Consolidating our achievements

The recently-published positive National Reform Programme progress report clearly highlights the reform track record that Malta has succeeded in implementing in recent years. It also identifies the main sectors that need to be focused on in order to further improve Malta's competitiveness.

One of the main significant achievements that characterises Malta's progress is its integration into the eurozone. This is by far the best independent certificate that confirms that Malta's macro-economic reforms being undertaken within the sustainability of pubic finances pillar of the NRP are yielding the desired results. Malta's efforts to achieve the convergence criteria have been successful.

Since becoming a member of the European Union, the NRP is one of the government's key strategic vehicles through which it seeks to address socio-economic challenges. Since being introduced in 2005, Malta's NRP has focused on improving the country's competitiveness in five strategic areas: the sustainability of public finances, competitiveness, employment, education and training and the environment.

An analysis of Malta's economic record in recent years reveals that its gross domestic product grew in real terms by 3.1 per cent and 3.2 per cent in 2005 and 2006 respectively. This is above the EU average.

The NRP progress report also examines the possibility of Malta connecting its energy sector to the European energy networks in order to enhance further competitiveness in this sector. The liberalisation of the fuel and gas functions is now well underway and it is envisaged that the reform process in this sector will contribute towards increasing domestic competition.

Improving Malta's national competitiveness is a prerequisite to ensure that the country will be able to further strengthen its geo-economic strategic advantages in the Euro-Mediterranean area and beyond. The securing of the Smartcity@Malta project, which will generate some 5,600 jobs, is the single largest foreign direct investment project in Malta to date and is indicative of the potential that Malta has to offer.

Malta has also consistently been seeking to improve the efficiency of its ports with the government pursuing a reform process of Malta's ports. This will ensure better connections between Malta and the international community.

Looking ahead, the main challenges for 2008 are increasing investment in research and development and registering a further improvement in the rate of female participation in the labour force. In 2005 the percentage of females in the labour force stood at 38.3 per cent, up from 36.6 per cent in 2004. Malta aims to reach the target of 40 per cent by 2010.

Strengthening Malta's competitive edge is dependent on improving its human resource base. Constantly upgrading the capacity of our workforce through education and training schemes is essential if we are to continue developing a workforce that can take advantage of the opportunities that the global economy is unleashing.

When it comes to foreign direct investment Malta has achieved the 5.4 per cent mark, which is higher than the 1.2 per cent average of the EU. When it comes to research and development Malta is gradually enhancing its position. In 2006 Malta invested Lm4.4 million in R&D.

In its document Families Growing Stronger, my government announced its Vision 2015 for Malta. The vision aspires to establish Malta as a centre of excellence in six sectors, primarily ICT, financial services, tourism, high-value-added manufacturing, education and healthcare. The NRP is one of the main vehicles that is already ensuring that short-, medium- and long-term development policies succeed in attaining this vision.

As we prepare our second NRP that will run from late 2008 to 2011 we shall be looking to consolidate our achievements, many of which are reflected in the 2008 budget, but more importantly, seeking to launch new initiatives that will indeed enable Malta to attain its ambition of becoming a centre of excellence.

Mr Galea is Minister of Competitiveness and Communications.