that, “when one becomes rapporteur, you are not there representing your country but the EESC institution, and therefore it is a very delicate role.” At a study group level, Mr Mallia’s work was no free-ride in trying to keep the balance between

the different interests of the online gaming industry, ranging from strong consumer interests to others with clear interest in protecting monopolies. Furthermore, Mr Mallia opted for the widest consultation possible. He states that “as a rapporteur I exercised my right to organise a public debate in Brussels and got a number of different speakers to talk about various aspects of online gambling, while in the meantime I held other consultations with associations and actual operators that showed interest in meeting me in the capacity of a rapporteur.” Mr Mallia claims that this experience taught him about the real lobbying pressures that exist in Brussels, with most delegates pushing forward their national interests. He states that “my approach was to discuss with all stakeholders, try to make them understand our point of view, and also try to find

a compromise about what I felt would be the right approach.” Mr Mallia explains that “drafting a report on online gambling was very complex for the reason that to date, there is absolutely no EU-wide regulation, as this is still exclusively governed by national law.” The approach to online gambling varies across the EU with some countries imposing a total ban, others pushing monopolies and others opening their markets through national licenses. “While keeping in mind that this industry has millions of EU consumers, has a turnover of billions of euro, and employs thousands of people, with this report I intended to push the Union in a direction for some sort of EU-wide regulation. By this I do not mean a total regularisation of the market because I understand that member states want to protect their industries

BUSINESS AGENDA | Dec - Feb 2012

EESC Update “If we want this industry to move forward, member states have to talk about the tax issue, because currently they are more focused to compete on fiscal policies or to block operators licensed by other countries from providing a service to their market.” and consumers,” he says. “However the reality is that the approach of national markets is not working because this industry operates online and therefore it is borderless. What is very worrying is that 85 per cent of online gambling sites are considered to be illegal, as they absolutely have no type of license,” he continues. He warns that “unless we sit down and regu-

late this market in a serious manner, we are going to lose it to the black market.” One of the major policy initiatives Mr Mallia introduced in his EESC Opinion was to at least start looking at EU-wide consumer legislation. Despite the resistance encountered by member states, in the end it was agreed that a mini-

mum EU-wide framework ought to be established. He also proposed a formal structured cooperation between member states whereby a ‘white-labelling list’ of regulated licensed companies is created. In this way consumers would be aware of the companies that are safer to interact with. An additional measure proposed in the report is the development of a label which every licensed operator in the EU would be required to show where it is licensed, directing consumers to the regulators’ website.” Mr Mallia shows concern that one of the most important elements that is missing in the EU in relation to online gambling is data. “Given that online gambling is nowadays available at home and thus is very easy to access, consumers can get easily addicted,” he warns. He adds that “unfortunately there is not even one EU study on online gambling addiction. Therefore the EESC Opinion urges the Commission to undergo a study on this sensitive issue to know the extent of the problem.” An important aspect of the online gambling debate and which many times halts progress is the issue of taxation. Mr Mallia believes that “if we want this industry to move forward, member states have to talk about the tax issue, because currently they are more focused to compete on fiscal policies or to block operators licensed by other countries from providing a service to their market.” A framework on taxation will result in a system whereby tax revenues earned from operators providing a service cross-border, are fairly distributed among member states,” he explains. Malta is a major player in the industry, and in light of these developments, he believes that it should react proactively in order to remain relevant. In his view “Malta can do more in terms of promoting the standards and the stringent regulations which operators in Malta have to abide by to obtain a Maltese license.” He adds that “unfortunately, due to the high amount of operators attracted to Malta, there are some who believe that this is attributed to lax regulation or standards. However, from what I have seen, this is not the case, as the Maltese regulator goes to pains to ensure that Maltese licensed operators protect consumers.” From a European perspective, Mr Mallia concludes that “the Commission took a courageous act to provoke a discussion in this sensitive area and its intentions are not to liberalise the market, but to protect consumers.” He believes that “we need to regulate the market, but with a vision to grow, keeping in mind that as there is no way that we are going to stop the internet, a balance needs to be struck between protecting the consumer and the national interests,” he concludes.

BUSINESS AGENDA | Dec - Feb 2012

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BUSINESS AGENDA | Dec - Feb 2012

eu policy

A Financial Transaction Tax: from political controversy to reality by 2014? By Omar Cutajar, MBB Permanent Delegate in Brussels

The proposed taxation of the financial sector has decidedly been the item that has generated the greatest attention of the media amongst the several initiatives, ideas and policy recommendations adopted by the EU institutions in their efforts to curb the economic and social impact of the ongoing international financial and economic crisis. The political build-up towards the proposal on a Financial Transaction Tax The discussions on the feasibility of a European financial transaction tax have been ongoing now for the past two years, with a first Commission Communication issued in October 2010, outlining the options between either a financial transactions tax applied exclusively in the EU, or applied at global level through a mechanism to be adopted by the G20 parties, or else through a financial adjustment tax. A European Parliament report, drafted by Greek MEP Podimata had earlier this year greatly increased the pros for a financial transaction tax, amplifying the political support across political party-groups. At the time, the European Commission appeared to be holding back its cards, preferring to undertake an extensive impact assessment on the competitiveness-related implications and practical feasibility of a financial transaction tax by its services. The impact assessment was ready by the end of this summer recess paving the way for the publication of a draft Council directive on a common system of financial transaction tax. In its proposal, the Commission is justifying the draft directive on the basis of a two-fold argument – namely that the financial sector makes its fair contribution at a time of fiscal consolidation in the member states and that it is amply sensible given that 10 member states have already a form or other of a financial transaction tax in place, to introduce a coordinated framework at EU level to ensure a convergence of the existing different taxes on financial transactions in the EU. What does the proposal contemplate? In brief, the Commission is defining the 'financial transaction tax' as a tax applied to financial transactions, usually at a very low rate, applicable to the exchange

of financial instruments between banks or other financial institutions. The draft directive would cover transactions relating to all types of financial instruments, including capital market and money market instruments (with the exception of instruments of payment), units or shares in collective investment undertakings and derivative agreements. Transactions with central banks are, however, excluded. The financial instruments in question include securities, bonds, shares and derivatives. The Commission is proposing a minimum tax rate for the trading of bonds and shares of 0.1 per cent and 0.01 per cent for derivative products, with member-states free to apply higher rates if they so desire. The tax would have to be paid by each party to a transaction. Both parties to the transaction would pay their share of the tax in their country of residence or deemed residence. Private companies (and households) would only be subject to the tax if they were to sell or purchase financial products. It is estimated that the FTT would raise around E57billion per year and that these new revenues would be split partly between memberstates and partly for the purpose of financing a share of the EU budget, therefore reducing memberstates' direct contribution to the EU budget. Reactions and progress to-date Since the publication of the draft directive, the reactions from member states, business lobby organisations and other stakeholders have been plenty. The European Commission through its impact assessment has recognised the adverse competitiveness implications for both established and emerging financial centres spread over the EU’s territory. The risk of relocation of certain financial markets activities is a veritable one though difficult to quantify in real terms due to the inherent advantage for financial sector firms to operate within established infrastructures at easy reach of qualified personnel. Nonetheless, the adjustments costs for the financial industry are not to be underestimated, particularly in the context of the alreadyevident failure to implement a global agreement on financial taxation despite the oft-repeated claims by the Commission as

“From a Maltese business perspective, the adoption of a new taxation measure at EU-level is bound to affect the competitiveness of the Maltese financial services industry vis-à-vis other financial jurisdictions both within and outside the European Union. Malta’s success in the area of financial services depends on its competitive tax regime and the portfolio of bilateral agreements Malta has with other countries. For this reason, the Malta Business Bureau will be closely monitoring the EU legislative debate on the draft directive introducing a financial transaction tax.” well as key champions of the FTT, namely France and Germany, of their unswerving commitment towards striking a common G20 agreement. The failure to further pursue the multilateral route towards a global agreement that would to a great extent neutralise the competitiveness-related concerns of a unilateral move by the EU to introduce a financial transaction tax leaves very little room for manoeuvre but to move on with the legislative process at European level. Since the proposed law is a directive, it will need to be transposed into member states' legislation. Bulgaria and the Czech Republic have joined the UK and Sweden in their outright opposition to the

Commission’s proposal. Discussions in the European Parliament are at best more advanced only in terms of the ideological entrenchment of support or otherwise of a financial transaction tax with a clear left-right divide on the matter. From a Maltese business perspective, the adoption of a new taxation measure at EU-level is bound to affect the competitiveness of the Maltese financial services industry vis-à-vis other financial jurisdictions both within and outside the European Union. Malta’s success in the area of financial services depends on its competitive tax regime and the portfolio of bilateral agreements Malta has with other countries. For this reason, the Malta Busi-

ness Bureau will be closely monitoring the EU legislative debate on the draft directive introducing a financial transaction tax. In the meantime, the legislative process at European level is in its initial stages and is bound to be a protracted one timeframes-wise, since the FTT proposal is also linked to the premise of a reform of the EU’s system of financial own resources in the context of the EU’s new budget for the period 2014-2020. Nonetheless, it remains the stated objective of the European Commission to ensure that the financial transaction tax would come into operation as of 1st January 2014.

BUSINESS AGENDA | Dec - Feb 2012

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BUSINESS AGENDA | Dec - Feb 2012

Business News MBB Update

15th September –

19th - 20th September –

MBB CEO participates in a Conference on ‘Wage Trends in Europe’ held in Brussels

MBB Executive participates in a Conference on Gender Equality in Brussels

MBB CEO Joe Tanti was invited by Businesseurope to participate in a conference addressing wage developments and their impact on competitiveness and social cohesion in Europe, through a high-level debate between researchers, employment policy makers and social partners. The sessions focused on trends in nominal wages, productivity and

their impact on competitiveness; the declining wage share as a catalyst of the recession; growth in wage inequality and consequences for social policy; and wage-setting systems and Europeanisation: indexation and levels of collective bargaining. The conference also provided an analysis of developments and policy issues in the European context, examining how wage

determination at national level can contribute to preventing and rectifying macroeconomic imbalances and enhancing competitiveness. Mr Tanti’s visit was supported by the European Commission. See page 27 for more details.

21st- 22nd September –

Launch of the MedAlliance Action Plan in Alexandria, Egypt MBB Permanent Delegate Omar Cutajar and Malta Chamber Internationalisation Manager Klaus Pedersen participated at the ‘Invest in Med’ final conference, organised by the MedAlliance – a consortium made up of ANIMA, ASCAME, BUSINESSMED and EUROCHAMBRES. The MedAlliance acted as the management body for the ‘Invest in Med’ programme – a €12million, principally EU-funded programme, aimed at developing sustainable trade relationships, investments and enterprise partnerships between the two rims of the Mediterranean. Various high-level political interventions were delivered, with special focus given to the fast-evolving political scenarios in the North African region. The ‘Invest in Med’

conference served to step up the momentum towards a more project-oriented economic cooperation efforts in the Euromed region as initially flagged during the 8th Euromed Industry Ministerial meeting held in Malta in May. The MedAlliance will contribute towards attracting key players and technologies by providing businessdriven proposals, identifying and highlighting EU and Mediterranean countries’ mutual competencies, and reinforcing regional clusters for ‘Mediterranean competitive offers’. These will support the global specialties that were identified during the ‘Invest in Med’ project to reinforce the Southern Mediterranean industrial strategies.

growing job creators: start-up companies that are able to internationalise quickly. The high potential SMEs should ideally be accompanied in their development efforts across the Euromed markets. This process is only possible through networks: individual coaching networks supporting international strategies and business development; as well as the coordination of business missions to develop synergies with other companies.

MBB Executive Mariella Scicluna attended a conference on gender equality, which provided the first opportunity to discuss and share ideas on implementing the priorities of the European Commission strategy for equality between women and men (2010-2015). The conference addressed the challenges and opportunities of gender equality, assessing how this can contribute towards economic growth.

According to the final Action Plan, the MedAlliance is willing to put a stronger emphasis on the development of a resource-centre, based on existing services developed by various business support and SME internationalisation organisations during the last decade.

The conference brought together more than 400 participants from European institutions, international organisations, EU member states, social partners and civil society. It marked the first year of the Strategy for equality between women and men (2010-2015), adopted in September 2010.

Most speakers concurred that the Mediterranean region needs fast

Ms Scicluna’s visit was supported by the European Commission.

arrangements were driven not only by limitations in the availability of public funds to cover investment needs, but also by efforts to increase the quality and efficiency of public services.

partnerships have seen the financing of major infrastructural developments. However, the framework for such agreements should be facilitated to target smaller-scale projects.”

MBB President John A Huber underscored the Maltese business sector’s belief in the need of a mindset shift within the policy parameters charting the development of PPPs: “Traditionally, public private

MBB CEO Joe Tanti and MEUSAC Head Vanni Xuereb addressed the audience with a joint-welcome note. Other speakers were Vincent Mifsud – CEO Malta Government Investments Ltd; Andre Fenech –

CSR Spokesperson Malta Chamber of Commerce, Enterprise and Industry; Stuart Broom – European PPP Expertise Centre in Luxembourg; and Tomasz Korczynski – Legal expert specialising in PPPs in Poland. The conference was chaired by MITA Chairman Claudio Grech.

Joint MBB and MEUSAC National Conference on Promoting PublicPrivate Partnerships In his opening address, Parliamentary Secretary for Consumers, Fair Competition, Local Councils and Public Dialogue Hon Dr Chris Said highlighted the fact that recent years have seen a marked increase in cooperation between the public and private sectors across the European Union. Public and private sectors worked hand in hand for the development and operation of infrastructure for a wide range of economic activities. Such PPP

The conference heard a strong and detailed articulation of the case for gender equality. This case was established in terms of justice, business success, economic growth and societal wellbeing. The economic crisis was addressed in the debates whereby it was argued that gender equality can and should be a factor in the recovery from the economic crisis. It can also enable the targets for Europe’s 2020 Strategy to be met.

Five plenary debates based on the key themes of the strategy took place. The issues addressed were labour market segregation, unequal pay, gender equality and the life cycle, violence against

29th September –

MBB and MEUSAC organised a half-day conference on ‘Promoting Sustainable Partnerships’. The aim of the conference was to promote Public Private Partnerships (PPP) and Corporate Social Responsibility (CSR) in Malta as well as to provide an opportunity for networking between the various stakeholders in the Maltese public and private sectors as well as civil society.

women, and women in economic decision making. The debates focused very much on the current situation of women and men in relation to each issue, the consequences of gender inequality, and the practices and initiatives that now have a capacity to improve gender equality in these fields.

See page 36 for article on gender equality.

See page 15 for more details.

BUSINESS AGENDA | Dec - Feb 2012

MBB UPDATE 3rd-4th October –

5th October –

MBB participates in the Second Edition of the Single Market Forum in Krakow, Poland

MBB coordinates the participation of AMIE Ambassador in ‘A Europe for Women Entrepreneurs’ Conference in Brussels

MBB CEO Joe Tanti and MBB Permanent Delegate Omar Cutajar participated in the Second Edition of the Single Market Forum, hosted by the Polish EU Presidency, bringing together senior representatives from all the EU institutions as well as representatives from organised civil society at European level. The discussions were in their main thrust an inter-institutional reflection on the future of the European Single Market in the context of the ongoing economic crisis and the prospects that a deepening and extension of the single market to the services industries and other fast-emerging digital commercial services would contribute to sustainable recovery. The discussions culminated in the adoption of the Krakow Declaration. The presentation of the Com-

mission’s working paper on the “20 Main Concerns of Citizens and Enterprises about the Single Market” conducted jointly by Maltese MEP Louis Grech and DG Markt’s Director General Jonathan Faull, provided the backdrop against which the recommendations put forward in the final declaration were adopted. From a general perspective, the main highlight of the Krakow Declaration is the call for further integration of the European Single Market in order to improve the EU’s competitiveness. The final plenary session of the Single Market Forum provided a political platform for the exchange of views on how the EU policymaking process could be facilitated to speed up the launch and implementation of the initiatives announced in the Commission’s Single Market Act.

Among others, Commissioner John Dalli (Health and Consumer Policy) intervened; regretting that too little was being done to raise awareness about the opportunities offered by the Single Market, and illustrated his viewpoint by suggesting the adoption of the same regulatory model successfully utilised in the harmonisation of the food industry’s EU acquis to other policy areas.

6th-7th October –

MBB President and CEO invited by the European Commission Representation in Malta for an information visit in Brussels The European Commission Representation in Malta, in collaboration with the Visits' Section of the Directorate-General for Communication of the European Commission hosted a group of 20 representatives of Professional Bodies and Non-Governmental Organisations to an Information Visit to Brussels earlier this month. During their two-day visit, participants attended talks by various speakers on the EU institutions, the political priorities of the EU, the EU, and the EU's Citizenship policy. Participants were also addressed by Joanna Darmanin, Head of Cabinet of Commissioner John Dalli, who spoke about the main issues related to the Commissioner's portfolio, namely Health and Consumer Policy. The programme also included a visit to the building that hosts the European Council where the participants were given a presentation on the role of this institution and the decision-making process by Dr Peter Agius. All the participants had positive feedback on the visit, describing it as a rewarding and beneficial experience that has given them direct access to and a better grasp of EU affairs.

The MBB coordinated Theresa Delia’s visit in Brussels, who addressed the Conference ‘A Europe for Women Entrepreneurs’, in the capacity of a Maltese AMIE Ambassador. The MBB’s role as a partner of this project is to focus on the synergistic efforts made by the Consortium and to network with the EU Network of Women Ambassadors. This gives further strength to the network created in Malta which also benefits from the pan-European campaigning efforts. Throughout the conference, a series of interactive sessions were held to discuss various themes concerning female entrepreneurship, which included the EU framework, current challenges and opportunities, and the need for tailored international growth support. Ms Delia gave a presentation on how the AMIE project is promoting female entrepreneurship in Malta. Presentations were also delivered by other keynote speakers and towards the end

of the conference recommendations were submitted to the European Commission. On a different note, throughout the months of October and November, MBB representative Mariella Scicluna, participated in seminars organised for young female students attending St Dorothy, the Gozo College and the Bishop’s Conservatory Girls’ Secondary Schools respectively. The AMIE project targets secondary school students as a potential audience, and thus organises events with the aim of exposing them to female entrepreneurship, while the AMIE ambassadors share their experience on how they successfully set up their business. These are followed by various presentations and brainstorming activities throughout all visits. The MBB is a partner in the AMIE consortium – an EU funded project promoting Female Entrepreneurship in Malta.

BUSINESS AGENDA | Dec - Feb 2012

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BUSINESS AGENDA | Dec - Feb 2012

MBB UPDATE 14th October –

MBB and Parliamentary Secretariat for Small Business and land jointly organise a Conference on Harnessing Intellectual Property Protection for Investment Promotion The absence of an efficient patent system in Europe was highlighted during a conference organised by the Malta Business Bureau and the Parliamentary Secretariat for Small Business and Land as part of the SME Week 2011 Activities at the Malta Fairs and Conventions Centre (MFCC), Ta’ Qali. A number of key experts in the field highlighted how diverging EU patent rules are causing the European Union to lose out on innovation. Experts also highlighted the fact that European enterprises’ research and innovation investments are not duly protected. MBB President John A Huber addressed the conference and stated that “this matter has dragged on for over a decade. These are timeframes that for the business environment are simply not acceptable. Action is needed. It is needed now! A European patent system truly responds to business needs to reduce costs and crossborder administrative burdens.” He added that “the inherent structure of the Maltese economy does not lend itself to R&D-inten-

31st October –

MBB Preident John A. Huber addressing the conference. sive set-ups; however there are already a number of success stories in certain sectors notably the generic pharma-business, the ICT sector and other less known but highly-specialised niche sectors such as marine biology. The adoption of a unified EU patent is nonetheless of critical importance for all businesses, as it is the best evident testament of how the internal market can facilitate the conduct of cross-border business, and how community policies in the area of the single market can enhance commercial competitiveness.” Parliamentary Secretary, Hon Jason Azzopardi also addressed the audience, stating that “intellectual property is sometimes

referred to as ‘hidden value’, but whether hidden or expressly valued, it is now clear that patents, copyright and related rights, trademarks, geographical indications and trade secrets are significant contributors to enterprise value.” Other speakers included Nikolaus Thumm – Chief Economist, European Patents Office; Godwin Warr – Director General, Commerce Department; Vincent Tilman – Senior Advisor, Eurochambres; Claude Vella Bonanno – Plant Manager, Solea Pharma Ltd; Nicholas Sammut – CEO, Malta Council for Science and Technology; and Jeanine Rizzo – Associate, Fenech & Fenech Advocates.

EU Life+ National Press Conference Launch and recruitment of New Project Manager MBB CEO Joe Tanti was a key note speaker in a press conference held at the Auberge d’Italie in Valletta, hosted by Parliamentary Secretary for Tourism, the Environment and Culture, Hon Mario Demarco. A presentation on all four EU Life+ projects awarded to Malta was given to the audience. The EU Life+ Investing in Water Project will run for 30 months with a budget of €334,642 and is 50 per cent co-funded by the European Commission. The project is intended to raise awareness about the problem of water scarcity in Malta. It will also encourage a change in culture that will lead to the adoption of best practices to

reduce water consumption by the business private sector in Malta. MBB welcomes new Project Manager for EU Life+ Investing in Water Project The Malta Business Bureau is pleased to announce its most recent addition to the team, Geoffrey Saliba, who will take over the post of Project Manager for the Life+ Investing in Water Project. Mr Saliba is a graduate in Tourism Studies from the University of Malta and has extensive experience in coordinating as well as managing EU Life+ projects.

BUSINESS AGENDA | Dec - Feb 2012

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BUSINESS AGENDA | Dec - Feb 2012

european economy

Wage Trends in Europe: in need of urgent reforms? Wages are an integral part not only of people’s lives but also of national policy. Political decisions with respect to wages affect individuals, employers and national economies, and possibly monetary unions respectively. DANIEL DEBONO takes a look at the debate surrounding wage trends in Europe.

The outcry of millions of Europeans facing austerity measures in various EU states to correct the fiscal imbalances that have brought Europe on the brink of a double-dip crisis is fairly loud. The debates on the causes of such a catastrophe are very much on, with different economic theories arguing about the multiple factors that have played a role in creating this abyss, and about how member states should act in order for Europe to move out of this economic gloom rapidly. The macroeconomic effect of excessive wage growth in Europe Studies conclude that wage trends in Europe were an important factor (among others) in the run-up and during the crisis, leading to the precarious economic climate that the euro zone is facing today. For instance, the fast wage growth experienced in the GIIPS countries (Greece, Italy, Ireland, Portugal and Spain) has jeopardised their economic competitiveness resulting in excessive budget deficits and extended public debt. According to a study published by DG Employment, Social Affairs and Inclusion in September 2011, a noticeable difference concerning labour compensation was registered in Europe over a 10 year period (2000-2010), with the highest percentage increases experienced in Greece (58.4 per cent), Ireland (49.7 per cent), Spain (39 per cent) and Portugal (36.4 per cent). These figures are in contrast with increases experienced by other euro zone countries such as Germany (11.5 per cent). Despite the fact that labour compensation could not be attributed as the sole factor causing current account imbalances, one cannot avoid noticing the correlation that exists between this factor and the GIIPS respective widening current account deficits. A natural reaction to the dismal economic performance by various European economies in general was to adopt moderate wage policies. In the last two to three years, following the financial crisis, wages have tended to grow below productivity levels. In the short term this is thought to lead to deflation, the strengthening of economic competitiveness and increase in net exports. However economists argue that within a monetary union, this strategy is not sustainable in the long term. A

“ The European Parliament has this year submitted to the EU Council proposals concerning the implementation of a European minimum wage target so that in every country the minimum wage should be at least 60 per cent of the national average wage. The adjusting of minimum wages covers only a small share of a wider scope debate to reform wage-setting mechanisms in the European labour market, in order to boost employment and economic growth.” more prudent policy would be for cost of labour to grow in parallel with productivity in order to avoid inflationary pressures and result in price stability. The microeconomic experience and social dimension A paper by the International Institute for Labour Studies in 2011 covering a decade (1998-2008) points out that wage moderation has been particularly stronger at the bottom end of the labour market. It concludes that “wages of the 10 per cent higher earners increased faster than their bottom counterparts,” therefore suggesting that the increase in wage inequality resulted rather from the increase of top wages and not from a fall of wages for the lower earners in the labour market.

While the traditional sectors characterised by trade are assumed to have had a small wage impact, thus resulting in wage moderation, other external factors such as skills and technological change have pushed other sectors to experience wage hikes, such as in the IT sector for instance – notably one of the most innovative sectors in the EU. On the negative side, in a majority of countries, the incidence of non-regular employment has increased and needless to say the labour force involved in this kind of activity is known to earn less than its regular counterparts. On a political level, the issue of wage trends in Europe is mainly characterised by a two-fold agenda: the adjustment of mini-

mum wages and the challenge to traditional wage-setting mechanisms. Minimum wages in Europe suffer from a fragmented platform with different legislative policies in different member states and at times even within national states themselves. On an EU level, while member states such as France and the UK have a national minimum wage mechanism, others, such as Germany, have sectoral agreements negotiated between the social partner representatives, and thus have no statutory national minimum wage mechanism in place. Despite this fragmented approach at an EU level, the European Parliament has this year submitted to the EU Council proposals concerning the implementation of a European minimum wage target so that in every country the minimum wage should be at least 60 per cent of the national average wage.

The adjusting of minimum wages covers only a small share of a wider scope debate to reform wage-setting mechanisms in the European labour market, in order to boost employment and economic growth. In recent years, member states such as Italy, Portugal, Germany, Greece and Spain, have experienced a move away from traditional collective bargaining tool methods and instead moved towards a decentralised approach whereby unions and employers deviate from the established pay norms and opt for productivity-linked pay systems. This has been the case in Greece at company level and in Italy at public sector level in respect to productivity-linked pay increases in 2011. Other countries such as Malta have a generalised wage indexation mechanism whereby the

BUSINESS AGENDA | Dec - Feb 2012

european economy “ The crisis has revealed long-standing competitiveness and fiscal imbalances in some countries. By contrast, those countries that have strong external positions – strength of exports and industrial activity – and lower overall indebtedness have shown greater resilience and are enjoying a more broadly based recovery.” – Senior Advisor for Social Affairs, Maxime Cerutti

increase in wages is linked to a cost-of-living adjustment (COLA) mechanism that determines the raise according to past inflation developments. A Commission report evaluating Malta’s National Reform Programme in 2011 urges the Government to “reform the automatic wage indexation mechanism, in consultation with the social partners to ensure that wage growth better reflects developments in labour productivity and competitiveness.”

BUSINESSEUROPE is a key social partner in Europe that actively participates in the debate of wage trends in Europe. Maxime Cerutti, Senior Advisor for Social Affairs, outlines the main policies of the organisation regarding this issue. In relation to the issue of wage increases to sustain long-term macroeconomic stability, Mr Cerutti states that “the crisis has revealed long-standing competitiveness and fiscal imbalances in some countries. By contrast, those countries that have strong external positions – strength of exports and industrial activity – and lower overall indebtedness have shown greater resilience and are enjoying a more broadly based recovery.” Thus, he observes, “an important element of their success has been to set a wage moderation path enabling companies to pay wages in line with the productivity of their workers.” An important forward-looking policy has been the decentralisation of collective bargaining. “A trend towards negotiations of wages at the plant level has been observed in recent years in several European countries. According to Mr Cerutti, “this allows companies to adapt their wage policies to varying economic outputs.” He believes that “the determination of wages is the exclusive competence of national social partners. The effective changes which were brought forward in some collective bargaining systems may serve as a source of inspiration for other countries. For example, German social partners increasingly use ‘opening clauses’ in sectoral collective agreements, which provide flexibility for companies to adapt national rules to their particular situation. Other examples include the possibility to agree on a variable starting date of the agreed wage increase, lump sum payments, variable elements of the wage and working time accounts, etc.” With regards to the issue of indexation systems, BUSINESSEUROPE argues that this has proved to be counterproductive. “Automatic wage adjustment to inflation contributes to a self-perpetuating inflationary spiral. For this reason, countries such as France and Italy decided to put an end to their indexation systems during the 1980s and 1990s,” Mr Cerutti argues. He believes that “competitive adjustments are now needed in many European countries. They can take place via quantities – employment and internal demand – or via prices: wages and prices. By cutting the link between wages and productivity, indexation systems contribute to greater unemployment. To avoid this, BUSINESSEUROPE believes that more flexible wage bargaining structures must be favoured to create growth and jobs,” Mr Cerutti concludes.

BUSINESS AGENDA | Dec - Feb 2012

Content House, composed of Content House (Advertising & PR), Content House (Publishing) and Content House (Investments) is one of the leading media companies in Malta. Founded in 2004 and with a staff complement of 17 dedicated employees on its books, last year Content House moved to larger, modern offices in Mriehel to cater for its existing and ever-growing business. Content House (Publishing) is responsible for some of Maltaâ&#x20AC;&#x2122;s leading magazines and Content House (Advertising & PR) is an established communication agency and the local agency for Scholz & Friends, one of the largest advertising agencies in Europe.

For the second consecutive year, Content House has received the Country Representative Award by the internationally acclaimed European Business Awards.

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BUSINESS AGENDA | Dec - Feb 2012

trade

Transporting Goods Across the EU Maltese businesses rely heavily on the cross-border trade of products with other EU destinations. Krista Micallef Trigona takes a look at the different modes of transport businesses can consider. Effective transportation is of paramount importance for businesses. It enables them to receive goods and to deliver orders to their customers safely, quickly and cost-efficiently. But transportation of goods is also important for international trade, national distributive trades and economic development. Statistics indicate that with the deepening integration of the enlarged EU, freight transport has increased rapidly. In the EU-27, total inland freight transport was estimated to be close to 2.4 million tonne-kilometres in 2008. A little over three quarters of this freight total was transported over roads. In the same year, maritime ports across the EU handled 3,919 million tonnes of seaborne goods – a modest reduction of 0.4 per cent in comparison to 2007. Meanwhile, in 2009, air freight (both domestic and not) carried through airports in the EU-27 stood at 12.3 million tonnes. As for the current scenario, Johann Vella, General Manager at Express Group, expresses that “in light of the economic recession, the industry is somewhat more strained then usual. Certain importers and exporters may be experiencing a decrease in demand whilst others have had to realign their operations and their strategy to be in line with the new market realities and to minimise the impact of the slowing market. Nevertheless, we have to acknowledge the fact that we are an island economy and we therefore depend on various forms of trans-

“ The transportation of goods is always dependent and determined by the urgency of the object being moved. For example, packages that are urgent and time sensitive are usually sent by express service. Such service providers offer a next day delivery service to EU destinations and a two day service to any other main town or city around the world. However, such services come at a premium and other cheaper methods, which although not fast enough, can be an alternative.” – Managing Director at Airswift Couriers Ltd, Mark Spiteri portation, be they by road, sea or air to ensure that commodities and products reach our country,” he maintains. As Mr Vella points out, there are a number of transportation modes businesses can choose from. But with such a varied selection, how can businesses determine which method is most suitable for them? “The transportation of goods is always dependent and determined by the urgency of the object being moved,” Mark Spiteri Managing Director at Airswift Couriers Ltd, authorised service contractors for UPS, explains. “For example, packages that are urgent and

time sensitive are usually sent by express service, otherwise known as ‘courier’ in Malta. Such service providers offer a next day delivery service to EU destinations and a two day service to any other main town or city around the world. One must keep in mind, however, that such services come at a premium and other cheaper methods, which although not fast, can be an alternative.” Methods of Trade Road Transport is a flexible option for international businesses, especially within the European Union, primarily because the motorway network is good and

there are no border controls. This form of transportation is relatively low cost, and you can also schedule transport to suit your needs as well as to track the location of goods. Moreover, consignments

can be secure and private. But risks are also involved, such as long distances, traffic delays and breakdowns, and the risk of goods being damaged.

BUSINESS AGENDA | Dec - Feb 2012

trade

“ Getting to know how your shipment is moving to its destination is a very important factor in today’s shipping industry as it gives customers visibility. With a reliable system, you are always in the know, and best of all, systems can provide the shipment information you need to keep your customers and colleagues up to date.” – Country Coordination Manager at DHL Express, Charles Schiavone

Sea Transport is especially beneficial to businesses that need to transport large quantities, without the pressure of fast delivery. Shipping large volumes can also come at a low cost and it is also a means that can be used for further transportation by road or rail. On the downside, this form of transportation is usually slower than other transport modes, furthermore, bad weather can add delays. Unlike road and air freight, routes and timetables are usually inflexible and it is a lot harder to track your goods’ progress. Air Transport offers numerous advantages for international trade. For starters, this form of transport delivers items quickly over long distances and gives high levels of security for sensitive items, furthermore, air transport can be used for a range of goods. The down side of air freight includes higher costs in comparison to other options, not

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all goods are suitable to carry via air, flights may also be delayed or cancelled, and upon arrival, further transportation is needed to transport your goods to their final destination. And where does traditional postage fit in the picture? Without a doubt, it is clear that advances in technology have had a huge impact on the traditional postage methods, particularly as a result of e-substitution. However, as Pierre Montebello, Chief Operations Officer at MaltaPost plc points out, “this movement has been offset by an increase in the number of mail items generated through online B2B and B2C transactions.” Mr Montebello explains that the web is certainly making an impact on the transportation of goods. “From a local standpoint, there has been an increase both in foreign outbound mail and in

the number of deliveries within the islands as more companies establish a web presence and sell their goods online. As a result, MaltaPost seeks to take advantage of the opportunities provided by online delivery channels. For example, to facilitate online commerce, MaltaPost offers a free web application which can be embedded into a website and will automatically calculate the cost of the available mailing options according to country of destination and item weight. This facilitates the calculation of delivery costs for customers of Maltese online retailers, giving them certainty when ordering.” Confidence and certainty in transporting goods from one destination to another are key and have had a great impact on modern transportation of goods. “In today’s world, anybody purchasing goods from other countries requires to know,

at any given moment, the whereabouts of his goods, and most companies now offer this facility,” Mr Spiteri states. This highly efficient system is known as tracking and likewise, Charles Schiavone, Country Coordination Manager at DHL Express, maintains that “getting to know how your shipment is moving to its destination is a very important factor in today’s shipping industry as it gives customers visibility. With a reliable system, you are always in the know, whether you are in the office or on the go, and best of all, systems can provide the shipment information you need to keep your customers and colleagues up to date and in the loop. “However, these systems cannot work if there is no human intervention behind the scenes. Data has to be inputted in real time with the progress of the consignment. If this is not done, customers would not have the real picture and the actual progress of their consignment. Hence, it is crucial that the service provider has a reliable network in place,” Mr Schiavone concludes. Now that customers and businesses can follow a product’s every move in their own time and comfort, what is the next thing in store for the transportation of goods industry? Well, according to Mr Spiteri, one trend that we

can expect to see on the scene is paperless transportation. “Airlines are now considering ‘paperless’ transportation of goods better known as e-freight. Up until recently, it was necessary that cargo moved with accompanied documentation, however, this concept will allow goods to travel without such documentation,” Mr Spiteri says, “which consequently enables the transportation community to become more environmentally sensitive.”

Selecting a Freight Forwarder Before selecting a freight forwarder bear in mind these three tips: 1. Ensure that they have experience in the type of goods you wish to transport. 2. Check to see whether they are experienced in shipping to the countries you are targeting. 3. Confirm whether they can handle several different transport methods.

11/21/11 12:50:46 PM

BUSINESS AGENDA | Dec - Feb 2012

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BUSINESS AGENDA | Dec - Feb 2012

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BUSINESS AGENDA | Dec - Feb 2012

business

R&D and innovation to boost business success Investing in R&D and innovation is not as daunting as many local businesses perceive it to be, and often yields success. Business Agenda explains why. With ever-increasing competition in the global markets, companies that make good use of research and development as well as innovation tend to be more successful than others and, in so doing, increase their profitability and ensure their long-term sustainability. The importance of this process was also recognised by the European Commission when it placed R&D and innovation at the very heart of its strategy for the coming years – Europe 2020. In its strategy, the Commission boldly states that boosting our performance in R&D and innovation is the only way for Europe to create good and well-paid jobs that will withstand the pressures of globalisation and support sustainable growth.

“Although R&D and innovation might seem prohibitive for many Maltese businesses – by challenging the misconception that such processes are restricted to large corporations with six-figure budgets or for PhD graduates, local enterprises would discover that they too can apply such a process to their operations.” Although R&D and innovation might seem prohibitive for many Maltese businesses – most of which are micro and small enterprises with limited resources available – by challenging the misconception that such processes are restricted to large corporations with six-figure budgets or for PhD graduates, local enterprises would discover that they too can apply such a process to their operations.

Indeed, R&D and innovation need not necessarily reinvent the wheel, but may even simply lead to an improved product or service or perhaps a novel way of carrying out a process that has more benefits than the previous way of doing things. Whilst a lot of entrepreneurs already put in a lot of effort to improve their products, services and processes, Malta’s recorded expenditure on

R&D as a percentage of GDP is only around 0.5 per cent, while the EU average is four times as much. With the aim of fostering a R&D and innovation culture, and of facilitating an increased application of such processes by local entrepreneurs, Malta Enterprise administers a number of schemes that specifically assist companies to embark on R&D and innovation projects within the framework of their operations. Among others, Malta Enterprise provides tax credits to compensate for eligible expenses incurred as part of an R&D project, effectively reducing the tax due by that enterprise, as well as supporting industrial research and experimental development. Moreover, Malta Enterprise also provides funds through two separate schemes financed by the European Regional Development Fund (ERDF) which are specifically designed to encourage R&D and innovation projects. Over €8.5 million have already been distributed to almost 100 beneficiaries in previous calls, while a Fourth Call for Innovation and a Third Call for R&D are envisaged to be announced in the coming months. Additionally, business advisory services focusing on research, technological development and innovation are also available to assist enter-

prises in their particular needs and to provide professional advice on how to maximise the use of their resources when undertaking such processes. Through its membership in the EUREKA Network and the Eurostars programme within the same Network, Malta Enterprise also facilitates cross-border collaborative R&D projects, whereby enterprises undertake a marketdriven R&D project together with at least one other partner from a different member state in the EUREKA Network. Participating enterprises may also obtain part-financing in relation to costs incurred to carry out the project. In recognition of the fact that R&D and innovation lead to the creation of knowledge and intellectual property, and that these too can be exploited by researchers and enterprises for their own benefit, Malta Enterprise also administers a scheme through which income from royalties on patents would be non-taxable. Such a scheme is possibly amongst the best in the EU. For further information on the assistance provided by Malta Enterprise to facilitate the access to R&D and innovation for local enterprises, one may contact the Corporation on 2542 0000 or via email on info@maltaenterprise. com

BUSINESS AGENDA | Dec - Feb 2012

focus

Equal Gender Opportunities in the Labour Market There is a plethora of EU and local legislation that seeks to ensure equal opportunities and treatment for men and women in the workplace but Mariella Scicluna asks – are they observed in practice? Gender equality is one of the fundamental principles of EU law. The Union’s objectives are to ensure equal opportunities and equal treatment for men and women, while combating any form of harassment and discrimination on the basis of gender. Even though the necessary legal framework aimed at ensuring equality exists and important legal instruments have been adopted at global, regional and national levels, equality is still not a reality for millions of women both in Europe, and worldwide. There is still a gap. The fact that various conferences on this subject matter are still being organised 30 years after the Convention on the Elimination of All Forms of Discrimination against Women, is evidence that we are still far behind in terms of what was set to be achieved. 2010 is a landmark year for the evolution of the European Employment Strategy (EES) and also a period of transition for European institutions that established the framework for the new ‘Europe 2020’ strategy. According to the Lisbon European Council of 2000, the overall aim of employment and economic policies was to increase the female employment rate to more than 60 per cent, improve the childcare system and reduce gender gaps in employment, unemployment and pay by 2010. One of the strategy’s most important aims is to achieve 75 per cent of overall employment rates for the 20-64 age group within a decade from now. These targets do not explicitly refer to women, however women are recognised to be a crucial resource, and thus their contribution is essential for Europe to achieve these targets. Despite lights and shadows, one must recognise that progress for female employment has been made. Effectively by 2010, 16 out of the EU-27 countries have already accomplished the target female employment rate of over 60 per cent. As per Eurostat statistics, in 2009, Mediterranean countries including Greece, Italy, Spain and Malta rated between 7.2 and 22.3 percentage points below the Lisbon target. On the contrary, the Northern and Baltic countries have all fulfilled the objective. Eastern countries, except for Slovenia, are still behind: however the gap is lower than that of Mediterranean countries. Among Continental and Anglo-Saxon countries only Belgium, Luxembourg

“ NCPE believes in the importance of equal gender opportunities in employment. It acknowledges the need that family responsibilities and child-rearing should be shared so that every member can participate actively within the family and in paid employment. In addition, it is important that family-friendly measures are accessible to both men and women at the workplace.” – Executive Director of the Malta National Commission for the Promotion of Equality (NCPE), Dr Romina Bartolo and Ireland had not reached the 60 per cent target by 2010. If we compare older female generations with current younger ones, a significant change in the labour market is surely to be found, however in comparison to men, women continue to participate less in the labour market. They are the ones who still tend to form their participation at the work place in relation to family formation and are more concentrated on part-time or temporary arrangements. Moreover, as evidenced by the current economic downturn, women are thus more prone to the risk of poverty and/or labour market exclusion in different phases and circumstances (especially young, elderly, single mothers, or migrant females) – creating even further discrimination. Although these ‘facts’ are common all over Europe, their intensity varies across countries. The structural, institutional and cul-

tural context indeed shapes women’s and men’s choices and risks in the labour market, their supply, the position they get, their career continuity, how they combine work with family responsibilities, and how they divide such responsibilities. In order for our societies to able to combat such inequalities a mentality change must occur across the board. This however can only be achieved step by step and through the development of social policies and the endorsement of such policies. Parents are required to share the same amount of responsibility in family matters and children upbringing via a ‘dual earner-dual carer’ family model and culture. This would create a balance in responsibilities, which in turn would create the possibility for women to continue to progress in their careers on a full-time basis, despite familiyrelated responsibilities. Policies, thus, need to adopt a lifecourse perspective, recognising women’s and men’s diverse experiences and needs in their different spheres of life, their evolutions over time and their complex interdependencies. In particular, the transformations of the labour market demand and regulation, of the family and demography, need to be taken into account while keeping in line with both the ‘Agenda for new skills and jobs’ and the ‘European platform against poverty’ flagship

initiatives, which can be addressed with lifelong training policies. Appropriate life-course policies can also contribute to reduce gender segregation to the extent that they also promote young women’s presence in non-traditional subjects and professions, and adult women’s entry into senior positions. It is largely recognised that the root causes of the gender labour market segregation (including pay gap) extend well beyond the equal pay for equal work goal. This is tied to educational segregation, job segregation, gender stereotypes, distribution of domestic and care responsibilities, and the transition from education to work, to name a few. Executive Director of the Malta National Commission for the Promotion of Equality (NCPE), Dr Romina Bartolo emphasises on the need for a balanced participation, stating that “NCPE believes in the importance of equal gender opportunities in employment. It acknowledges the need that family responsibilities and child-rearing should be shared so that every member can participate actively within the family and in paid employment. In addition, it is important that familyfriendly measures are accessible to both men and women at the workplace, since these are means which enhance equality of opportunity in employment. Work-life balance is essential in order to secure the opportunity to persons with caring responsibilities to actively care for

“ Employers need to be sensitive to the need for shared responsibilities and equal gender participation in the labour market, it is important to stress that employers must not be loaded with the cost of policy measures to counter-balance the lack of such participation” – Director General of the Malta Chamber, Ing. Ray Muscat.

their children or other dependant family members. As to employment of men and women, employers are to seek and assess abilities of individuals rather than attach one job to one sex and not the other based on stereotypes. Currently NCPE is working on an EU co-financed project entitled ESF 3.47 – Unlocking the Female Potential aimed at encouraging equal opportunities to both men and women at the place of work. Through the project’s campaign, companies are applying for the ‘Equality Mark’ which is awarded to companies that prove they are gender-equal in the opportunities they offer. NCPE is currently meeting these companies, and assessing their policies and practices, including recruitment and employment practices, and the implementation of family friendly measures, to ensure that a commitment towards gender equality is evident in these entities.” Ing. Ray Muscat, Director General of the Malta Chamber, states on behalf of the local business community that, “without a doubt, the closing of the gap between men and women needs to be a clear objective for 2020, both for economic reasons as well as for social ones. Of course, this objective brings about the need for increased responsibilities of the household, primarily the caring of children. He further noted that policy measures should go a long way to support families to better plan and implement such shared responsibilities. However, although employers need to be sensitive to the need for shared responsibilities and equal gender participation in the labour market, it is important to stress that employers must not be loaded with the cost of policy measures to counter-balance the lack of such participation. Having said that, during employment processes gender discrimination must be avoided.

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AWARENESS

Cleland & Souchet Celebrates its 10 Year Anniversary from 18 countries around the world, including their own Maltese DOK wine called ENO. The wine area in their outlet has just been expanded to offer more high end wines and many are available for tasting, totally free of charge, in their Enomatic wine serving system. This Christmas, their iconic hampers, will be spotted in all the right places. Beautifully presented and filled with quality wines and fine foods, a Cleland & Souchet hamper is a delight to receive and savour. Of course, you will also find an extraordinary range of distinctive gifts too. From personal accessories to fine leather goods and decorative items for the home, you are spoilt for choice with the vast range of exceptional brands at Cleland & Souchet.

Since its inception in 2001, Cleland & Souchet has pioneered its own lifestyle retail concept, bringing together the world of luxury for the home with distinctive gifts and the world of wines, fine foods, spirits and cigars. Today, the company has built an unrivalled reputation for excellent quality and the highest standards of service. Their retail outlet in

Portomaso has become the home of the world’s leading brands, including Baccarat, Christofle, Riedel, Casa Bugatti and Versace by Rosenthal to name a few. The wine division of the company has also flourished over the years and it is now the favoured supplier of wines to many of Malta’s leading hotels and restaurants. Their portfolio includes top wines

For more information, ask for their Christmas gift brochure or pop into their shop in Portomaso, open Monday to Saturday and all week during December. Parking for patrons is free of charge.

Cleland & Souchet, 14, Portomaso. Email: info@clelandsouchet.com; Tel: 2138 9898

LOOK OUT FOR THE Trustmark WHEN TRADING ONLINE Trust – or the lack of it has for a long time been considered to be the major barrier to consumers taking up eCommerce. Consumers want to make sure that they know who they are trading with, that they will get the product or service they were promised and that there will be a fair form of redress if things go wrong. Having said this, some 51 per cent of Maltese are today shopping online and spending more whilst at it. It stands to reason that our entrepreneurs would seek to capitalise on this important new trading channel. There is sufficient anecdotal evidence available to indicate that local eCommerce sites are on the increase. The level of advertising of local eCommerce sites is already a clear testament to this. Purchasing from Maltese sites is also now on the increase. Notwithstanding these positive trends, there is no question that more can be done to drive the purchases from local sites. With a view to addressing the trust issue, the MCA has just launched a new trust-mark for local eCommerce sites.

The launch of this trust-mark allows the authority to reward those sites which are fully compliant with legal obligations and adhere to a code of practice with the trust-mark. The code of practice has been specifically designed to ensure that compliant sites will provide consumers with all the information they need to make a purchase with confidence. A second trust-mark is also available for sites that do not allow online purchase, but offer infor-

mation regarding products or services that are available from brick and mortar outlets. This is an interesting concept, which allows entrepreneurs who are taking the first steps in using this medium to start off on the right track. The MCA will be embarking on a media campaign spanning a number of months to ensure high visibility of the mark amongst Maltese consumers.

Traders who are interested in applying for the trust-mark will find all relevant information on the site dedicated to the trust-mark http://eshop. mca.org.mt

King Shoe Shop introduces Stegmann This winter, King Shoe Shop introduces Stegmann. The Stegmann Company was founded in 1888 and has led the way as a family company for generations. Stegmann is the inventor of the natural felt clog. In the course of time, manual and technical masterpieces have been achieved and it has been a permanent goal to improve the models. The combination of an anatomically formed cork insole with an anatomically shaped felt upper, results in the most comfortable and relaxing slipper in the world. Best craftsmanship as well as seamless felting techniques guarantee an optimised fit that saves the foot from pressure marks.

Stegmann slippers are exclusively available from King Shoe Shops in Valletta, tel: 2122 4804; San Gwann, tel: 2137 8433 and Tigrija Palazz Gozo, tel: 2156 9423. Visit www.kingshoeshop.net to view the full collection.

FIMBank Brazilian joint venture launched IFC, a member of the World Bank Group, FIMBank plc, the Maltabased trade finance bank, and BICBANCO, recently launched BRASILFACTORS to offer domestic and cross-border factoring and complementary services to Brazilian corporates and small and medium enterprises.

Mr Al-Saleh said "small and medium enterprises are a decisive driver for the growth of the Brazilian economy and products such as factoring play a key role in supporting these companies, as we have seen in many other countries where factoring has been a great success."

This joint venture was launched with an initial equity investment of US$10 million, which may increase to US$25 million in progressive future calls as the business develops. FIMBank and BICBANCO have each acquired a 40 per cent stake in the new company while IFC has acquired the remaining 20 per cent.

The factoring industry is considered an important financing alternative for SMEs as it provides an integral service that includes the purchase of the SMEs’ trade related receivables as well as trade bill collection and administration. These services allow SMEs to take advantage of strong growth opportunities and overcome capital and access to finance constraints.

Although the Brazilian economy is one of the fastest growing in the world, SMEs in this country generally have limited access to funding and sophisticated trade solutions. BRASILFACTORS aims to help fill this gap with short-term funding against receivables and management solutions, such as risk protection and collection services, for both domestic and export transactions. The inauguration ceremony that took place in São Paulo was presided by FIMBank Chairman Najeeb Al Saleh and President Margrith Lutschg Emmenegger, BICBANCO’s Vice President Milto Bardini and IFC – Head of Equity – Financial Markets, Latin America and Caribbean, Paulo de Bolle.

Mr Bardini said “the launch of BRASILFACTORS reaffirms our commitment to Brazilian entrepreneurs at all levels. We believe that SMEs stand to benefit substantially from the management solutions and services BRASILFACTORS will offer.” “Our support to BRASILFACTORS is part of IFC’s strategy to help reduce income inequality by strengthening the competitiveness and access to finance for SMEs, and integrate small producers into the supply chain,” concluded Mr de Bolle. For more information about FIMBank and its international factoring operations visit www.fimbank.com

BUSINESS AGENDA | Dec - Feb 2012

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COttage Delight gentleMen’S SeleCtiOn

Made from the famous Emilia Region milk which is known to be richer in both nutrients and flavours and cured for not less than 24 months, Ferrari Parmigano Reggiano is not simply any cheese – this is the Ferrari of cheeses.

From the hilly terrain of Parma comes an exclusive cuvee’ made by carefully selecting the best grapes and creating a harmony and balance between the young and fresh fruit with the aroma of mature wines, all elegantly contained in a 1.5 litre magnum decorated with Swarovsky Crystals.

Born out of 200 years of traditional artisan experience and goodness, Muzzi panettone is filled with a decadently original Limoncello cream and hand wrapped to add a special touch.

Pheasant Pâté, Duck and Orange Pâté, traditional Scottish Oatcakes, Poacher’s Pickle, Red currant Jelly and Sweet Apple Chutney all brought together to create this luxurious selection of savoury specialities – a gourmet’s dream come through.

...MakeS ChriStMaS FREE

ALL DELIVERY A OVER MALT

Simply visit www.thewembleystore.com to feast your eyes on tantalising gifts you may purchase online and have delivered directly to your clients. or visit us at

305, rePubliC Street, valletta | www.theweMbleyStOre.COM

tel. 2122 5147

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BUSINESS AGENDA | Dec - Feb 2012