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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.
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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
