Malta's economic model is being adjusted to attract foreign investment that takes up less land and requires fewer workers to generate economic growth, Minister Silvio Schembri said on Monday.

However, the island's economic model does not need to be completely changed, he insisted.

Speaking to Times of Malta Schembri said gone are the days when the country had to accept any and all foreign investment to grow the economy.

It could now be selective in the investment it accepts and is focusing particularly on the pharmaceutical industry, which creates more value-added work while taking up less land and employing fewer, more highly-skilled workers.

But the economic model does not need to change, he said. It just needs to be adjusted to reflect the country's current needs.

"You change something that is failing. But our economic model worked and is still working, so much so that we're enjoying one of the highest rates of economic growth in Europe," he said.

His comments appear to contrast with what Finance Minister Clyde Caruana said last week.

Speaking at a conference, Caruana highlighted the necessity for an overhaul of the economic model if Malta wants to remain competitive in the face of local and international challenges.

“We don’t just need to rethink and reform, we need to reinvent ourselves. We need structural change, not mere reform,” Caruana said, though similarly warning that a new economic model needs to produce more value with less input and fewer pressures on Malta’s infrastructure.

But on Monday Schembri said that the Nationalist Party was pushing to change the economic model. This was not the government's vision.

Just like it introduced policies to reduce unemployment and boost a weak economy in 2013, and just like it got more women into the workforce through measures like free childcare, a Labour government once again is creating new measures to make better use of land and avoid a huge influx of workers, he said.

"We're now in a position to be selective about what investment we attract and accept," he said.

"We are also being selective in the way we allocate land. We are going for more vertical, rather than horizontal buildings, to accommodate more light industries that are often based on research and innovation."

'No other industry would exist without construction'

In his comments to Times of Malta, Schembri defended the construction industry, insisting it was a crucial part of the economy, just like all other sectors. He said it could go green by building higher up to take up less land and continue an exercise in retrofitting old factories with more efficient and sustainable materials.

The economy does not depend on construction, Schembri said, but without it, no other industry can exist. Building contractors must be brought in to build the manufacturing facilities for the new foreign investment.

"Let's not cast a dark shadow on the construction industry, because it is transitioning. There is room for improvement, true, and the industry is changing," he said.

"But we cannot say the construction industry is bad because everything else cannot be achieved without the construction industry."

Speaking at a Labour Party activity on Sunday, Prime Minister Robert Abela also touched on changes in the economy, saying the government would continue to help businesses to thrive and take the country forward.

Malta is open for business and will remain open for business, he repeatedly stressed, and there could be no break or pause.

But he also said the government was now looking towards a transition to a new economy that is focused on skills that are greener and more digitalised.

'Caruana created and spearheaded the problem' - PN

In a statement on Monday, the Nationalist Party said that while Caruana was now fearing further population growth, it was he who created the economic model and spearheaded it for many years.

A year ago, Caruana had already acknowledged that the economic model failed, the PN said. The party therefore expected him to come up with a new, long-term economic vision over the past months.

"Workers expected the government to announce new economic niches. What investment will be made in existing industry verticals? What added-value jobs will there be for Maltese workers? Which new economic sectors will be introduced - ones that pay well and not with cheap labour? And above all, what vision is there for a better quality of life for our young people," it asked.

"Clyde Caruana and Robert Abela have no idea how to solve the problem they created themselves and will only make it worse."