Maltese businesses have always been keen to seek opportunities within third countries. This keenness has been translated into a successful track record for several of our businesses. Third country business is also something for which there is a current, and foreseeable, desire.
Being part of a small open economy makes internationalisation many times a must, rather than an option. It is well known that the Maltese have a strong entrepreneurial spirit and that they are not shy of risk. It is important to provide the business community with support if this desire is to be fulfilled.
The European institutions are aware and attuned to this desire, which is also present in other Member States. The European Fund for Sustainable Development (EFSD) was recently launched in Malta during an event organised by the European Commission Representation in Malta and the Ministry for Foreign Affairs and Trade Promotion. The EFSD is a new EU financial instrument aimed at supporting European companies to invest in activities that otherwise would not take place in Africa and neighbourhood countries. It is intended to mitigate risk (including commercial risk-losses, political and country risk and currency risk) to private investors planning projects in fragile and conflict-affected third countries. This fund will enable Maltese businesses to seek opportunities in the identified third countries, with the potential to reap the added benefits at home.
The fund makes use of public sources to enable private investment. This model was already successful in Europe in the last years through the EU Investment Plan, also known as the Juncker Plan.
Investment and profit-making must be framed in the context of promoting key social and environmental concerns. The benefits here are not one-sided. This initiative offers a key opportunity for European businesses to penetrate emerging markets and profit from attractive investment opportunities which remain largely untapped. Other economic blocks are similarly exploring these markets with a keen eye. This also fits into the wider current geo-political narrative – society is evolving rapidly in the face of modern technologies and challenges. Public debate tends to focus on the threats posed but not on the opportunities. Focusing only on the threats will not see the EU retain its global lead position into the future; the sustainable exploitation of opportunities, whenever and wherever they arise, will.
The fund will also contribute to meeting the Sustainable Development Goals for 2030. European businesses traditionally employ high standards in various aspects of the business model, ranging from the environment and health and safety, to governance ethics and employee rights. The EFSD will thus provide an opportunity to export these European values, which will help further boost societal development in the third countries.
It is ever more significant in the context of high irregular migration flows towards Europe, particularly from Africa. Some of the key causes of irregular migration are economic, including low economic growth and limited opportunities. The EU has realised that these issues cannot be solely met through public spending in the form of development aid. Therefore, business has a crucial role to play through its investment in these third countries. The latter would benefit from the added investment through the creation of new jobs, entrepreneurship, innovation, upgraded infrastructure and increased development and economic growth more generally.
This fund offers a win-win situation for the local business community to invest in the sustainable development of third countries, while expanding Maltese business operations into markets with huge potential. The MBB is also willing to act as a facilitator for any businesses interested in exploring this excellent opportunity.
David Zahra is the president of the Malta Business Bureau. The MBB is the EU-business advisory office for the Malta Chamber of Commerce, Enterprise & Industry, and the Malta Hotels and Restaurants Association.