Insight

We Have Yet to See the Best of Malta

Malta’s diverse and growing economy, in combination with its forward-thinking, professional business community, helped the island to win foreign investment, explains Malta’s Prime Minister, Dr Joseph Muscat.

Could you give us a brief overview of Malta’s economic and social profile, and do you believe Malta could be a role model for other states?

The driving force behind Malta’s past and current success is that we are open for business. We attract entrepreneurs from all over the world. They come because Malta is a fantastic place to grow a business. We have a skilled workforce, first-class technology and communications, the English language and 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. I often say the best of Malta is yet to come. Our long-term vision is to be the best we can possibly be within our European family.

Malta’s economy, the smallest in the European Union, is set to outperform the European Union. How has Malta been influenced by the recent turbulences in the eurozone, and do you believe Malta has yet to unleash its full economic potential?

Our economy is performing well. We did not suffer in the way others did. Our banks needed no bailouts. Debt did not soar. We have high levels of employment, and our economy is growing. All sectors of the economy are contributing to this growth, especially finance and manufacturing. Tourist arrivals are at record levels. New companies are setting up, and order books are healthy. And we are keen to diversify further. Our next big project is to develop a maritime hub. We already have the biggest shipping register in Europe, and the hub will provide state-of-the-art facilities for the shipping industry. It will complement Malta’s aviation park, which attracts business from around the world. Malta has enormous potential to develop further. We are investing in education, developing a digital economy, introducing free childcare to increase female participation in the workforce and greatly reducing energy tariffs to increase disposable income for families and reduce business costs.

As an FDI location, what kind of investment would you like to attract?

We are not interested in the quick buck or glitzy things. We are looking at what makes sense in the medium to long-term. Our unique selling points are our flexibility and proximity to government and institutional decision makers. We have built a reputation as being approachable, while also offering a regulatory framework that is serious and business sensitive. We will continue to target investment from financial services, tourism, high-value manufacturing, life sciences, maritime and aviation, as well as ICT and the creative industries. But more importantly we want to broaden and deepen the activities and services that are already being offered in or from Malta. One such example is our shipping registry, which is the largest in Europe. We have been exploring new ways to expand the maritime industry and have just launched an international project for the development of a maritime village to attract operations and support services that surround the wider international shipping and super yacht industry. This is a strategy we would like to implement across all our industry segments.

In particular, Malta’s International Finance Centre has flourished in recent years. What are the main reasons for this growth?

We have solid, responsible regulation. That’s the bedrock of good finance. But we don’t stifle the sector with bureaucracy. Responsible regulation allows the sector to flourish. The reputation of the financial services sector was actually reinforced because of the resilience and stability it showed during the financial crisis.

What level of importance is your government placing on developing links with the BRIC countries – Brazil, Russia, India and China – and other high-growth economies?

We have very good relations with China and are actively encouraging Chinese companies to use Malta as a gateway to the EU and the North African market while also promoting Malta as a channel to invest in China. We have recently struck a deal with the Chinese for investment in our energy company, Enemalta. Similarly, we would like to attract investment from other BRIC countries and high growth markets such as Turkey and the Gulf region, which are also on our radar.

What role can public-private partnerships play in Malta’s infrastructure development?

We totally believe in the private sector and would welcome public-private partnerships in any sector. We opened up the energy market for private sector involvement – this is a first for Malta. Government will still have its own capital projects but I believe we should focus on projects that are less of interest to the private sector but are strategically important for our national interests.

Malta celebrated 10 years of EU membership in 2014. How would you describe Malta’s EU experience thus far, and how do you see relations develop in the next years?

We play a full part in European affairs. When the EU came to the aid of Greece, we contributed too. But I do think the EU has to recognise the problem that Mediterranean countries face with irregular immigration. There needs to be a sharing of the burden and a whole new approach to tackling this problem. We should not tolerate human trafficking and the tragic incidents of overcrowded boats capsizing in the Mediterranean Sea with a huge loss of life. On the economic front, there is a need to shift from austerity towards stimulating the European economy.

In terms of foreign policy, how do you see Malta’s role evolving?

As a new Mediterranean is shaping up, Malta can rediscover its role as a trusted broker and interlocutor. We want to have a greater say in the Mediterranean and to play out our vocation. Malta is considered a key ally by many North African countries because we have a genuine interest in these countries. We want to ensure that the transition in our neighbourhood is a success, because we want stability in the region and we believe stability brings prosperity. We don’t want to adopt the approach “we Europeans, you North Africans”. It should be “we Mediterraneans”. We are all neighbours and equals.

Historically, we are interested in the Israeli-Palestinian situation. Malta is one of the few European Union countries that have recognised Palestine, but we also think of ourselves of being close to the Israeli people. I believe there is scope for us to foster a forward-looking discussion on the future of the Israeli-Palestinian issue. We can relate to both sides and are small enough to be trusted and a threat to no one, although we do not want to wear boots that are larger than our size.

Malta will assume the EU Presidency in 2017. What issues will feature high on your agenda, and what are your intentions to encourage member states to be more supportive of each other and work in solidarity together?

It is a little too early to set the agenda yet, but we will work to strengthen Europe and promote economic growth and social justice. The Mediterranean region will of course be high on our agenda, and we will keep promoting further cooperation with our southern neighbours.

Valletta has been chosen as the European Capital of Culture in 2018. What is the key message that you would like to get across about your country?

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. Many people in the EU associate Malta only with issues such as bird hunting and irregular migration, but Malta is more than that. The European Capital of Culture gives us the opportunity to show the other side of Malta: our history, culture and arts.

How is Malta rising to the challenge of attracting the best companies and the brightest talent?

Malta is a fantastic place to live and invest in. Malta has many faces: the sea and the sun, culture and history, business and investment. Foreign investors always comment favourably on our business environment and the efficient service they receive. This is very positive, but we want Malta to be a place that they think of as home. To smooth the process of settling in, we created a citizenship and visa agency, which is committed to clear deadlines and a fast track for business. We have also developed a new residency scheme, which offers favourable conditions for foreigners if they relocate to the island. We want to show our foreign guests that we value their contribution towards economic growth and wealth creation.

Looking to the future, how would you like Malta to develop and where would you like Malta to be positioned in the next 10 to 15 years?

We want to continue building on what has been successful so far. We will only change things for the better. Our aim is to create significant economic growth in order to cut our deficit in a sustainable way. My vision is that we create enough employment opportunities that we need to bring in people from Europe and elsewhere to fill these roles. This is what I dream of and this is what I will work to achieve.

Joseph Muscat (born 22 January 1974) has been Prime Minister of Malta since 2013. Muscat has been leader of the Labour Party since 6 June 2008, and he was Leader of the Opposition from 1 October 2008 to 10 March 2013. Previously he was a Member of the European Parliament from 2004 to 2008. After the Labour Party's victory in the March 2013 general election, Muscat took office as Prime Minister on 11 March 2013. Muscat received his secondary education at St Aloysius' College, Malta. He received his tertiary education at the University of Malta and the University of Bristol. He graduated Bachelor of Commerce in Management and Public Policy (University of Malta, 1995), Bachelor of Arts with Honours in Public Policy (University of Malta, 1996), Master of Arts in European Studies (University of Malta, 1997) and Ph.D in Management Research (University of Bristol, 2007) with a thesis on Fordism, multinationals and SMEs in Malta.

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