The third item on the agenda for the very first meeting of the George Borg Olivier cabinet in August 1962 was a memorandum which had been prepared by London-based Messrs Rolli Brothers (Bankers) Limited on Malta’s future economic strategy.
One of the biggest preoccupations in the run-up to Independence was Malta’s ability to build an economy that was diversified and able to sustain the development of the country.
The memo tried to shed light on what economic strategies Malta should pursue especially since the 1959 Development Plan was partly successful.
The memo argued that in post-Independence, Malta “should at the same time exploit three other possibilities to the full. Neither of these needs heavy capital investment but what is required is to exploit the geographical and physical situation of Malta. The potential sources are: the establishment of Malta as a centre for international finance; the development of a tourist industry; and the creation of a Maltese national shipping flag.”
Looking back at the past 56 years since Independence, Malta has managed to build a diversified economy across a number of sectors, with important contributions coming from the original three pillars identified by Messers Rolli Brothers in 1962.
Malta has since built a strong regulatory-based cluster. Starting from financial services, to the maritime sector, to the remote gaming sector, to aviation and pharmaceuticals, Malta has always used its power to legislate and set up economic clusters. Today, we are a strong services-based economy with close interlinkages between different sectors and with sectors that are diversified from within. Also, our tourism industry has grown and remains one of the key pillars of our economic fabric.
There must be a focus on restoring Malta’s reputation and credibility- JP Fabri
However, we are at a critical juncture. We are feeling the brunt of the COVID-19 pandemic and there is a growing realisation that the recovery is not going to be as fast or immediate as originally hoped for. As countries and economies continue coming to terms that we have to learn how to live with this pandemic, the economic consequences are significant.
It is therefore opportune for us as country to not only identify the weaknesses and challenges we are currently facing but more importantly to chart a way forward based on four main pillars.
Transformation. There is no doubt that Malta’s economic fabric needs to continuously transform itself. Attracting new sectors should not come at the expense of reinventing the ones already present. Such sectors provide the backbone of Malta’s economy and we need to ensure that they remain competitive, attractive and innovative. As we transform, we need to address key attractiveness issues and ensure that these are repaired.
These include governance, the justice system as well as to focus on broken or non-existent ecosystems. Here, the access to finance and a good connected banking system become critical for prospective investors. Also, there must be a focus on restoring Malta’s reputation and credibility while strengthening our regulatory and oversight institutions.
Technology. Malta has always been a front mover when it comes to the adoption of technology especially of e-government. However, more needs to be done. Going forward, the government needs to ensure that the digital transformation deepens and there are all the requirements for Malta to become a proper digital society whereby a digital identity coupled with digital signatures become the norm of the day and where interactions between government, authorities and stakeholders become seamless.
More importantly, we do not need to focus only on the delivery but more importantly on the processes.
Talent. There is no doubt that Malta’s human resource has been the backbone of our economic success. A number of structural challenges are threatening our long-run economic model.
Early school- leaving rates remain high, graduate numbers remain low, graduates in science, technology, engineering and mathematics too remain low and educational attainment is also challenging.
Moving forward we need to ensure that we have both the quantity and quality of students to propel Malta’s economic future with the right skills and those required by the industries of tomorrow.
Transition. The economic recovery needed and stimulus packages that will be required to sustain demand and investment should be used to transition our economy on to a more sustainable trajectory whereby quality of life is given the importance it requires.
We need to see a green renewal which spans across and within sectors.
Celebrations should not be backward-looking and just reminiscing on our past achievements. On the contrary, they need to be forward-looking to ensure that the future we collectively are responsible for is better than our present. It is therefore our collective responsibility that on our 56th Independence celebrations we reflect on our economic future.
JP Fabri is co-founding partner at Seed Consultancy.