Malta’s economy witnessed a remarkable surge during the first quarter of 2023 and our growth was two-and-a-half times that of our peers in the European Union.

However, this economic vibrancy was not accidental: it was the result of our strategic policies and an affirmation of our ability to manage the economy such that it grows from strength to strength.

And the opportunities we have before us will enable us to grow even further in the years to come.

We must now shift our focus to the next phase of our economic development by listening to what society at large as well as key stakeholders have to say and by mapping out a vision for the future of our country. And, while doing so, we must continue to transition into a more knowledge-based economy, thus creating higher value-adding sectors that enhance our sustainability.

To start with, I believe that we have to build on the five key pillars which we set out in our Economic Vision launched in 2020: quality of life, education, better infrastructure, climate neutrality and governance. By building on this vision and implementing it accordingly as part of our cross-governmental drive to deliver, I am confident that my government will transition our economy into one that is knowledge-intensive, green and based on a diversified investment portfolio.

Through enhanced cooperation with our social partners and industry leaders, we must look at sectors which we championed in recent years and provide them with the necessary conditions to aid their transitions while they continue to grow.

The maritime and aviation sectors, the digital sector, pharmaceuticals and the service-based industries are just a few examples of economic niches where such a collaborative approach, coupled with robust policymaking, has been crucial for our island to become a leader in the field.

Nonetheless, our policymaking is not limited to creating sector specific policies that nurture our industries’ potential to grow. And those who attribute our growth to population expansion and the construction industry misconstrue the complex nature of Malta’s economic development and the hard work of Malta’s entrepreneurs.

Our economic growth is primarily rooted in a carefully cultivated environment that encourages business investment and quality careers.

It is through the implementation of measured policy actions that we managed to turn the country around. To cite just one example, whereas, until a decade or so ago, low employment rates were a norm, today, we have the highest employment rate in Malta’s history.

This was the result of transformative policies, such as the reduction in the tax burden, the introduction of free childcare, the in-work benefit and other policies aimed at making work pay.

These initiatives not only increased our workforce but contributed to a doubling of our employed graduates and to our productivity growth being triple that of the euro area.

Additionally, the unprecedented investment in all levels of our education system must not be underestimated. Since 2013, the annual expenditure on our university has doubled to nearly €100 million, we invested in new facilities for MCAST and carried out significant investment in our primary and secondary schools.

Throughout this year, we will inaugurate at least three schools where our investment led to new facilities or total modernisation. This strong pace will be retained throughout the legislature.

And this brings me once again to our vision: the robust growth we have successfully achieved thus far is not our point of arrival but a platform for further success.

Our commitment is clear: we will diversify our economy further in order to ensure that our growth trajectory continues. We must nurture the exciting shift we are witnessing with a new wave of highly innovative start-ups and R&D companies that enrich Malta’s economic landscape.

We will diversify our economy further in order to ensure that our growth trajectory continues- Robert Abela

These enterprises are pioneering advancements in various fields, driving forward economic diversification and enhancing Malta’s competitiveness. We will help them by accelerating our push towards innovation, research and development and integration (R&D&I), reinforcing Malta’s reputation as a hotbed for technological advancement.

Another key focus in our transition towards a knowledge-based economy is the need to continue accelerating the investment in knowledge sharing and improving our emphasis on education, particularly in science, technology, engineering and mathematics (STEM) subjects.

These disciplines will play a pivotal role in shaping Malta’s economic future, equipping our workforce with the necessary skills to navigate an increasingly digital and knowledge-driven global economy.

Our firm belief is that the digital transition, most notably, holds significant potential for Malta. By leveraging artificial intelligence, we can address current workforce limitations and significantly boost our efficiency and competitiveness.

We will, undoubtedly, face numerous and various challenges throughout. These include the introduction of a global minimum tax rate, inflation and overall global uncertainty. In parallel to addressing these issues, our commitment and target remain clear: ensuring Malta remains an attractive and competitive jurisdiction.

Yet, our ambition transcends economic prowess. We aim to look beyond Malta being merely a destination for business. We want to strengthen the business environment where the public sector is engaged, and a vibrant community is fostered. We want Malta not only to be viewed as a great place for businesses to thrive but also as a wonderful place for individuals and families to live, grow and prosper.

Our journey towards climate neutrality also presents another significant economic opportunity. We will generate renewable energy from solar and wind power and transform waste into a resource. This shift will stimulate economic activity and enhance sustainability.

As global incentive systems adapt to facilitate digitalisation and reduce environmental impact, we will ensure that Malta’s offer evolves accordingly and remains among the best in Europe. Moreover, public entities must continue to adopt a proactive, solution-oriented approach and remain responsive to businesses’ needs, while striving to keep reducing unnecessary bureaucracy.

Our experience in successfully navigating the COVID-19 pandemic and, more recently, cushioning energy inflation, demonstrates our capacity for resilience. The measures that we have implemented safeguarded jobs and the economy and complemented our focus on the long-term goal of economic transformation.

Finally, in our road toward the next phase of economic evolution, investing in our workforce’s upskilling and reskilling is non-negotiable. This will equip our future economy with the talent required to drive prosperity. By embracing innovation, prioritising education and leveraging our resilience, we can confidently progress towards the next phase of Malta’s economic prosperity.

Robert Abela is prime minister.