Achieving a more competitive Malta

Over the last few months Malta has taken significant steps to formulate a strategy that seeks to enhance its competitive edge both regionally and globally. As an EU member state, Malta has been able to benefit from the support and guidance the EU provides through the so-called Lisbon Agenda framework. The Lisbon Agenda has been designed to assist member states carrying out reforms to cope more effectively with continuous changes in the market place.

Strengthening one's competitive edge has become the main strategic objective of all countries in today's world. Malta is, of course, no exception.

The Lisbon Agenda is at the forefront of all EU member states' efforts to enhance competitiveness within a regional bloc dimension. As a small state located in the heart of the Euro-Mediterranean region, the successful implementation of such a strategy will have important implications for the economic performance of our country.

When formulated in March 2000, the Lisbon Agenda aimed at making "the EU the most competitive, dynamic and knowledge-driven economy in the world by 2010, capable of creating and sustaining more and better jobs". Half way through the strategy period, it was clear that the targets set needed to be refocused. The recent mid-term review in the form of the Kok report has recommended that the wide-spanning objectives originally aimed for, be narrowed down in focus to cater for macroeconomic stability, microeconomic reform and employment creation. The EU has subsequently released a list of 24 guidelines to assist member states in their reform process.

This new approach is based on a three-year governance cycle, about to commence late in 2005 and will be renewed in 2008. Action is taking place at both Community and member state level.

A Community-level Lisbon action plan has been prepared at a central level while member states have been asked to prepare a National Reform Programme (NRP).

The NRP we are launching will, thus, be a blueprint for the country's direction over the forthcoming three-year period up to 2008.

In recent years, Malta has enhanced its comparative advantages in a number of areas including an increased computer-literate population, an efficient and integrated financial services sector, low unemployment and effective social inclusion. On the other hand, a comparative analysis with the EU25 member states reveals that there are areas where Malta still needs to perform better. This overriding goal of improving the quality of life of all citizens is, in fact, being tackled in the government's NRP programme of activity.

Malta has chosen five strategic themes, which were approved by the EU, to form the pillars of its NRP. These themes are: the sustainability of public finances; competitiveness; employment; education and training and the environment.

In formulating the NRP due diligence was given to various factors among which: (i) EU guidelines and related documentation; (ii) the pre-budget document; line ministry strategic plans, previous government strategic studies and reports and (iii) social partner documentation.

A public consultation process for the NRP was launched on July 5 this year with a day conference entitled Taking The Lisbon Strategy Forward and meetings were held with line ministries and public sector organisations.

The National Reform Programme for Malta is thus the result of a comprehensive and constructive consultative process that has taken place between all the main players in this sector. The NRP includes measures that Malta intends to adopt during the period 2005-2008 and on which its competitive scorecard will be assessed.

It is the government's intention to ensure that during the three-year period, the NRP's strategic objectives will be met so that Malta becomes more competitive and is thus in a position to register growth in productivity and employment.

The government's approach towards enhancing competitiveness focuses significantly on macroeconomic stability, enhancing human resources and focusing on key areas of economic growth and development, which are all conducive to overcome the difficulties and exploit the potential benefits associated with economic activity in a small island state.

In order to be successful it is essential that all social partners contribute to this reform process, including civil society. The essential role played by social and civil dialogue in promoting competitiveness by enhancing credibility of government policy and devising ways and means to enhance economic performance cannot be overemphasised.

As an integral part of the government's overall strategy, the Ministry of Competitiveness and Communications has set the stage to start implementing a reform process that will ensure that Malta's competitive edge is strengthened in the years to come. This is the challenge we have before us; a challenge I have no doubt we will be able to overcome and, thus, guarantee a more prosperous future for all.

Mr Galea is Minister of Competitiveness and Communications.