OPENING
SPEECH BY THE HON. LAWRENCE GONZI, PRIME
MINISTER, AT THE LAUNCH OF THE ERNST & YOUNG
INVESTMENT ATTRACTIVESS SURVEY 2009 - HOTEL
PHOENICIA, FLORIANA – WEDNESDAY 15TH
JULY 2009
Distinguished
guests
Ladies and gentlemen
After several
years of rapid and almost unhampered growth, the
global economic landscape has changed within the
space of a year. Rising food and energy prices,
a major international financial crisis and the
related global recession are confronting
policymakers with new economic management
challenges. Today’s volatility, more than ever,
underscores the importance of a
competitiveness-supporting economic environment
that can help national economies to weather
these types of shocks. Only such strategies can
ensure a solid economic performance going into
the future.
The shocks our
economy has experienced throughout the past year
have tested Malta’s resilience on two main
fronts. First, its ability to withstand the
shock and second, which is the present challenge
we are facing, is its ability to recover quickly
from this shock. In both cases, the coping
ability is not inherent but is nurtured. It is
the result of policy interventions which aim to
make the economy more flexible, competitive and
attractive for investment.
This conference
and the publication of the Ernst & Young Malta
Attractiveness Survey 2009 comes at the right
time as it allows us to quantify, through the
perceptions of top executives of 101
foreign-owned companies present in Malta the
success of our economy’s coping ability.
Throughout these past four years, Ernst &
Young’s annual survey has examined the many
factors enabling our economy to achieve
sustained economic growth and long-term
prosperity. This benchmarking exercise has been
able to identify strengths as well as obstacles
to improved competitiveness and stimulating
discussion on strategies to overcome them. It
is for this reason that I would like to thank
Ernst & Young Malta for its contribution to the
economic debate and I am sure that throughout
this conference a stimulating discussion will
follow.
In my
intervention this morning, I plan on giving a
brief overview of Malta’s performance in
withstanding the shock as well as in its ability
to recover quickly focusing mainly on
competitiveness issues.
Although our
economy was affected by the economic crisis, we
can safely say that Malta did not experience the
full blow of the turbulence. Policies and
reforms which were implemented over the past
years have made our economy more flexible,
capable of withstanding this external shock.
Our performance in this regard can be attributed
to a number of inter-related factors. Our
macroeconomic stability over the past few years
has been strengthened through Malta’s entry into
the euro zone. The euro as our national
currency has not only made Malta a more
attractive investment destination but in the
space of a year it has shielded us from a major
financial crisis which could have hit our
national currency and financial sector. In
response to economic indicators, my Government
maximised Malta’s nimbleness and tailor-made an
investment support package which managed to
transform looming threats into investment
opportunities and protected over 2,500 jobs in
the process. Malta’s social development was
also an important factor in our success and I
publicly thank all social partners which enabled
the collaborative approach towards the
undertaking of corrective measures in the face
of this adverse shock. Our success in
withstanding these external pressures has been
underlined by the European Commission which
described our measures as targeted and timely.
Economic
literature shows us that recessions are of a
transient nature and latest economic indicators
are showing that the turbulence on a global
level is subsiding. Governments all over the
world have implemented stimulus packages with
the aim of kick-starting the respective
economies. Malta’s package, estimated at 1.6%
of its GDP, was singled out by the European
Commission as one the member states which spent
most on stimulating the economy. In the face of
a global recession, it is not only important to
withstand the shock but more importantly to
recover quickly from it. This in turn, is
largely determined by a country’s
competitiveness.
Competitiveness
is a wide-ranging term but in the main it refers
to the set of institutions, policies and factors
that determine a country’s productivity level.
Apart from sustaining a country to achieve a
high level of income, the productivity level
also determines the rates of return obtained by
investment. Competitiveness is therefore
intrinsically linked to investment
attractiveness which together contribute to the
economy’s growth potential over the medium to
long run.
The determinants
of competitiveness and investment attractiveness
are many and complex however for the purposes of
this conference I would like to propose a
strategic analysis of these factors grouped into
the three main pillars. A central point,
however, is that they are not mutually
exclusive. On the contrary they reinforce each
other.
The first pillar
can be categorised as factor-driven
determinants. At a basic level, countries
compete on the basis of their factor
endowments. In this regard, Malta’s only
resource is our human resource. In Malta’s
emerging knowledge economy, our workers are
central to our current and future success.
Investments in Malta are the biggest vote of
confidence in our stable, adaptable and
multi-skilled workforce and in our education
system’s adaptability to provide the expertise
needed. We have invested heavily in our
education system and have integrated latest ICT
in technologies in our teaching component. Our
University and quality vocational institute are
under-going continual reappraisal to ensure that
they are in tune with the needs of a modern
economy. In addition, my Government has felt
the need to spur not only labour supply but also
labour demand. EU funds have been particularly
beneficial in labour demand support packages.
Given this success, my Government has recently
launched 3 main schemes which focus on
employability and training which are expected to
target 26,000 people. A number of reforms,
particularly income tax reforms and fiscal
incentives have been instrumental in increasing
peoples’ willingness to work. Given the
encouraging results, my Government is committed
to continue reducing the existing disincentives
to work. However, employers must also play
their part by enacting further family-friendly
measures to ensure a healthy work-family balance
which will in turn attract further women into
the labour market.
The second pillar
which I believe is crucial for an economy to
compete in an ever-globalised world can be
referred to as the efficiency-driven
determinants of competitiveness. Efficiency is
essential in this day and age and its benefits
or applicability is wide-ranging. To sustain
its investment attractiveness and reap its
growth potential, an economy must be
increasingly characterised by efficient product
markets, sophisticated financial markets and the
ability to harness the benefits of existing
technologies. Our investment in information
technology over the past years has been pivotal
in attracting a number of foreign investments to
our shores. However, there is no room for
complacency. We now need to continue harnessing
technology to reduce existing Government
bureaucracy. There are currently 71 government
services online through which businesses and
citizens can access at whatever time they want.
These measures all make service delivery easier
and more efficient for businesses. Excessive
bureaucracy should not be viewed as a weakness
but as an opportunity for improvement and the
recently launched MEPA reform is a witness to
our commitment to continue reducing bureaucracy
and to further instil the values of efficiency,
accountability and transparency.
An area which I
believe is closely related to efficiency
vis-à-vis competitiveness is the market size.
Malta’s integration with Europe’s single market
offers Maltese businesses an immense opportunity
to target a market of 500 million consumers
whilst exploiting our strategic geographical
position. This is an opportunity for further
growth and my Government through Malta
Enterprise and the Ministry of Foreign Affairs
is working to further reap the full benefits of
the single market. Energy is also an area which
my Government is investing with the aim of
increasing both the efficiency and security of
supply. Our planned investment in an
interconnector grid between Malta and Sicily as
well as in wind farms will ensure that Malta’s
energy supply is secure and efficient.
The third and
final pillar which is going to be the main
driver of economic growth and competitiveness in
the near future is innovation. Research and
innovation is not an end in itself but a means
to an end. Improving Malta’s performance is not
only by providing more funds or more start-ups.
We need to look at the whole chain of the
innovation process. This means having the
necessary amount of skilled people. The
investment in people has to be accompanied by
infrastructure and facilities. It also means
having the right financing instruments for
encouraging research and innovation. Finally,
it also means having the right protection for
the end production in terms of patent of
intellectual property rights. This is what we
are doing as a Government. We are complementing
our investment in human resources with further
investment in our infrastructure. The
University of Malta is currently building a new
ICT facility apart from its engineering
proto-typing machinery and super computer labs,
once again through EU funding, which will boost
the countries research facilities. Malta
Enterprise has also launched schemes to
incentivise the undertaking of research and
development by local companies.
Ladies and
gentlemen,
Competitiveness
and investment attractiveness are key areas in
my Government’s economic vision for the
country. Not only have they been instrumental
in weathering current economic challenges but
they are at the backbone of our recovery
process. The dynamic nature of competitiveness
is also important for Malta to exploit its
economic growth potential.
Although we have
managed to garner a number of successes,
investment attractiveness is a fluid concept,
meaning that we have to nurture it and intervene
with the appropriate policies to ensure that as
a country we keep our competitive edge.
My Government is
conscious of the opportunities that are
available for Malta to continue improving its
competitiveness. Reforms are a cornerstone of
this improvement. Reform is not about
dismantling what we have achieved but it is
about equipping people to succeed in times of
changes.
It is for this
reason that we have embraced an ambitious reform
process which has been based on public
consultation. This survey and conference comes
at a time when we are working on our pre-budget
document which is also based on a number of
consultation meetings with stakeholders such as
the MCESD and the public in general.
I am confident
that this survey and conference proceedings will
also be instrumental for us when drawing up our
budgetary policy as Ernst & Young Malta have
managed once again to capture the perceptions of
foreign investors here in Malta.
Thank you.
DOI – 15.07.2009
--------------------------------------
SPEECH BY THE HON. LAWRENCE GONZI, PRIME
MINISTER, ON THE OCCASION OF MSC SPLENDIDA’S
MAIDEN VISIT TO MALTA - VALLETTA WATERFRONT –
WEDNESDAY 15TH JULY 2009
Captain Bossi
Distinguished guests
Ladies and gentlemen
It is indeed an honour and a privilege for me,
on behalf of Government and Malta, to welcome
MSC Splendida to the Valletta Grand Harbour on
its maiden voyage.
We are today not only witnessing a vote of
confidence in our cruise liner industry and
related infrastructure but also in its future
prospects as it is a great satisfaction to hear
that MSC will be expanding its operation to
Malta during 2010.
MSC’s plan of bringing 170,000 passengers during
2010 confirms Malta’s potential as a port of
call. This potential is being confirmed
through this maiden voyage in which Malta is one
of four harbours that the Splendida is sailing
in. The significance of this event extends well
beyond to the welcome ceremony. It has
projected the Valletta Grand Harbour as one of
the main Mediterranean ports which will surely
leave longer-term benefits to the cruise liner
industry.
However, in view of our recent successes in this
industry, which were confirmed at a European
level, there is no room for complacency. Our
investment in the Grand Harbour and surrounding
areas as well as in the related infrastructure
must be continuous. Our attractiveness as a
port of call must be nurtured.
It is for this reason that my Government is
embarking on a regeneration programme for the
Grand Harbour and Valletta which will further
enhance Malta’s potential as a port of call.
Previously under utilised space will be
regenerated into a showcase of new and
innovative commerce, thus stimulating new levels
of investment with a focus on expanding Malta’s
growing position within the international cruise
liner market. A main aim of this project is to
turn the harbour into one that is functional all
year round and to cater for increased cruise
liner traffic.
Regeneration works at Boiler Wharf in Senglea
are going on as planned and the infrastructure
we are investing in will complement Valletta
Waterfront and enhance Malta’s capacity to
attract larger cruise liners.
Earlier this month, my Government has launched
another ambitious project which will see further
regeneration of the Grand Harbour area known as
Menqa. This area which will connect Boiler
Wharf to Valletta Waterfront will be transformed
into a commercial and residential hub in the
Grand Harbour as well as a yacht marina. This
€130 million investment will further exploit the
potential of our idyllic Grand Harbour and will
further project Malta as a centre of
international attractiveness.
These two projects which will complement
Valletta Waterfront and enhance the
infrastructure for the cruise liner industry are
part of a wider and holistic programme my
Government has for Malta’s capital city.
We have recently launched the project for City
Gate and the Opera House site by world-renowned
architect Renzo Piano. His intervention through
his vision and designs will ensure that Valletta
will truly be transformed into a jewel of the
Mediterranean and will further make it an
attractive port of call.
There is a clear understanding that the key to
the success of any urban program is the facility
of access and mobility. Unless people can move
around with ease and can travel to and from the
Harbour and within Valletta without delays, all
these individual projects will never connect
into a greater whole and will never succeed.
Apart from the launched reform of public
transport which will encourage the increased use
of ferries, water taxis and other sea transport,
my Government will also be investing in
panoramic lifts which will not only improve
inter-connectedness but will enhance the
experience Valletta can offer.
My Government’s vision for this sector and area
is ambitious but attainable if all stakeholders
work together and cooperate. Today’s event
confirms this. On behalf of Government, I would
publicly like to thank VISET for its €2 million
investment in extending the quay and Hamilton
Travel for making this maiden call to Malta
possible.
This stands to show that by working together,
not only can we implement our national vision
but we can contribute in making Malta a centre
of excellence in tourism.
Finally, I would also like to thank MSC for its
faith in Malta’s potential as a port of call and
wish it further successes in the years to come.
