In the last few years, Malta’s Industrial Competitiveness was severely tested due to a number of exogenous shocks: the COVID-19 crisis followed in quick succession by the war on Ukraine.
Whether or not the fear of financial contagion from the fallout of the Silicon Valley Bank will materialise and its potential impact on the world economy, including Malta, is still to be seen.
Malta’s economy keeps proving to be resilient and the rebound we are experiencing shows that our diversified economy can withstand challenging times. Since the 1960s, local and foreign direct investment have been a prime mover for Malta’s economic development.
It spurred growth, geared us to be export-oriented, created jobs that shaped our economic and societal development, and facilitated technology transfer and skills generation.
As a small EU member state located at the periphery of the single market and having one of the most open economies, we are susceptible to international developments, both economic and geopolitical. Malta enjoys healthy commercial relations with the major international trading partners.
The recently launched US initiatives such as the Chips and Science Act, the Infrastructure Act and the Inflation Reduction Act, have brought about a much-needed reflection on European and Maltese Industrial Competitiveness vis-à-vis the ever-changing international landscape.
Is Europe doing enough to quickly counter the tectonic economic shifts happening globally?
Upcoming EU legislation
Malta firmly believes in the importance of free trade and ensuring that market forces play an instrumental role in enhancing competitiveness. Within this changing international scenario, the EU has rolled out the European Chips Act and the Communication on the Green Deal Industrial Plan.
Malta firmly believes in the importance of free trade and ensuring that market forces play an instrumental role in enhancing competitiveness- Kurt Farrugia
The European Commission is also actively working on two pieces of legislation known as the Net Zero Industrial Act and the Critical Raw Materials. Certainly, the Net Zero Industrial Act will be an important prime mover to fast-track investment around Clean Tech.
These initiatives, especially those related to Clean Tech, will all give rise to important opportunities both with respect to greenfield and the expansion of investment already based in Europe. Malta needs to capitalise on these opportunities. We are now faced with strategic conundrums on how best to tap into these opportunities.
Malta Enterprise, together with the business community, is reflecting on number of strategic routes to take which are mainly related but not limited to: (a) ensuring that Maltese enterprises particularly SMEs can tangibly benefit from these initiatives, with particular focus on Clean Tech and semiconductors; (b) taking an active role in steering new initiatives related to Important Projects of European Common Interest (IPCEIs) to revisit their mechanism and ensure that they are truly accessible to SMEs; (c) determining the niches within Clean Tech in which we can attract foreign direct investment and (d) leveraging Malta’s historical expertise in the blue economy, automotive and engineering to capitalise on the arising opportunities.
‘Europe’s single market at risk’ event on March 29
Malta Enterprise continuously screens the market for new investment opportunities that bring benefits for the Maltese and European economy. The niche market opportunities are out there, and it is essential that we identify them and invest in them.
On Wednesday, March 29, the Malta Enterprise EU affairs team will be organising a debate on ‘Europe’s single market at risk – the intensification of geopolitical tensions and their implications on small member states within the single market’.
The debate will build on the above points while discussing the regulations that govern the EU and whether in the current international scenario, these regulations actually penalise the bloc’s competitiveness.
A strong line up of international and local speakers have been scheduled for the debate including Dan O’Brien, chief economist, Institute of International and European Affairs in Dublin, and with the virtual participation of Bernardus Smulders, deputy director general State Aid, DG Comp at the European Commission, and Martin Sandbu, European economics commentator at the Financial Times.
This debate is an opportunity to discuss the challenges and opportunities related to our industrial competitiveness. The activity starts with registration at 8.30am at The Palace Hotel, Sliema. Industry, stakeholders and policymakers wishing to attend the event are invited to send an e-mail on email@example.com
Kurt Farrugia is chief executive officer, Malta Enterprise.