What makes a country rich? There are many factors that contribute to a country’s success but natural resources are an important component. An abundance of oil, gas, gold and minerals provide wealth. When properly exploited, managed and sold, the rewards are great.
It’s no secret why Saudi Arabia is a wealthy country. It’s one of the largest oil-producing countries in the world. So too is the United States. And the expanding oil industry in Russia has brought that country riches too.
From Riyadh to Texas to Siberia, the value of oil can’t be understated.
Russia is also one of the biggest suppliers of gold, along with China, Australia, the US and South Africa. It’s a commodity worth selling because it is scarce and people want to buy it.
By contrast, Malta has no natural resources. Our only mineral is limestone. We quarry it to make good use of it in construction but that’s as far as it goes.
It’s the lack of such natural treasures that has forced us to be inventive. The country’s citizenship programme is part of that innovative thinking.
We welcome a mere 300 or so new Maltese families a year under the scheme with revenue of €1.4 billion since 2014.
We might have no oil or gold revenues on our balance sheet but we have contributions from our new citizens. It is money that benefits us, the indigenous population, now more than ever as we struggle to recover from COVID-19.
To break that down, we’re talking about €233 million per year. It would require taxable income of €28 billion to generate an equivalent amount for the Maltese state coffers.
Is that figure really as impressive as it seems? Yes, it is. By comparison, Malta’s entire tourism industry generated €2 billion in direct revenue in 2019, which was a record year. With an industry average pre-tax margin of 10 per cent, that is a tax contribution of €70 million a year, less than one-third of the direct contribution from the Individual Investor Programme.
We might have no oil or gold revenues but we have contributions from our new citizens
And there’s more. These figures don’t take into account indirect injections into the Maltese economy, such as flights, making use of the airport, hiring cars, taking taxis and using restaurants. We often talk of the need to attract quality, not just quantity, and this is living proof of where we are succeeding.
People of wealth have always had the ability to move around the world. Our programme recognises this and provides the value of citizenship in exchange for investment to benefit the Maltese people. We do this in a responsible manner, using the resources of the police and international agencies.
We weed out applicants who cannot account for their wealth, and this includes individuals who are already travelling and operating within the EU.
Our system is based on transparency with the names of new citizens published. It involves a regulator and even includes a reverse mechanism for stripping individuals of their new citizenship should damaging information come to light late in the day.
What else adds to a country’s wealth? The talent and skills of its people are important too.
The thriving businesses in many different sectors testify to the abundance of talent in Malta. And one thing people in business know is the importance of marketing. When you have a great product, you need to get out there and tell people about it.
When it comes to our residence scheme, we need to promote its good qualities.
Sadly, there are some in Malta who prefer to do the opposite and talk their country down abroad. Now is the time to appreciate the wealth this scheme has brought to our islands.
It’s going to take time for the economy to bounce back from the COVID-19 emergency but having more than €1 billion in the bank is going to be more useful than ever. And that’s something all Maltese should be proud of.
Alex Muscat, Parliamentary Secretary for Citizenship and Communities