“Our best economic opportunity is for a more digital and environmentally aware Malta, this is what the new prosperity means,” said Prime Minister Robert Abela during his address at the Business Breakfast under the name Lejn Prosperita’ Ġdida (Towards a New Prosperity).
The event took place on Friday morning, where various business and economic experts as well as ministers came together who gave their input on the furture of Malta’s economy through various panels.
PM Abela started his address by noting that when he was elected it seemed like Malta was at the end of phase of growth putting it at par with EU averages like employment which was nowhere close to what we have now in previous years.
“People thought that the continuity I promoted in the beginning would not result in anything but it is exactly the foundation which led to our success during this pandemic. When most economies in the world went downhill, we made more investments and increased employment.”
He explained that the Malta Enterprise approved a total of 190 project investments, both foreign and local over the last year, creating around 1,900 employment opportunities; “24% of which are start-ups who felt confident enough to open a business during a pandemic.”
Abela said that in the current context there is no room for pessimism since, as a progressive thinker, he does not think that Malta should ever limit its capabilities and made reference to the five pillars on which this government has built its vision for the next ten years.
The first pillar is good governance which is not only being highlighted in order to focus on recovering Malta’s reputation but ratmher because this government always believed in good governance in of itself, he said. This is followed by quality of life, education, infrastructure – which can all be improved through digitalisation – and most importantly the environment which Abela said is the main factor that will carry this vision forward. He believes that the environment amalgamates all of the other pillars into one as they are all necessary in order for Malta to reach its Carbon neutrality goals for 2050. This includes restructuring how construction is carried out as well as the transport sector.
“Our biggest economic opportunity is for a digital and environmentally aware Malta, this is what the new prosperity means,” he concluded.
Covid-19; effects on global economy and future challenges
Finance Minister Clyde Caruana opened the event by outlining the effects that Covid-19 on the global economy and the future challenges that are expected to result from it.
“The effect of the pandemic on the global economy is 50 times larger than the recession of 2008 had on the global economy where it took the EU up until 2016 to recovery fully. Thus, the challenges we have coming will be much tougher than that of the recession. I am not saying this to scare you but to make you aware of the challenge we have ahead,” he said.
He explained that the EU currently taking some decisions that are not wise considering the current contexts like focusing on how to get more money through taxes – “I definitely do not think that this is the time to do that when businesses have already been negatively impacted.”
Taxation is one of the main things that Malta will be researching in the coming weeks, alongside employment which Caruana said needs to be safeguarded as the worst thing that can happen is for people to start losing their jobs, threatening the economic structure altogether. He also mentioned the need to focus on business productivity.
He was followed by Ernst and Young partner Chris Meilak who said that this pandemic made people aware of how individual as well as business success has always been evaluated in line with surplus, assets and GPD. “While these are all good, Covid-19 has made us realise that this is one part of the puzzle and there were a lot of decisions we had been postponing which we then had to take immediately.”
Meilak explained that such decision included new opportunities which Malta has to focus on in the future including digitalisation, funding, lifelong learning and entrepreneurship.
Businesses moving towards the same goal
During the first panel discussion the direction in which businesses are headed was discussed with Economy Minister Silvio Schembri saying that Malta is at an advantage due to its size and the functional working relationships that exist within the business community.
“This makes it easy for us to be agile and adaptable, so much so that we are seeing an amalgamation and these values today,” he remarked.
When asked how difficult it is for businesses to move towards the same goal, Schembri said that thankfully there has been a lot of understanding from all of the stakeholders despite the challenges that came up.
“We were working at such a fast economic pace that few businesses had the opportunity to look internally and see if they are doing businesses effectively. This is what the pandemic made us realise, turning our focus on efficient resources and digitalisation. It also showed us that we have a strong and resilient economy in Malta, and it is so because it is diversified.”
Chamber of Commerce Managing Director Mariza Xuereb also commented on this topic, saying that the pandemic has made everyone aware of the importance of sustainability and productivity.
“We cannot slack off now, we are still in the preseason of the competition, so we are still training but this means that it is the time solidify our level of competitivity at a global scale.”
Green economy and sustainability
The second panel tackled the move towards a green economy and sustainability.
Energy Minister Miriam Dalli was asked if she is concerned that a sudden shift into a green economy, which is positive, might still create new victims in its trail.
“We are aware of this challenges that will come ahead, however, there is a transition period, and the change will not happen overnight which will allow us to address any issues that come up along the way,” Dalli remarked.
She noted that work has to start from somewhere however and her interest is finding those bottlenecks that are hindering investment in this sector, such as roofs that cannot support solar panels.
“We have an opportunity to take on the green deal and make it our own, for example embarking on more pilot projects relating to water renewable energy which might not be as plausible for other countries that are doing better with solar panels than we are due to their size. We must also look into opening more opportunities for human resources in these sectors through investment and incentives in our education.”
Former Central Bank Governor Mario Vella shared Dalli’s sentiment, saying that growth does not happen immediately but “this is the time to go on the attack especially with the pandemic and Brexit closing in on us.”
He highlighted the importance of being concrete and transparent with the information that is delivered to the public as it is “not the time to sell smoke”.