Your party has just been re-elected to lead the country for a second term. What do you believe were the main reasons that led to this consecutive win?
Maltese families from all factions of society have benefited from an improved quality of life and increased disposable income. It cannot be denied that this was a consequence of the strong economy that we have built. The key to our economic success was to give families more of their own money, which in turn will continue to be injected into the local economy. I would say that this is the main reason, but of course I believe my administration did a lot of good for the country – not merely in economic terms, but for families by pushing forward on civil liberties; for students through widening opportunities for the younger generation; and for the environment mainly by closing the tap on use of heavy fuel oil for energy production.
In 2013, you had set your sights on making Malta the most competitive economy in the EU. How much of this ambitious target do you think you have achieved and what are your plans and priorities for the new legislature?
Malta experienced unprecedented economic growth over the past years. In the past four years Malta reached the lowest rate of unemployment in its history. Real GDP growth turned out at 5% in 2016 – the second highest in the EU. We have put forward ideas like universal free childcare, which has unleashed the tremendous, previously untapped potential of the female labour force. We have lowered energy bills by 25%, increased pensions for the first time in 25 years, while we are also taking people off benefits and putting them into work through in-work benefits. We have created enough job opportunities not only for the Maltese, but also for 30,000 foreigners. We have developed from a place where there were not enough jobs, into a place that needs more workers to fill all the jobs.
In the first quarter of this year, growth was at 4.2% – one of the highest in the Eurozone. This, as well as the surplus Malta registered in 2016, the first one in 35 years, are evidence that we have met our target, and I am confident that the new administration will continue to meet it. The aim of the new legislature is that the benefits of this growth are reaching those that need it most.
Many, including the international rating agencies, were surprised that Malta’s small economy was able to outperform the majority of other EU states. How do you explain this?
All sectors of the economy are contributing to our growth. In 2016, we received a record of almost 2 million tourists. We are seeing growth in financial services and iGaming, and even in manufacturing, which many had predicted to be obsolete by now. New companies are setting up, and order books are healthy. The driving force behind Malta’s past and current success is that we worked on turning Malta into the ultimate destination for investment and left our doors wide open for businesses. We have a skilled workforce, first-class technology and communications, and we continue to foster a pro business environment. Investors also comment favourably on our ‘can-do attitude’. This is perhaps what differentiates us. There is a spirit in Malta to always do better. This also means that we are aware that past success is not a guarantee for the future. So we need to diversify further.
Over the past months, Malta has been in the international media spotlight more than once and not always for the right reasons. What is your answer to the so-called ‘Malta Files’ revelations and to the recent criticism of Malta’s management of its tax affairs?
There is nothing secret about the Malta Files. The information released was public on an open public register that can be accessed by anyone. If you look into it, it is evident that none of the allegations are true and that these companies have been investing in Malta for years. Our systems are OECD compliant and have been vetted by the European Commission. Malta is also ranking positively in the Tax Justice Network’s Financial Secrecy Index as well as on the Financial Secrecy Index, outranking other EU member states. These rankings and the highly regulated financial sector are confirming that Malta is very much on top of its tax affairs.
What sectors of the economy do you feel offer foreign investors the greatest opportunities going forward?
Our next big projects will be related to logistics and the maritime economy with the construction of a dedicated maritime services hub. We have also invested heavily in education and health, in particular with a view to make them exportable services industries. We want Malta to become a leading medical hub in the region, and the interest received by foreign investors, for instance for the opening of a new private hospital and a medical school on Malta’s sister island Gozo, confirms that Malta has the right credentials in this regard. When it comes to education, we want to build on our reputation as a teaching and training centre. Malta is already a top location for teaching and learning English. In the autumn of 2017, the American University of Malta (AUM) – a private university – will open its doors. Our intention is to position Malta as an education destination for students from all over the region and beyond. We also want to consolidate the results we achieved so far in other sectors, and current and potential investors believe that Malta is extremely attractive for FDI. Malta endeavours to pursue its promise of an environment conducive to business that offers investors stability and transparency in terms of corporate taxation and regulatory processes.
What would you highlight as your government’s legacy on Maltese society?
I think we have achieved tremendous progress with regards to social rights and civil liberties. Not long ago, the international media looked at us as a country that was lagging behind in these areas because we did not even have divorce. Today they consider Malta as one of the most advanced nations when it comes to gay rights amongst other things.
We can also observe a change in Maltese society in general. Our economy has advanced and our nation has become richer. While a few years ago, people were worried about the cost of utilities, they are today concerned about a better environment and the cleanliness of the country. This gives us satisfaction because it means that our families are no longer plagued by the uncertainty that prevailed previously. We are aware that we need to up the ante in terms of environmental protection and that this is something that we need to look at seriously if we want the country to stay at the top. Our long-term vision is to transform Malta into a cosmopolitan country, offering its people the highest quality of life.
What are your views on Malta’s growing infrastructure deficit?
We have grown too much and too quickly, and our infrastructure has not been able to keep up with this growth. But we don’t need any more wake up calls, infrastructure investment and development are high on our agenda. Our current infrastructure was built for a country of 400,000, but due to tourism and population growth, there are many more people on the island today. Traffic is also a big problem, and we have already started to address the situation by creating alternative routes, employing systems such as tidal lines, and building new flyovers. Our public transport system is also showing signs of improvement under a new operator, and the number of public transport users has increased. However, the long-term solution to traffic consists of two main ways: introducing alternative means of transport – like underground tunnels – and increased sea connectivity. Such a vision also includes addressing new construction projects in a holistic way that factor in traffic and traffic flows.
Malta just held its first EU Council Presidency. How would you describe your experience at the helm of the EU?
The Maltese Presidency of the Council came at a time when the very existence of the Union was being put to test. The economic crisis, Brexit, migration issues, security threats and terrorism have traumatised the European project. However, we were deeply committed to ensuring that the European project continues. The EU Council Presidency was both a challenge and an opportunity for us as a nation. We showed that even the smallest member state of the Union can contribute to prosperity, peace and security. We brought tangible results in areas that truly make a difference to European citizens. On the issue of migration, we struck a deal to avoid a humanitarian crisis in the central Mediterranean. We agreed to further assist the Libyan coast guard in their efforts to counter human trafficking while also engaging with would be migrants to explain the perils of the dangerous trip.
Malta’s leadership also helped to strengthen the single market, in particular the single digital market, by addressing the issue of unjustified geo-blocking and by removing roaming charges in Europe, a measure which brought about a real change in peoples’ lives. We also pushed for the development of the European Social Pillar by addressing the ever-changing issues of the job market and for women’s full access to employment. Malta also promoted the better governance of our oceans, in particular that of the Southern Mediterranean basin.
How do you see Malta’s relationship with the UK developing in the future?
We, like our fellow EU member states, want a fair deal for the UK, but – and I have said this very clearly – this cannot translate into a better deal than membership. As a country, Malta is keen to continue to have excellent bilateral relations on many fronts with the UK, although it is still too early to define what this would look like. But I think we need to consider the UK’s exit from the European Union as an opportunity. British companies wanting to remain within the EU could see us as a gateway to the European Union.
Can you give us insight into Malta’s foreign policy and the role Malta can play within the Mediterranean region?
Our vision is that of a safe Mediterranean region, which offers peace, wealth, stability and work for people on all sides. Malta has always been an advocate for diplomacy and dialogue, and we have always highly regarded the proactive approach to resolve international issues and address threats to global security. The situation in the Middle East has a huge bearing on that of our region and the whole world. With a clear view on the rights of the Israelis and Palestinians, my country continues to back initiatives aimed at rekindling the prospects of peace talks and to keep the two-state solution alive.
Malta also has an innate vocation to serve as a natural bridge between the European Union and North Africa. Our country is considered a key ally by many North African countries because we have a genuine interest in these countries. We want stability in the region, and we believe stability brings prosperity. With Libya, we have a close relationship and President Fayez Serraj visited Malta recently. We will continue to assist because stability in Libya impinges directly on the stability of the whole region.
Over the last years we have also improved relations with the Gulf countries including Jordan, Lebanon and Iran. In fact, we were one of the first delegations to visit Tehran after the scaling back of the sanctions. With Russia, we have followed the EU line while still looking after our own interests. Our relationship with China dates back some 45 years, and has strengthened significantly in the past four years.
Valletta has been chosen as the European Capital of Culture in 2018. What opportunities does this title present to Malta?
It is a brilliant opportunity for us to showcase Maltese culture. The truth is Valletta is a gem that many people have yet to discover. It is a wonderful place to wander around and absorb. The European Capital of Culture gives us the opportunity to show the other side of Malta: our history, culture and arts. It’s also an opportunity for Malta to not only strengthen its cultural infrastructure through the development of its local sector, but also to open new avenues of dialogue and knowledge-sharing with various international partners from within the fields of culture, the arts, academia and diplomacy.
What are your expectations for Malta in the coming five to ten years?
Our country’s best days. This is the commitment the Labour Party’s campaign made to Maltese families and this will be my expectation for the next five years. We spent four years building the foundations and implementing changes that were the first in our country’s history. Now the focus will switch to sustaining this growth and these changes, and maintaining positive relationships with the public and stakeholders to turn Malta from one of the best in Europe to one of the best in the world. We also need to give proper importance to urbanisation, infrastructure development and long-term planning. In a few years’ time, I hope that Malta will not only be an economic success story, but also a country that offers one of the best qualities of life to its people. Our people must gain confidence in our nation, and start believing that although we are a small nation, we are not inferior.