It has often been said that Malta’s economy is very resilient. This is a view which I fully subscribe to and which data proves to be the case. The last severe recession we had was some 37 years ago, where the economy had slowed down significantly. Even then we did not experience negative growth rates, but we did experience high unemployment which was mitigated only through tadeonal public sector employment.

Since then, we have had blips and we have been into what is referred to as technical recession because for two successive quarters, real gross domestic product had decreased. However, we did not experience the severe downturn in economic activity that other countries experienced.

This is very often attributed to the fact that our economy has diversified into a range of economic activities. Many foreign analysts find it difficult to understand that we have an interesting manufacturing sector that has become more advanced over the decades; that we have leading aviation maintenance companies located here; that we have one of the most successful transhipment centres in the Mediterranean; that we have IT companies which do not just service the local business sector but also export their services; and that in addition to all of this, we also have a vibrant tourism sector.

As such, while some activities could experience difficult moments because of global market conditions, other activities make up for this through a positive performance. Therefore, on aggregate, our economy stays in positive territory.

We have also been very capable to attract investment in new areas. Using the analogy of the farmer, we have been able to grow trees that have eventually delivered good fruit which replaced other trees that would have died because the external environment could not sustain them. All this has made our economy resilient, able to survive and prosper in an ever-changing world.

For various reasons, such as developments in technology, the emergence of new competitors and changes in investors and consumer attitudes, the pace of change is now increasing, to put it mildly. Some will tell you it has become frenetic. This makes the future utterly unpredictable.

Regardless of the cause of change, our economic resilience needs to be based less on our ability to predict accurately the future and based more on our ability to adapt and respond.

To retain this ability, we need to focus more on how our economy contributes to the competitiveness of business operating in Malta. We need to focus on how the various components that make up Malta add value to business. For example (and I need to explain myself well here) it is very fine that we ensure that we have good governance both at an individual business level as well as at a state institution level, that on its own does not grow a business and does not grow an economy.

We also need to focus more on the future and the medium and longer term. In an economic environment, we can rest assured that an activity which is very lucrative today will not remain so in a number of years from now. The competitive advantage that businesses operating in Malta have today will be lost unless we reinvent ourselves. There is a cycle that we cannot escape.

Looking back, one may think that things have fitted in nicely into place for Malta. They did not fit into place automatically. Someone worked hard to ensure that they fitted into place. Today we talk, for example, of the presence of gaming companies and their contribution to our economy. They did not just wake up one day and collectively decided that they should invest in Malta. There was a concerted effort over the years that started 10 or more years ago to make it happen. The same applies to every economic activity we have.

This is why we need to ensure that our economy remains resilient in the face of external challenges. We need to devote thinking time to adapt and respond to changing circumstances and start to develop new activities as others need to be replaced.