Reuben Buttigieg is Managing Director of Erremme Business Advisors Limited and President of the Malta Institute of Management
Over the last year, we have seen various repercussions on businesses related to the pandemic
However, some sectors actually benefitted from the current situation as there are opportunities in every problem. Nevertheless, that does not solve the economic issues that countries will face, particularly a small island.
During the last year, Malta has experienced a quick and sudden growth in e-business. I recall various discussions over the years about why Malta still does not make full use of technology despite branding itself as a technologically-advanced country. Indeed, Covid-19 left some business with no choice, and they had to start thinking differently overnight. However, some businesses still seem to lag and haven’t yet addressed technology’s foremost opportunity. Maltese businesses seem to manage to sell mainly to residents in Malta. Businesses have so far either failed to or not targeted clients beyond Maltese borders. Now is the time to rethink also given that the number of residents has decreased and the temporary residents and tourists are not existent.
Companies with products directly related to the situation, such as resellers of masks and sanitisers, among others, did well in the circumstances. Others survived through the various government incentives, such as the education sector, which quickly turned online and benefitted from the Malta Tourism Authority grants. In all this, technology and software companies have done exceptionally well.
The construction industry in Malta seemed not to have slowed down so far, and neither the ancillary services. Some turnkey works have also been related to the fact that people were at home and took the opportunity to do what they had been postponing for some time.
A year later, however, a considerable number of persons are cash depleted. This is even more so for businesses directly affected, such as catering establishments and anything related to tourism or travel. Travel has impacted one of Malta’s most robust industries, is the financial services industry. Professionals stopped travelling, and prospects stopped coming to Malta. Furthermore, Identity Malta has been, rightly so, very cautious about Visa issuance, which in turn impacted other industries such as the education sector and the recruitment sector.
Experts in the travel industry estimate that travel may again reach the 2019 level by not earlier than 2024. In this context, Malta needs to reinvent itself quickly if it is not to face an unprecedented downturn in the economy. There are various ways how this can be done, but for once, really and truly, it needs to get all its minds together irrespective of politics or sectoral agendas.
Added to this situation, Malta will face a general election by the end of 2022, which certainly will further jeopardise the economic scenario. In this context, the Prime Minister should delay as much as possible the elections as the country cannot go into election mode now. It will be an unparalleled present to the Maltese population and the economy if the political parties agree.
In spite of the elections, all stakeholders should push the political parties towards an agreed-upon strategy and action plan involving all the country’s resources, including the national airline and influencing also, wherever possible, financial institutions. Malta cannot follow the measures adopted in other member states as it is too small, but it needs to lead in ideas in the order the EU follows.
The Maltese people have always been very creative, particularly in difficult moments. This is the time for this generation to strengthen its original DNA. Malta can lead the way in an economic turnaround; it can do it the Malta way if only opinion leaders work to unite ideas. Malta’s lateral thinking guru, Edward Debono, has on various occasions stated that the democratic system of government and opposition is in itself a limit to our thinking process. More than ever before, that statement is correct, as we have seen in various countries. If only politicians worked together, we might have been in a better health and economic situation.