Economic Strategy

Roadmap for Success: Innovate, Adapt and Focus

Economic diversification has long been high on Malta’s agenda. However, to sustain the growth output, the Mediterranean country is identifying critical factors for success while strengthening its unique competitive advantages.

Throughout the past years, Malta displayed strong resilience in terms of GDP and employment growth, Prof. Josef Bonnici, Governor of the Central Bank of Malta, said. He noted that Malta had successfully diversified its economy, creating high value-added job opportunities that raised living standards. Bonnici attributed much of Malta’s success to the island’s profitability rate: “Doing business from Malta has been more profitable than doing business from the centre of Europe, say from Luxembourg, and I think that is quite remarkable and also explains the resilience.” Going forward, he concluded that it is important for Malta to strengthen education, human resources, FDI diversification and infrastructure to allow companies to continue operating efficiently and productively.

David Curmi, President of the Malta Chamber of Commerce, stressed, “Malta cannot be everything to everyone, we need to focus on the economic sectors that we want to grow, and we need to focus on the partners we want to do business with.” He also advocated further economic diversification: “Our chamber believes that an industrial economy is as important as a financial economy.” According to Curmi, government should create and enable a business environment that makes it easy for the private sector to invest and prosper. “This can be done through smart regulation, development of human capital, addressing market failures as well as fostering public and private partnership.”

Mark Watkinson, CEO of HSBC Bank Malta, highlighted the need for a long-term vision. “We need to ask ourselves: what jobs do we want our children to be doing in 2050?” He said that Singapore and Dubai could be role models for Malta’s economic strategy in areas such as logistics and transportation, communications and tourism. “We are a relatively small economy, we can’t afford to have a super mixed economy. I think it is really important for the long-term success of Malta that we focus on our competitive advantages.” He said he believed Malta should build its economic future around tourism as well as its position as a transshipment and trading hub, “a marketplace for the region”.

Malta was performing much better than other eurozone countries, Joshua Zammit, Deputy Chairman and CEO of Malta Industrial Parks, said. He added that Malta’s goods and labour markets were quite efficient, the country was technology-ready and Malta had a strong financial sector as well as a workforce that was trainable and ready to continuously update its skills. Mr Zammit, however, also said that the public administration as well as the judiciary needed to be more efficient. “Our infrastructure and the demands we are placing on our infrastructure, particularly transportation, roads and energy supply, are also important challenges that we need to face.” He also pointed to the demographic changes and the need to ensure the longterm sustainability of pensions and the health care system.