Economic Vision 2022

Smart & Sustainable Island An official publication of

The Malta Chamber of Commerce, Enterprise and Industry

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Introduce an educational framework to attract talent, build a strong talent pool and to satisfy demand of the current and future local industry Collaborate with local and foreign universities, institutes and training bodies, to increase awareness and interest in taking up careers in technology

Talent

Strengthen the academic interchange in the field of technology and research, by signing agreements with local and international partnering Universities Devise training programmes to supply the market with upcoming and trained employees and minimize the digital divide as well as the digital gender gap Encourage students to take up STEM subjects and instill leadership, innovation, creativity and entrepreneurial skills

OUR VALUES

Provide free wi-fi access promoting a more digitally inclusive society where no one is left behind

Initiatives to place Malta at the forefront of the global tech and innovation community Attend local and international industry events to promote Malta as a Tech Hub of Choice Act as a promotional platform for the local tech sector Offer exposure opportunities to the businesses community during local and international industry events and fairs

Promote

Attract foreign entities to start up, operate and trial their novel technologies locally Organise networking events between startups and investors to facilitate connections Celebrate the successes of local businesses

Driver behind research related to technology and innovation in Malta Enhance the education platforms available locally to fall in line with the demands of the industry, but also be the medium by which tech professionals are exposed to new innovative technologies Manage the dissemination of research findings and innovations to ensure the findings reach the right target audience and elevate the overall quality level and know how of the industry Facilitate access to innovative tools and infrastructure Lead the way for start-ups through innovative accelerator programs Acting as a lynchpin for academia, industry and research and development facilities to promote the development and experimentation of innovative technologies Assess the market for niches and untapped potential, which the Maltese tech companies can tap into to advance, grow and internationalisation Build a nurturing and supportive ecosystem, essential for the local tech industry to flourish and grow

Innovate Assist Reach out to over 190 businesses operating in the Tech sector Provide guidance and support to local businesses seeking to digitize their processes, tap into the world of eCommerce and/ or internationalise Recommend possible areas of potential expansion and offer assistance in funding opportunities or establishing a network of industry contacts Act as the link between national, EU and international SME support, while ensuring superior client relationship management through personalised advisory services Guide businesses in enhancing their portfolios and pitches to attract investment / export their products Build extensive networks of major industry players to tap into piloting projects, R&D, as well as offer credibility amongst international start-ups Educate the tech sector in managing business growth, ensure readiness for potential investment and internationalisation https://tech.mt/

Techmt.Contact@tech.mt

@Tech.mtMalta

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CONTENTS 06 07 09 20

The Malta Chamber of Commerce, Enterprise and Industry Editorial

The Malta Chamber President Marisa Xuereb

The Malta Chamber CEO Dr Marthese Portelli Future-proofing Industrial Infrastructure - Indis Malta Chief Operations Officer Omar Debono

23 24 26 28

The Malta Chamber Deputy President Chris Vassallo Cesareo

The Malta Chamber Highlights 2021

The Prime Minister of Malta Dr Robert Abela

Leader of the Opposition Dr Bernard Grech

30 34 36 38 40 42 43 45

From The Chamber’s Diary

This Is A Time To Learn, Grow and Adapt - HSBC Bank Malta p.l.c.

Chief Executive Officer Simon Vaughan Johnson

Minister of Finance and Employment Clyde Caruana The Shadow Minister of Finance Mario de Marco In Figures: A Look Back at 2021 The Governor of the Central Bank of Malta Prof. Edward Scicluna

Gold Sponsors Taking to the Skies – David Curmi, Air Malta Chairman

47

Looking Ahead With Caution - Bank of Valletta Chairman Dr Gordon Cordina

49

Business Projections and Plans - Tech mt, Ivalife, Enemed, MMH, MIDI, Malta Business Registry, Planning Authority, Family Business Office

58 69 71 73

Malta Chamber Sustainability Committees 2021-2022

Bronze Sponsors

Banking on a New Future – BNF Bank It’s Time to Support and Celebrate Science - Evolve Chief Visionary Officer Christopher Busuttil Delbridge

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Malta’s Challenges For 2022 - Sparkasse Bank Malta plc Managing Director Paul Mifsud

76

Sustainable Mobility: Walking The Talk - Andrew Bezzina, Co-Founder of eCabs

77 79 80

Positivity In Changing the Way Forward - Exante Communications Director Patrick J O Brien

Eurochambres Economic Survey 2021-22

87 91

Shaping The Future Of Working And Living – the Quad Central Family Ties - Laferla Joint Managing Director Keith Laferla

2022 Is The Year To Sense, Seize And Transform - Malta Enterprise CEO Kurt Farrugia

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Transport Malta Aviation and Maritime Records

Fighting The Impact Of Financial Shocks Post-COVID - STM Malta CEO & Managing Director Deborah Schembri

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Out with the Old; In With The New - BMIT Chief Marketing Officer Jack Mizzi

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At a Glance – What Will 2022 Hold?

European Perspective

Published by The Malta Chamber of Commerce, Enterprise and Industry 64, The Exchange Buildings Republic Street Valletta, VLT, 1117 - Malta T: +356 2123 3873 E: info@maltachamber.org.mt www.maltachamber.org.mt In association with

Editor Coryse Borg Production Petra Urso Photography Alan Carville Design Ramon Micallef - BoxDesign

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Reshaping the

Economic Ecosystem Editorial from Kevin Mizzi

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key date in the economic and business calendar for 2021 was COP26, the aftermath of which left many stakeholders feeling underwhelmed ready by outcomes that are, or will be, inadequate in the fight against climate change and its unfavorable effects on businesses and economic sustainability.

One of the most crunching pain points currently being experienced by global businesses, their supply chains and their consumers is the worldwide inflationary pressures being felt aggressively in the shipping and logistics industry.

Freight costs have been on a sustained aggressive growth path over the last few months.

Initial issues related to the supply-side damage arising from the pandemic such as decreased container ship flow, less efficient port side operations and labour shortages have merged with issues relating to supply chains being unable to cope with the recent surge in consumer and industry demand.

Particularly problematic has been the skyrocketing cost of the containers themselves, mainly owing to them moving less freely and frequently from one port to another.

This has manifested in drastic and sustained increases in shipping and freight costs.

The cost of shipping a 40-foot-equivalent unit from China to the US has risen fourfold to a cost approximating $10,000.

Europe is also currently being rocked by an energy crisis which has been a key driver in pushing Eurozone inflation past 4.1%. This news brings with it the added worry of the European Central Bank having underestimated the strength and inertia of current inflationary dynamics.

In the beginning of Q4 2021 European average energy inflation grew to levels of 23.5%, with the European Commission not expecting this level to fall prior to the middle of Q2 2022.

Energy inflation for each country is determined by their specific energy mix and needs.

Considering this, countries such as Malta and Portugal stand as outliers as a mix of successful long term hedging contracts and local generation has allowed inflation to be tamed below the 2% mark.

Another factor is the increasing cost and shortage of supply for semiconductors and other elements that are crucial in European manufacturing. Such shortages and supply chain bottlenecks have caused almost a quarter of European manufacturers to experience a contraction in output.

Narrowing the view specifically to Malta, the island microstate produces only around 20% of its food necessities, has limited access to fresh water and lacks energy sources. It depends on the importation of mineral fuels and oil, non-electrical machinery, aircraft, transport equipment, plastic and other semi-manufactured goods.

Malta must be more vigilant and forward thinking than ever to protect its economy from its weak links, while proactively working to strengthen and protect the country’s supply chains and avenues of revenue and growth, whilst also preserving the country’s competitiveness vis-à-vis its peers and partners. n

“Malta must be more vigilant and forward thinking than ever to protect its economy from its weak links, while proactively working to strengthen and protect the country’s supply chains and avenues of revenue and growth, whilst also preserving the country’s competitiveness vis-à-vis its peers and partners.”

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People, Education and

Ethical Business The Malta Chamber President Marisa Xuereb

T

he greatest asset of our country is its people. This has always been the case and is even more so today when progress is measured in terms of the creation and application of knowledge, success at absorbing new technologies, the attainment of environmental sustainability goals, and the implementation of good governance practices. All this requires high calibre human resources.

It is for this reason that the Malta Chamber is engaged in promoting improvements in education for the future and in fostering closer relations with those entities that are involved in research and higher education, notably the University of Malta and the Malta College of Arts Science and Technology (MCAST).

In our policy document for a National Workforce Strategy published in August 2021, we proposed 56 recommendations directed at attracting, retaining, upskilling, and nurturing talent to improve Malta’s competitiveness. We must incentivise active labour market participation; contain the risks of excessive labour turnover and brain drain; identify critical skills gaps and address them through upskilling and sustainable sourcing of foreign labour; and use all resources available to us to develop better foresight of our labour market. The latter requires that we have a holistic and dynamic economic vision that provides direction and responds to changing domestic scenarios and international developments, whether political, economic, environmental or health-related.

One scenario that has changed substantially over the last couple of years is the world of work. The COVID-19 pandemic accelerated the absorption of remote working technologies by businesses that had to find a way of adapting to social distancing challenges.

The learning curve was steep, but those businesses that managed to drive digitalisation systematically and pragmatically through

their organisations performed much better than competitors who were unprepared and slow to respond. The lessons for the future of work are there for all to take away: build your organisation on the best people you can possibly find; keep abreast with technology and make sure you are able to harness it before your competitors; take a risk-based approach to decision-making and keep in mind that the long-term target is sustainability.

When we look at countries that are doing well no matter their size, we find that they invest heavily in people and technology, try to mitigate their impact on the planet and pursue high value-added activities.

Way back in 1994, the triple bottom line accounting framework was proposed, featuring the 3Ps of People, Planet, and Profit.

Twenty-five years on, we are moving towards ESG reporting, where we will be obliged to look at the environmental, social and governance aspects of organisations. The inclusion of governance along side the environmental and social aspects of business is an important development that is of pertinence to Malta, as several of our recent challenges as a country were rooted in weak governance.

A well-educated population is able to value good governance, and to balance economic prosperity with wellbeing and the quality of life. Uneven progress in educational attainment threatens social cohesion and can be dangerous in a democracy. Prosperity without consistent progress in educational attainment is particularly dangerous because wealth provides the means to undertake initiatives but not the value set that enables decision-making that safeguards the common good and long-term sustainability. As we approach the next general election, let us all remind ourselves of our responsibility to engage in the democratic process with decency, reasonableness, and objectivity. As the foremost business organisation in the country, our mission is clear: to be the true voice of ethical business. n

“When we look at countries that are doing well no matter their size, we find that they invest heavily in people and technology, try to mitigate their impact on the planet and pursue high value-added activities.”

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The Malta Chamber: The Industry Mover of

Reputable Business The Malta Chamber CEO Dr Marthese Portelli

B

eing part of a highly reputable business organisation like The Malta Chamber feels like belonging to an extended family whose formation is guided by intrinsic values, which are shared by our members, thereby facilitating growth in a vibrant resource-driven economy.

In an age when a technology-powered society is constantly being nurtured, it becomes even more important to connect regularly with each other to transmit trust via our ties and cultivate long lasting business prospects and relationships. At the Malta Chamber we are committed to facilitating business to business, primarily by assisting and introducing our members to other business owners, entrepreneurs and professionals who can help them achieve their aspirations in several ways.

Firstly, the most appealing aspect of being part of The Malta Chamber is that it places you in a prime position to be a genuine industry mover. Going beyond simply serving as a platform to boost sales and attain visibility, being a part of The Malta Chamber affords you the expertise and credibility required to effectively lobby your business interests with the policy makers and decision takers that matter. It is precisely this clout that gives credence to the claim that The Malta Chamber is the strongest voice for Maltese business, as evidenced by testimonials from our members who confirm that The Malta Chamber genuinely influences and steers towards substantive business-related policy and effective implementation.

Secondly, The Malta Chamber believes that concerns are best deciphered at source by listening to woes from the horses’ mouth before attempting to pilot solutions. One needs to be in the thick of things to sharply identify the root causes that need to be addressed. To mention one example, since I took over the role of CEO at The Malta Chamber a few months ago, I repeatedly brought together operators and practitioners from the entire supply chain, some of whom come from competing fronts, to understand how to best represent local manufacturers, importers, freight forwarders, shipping agents and retailers all of whom are facing a common challenge – that of the current international trade disruptions and supply chain bottlenecks which are contributing to inflationary pressures in both strategic and non-strategic markets, which in turn has consequentially exerted strain on the operations of local businesses.

While these developments have been mostly homogenous for EU member states, micro island states like Malta tend to be hurt more than most. For this reason, we have delved into technical processes and analyses with all industry cluster stakeholders to get an unfragmented macroeconomic picture of the current state of play in the international market whilst also focusing on micro elements to fine tune our thoughts. It is very clear that, while the EU’s peripheral locations benefit from relative stability on the level of the economic, political, and regulatory environment due to EU membership, the companies located in island periphery locations not only suffer from competitive pressure and handicaps vis-à-vis the EU core, but also from non-EU competition.

The Malta Chamber remains determined to defend the interests of our country’s operators by addressing the pain points strategically, pragmatically, and effectively – no matter how tall the order is. Our inhouse expertise allows us to advocate and preserve the interests of all our members, efficaciously and dynamically, even though, at times they come from competing fronts.

Thirdly, we will keep pushing for a more effective green and digital transformation, which we believe should go beyond the simple allocation of funds to projects described as such. We need to ensure that funds are being diverted to projects that will actually make a difference.

We need to ensure that we have the proper infrastructure and skills to implement, support and maintain this transformation. We also believe that there is the need to carry a thorough assessment of the current EU State Aid framework and push for the necessary changes we require to qualify for a regional aid coverage that is much more representative of Malta’s needs.

These are precisely the lines of inquiry that our members expect us to raise and that is why when The Malta Chamber expresses itself, people take note, especially the leadership of the country. Over the coming months with a looming general election, The Malta Chamber will continue to up its game to contribute towards an honest social dialogue. We will continue being the ‘Voice of Business’ through our distinct, substantive, well-articulated and constant dialogue that voices business opinions soundly and reflects their aspirations coherently. n

“At The Malta Chamber we are committed to facilitating business to business, primarily by assisting and introducing our members to other business owners, entrepreneurs and professionals who can help them achieve their aspirations in several ways.”

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Future-proofing

Industrial Infrastructure

While the country has made significant strides in its recovery from the economic impact of the pandemic, 2022 is a key year in order to ensure INDIS Malta returns to the growth rates they were registering before, according to Chief Operations Officer Omar Debono.

A

s the largest operator of industrial parks in Malta and Gozo, INDIS Malta’s biggest challenge is to ensure that it has the necessary industrial infrastructure to accommodate new investment and the expansion of existing operations, thereby facilitating the generation of wealth and, more importantly, new employment opportunities.

“While we manage more than three million square metres of industrial space, the fast pace with which the Maltese economy was growing prior to the pandemic means that practically all of this space is already allocated, with less than 5% being readily available for allocation,” Chief Operations Officer Omar Debono says.

It is for this reason that INDIS Malta has embarked on an ambitious industrial infrastructure investment programme, through which they shall not only address the current shortage of industrial space, but also the forecast demand for the coming years.

INDIS Malta also recently implemented an extensive reorganisation and rebranding exercise. While the rebranding exercise was a necessity in order to give the organisation

a fresh and energetic look that reflects their dynamism, Mr Debono says that it would have been a mere cosmetic exercise had it not been complemented through a reorganisation process that enables them to better fulfil their crucial role within the local economy, which has evolved along the years.

“Indeed, while previously we were responsible almost exclusively for manufacturing facilities and the two artisan villages, nowadays we also provide innovative solutions for other industries such as life sciences, ICT and knowledge-based industries, as well as aviation, among others,” he continues, “Our vision is to support investment within these and other industries through the continuous development and management of qualitative and sustainable industrial property solutions.”

INDIS Malta’s tenants operate within a large variety of sectors. During the pandemic, it witnessed the entire spectrum of possible effects – from severe challenges faced by some companies to tenants being largely unaffected, but also others who actually saw an increase in demand for their products, or

“Our vision is to support investment within these and other industries through the continuous development and management of qualitative and sustainable industrial property solutions.”

21

Marsa

Ħal Far

“We need to listen to the business community and other stakeholders in order to come up with innovative solutions that address the challenges they are facing, even if this would require us to take tough decisions in the process”

in some cases even managed to identify new product lines required by this new reality we were suddenly living.

“Within this context, we continued to provide our assistance whenever and wherever possible,” Mr Debono states, “Internally, as everyone else, we had to make some changes to and within our offices to reduce the risk of further spreading the pandemic, and within this context there were also periods of time when the large majority of our staff were working from home. Our staff is to be commended, as we continued to provide the high level of service that people have come to expect from us.”

Mr Debono reiterates that the relentless pace with which Malta’s economy was growing meant that they could hardly keep up with the demand for industrial infrastructure.

“We thus took advantage of the slowdown brought about by the pandemic to embark on our investment programme to upgrade the industrial infrastructure, thereby enabling us to be in a better position to accommodate new investments or expansion projects, which would in turn create more wealth and job opportunities. In addition, through the projects we shall

be embarking on within the framework of the programme, we are injecting capital into the local economy, thereby contributing to its recovery.”

The pandemic has accelerated the implementation of certain technological advancements which shall be beneficial even in the longer term, such as those technologies that enabled INDIS Malta to switch most of our staff to remote working during the peak of the pandemic. The benefits by now are well-known, Mr Debono says, from the possibility to increase and enhance family-friendly measures, to the reduction of traffic on the roads when meetings are held online, amongst many others.

“INDIS Malta’s work on the ambitious infrastructure investment programme continues in 2022 and in the years to come. While the various projects have different target dates for their completion, we shall start seeing the results of the shorter-term ones. We need to listen to the business community and other stakeholders in order to come up with innovative solutions that address the challenges they are facing, even if this would require us to take tough decisions in the process” n

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Innovation Hub, Xewkija - Gozo

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Delivering on expectations of

Young Enterpreneurs The Malta Chamber Deputy President Chris Vassallo Cesareo

I

f I had to single out one prominent requirement persistently asked for by entrepreneurs since I was elected Deputy President of the Malta Chamber in March, it would have to be the wish for an enabling environment that encourages and incentivises business and trade.

Since my recent appointment as Chairperson of the non-profit foundation for young entrepreneurs ‘Junior Achievement Young Enterprise (JAYE)’ I have come across a number of innovation-minded youngsters who are working hard, focused on seeing their ideas and ventures take shape and thrive.

Despite being the longest established social partner in Malta – having been founded in 1848 – The Malta Chamber has been constantly renewing itself over the years to transmit an entrepreneurial culture within its membership.

Thanks to our Young Chamber Network (YCN), four out of every 10 members today at the Malta Chamber are under 45 years of age, double the amount we had until three years ago when the YCN was set up. We even scaled up our already ambitious expectations by decreasing the YCN age threshold to 40.

We also complemented our resolve by opening our doors for Kordin Business Incubation Centre (KBIC) tenants.

Through these efforts, out-of-the-box ideas and thinking started trickling in more steadily, contributing significantly to our policy contributions and rendering our representation more valued by decision makers.

We genuinely believe that staying constantly tuned with industry developments emerging from the rise of technology, platform economics and virtual communications is not just necessary and vital for our local industry and commerce, but it is equally valuable to foster a global market mindset amongst our commercial community.

Equally important is our attractiveness and the unique characteristics of our environment.

Having English as our main business language, competitively-priced human resources, flight

connectivity to major European destinations and a strong ICT infrastructure serve as important prerequisites in the quest to get a business off the ground, rendering us attractive for foreign entrepreneurs.

Measures and investments geared towards making Malta an ideal jurisdiction for start-ups are, for the Malta Chamber, putting our money where our mouth is.

At times we still come across certain basic stumbling blocks that prevent further progress, such as, for example, something as basic as not having a reference point for a funding application, to be able to track it against agreed implementation timeframes, a tracking process that is in everyone’s interest.

Risk aversity is automatically more pronounced for novel industries. Lengthy timeframes to proceed from proof-of-concept to financial support often spell trouble for an inventor. As Malta Chamber, we work closely with Malta Enterprise to improve accessibility to various schemes, which are certainly very useful as a source of encouragement to incentivise innovation and nurture business industries like drones, fintech, e-sports and digital gaming sectors.

Another concrete way how the Malta Chamber actively assists young entrepreneurs who are ready to spread their wings internationally is to actively engage with its wide array of partners within the Enterprise Europe Network (EEN). Since the pandemic struck, the Malta Chamber and its private-public partner ‘Trade Malta’ have increased participation on international B2B digital platforms jointly organised with EEN partners.

As Deputy President I am proud of where we are today, conscious and determined to forge further ahead in our quest for more innovation and value.

I invite all interested parties to stay tuned to Malta Chamber’s forthcoming initiatives and matchmaking opportunities targeted at our exciting young entrepreneurs and micro-sized to keep delivering on their expectations. n

“As Malta Chamber, we work closely with Malta Enterprise to improve accessibility to various schemes, which are certainly very useful as a source of encouragement to incentivise innovation and nurture business industries like drones, fintech, e-sports and digital gaming sectors.”

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Collaborating with key stakeholders and organisations The Malta Chamber And Foundation For Transport Committed To Sustainable Mobility The Malta Chamber and the Foundation for Transport signed a cooperation agreement to promote forms of mobility that are sustainable, energy-efficient, and respectful environment. Through this signing, both parties agreed to collaborate on initiatives related to the fleet electrification which will result in reduced emissions and an advancement in the technology and expertise in this sector. These include the building of competencies and certification of people and organisations that operate in the sector, the establishment of guidelines to promote a wider adoption of charging stations, and fiscal incentives to electrify their vehicle fleet with a strong emphasis on cost effectiveness.

The Malta Chamber Signs MOU With The Malta Chamber Of Construction Management To Support Ethical Construction Development The Malta Chamber and the Malta Chamber of Construction Management signed a Memorandum of Understanding aimed at supporting the business and development of the construction industry. The two entities shall seek to co-operate actively on matters of national economic policy with respect to the community of construction management, architecture and civil engineering and the upholding of business ethics while promoting best practices amongst members of both organizations, and the general-public.

Malta Trust Foundation Teams Up With Malta Chamber To Launch ‘Your Device Your Right’ Project Your Device Your Right, an initiative launched by the Malta Trust Foundation, is seeking to bridge this divide by distributing second-hand refurbished laptops to students struggling to keep up with their classmates. Through a previous agreement signed with the Malta Chamber of Commerce, Enterprise and Industry, its members are also being encouraged to donate used laptops and tablets; an initiative that will double up as an environmental incentive for technological hardware to be recycled. Through a pilot project carried out over the past months, 55 refurbished laptops have already been donated to referred students.

Klikk, Bronze Partners of The Malta Chamber, have also contributed towards this project.

The Malta Chamber And JAYE Team Up To Shape Malta’s Future The Malta Chamber has signed a Memorandum of Understanding with JAYE Malta Foundation with the aim of promoting an entrepreneurial culture amongst the young, the leaders of tomorrow.

The MOU underlined the values of the two organisations in terms of promoting an entrepreneurial culture among the young and providing the necessary support to all businesses.

The Malta Chamber And AP Valletta Sign Agreement To Work Towards A Sustainable Building Sector The Malta Chamber has signed a Cooperation Agreement with architecture and design firm AP Valletta to co-operate actively and explore common projects on the future of the built and unbuilt environment in Malta. ‘Building Futures’ will focus on typologies of space representative of the challenges Malta faces from a cultural, economic, social and environmental point of view, taking a multidisciplinary approach, bringing together designers, data analysts, economists and others in a collective effort to re-imagine the current systems. It will combine AP Valletta’s knowledge and experience in research and design projects, with The Malta Chamber’s commitment to develop a tangible vision for sustainable economic growth.

25 Malta Chamber and GWU to promote active ageing and address legal anomalies The Malta Chamber and the General Workers’ Union signed a framework agreement on active ageing and intergenerational approach to ensure a healthy, safe, and productive working environment to enable workers to remain in the labour market and facilitate the transfer of knowledge and experience between generations. The two social partners acknowledged the strong need for policies in the context of the Maltese labour market to ensure that valuable human resource and experience is retained for as long as possible. They will promote good practices through a digital tool which will be made available to the public.

Increasing Start-Ups Support: Malta Chamber Membership Set To Increase Start-Ups’ Visibility A collaboration between Malta Enterprise and the Malta Chamber of Commerce, Enterprise and Industry will see start-ups benefitting from a new measure set to increase their visibility. The agreement, supported by the Ministry for Energy, Enterprise and Sustainable Development, will allow innovative businesses hosted at the Korradino Business Incubation Centre (KBIC) to strengthen their network. Entrepreneurs will benefit from services, rights, and obligations resulting from a partnership with the Malta Chamber. This includes the opportunity to actively participate in internal committees, join the Young Chamber Network, meet established businesspeople and access international opportunities.

WE MAKE: A New Project For Businesses To Implement Sustainable Investments Through the collaboration of the Energy and Water Agency (EWA), the Malta Business Bureau and the Malta Chamber of Commerce, businesses within the manufacturing industry will be given more guidance on how to consume energy and water efficiently. With the WE MAKE project (Water and Energy Management and Knowledge Transfer in Manufacturing Enterprises), the manufacturing sector will benefit from energy audits, offered by the EWA, so that businesses are guided on how to enhance their energy consumption and operate efficiently.

This project will offer information on possible financial investments, where a forum will be created so that businesses can discuss and present best practices in the sector. This will lead businesses to have more guidance on how to operate sustainably.

New Service For Enterprises That Combines Mental Health And Entrepreneurship The Malta Chamber, in collaboration with government entities, business representatives and the Richmond Foundation, launched MENT+, a mental health assistance service. MENT + is an initiative launched after several businesses recognised the impact of the pandemic on mental health. The programme provides training in the form of short clips tackling topics such as how one can adapt to change, mental health and resilience, amongst others. One-to-one sessions for those requiring further assistance will also be provided by the Richmond Foundation.

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Building

a new prosperity for our children

The Prime Minister of Malta, Dr Robert Abela

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C

“Our aim is to focus on developing synergies whilst transforming challenges into opportunities to act differently, reinvent ourselves, and develop new strengths.”

OVID-19 proved to be a defining moment for our nation. Yet, instead of weakening us, it strengthened us even further. It united us in a spirit of togetherness, sharing the values that we all truly treasure: solidarity, good health, faith in a brighter future, a better environment, and more fairness, amongst others. The pandemic and its daily challenges enabled us to refocus our vision, such that we can enhance the present and build an even better Malta for our children.

And we face the future with great optimism: with an economic machine that is at its strongest, and our lowest unemployment rate ever. The thousands of persons who joined the labour force because of the reforms we implemented are still in employment, thus demonstrating the strength of the incentives we introduced. The thousands of businesses that started operations in recent years withstood the pandemic, thanks to the buffers built during times of plenty, and the fiscal assistance we provided.

Yet, the challenges we are addressing in the recovery phase are very much like those that we were facing before the pandemic, including shortages in the labour force both in terms of human capital and skills, infrastructure bottlenecks, the demand for a better quality-of-life, the need for better governance, and of course, climate change.

As I highlighted on various occasions in the midst of the pandemic, our nation needs to adopt a holistic strategy that addresses all of these aforementioned challenges in order to enhance and ensure our country’s social and economic prosperity. Our Economic Vision for Malta 2021 – 2031 is a step in this direction as it brings together five pillars of growth that will address challenges and concerns and ensure Malta’s future success.

Our aim is to focus on developing synergies whilst transforming challenges into opportunities to act differently, reinvent ourselves, and develop new strengths.

Taking the FATF decision to put Malta under increased monitoring as an example of the above: were we pleased to be placed on the enhanced monitoring list? Of course not. But we acknowledged the decision, recognized the deficiencies in our system, and immediately set off on our course to carry out the effective implementation of reforms.

In fact, good progress is being registered in the implementation of the action plan agreed with the FATF, as the decision empow-

ered us to look anew at our regulatory institutions and assess where and why further action needs to be taken. We are doing this with a sharper focus on our operations and their effectiveness, aided by a substantial increase in budget and human capital.

In so doing, we are rebuilding our governance systems and the investment we are making will yield very strong returns. Our resolve and ultimate objective are indisputable.

This approach is one which we are implementing across government, including in the areas of infrastructure and education. Even here we must move from being reactive to becoming more proactive. We need to think ahead, preempt the next challenge, and constantly build capacity.

Let us learn from how our health system managed to overcome the pandemic. Our investment was four times the EU average and as a result, our systems had the capacity to withstand the unexpected shock of COVID, and in parallel enhanced our efforts to ensure Malta’s economy remains both robust and resilient.

This is where our national recovery and resilience plan can put us in good stead as it includes a combination of structural reforms and investments that aim to foster recovery from the pandemic, as well as fast track the green and digital transitions to make Malta a smarter and more resilient economy. How we transform these twin challenges into double opportunities will define our nation’s future.

Thus, we adopted a novel approach to develop this plan: instead of seeking quick wins, we deliberated and evaluated challenges which we will need to address in the not-sodistant future. Hence, our plan is full of digital transformations that will make a real difference to our families and businesses, adding value to the lives and livelihoods of our citizens. It is replete with green investment projects that will showcase why environmental regeneration has the potential to be the best economic opportunity for our present and future generations.

Indeed, our objective is not just to react to and recover from the pandemic. Rather, we aim to embark on a long-term plan that leads to a better quality of life for all those who call Malta their home. We want to put the needs of our people and our communities first. We want to ensure our children will inherit a prosperous, fair, and sustainable Malta. n

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2022 the year we move ahead for good reputation and new economic sectors Dr Bernard Grech, Leader of the Opposition

N

ext year the Maltese people will be invited to choose a government for the next five years. This is an occasion for both political and economic renewal. When buying a financial product we are told that the past is not a guarantee for the future. When choosing a government, it is however the opposite way round. We believe that the Labour Government has put the national interest in peril and the economy on a track of uncertainty through the continuing degradation of Malta’s name overseas and reckless financial management tying the Maltese people to billion Euro deals in inefficient public utilities. Are these not enough of warning that if trusted again with our future, Labour will fail to secure our longer-term interests?

In June, all Maltese efforts to sell, to pitch our country, to attract investment were dealt a debilitating blow. In reality, Malta’s greylisting should mean that local government is not to be trusted in applying fundamental money-laundering rules. Tragically, the price paid for such is however borne by business rather that by politicians. Our SMEs, our professionals and ultimately all our people are paying the price of abuse of power.

We believe this is a gross injustice. We stand ready to remedy such injustice first of all by unblocking the paths of justice towards those who need to render account for corruption mismanagement and abuse of public office, but also by seeing to the concrete measures needed to alleviate the impact of greylisting on our businesses, from the small importer to the big services conglomerate. Most importantly, we will work openly to restore Malta’s position back to whitelist. This will be our utmost priority once elected and we are confident that sound public support for a change of direction together with the guarantees of a new PN government at the technical and political levels will be the trigger needed to successfully present Malta’s case to go back to the white list at the next session of the FATF after a general election.

Out of greylist is not an objective in itself for

us. We see Malta’s reputation as the key factor not only to consolidate and build upon the industries which call Malta home but also to expand further. For the past two legislatures, Malta has failed to chart the way for new industries to settle here. We must rethink our FDI strategy to be able to attract new growth from new economic sectors. The next decade will see unprecedented investments in the digital and green revolutions happening around us. Nine million electric cars are expected to hit the road in Europe before 2030. Five million new green jobs are expected to be up for grabs in Europe in the next five years. Meanwhile, at least half of our workforce is expected to be competing with roboticised processes. We are already very late in tackling these three phenomena here in Malta.

A new PN government under my leadership will need to make up for time lost in adapting our workforce to change while stimulating private investment in digitalisation and the green revolution. To do this we must secure a societal movement. The deep changes needed for Malta to jump two or three steps in its competitiveness when compared to competing markets requires ownership from the businesses themselves. For this reason, our approach is by definition inclusive.

Inclusivity however needs to go well beyond the feel good moments of political speeches.

For instance, inclusivity in the labour market necessitates a much bigger share for industry itself on the faculty boards of MCAST and University. The jobs of 2030 can only be filled by qualified workers if these are equipped with the needs of our industry, responding to the latest technological developments be it in design, work psychology, engineering or programming.

Inclusivity requires also a deep change of mentality in approaching EU opportunities.

While Malta has been allocated over one billion in EU funding for the next seven years, including for private upgrades and investment in Research and Innovation, little has been done so far to empower the private sector itself to tap

into these opportunities for Maltese industry to close the gap of its competitive disadvantages given our natural logistical handicaps. More importantly, EU funding needs to go beyond Malta’s national allocation. Huge and so far largely untapped opportunities are up for grabs in the shape of direct EU funding where Maltese businesses need to partner with European counterparts and academia to participate in EU-wide projects. To do this we must invest in networking. Government needs to be the trigger for that.

Next year needs to see a radical change in approach where we not only secure wider access to EU funding for business but include business representation organisations in the very same planning and negotiation of EU funding rules to make sure that implementation is not a one size fits all business.

The Nationalist Party under my leadership has already announced a series of new ideas to bolster new economic growth in Malta. Central to these proposals is the tax exemption of all profits from start-ups in new technology areas which is reinvested in attempts for further growth. Another central proposal to our ethos is the proposed national fund to make up for the competitive disadvantage of local business in its import and export efforts in the context of rising freight charges.

Beyond policy measures, the conduct of public affairs in Malta must stand up to be at least as inspiring and deserving of trust as that of our business leaders and business representative organisations. We find inspiration for instance in the Chamber’s consistent stance for responsible business and its published vision for a reputable and competitive economy.

Indeed, we firmly believe that government needs to once again provide wider stimuli for organic growth based on sound reputation. Politics needs to lead by example by not only lending an ear and responding to business needs but by leading with integrity and a public duty in office. This will be our mission from day one once we have your trust as from next year. n

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“The deep changes needed for Malta to jump two or three steps in its competitiveness when compared to competing markets requires ownership from the businesses themselves.”

30

FROM THE CHAMBER’S DIARY… Transparency, Good Governance, Ethical Business

20th January 2021 In continuing its call for good governance, The Malta Chamber launches a report on the reform needed in Public Procurement.

Malta Chamber appoints new CEO

22nd April 2021 The Malta Chamber of Commerce, Enterprise and Industry is pleased to announce that Dr Marthese Portelli will be joining its dynamic staff complement in the role of Chief Executive Officer as from 1st June 2021.

The Malta Chamber Outlines Priorities for Recovery

6th May 2021 Chamber presents Public Procurement recommendations to Prime Minister and the Leader of the Opposition

3rd February 2021

Earlier today, The Malta Chamber of Commerce, Enterprise and Industry held a virtual meeting with the Hon Prime Minister Dr Robert Abela to introduce the new Board of Management and put forward its priorities for the coming months. The Minister for Economy, the Hon Silvio Schembri was also present.

A delegation from The Malta Chamber of Commerce, Enterprise and Industry, led by President Perit David Xuereb, this afternoon presented a copy of its recently published report on a proposed Public Procurement Reform to the Prime Minister The Hon Dr Robert Abela. The document makes 36 tangible recommendations for improved public procurement processes, following a thorough consultation process with The Malta Chamber members. The Malta Chamber of Commerce, Enterprise and Industry also presented the Leader of the Opposition with a copy of its report this morning. Dr Grech was visiting the Exchange Buildings for the first time since his appointment as Leader of the Opposition.

The Malta Chamber launches a document led by the Education Thematic Committee titled Education for the Future

16th June 2021 The Malta Chamber and JAYE team up to shape Malta’s future

17th March 2021 The Malta Chamber of Commerce, Enterprise and Industry signed a Memorandum of Understanding with JAYE Malta Foundation with the aim of promoting an entrepreneurial culture amongst the young, the leaders of tomorrow.

President Ms Marisa Xuereb welcomed Minister for Education, then Hon. Minister Justyne Caruana to The Malta Chamber. The delegation included CEO Dr Marthese Portelli and individuals forming part of the Education Thematic Committee, chaired by Ms Claudine Attard.

31 The Malta Chamber furniture makers and MCAST join forces to address shortage of workers

Malta Chamber Facilitates A Q&A Session For Members With EU Commissioner Gabriel

29th June 2021

4th November 2021

The Malta Chamber of Commerce, Enterprise and Industry joined forces with MCAST to promote carpentry and joinery programmes as the sector faces a shortage of skilled workers.

The initiative was led by Stefano Mallia, President of the Employers’ Group of the EESC, supported by four Employer organisations in Malta.

The Malta Chamber Launches Rediscover – A New Vision For The Tourism Industry In Malta The Malta Chamber and Foundation for Transport committed to sustainable mobility

10th November 2021 Tourism Operators Business Section calls for industry renewal as it puts forth 125 recommendations.

11th August 2021 The Malta Chamber of Commerce, Enterprise and Industry, and the Foundation for Transport signed a cooperation agreement to promote forms of mobility that are sustainable, energy-efficient, and respectful of the environment.

The Malta Chamber launches its recommendations on the National Workforce Strategy

25th August 2021 The Malta Chamber, in collaboration with RSM Malta, presented its recommendations on the National Workforce Strategy during a press conference which was attended by Hon. Minister Clyde Caruana and Opposition Spokesperson Hon. Dr Jason Azzopardi, among others. The central theme to the recommendations is to nurture, attract, retain, and upskill talent so as to boost productivity and increase the added value provided by the workforce.

The Malta Chamber Insists On Better Communication Between Businesses And MBR

11th November 2021 The Malta Chamber is all for better regulation and full compliance without excessive bureaucracy and without disproportionate administrative burdens and costs.

A budget which acknowledges present realities

11th October 2021 The Malta Chamber of Commerce, Enterprise and Industry welcomes this year’s budget. The Chamber recognizes the challenging fiscal position in which the Minister of Finance formulated the Budget.

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2022 Quality as a Priority The coming year will be primarily marked on Malta’s ability to sustain the progress achieved in the initial steps towards the recovery from COVID-19, says Minister of Finance and Employment Clyde Caruana.

35

2021

will be considered a significant year for our economy, a pivotal year characterised by the country overcoming further challenges thrown at it by the pandemic, up until the beginning of the third quarter of the year, to finally emerge with a greater sense of determination, endeavour and above all a renewed sense of pre-pandemic normality, in this last quarter, states Minister Clyde Caruana.

“Our main purpose for the year was to consolidate our efforts in the fight against COVID-19 whilst seeing that businesses find a stronger footing. Our goals have been achieved, as demonstrated through vaccination rates, economic activity rates, and employment rates.”

According to Mr Caruana, 2022 will be primarily marked on Malta’s ability to sustain the progress achieved in the initial steps towards the recovery from COVID-19.

“There are still plenty of pitfalls ahead, especially since the vaccination rates in Europe are considerably lower than Malta’s, and further restrictions on the continent and on a global level could increase price instability and decrease demand.”

Moreover, Malta has to also contend with the variables deriving from the pandemic, such as energy prices, supply-chains dysfunctions and transport cost.

“On the upside, our solid response to the pandemic has left the country in a relatively favourable position compared to its European counterparts,” Mr Caruana says, “In either case, 2022 is to be earmarked for the prioritisation of quality; quality of lives, quality of our labour force, quality of our export content and quality of Malta’s unique selling proposition.

This requires a shift in mindset, he stresses. A country’s growth is often defined through the year-on-year increase in the GDP. Focusing on such GDP growth has many-a-time provided comfort to world leaders that an economy is moving in the right direction, nonetheless, economists advocate that this economic measurement may be misleading when making policy decisions for everyone’s best interest, including that of our children and other generations beyond.

“Considerations must be made of other costs which do not feature in this ‘cash flow’ analysis. We are to be more concerned about the quality of life or technically ‘sustainable economic development’. When we prioritise sustainable economic development over eco-

nomic growth, we are aiming at an economy that is sufficient and resilient, a society that is fair, just, and equal, and an environment that is valorised, protected and which contributes to the same society’s wellbeing.”

It is in this context that Minister Caruana speaks of the construction sector.

“Without a doubt an important contributor to our economy historically, today, and in the years to come. The growth of the construction sector was both a direct result of the rapid growth of other sectors, such as financial services and gaming, and a result of lack of investment alternatives – thereby gaps in the financial services sector resulted in construction projects remaining the most lucrative and tangible means of investment for the common family head and the businessman alike.”

Yet, he adds, we need to be conscious that the sector comes with inherent non-monetary costs, mostly of an environmental and social welfare type, including noise and air pollution, negative visual impacts, and the reduction of physical space, to name but a few.

“Being a small, densely populated, island-state with no other island to serve as

activity rates in the EU in 2020, at 60.1%, to now having one of the highest activity rates in the EU, at 77.4%. The success witnessed in terms of quantum is to be translated in the retention of knowledge within the labour force, especially of our older workforce, and the improved quality of skills. Hereby our work in 2022 shall relate to the implementation of the recently launched National Employment Policy, of which measures such as tax benefits for older workers, part-timers and overtime workers have already been introduced.”

Nonetheless, a key challenge over the coming years shall be the overcoming of skills shortages, also in the face of high Early School Leavers and low education attainment levels.

“Efforts will be placed on deriving the best output from our human capital, for the improvement of Malta’s competitiveness in the attraction of new sectors, new business, and in combination with investment in technology, for improved productivity rates. It is through such a leap that Malta, as a whole nation, can then also look earnestly and concretely to further improvements in the work/life balance for a better quality of life.” n

“2022 is to be earmarked for the prioritisation of quality; quality of lives, quality of our labour force, quality of our export content and quality of Malta’s unique selling proposition.” our Plan B, we do not afford to make a wrong decision in the use of our land. Aside from these aspects, we need to be able to develop a well-balanced portfolio of sectors that offer the country the right resilience and hence reduced dependency on key sectors, in the face of possible future challenges. For the pursuit of quality of life, we need to also aim towards sectors that have lower environmental and social welfare costs.”

Minister Caruana says that, to thrive in such sectors, there is the need of the right amount of investment in technology, supported through adequate skills.

“This brings me to the quality of the labour force. Huge strides have been made over the past decade in terms of activating the workforce to include wider cohorts of females, as well as the older workforce and the long-term unemployed, moving Malta from having some of the lowest

36

Driving a thriving economy, enhancing well-being, and

restoring Malta’s reputation The Nationalist Party’s Shadow Minister of Finance Mario de Marco says that the Maltese economy is at a crossroad. Navigating towards a sustainable and a thriving economy is a collective aspiration.

T

o walk the talk and send the right messages to all the stakeholders, especially beyond our shores, is a specific responsibility on those entrusted with the executive power to run the country.

The successful decisions we take today as a nation ought to leave an impact on the country’s ability to prosper, and to enhance the wellbeing of its citizens over the forthcoming decade.

Undeniably, the pandemic brought about unexpected economic challenges and health related risks. Yet, the economic challenges Malta is presently facing cannot be attributed entirely to the outbreak of the pandemic.

The market dynamics in 2019 were already showing clear signs of potential misalignment in key economic sectors, namely tourism, retail and commercial property. Certain key drivers, namely the IIP scheme and the significant increase in population, which were also fueling economic growth between 2013 and 2019 proved unsustainable and short-lived. When the benefits of such schemes waned, the fiscal surplus was short-lived, and the fiscal deficit re-emerged and is expected to remain for the years to come.

It is misleading on the part of Government to attribute the deficit as being caused entirely

by Government expenditure on COVID related measures. Whilst COVID undeniably dented incoming revenue due to a contracted economy and increased Government expenditure through schemes aimed at saving employment and supporting the economy, a significant part of the deficit is structural and the result of a Government-recurrent expenditure which has been increasing significantly and perhaps unsustainably towards the last nine years.

Public debt is estimated to double between 2019 and 2024 from 5.3 billion euro to 10.6 billion euro. In the meantime, Malta lost an excellent opportunity to attract investors leaving the UK following Brexit, missing out heavily on what Ireland and Luxembourg managed to do.

Government’s attempts to create new niches of economic activity, namely the hubs for medical cannabis and crypto currencies, were problematic, as the Government underestimated the risks and posed serious reputational damage on Malta as a reliable jurisdiction.

Following the FATF decision, local businesses today were put in a position to incur hefty compliance costs in their day to day operations, denting significantly their international competitiveness. The health mitigation measures on international travel were and are still a challenge to our economy. Unlike other larger countries in Europe and beyond, Malta’s exposure to tourism is relatively high. By the end of 2021, Malta’s inbound tourism expenditure is still expected to be just 37% of 2019 levels.

Is there light at the end of the tunnel?

In compiling an economic strategy plan for the years ahead, we cannot cut corners and seek to address only the symptoms. A factual and unbiased assessment on the source of the challenging factors is the only responsible way to go.

Implementing a smart action plan on how the inherent risks can be mitigated and the benefits from opportunities maximised, is a sensible approach to adopt aimed to secure a future for present and future generations.

Government needs to get its house in order by restoring sustainability in public finances.

Irresponsible expenditure and unaccounted

“All the professionals and practitioners, who are being urged to work towards a common goal in restoring Malta’s international reputation, should back this call by being a catalyst for change and to do what is right.”

transactions which shed light on serious corruption claims, besides being morally and legally deplorable, will pose higher Government induced costs on the industry if the public debt keeps on increasing at an alarming rate.

During the past two years, outstanding debt increased by €2.4 billion and within two years, debt to GDP ratio is expected to reach 65% of GDP. Lower government deficit on the back of just economic growth is another risky strategy especially in the midst of economic uncertainties in the months ahead, and a clear sign of a lack of commitment by the responsible fiscal authorities to learn and act on past shortcomings.

Construction is a very important industry for a small island economy, such as Malta’s.

Yet, pressing environmental issues and serious shortcomings in the working practices employed by the industry, cannot continue to be ignored. Demand for construction is a derived demand, i.e. aimed to satisfy other direct demands, such as residential, commercial and agricultural use. It’s high time for bold decisions to be taken. The country needs to undertake carrying capacity studies on the sustainable level of tourists it can host within a year, therefore ensuring that such activity will not negatively impact the environment or impinge on the wellbeing of its permanent residents.

Likewise, the same type of professional exercise needs to be undertaken in determining the sustainable population level this country can accommodate. From a planning perspective, it is high time that what is Outside Development Zone should be treated as such. Although landowners have the right to build their properties in line with the local plans, likewise they should similarly be held responsible to build their developments which respect aesthetical guidelines given to them by the Planning Authority, including the construction material to be used, the colour and design of fixtures and fittings.

37 Arts, culture and entertainment is another area requiring special attention as the country moves forward to recover post-pandemic.

This sector forms the backbone of our identity and innovation and going phygital (physical and digital experiences combined) is the way forward, if we are seriously aspiring to attract more value-added tourism to Malta.

The main challenges for next year revolve around the country’s ability to preserve its competitiveness. We are experiencing constant increases in inflationary pressures, explained by cost-push factors such as increase in international energy prices and logistics.

Being an island, our country is already disadvantaged by its insularity. The opposition had already dished out proposals on how a fund can be set up and sustained to alleviate this natural barrier and put our local industry at a level playing field with their European counterparts.

Moreover, we need to find new sustainable niches in our economy that could take over part of the slump tourism is expected to be facing during the coming two to three years.

The Opposition sees a lot of potential in the maritime sector, the green economy and related activities which could see thousands of green jobs created. In addition, sustainable development, renewable energy sources, novel technologies to be installed in shipping vessels, remote working visas and longer-term working tourists, innovative pharma products, the creation of an innovative education hub in Malta are all tangible examples of the direction we are aspiring to take the country forward. We need to pay beyond lip service to research and innovation and give the necessary support to start ups and young entrepreneurs who represent the economy not only of tomorrow but even more so of today.

The FATF grey listing complicated the competitiveness issue even further, as the amount of regulatory and compliance costs are spiraling as we speak, at the detriment of local businesses, especially small firms and startups. Although a restricted number of political individuals are to blame for the fate of this undesirable state, the country needs to get its act together and all the stakeholders involved need to work towards a common direction. That of returning to the white list as soon as possible.

All the professionals and practitioners, who are being urged to work towards a common goal in restoring Malta’s international reputation, should back this call by being a catalyst for change and to do what is right.

Besides the challenges the pandemic brought with it, there are also opportunities that the country can embark on in paving its economic strategy for tomorrow. Consumer’s expectations and preferences changed significantly during the past 20 months. Technology helped to bring new practices which a couple

of years ago no one would have expected. The digital transformation increased its pace in every facet of our daily needs. Remote working, on-line orders and deliveries, the concept of blended education and telemedicine are some examples.

With these constant and fast-moving changes in our modus operandi, lifelong learning and the reskilling of our human capital became a paramount need to maximise the potential of our only resource. The rethinking of our education system is an important component of the Opposition’s economic vision. Our education system needs to be more in accord with the needs of our fast evolving industry, to empower individuals with the necessary skills being demanded by employers.

The need for the country to reintroduce the trade schools is currently being evaluated.

In addition we can aspire to internationalise our vocational institutes with the help of apprenticeship schemes to be operated by the industry. Against this economic backdrop, our education needs to reflect the importance of Science, Technology, Engineering and Mathematics (STEM) in its curriculum.

The next milestone that this country can achieve during the new norm is a shift from

measuring economic benefit to wellbeing. This is a paradigm shift in mentality, where economic benefits are not restricted to monetary value but include concepts such as work-life balance, quality time with family, better state of the environment, open spaces for recreational activities, more value to health and safety. The list is endless, but we are determined to achieve it if the people entrust the Nationalist Party back in government.

To achieve all this as a nation, we need the society to stop and reflect on the need to be agile and able to decipher what is morally good and what is not. To understand and advocate sustainable and long-term growth over exponential growth, with immediate returns but short-lived. A fiscal morality of doing more with less to keep public debt within sustainable levels.

I firmly believe that this is the direction the country urgently needs to embark on, sooner rather than later. Bold and timely decisions will put us in a position to give back a thriving economy to our people and enhanced wellbeing to our society. Finally yet importantly, putting Malta’s reputational stand where it belongs for the benefit of current and future generations. n

A LOOK BA

IN FIGURES

38

4.9% 3.6% The forecast rate of real GPD growth in 2021

The unemployment rate in Malta as at October 2021

178,981

€1.5 bn

Total estimated inbound visitors for October 2021.

Total nights spent amounted to

1,367,188

Total tourist expenditure surpassed

€156.6 million

Fiscal deficit forecast for Malta in 2021

60%

The percentage of young people who said that they would rather live in another European country

62%

The percentage of FDI companies which stated that they find Malta to be an attractive destination for FDI

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CK AT 2021 Sources: Central Bank of Malta, NSO, EY, Eurostat, Budget 2022

1in5

62%

90%

Gozitans in full time employment whose jobs are primarily based in Malta

The decline in tourism arrivals in the first half of 2021

Nine out of every ten youths in Malta believe that Malta’s environment is getting worse

57%

68%

50%

The percentage of employees who expect to keep working from home more often post-COVID

The percentage of youths who think overdevelopment is first in the list of Malta’s biggest challenges, followed by the environment (55%), traffic (26%) and international image (24%)

The percentage of company owners who said that the financial impact of COVID-19 has been either positive or neutral, an increase from 2021 when it was 44%

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Surviving the

Financial Shock post-pandemic

Governor of the Central Bank of Malta, Prof. Edward Scicluna says that from a financial stability perspective, things could have been far worse for banks and financial institutions were it not for the massive regulatory and supervisory changes which took place in the aftermath of the international financial crisis.

You have remarked in the past that things were not as bad as they could have turned out to be for the local banking sector and the economy. However, there was a degree of ‘financial shock’ that the pandemic has brought about. How long do you think it will take for Malta to recover from that?

There is no doubt that the COVID-19 pandemic presented a major challenge for the economy and for the financial system. Looking back, I think it is safe to say that the policy response was successful in avoiding the economic crisis from becoming a financial crisis. The Central Bank of Malta played its part in the implementation of the extraordinary monetary policy support measures launched by the ECB, while the fiscal and supervisory authorities also played a key role. From a financial stability perspective, things could have been far worse for banks and financial institutions were it not for the massive regulatory and supervisory changes which took place in the aftermath of the international financial crises.

As for the near future, the economy is projected by the CBM to grow strongly by 5.1% in 2021 and by 5.9% in 2022 with GDP expected to exceed its pre-pandemic levels in 2022. The recovery is also visible in the labour market, where the unemployment rate has returned to pre-pandemic levels. Inflation is likely to pick up next year as the recovery progresses, but it is projected to remain around 2%, as the recent increase in international commodity and import prices is expected to decelerate. Hence, I would say that our outlook is cautiously optimistic.

The ramifications of the ceasing of economic activity and commerce due to COVID-19 lockdowns and other measures continue to be felt. What impact has this had on the local banking sector?

A key difference with respect to the 2008 Financial Crisis is that this time the financial sector remained in a much stronger position, the result of the reforms referred to above. Thanks to them and to its strong fundamentals, the domestic financial system proved itself resilient. According to the Central Bank of Malta’s Interim Financial Stability Report, the banks remain well-capitalised and highly liquid. Profitability was indeed affected by the crisis but has improved with the reopening of the economy. Moreover, the level of lending remained generally stable, while the banks’ balance sheet expanded following a large increase in deposits. Accommodative fiscal and monetary policy were an important source of liquidity.

The government has said that it plans to halve its deficit of the next year to 5.6% of GDP, as the economy picks up postCOVID. Do you think that this is feasible?

Success or otherwise in controlling the deficit and the debt depends on the extent to which the economic growth rate exceeds the interest rate. Also helpful would be the drastic reduction of COVID-19 related expenditure and the return of strict EU spending rules.

You have stated that digital currencies/ transformation offered “enormous opportunities” in various spheres, such as facilitating cross-border payments and promoting financial inclusion, but we should go for a “cautious approach”.

What exactly do you mean by that?

Digitalisation, innovation, and changes in consumption patterns have promoted the creation of several digital currencies. These currencies can potentially reduce transaction costs, facilitate cross-border payments and foster innovation across several sectors, leading to efficiency gains and enhanced availability of financial services. However, they also pose serious risks.

Unregulated or poorly designed digital currencies can be used for illegal activities, damage the monetary policy transmission mechanism, increase the cost of borrowing, make economies more vulnerable to abrupt movements of capital or destabilise emerging markets. This is precisely why we need to be cautious. Regulation may help us to take advantage of these benefits, while mitigating some of the risks. In July, the ECB decided to launch the investigation phase of a digital euro. The Central Bank of Malta, as part of the Eurosystem, is participating in this project.

What do you think are the main changes needed for Malta to be taken off the grey-list as soon as possible?

The fact that Malta passed through the Moneyval examination but got stuck on the FATF one means one thing – we have very little to show in terms of effectiveness, considering the reforms we have carried out. Our credibility requires us to score, not just play well. For this to happen the police, the prosecutor’s office and the courts need now to focus on raising their efficiency. One expects the courts especially, but as well the whole legal profession, to get the best systems expertise to rehaul our antiquated court system and bring it on par with our European peers. n

41

“Inflation is likely to pick up next year as the recovery progresses, but it is projected to remain around 2%, as the recent increase in international commodity and import prices is expected to decelerate. Hence, I would say that our outlook is cautiously optimistic.”

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GOLD SPONSORS The Malta Chamber of Commerce, Enterprise and Industry is very grateful for the support of its collaborators, who are committed to building and contributing towards measures that aim at enhancing competitiveness within the local business sphere.

Coming from a wide variety of industries, The Malta Chamber’s Gold Collaborators provide an indispensable toolset of industry hands-on knowledge that when combined with the Chamber’s positioning to lobbying with policy makers, places our entity as the go-to organisation to improve Malta’s business future.

Several events and initiatives have been co-organised with our Collaborators to provide real time industry updates on various topics including sustainability, digitalisation, recovery and resilience, skills and internationalisation. The aim of these activities, combined with networking opportunities, provided tangible value for our members to enhance business models, development and growth.

Thanks to the help of our collaborators, The Malta Chamber will continue to fulfil its mission at being Malta’s largest business representative body and the true voice of business.

The official airline of the Maltese Islands, its aim is to be recognised as one of the world’s leading destination airlines. As a destination airline, their wish is to place their deep understanding of Malta at their clients’ service. A commitment to offering attractive fares and value-formoney is central to their way of doing business.

Established in 1974, Bank of Valletta is proud to be the largest bank of Maltese origin and ownership. They offer personal solutions to retail customers through the largest branch network on the Island, as well as tailored financial advice, business financing and high-end services to corporate companies and wealth management customers.

EY’s purpose is Building a Better Working World.

The insights and quality services they provide help build trust and confidence in the capital markets and in economies the world over. They develop outstanding leaders who team up to deliver on our promises to all their stakeholders, playing a critical role in building a better working world.

HSBC Bank Malta is the Maltese subsidiary of the British multinational banking and financial services company HSBC. The Bank operates numerous branches and offices throughout Malta and Gozo, providing a comprehensive range of financial services including retail banking and wealth management, commercial banking and global banking and markets. They are also active in the areas of life assurance and fund management.

RSM Malta was established by a team of reputable partners who are Certified Public Accountants with several years of working experience. Their setup enhances business efficiencies, reduces internal bureaucracy and underpins our client-focused culture, as well as assisting their clients in readily connecting to partners and directors, providing both leading advice and great value for money.

The firm is a member of RSM International.

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Taking to the Skies Since 1974, Air Malta - a strategic national asset and the national flag carrier of the Maltese Islands - has played a vital role in supporting the national economic, social and cultural development of the Islands by ensuring stable and regular passenger and cargo connectivity within Europe and beyond.

A David Curmi Air Malta Executive Chairman

ir Malta is a point-to-point airline that attaches to the bigger airlines through 13 codeshare and 61 interline agreements.

Over the course of its history the airline transported over 55 million passengers safely to and from the Maltese Islands. It is key for Malta’s connectivity, contributing to around 35% of traffic and ensuring all-year round operations to more than 20 European cities and major airports.

Encouraged by strong evidence of the return for the demand for leisure air travel, Air Malta is gradually restoring its operations and plans to operate approximately 130 flights per week on 21 European routes in Summer 2022.

Air Malta started the renewal of its fleet in 2018, moving from old Airbus A320CEO to greener A320NEO and, by 2024, the entire fleet will consist of a single-type aircraft, the A320NEOs. The airline currently operates a fleet of seven Airbus, four A320NEO and three

A320CEO aircraft. With the deployment of the new energy-efficient aircraft, Air Malta will significantly reduce fuel consumption, CO2 emissions and noise footprint and will therefore be well-placed to be a leader in the reduction of human induced climate change and in meeting its sustainability targets.

Air Malta is committed to ensure that its customers are at the centre of its strategy, and the airline is taking several tangible initiatives to leverage technology to deliver an outstanding customer journey and experience. To this end, the airline achieved a key milestone in its digital transformation journey by successfully launching its new booking and customer experience platform.

The airline has consistently ranked amongst the best regional airlines in Europe and has recently been voted the third ‘Best Regional Airline in Europe’ and the 10th ‘Best Regional Airline in the World’ at the Skytrax World Airline Awards™ 2021. n

Parents transferring their business to their children during this one year period will benefit f rom a reduced stamp duty of 1.5% with no capping on the amount to be transferred.

T: +356 2149 7970 E: familybusinessact@gov.mt FamilyBusinessOfficeMalta Family Business Office Malta

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Looking Ahead With Caution According to Bank of Valletta Chairman Dr Gordon Cordina, the repercussions of COVID-19 will be felt for a while yet.

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he economic shock of COVID-19 threatened the quality of credit, at the same time that it necessitated banks to step up their provision of liquidity to affected businesses in times of unprecedented difficulty, says Dr Cordina.

“This brought not only a situation of more careful management of capital and risks, but also heighted service delivery challenges especially to meet the demand associated with Government-backed schemes that were essential to sustain the integrity of business in the country. The dampened global economic scenario reduced the possibilities for returns on Treasury assets for banks and tended to exacerbate the excessive intake of liquid deposits which can not be readily transformed into income-earning assets,” he states.

The industry has tended to over-provide for the potential negative impacts of COVID-19 on the lending portfolio, driven in good part by regulatory requirements. Borrowers are also overall managing to keep to their commitments as lending moratoria are expiring and support schemes are run down, the BoV Chairman adds.

“While this should apparently allow for a release of such provisions, the risks from COVID-19 are far from over, and there could be further setbacks to the speed of economic recovery in Malta for key tourism and consumption sectors.”

Bank incomes have over the past year been sustained by home loan growth on account of a satisfactory performance of the real estate market. Demand may in the near future be affected by the expiry of the period for which preferential duty rates were offered by Government. On the other hand, the supply of new property is expected to continue at a fast pace in the coming two years, on account of permits issued up to 2019. This, coupled with the liquidity in household portfolios in Malta may well entice a strong market for home loans over the next year.

“The negative interest rate scenario is possibly one of the greatest challenges to the income statements of banks. This is very unlikely to change in 2022, at the same time that economic conditions may be depressed by the general and substantial increases in commodity prices worldwide. Banks will need to manage the resulting risks to their credit portfolios and face their costs.”

“The long-term effects of a long grey-listing could be deleterious to finance-based economic sectors, and to the ability of banks to continue to provide a range of foreign-related services to their customers.”

When asked about the consequences of Malta’s FATF greylisting, Dr Cordina says that the present ramifications are a general increase in the requirements for due diligence when conducting business with foreign counterparts, and a decrease in appetite by certain segments of foreign operators in doing business in Malta.

“Most of these effects had already however been provided for in the period running to the grey-listing event itself. It is however now critical to exit this situation in the most rapid way possible, and to build the reputation and credibility of the Maltese economy, financial sector and governance institutions in this process. The long-term effects of a long greylisting could be deleterious to finance-based economic sectors, and to the ability of banks to continue to provide a range of foreign-related services to their customers.”

BoV continues to be strongly focused on de-risking and embedding regulatory require-

ments in its day-to-day operational methods in a manner that is as least as possible intrusive to the customer experience. Digitalisation and simplification will continue to be pursued to attain these objectives, within the wider context of the Bank’s 2023 Strategy.

The Bank aims to reinforce its strong relationship with the development of the Maltese economy and will focus on the home loan and business loan markets through quality of service and effective pricing. It will also be especially focused on incentivising deposit customers to better utilise their liquidity into longer term, better-rewarding financial assets, including in the pensions space.

“The return to a stable and predictable dividend behaviour is a top priority item for the Bank’s board. Similarly important are the Bank’s commitment to its environmental, social and governance obligations, as well as the development of the Bank as an employer of choice for the best talent.” n

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This is a time to

Learn, Grow and Adapt Chief Executive Officer at HSBC Bank Malta p.l.c. Simon Vaughan Johnson says that a particularly important challenge - and opportunity - in 2022 and the years ahead is the country’s commitment to implement the Low Carbon Development Strategy.

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dentifying measures to move towards a carbon neutral economy by 2050 is the main aim of the Low Carbon Development Strategy, which includes a first 10-year plan, costed to reduce emissions and achieve the 2030 interim EU target.

As part of HSBC’s commitment to be a net zero organisation by 2030 and to facilitate the transition in Malta, the HSBC Malta Foundation is funding a two-year project together with The Malta Chamber titled ‘Establishing Malta’s framework for a net zero carbon building’.

“This project is targeting the country’s building and construction sector with the goal of raising standards in energy efficiency and conservation. We have also recently launched the HSBC Responsible Investment Fund which has seen strong interest from Maltese customers,” explains Mr Vaughan Johnson.

Moving on to the main challenges in the current dynamic regulatory landscape, he mentions the imperative for banks to prioritise compliance modernisation, safety and soundness. This transformation is essential in order to preserve Malta’s integrity as an important financial centre and requires significant human and capital investment which is compounded by severe resource shortages across the board, he says.

“As we slowly emerge from the Covid-19 pandemic, we’ll need to assess its impact on the economy as Government support measures taper off, and we also need to monitor the trends in our tourist industry, which reassuringly have shown positive growth over the summer months. A sustained pandemic situation could lead to increased expected credit losses within the financial sector as corporate clients request additional moratoria and could also lead to reduced consumer confidence.”

Mr Vaughan Johnson asserts that the pandemic has created unique challenges and opportunities - to learn, grow, and adapt. “From the outset, the pandemic really challenged our established ways of working, and the way the Bank interacted with and provided banking services to customers”, he says.

“Importantly, the pandemic has connected the world with a common sense of purpose and has shown what can be achieved with true collaboration, increasing climate awareness and accelerating climate action."

“The pandemic forced digitalisation at a quicker pace which has enhanced the Bank’s ability to serve personal and corporate customers who in turn have significantly increased their digital interaction with HSBC. The Bank’s aim was to simplify various processes and give its customers the choice of interacting electronically or in person.”

“Remote working was previously not championed as an approach, but we were quick to draw up a Remote Working Policy, in close liaison with the Malta Union of Bank Employees (MUBE) and are now fully embracing a hybrid model and making positive changes to our working environment and office footprint,” he states, "Importantly, the pandemic has connected the world with a common sense of purpose and has shown what can be achieved with true collaboration, increasing climate awareness and accelerating climate action, whilst at the same time highlighting the importance of robust business continuity plans." n

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How will Malta fare economically in

2022?

Tech.mt CEO Dana Farrugia, says that Malta’s continued success in the technology sphere depends on several areas. The workforce will need to acquire new skillsets to be able to deal with innovative and digitallyfocussed technologies such as the Internet of Things and Blockchain.

Just as important is educating the young people who will be making up Malta’s workforce in the future. All this is vital for the success of local enterprises and the economy, she stresses.

Bringing Malta out of greylisting, repairing its reputation and taking care of the environment while ensuring sustainable economic growth within the economy are just some of the important issues that Malta has to face head-on in 2022, says IVALIFE Insurance CEO Reuben Zammit. Mr Zammit also warns against complacency as far as vigilance against COVID-19 is concerned, saying that we are far from being ‘back to normal’ as yet.

In the meantime, Enemed Chairman Kevin Chircop believes that the level of due diligence and anti-money laundering rules that need to be followed -both in Malta and globally – has rendered the traditional way of doing business obsolete. As for challenges, he cites one of the main ones to be the prices of energy which have shot up due to the pandemic and other factors.

MMH Malta Executive Chairperson Angelique Abela continues on the same vein, stating that maritime and oil and gas industries have faced a number of challenges, with more on the horizon such as shifts in various sectors of the industry towards sustainability and the use of lower-emission fuels.

The Manoel Island masterplan was recently unanimously approved by the planning board of the Planning Authority, which commended the efforts that have been made to achieve a more sustainable masterplan which now has a better balance between built-up and open spaces. MIDI will now be submitting its plans for a full development permit with the aim of commencing works towards the last quarter of 2022.

Family Business Office Regulator Dr Joseph Gerada says that finding the balance between economic growth and remaining competitive in a world which is currently struggling economically, while safeguarding the health of the public in general is not going to be an easy task.

New Registrar of Companies and Chief Executive Officer of the Malta Business Registry Dr Geraldine Spiteri Lucas says that one of her missions is to push the drive for a high-performance culture registry, putting stakeholders at the centre of the MBR while remaining true to their values and mission of providing businesses with a sense of security throughout all their endeavours.

Minister for the Environment, Climate Change and Planning Dr Aaron Farrugia says that as global economies are starting to recover (or adapt) from the pandemic, we are seeing a 600% increase in European gas prices which will no doubt pose a challenge for the upcoming year.

Other challenges include climate change, the environment and waste management, he states.

Read more about what these movers and shakers have to say in the next pages.

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New Skillsets for the

New Digital Economy

Ms Dana Farrugia, CEO at Tech.mt outlines the key areas critical for Malta’s continued success in the technology sphere.

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or Tech.mt, the agency tasked with promoting and cultivating Malta’s technology and ICT sector, creating a culture of innovation is a priority. The current challenges have accelerated the need for us to transform, change, and reinvent ourselves for the future, so that we can emerge stronger. The latest version of the EU Innovation Scoreboard indeed highlights that the EU’s innovation performance continues to increase at a steady pace. Indeed, Malta registered the second greatest performance growth rate (51.5 per cent) among all member states between 2014 and 2021 in the field of Information Technology Use. Being at the forefront of integrating technology and innovation in different sectors, Malta has continued to push the boundaries in the digital sphere. Malta’s success in this sector is mainly due to the Governments’ drive and commitment towards the digital sector and the private sector’s continued investment and growth.

Access to incentives and financial instruments are key elements in building innovation ecosystems, including those related to tech and the digital economy, says Dana Farrugia, CEO at Tech.mt, adding that Malta needs to further strengthen this element through venture capital and other equity schemes.

“Although a lot is being done; we need further digital transformation to ensure that the public sector can become not only an enabler of growth but a main driver,” she says.

“The future of the digital economy will require a new skillset of the workforce. With new technologies such as IoT, blockchain, virtual reality and the onset of 5G; the skillsets are going to be critical for the success of any enterprise and economy.” Ms Farrugia stresses that it is therefore critical that educational institutions, including primary and secondary, schools start equipping our future workforce.

Concurrently, it is going to be critical to also reskill and upskill our current workforce.

“Malta has built a diversified economy on the basis of regulatory innovation and key

“We acknowledge that large tech companies, although a vital backbone, have their own challenges to face however, Tech.mt can assure that it is present in various fora to influence policy and is constantly finding avenues internationally where to promote Malta’s Tech sector as a choice of excellence. Tech.mt would like to thank the local tech companies who have sustained the economy through the pandemic following increased demand.” sectors such as remote gaming, financial services and pharmaceutical manufacturing are all based on the power of regulation. We need to continue carving out new economic sectors that are digitally focused. Malta has already started treading new ground in the fields of blockchain, artificial intelligence and other key areas.

The unfavourable news Malta experienced in 2021 may have impacted its attractiveness, and hence, its economy. “Going forward we are committed to continue working hard to restore our island’s appeal; we must all work together to improve our country’s government and service quality. While constructive criticism is important, we must equally focus on the positive and highlight our achievements.

With Government’s roadmap in place and the economy performing well, we can focus on re-establishing trust in our attractiveness and assuring prosperity,” highlights Ms Farrugia.

We acknowledge that large tech compa-

nies, although a vital backbone, have their own challenges to face however, tech.mt can assure that it is present in various fora to influence policy and is constantly finding avenues internationally where to promote Malta’s Tech sector as a choice of excellence. Tech.mt would like to thank the local tech companies who have sustained the economy through the pandemic following increased demand.

Ms Farrugia says that guiding businesses in enhancing their portfolios and pitches to attract investment and export their products lies at the heart of what Tech.mt does. Recent projects include its well-received consultancy initiative for start-ups and academia and the collaboration on the launch of several guarantee and funding schemes for SMEs. Focusing on post-COVID prospects, Tech. mt shall continue to push the use of technology and to cultivate innovation mindsets with the ultimate aim to support business organisations in gaining a competitive edge. n

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Challenging the Status Quo IVALIFE Insurance is a new digital first, technology-driven life insurance company which provides a range of smart life insurance products tailored to both individual and group needs. CEO Reuben Zammit speaks about some of the decisions Malta faces going into 2022 and what challenges the local insurance sector faces.

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avigating the country out of greylisting and repairing its reputation to attract foreign investment, as well as protecting the environment while ensuring sustainable growth within the economy are two important factors that Malta has to face going into 2022, according to IVALIFE CEO Reuben Zammit.

“A strategic change to a green economy rewarding environmentally friendly initiatives and investment is well-needed,” he says, “Other areas which need to be tackled include restoring a healthy US Dollar correspondent banking relationship for Malta, managing the pressures on the incrementing cost of living and finding a feasible way of recovering the €5b outstanding tax bill due to the Government of Malta.”

When speaking about the changes that COVID-19 has brought about in the day-to-day operations at IVALIFE, Mr Zammit says that they built their organisation to operate remotely, and COVID proved that this was a good decision as the business impact was diminished to a minimum.

“We could carry on working seamlessly without any business interruptions. This also helped to cut on travelling time and thus contribute to lesser emissions. We allowed for a flexible working environment, and we accelerated the pace of digitalisation, with our resources working effectively and efficiently.”

As we move into 2022, Mr Zammit warns against the dangerous ‘back to normal’ confidence as we still see soaring COVID-19 cases.

As for the challenges the insurance sector may face in 2022, he mentions that the availability of sufficient disposable income to take out life covers as insurance is sometimes perceived to be “extra”, leading to postponements in personal plans.

“The insurance industry needs to do more to make insurance more of a commodity item that is easier to obtain,” he stresses, “The ever-increasing amount of compliance requirements is another issue. Compliance cannot be seen as a ‘one size fits all’ solution, as what may make sense in one financial sector may not apply for another. Regulation should also be proportionate on the kind of products being offered, rather than having a blanket regulation.”

Some of the company’s main aims for 2022 are taking customer centricity to the next level, making available customised offerings through digital access, extending their product offerings to include individual and corporate pension plans, continue building and improving on their digital offering and creating a real digital interface for clients to interact with them in a personalised manner.

“The insurance industry needs to do more to make insurance more of a commodity item that is easier to obtain.”

“As customer experience becomes more important and clients expect and demand all services digitally, the local insurance market is going to need to jump on the digital bandwidth sooner rather than later,” Mr Zammit concludes. n

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A new way of

doing business The COVID-19 pandemic has not been kind to the energy sector, particularly aviation. How does Enemed Chairman Kevin Chircop see the company getting over this particularly tough hurdle?

“Our core values of ‘Respect’, ‘Responsiveness’ and ‘Results’ are inbuilt in all our daily decisions, be it a policy or simply an operational procedure… it is our way of life. It is the way we conduct business.”

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nemed Chairman Kevin Chircop believes that the one of toughest decisions Malta faces next year and the years to come is related to the change in culture that must be enforced in relation to fiscal discipline.

“The level of due diligence and anti-money laundering rules that are required to be followed - and this is not something that is happening in Malta only but globally - means that the traditional way of doing business is obsolete,” he said.

On an international and a local level, Mr Chircop sees the prices of energy - in particular fuels that have skyrocketed partly because of the effects of the pandemic and partly because of the global drive to move to more ‘cleaner’ fuels - as one of the main challenges for his industry over the next year.

2022

“Financial institutions and hedge funds are not keen anymore in providing support for this industry, hence large oil companies are finding it difficult to maintain or build new oil rigs. The surge of COVID-19 numbers is slowing the large economies once again, hence the fine balance between demand and supply has not as yet been established,” he said.

Mr Chircop states that the pandemic has had terrible consequences for certain divisions, particularly for aviation, which was at an almost complete standstill for eight months.

“The level of due diligence and anti-money laundering rules that are required to be followed - and this is not something that is happening in Malta only but globally - means that the traditional way of doing business is obsolete.”

“We are proud that we sustained our employees in every way we could and did not lay off anyone. This does not mean that we are out of the woods since sales for this year are only about 55% of 2019; however, the trend is improving so there is hope,” he explained, “Our company culture is one of continuous improvement and being lean. We are in continuous search of doing things better and in an efficient manner so there is this constant search of keeping our operational costs to a minimum even when the company is going strong.”

Although it was already planned to be implemented, the pandemic accelerated the decision to move to remote working and flexibility at Enemed.

“We are glad that this was implemented with success and will definitely be kept since it gives our employees full flexibility and easily reach the work life balance especially for parents with young kids,” said Mr Chircop, “Our core values of ‘Respect’, ‘Responsiveness’ and ‘Results’ are inbuilt in all our daily decisions, be it a policy or simply an operational procedure...

It is our way of life. It is the way we conduct business.” n

Facing Challenges Head-On MMH Malta Executive Chairperson Angelique Abela says that, as with every industry over the past two years, maritime and oil and gas industries have faced a number of challenges, with more on the horizon.

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s Executive Chairperson of MMH Malta Limited, Angelique Abela’s primary focus is the overall direction, strategy and business development of the company.

Ms Abela also has the responsibility of overseeing new projects being undertaken by the company, amongst which are the rehabilitation of the former Malta Shipbuilding site in the Grand Harbour into the Mediterranean Maritime Hub – a centre of excellence for the marine, oil and gas industry in the Mediterranean - and the growth and expansion of the MMH Academy, successfully established in 2014.

“The next challenges we foresee are the shifts in various sectors of the industry towards sustainability and the use of lower-emission fuels. As with every sector, we must also navigate through the current challenges being faced in our local economy at this moment,” she states.

According to Ms Abela, one main ‘positive’ that COVID-19 brought about was that digitalisation within the sector increased, allowing the industry to function more efficiently.

“However, more importantly, the pandemic brought awareness and a strong drive towards the safety and well-being of seafarers. As a company, we are proud that on a local level, we worked with Government and the relevant authorities to ensure that crew changes could continue to be carried out safely and with minimal impact to the seafarers and the essential work that they do,” Ms Abela said.

As for plans for 2022 and beyond, the Mediterranean Maritime Hub will continue to support the maritime industry on a local and international level.

“We also hope for general growth within the sector and aim to continue investing in our goal to ascertain Malta as a centre of excellence for the Maritime and Oil and Gas industries.” n

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“We are proud that on a local level, we worked with Government and the relevant authorities to ensure that crew changes could continue to be carried out safely and with minimal impact to the seafarers and the essential work that they do.”

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A new lease of life for Manoel Island The Manoel Island masterplan has been unanimously approved by the planning board of the Planning Authority. The planning board commended the efforts that have been made to achieve a more sustainable masterplan which now has a better balance between built-up and open spaces, with the open spaces now heavily outweighing the built-up area. MIDI will now be submitting its plans for a full development permit with the aim of commencing works towards the last quarter of 2022.

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hile Manoel Island is a critical part of Malta’s history, it remains a much-loved part of the local landscape and culture. Preserving this unique heritage and making it accessible, is at the heart of the revised MIDI masterplan.

The new masterplan for Manoel Island aims to retain the aspects of the mixed-use development while placing a stronger emphasis on creating larger public spaces. The masterplan contemplates that the footprint of the new buildings to be developed on Manoel Island will be scaled down to cover less than 10% of MIDI’s concession and the gross floor area of the new buildings will be 55,000sqm compared to the 95,000sqm permitted in the original Outline Development Permit. Furthermore, Manoel Island is going to have 175,000sqm of open space for the enjoyment of the public.

Restoration of Heritage Buildings The existing heritage buildings are central to the design philosophy of the new masterplan.

The masterplan provides a new lease of life to the heritage buildings present on Manoel Island, including Fort Manoel, which has already been restored. The Customs House, St. George’s Chapel and the Cattle Shed will occupy prominent positions within the new 35,000sqm open space which extends from the Manoel Island bridge to the Lazzaretto quay. These buildings will be restored to provide an animated commercial offering which compliments the surrounding open spaces.

The Marina The existing marina concession will be upgraded, and the capacity of the marina will be increased to approximately 190 berths. Apart from pontoons, the marina will include a quay for larger berths which will be offered stern to berths. The marina will be protected by a floating breakwater which in the new masterplan replaces the fixed breakwater. By providing a floating breakwater the impact on the environment is largely mitigated.

The Residences The residential buildings are positioned in two clusters on the parts of the island where studies show that they will not impede on archaeologically sensitive areas. The first cluster is located

The two clusters are separated by the large public open space which is located at the heart of the development.

along the south shore and the second cluster is located between the Admiralty Canteen and the Lazzaretto.

The two clusters are separated by the large public open space which is located at the heart of the development. The building heights will be slightly terraced from the seafront towards the centre of the island to create a varied architectural skyline which respects the islands topography. The maximum height of the development will not exceed the height of the buildings in Fort Manoel.

No land reclamation In a move away from the original plan that included 14,000sqm in land reclamation, the revised masterplan does not include the land reclamation originally contemplated as part of the development. As a result, the residential block which was proposed for the north shore entrance to Manoel Island will not be developed, thus reducing the impact on the Gzira community.

By focusing on the heritage assets on Manoel Island, the revised Masterplan represents a new way of preserving Malta’s history for the benefit of its residents and visitors. This blend of history with the contemporary world will transform Manoel Island into a new and unique destination for Malta. n More information about the new MIDI Manoel Island Masterplan can be found at www.manoelisland.com.mt.

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Sustainable Mobility Committee Luke Borg Kevin Vella Konrad Pulé – Chairperson Ian Mizzi Prof. Maria Attard

Malta Chamber Sustainability Committees 2021-2023

Energy Efficiency and Conservation Committee Ing. Trevor Buhagiar Ing. Manuele Vagnoli Ing. Matthew Spiteri Ing. Tiziano Petrosino Timothy Alden – Policy Executive, The Malta Chamber Ing. Patrick Spiteri Staines – Chairperson Ing. Jean Paul Attard Ing. Olaf Zahra

Circular Economy Committee Nathan Chatland - Economic Policy Analyst, The Malta Chamber Timothy Alden – Policy Executive, The Malta Chamber Ing. Oliver Fenech – Chairperson Dr Robert Cortis Tonio Montebello

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Planning AHEAD with VISION Dr Geraldine Spiteri Lucas was appointed as Registrar of Companies and Chief Executive Officer of the Malta Business Registry in October 2021. She is responsible for the overall management and performance of the Malta Business Registry, as well as the strategy development and implementation of the Business Register.

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s MBR Registrar I need to ensure that the company incorporation is a smooth and timely one, this is in itself a challenge since we are a supervisory authority, for anti-money laundering purposes, and we need to vet documents and involvements thoroughly. The same applies to notifications that need to be submitted to the Registrar for registration by existing companies and other legal organisations. I am currently examining the whole situation in order to come up with a plan to address any shortcomings in the service offered by us.

Everything is possible knowing that I am surrounded by hard working employees who are experts in their relevant fields,” Dr Geraldine Spiteri Lucas explains.

Dr Spiteri Lucas says that her intention is clearly to push the drive for a high-performance culture registry, putting stakeholders at the centre of the MBR while remaining true to their values and mission of providing businesses with sense of security throughout all their endeavours.

“My immediate action plans are to ensure that a homogeneous approach is adopted when vetting documents both at incorporation stage and notifications of existing entities and also a good level of communication with company directors, professionals engaged in assisting companies and other organisations involved in the business field in order to ensure that they are aware of new legal obligations in a timely manner and have a clear vision of how the MBR is going to implement new procedures emanating from law.”

Personally, she says, when she is implementing short term measures she will still be looking and assessing their effect on the long term.

“I always plan ahead and think of a plan B, C and D just in case something does not go as planned. My main objective as Registrar is to ensure that the information, both basic and beneficial ownership information, on the MBR’s portal is accurate and up to date. This is a topic which is very close to heart as having a proactive register which is fully transparent with ac-

“I always plan ahead and think of a plan B, C and D just in case something does not go as planned. My main objective as Registrar is to ensure that the information, both basic and beneficial ownership information, on the MBR’s portal is accurate and up to date.”

curate information is a tool both for competent authorities and professionals involved in the fight against money-laundering and the general public. During my time as Chief Legal Officer I have ensured that when proposing legislation to Parliament, we included measures, and at times even sanctions, to ensure that all companies are adhering to their filing obligations in a timely manner. At the beginning it might have looked too much however now everyone is appreciating that this was needed and that the portal is now more useful than ever before.”

Complimentary to the above point, is Dr Spiteri Lucas’ vision to see the MBR going paperless and seeing the system fully functioning on the DLT system.

“A lot of development has already been done however going paperless is a very ambitious and, needless to say, requires huge efforts and determination, the latter of which our team has plenty of, and it is with that determination that we will succeed in this as well.”

In the meantime, Dr Spiteri Lucas asserts that the MBR is working hard to address the FATF’s action plan.

“We are addressing the recommendations with a positive approach as we know that after all our efforts at the end, we (and Malta) are going to come out stronger and better. For 2022 I would like to also see the majority of our new online portal implemented and functioning.” n

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A Matter of

Time and Space Tough decisions will need to be taken together with quicker action towards clean and renewable energy, as well as sustainability, says Minister for the Environment, Climate Change and Planning Dr Aaron Farrugia.

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alta has remained resilient to the energy crisis so far with government being in a position to subsidise the increase in prices -but there is a degree of uncertainty as it might derail our green transition. And it might only be a matter of time until it affects us directly or indirectly, says Minister Aaron Farrugia As global economies are starting to recover (or adapt) from the pandemic, we are seeing a 600% increase in European gas prices which will no doubt pose a challenge for the upcoming year.

“We will also have to face the issue of inflation: in the EU, the leading cause appears to be energy, while food is keeping prices up locally.

Climate change and waste management are also challenges we will continue to tackle in the coming year, as well as creating a balance and continuing to foster a good relationship between development and the natural environment… while taking more ambitious and bold steps towards better planning.”

Minister Farrugia says that he thinks that the experience of the pandemic made people more aware of the importance of the natural environment and the spaces we live in.

“It gave an impetus for many urban greening and open space projects that have cropped up precisely during the heights of the pandemic and helped us become more aware of the benefits of greener infrastructure. We have quickly become more health-conscious, prioritising air quality and wellbeing in urban areas. We have started looking at more sustainable building practices: the Long Term Renovation Strategy was launched precisely in the backdrop of COVID-19, and the Building and Construction Authority was also established during this time.

Directly or indirectly, the pandemic has affected the way we look at building and planning, as it has exposed some of our vulnerabilities and shifted our priorities -- perhaps for the better.”

From the perspective of the operations of the Planning Authority, the COVID-19 pandemic helped to highlight how important a shift towards an automated system is. Measures that were adopted include going paperless, digitisation, increased services through the web-portal, upgrading of the Authority’s server room, the setting up of an off-premises data continuity centre, hot desking and increased electronic security.

“In view of its ongoing past ICT investments, the organisation has naturally adapted to working under COVID-19, with a switch to almost 100% remote, digital work. The public sector was directed to work remotely, in cases where this could be possible and are now slowly returning back to the offices. However, a number of Ministers have acknowledged teleworking benefits and suggested that this is here to stay. In fact, I pledged to roll out incentives to encourage more people to work from home, even after the COVID-19 crisis is over, in order to reduce traffic and improve air quality,” he says.

The PA has received an overwhelmingly positive response to online Board sessions, particularly from architects and periti who appreciated saving time as well as the positive environmental impact. The past months have laid the foundations for enhanced public sector productivity far into the future, Minister Farrugia adds.

On to Malta’s Strategic Plan for Environment and Development (SPED), released in 2015, drafted by the PA and approved by Parliament, Minister Farrugia says that this is the holistic blueprint for Malta’s path to sustainable development.

“One way or another, everyone has a hand in shaping the world they will leave to their children. And Malta’s residents are no exception.

While the 2015 document was a good start to tackle planning and the environment in a holistic manner, it is now time to address further issues, away from piecemeal solutions to challenges faced. Reviewing SPED would be the first step in achieving a better and straightforward policy in Malta. Now, the plan is undergoing its first revision.”

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“One way or another, everyone has a hand in shaping the world they will leave to their children.”

The SPED remains Malta’s overarching vision for development and guides other subsidiary plans and policies and serves as a reference point for other Government policies with a spatial dimension. But times change and new challenges emerge, which is why periodic revisions are a legal requirement integral to the SPED as a living document, continues Dr Farrugia.

We are identifying past and present development trends to project Malta’s future spatial needs, as well as to determine how our sustainability framework can ensure that development today does not hinder the lives of future generations. By updating our Spatial Strategy, we can plan for the required economic growth while safeguarding our environmental and social wellbeing.”

The SPED clearly defines each of the islands’ spatial areas to avoid a one-size-fitsall approach, he says. It, therefore, translates the country’s vision of having a more efficient economy, more sustainable use of space and improved health and well-being into a spatial vision for each area.

“These studies will help us form a picture of Malta’s current land use, so we can then establish likely future scenarios to plan for, as well as manage our limited land and sea resources sustainably and in an integrated manner. But the process is extremely time and resource-intensive,” he explains.

To date, Terms of References for every study have been set out, and all the studies have commenced. The entire review is proceeding along a timeline set to coincide with the conclusion of the Issues Paper and formulation of future strategic growth scenarios. Specifically, the Development Capacity Study is of top priority as it will inform the other studies in terms of space availability required for future social and economic growth.

“This current research stage is essential, but the most important element of the SPED’s review is still to come - the public consultation phase.”

Once completed, the studies will be published and the public will be invited to actively participate in the review process through con-

tributions and suggestions, before the formulation of the new Spatial Strategy will commence.

“The challenges of the upcoming year and those that we plan to tackle; most urgently, the need for an aesthetics policy particularly for outside Urban Conservation Areas. Different governments have protected UCAs, but outside of them, there is a definite need for more uniformity and better-looking buildings. We also need to seriously look at the need to incentivise comprehensive development in order to have better planning in both environmental and economic terms. The PA will continue to work on an updated rural policy through which we will aim to keep ODZ development to a minimum while protecting the agricultural sector. Other challenges we will be tackling head on is urban greening, which is a difficult task in view of our highly dense urban areas and fragmented ownership. But I am hopeful as I see scope and opportunity to improve our existing open spaces through the introduction of further green infrastructure. We are continuing to work towards better spaces and improved quality of life across the board.” n

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65

Keeping it

in the Family Family Business Office Regulator Dr Joseph Gerada says that recent developments seem to indicate that the toughest decisions that Malta will be facing over 2022 will be mainly related to the pandemic and the restrictions that we may have to impose once again, in the hope that these may help maintain the pandemic within control.

F

inding the balance between economic growth and remaining competitive in a world which is currently struggling economically, while safeguarding the health of the public in general is not going to be an easy task, says Dr Joseph Gerada.

“I do not feel that we can afford to go back to the same level of restrictions we had to apply over the worst period of the pandemic as both our businesses and the government will find it very difficult to continue injecting money which will in turn continue to lead to higher rates of inflation. However, the health and welfare of the public has to remain the utmost priority, and this inevitably means that it is not going to be an easy year for business,” he attests.

According to Dr Gerada, family businesses are very resilient when it comes to facing obstacles and overcoming them: “As stated, next year we may have to take some tough decisions in relation to the pandemic and these may in turn have a negative effect on the business of these families. However, I believe that as they have done over the past year, family businesses will continue to adapt to ensure their own survival and that of their families which depend on the income received from their enterprise.”

Although clearly those businesses operating directly in tourism are the ones that are worst hit whenever restrictions are put in place, the reality is that most of the other economic sectors in Malta and Gozo, are somehow dependent on tourism, even if indirectly, he continues.

“These family businesses will therefore have to come up with new ways of surviving during the dry periods. For some, this will be a time of reflection and action to make the necessary changes to their business model so that they may remain competitive. The cost of imports and exports, as a result of higher transportation costs are also having a negative impact on local family businesses, and it is therefore crucial that over the next year solutions are found to overcome these obstacles. The Government is currently encouraging businesses to invest in storage so that they may reduce transportation costs by increasing orders while reducing their frequency.”

Dr Gerada says that he is sure that they will be able to find other solutions to ensure that family businesses may forge ahead while hoping that the pandemic will ease off over the next year. Of course, primarily, their greatest hope is that the pandemic will become a thing of the past, and that businesses may return to the levels of operation of 2019 and 2020.

“This will enable us to continue with our reach out programmes, conferences and mass events. We also hope to see more family businesses creating their succession plans and actioning them so that the new, younger generations can take over, bringing in innovative ways of doing business which will ensure that these family businesses may survive the test of time.” n

“I do not feel that we can afford to go back to the same level of restrictions we had to apply over the worst period of the pandemic as both our businesses and the government will find it very difficult to continue injecting money which will in turn continue to lead to higher rates of inflation.”

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Through several initiatives that have been undertaken, our collaborators contributed significantly towards the relentless representation of Maltese ethical businesses responsibly.

During 2022, The Malta Chamber endeavours to continue influencing the formation of policy at national and European level towards the development of an enterprise culture while creating favourable economic conditions.

Our Bronze Collaborators renewed their commitment to leverage their efforts and knowledge with The Malta Chamber towards formulating various policy positions which are favourable for industry, to undertake the forthcoming challenges ahead pragmatically, coherently and diligently.

71

Banking on a New Future The Bank that is centred around its customers.

S

ince its inception, BNF Bank has grown into becoming a core bank within the Maltese financial eco-system. It has built a solid reputation by entering into meaningful conversations and creating lasting relationships with its customers.

Offering a varied yet simple-to-understand suite of products and services that cater for personal and business clients has been key to the growth that BNF Bank has seen during the past years. From students to young couples looking to finance their first home, individuals looking to finance their personal dreams to budding entrepreneurs, they are sure to find trained staff in the 12 branches strategically located in Malta and Gozo who can offer tailor-made solutions which are competitive, responsive to their changing needs and above all, focused on quality.

Family businesses, start-ups and large corporations are provided with a top-end relationship-based banking partnership and solutions that facilitate growth. BNF Bank has recently set-in motion its internationalisation drive, with the opening of a branch in London, providing an opportunity for investors looking into expanding or exploring business opportunities in the UK.

Setting sustainable long-term plans; today, tomorrow, the future.

During the past years, BNF Bank has been ever-present in the community that it serves.

This provides long-term stability and brand recognition, strengthening the Bank’s strategy to become the bank of choice in Malta. As BNF Bank continues to be present in the community with the intent to leave an environmental and social impact, it fully embraces Environmental, Social and Governance (ESG) standards and considers applying an ESG lens to business strategy as being crucial to generating value.

The Bank’s efforts and successful results have been recognised by international reputable institutions such as The Banker, published by the renowned Financial Times, which bestowed BNF Bank with the Bank of the Year accolade for two years in a row, in 2020 and 2021.

This is testament to the commitment and dedication of the employees, the customers that

“While delivering the quality service that BNF Bank is distinguished for, the aspiration to ‘build a new future’ for the Bank and its customers has now become more of a reality and will continue to evolve in the coming years.”

BNF Bank CEO & MD Michael Collis

choose BNF Bank as their preferred financial partner and the sustainable and prudent vision of growth that the bank is implementing.

Continuous search for innovation The investment in technology is key to remain relevant in today’s banking industry where clients demand top-notch service at their fingertips from the comfort of their homes and offices. The Bank’s technological plan has seen all the customer touchpoints either improved or new ones introduced during the past years.

The technology path is now leading towards a digital transformation journey.

BNF Bank has chosen Temenos to spearhead the next phase of technological investment of the bank, considered as the providers of the most successful and widely used digital core banking solution in the world. BNF Bank is one of the fastest growing banks in Malta and

will be the first systemic bank on the island to have access to all the innovation and functionalities of the cutting-edge banking technology software.

Embracing the future While delivering the quality service that BNF Bank is distinguished for, the aspiration to ‘build a new future’ for the Bank and its customers has now become more of a reality and will continue to evolve in the coming years.

By combining leading technology with the human element of its people, drawing from their insights, experience, and expertise, together with a strong commitment from its shareholders, BNF Bank increased its efforts to provide superior customer experience, positioning itself as key player in establishing stability for what the future holds and building on its success for prosperity. n

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73

It’s Time to Support and

Celebrate Science As the Chief Visionary Officer of Malta’s fastest-growing science company Evolve, Christopher Busuttil Delbridge says that progress in any country can be measured by whether or not the scientific based sector is thriving.

How do you intend to help scientists, researchers, surgeons and biomedical specialists increase efficiency over the next year and beyond?

Efficiency is a tricky word in science. We are more pragmatic and tend to focus more on effectiveness. For example, issuing 20 specific results in an hour could be considered efficient in some quarters; however, we are focused on enabling the fact that the necessary training, tools and methods on site guarantee the correct results to be issued first time. Sometimes it really is a question of life and death.

Our services have been in fact honed around the whole lifecycle of any project - design (a space, or a solution), equip (take on the whole hassle of logistics, installation and any initial calibrations), train (ensure the highest standards are met and kept) and maintain (for any customer to take full advantage of their investment while ensuring correct and accurate results).

At Evolve we are very keen on training our personnel, learning from our own mistakes, integrating fool-proof methods of operation, assistive automation and leveraging advances in technology such as Augmented Reality (AR), Artificial Intelligence (AI) and Internet of Things (IoT) for the benefit of our customers.

Why should it be in the general public’s interest to support and celebrate the successes of the scientific based sector?

Scientific activities underpin and define who we are today as a human race and how we live our lives. We have so many comforts, live better and longer lives and are able to respond to immediate threats (such as the recent Sars-Cov2 virus), thanks to all the work done in the mostly hidden confines of laboratories.

It is high time that this huge achievement and contribution is brought to light by companies like Evolve who have been working in the shadows supporting this very important sector. The world invests so much money into luxury products, experiences and construction, just to name a few.

Yet the funding for the one thing that really makes a difference to our life is many times lacking. It is high time that the general public is sensitised to who and what is actually supporting them.

The scientific based sector is a symbol of progress in any country.

Once it starts thriving it signifies that the country has come a long way and matured to a level, as well as produced enough local talent to be able to support white, purple and gold collar job positions. Very interesting indeed.

What are Evolve plans, hopes and ambitions for 2022?

This will be the year to practice what we preach even more. We have already engaged specialists to lead our team towards building a ‘Culture of Distinction’. This includes a huge focus on our quality aspect as measured from various aspects, caring for each other and all other stakeholders, and great team-building activities to counter the effects of remote working and ballooning staff numbers who are all new to our culture. I am positive the knock-on effect will be felt by one and all in a short time. n

“The scientific based sector is a symbol of progress in any country. Once it starts thriving it signifies that the country has come a long way.”

75

IT, Interest Rates and the Island’s Greylisting among

Malta’s challenges for 2022 According to Sparkasse Bank Malta plc Managing Director Paul Mifsud, one of the challenges for the local banking industry in 2022 will remain the strain on earnings due to the prevailing negative interest rates in Euro.

T

he ramifications of the ceasing of economic activity and commerce due to Covid-19 lockdowns and other measures continue to be felt.

Commenting on the impact this has had on the local banking sector Paul Mifsud, Managing Director of Sparkasse Bank Malta plc, explained that as the lockdowns in Malta had become all the more prevalent, businesses started to seize up as a result, and liquidity and earnings became a concern.

“A slowdown in economic activity is a matter of concern for banks especially those that have large credit exposure to the local economy. As a result, several local banks were obliged to adjust their credit strategies for both existing as well as new credit applications and increase their provisions for non-performing loans,” Mr Mifsud said.

In Malta there are a number of local retail banks that are directly exposed to the local economy and other banks (referred to as noncore domestic banks) that have less exposure locally and therefore may not necessarily be exposed to the same typology of risk.

Sparkasse, for instance, is one such bank where its exposure to credit in general is insignificant. The Bank, being a custodian and

“A slowdown in economic activity is a matter of concern for Banks especially those banks that have large credit exposure to the local economy.”

depositary bank for funds licensed in Malta, chooses to hold its assets in cash with the Central Bank of Malta and part in High Quality Liquid Assets and away from traditional lending.

“This offers the Bank’s professional investor customers the comfort of dealing with a bank that is highly liquid with little exposure to business or real estate credit risk. This strategy paid off under Covid-19 as the risk of holding a defaulting or non-performing loan was not inherent in the Bank’s book,” Mr Mifsud stated.

In Mr Mifsud’s opinion, the primary challenges for the local banking industry over the next year remain the same as in previous years and can be summed up in three: negative interest rates, IT scalability and further due diligence stress points as a result of the island’s grey listing.

“As for the Bank’s plans for 2022, our ambition is to continue to deliver a personalised and efficient service to our customers and continue to provide career progression and opportunities for our work force,” Mr Mifsud concluded. n

76

Sustainable mobility:

walking the talk eCabs is the mobility leader in Malta. It evolved from a transport service provider into a mobility technology player. Today it employs a tech team of over 50 technologists hailing from 10 nationalities operating across five countries. Its next big step is taking its technology into foreign territories in 2022 to compete with the global giants. “While we plan to embark on this exciting journey, we are not losing sight of the local challenges and our own responsibilities.

We made a conscious decision to position sustainability at the core of our agenda and we are determined to persuade local stakeholders to start walking the talk” says Dr Andrew Bezzina, Co-Founder of eCabs and the Director responsible for Malta operations. year, we launched a pilot project through which we invested in a multi-branded fleet of fully electric vehicles to test and determine the operational and commericial suitability and viability of EV’s in a 24/7 operational context, on our challenging road network.

In eight months, we test covered 120,000kms, consuming 14,400KwH of electricity, translating to 0.12KwH per kilometre travelled. We saved 6.1 tonnes in CO2 emission versus an ICE and benefited from economic savings of circa 65% of the fuelcosts. Those CO2 savings would go up to over 600 tonnes p.a with a fully electric eCabs fleet and more than triple that, had we to include all partner driver vehicles. Cost savings have also been positive with 60% less in maintenance and servicing expense. In order to accelerate take-up we also launched a financial incentive for all our partner drivers which

“To date, out of over 1,000 partners driving on the eCabs platform, 150 already drive an electric or hybrid” Possibly one of this year’s boldest moves in sustainability locally was your commitment to a fully electric and hybrid fleet operating on your platform. What spurred this?

Commercially-speaking, 2020 was a terrible year in which business activity in Malta halted to a grind. However, in terms of quality of life, it was literally a breath of fresh air with less traffic, less congestion and cleaner air. In many ways that situation contributed to the resetting of our thinking around the boardroom table and saw us reprioritise, amongst many things, an already important priority for a long term sustainable and

cleaner platform which is at the core of our ESG agenda. Having a local operation that runs entirely on EVs and hybrids by 2025 is no mean feat, it presents many challenges and relies on multiple stakeholder responsibilities. However, we are set on our course and determined to achieve our goal.

How do you plan to achieve this and what results have you seen so far?

At the core of whatever we do is data and evidence. Every decision we take is informed by analysis and the collation of knowledge from multiple data points we tap into across our operation. In this context, earlier this

sees them being charged a reduced commission rate for all ECO rides, hence making a direct financial contribution towards the attainment of these goals. In doing this, we are adding more incentives to existing government grants for our partner drivers to invest in cleaner vehicles.

To date, out of over 1,000 partners driving on the eCabs platform, 150 already drive an electric or hybrid. In essence our plan is to gradually decommission ICE vehicles and replace them with EV’s whilst we incentivise our partner drivers to do the same with their vehicles. Our goal is to complete the full transition by 2025.

2022

You are eight months into this promise.

What are the biggest challenges you face?

The largest challenge we have at hand revolves around the charging infrastructure. Between the EV brands tested, we’ve managed an average range of 290kms per half day on a full charge. That range is circa 55% less than a full tank of fuel in an ICE, and just about serves our range requirements today. In our growing market, we estimate that we will need circa 55% more range by next summer, assuming a projected healthy recovering market. We are about to start tests on a new set of EVs which are estimated to solve this issue. The solution comes in the form of a mix of fast and normal charging for a healthy battery lifetime, which is an important consideration with manufactures guaranteeing batteries for 8 years or 160,000kms.

There are also limitations on how many chargers can be installed on standard threephase electricity meter and fleet operators will inevitably have to invest in their own substations - a hefty investment of around €150,000. Outline plans are already being drawn up for an electricity substation at our logistics centre, and discussions with the government have also confirmed plans for such substations to be partially funded via grants or tax credits. The island’s charging infrastructure would also best be planned for fast charging, leaving the eight to ten-hour charging

77

“We remain committed to the investment needed in EVs and the infrastructure required to make it work, as well as being responsible stakeholders to help achieve our national targets.” cycle at base, or the home in the case of consumers. This will however require existing parking spots to be given up for EV charging spaces, and we all know that parking is in short supply. The lurking skills gap of mechanics, electricians, panel beaters and other needed trades also needs to be tackled. On this front, it is commendable that MCAST has already embarked on such a plan.

Would you say that enough is being done?

As a country we need to be more serious about this vision. With a growing population and with consumption on a constant long term growth rate, we need to acknowledge that these changes are an absolute must. This will require national commitment and the execution of a plan which doesn’t waiver every year or two. Green washing and skindeep changes will not cut it. A national transi-

tion to EVs needs to be addressed at multiple levels involving all stakeholders.

As the main conductor, the Government doesn’t have it easy; however important stakeholders also include consumers who affect demand, and by default shape supply. Fleet operators will need to be ready to invest for the demand generated. In the meantime, we will continue to build and shape the technology that addresses our industry’s challenges. We remain committed to the investment needed in EVs and the infrastructure required to make it work, as well as being responsible stakeholders to help achieve our national targets. However, make no mistake: a single operator’s efforts will be a futile effort if it is not complemented by a concerted effort and commitment by all stakeholders. We hope that everyone realises this and starts walking the talk. n

Shaping the future of

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While a hybrid work environment has enabled the world to remain productive, it has not been perfect. It has been a socially isolating period, lacking the human connection that can

be a vital source of inspiration, creativity and community. And while there are many technical advances made which shall remain, there is a general global consensus around the benefits of a move back to the office. What will change is how that office should look and feel. At the Quad Central not only do our offices deliver, but there are spaces crafted for interaction and living even outside of the office itself. With its own village feel, there are green areas, piazzas with benches (and wifi), shops, supermarket, and a range of services we know people need for their daily lives. You can dine here or take away, work out at the gym, drop your little ones at childcare, all in a day’s work. The Quad Central is designed to support our lifestyles, for today and for the future. n

About the Quad Central Projected to achieve LEED® Platinum Certification, the Quad Central is set to be the next-generation office, catering, and amenity development, opening in 2021. The development has been carefully crafted to foster the best possible tenant and visitor experience, whilst implementing notable green and environmentally friendly building concepts. The concept of the Quad central is one that embraces personal well-being and improved lifestyle for anyone working or visiting the project, through the centrality of the address as well as a unique mix of amenities, including ample public parking, a childcare centre, fitness facility and wide range of retail. More information about the Quad Central is available at www.thequad.com.mt

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79

Family Ties Brothers Mark Jr. and Keith Laferla assumed joint Managing Director positions at Laferla last year, with their youngest brother Kevin also settling into management. Mark Laferla Jr. speaks about the plans, hopes, goals and ambitions for the insurance provider in 2022.

L

aferla is now in its 38th year of operation, having been founded by Mark Laferla Sr in 1984. Over the years, the brand has carved out a very respectable position in the market for a high standard of service, and an unmatched claim settlement promise.

“We are now running the day-to-day operations, while our father remains Chairman of the board and offers guidance based on his 50 years in the industry,” Mark Laferla Jr. explains, “Each of the three siblings is focused on a particular area of the business and we are encouraged to see that the hard work and efforts of our entire team have translated into a strong and steady growth path for the firm over the years with an enviable portfolio of private and commercial clients. Over the course of 2022, we plan to continue to strengthen our position in the local

“The economy is a giant web of connected elements; and no industry, including the insurance sector, is immune to this. If our clients start to feel the pinch of the economy being impacted by any of these factors, then we will in-turn feel the impact too.” market as a leading insurance provider, whilst focusing more on our expansion plans overseas as well as in other business sectors.”

As we go into 2022, Mr Laferla feels that the country faces three primary challenges, which will require some tough decisions to be taken.

“The first is the pandemic where we need to move away from handling the situation as a crisis and move towards living with the fact that the disease is here to stay, in whatever variation or mutation it may take. Restrictions, and limitations are going to be counter-productive in the long term if we do not clearly and decisively begin to shift away from them and move towards what we now refer to as ‘pre-pandemic’ ways of life.

“The second major decision relates to the grey listing, which we are sure we have not yet felt the affects of. We must strike a balance between proving our jurisdiction is reliable, while all the while allowing the business sector to operate without further complicating and burdening the economy with excessive tick-box exercises. Lastly, the reputation and accessibility of Malta as a place to do business must be restored by going back to the drawing board and again promoting the island for our strengths, while showing that we are serious about addressing any shortcomings we know we have.”

Mr Laferla states that the fact of the matter is that each of the three challenges listed above will impact every aspect of the Maltese economy to some degree or another.

“The economy is a giant web of connected elements; and no industry, including the insurance sector, is immune to this. If our clients start to feel the pinch of the economy being impacted by any of these factors, then we will inturn feel the impact too. Our company is very focused on maintaining our renowned service, whilst continuously investing heavily in area of the operation such as our IT infrastructure to further be able to service our clients efficiently and professionally. Availability of manpower is also a challenge for all industries, especially because we have seen the expat community diminish during the pandemic and they are nowadays a key part of the local workforce and community.” n

80

Quality of Life

Key for Economic Regeneration in 2022 CEO of Malta Enterprise Kurt Farrugia explains how businesses should focus on going digital and sustainable in an economy forecasted to reach pre-pandemic levels records of growth faster than other EU Member States.

What do you foresee on the horizon for Malta’s economy in 2022?

We are cautiously optimistic for 2022, despite markets and policymakers grappling with the ongoing pandemic, the threat of looming inflation and climate change. Two years later and the pandemic can still quickly change all our plans and forecasts, and global trade routes and supply chains have not yet recovered. Having said that, despite the volatility, Malta’s economy has been quite stable, with independent credit rating agencies forecasting that we will recover to pre-pandemic records of strong growth and have the highest economic growth amongst all EU member states.

As Malta Enterprise, I am proud of how the corporation handled it’s responsibility to the local economy during the crisis - issuing out €653 million in the form of the wage supplement to 17,500 businesses, safeguarding the jobs of 105,000 employees. The pandemic has served for us and the business community to get closer than ever, and we are, all of us, more informed and better for it. Despite the turmoil, Malta Enterprise still approved €67.9 million worth of new projects, set to create 1,456 new jobs.

Malta’s broad handling of the pandemic and high vaccination rate have meant that we got back to work faster than most countries, our factories kept on going, inspiring other international companies to shift their operations to our islands. We have strengthened our start-up and entrepreneurial offering and are seeing past investments and plucky ventures paying off.

A number of medical cannabis companies have just qualified and obtained their licenses to start manufacturing medicinal products and have started exporting the first batches of their products and we expect other companies to reach that milestone in 2022. We have been

nurturing a medical cannabis ecosystem ever since the legislative bill was introduced in 2018, which provided the regulatory framework the sector was crying out for.

We are now offering one of the most attractive start-up packages in Europe and startups are setting up base in Malta from various sectors including cyber security, fintech, KYC/ AML, medtech, edtech, to drones, life sciences, and research and development.

The new normal has changed everything, and business models must adapt accordingly.

Quality of Life should be top priority in economic regeneration. Companies have to sense their changes, seize the opportunities and transform to fill the gaps in their processes.

We are committed in guiding and supporting these businesses, focusing on their transformation both internally and externally through schemes designed to address this shift, such as Change to Grow, ReStart and the Smart & Sustainability Scheme.

I think Malta has a lot to look forward to if we keep in line with the government vision launched this year, structured around the five pillars of sustainable economic growth which can lead to better quality of life; infrastructure and investment, education and employment, the environment, and high standards of account- ability, governance and rule of law..

The National Budget for 2022 announced in October mentioned start-ups several times. How will the announced measures make Malta more attractive for start-ups?

We believe that start-ups are key drivers of economic and societal growth and are often a catalyst for radical innovation. In fact, during the covid-crisis, start-ups popped up and played a critical role, seizing the opportunities to provide solutions for our current challenges such as

“We believe that start-ups are key drivers of economic and societal growth and are often a catalyst for radical innovation.” helping us shift towards fully digital work, education, and health services, and have provided innovations in medical goods and services.

The 2022 Budget introduced the much-anticipated Start-Up Residence Permit, which will make it easier for start-ups to establish themselves in Malta. Malta is ideal for start- ups, with our size working in our favour here. We obtain feedback from entrepreneurs frequently, and then adapt regulations and infrastructure in a way that that larger economies cannot. Malta Enterprise works with the government and various stakeholders to develop policies that reduce barriers to entrepreneurship, provide incentives, and boosts entrepreneurial potential. The Start-Up Residency Permit is in fact the culmination of feedback from various stakeholders.

81 “Despite COVID, we have approved

€67.9 million worth of new projects, creating 1,456 new jobs”

an opportunity for budding entrepreneurs to secure business deals financing their dreams and platform to showcase their idea to the nation. We know Malta has the talent and ideas, and having a show like Shark Tank on air, we hope will only inspire and motivate potential entrepreneurs further.

Sustainability is key to Malta Enterprise’s operations and strategy. Why is this and how is it demonstrated?

Fostering a local start-up ecosystem is a priority for us as we do not want to only be a place to do business in, but also a place which entrepreneurs can proudly call home. We have attracted startup accelerator programmes, developed seed-financing schemes and expanded other financial incentives, consolidating in a national portal we launched last year - startinmalta.com . The portal provides all the necessary information for a local or foreign start-up looking for a place to do business from, and a place to call home.

The residency permit together with our improved financial offering – which can reach up to 1.2 million euro for highly innovative startups has greatly improved our attractiveness to ambitious entrepreneurs.

In 2021 we also held the very first edition of the Start-up Festival, hosting a number of different workshops and motivational speakers all

focusing on three main pillars of sustainability, digitalisation and innovation. The festival was held on the 20th anniversary of the Kordin Business Incubation Centre (KBIC), which has been the home to several success stories and was the perfect place to announce the building of KBIC2. KBIC2 will be a state-of-the-art complex hosting the most innovative start-ups in a supportive environment.

On top of that, with a special focus on sustainable elements and our blue and green economies, Malta Enterprise will be launching the Blue Med Hub aiming to serve as a platform for ideas coming from investors, start-ups and researchers especially in the Mediterranean region, catering for solutions to address the imminent challenges of our blue.

We also announced the arrival of hit-reality TV show Shark Tank to Malta. The show will be a big boost to the Maltese start-up ecosystem as

The business world has changed. Businesses are increasingly expected to be socially and environmentally responsible and that is a direction our modern economy must internalise. Malta Enterprise will be supporting businesses’ digital and green transitions as we move towards a carbon neutral society. We have launched several specific support measures in 2021, providing business funding to support the undertaking of investments that lead to more sustainable processes and support for those making the move to electric vehicles. In addition, a newly-launched ESG dashboard will make it easier for investors to allocate investment capital to companies based on their environmental, social and governance credentials.

Adopting sustainable practices has been repeatedly shown to improve an enterprise’s bottom line. It increases a company’s attractiveness to prospective employees and customers, reduces business costs, improves reputation, and leads to faster growth.. Going green will not be easy, but we would rather see it as an opportunity rather than a burden. It is the core of our operations and strategy throughout Government. Our schemes reflect this, and we are assisting enterprises to understand this need for change and adapt accordingly so to to future-proof their business. n

82

TRANSPORT MALTA AVIATION & Photos: Peter Paul Barbara

CAPE TOWN COMPLIANCE INDEX Score is

87.5

and compliance is considered very high

DRONES during 2021

1,630 6,500

drone registrations

Total Number of Aircraft on the Malta Aircraft Register 2012-2021* *2021 partial

flight submissions

Air Operator Certificates 2021: 6 Current:

128

155

175

213

243

265

298

392

532

618

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

41

Evaluation of Flight Simulation Training Devices (FSTDs)

13

83

MARITIME RECORDS

ADVANTAGES OF THE MALTA SHIP REGISTRY INCLUDE:

MALTA’S SHIP REGISTER IS THE LARGEST IN EUROPE AND THE SIXTH IN THE WORLD IN TERMS OF GROSS TONNAGE.

• Reputable and internationally recognised ship register • European flag with a long maritime tradition • On the white list of the Paris MoU and Tokyo MoU

9,270

• Highly responsive flag administration with one of the largest registers in the world and active in European Union fora and international organisations • Very reputable and experienced legal and corporate services

vessels registered under the Malta Flag totalling 85.9m gross tonnage.

supporting registration, management and administration

CURRENTLY, THERE ARE 28 APPROVED MARITIME TRAINING PROVIDERS DELIVERING 188 APPROVED STCW COURSES AND 23 NONSTCW COURSES.

Yachts registered over 24m 2012-2021* *2021 partial

337

398

452

501

The shipping industry contributes to

14% of GDP 575

687

751

806

859

980 MALTA

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

85

Positivity In

Changing the Way Forward Malta must be part of global and European efforts to respond to complex challenges that all countries face, as we work together with multiple and historic rhythms of change converging in our time to maintain a strong Economy, states Exante's Communications Director and journalist Patrick J O Brien.

T

he COVID-19 pandemic arrived suddenly in a world that was unprepared for such an event and impacted the global economy severely and at pace. While global markets have become accustomed to economic shocks over the past century, the COVID-19 pandemic crisis was different in one material respect; it stemmed from a global health crisis that quickly morphed into an economic crisis. The combined force of these crises was unprecedented in many ways as it has severely impacted markets and individuals globally.

Despite the unfavorable circumstances brought by the pandemic, the financial services sector in Malta saw an increase of 5.5% in real Gross Value-Added rate, which grew to €1.028 billion in 2020, according to an overview of the financial sector given in the Malta Financial Services Authority’s annual report. The authorities’ swift and bold policy response did help mitigate the impact.

The FATF greylisting it seems, did not impact the Maltese economy, though that could change if the country were to remain on the list for a prolonged period of time. Malta is fortunate to have built such strong mutual ties of commerce and industry with Its European Neighbours. I believe that continued structured engagement will help to reinvigorate transatlantic economic relations. To paraphrase Jean Monnet, an architect of European integration and a committed transatlanticist, nothing is possible without human initiative, but nothing can be enduring without institutions.

COVID-19 forced radical changes in customer behavior, moved significant portions of the economy online, and increased customers’ comfort and willingness to engage digitally. Moreover, for many financial institutions, COVID-19 has unlocked hidden potential, stripping away many of the barriers that organisations traditionally face in realising the digital promise.

Digital technology continues to transform the financial industry, changing the way payments, savings, borrowing, and investment services are provided and who provides them. Fintech and Big Tech companies now compete with banks and other incumbents across a range of markets.

Meanwhile, digital currencies promise to transform the heart of finance: money itself. For sure, in the past year alone, digital finance has helped households and businesses meet the challenges posed by the COVID-19 pandemic. It has also given governments new ways of reaching those who need support. Progress to date has been impressive. Yet if it is to realise its full potential in bolstering financial inclusion, private sector innovation must be supported by the appropriate public goods, as innovation has large spillovers to all aspects of economic activity. Public goods provide the underpinnings of financial inclusion.

“COVID-19 has unlocked hidden potential, stripping away many of the barriers that organisations traditionally face in realising the digital promise”

The European Commission has adopted a positive assessment of Malta's recovery and resilience plan. This is an important step towards the EU disbursing €316.4 million in grants under the Recovery and Resilience Facility (RRF). This financing will support the implementation of the crucial investment and reform measures outlined in Malta's recovery and resilience plan. It will enable Malta to emerge stronger from the current pandemic.

The plan contains an impressive range of measures to green Malta's economy, boost its digital competitiveness and further strengthen its health system. I also welcome the important commitments to safeguard judicial independence, strengthen the anti-money laundering framework and close off opportunities for aggressive tax planning. n

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The RSM network is administered by RSM International Limited, a company registered in England and Wales (company number 4040598) whose registered office is at 50 Cannon Street, London, EC4N 6JJ. The brand and trademark RSM and other intellectual property rights used by members of the network are owned by RSM International Association, an association governed by article 60 et seq of the Civil Code of Switzerland whose seat is in Zug. Any articles or publications contained within this website are not intended to provide specific business or investment advice. No responsibility for any errors or omissions nor loss occasioned to any person or organisation acting or refraining from acting as a result of any material in this website can, however, be accepted by the author(s) or RSM International. You should take specific independent advice before making any business or investment decision.

87

EUROCHAMBRES

ECONOMIC SURVEY 2021-22 Increase in operational costs the biggest challenges foreseen in 2022 by business operators.

D

espite facing a sharp contraction in the biennium 2020-21, businesses in Malta expect to perform better in 2022 as a result of severe measures taken to curb the spread of the virus, the re-opening of the economy and the consequent rebound in most sectors.

We must remind readers that the survey was carried out at the beginning of the fourth quarter of 2021 just before the discovery of new Covid-19 variants such as the Omicron variant in late November.

Compared to 2021, where the path towards recovery remained extremely uncertain, the EES2022 results show initial signs of confidence facing structural challenges such as debt accumulation and the business approach towards the twin transition.

What is the EES? The Eurochambres Economic Survey (EES) is an annual pan-European bench-marking exercise organised by the Association of European Chambers of Commerce and Industry. The Malta Chamber has been actively participating in this exercise for the past 22 years. Our participation in this initiative is of great significance for the local business community. This survey enables the organisation to gauge our members economic performance with that of companies throughout the rest of Europe and forecasts performance and expectations for the following year.

Surveyed enterprises grouped by number of employees 250+

21.12%

<10

49.27% 50-249

43.24% 10-49

68.37%

This is possible by means of a harmonised system of running this survey, the design of the questionnaire, its distribution, as well as the collating and interpretation of information received.

Summary of the results and key highlights The final response number was 181 operators from various sectors with 88% hailing from Small and Medium sized Enterprises (SMEs) and the remaining 12% employing more than 250 employees and therefore considered as large operations.

From a sectoral profiling, 23% of respondents hailed from manufacturing, 19% from import, wholesale and retail and the remainder in services 58% with the most represented sectors being logistics and transport and financial services.

The expectations for next year in terms of revenue from national sales and exports, size of workforce and levels of investments are overall positive or will remain at the same levels as 2021.

Business viability when compared to 2019 was a mixed bag with 55% stating their operations are equally or more viable and 45% saying slightly or significantly less viable.

Increasing operating costs and labour shortages will slow down recovery In terms of the immediate concerns and challenges: the biggest concerns remain (a) shortage of labour and pressure on wages; (b) operating costs such as freight, logistics delays and sourcing raw materials with regulatory and compliance costs also featuring highly. Access to finance for new investment, dealing with banks and recovery of payment dues by third parties also featured amongst the key short to medium term challenges.

Covid-19 pandemic developments and expectations in the medium term.

In 2022 the biggest covid related impact on companies will be supply chains disruptions, travel restrictions and potential further lockdown measures.

When the operators were asked about their opinion over the period 2021-23 the most unlikely scenarios were listed as (a) the return to 2019 tourist numbers; (b) a reduction of Gov-

ernment’s deficit rate below the 6% mark; (c) the reduction in corporate tax rates (d) the removal of Malta from FATF greylist and finally (e) the complete removal of all covid related travel restrictions.

The most likely scenarios during the next two years were (a) an inflation rate above 3% per annum (b) an abnormally high level of bankruptcies and an increased activity in mergers and acquisitions, (c) greater tax enforcement and introduction of environmental taxation (d) slowdown in the property market and (e) an increase in money laundering convictions.

Main challenges to business development expected for 2022 Digitalisation of activities Sustainability 9% requirements 8%

Labour Costs 30%

Fnancing conditions 12% Affordable access to energy and raw materials 11%

Lack of Skilled Workers 30%

Conclusions The Malta Chamber and its members expect that overall, 2022 will be a transitory year with the prospect of recovery on top of most governments’ agendas. Moreover, the aftermath of the pandemic is gradually revealing a mismatch between global supply and demand and is expected to continue during the next year, which could result in an upward pressure on overall prices. Furthermore, the soaring prices of oil, coal, and gas call for extreme prudency on the disruptive impact that a potential energy shock can have on businesses. All of the issues coupled with workforce shortages and demands in pay rises could result in an inflationary spiral which could slow down the path to full recovery. n

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91

Fighting the impact of financial shocks post-COVID

STM Malta CEO & Managing Director Deborah Schembri warns that careful financial planning is needed if the financial services industry is not to suffer adverse consequences in the future.

T

he COVID-19 pandemic has caused unprecedented challenges to the global economy, not least to the financial services industry, says CEO & Managing Director of STM Malta Deborah Schembri.

“The net impact of the pandemic on market participants operating in the industry culminated in heightened liquidity, credit, solvency and cybersecurity risks, to name a few.

Similarly, the sound capital positions of the insurance sector prior to the outbreak of the virus provided insurance undertakings with certain buffers which came in handy to fight the impact of financial shocks on the sector, although the uncertainty around the medium- and long-term economic consequences of the pandemic on insurers - and the industry in totality - remains,” Ms Schembri elaborates.

The pandemic prompted liquidity challenges in certain areas of the investment services and funds industry, particularly for firms trading in fixed income securities and less liquid assets, such that in the initial stages of the pandemic, entities faced an uphill struggle to maintain adequate liquidity levels as a result of depreciation in asset value and surges in volatility, coupled with substantial redemptions from customers invested in various asset classes.

“By and large, the industry confronted the challenges posed by the pandemic in a remarkable manner. Over the years, Malta has been able to cope with challenging times and it is apt for this perseverant mentality to steer the industry in a direction which will lead to enhanced standards and increased resilience, even more so considering that the financial services sector has been a major contributor

to the sustainable growth of the Maltese economy. The stage is set for stakeholders to grab the bull by its horns,” Ms Schembri states.

Malta’s open economy, however, makes it vulnerable to external factors that are largely beyond the control of local economic policymakers.

“The pandemic’s worst phase is probably over. But there are evolving international economic issues that call for prudent fiscal planning in the medium term so as to avoid having to make unpleasant corrections in the coming years,” she says.

The IMF has advised central banks to be “very, very, vigilant” about rising inflation and to take early steps to tighten monetary policy should price pressures prove persistent.

“Food prices and the cost of energy are increasing at a fast rate. These will affect the pockets of families in Malta and in the source markets of our tourism industry. Consumer behaviour could change,” she warns.

The fiscal support given to local businesses to guarantee their liquidity during the pandemic will soon come to an end. Malta’s fiscal authorities have been among the most generous in supporting local business in the last two years.

“But we now need to start thinking about how the cost of this support will be repaid without kicking the can down the road, leaving future generations to solve the problem. We also need to look at our education system and have a strategy in place to ensure that the supply of human resources for businesses is somewhat near the demand,” Ms Schembri concludes. n

“Malta has been able to cope with challenging times and it is apt for this perseverant mentality to steer the industry in a direction which will lead to enhanced standards and increased resilience…

The stage is set for stakeholders to grab the bull by its horns.”

93

Out with the Old;

In with the New In the view of BMIT Chief Marketing Officer Jack Mizzi, in 2022 Malta needs to do whatever it takes to start restoring the reputational damage we are facing as a country, as well as looking forward and facing challenges affecting the technology sector head-on.

“T

here have been a lot of good intentions so far, but we now need to move to clear action, including taking decisions that might be unpopular in the short term, at least for some sectors of the population, says Jack Mizzi.

According to Mr Mizzi, a second concern relates to the push towards tax harmonisation at EU level, and the 15% tax for multinationals.

“As a country we should defend our tax schemes since key industries depend on these benefits to continue operating from Malta,” he adds.

Finally, he says, Government needs to start getting serious on the environment and sustainability. For example, we are experiencing a construction drive without precedent, that not only will compromise the lifestyle of future generations, but in the more immediate term could also dent tourism, and foreigners considering moving to Malta. The tourism sector is already fragile due to the pandemic, and we need to continue offering solid reasons for tourists to come to Malta if we want to future-proof this key economic sector.

The primary challenges Mr Mizzi foresees for the technologies industry relate to the ability to recruit the right talent for more specialised jobs, as well as being able to adapt new technologies to the realities of the local market. The technology sector is famously adept at turning challenges into opportunities, he asserts.

“In this context,” he says, “we could expect more people to be employed on a remote work model, and tap into a wider pool of resources, worldwide. Secondly, we need to get more creative as an industry, to be able to deliver innovative solutions that seek to transform business to new digital realities rather than keep doing things as we did in the past, and therefore losing out on the bigger picture.”

According to Mr Mizzi, the local technology sector has an opportunity to grow only if it has access to skills, so this is an area which continues to require attention. The sector would also benefit if businesses were incentivised to digitise their operations, or to integrate solutions that are based on new realities. Sometimes it is easy for businesses to continue consuming technology like they did in the past, but the most recent paradigm shift means that they are most likely rendering themselves uncompetitive by doing so.

“Fiscal incentives, coupled with access to EU funding in this area would go a long way towards helping small and medium sized businesses do this leap forward, in the same way that larger organisations have started doing already. We feel that all this fits into BMIT’s leading position as a trusted advisor to our clients seeking to harness tech for business,” he states.

BMIT Technologies will continue to invest in systems, people and technology to be able to help their customers address these challenges, continuing to roll out solutions which enable their customers to move digital in the most effective manner, quickly.

“Our ambition is to be a leading player in transforming the local digital landscape in a tangible manner. Our strong legacy and exten-

“We need to get more creative as an industry, to be able to deliver innovative solutions that seek to transform business to new digital realities rather than keep doing things as we did in the past, and therefore losing out on the bigger picture.”

sive expertise as an IT infrastructure player through our datacentres or on the cloud has evolved into transforming technology into an asset, enabling us to provide peace of mind to our clients, that allows them to focus on their core business without worrying about being compliant or exposed to undue risk. We keep building on this to ensure that we truly are a digital enabler to businesses, where technology is harnessed and used to empower clients through their tech requirements, whatever they might be. It’s a big ambition, but we believe that with the right focus and passion we will succeed, once again.” n

94

AT A Glance

95

Paul Mifsud

Dana Farrugia

Simon Vaughan Johnson

Kevin Chircop

Deborah Schembri

Omar Debono

Sparkasse Bank “We seek to continue to grow our assets under custody beyond the current 8.8 billion euros and to retain our dominant position in this market. We see that significant growth can be derived from the Bank’s branch in Dublin where the Bank seeks to optimise its revenue from. We plan to grow this in 2022 and beyond as we continue to seek strategic alliances and investment.”

Enemed “Our plans are to fully recover from the Covid-19 impact on our financials and make full use from the efficiencies derived from the new National Distribution Centre in Ħas Saptan.

Also, we are planning further automations in relation to the ordering process for our clients hence ensuring that our service will continue to make our company ‘the preferred choice for our customers’”.

Tech.mt “Our goals for 2022 include initiatives to place Malta at the forefront of the global tech and innovation community, attending local and international industry events to promote Malta as a tech hub of choice, attract foreign entities to start up, operate and trial their novel technologies locally and encouraging students to take up STEM subjects.”

STM Malta “Reputational damage from greylisting could eventually adversely affect the country and its financial system by reducing its attractiveness for investors and corporates, ultimately leading to capital outflows and weaker-than-projected economic performance.

However, Malta’s banks and supervisory authorities have had more time to prepare contingency plans than those in some other countries following an earlier 2019 Moneyval report.”

HSBC Bank Malta “Malta’s foremost challenge is the swift response, resolution and execution of the plan of action to remove Malta from greylisting. It is imperative that the progress registered thus far continues at pace, in order to continue to promote Malta as a financial hub, to attract foreign direct investment and to capture the opportunity to attract talent and creativity.”

INDIS Malta “Our main hope is that 2022 will represent another step in the recovery from the pandemic, especially in terms of people’s health and well-being – which is the most important aspect – but also in terms of economic prosperity which will also lead to benefits and opportunities for the same people.”

96

The

Recovery after the Storm The economic recovery after the COVID storm has started in Europe, says MEP Josianne Cutajar.

I

t is significant that in order to enhance the productive system and to heal the social wounds the pandemic has caused, the national recovery plans will mainly focus on two pillars: environmental sustainability and digitalisation. The so-called twin transition is still a major priority in this regard, and this is for several reasons, states Josianne Cutajar.

Firstly, both the governments of developed and developing countries alike are facing historical challenges, challenges that are in dire need of a swift response. One such major challenge is global warming, an issue that should be at the top of the EU’s political agenda as for many countries, including ours, the fight against climate change is a matter of survival.

The interest of the general public in the COP26 has also shown a renewed global sensitivity towards the environment.

Secondly, the European Union still has to build a credible digital strategy that pushes our continent to keep up with the fierce global digital competition that has so far relegated Europe to a secondary position while it is still searching for utter technological autonomy. We should thus support the efforts being made to ensure that the next 10 years would truly constitute the ‘European Digital Decade’.

“Any changes, including those brought about by the twin transition, imply a process of adaptation. Businesses should be ready not only to face the challenge ahead of them, but - most importantly - to grab the opportunities that come with both the environmental and the digital revolution. This change will not happen overnight, and we cannot expect that our companies, especially the small and medium-sized ones, will be successful in the transition without the proper support, so we should be more than ready to help out,” she says.

The reduction of administrative burden so as to enable our businesses to adapt to new legislation is one area that we need to work upon, says Ms Cutajar.

“Compliance requirements should be reasonable and proportional if we want SMEs to benefit from the environmental transition and not see it as a threat for economic competitiveness. Financial support is another way to help

companies make their operations cleaner and invest in environmental-innovative business segments. Let us think of sectors that are important for the sustainable development of our islands; for instance: e-mobility, renewables and the circular economy. More generally, climate-related expenditure can spur communities and countries to renew their development model, while being more sustainable. In the case of Malta, embracing the environmental transition also means enhancing our positioning as a sustainable tourism destination.”

Unleashing Malta’s potential in the tech sphere will also ensure a leadership role in the digital transition.

“Our country’s tech-friendly business environment as well as its ICT-skilled workforce have already been widely recognised by the European Commission, including in the annual SME Performance Review as well as in the Digital Economy and Society Index and in the European Innovation Scoreboard. Have we done

Malta and Gozo have all it takes to become a successful laboratory for the green and the digital transition, she stresses. Projects and new technologies can indeed be tested on our islands, with the successful ones being later replicated in larger cities and countries. Moreover, building on our strengths not only means enhancing our positioning in the European scenario, but would also contribute to becoming a more attractive place to live and work for both our citizens and highly qualified foreign talent that choose our islands to invest and do business.

“Combining an excellent education system with a dynamic innovation ecosystem can be the best antidote to tackle the labour and skills shortage that is currently affecting many European countries, including Malta.”

While the conditions to build our unique value proposition for citizens, businesses and investors are many and can help Malta and Gozo overcome the geographical disadvantage

“Businesses should be ready not only to face the challenge ahead of them, but - most importantly - to grab the opportunities that come with both the environmental and the digital revolution.” enough, however? No – and that’s why we need to carry on. Achieving the goals of the European Digital Decade, which sets concrete targets in terms of digital skills, connectivity, digitalisation of businesses and of the public sector, will be a concrete step to make Malta, Gozo and Europe advance on the path of the technological revolution akin to what we are already doing with the climate goals.”

In this process towards a cleaner and a more digital Malta, education is essential to build responsible citizens, to enhance civic engagement and to foster a highly skilled workforce. This is the reason why our education system must be fit for purpose, with due importance being given to entrepreneurship as well as green and digital skills, while at the same time ensuring the attractiveness and the openness of the research activities carried out in our country.

they suffer from, insularity remains a challenging condition. Difficult connectivity, extra-costs for SMEs and insufficient integration with the European energy market are some of the examples of what an island like ours faces on a daily basis.

“This is the reason why it is time to build a new pact between the European Union and its islands and give concrete application to the Treaties, effectively recognising the specificities of insular regions through additional flexibility, including in terms of a more island-friendly State Aid discipline. After five years since the last resolution on insularity, the European Parliament will discuss a report concerning European islands between 2021 and 2022. And as the only Maltese MEP in the negotiating team, I am committed to enhance the European policy response for Small Island States and their specific challenges.” n

97

A VISION

For defending The National Interest In Europe Maltese business and the Maltese economy flourished when we found ways to make good use of our competitive advantages, says Peter Agius, MEP candidate & PN spokesperson. nion accession opened up opportunities to "Malta right U a whole series of Maltese business models based on our free access to the single market now is largely and our national sovereignty to determine tax missing in action and business rules.

Both these cornerstones of the Maltese in pitching success in Europe will come under stress next a sense of year. We must stand ready to defend our model.

We need to be more convincing in pitching our particular need particular needs in the complex but rational European decison-making machinery. Most for particular importantly, we must anticipate change and circumstances adapt ourselves ideally by harnessing the opportunities coming our way through in the digiin Brussels." tal and green revolutions happening around us.

The competitiveness of our undertakings needs to be the foremost consideration of those having the burden and the honour of representing us around negotiation tables in Brussels. Having plied that trade for some years in the Council of Ministers as well as in the European Parliament I have seen first hand how Member States and MEPs are adamant in defending their regional or national industry champions to secure further market share or to defend it from European and most importnatly, international, encroachments.

Having represented Maltese particularities with a large share of success before accession, Malta right now is largely missing in action in pitching a sense of particular need for particular circumstances in Brussels. In many cases we intervene late in the day when the cards are already dealt. In many others we need to jump on wagons steered by others in the hope that the horses head our way.

The first years post-accession were a resounding success for Maltese business. Those were the reaping years of soils well cared for before 2004. Now we need to realise however that EU membership requires constant negotiation. On visits to shop floors and factories I am sometimes told that this or that disadvantage is due to some failed pre-acession negotiations.

There is often a sense of impotence that the the EU behemot was once considering our needs but has now closed that window of consideration. That is fundamentally wrong. We must urgently challenge our own dangerous pseudo-dogmas on the EU as they are leading us in a cul-de-sac which will see sectors of society despising a Union made of rigid rules where one size fits all.

It is one size fits all when we fail to make a good case in good time that other sizes merit a different tailoring approach. You can’t wake up three years after a Commission proposal was tabled and pretend to change the dynamics of European negotiations when all parties have had three or four rounds of debates and negotiations. This is what we did with the trucking directive. Equally, you can’t blame the Union for its rigid state aid rules on farming when you don’t take the initiative of seeking allies in the Council of Ministers to move the European Commission in the other direction.

We must not only strive to be ahead of the negotiation process in Europe. We also need to ensure that implementation of directives takes due stock of the needs of Maltese businesses. The single use plastics directive is a case in point – a case of bad practice in fact.

Several operators in Malta were left with open questions as to whether their operations fell within the remit of the Directive million euro investments on change of machinery and processing methods were held in abeyance for months for lack of clear answers from Government ministries.

All of the above challenges need not be addressed as from next year. The above relates to run of the mill approaches to defending the national interest in the European decision-making table. We must also however strive to infuse the EU decision-making structures with a more systemic approach to considering the needs of insular and less

favoured regions. The Treaty is clear - these regions and islands require particualar attention and policies designed to secure their particular needs. This is hardly happening right now in Europe. The Treaty article remains a paper tiger. To counter this we must ally ourselves with like-minded actors in Europe. We must also push for a systematic consideration of the needs of island and isolated territories through the inclusion of the impact of new or revised EU legisaltion on those particular territories. This can be done through the use of the impact assessment tool which the European Commission anyway undertakes to assess social, environmental and economic impacts of proposed rules before submitting legislation to the Member States and the Euroepan Parliament.

I strongly believe that we must mould European laws and policies to fit us better. We can’t lament on one size fits all if we are not doing our best to adapt the sizes to our needs. For this reason I submitted a written proposal to the Future of Europe Conference with a suggested mechanism for an impact assessment asssessing the cost of insularity to be done before the Commisison proceeds to propose key acts of legislation. We must push this idea across the board and with allies all over the continent to see the change we need for the sake of Maltese business and ultimately Maltese society. I will keep on pushing this cause both as a Nationalist Party activist as well as a candidate for the forthcoming European elections. n

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