Investment on the increase

Investment was on the increase, growing by 25 per cent in the past year, and this was the basis of the economic change which was taking place in the country, Nationalist MP Josef Bonnici said in parliament.

In the manufacturing sector, investment in the first nine months of the year reached Lm35 million when in 1997 and in 1998 it had been Lm17 million each year.

Prof. Bonnici said that investment in the food and beverages sector, which was being liberalised, stood at Lm5.3 million this year, double the figure last year. Exports in this sector reached Lm16 million, up from Lm14.4 million last year.

The textiles sector saw exports reach Lm12.2 million, up from Lm5 million in 2000. The company Nylon Knitting, which had invested in modern technology, was behind this increase.

Exports in printing and publishing had reached Lm24 million, up from Lm19 million last year and Lm12 million in 2000. Behind this increase was De La Rue which had closed a factory in Singapore, bringing it over to Malta.

Investment in chemicals reached Lm20 million, up from Lm16.7 million in 2000.

The pharmaceutical sector was another important sector. Companies from Spain and Switzerland were investing in Malta and companies which were already here, such as Pharmamed, were increasing their investment. Such investment was due to the changes made in the Business Development Act.

Other companies which increased their investment were Dowty Automotive, Playmobil, Europharmaceutical and Baxter.

In the machinery, communications equipment and apparatus sector, where ST was involved, exports had increased to Lm357 million, up from Lm353 million last year, even though the dollar had depreciated by 40 per cent.

Medical equipment exports reached Lm19.3 million, up from Lm16.6 million last year.

Exports in the other transport sector had exploded to over Lm10 million from just over Lm4 million. This was due to Methode investing over Lm2 million.

Other investments, Prof. Bonnici said, included that by Lufthansa Teknik, which was a major new investment.

He underlined the point, however, that Malta was not competitive in internal transport costs, a problem the government wanted to solve.

Tonio Fenech (PN) berated the Opposition for the way it had criticised the budget. Labour MPs attacked the rise in expenditure and at the same time cried foul whenever some vote went down and failed to specify in which areas they thought spending could be cut.

He also criticised the constituted bodies for their reaction to the budget, saying they did not yet seem capable of seeing beyond their sectoral interests, towards the national interest.

He said that under the PN, the government's role in the economy had gradually been reduced. The PN was committed to restructering in a socially responsible manner.

It was true the government employed too many people, but the country's economic problems would not be solved by laying them off. Instead, the government was taking measures leading to the gradual absorption of excess workers in the private sector.

Replying to Alfred Sant's criticism of the expenditure on "embellising roundabouts", he said the project had a direct effect on the quality of life and made the tourism product more attractive.

Another effect had been to make 350 previously unproductive workers more productive by having them employed in a public-private initiative. Furthermore, the company involved in the project would make more profit, pay more tax, and the workers involved earn a higher income, the net result being of benefit to the economy.

He acknowledged that the PN government was responsible for part of the deficit, but only because it had invested so much money in uprading communications, building a new airport and freeport, improving schools, building new roads and other important infrastructural projects. If it had not done that, people would still be seeking to emigrate and find work overseas.

He stressed the need to attract new investment, and augured that Malta Enterprise would be effective and efficient, and not take long to approve permits. But, he added, this also depended on other bodies and authorities, and it was important that they did not lengthen the process. He also stressed it was important for Malta Enterprise not to waste energy in what he called empire building.